Pandora A/s · OMXCOP:PNDORA
Pandora A/s — Pandora A/S Ord — Q4 2022 Earnings Presentation
42 slides from Pandora A/s's earnings presentation, Feb 9, 2023
Slide 1: Fourth Quarter Results 2022
FOURTH QUARTER RESULTS 2022 08 FEBRUARY 2023
Slide 2: Agenda of Today
AGENDA OF TODAY 1. EXECUTIVE SUMMARY 2. PHOENIX UPDATE 3. Q4 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: High End of 2022 Guidance Achieved
HIGH END OF 2022 GUIDANCE ACHIEVED Sustainable growth Solid profitability Execution continues Sustainability lead +7% 25.5% +5% 6% Organic growth in 2022, EBIT margin in 2022, Sell-out growth for Reduction in GHG emissions above full year guidance high end of guidance Moments in 2022 (Scope 1,2,3) f
Slide 4: 2023 Guidance
2023 GUIDANCE ”Despite the growing macroeconomic headwinds, our trading showed resilience through the quarters of 2022 and current trading in 2023 has started well. So, whilst the macroeconomic environment remains uncertain, we enter 2023 with confidence” - Alexander Lacik, President and CEO of Pand
Slide 5: Agenda of Today
AGENDA OF TODAY 1. EXECUTIVE SUMMARY 2. PHOENIX UPDATE 3. Q4 2022 FINANCIALS 4. FINANCIAL GUIDANCE 5. APPENDIX 5 Pandora Q4 2022 - Investor presentation
Slide 6: Phoenix Strategy: Execution Is Progressing Well
PHOENIX STRATEGY EXECUTION IS PROGRESSING WELL GROWTH PILLARS INITIATIVES 2022 milestones Most recognisable jewellery brand in the world • Global brand awareness well ahead of closest competitors BRAND • Price increases of 4% implemented early Q4. Initial analysis Drive higher brand penetration show
Slide 7: Sustainability at a Glance
NEW SUSTAINABILITY REPORT LAUNCHED ON FEBRUARY 8 ON PANDORAGROUP.COM SUSTAINABILITY AT A GLANCE A 100% #3 6% 100% 99.6% 61% AAA 6pp *Danish Institute for Human Rights, 2022, Documenting respect for human rights. **Excluding pearls. 7 Pandora Q4 2022 - Investor presentation
Slide 8: Big Brand Moments Fuelling Heat & Desire in Q4
FOURTH QUARTER 2022 RESULTS BIG BRAND MOMENTS FUELLING HEAT & DESIRE IN Q4 COLLABORATIONS, DIAMONDS & A HOLISTIC BRANDING APPROACH OCT OCT NOV DEC PANDORA X KEITH HARING PANDORA X SPIDERMAN DIAMONDS BY PANDORA PANDORA ONE JEWELLERY HOUSE
Slide 9: Pandora Successfully Increases Prices
PANDORA SUCCESSFULLY INCREASES PRICES Growth pillars BRAND ▪ In Q4 2022 Pandora implemented a 4% average price increase ▪ A third of the assortment was adjusted, keeping entry price points unchanged and protecting the affordability of the brand ▪ Initial analysis suggests promising results - positiv
Slide 10: Resilient Growth - Despite Macro Headwind
RESILIENT GROWTH Growth pillars BRAND - DESPITE MACRO HEADWIND Resilient growth vs 2021 despite macro headwind…… • Despite an increasingly challenging market 12% Pandora, Sell-out growth vs 2021 backdrop, Pandora’s sell-out growth has remained 10% resilient Illustration of underling performance 8% a
Slide 11: Q4 Topline Growth at High-End of Guidance
Q4 TOPLINE GROWTH AT HIGH-END OF Growth pillars CORE MARKETS GUIDANCE • Pandora landed Q4 2022 sell-out performance in-line with Sell-out growth expectations (like-for-like)* Organic growth • Q4 2022 saw a step-up in external promotional activity. Pandora remained disciplined in its approach with a
Slide 12: Diamonds by Pandora Launch
FUEL WITH MORE Growth pillars DESIGN DIAMONDS BY PANDORA LAUNCH “Diamonds are not just forever; They are for everyone.” Key points: ✓ US market for lab-created diamonds is estimated at around USD 1.2 billion in size, or roughly 10x the UK market ✓ With the expansion of Diamonds by Pandora into US an
