Pandora A/s · OMXCOP:PNDORA
Pandora A/s — Pandora A/S Ord — Q1 2022 Earnings Presentation
43 slides from Pandora A/s's earnings presentation, May 7, 2022
Slide 1: First Quarter Results 2022
FIRST QUARTER RESULTS 2022 INVESTOR PRESENTATION 04 May 2022
Slide 2: Agenda of Today
AGENDA OF TODAY 1. EXECUTIVE SUMMARY 2. PHOENIX UPDATE 3. Q1 2022 FINANCIALS 4. FINANCIAL GUIDANCE 5. APPENDIX DISCLAIMER This presentation contains forward-looking statements, which include estimates of financial performance and targets. These statements are not guarantees of future performance and
Slide 3: Record Revenue in Q1
RECORD REVENUE IN Q1 $ Sustainable growth Execution of Phoenix Profitable growth continues High quality growth driven Organisational 23.0% EBIT margin in Q1 by all product Platforms strengthening pays off in 2022 - absolute EBIT up the numbers 45% vs Q1 2021 3 Pandora Q1 2022 - Investor presentation
Slide 4: 2022 Guidance Update
2022 GUIDANCE UPDATE ORGANIC EBIT GROWTH MARGIN 4-6% Previously (3-6%) 25.0-25.5% (Unchanged) For assumptions behind the guidance, please refer to slide 21 4 Pandora Q1 2022 - Investor presentation 4 Pandora Q1 2022 - Investor presentation
Slide 5: Agenda of Today
AGENDA OF TODAY 1. EXECUTIVE SUMMARY 2. PHOENIX UPDATE 3. Q1 2022 FINANCIALS 4. FINANCIAL GUIDANCE 5. APPENDIX 5 Pandora Q1 2022 - Investor presentation
Slide 6: Phoenix Strategy Execution Continues at High Speed
PHOENIX STRATEGY EXECUTION CONTINUES AT HIGH SPEED GROWTH PILLARS INITIATIVES • Pandora Moments delivers strong growth Drive the core (Moments platform) DESIGN • Pandora ME with solid growth Fuel the brand with more • Pandora Collabs supported by very strong Marvel launch Increase & optimise the net
Slide 7: Driving the Core: Moments Continue to Deliver
DRIVING THE CORE Growth pillars DESIGN MOMENTS CONTINUE TO DELIVER *Excl. Collabs 63%* Share of business in Q1 2022 17% Sell-out growth vs Q1 2021 7 Pandora Q1 2022 - Investor presentation
Slide 8: Fuel with More: Marvel Support Growth
FUEL WITH MORE Growth pillars DESIGN MARVEL SUPPORT GROWTH 3% Share of business in Q1 2022* *6% share of business since launch 17 February 8 Pandora Q1 2022 - Investor presentation
Slide 9: Fuel with More: Continue to Support New Platforms
FUEL WITH MORE Growth pillars DESIGN CONTINUE TO SUPPORT NEW PLATFORMS PANDORA ME PANDORA Brilliance 132% Getting ready for sequential global roll- out later in 2022 Sell-out growth vs 2021 9 Pandora Q1 2022 - Investor presentation
Slide 10: Growing Core Markets: Solid Growth in Europe
GROWING CORE MARKETS Growth pillars CORE MARKETS SOLID GROWTH IN EUROPE Organic growth Q1 2021 closed stores vs vs due to Q1 2022 2021 2019 COVID-19* US 7% 62% 9% China** -18% -57% 1% UK 32% 34% 100% Italy 33% 31% 40% Australia 0% 0% 7% France 35% 16% 43% Germany 43% 45% 83% Rest of Pandora 35% 6% 2
Slide 11: US Update: Continued Growth in US in Q1
US UPDATE Growth pillars CORE MARKETS CONTINUED GROWTH IN US IN Q1 Q1 2022 IN LINE WITH EXPECTATIONS LAID OUT IN GUIDANCE • US organic growth was up 7% vs Q1 2021, which equals to 62% PHOENIX STRATEGY vs Q1 2019 or a 3-year CAGR of 17% 2X • The growth in Q1 2022 was supported by the Marvel collectio
