Pandora A/s · OMXCOP:PNDORA
Pandora A/s — Pandora A/S Ord — Q2 2024 Earnings Presentation
47 slides from Pandora A/s's earnings presentation, Aug 13, 2024
Slide 1: Second Quarter Results 2024
13 AUGUST 2024 S E C O N D Q U A R T E R R E S U L T S 2 0 2 4
Slide 2: Agenda of Today
AGENDA OF TODAY O1 Executive summary O2 The Pandora ecosystem O3 Phoenix strategy update O4 Q2 2024 financials O5 Financial guidance O6 Appendix DISCLAIMER This presentation contains forward-looking statements, which include estimates of financial performance and targets. These statements are not gu
Slide 3: Phoenix Delivers Another Strong Quarter
Sustained growth Solid profitability PHOENIX DELIVERS 15% 80.2% ANOTHER STRONG Organic growth in Q2 2024 Gross margin, +210bp compared to Q2 2023 QUARTER 8% 19.8% DOUBLE-DIGIT LFL in Q2 2024 EBIT margin, -40bp compared to Q2 2023 ORGANIC GROWTH IN Q2 Growth across collections Strong return on capita
Slide 4: 2024 Guidance: Revenue Guidance Upgraded
2024 GUIDANCE REVENUE GUIDANCE UPGRADED “Our strategy continues to take Pandora to new heights despite general consumer spending being somewhat sluggish. We have successfully started the journey to make Pandora known as a full jewellery brand, and our results show that consumers like what they see.
Slide 5: Agenda of Today
AGENDA OF TODAY O1 Executive summary O2 The Pandora ecosystem O3 Phoenix strategy update O4 Q2 2024 financials O5 Financial guidance O6 Appendix
Slide 6: The Pandora Brand at the Centre of Value Creation
THE PANDORA BRAND AT THE CENTRE OF VALUE CREATION OUR OWN BRAND • Pandora owns the space of jewellery BRAND with a meaning • This drives demand at scale • Developed through the iconic Moments platform over 25 years • In a largely unbranded category, J Pandora has the highest unaided W EW ELLERY G IT
Slide 7: End to End Complete Vertical Integration: Retail Network
END TO END COMPLETE VERTICAL INTEGRATION A HIGHLY PRODUCTIVE GLOBAL RETAIL NETWORK ENHANCING BRAND AWARENESS 01 OUR OWN RETAIL NETWORK • 2,695 concept stores globally IBUTION AT SC of which 1,984 are O&O TR 01 AL • 3,940 other points of sales IS E D • Store network drives more than half of brand awa
Slide 8: End to End Complete Vertical Integration: Crafting
END TO END COMPLETE VERTICAL INTEGRATION STATE-OF-THE-ART CRAFTING FACILITIES LEVERAGING SCALE AND ENSURING QUALITY IBUTION AT SC TR AL IS E D BRAND 02 OUR OWN CRAFTING SET-UP J W EW ELLERY G IT H • Ability to mass produce at scale with A MEAN IN >100m of units produced in-house per year CR E • Deve
Slide 9: Our Equity Story
1 3 A UGU ST 2024 OUR EQUITY STORY Pandora is the only global brand in the accessible luxury jewellery market. The Pandora brand has the highest awareness in the jewellery market globally and owns the space of “jewellery with a meaning” in the minds of consumers. This is the core competitive edge an
Slide 10: Agenda of Today
AGENDA OF TODAY O1 Executive summary O2 The Pandora ecosystem O3 Phoenix strategy update O4 Q2 2024 financials O5 Financial guidance O6 Appendix
Slide 11: Good Momentum Across All Pillars
STRATEGIC GROWTH INITIATIVES GOOD MOMENTUM ACROSS ALL PILLARS • Restaging the brand – transforming • Art & Science – consumer-centric the perception of Pandora jewellery concepts • Retail transformation (Evoke 2.0) • Drive growth in core – charms & • Iconise heroes carriers • Expand design aesthetic
Slide 12: The Restaging of Our Brand Is Working
A FULL JEWELLERY BRAND THE RESTAGING OF OUR BRAND IS WORKING CUSTOMER ACQUISITION 29% LFL IN FUEL WITH MORE DESIRABILITY BRAND CONSIDERATION AND UNAIDED AWARENESS GROWING Classification: Pandora Internal
Slide 13: Solid LFL Growth Across Collections
