Full year results at the high-end of the guidance - Strong brand drives resilient growth

Financial highlights

• Full year organic growth ended at 7% (guidance 4-6%) and the EBIT margin at 25.5% (guidance 25-25.5%).
• Q4 2022 organic growth of 4% (19% vs Q4 2019) comprising of sell-out growth of -1% (negatively impacted by the fire in the European Distribution Center by roughly 1pp) and network expansion of +4%.
• Brand shows good resilience in macroeconomic uncertainty; US sell-out growth improves sequentially to -7%, Europe resilient at +2% sell-out growth despite some pockets of macro-driven consumer weakness.
• Gross margin +0.5pp vs Q4 2021, reflecting good discipline despite a heavily promotional external environment. The EBIT margin in Q4 2022 was 32.5%, an increase of 2.8pp vs. Q4 2021 with good cost control.
• Leverage remains low with NIBD to EBITDA at 0.8x. Pandora has a strong liquidity and funding position.
• Proposed dividend of DKK 16 per share and a new share buyback program of DKK 2.4 billion until 30 June with an intention to go up to DKK5.0 billion, assuming no material deterioration in the macroeconomic climate. Proposed dividend of DKK 16 per share and a new share buyback program of DKK 2.4 billion until 30 June with an intention to go up to DKK 5.0 billion assuming no material deterioration in the macroeconomic climate.

Phoenix strategy highlights

• Pandora continues to make good progress on its Phoenix strategy; Moments delivered flat sell-out growth vs Q4 2021, underpinning its resilience and position as a leading product category in jewellery.
• Prices successfully adjusted in Q4 2022 (4% on average) with positive financial impact.
• Diamonds by Pandora launch in North America tracking as planned. New collections planned for 2023 with further geographical expansion.
• Pandora reduced total greenhouse gas emissions (scope 1, 2 and 3) by 6% vs. 2019 baseline, on track to halve emissions by 2030. 61% of all silver and gold came from recycled sources, on track towards 100% by 2025.

2023 outlook and current trading

• Pandora is confident in its ability to adapt to the uncertain environment whilst driving strategic priorities.
• Initial guidance for 2023 is -3% to +3% organic growth and an EBIT margin around 25%.
• Current trading in 2023 has been solid with a good, broad-based pick-up in sell-out growth. This is somewhat helped by an easier comparative base due to Omicron and earlier product launches than last year. Nonetheless, Pandora is pleased with the underlying trading which continues in line with Q4 2022.

Alexander Lacik, President and CEO of Pandora, says:
“We ended 2022 on a high note. Despite the macroeconomic pressure on consumers and COVID-19 headwinds in China, we continue to deliver solid growth vs. pre-pandemic levels. We have started 2023 well, and are confident that the transformation of the brand over the past few years puts Pandora in a good position to manage adversity and emerge stronger. In 2023, we will keep executing on our strategy, take market share, and accelerate network expansion while taking prudent cost actions to protect margins.“

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