Slide 12: China Update: Negatively Impacted by COVID-19
CHINA UPDATE Growth pillars CORE MARKETS NEGATIVELY IMPACTED BY COVID-19 CHINA REMAINS CHALLENGED • Performance in China continue to be unsatisfactory and negatively impacted by COVID-19 and saw -57% organic growth vs 2019 PHOENIX STRATEGY 3X • Most of the stores were kept formally open, but saw a s
Slide 13: Strong Brand with Pricing Power
Growth pillars STRONG BRAND WITH PRICING POWER CORE MARKETS SELECTED AND CAREFUL ADJUSTMENTS Programme NOW 2019-2020 Promotional days Ending 2021 with Complete restructuring programme of peaks with ~220 ~115 days Pandora including a heavy detoxing of the promotional level 2018 2019 2020 2021 2022 20
Slide 14: Strong Brand Engagement in Q1
Growth pillars STRONG BRAND ENGAGEMENT IN Q1 BRAND SUPPORTED THE NEW HEROES 16M 40M Engagements* Impressions across social platforms* *From 15 February – 21 March
Slide 15: Personalisation Is the Future: Solid Online Performance
PERSONALISATION IS THE FUTURE Growth pillars PERSONALISATION SOLID ONLINE PERFORMANCE IN Q1 2022 155% (-17% VS 2021*) 50,000 signed up first four weeks** ONLINE REVENUE MORE SOFT LAUNCH OF NEW THAN DOUBLES VS 2019 LOYALTY PROGRAMME IN FRANCE *Online performance is down vs Q1 2021 as **Pandora France
Slide 16: Agenda of Today
AGENDA OF TODAY 1. EXECUTIVE SUMMARY 2. PHOENIX UPDATE 3. Q1 2022 FINANCIALS 4. FINANCIAL GUIDANCE 5. APPENDIX 16 Pandora Q1 2022 - Investor presentation
Slide 17: Key Financial Highlights
KEY FINANCIAL HIGHLIGHTS RECORD-BREAKING REVENUE AND STRONG EBIT MARGIN COMMENTARY TOPLINE Q1 2022 Q1 2021 • Performance in Q1 was strong, delivering Revenue, DKK million 5,689 4,500 record high revenue for a first quarter Organic growth 21% 13% • Strong EBIT margin ending well above Q1 Sell-out gro
Slide 18: Revenue Performance
REVENUE PERFORMANCE GROWTH DRIVEN BY SELL-OUT – NETWORK EXPANSION STARTS CONTRIBUTING COMMENTARY The revenue performance continue to be impacted Q1 2022 GROWTH COMPOSITION VS Q1 2021 by COVID-19 and should be interpreted with care %-p growth (approximately) • Organic growth was up 21% in Q1 2022, (1
Slide 19: Solid EBIT Margin
SOLID EBIT MARGIN UNDERLYING EBIT MARGIN DRIVEN BY OPERATING LEVERAGE COMMENTARY • Strong underlying EBIT margin driven by %-p development (approximately) operating leverage, and further supported Underlying EBIT margin development by tailwinds from gross margin efficiencies 25.7% 0.3% • Government
Slide 20: Agenda of Today
AGENDA OF TODAY 1. EXECUTIVE SUMMARY 2. BUSINESS UPDATE 3. Q1 2022 FINANCIALS 4. FINANCIAL GUIDANCE 5. APPENDIX 20 Pandora Q1 2022 - Investor presentation
Slide 21: 2022 Organic Growth Guidance
2022 ORGANIC GROWTH GUIDANCE TARGET UPDATED FROM “3-6%” TO “4-6%” ORGANIC GROWTH IN 2022 NEW GUIDANCE ASSUMPTIONS • Based on the strong performance in Q1 and Organic growth guidance DKK billion an updated outlook for 2022, Pandora %-points approximations 5.5% 25.9-26.3 updates the organic growth gui
Slide 22: 2022 EBIT Margin Guidance
