Pandora A/s · OMXCOP:PNDORA
Pandora A/s — Pandora A/S Ord — Q3 2024 Earnings Presentation
45 slides from Pandora A/s's earnings presentation, Nov 6, 2024
Slide 1: Third Quarter Results 2024
06 NOVEMBER 2024 T H I R D Q U A R T E R R E S U L T S 2 0 2 4
Slide 2: Agenda and disclaimer
AGENDA O1 Executive summary O2 Phoenix strategy update O3 Q3 2024 financials O4 Financial guidance O5 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: Phoenix delivers a solid quarter
Strong growth Solid profitability 11% 80.1% PHOENIX DELIVERS A Organic growth in Q3 2024 Gross margin, +110bp compared to Q3 2023 SOLID QUARTER 7% 16.1% DOUBLE-DIGIT LFL in Q3 2024 EBIT margin, -40bp compared to Q3 2023 ORGANIC GROWTH IN Q3 Growth across segments Strong return on capital and EPS gro
Slide 4: 2024 guidance: organic growth guidance lifted towards high-end
2024 GUIDANCE ORGANIC GROWTH GUIDANCE LIFTED TOWARDS HIGH-END “We are very pleased with our strong results this quarter, particularly in the context of the current macroeconomic backdrop. We are transforming the perception of Pandora into a full jewellery brand and unlocking the next chapter of our
Slide 5: Agenda
AGENDA O1 Executive summary O2 Phoenix strategy update O3 Q3 2024 financials O4 Financial guidance O5 Appendix
Slide 6: 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) • Drive growth in core – charms & • Iconise heroes carriers • Expand design aesthetics &
Slide 7: Brand restaging working
BRAND RESTAGING WORKING DRIVING BRAND HEAT THROUGH CULTURAL ACTIVATIONS MAJOR BRAND KPIs MOVING WINNING ACROSS DRIVING NON-STOP BRAND FORWARD COLLECTIONS BUZZ Global brand penetration, unaided Moments and PANDORA ESSENCE drove Connected to culture through awareness and brand consideration all a majo
Slide 8: 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 fueling with more • Our Core segment delivered a resilient 2% LFL in Q3 2024, with a -1pp dr
Slide 9: Growing the core: leveraging our icons
GROWING THE CORE LEVERAGING OUR ICONS Robust 2% LFL growth across the Charms and Carriers core PANDORA MOMENTS SILVER PANDORA ME LINK CHAIN PANDORA MOMENTS CHERRY BRACELET WITH HEART- BRACELET BLOSSOM DANGLE CHARM SHAPED CLASP 9 Pandora Q3 2024 - Investor presentation
Slide 10: Fuelling with more: a full jewellery brand
FUELLING WITH MORE A FULL JEWELLERY BRAND 21% LFL growth in total PANDORA LAB-GROWN TIMELESS ESSENCE DIAMONDS 18% 169 34% Like-for-like DKK million Like-for-like revenue 10 Pandora Q3 2024 - Investor presentation Classification: Pandora Internal
Slide 11: Expanding into new design aesthetics
PANDORA ESSENCE WELL RECEIVED EXPANDING INTO NEW DESIGN AESTHETICS Expanding the full jewellery brand offering: Pandora taps into a new aesthetic space of organic, fluid and natural shapes (~17% of the jewellery market) Collection has shown encouraging response in all markets - already reaching 3% s
Slide 12: Engraving: personalisation driving incremental revenue
PERSONALISATION DRIVING INCREMENTAL REVENUE ENGRAVING At least 1,450 Total number of stores with engraving services Stores to go in 2024 Stores with engraving ~850 ~1.250 ~350 ~200 2021 2022 2023 2024 +7 +5 # markets with online engraving 12 Pandora Q3 2024 - Investor presentation Classification: Pa
Slide 13: Phoenix strategy is delivering solid LFL growth
PHOENIX STRATEGY IS DELIVERING DELIVERING SOLID LFL GROWTH • Since the inception of the Phoenix strategy in 2021, Pandora has delivered solid +7% +16% +5% LFL growth • New initiatives announced at the CMD 2023 are tracking as planned Q3 2024 LFL Q3 2024 LFL GROWTH Q3 2024 LFL GROWTH • Q4 2024 compar
Slide 14: Markets | US