BRINGING THE FULL JEWELLERY BRAND OFFERING TO LIFE SOLID LFL GROWTH ACROSS COLLECTIONS • In line with the strategy, we continue to attract more consumers into the Pandora brand – growing the core segment and fuelling with more • Our Core segment delivered a resilient 1% LFL in Q2 2024. The Fuel with
Slide 14: Leveraging Our Icons
GROWING THE CORE LEVERAGING OUR ICONS Solid growth across the Charms and Carriers core - Moments and Pandora ME PANDORA ME LINK CHAIN ELEVATED HEART STERLING SILVER BRACELET WITH BRACELET SILVER RING WITH CLEAR HEART-SHAPED CLASP ZIRCONIA 14 Pandora Q4 2022 - Investor presentation
Slide 15: Fuelling with More: A Full Jewellery Brand
FUELLING WITH MORE A FULL JEWELLERY BRAND PANDORA LAB-GROWN TIMELESS ESSENCE DIAMONDS 29% 172 88% Like-for-like DKK million Like-for-like revenue* 15 Pandora Q2 2024 - Investor presentation *Including DKK 96 million of sell-in Classification: Pandora Internal
Slide 16: Pandora Essence Off to an Encouraging Start
NEW COLLECTION LAUNCH PANDORA ESSENCE OFF TO AN ENCOURAGING START NEW DESIGN AESTHETIC YELLOW GOLD PLATED EARRINGS PEARLS TAPPING INTO A NEW AESTHETIC SPACE OF ORGANIC, FLUID & NATURAL SHAPES ~17% OF THE JEWELLERY MARKET Classification: Pandora Internal
Slide 17: Markets | US
MARKETS | US • US delivered another robust quarter with LFL at 5%, despite a slightly softer jewellery market, continuing to build market share • Brand momentum driven by the “BE LOVE” campaign and the continued halo effect from Diamonds successfully driving 5% customer acquisitions within the Fuel
Slide 18: Markets | Germany, UK, Italy and France
MARKETS | GERMANY, UK, ITALY AND FRANCE • Key markets in Europe remained solid at LFL of 10% ➢ Germany delivered yet another exceptional quarter with a LFL at 65%, driven by the ongoing brand momentum 10% ➢ UK delivered a stable LFL of 1% despite the dampened consumer sentiment, performing ahead of
Slide 19: Markets | China and Australia
MARKETS | CHINA AND AUSTRALIA (23)% • China delivered -23% LFL, in line with expectations ➢ We continue investing in media and the brand – and reduce promo levels at the same time ➢ Pandora will continue to focus on driving key collections and driving its core brand ideology in the market to build t
Slide 20: Markets | Rest of Pandora
MARKETS | REST OF PANDORA • Rest of Pandora continues to grow double-digit LFL of 13% ➢ Established markets such as Spain and Poland sustaining mid- teens LFL ➢ Less penetrated markets such as the Netherlands, Portugal, Austria and Japan delivered solid double-digit LFL ➢ As expected, growth levels
Slide 21: Network Expansion: Driving Consistent Profitable Growth
NETWORK EXPANSION DRIVING CONSISTENT PROFITABLE GROWTH 2024-2026 2024 3% organic 2023 CAGR 2022 225-275 4-5% concept stores, net openings 4% organic 175-225 3% organic growth Pandora owned shop-in-shop, net openings organic growth growth DKK ~2.5BN Annual incremental revenue** Net Opened Opened 150-
Slide 22: New Store Concept Roll-out Continues
EVOKE 2.0 STORE CONCEPT NEW STORE CONCEPT ROLL-OUT CONTINUES FIRST FLAGSHIP STORE OPENED IN COPENHAGEN 154 EVOKE 2.0 CONCEPT STORES OPENED BY Q2 2024 of which 4 stores is in the partner network TARGETING 1,375 – 1,425 O&O EVOKE CONCEPT STORES BY 2026 EUROPE AUSTRALIA ASIA AMERICAS 41 stores 11 store
Slide 23: Agenda of Today
AGENDA OF TODAY O1 Executive summary O2 The Pandora ecosystem O3 Phoenix strategy update O4 Q2 2024 financials O5 Financial guidance O6 Appendix
Slide 24: Key Financial Highlights: Solid Profitability
KEY FINANCIAL HIGHLIGHTS SOLID PROFITABILITY TOPLINE Q2 2024 Q2 2023 FY 2023 Revenue, DKK million 6,771 5,894 28,136 Organic growth, % 15% 5% 8% Like-for-like, % 8% 2% 6% FINANCIAL RATIOS Q2 2024 Q2 2023 FY 2023 Gross margin, % 80.2% 78.1% 78.6% EBIT margin, % 19.8% 20.2% 25.0% Cash conversion incl.
