Pandora A/s · OMXCOP:PNDORA
Pandora A/s — Pandora A/S Ord — Q1 2021 Earnings Presentation
35 slides from Pandora A/s's earnings presentation, May 10, 2021
Slide 1: First Quarter Results 2021
Investor presentation 04 May 2021 FIRST QUARTER RESULTS 2021
Slide 2: Agenda of Today
AGENDA OF TODAY Q1 results 1. Update on Q1 results 2. Q1 Q&A Strategy launch 1. Intro to Phoenix, our new strategy 2. Phoenix Q&A DISCLAIMER This presentation contains forward-looking statements, which include estimates of financial performance and targets. These statements are not guarantees of fut
Slide 3: Agenda Q1 Results
AGENDA Q1 RESULTS 1. Executive summary 2. Business update 3. Q1 2021 Financials 4. Financial guidance 5. Appendix 3 Pandora Q1 2021 - Investor presentation
Slide 4: Turnaround Completed
TURNAROUND COMPLETED Today, Pandora is releasing its new strategy, Phoenix - a new chapter of sustainable and profitable growth Continuation of strong More than +50% growth Sell-out growth momentum in Q1 2021 in US vs 2019 in Q1 2021 ending at – online growing +200% –5% vs 2019 despite vs 2019 30% o
Slide 5: Pandora Guidance Upgrade for 2021
PANDORA GUIDANCE UPGRADE FOR 2021 - Strong initial performance in 2021 Guidance is upgraded Cash distribution to New sustainability Organic growth “Above 12%” shareholders report is released today Before “Above 8%” reinitiated – strong results EBIT margin “Above 22%” achieved, and ambitious Before “
Slide 6: Agenda Q1 Results
AGENDA Q1 RESULTS 1. Executive summary 2. Business update 3. Q1 2021 Financials 4. Financial guidance 5. Appendix 6 Pandora Q1 2021 - Investor presentation
Slide 7: Solid Performance Despite 30% Stores Closed
SOLID Sell-out growth Q1 2021 Q1 2020 PERFORMANCE closed stores closed stores vs vs due to due to Q1 2021 2020 2019 COVID-19* COVID-19* DESPITE 30% US 81% 52% 9% 13% STORES CLOSED UK -7% -16% 100% 10% • Underlying performance is best viewed vs 2019 (no COVID-19 Italy 5% -11% 40% 25% impact) • Solid
Slide 8: COVID-19 Blurs the Reading of the Performance in Q1 2021
COVID-19 BLURS THE READING OF THE PERFORMANCE IN Q1 2021 - UNDERLYING NUMBERS CONFIRM THAT TOPLINE IS STABILISING • Sell-out growth vs 2019 ended at -5% and was impacted by Illustrative underlying Q1 2021 performance two opposing COVID-19 factors: 1. Lockdown of stores dragging down revenue in Q1 20
Slide 9: Maintaining Strong Brand Momentum
MAINTAINING Global unaided awareness STRONG BRAND Pandora Pandora No. 1 in unaided MOMENTUM Number of Key Markets where Pandora is #1 awareness in 5 out of 7 39% 36% 35% key markets – no. 2 in US Continue to increase 5/7 5/7 5/7 the relative gap to Q1 2020 Q4 2020 Q1 2021 competitors1 . 1Pandora has
Slide 10: Q1 2021 Digital Results
Q1 2021 DIGITAL RESULTS Online revenue Online conversion rate Click & Collect in the US more than triples vs 2019 continue the strong traction 205% 3% ~10% (136% vs 2020) (+84% vs 2020) (of online sales in the US) 10 Pandora Q1 2021 - Investor presentation
Slide 11: Becoming Low-Carbon, Circular and Inclusive
SUSTAINABILITY REPORT 2020 BECOMING LOW-CARBON, CIRUCLAR AND launched May 4, 2021 INCLUSIVE LOWERING OUR SUPPORTING A BEING AN INCLUSIVE CO2 FOOTPRINT CIRCULAR ECONOMY AND FAIR BRAND • Switched to 100% • Established roadmap for • Completed company- renewable energy in our achieving target of using w
Slide 12: Agenda Q1 Results
AGENDA Q1 RESULTS 1. Executive summary 2. Business update 3. Q1 2021 Financials 4. Financial guidance 5. Appendix 12 Pandora Q1 2021 - Investor presentation