MARKETS | US • US delivered another robust quarter with LFL at 6%, fueled by strong returns on marketing investments • Despite a heavy external promotional environment, Pandora continues to build market share 6% • Network expansion in the US continues – new store openings drove organic growth to 14%
Slide 15: Markets | Germany, UK, Italy and France
MARKETS | GERMANY, UK, ITALY AND FRANCE • Key markets in Europe delivered LFL of 4% Germany delivered yet another excellent quarter with LFL at 42%, driven by the ongoing brand momentum 4% UK delivered a resilient LFL of -2%, performing ahead of the market Italy delivered LFL at -8%. Despite m
Slide 16: Markets | Rest of Pandora
MARKETS | REST OF PANDORA • Rest of Pandora continues to grow double-digit LFL at 14% Mexico and Spain, more than a quarter of the combined revenue in Rest of Pandora, delivered low teens LFL Less penetrated markets such as the Netherlands, Portugal and Austria delivered solid double-digit LFL
Slide 17: Markets | China and Australia
MARKETS | CHINA AND AUSTRALIA (33)% • China delivered -33% LFL, below expectations Pandora is committed to navigating the markets complexities and gradually build the brand Pandora is currently considering the next step on this journey • Australia reported -2% LFL in Q3 2024 The retail channel
Slide 18: Network expansion: driving consistent, profitable growth
NETWORK EXPANSION DRIVING CONSISTENT, PROFITABLE GROWTH CMD TARGET (2024-2026) 2024 3% organic 2023 CAGR 2022 225-275 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
Slide 19: Evoke store concept roll-out continues
EVOKE STORE CONCEPT NEW STORE CONCEPT ROLL-OUT CONTINUES 295 Evoke concept stores opened by Q3 2023 of which 11 are partner concept stores Including prominent locations such as Tokyo Shibuya Targeting 1,375 – 1,425 Evoke concept stores by 2026 Number of Evoke stores EUROPE AUSTRALIA ASIA AMERICAS 83
Slide 20: Agenda
AGENDA O1 Executive summary O2 Phoenix strategy update O3 Q3 2024 financials O4 Financial guidance O5 Appendix
Slide 21: Key financial highlights
KEY FINANCIAL HIGHLIGHTS STRONG EPS GROWTH TOPLINE Q3 2024 Q3 2023 FY 2023 Revenue, DKK million 6,103 5,572 28,136 Organic growth, % 11% 11% 8% Like-for-like, % 7% 9% 6% FINANCIAL RATIOS Q3 2024 Q3 2023 FY 2023 Gross margin, % 80.1% 79.0% 78.6% EBIT margin, % 16.1% 16.5% 25.0% Cash conversion incl.
Slide 22: Revenue performance
REVENUE PERFORMANCE DOUBLE-DIGIT GROWTH • The investments under Phoenix are yielding positive results, resulting in Q3 2024 GROWTH COMPOSITION VS Q3 2023 solid traffic-led LFL growth %-p growth (approximately) • Meanwhile, Pandora continues to expand the store network and take 12% over selected part
Slide 23: EBIT margin
EBIT MARGIN ON TRACK TOWARDS FULL-YEAR • The reported Q3 EBIT margin was - GUIDANCE (AROUND 25% EBIT MARGIN) 40bp Y/Y, in line with expectations and prior communication %-p development (approximately) EBIT margin development excl. non-recurring items • Pandora remains on track towards around 25% for
Slide 24: Agenda
AGENDA O1 Executive summary O2 Phoenix strategy update O3 Q3 2024 financials O4 Financial guidance O5 Appendix
Slide 25: 2024 organic growth guidance
2024 ORGANIC GROWTH GUIDANCE RAISING GUIDANCE TOWARDS HIGH-END GUIDANCE ASSUMPTIONS • Pandora narrows its organic growth guidance to 11-12% (previously 9-12%) Organic growth guidance • The LFL guidance is narrowed to %-p development (approximately) 6-7% (previously 5-7%). The guidance implies 2-5% L
Slide 26: 2024 EBIT margin guidance
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 +60bp margin expansion and net operating leverage from LFL is “S
Slide 27: Update on 2023 CMD EBIT margin target
UPDATE ON 2023 CMD EBIT MARGIN TARGET What has changed since October 2023? • The CMD target was set based on HIGHER COMMODITIY PRICES – commodity prices and FX rates on September 25, 2023 INITIATING MITIGATING ACTIONS • Since then, silver has increased from around USD 24 to now around USD 33/oz. Adv