Slide 25: Revenue Performance: Double-Digit Growth
REVENUE PERFORMANCE DOUBLE-DIGIT GROWTH • LFL growth of 8%. Brand momentum drives strong traffic Q2 2024 GROWTH COMPOSITION VS Q2 2023 across geographies %-p growth (approximately) • Network expansion driven by 255 store openings in the past 12 16% DKK million months* 15% 1% 1% 6,771 1% • Phasing of
Slide 26: EBIT Margin: Solid Q2 Margin
EBIT MARGIN SOLID Q2 MARGIN • The underlying EBIT margin remained flat Y/Y %-p development (approximately) • The reported Q2 EBIT margin was EBIT margin development excl. non-recurring items 19.8%, -40bp Y/Y reflecting a higher temporary drag from 0.5% forward integration and 1.2% 0.6% investments i
Slide 27: Agenda of Today
AGENDA OF TODAY O1 Executive summary O2 The Pandora ecosystem O3 Phoenix strategy update O4 Q2 2024 financials O5 Financial guidance O6 Appendix
Slide 28: 2024 Organic Growth Guidance: Upgraded Revenue Outlook
2024 ORGANIC GROWTH GUIDANCE UPGRADED REVENUE OUTLOOK GUIDANCE ASSUMPTIONS • Pandora raises its organic growth guidance to 9-12% (previously “8- Organic growth guidance 10%”) %-p development (approximately) • The LFL guidance is raised to 5- 7% (previously “4-6%”). The low- end of the LFL guidance a
Slide 29: 2024 EBIT Margin Guidance: Maintaining Solid Profitability
2024 EBIT MARGIN GUIDANCE MAINTAINING SOLID PROFITABILITY GUIDANCE ASSUMPTIONS • The EBIT margin guidance for 2024 is unchanged at “Around 25%” EBIT margin guidance • Network expansion is expected to %-p development (approximately) drive a +60bp impact (previously 50bp) and net operating leverage is
Slide 30: Closing Remarks
CLOSING REMARKS Strong momentum The restaging of Structurally high Guidance with 16% organic our brand is profitability whilst upgraded to growth YTD working driving strategic 9-12% organic - despite tough investments growth backdrop
Slide 31: Our Equity Story
Our equity story 1 3 A UGU ST 2024 Pandora is the only global brand in the accessible luxury jewellery market. The Pandora brand has the highest awareness in the jewellery market globally and owns the space of “jewellery with a meaning” in the minds of consumers. This is the core competitive edge an
Slide 32: Appendix
13 A UGU ST 2024 APPENDIX
Slide 33: Customers: Decisions Highly Influenced by Wearers
DIRECTIONAL ONLY CUSTOMERS | DESPITE ~50% MALE CUSTOMERS, DECISIONS ARE HIGHLY INFLUENCED BY WEARERS CUSTOMER GROUPS 2023, % Self-purchasers Female gifters Male gifters Hinted by end-user Approx. ~80% of transactions are 35% 45% 45% influenced by the wearer ~80% 15% Self-purchasers Minimum 50% shop
Slide 34: Pandora Consumer: Global Purchase Funnel
PANDORA CONSUMER GLOBAL PURCHASE FUNNEL – DEVELOPMENT I PANDORA – FEMALE AGE GROUPS Base: All women FEMALE OVERALL 18-24 YO 25-40 YO 41-64 YO Unaided awareness 33 39 32 33 Aided awareness 83 84 81 84 CR3 28 38 33 23 Consideration 26 34 29 21 Set1 CR4 60 59 60 60 Purchase2 16 21 18 13 Ownership 33 44
Slide 35: Revenue Development by Segments
REVENUE DEVELOPMENT BY SEGMENTS Share of DKK million 1 Q2 2024 Q2 2023 LFL revenue Core 5,108 4,764 1% 75% - Moments 4,346 4,025 3% 64% - Collabs 526 545 -14% 8% - ME 236 194 14% 3% Fuel with more 1,663 1,130 29% 25% - Timeless 1,225 880 29% 18% - Signature 205 218 -13% 3% - PANDORA ESSENCE2 172 - -
Slide 36: Revenue Development by Channel
