Pandora A/s · OMXCOP:PNDORA
Pandora A/s — Pandora A/S Ord — Q2 2021 Earnings Presentation
40 slides from Pandora A/s's earnings presentation, Aug 18, 2021
Slide 1: Second Quarter Results 2021
SECOND QUARTER RESULTS 2021 INVESTOR PRESENTATION 17 AUGUST 2021
Slide 2: Agenda and Disclaimer
AGENDA Q2 RESULTS 1. EXECUTIVE SUMMARY 2. BUSINESS UPDATE 3. Q2 2021 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
Slide 3: Strong Momentum Continues
STRONG MOMENTUM CONTINUES SOLID REVENUE GROWTH AND EBIT MARGIN IN Q2 2021 $ Sell-out growth in Q2 2021 US sell-out growth of 63% EBIT margin of 25.2% ending at 7% vs 2019 and sequential driven by operating leverage despite 15% of stores improvement in key and lifted by US growth temporarily closed E
Slide 4: 2021 Guidance Upgrade
2021 GUIDANCE UPGRADE Organic growth “16-18%” EBIT margin “23-24%” Cash distribution to (3-5% vs 2019) Before “Above 22%” shareholders Before “Above 12%” continues 4 Pandora Q2 2021 - Investor presentation 4 Pandora Q2 2021 - Investor presentation
Slide 5: Agenda Q2 Results
AGENDA Q2 RESULTS 1. EXECUTIVE SUMMARY 2. BUSINESS UPDATE 3. Q2 2021 FINANCIALS 4. FINANCIAL GUIDANCE 5. APPENDIX 5 Pandora Q2 2021 - Investor presentation
Slide 6: Strong Second Quarter Despite 15% of Stores Closed Due to COVID-19
STRONG SECOND QUARTER DESPITE 15% OF STORES CLOSED DUE TO COVID-19 Q2 2021 closed Q2 2020 closed • US. Continued, unusual strong growth, YoY vs YoY vs stores due to stores due to accelerated by stimulus packs Q2 2021 2020 2019 COVID-19* COVID-19* • China. Sequential improvement, but still US 134% 63
Slide 7: Brilliance Test Launch in the UK Progressing Well
BRILLIANCE TEST LAUNCH IN THE UK PROGRESSING WELL - DECISION ON GLOBAL LAUNCH LATE 2021 • Early May, Pandora launched its new platform, Pandora Brilliance - a test launch in the UK • Pandora Brilliance is the first collection tested with the aim to become a potential new platform next to Moments - b
Slide 8: COVID-19 Continues to Impact Performance
COVID-19 CONTINUES TO IMPACT PERFORMANCE - UNDERLYING GROWTH EXPECTED TO BE POSITIVE • Sell-out growth vs 2019 ended at 7% and was impacted by two opposing COVID-19 factors: Net impact of lost revenue due to COVID-19 1. Lockdown of stores dragging down revenue in Q2 2021 – partially offset by revenu
Slide 9: Maintaining Strong Brand Momentum
MAINTAINING STRONG BRAND MOMENTUM 35% 37% 33% Pandora 34% 35% 33% 13% 14% 11% Avg. Global competitor Number of Key Markets where Q2 Q2 Q2 Q2 Q2 Q2 Pandora is #1 2019 2020 2021 2019 2020 2021 5/7 5/7 5/7 Q2 2019 Q2 2020 Q2 2021 * Pandora has seen a small decrease in unaided awareness. On a relative b
Slide 10: Q2 2021 Digital Results
Q2 2021 DIGITAL RESULTS - OUR DIGITAL INVESTMENTS GENERATES STRONG RESULTS 132% (-16% VS 2020) 17%(-6% VS 2020) 13% (OF ONLINE SALES IN THE US) ONLINE REVENUE MORE ONLINE CLICK & COLLECT IN THAN DOUBLES VS 2019 DISCOUNTS IN Q2 THE US CONTINUE THE STRONG TRACTION 10 Pandora Q2 2021 - Investor present
Slide 11: COVID-19 in Thailand
COVID-19 IN THAILAND – SIGNIFICANT PRECAUTIONARY ACTIONS TAKEN, LIMITED DISTRUPTIONS SO FAR • During the last couple of months, the number of COVID-19 cases in Thailand have increased • Due to the significant precautionary measures taken by Pandora, the impact on production in Q2 was immaterial • To
Slide 12: Online Capital Markets Day Unfolding the Phoenix Strategy
