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Resilient performance continues in uncertain times

05-03-2023

Financial highlights

  • Brand registers its fourth consecutive quarter of resilient growth despite the macroeconomic challenges.
  • Q1 2023 organic growth at 1% and like-for-like (LFL) at 0%.
  • LFL in key markets in Europe sequentially improves to 0%, US remains at -7% as in Q4 and Rest of Pandora remains strong at 12%.
  • Network expansion drives 3% growth and generates strong margins.
  • Gross margins continue the upward trend witnessed over past years and reach 77.5%, +1.5pp vs. Q1 2022.  Pricing actions, channel mix and commodity tailwinds contribute positively.
  • As expected, EBIT margin at 21.5% down 1.5pp vs. Q1 2022 reflecting a.o. revenue and cost phasing. Full-year EBIT margin to be broadly in line with last year.
  • Leverage remains low with NIBD/EBITDA at 1.2x. DKK 1.5 billion of share buyback program completed. Assuming no material macroeconomic deterioration, intention remains to go up to DKK 5.0 billion.

Phoenix strategy highlights

  • Pandora further consolidated Moment’s position as a leading category in global jewellery through launch of a new iconic studded bracelet. The new bracelet sees strong demand across most geographies.
  • Investments in other product platforms seeing encouraging results; Timeless had a strong quarter at 11% LFL whilst Pandora ME also shows broad-based growth at 21% LFL. Diamonds by Pandora tracking as planned.
  • Price increases undertaken in Q4 2022 drives a positive impact on the EBIT margin (broadly neutral on revenue). Pandora sees further opportunities for price increases over time.
  • China trading gradually improved following the re-opening and LFL is positive since late March. Pandora is preparing for a phased relaunch of the brand later in the year.

2023 guidance and current trading 

  • Reflecting the solid start to the year, the organic growth guidance range is updated to “-2% to +3%” (previously -3% to +3%). The EBIT margin guidance remains unchanged at “Around 25%”.
  • Current trading in Q2 2023 has so far been resilient with underlying LFL trends broadly similar to Q1 2023. The level of uncertainty remains elevated due to the macroeconomic environment.

Alexander Lacik, President and CEO of Pandora, says:
“We have started 2023 well with resilient growth and solid margins. Our investments in lifting the brand are paying off with good performance in our Moments base business and strong results from the newer platforms, Timeless and Pandora ME. It’s clear that we are increasingly the jewellery brand of choice, particularly for gifting occasions. The macroeconomic outlook remains uncertain, but we are confident in our ability to adapt and thrive as we’ve proven over the past few quarters.“

DKK millionQ1 2023Q1 2022FY 2022FY 2023 guidance
Revenue5,8505,68926,463 
Organic growth1%21%7%-2% to 3%
Like-for-Like, %0%17%4% 
Operating profit (EBIT)1,2561,3106,743 
EBIT margin, %21.5%23.0%25.5%Around 25%

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