2022 EBIT MARGIN GUIDANCE PANDORA TARGET AN EBIT MARGIN RANGE OF “25-25.5%” EBIT MARGIN GUIDANCE 2022 • Pandora maintains the EBIT margin guidance, despite inflationary cost pressures across the value chain and one-offs amounting to approximately DKK 200m incremental cost vs EBIT margin guidance bri
Slide 23: Inflation & Cost Increase
INFLATION & COST INCREASE INFLATIONARY PRESSURE AND OTHER COSTS DRIVE AROUND DKK 200 MILLION COST INCREASE VS ORIGINAL GUIDANCE COMMENTARY Estimated negative • The combination of escalating inflation, the COST INCREASE FULL YEAR (DIRECTIONAL) Actuals war and continued COVID-19 impact in impact vs or
Slide 24: Rest of Year – Implied Guidance
REST OF YEAR – IMPLIED GUIDANCE Implied organic growth vs 2021 ORGANIC GROWTH • The implied rest of year organic growth of 0-2% corresponds to 12-15% vs 2019 21% compared to 18% in Q1 • The implied deceleration vs 2019 is caused by the increased uncertainty for the rest of 4-6% year, primarily from
Slide 25: Closing Remarks
CLOSING REMARKS
Slide 26: Closing Remarks
CLOSING REMARKS Execution of Phoenix Encouraging growth across Organic growth guidance Strong profitable growth continues at high speed all product platforms updated to 4-6% (previously 3-6%) 26 Pandora Q1 2022 - Investor presentation
Slide 27: Q&A
Q&A 27 Pandora Q1 2022 - Investor presentation
Slide 28: Appendix
APPENDIX 28 Pandora Q1 2022 - Investor presentation
Slide 29: Pandora Consumer
DIRECTIONAL ONLY PANDORA CONSUMER CUSTOMER GROUPS In % Self-purchasers Female gifters Male gifters Hinted by end-user 100% ~30% Minimum 75% of all ~35% ~35% purchases are ~15% Self-purchasers ~15% Minimum 50% 5-10% ~75% ‘decided’ by women shop more frequently of all gifts are 5-10% hinted (index ~13
Slide 30: Pandora Consumer: Female Funnel by Age Group
PANDORA CONSUMER PANDORA FEMALE FUNNEL SPLIT BY AGE GROUPS Base: All women FEMALE OVERALL 18-24 YO 25-40 YO 41-64 YO Unaided awareness 33 38 34 32 Aided awareness 84 85 83 83 CR3 25 32 28 20 Consideration 21 27 23 17 Set1 CR4 58 57 59 58 Purchase2 12 16 14 10 Ownership 30 41 33 26 N=31,016 N=4,128 N
Slide 31: Revenue Development by Channel
REVENUE DEVELOPMENT BY CHANNEL Pandora owned1 retail 3,925 2,956 25% 20% 69% - of which concept stores 2,445 1,381 65% 43% - of which online stores 1,219 1,417 -17% 21% - of which other points of sale 261 158 61% 5% Wholesale 1,567 1,365 14% 12% 28% - of which concept stores 833 689 23% 15% - of whi
Slide 32: Revenue Development by Global Business Unit
REVENUE DEVELOPMENT BY GLOBAL BUSINESS UNIT Moments & Collabs 4,197 3,252 20% 74% - Moments 3,602 2,866 17% 63% - Collabs 595 386 41% 10% Style and Upstream Innovation 1,492 1,249 11% 26% - Timeless 945 826 5% 17% - Signature 396 364 5% 7% - ME 142 58 132% 3% - Brilliance 9 - - 0% Total revenue 5,68
Slide 33: Key Markets Revenue and Sell-out Growth Overview
KEY MARKETS REVENUE AND SELL-OUT GROWTH OVERVIEW US 1,650 1,391 7% 0% 29% China 254 281 -18% -31% 4% UK 808 587 32% 45% 14% Italy 586 440 33% 35% 10% Australia 245 243 0% -2% 4% France 262 194 35% 33% 5% Germany 273 191 43% 88% 5% Total top-7 markets 4,077 3,326 16% 13% 72% Rest of Pandora 1,612 1,1
Slide 34: Store Network Development