PANDORA WILL HOST AN ONLINE CAPITAL MARKETS DAY 14 SEPTEMBER UNFOLDING THE PHOENIX STRATEGY • The Phoenix strategy was launched on May 4 at the Q1 extended conference call together with a high level overview of the key components in the strategy • The strategy will be covered in greater details at P
Slide 13: Agenda Q2 Results
AGENDA Q2 RESULTS 1. EXECUTIVE SUMMARY 2. BUSINESS UPDATE 3. Q2 2021 FINANCIALS 4. FINANCIAL GUIDANCE 5. APPENDIX 13 Pandora Q2 2021 - Investor presentation
Slide 14: Key Financial Highlights
KEY FINANCIAL HIGHLIGHTS SOLID REVENUE GROWTH AND EBIT MARGIN TOPLINE Q2 2021 Q2 2020 Q2 2019 COMMENTARY Revenue, DKK million 5,155 2,876 4,693 • Strong Q2 performance despite that 15% Organic growth 84% -38% -7% of the stores were temporarily closed Organic growth vs 2019 13% n/a n/a • Strong EBIT
Slide 15: Revenue Bridges Heavily Impacted by COVID-19
REVENUE BRIDGES HEAVILY IMPACTED BY COVID-19 SELL-OUT VS Q2 2019 IS THE BEST KPI COMMENTARY Q2 GROWTH COMPOSITION VS Q2 2019 The revenue bridges are heavily impacted by the 14% 13% 1% significant COVID-19 impact across channels. The %-p growth (approximately) 4% most relevant KPI, is the 2-year stac
Slide 16: Very Solid EBIT Margin
VERY SOLID EBIT MARGIN EBIT MARGIN CLIMBS TO HIGHEST Q2 LEVEL IN THREE YEARS COMMENTARY %-p development (approximately) • Q2 2020 was heavily impacted by COVID- 19 and the EBIT margin bridge clearly reflects this 1.5% 25.2% • The “Operating leverage” bucket includes 2.8% 0.2% both the positive impac
Slide 17: Agenda Q2 Results
AGENDA Q2 RESULTS 1. EXECUTIVE SUMMARY 2. BUSINESS UPDATE 3. Q2 2021 FINANCIALS 4. FINANCIAL GUIDANCE 5. APPENDIX 17 Pandora Q2 2021 - Investor presentation
Slide 18: Full Year 2021 Guidance Organic Growth
FULL YEAR 2021 GUIDANCE ORGANIC GROWTH GUIDANCE ASSUMPTIONS 2021 Organic growth • The updated guidance is based on the Guidance DKK billion assumption that 5% of the stores will be %-points approximations 16-18% 17-19% 22.0 to 22.4 temporarily closed or severely impacted in 1% 1% the second half (pr
Slide 19: Full Year 2021 Guidance EBIT Margin
FULL YEAR 2021 GUIDANCE EBIT MARGIN GUIDANCE ASSUMPTIONS 2021 • Pandora increases the EBIT margin guidance EBIT margin driven by higher topline and thereby operating leverage %-points approximations • The unusual strong growth in the US - which is highly margin accretive – supports the upgrade Guida
Slide 20: Implied Organic Growth Guidance for Second Half of 2021
IMPLIED ORGANIC GROWTH GUIDANCE FOR SECOND HALF OF 2021 Organic growth vs 2019 5% COMMENTARY 2-5% 3-5% • Compared to a COVID-19 clean base in 2019, Pandora expects 2-5% organic growth in the second half of the year • The guidance corresponds to an underlying H1 actuals H2 implied guidance FY 2021 gu
Slide 21: Implied EBIT Margin Guidance for Second Half of 2021
IMPLIED EBIT MARGIN GUIDANCE FOR SECOND HALF OF 2021 Implied EBIT margin for second half of 2021 COMMENTARY • Pandora has historically delivered an EBIT margin pick-up in the second half of the year compared to the first half. This year will be 23-25% no different • Two factors, however, drives a so
Slide 22: Pandora Will Continue Cash Distribution for 2021
PANDORA WILL CONTINUE CASH DISTRIBUTION FOR 2021 STRONG LIQUIDITY CASH DISTRIBUTION COMMENTARY & LOW LEVERAGE QUARTERLY SPLIT, DKK BILLION • Pandora continues the cash distribution plan announced in Q1 2021 Completed* Confirmed To be confirmed • At the Annual General Meeting in March 1.0 1.0 1.0 202