Slide 13: EBIT Margin Up 5pp - Driven by Operating Leverage
Commentary EBIT MARGIN UP 5PP • Performance in Q1 was strong given 30% - DRIVEN BY OPERATING LEVERAGE of the stores were temporarily closed Key financial highlights • EBIT margin ending well above Q1 2020 proving the robust operating leverage in Topline Q1 2021 Q1 2020 Q1 2019 the business Revenue,
Slide 14: Strong Revenue Development Considering Store Closures
STRONG REVENUE DEVELOPMENT Commentary • Organic growth vs 2019 was negatively CONSIDERING STORE CLOSURES impacted by -1.5pp from the closure of 54 concept stores Q1 growth composition vs Q1 2019 %-p growth (approximately) • The lockdowns in physical stores has 4,804 skewed the channel mix towards on
Slide 15: EBIT Margin Up 5pp - Driven by Operating Leverage
EBIT MARGIN UP 5PP - DRIVEN BY OPERATING LEVERAGE EBIT margin at strong level in a difficult environment Commentary %-p development (approximately) • Pandora delivered a solid EBIT margin in Q1 2021, proving the strong operating leverage 20.1% • The EBIT margin was impacted by 2.0% 1.5% 2.5% headwin
Slide 16: Agenda Q1 Results
AGENDA Q1 RESULTS 1. Executive summary 2. Business update 3. Q1 2021 Financials 4. Financial guidance 5. Appendix 16 Pandora Q1 2021 - Investor presentation
Slide 17: Guidance Upgraded Following Strong Performance in Q1
Guidance upgraded following strong performance in Q1 PREVIOUS 2021 UPGRADED 2021 GUIDANCE GUIDANCE Including impact from Including impact from COVID-19 COVID-19 ORGANIC REVENUE ORGANIC REVENUE GROWTH GROWTH Above 8% Above 12% (Above -3% vs 2019) (Above 0% vs 2019) EBIT MARGIN EBIT MARGIN Above 21% A
Slide 18: Organic Growth Guidance Bridge
ORGANIC GROWTH GUIDANCE BRIDGE GUIDANCE ASSUMPTIONS • The updated guidance is based on the assumption that 2021 vs 2020 Illustrative COVID-19 impacts 20-25% of the stores will be temporarily closed during the first half of 2021 and 5-10% in the second half. This is expected to impact organic growth
Slide 19: EBIT Margin Guidance Bridge
EBIT MARGIN GUIDANCE BRIDGE GUIDANCE ASSUMPTIONS %-points approximations • Pandora increases the EBIT margin guidance driven higher topline and thereby operating leverage Illustrative COVID-19 impacts • In addition, Pandora has identified DKK 100 million further cost reductions – on top of the DKK 3
Slide 20: Pandora Resumes Cash Distribution Following a Strong Start to 2021
PANDORA RESUMES CASH DISTRIBUTION FOLLOWING A STRONG START TO 2021 Commentary Cash distribution Strong liquidity & low leverage • Pandora resume cash distribution Quarterly split, DKK billion Share buyback • At the Annual General Meeting in March 2021, Dividend Pandora was granted the authorisation
Slide 21: Closing Remarks
CLOSING REMARKS Strong performance Launching the headlines of Cash distribution Upgraded guidance in Q1 2021 the new strategy today resumed – from turnaround to sustainable growth 21 Pandora Q1 2021 - Investor presentation
Slide 22: Appendix
APPENDIX 22 Pandora Q1 2021 - Investor presentation
Slide 23: Pandora Consumers Are Across Generations
PANDORA CONSUMERS ARE ACROSS GENERATIONS Age distribution of our consumers who have purchased Pandora within the last 12 months 18 65 31% 25% 25% 19% 18-24 25-34 35-44 45-65* Source: Pandora Brand Tracker 2020 (n=2508) Note: Markets include IT, ES, FR, UK, DE, RU, CA, CN, AU *Age range stops at 54 i
Slide 24: Pandora's Online Business & Presence