Slide 13: Network Development Shows Great Potential Ahead
NETWORK DEVELOPMENT SHOWS Growth pillars CORE MARKETS GREAT POTENTIAL AHEAD O1 Analysed top markets O2 Mapped 13,000 locations Extrapolated 7,000 viable commercial locations O3 O4 Identified 600* best locations: ~50% in US and China O5 Planned to roll-out in phases 13 Pandora Q4 2022 - Investor pres
Slide 14: Network Development Driving Significant Growth and Profit
NETWORK DEVELOPMENT Growth pillars CORE MARKETS DRIVING SIGNIFICANT GROWTH AND PROFIT DKK 1.2 billion incremental and profitable revenue from network development in 2022: NETWORK EXPANSION FORWARD INTEGRATION INCL. TAKEOVERS DKK 555 million revenue in 2022 DKK 615 million revenue in 2022 ** • At the
Slide 15: Agenda of Today
AGENDA OF TODAY 1. EXECUTIVE SUMMARY 2. PHOENIX UPDATE 3. Q4 2022 FINANCIALS 4. FINANCIAL GUIDANCE 5. APPENDIX 15 Pandora Q4 2022 - Investor presentation
Slide 16: Key Financial Highlights
KEY FINANCIAL HIGHLIGHTS FULL YEAR RESULTS AT THE HIGH-END OF THE GUIDANCE COMMENTARY • Revenue growth ended slightly above guidance Q4 2022 Q4 2021 FY 2022 FY 2021 • Q4 revenue negatively impacted by roughly 1pp TOPLINE due to the fire in the European Distribution Center. No insurance compensation
Slide 17: Revenue Performance
REVENUE PERFORMANCE GROWTH CONTINUES – NETWORK EXPANSION SUPPORTS PROFITABLE GROWTH Q4 2022 GROWTH COMPOSITION VS Q4 2021 COMMENTARY • Q4 2022 saw highest organic growth vs 2019 at 19% - a sequential improvement vs the first three quarters • Network expansion added 4% of organic growth as Including
Slide 18: EBIT Margin
EBIT MARGIN EBIT MARGIN EXPANSION DRIVEN BY OPERATING LEVERAGE Q4 2022 EBIT margin development vs Q4 2021 COMMENTARY • Continued strong EBIT margin in Q4 2022 • Underlying EBIT margin is up 1.1pp vs Q4 2021 – driven by solid operating leverage • Full year EBIT margin ending at the high end of the gu
Slide 19: Agenda of Today
AGENDA OF TODAY 1. EXECUTIVE SUMMARY 2. BUSINESS UPDATE 3. Q4 2022 FINANCIALS 4. FINANCIAL GUIDANCE 5. APPENDIX 19 Pandora Q4 2022 - Investor presentation
Slide 20: 2023 Organic Growth Guidance
2023 ORGANIC GROWTH GUIDANCE GUIDANCE ASSUMPTIONS SHOWING RESILIENCY IN AN UNCERTAIN ENVIRONMENT WHILE • The economic outlook for 2023 remains highly CONTINUING TO BE HIGHLY CASH GENERATIVE uncertain. High inflation and rising mortgage rates suggest consumer spending will remain under pressure Organ
Slide 21: 2023 EBIT Margin Guidance
2023 EBIT MARGIN GUIDANCE GUIDANCE ASSUMPTIONS ANOTHER YEAR OF SOLID PROFITABILITY • The EBIT margin guidance for 2023 is Around 25% • Despite headwind from macro and higher EBIT margin guidance than normal salary increases as well as net headwind from FX/commodities, the EBIT margin is expected to
Slide 22: 2023 Other Guidance Parameters
2023 OTHER GUIDANCE PARAMETERS OTHER GUIDANCE PARAMETERS • CAPEX: for the year is expected at around 6% share of revenue • Store network: • Concept store network expected to increase by 50- 100 net openings • Pandora owned other points of sale expected to increase between 50-100 net openings • Tax r
Slide 23: Cash Distribution 2023 Highest in Pandora History
CASH DISTRIBUTION 2023 HIGHEST IN PANDORA HISTORY COMMENTARY • During 2022, Pandora has paid out DKK 5.1 billion to shareholders • Pandora’s liquidity is strong and the leverage at 0.8x is at the low end of the capital Cash distribution since 2015 (DKK billion) structure policy Share buyback, Divide
Slide 24: Closing Remarks
CLOSING REMARKS
Slide 25: Closing Remarks