Slide 23: Closing Remarks
CLOSING REMARKS
Slide 24: Closing Remarks
CLOSING REMARKS Strong performance and Phoenix in progress – more Cash distribution continued Upgraded guidance profitability in Q2 2021 to come at the online Capital Markets Day 14 September 24 Pandora Q2 2021 - Investor presentation
Slide 25: Q&A
Q&A 25 Pandora Q2 2021 - Investor presentation
Slide 26: Appendix
APPENDIX 26 Pandora Q2 2021 - Investor presentation
Slide 27: Full Year 2021 Thoughts About Underlying Performance
FULL YEAR 2021 THOUGHTS ABOUT UNDERLYING PERFORMANCE COVID-19 impacts UNDERLYING PERFORMANCE Guidance • 2021 is materially impacted by COVID-19. Organic growth Full year 2021 6% The unusual circumstances makes it difficult 16-18% to interpret the underlying performance • A negative COVID-19 impact o
Slide 28: 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 29: 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 30: Revenue Development by Channel and by Global Business Unit
REVENUE DEVELOPMENT BY CHANNEL AND BY GLOBAL BUSINESS UNIT Channel Development Organic growth Share of revenue Organic growth Share of revenue DKK million Q2 2021 vs Q2 2020 Q2 2021 H1 2021 vs H1 2020 H1 2021 Pandora owned retail 3,399 37% 66% 6,355 26% 66% - of which concept stores 2,027 115% 39% 3
Slide 31: Store Network Development
STORE NETWORK DEVELOPMENT Net openings Number of points of sale Q2 2021 Q2 2021 vs Q1 2021 Q2 2021 vs Q2 2020 Concept stores 2,630 -29 -84 - of which Pandora owned 1,379 -15 6 - of which franchise owned 745 -10 -83 - of which third-party distribution 506 -4 -7 Other points of sale 4,095 45 -444 - of
Slide 32: Key Markets Revenue and Sell-out Growth Overview
KEY MARKETS REVENUE AND SELL-OUT GROWTH OVERVIEW Organic Organic Share of Growth vs Sell-out growth Sell-out growth Share of Growth Sell-out growth revenue, DKK million Q2 2021 2020 vs 2020 vs 2019 revenue H1 2021 vs 2020 vs 2020 H1 2021 US 1,771 179% 134% 63% 34% 3,161 112% 107% 33% China 390 3% 7%
Slide 33: 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 Q2 2021 Q2 2021 Number of O&O Number of O&O Number of O&O Q2 2021 Q2 2021 Q2 2021 Q1 2021 Q2 2020 /Q1 2021 /Q2 2020 Q2 2021 Q1 2021 Q2 2020 /Q1 2021
Slide 34: Profitability Development
PROFITABILITY DEVELOPMENT DKK million Q2 2021 Q2 2020 FY 2020 FY 2019 Revenue 5,155 2,876 19,009 21,868 Cost of sales -1,180 -722 -4,475 -4,950 Gross profit excl. restructuring costs 3,975 2,155 14,534 16,919 Restructuring costs - -56 -159 -1,016 Gross profit incl. restructuring costs 3,975 2,099 14
Slide 35: Working Capital and Cash Management
WORKING CAPITAL AND CASH MANAGEMENT DKK million Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020 Inventory 2,557 2,373 1,949 2,619 2,250 - Share of revenue (last 12 months) 11.8% 12.3% 10.3% 13.7% 11.6% Trade receivables 691 602 870 607 602 - Share of revenue (last 12 months) 3.2% 3.1% 4.6% 3.2% 3.1% Trade p
Slide 36: 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 at least 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%
Slide 37: 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 38: 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 39: 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 40: C) PANDORA ‘ri
Ad NY C) PANDORA ‘ri