STORE NETWORK DEVELOPMENT Other points of sale (retail) 357 334 253 23 104 Other points of sale (wholesale) 3,168 3,255 3,243 -87 -75 Other points of sale (third-party) 481 565 554 -84 -73 Other points of sale, total 4,006 4,154 4,050 -148 -44 US 391 388 391 3 0 224 37 45 China 209 214 228 -5 -19 19
Slide 35: Income Statement
Revenue 5,689 4,500 23,394 Cost of sales -1,365 -1,065 -5,590 Gross profit 4,324 3,436 17,803 Sales, distribution and marketing expenses -2,505 -2,049 -9,939 Administrative expenses -509 -484 -2,026 Operating profit 1,310 903 5,839 Finance income 88 17 152 Finance costs -98 -109 -613 Profit before t
Slide 36: Working Capital and Cash Management
WORKING CAPITAL AND CASH MANAGEMENT DKK million Q1 2022 Q4 2021 Q3 2021 Q2 2021 Q1 2021 Inventory 3,534 2,991 3,197 2,557 2,373 - Share of revenue (last 12 months) 14.4% 12.8% 14.4% 11.8% 12.3% Trade receivables 790 1,009 801 691 602 - Share of revenue (last 12 months) 3.2% 4.3% 3.6% 3.2% 3.1% Trade
Slide 37: Hedging Policy and Raw Materials Share of Production Costs
HEDGING POLICY AND RAW MATERIALS SHARE OF PRODUCTION COSTS Commodity hedging policy is to hedge at least an average Raw material share of cost of goods sold of 70% of future 12 months use in production For illustrative purposes Other Other raw materials Gold Silver Hedged Realised 100% 70% to 100% 5
Slide 38: Sustainability at Pandora: Low-Carbon Business
SUSTAINABILITY AT PANDORA LOW-CARBON BUSINESS As the world's largest jewellery maker, we are We believe high-quality jewellery, superior determined to reduce our climate footprint and business performance and high ethical help set an example for the wider industry. standards go hand in hand, and we
Slide 39: Circular Innovation; Inclusive, Diverse & Fair Culture
CIRCULAR INNOVATION INCLUSIVE, DIVERSE & we strive to ensure that our use of raw materials in both the crafting and sales of our jewellery has the FAIR CULTURE lowest impact possible on the environment, We want everyone – from our customers, employees people and communities. and suppliers to our bus
Slide 40: Key ESG Ratings
KEY ESG RATINGS | PANDORA PERFORMANCE RATING PERFORMANCE Methodology note, low score = good 12/100 – Pandora ranked 10th (out of 177 companies) in Textiles & Apparel sector Methodology note, AAA = top score Top “AAA” rating – 6th straight year Methodology note, A = top score C rating – Top 20% of In
Slide 41: Investor Relations Contact Details
INVESTOR RELATIONS CONTACT DETAILS Investor Relations team Share information ADR information Trading symbol PNDORA ADR trading symbol PANDY John Bäckman Identification Sponsored level 1 VP, Investor Relations, Tax & Treasury DK0060252690 Programme type number/ISIN programme (J.P. Morgan) +45 5356 69
Slide 42: Disclaimer
DISCLAIMER This Company announcement contains forward-looking statements, including, but not limited to, guidance, expectations, strategies, objectives and statements regarding future events or prospects with respect to the Company’s future financial and operating results. Forward-looking statements
Slide 43: C) PANDORA ‘ri
Ad NY C) PANDORA ‘ri