PANDORA’S ONLINE BUSINESS & PRESENCE Online store development Online platforms DKK million Online store % of Group Revenue Online store revenue % Pandora online stores available in 20 markets 2,600 55 across all regions, incl. China (own and Tmall 2,400 50 2,200 52% distribution), Australia, Italy,
Slide 25: Revenue Development by Channel and by Global Business Unit
REVENUE DEVELOPMENT BY CHANNEL AND BY GLOBAL BUSINESS UNIT Channel Development LC growth Share of revenue LC growth Share of revenue DKK million Q1 2021 vs Q1 2020 Q1 2021 FY 2020 vs FY 2019 FY 2020 Pandora owned retail 2,956 18% 66% 13,426 -2% 71% - of which concept stores 1,381 -20% 31% 7,321 -29%
Slide 26: Store Network Development
STORE NETWORK DEVELOPMENT Net openings Number of points of sale Q1 2021 Q1 2021 vs Q4 2020 Q1 2021 vs Q1 2020 Concept stores 2,659 -31 -87 - of which Pandora owned 1,394 12 12 - of which franchise owned 755 -42 -90 - of which third-party distribution 510 -1 -9 Other points of sale 4,050 -352 -543 -
Slide 27: Key Markets Revenue and Sell-out Growth Overview
KEY MARKETS REVENUE AND SELL-OUT GROWTH OVERVIEW Organic Share of Growth vs Sell-out growth Sell-out growth Share of Organic Sell-out growth revenue, DKK million Q1 2021 2020 vs 2020 vs 2019 revenue FY 2020 Growth FY/FY vs 2020 FY 2020 UK 587 1% -7% -16% 13% 2,960 5% -2% 16% Italy 440 -2% 5% -11% 10
Slide 28: Concept Stores per Market
CONCEPT STORES PER MARKET Growth Growth Growth O&O stores Growth O&O stores Number of concept stores Number of concept stores Number of concept stores Q1 2021 Q1 2021 Number of O&O Number of O&O Number of O&O Q1 2021 Q1 2021 Q1 2021 Q4 2020 Q1 2020 /Q4 2020 /Q1 2020 Q1 2021 Q4 2020 Q1 2020 /Q4 2020
Slide 29: Profitability Development
PROFITABILITY DEVELOPMENT DKK million Q1 2021 Q1 2020 FY 2020 FY 2019 Revenue 4,500 4,172 19,009 21,868 Cost of sales -1,065 -942 -4,475 -4,950 Gross profit excl. restructuring costs 3,436 3,230 14,534 16,919 Restructuring costs - -86 -159 -1,016 Gross profit incl. restructuring costs 3,436 3,144 14
Slide 30: Working Capital and Cash Management
WORKING CAPITAL AND CASH MANAGEMENT DKK million Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020 Inventory 2,373 1,949 2,619 2,250 2,155 - Share of revenue (last 12 months) 12.3% 10.3% 13.7% 11.6% 10.1% Trade receivables 602 870 607 602 1,081 - Share of revenue (last 12 months) 3.1% 4.6% 3.2% 3.1% 5.1% Trade
Slide 31: Hedging Policy and Raw Materials Share of Production Costs
HEDGING POLICY AND RAW MATERIALS SHARE OF PRODUCTION COSTS Commodity hedging policy is to hedge Raw material share of cost of goods sold around 70% of future 12 months use in production For illustrative purposes Other Other raw materials Gold Silver Hedged Realised 100% 70% to 100% 51% 58% 59% 54% 7
Slide 32: Sustainability Approach
Read more in our Sustainability Report released 4 May 2021 SUSTAINABILITY APPROACH 1) LOW-CARBON BUSINESS We believe high-quality jewellery, As the world's largest jewellery maker, we are determined to reduce our superior business performance and climate footprint and help set an example for the wid
Slide 33: Circular Innovation and Inclusive & Fair Culture
Read more in our Sustainability Report released 4 May 2021 2) CIRCULAR INNOVATION 3) INCLUSIVE & FAIR CULTURE Partnering with UNICEF to empower young people From 60%1 recycled in Pandora and UNICEF have partnered to support the most >99% 2020 to 100% in 2025 vulnerable children, especially By 2025,
Slide 34: 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 35: Pandora Q4 2020 - Investor presentation
Pandora Q4 2020 - Investor presentation