CLOSING REMARKS Well prepared for a potential Initial analysis of price Ending the year on a high Entering 2023 with recession. Pre-emptive cost increases show promising note with the brand confidence but prepared for a measures being taken results – structured annual showing good resilience range o
Slide 26: Capital Markets Day: Save the Date for October 2023
CAPITAL MARKETS DAY SAVE THE DATE FOR 5 OCTOBER 2023 IN LONDON MORE INFO WILL FOLLOW 26 Pandora Q4 2022 - Investor presentation
Slide 27: Q&A
Q&A 27 Pandora Q4 2022 - Investor presentation
Slide 28: Appendix
APPENDIX 28 Pandora Q4 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 Global Business Unit
REVENUE DEVELOPMENT BY GLOBAL BUSINESS UNIT Moments incl. Collabs 7,028 6,311 0% 71% - Moments 6,045 5,510 0% 61% - Collabs 983 801 2% 10% Style 2,828 2,700 -4% 29% - Timeless 1,773 1,656 -3% 18% - Signature 660 695 -14% 7% - ME 314 328 -4% 3% - Diamonds by Pandora 81 20 196% 1% Total revenue 9,856
Slide 32: Revenue Development by Channel
REVENUE DEVELOPMENT BY CHANNEL Pandora owned1 retail 7,452 6,471 8% 76% - of which concept stores 4,434 3,668 11% 45% - of which online stores 2,466 2,465 -3% 25% - of which other points of sale 553 338 49% 6% Wholesale 2,197 2,291 -4% 22% - of which concept stores 1,115 1,278 -7% 11% - of which oth
Slide 33: Key Markets Revenue and Sell-Out Growth Overview
KEY MARKETS REVENUE AND SELL-OUT GROWTH OVERVIEW US 2,820 2,523 -7% -3% 29% China 143 222 -41% -36% 1% UK 1,613 1,521 1% 9% 16% Italy 913 961 -9% -5% 9% Australia 535 491 1% 8% 5% France 475 498 -9% -5% 5% Germany 494 478 -3% 3% 5% Total top-7 markets 6,991 6,694 -5% -1% 71% Rest of Pandora 2,865 2,
Slide 34: Store Network Development
STORE NETWORK DEVELOPMENT Other points of sale (retail) 464 431 334 33 130 Other points of sale (wholesale) 3,200 3,204 3,255 -4 -55 Other points of sale (third-party) 321 332 491 -11 -170 Other points of sale, total 3,985 3,967 4,080 18 -95 US 420 405 388 15 32 270 15 83 China 252 232 214 20 38 234
Slide 35: Income Statement
Revenue 9,856 9,011 26,463 23,394 Cost of sales -2,345 -2,188 -6,273 -5,590 Gross profit 7,511 6,822 20,190 17,803 Sales, distribution and marketing expenses -3,720 -3,535 -11,322 -9,939 Administrative expenses -586 -610 -2,125 -2,026 Operating profit 3,206 2,678 6,743 5,839 Finance income 101 17 41
Slide 36: Working Capital and Cash Management
WORKING CAPITAL AND CASH MANAGEMENT DKK million Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Inventory 4,211 5,155 4,239 3,534 2,991 - Share of revenue (last 12 months) 15.9% 20.1% 16.9% 14.4% 12.8% Trade receivables 1,262 880 663 790 1,009 - Share of revenue (last 12 months) 4.8% 3.4% 2.6% 3.2% 4.3% Tra
Slide 37: Hedging Policy and Cost of Goods Sold Break Down
HEDGING POLICY AND COST OF GOODS SOLD BREAK DOWN Commodity hedging policy is to hedge at least an average Cost of goods sold break down of 70% of future 12 months use in production For illustrative purposes Other Gold Production labour & overheads Customs & Freight Other raw materials Silver OEM/ODM
Slide 38: Sustainability Ambitions Position Us as Leader
SUSTAINABILITY AMBITIONS POSITION US AS LEADER 38 Pandora Q4 2022 - Investor presentation
Slide 39: Key ESG Ratings | Pandora Performance
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 – 7th straight year Methodology note, A = top score A list – Leadership leve
Slide 40: 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 95,500,000 Sector Apparel, Accessories & Luxury Goods
Slide 41: 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 42: C) PANDORA ‘ri
Ad NY C) PANDORA ‘ri