Slide 28: Closing remarks
CLOSING REMARKS We are investing The full jewellery Our profitability Organic growth behind, and brand mission is remains solid, guidance narrowed executing on, an making good helping drive to high end exciting pipeline of progress double-digit EPS growth initiatives growth
Slide 29: The Pandora equity story
The Pandora equity story Q&A 06 NOVEMBER 2024 A strong brand in an attractive category • Pandora stands as the sole global brand in accessible luxury jewellery, owning the distinct position of “jewellery with a meaning” with consumers worldwide. • The jewellery market has historically outpaced GDP g
Slide 30: Appendix
06 NOVEMBER 2024 PANDORA > ~ <) ‘ ’ v | PANDORA PANDORA APPENDIX
Slide 31: 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 32: Pandora consumer
PANDORA CONSUMER GLOBAL PURCHASE FUNNEL – DEVELOPMENT I PANDORA – FEMALE AGE GROUPS Base: All women PANDORA 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 Considered1 26 34 29 21 CR4 60 59 60 60 Purchased2 16 21 18 13 Ownership 33 44 36 28 N=28,7
Slide 33: Revenue development by segments
REVENUE DEVELOPMENT BY SEGMENTS Share of DKK million Q3 2024 Q3 2023 LFL revenue Core 4,634 4,368 2% 76% - Moments 3,895 3,604 2% 64% - Collabs 514 561 -6% 8% - ME 226 202 21% 4% Fuel with more 1,468 1,204 21% 24% - Timeless 1,065 841 18% 17% - Signature 170 275 -32% 3% - PANDORA ESSENCE1 169 3 - 3%
Slide 34: Revenue development by channel
REVENUE DEVELOPMENT BY CHANNEL Organic Share of DKK million Q3 2024 Q3 2023 growth revenue Pandora owned1 retail 4,995 4,267 17% 82% - of which concept stores 3,519 3,049 14% 58% - of which online stores 1,090 877 26% 18% - of which other points of sale 386 341 21% 6% Wholesale 914 1,126 -12% 15% -
Slide 35: Key markets revenue and growth overview
KEY MARKETS REVENUE AND GROWTH OVERVIEW Organic Share of DKK million Q3 2024 Q3 2023 LFL Growth Revenue US 1,796 1,566 6% 14% 29% China 84 132 -33% -36% 1% UK 740 729 -2% 0% 12% Italy 466 496 -8% -7% 8% Australia 195 221 -2% -13% 3% France 227 220 -1% 3% 4% Germany 431 301 42% 43% 7% Total key marke
Slide 36: Store network development
STORE NETWORK DEVELOPMENT Total concept stores O&O concept stores Growth O&O Growth O&O Growth Growth stores stores Q3 2024 Q3 2024 O&O Q3 2024 Q3 2024 NUMBER OF CONCEPT STORES Q3 2024 Q2 2024 Q3 2023 / Q2 2024 /Q3 2023 Q3 2024 / Q2 2024 /Q3 2023 US 479 465 437 14 42 390 16 58 China 204 208 227 -4 -
Slide 37: Consolidated income statement
CONSOLIDATED INCOME STATEMENT DKK million Q3 2024 Q3 2023 FY 2023 Revenue 6,103 5,572 28,136 Cost of sales -1,217 -1,168 -6,012 Gross profit 4,886 4,404 22,125 Sales, distribution and marketing expenses -3,352 -2,913 -12,707 Administrative expenses -553 -571 -2,379 Operating profit 980 920 7,039 Fin
Slide 38: Working capital
WORKING CAPITAL Share of preceding 12 months’ revenue Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 Inventories 16.0% 14.9% 15.2% 14.8% 17.8% Trade receivables 2.5% 2.8% 3.8% 4.8% 3.4% Trade payables -9.7% -9.2% -9.2% -11.4% -8.7% Other net working capital elements -2.9% -2.4% -2.9% -6.4% -3.3% Total 5.9%
Slide 39: Pandora Q3 2024 - Investor presentation
39 Pandora Q3 2024 - Investor presentation
Slide 40: Commodity hedging and cost of goods sold breakdown
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 100% 9% 4% 16% 8% 6% 4
Slide 41: 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 42: Cash distribution 2024
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 43: 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 44: 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 45: Pandora
Ld OS PANDORA AY