REVENUE DEVELOPMENT BY CHANNEL Organic Share of DKK million Q2 2024 Q2 2023 growth revenue Pandora owned1 retail 5,567 4,603 19% 82% - of which concept stores 3,788 3,089 18% 56% - of which online stores 1,345 1,141 19% 20% - of which other points of sale 434 372 19% 6% Wholesale 995 1,131 -2% 15% -
Slide 37: Key Markets Revenue and Growth Overview
KEY MARKETS REVENUE AND GROWTH OVERVIEW Organic Share of DKK million Q2 2024 Q2 2023 LFL Growth Revenue US 2,173 1,834 5% 14% 32% China 118 156 -23% -23% 2% UK 694 656 1% 4% 10% Italy 568 584 -6% -3% 8% Australia 211 218 -8% -3% 3% France 261 231 0% 13% 4% Germany 464 295 65% 57% 7% Total key market
Slide 38: Store Network Development
STORE NETWORK DEVELOPMENT Total concept stores O&O concept stores Growth O&O Growth O&O Growth Growth stores stores Q2 2024 Q2 2024 O&O Q2 2024 Q2 2024 NUMBER OF CONCEPT STORES Q2 2024 Q1 2024 Q2 2023 / Q1 2024 /Q2 2023 Q2 2024 / Q1 2024 /Q2 2023 US 465 457 427 8 38 374 8 74 China 208 212 231 -4 -23
Slide 39: Consolidated Income Statement
CONSOLIDATED INCOME STATEMENT DKK million Q2 2024 Q2 2023 FY 2023 Revenue 6,771 5,894 28,136 Cost of sales -1,342 -1,289 -6,012 Gross profit 5,429 4,606 22,125 Sales, distribution and marketing expenses -3,503 -2,839 -12,707 Administrative expenses -588 -578 -2,379 Operating profit 1,338 1,188 7,039
Slide 40: Working Capital
WORKING CAPITAL Share of preceding 12 months’ revenue Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 Inventories 14.9% 15.2% 14.8% 17.8% 16.6% Trade receivables 2.8% 3.8% 4.8% 3.4% 2.9% Trade payables -9.2% -9.2% -11.4% -8.7% -8.5% Other net working capital elements -2.4% -2.9% -6.4% -3.3% -2.6% Total 6.0%
Slide 41: Pandora Q2 2024 - Investor Presentation
41 Pandora Q2 2024 - Investor presentation
Slide 42: Commodity Hedging and Cost of Goods Sold Break Down
COMMODITY HEDGING AND COST OF GOODS SOLD BREAK DOWN COMMODITY HEDGE RATIOS COST OF GOODS SOLD BREAK DOWN (AT USE OF SILVER AND GOLD FOR PRODUCTION) Actual hedge ratios Other Gold Production labour & overheads Customs & Freight Other raw materials Silver OEM/ODM Hedged Realised 9% 8% 100% 4% 16% 92%
Slide 43: Capital Allocation: Significant Cash Returns for 2024
CAPITAL ALLOCATION SIGNIFICANT CASH RETURNS FOR 2024 1 2 3 Financial Dividends Share All excess strength & buybacks cash returned investments Maintain investment Progressive dividend Remaining cash paid Targeting DKK 5.5BN grade ratings policy out through share cash returns in 2024** buybacks CAPEX
Slide 44: Executing on Another Year of Strong Cash Returns
CASH DISTRIBUTION 2024 EXECUTING ON ANOTHER YEAR OF • Pandora’s total payout ratio has averaged 102% since 2012 (upper STRONG CASH RETURNS chart) • As part of the return of cash to Total payout ratio (incl. share buyback), %* Total payout ratio (incl. share buyback), % shareholders, Pandora has boug
Slide 45: Investor Relations Contact Details
INVESTOR RELATIONS CONTACT DETAILS Investor Relations team Share information Trading symbol PNDORA Bilal Aziz Identification number/ISIN DK0060252690 VP, Investor Relations & Treasury GICS 25203010 +45 3137 9486 biazi@pandora.net Number of shares 82,000,000 Sector Apparel, Accessories & Luxury Goods
Slide 46: 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 47: C) PANDORA ‘ri
Ad NY C) PANDORA ‘ri