Capital structure policy and cash distribution
At the end of December 2021 and following another year of strong cash generation, Pandora’s leverage was only 0.4x NIBD to EBITDA, below our capital structure policy of 0.5-1.5x. During the last couple of years, Pandora has successfully decreased net working capital by DKK 3 billion. At the same time, capitalized lease liabilities have decreased by more than DKK 1 billion. Combined, these two factors have decreased leverage by around 0.5x. As cash distributions to shareholders are limited to the amount of free reserves in the Parent Company, the lower net working capital and lease liabilities also currently impact the ability to reach the upper part of the leverage range. As of 31 December 2021, free reserves in the Parent Company amounted to DKK 7.5 billion.
During 2021, Pandora paid extraordinary dividends of total DKK 15 per share. In addition, from 5 May 2021 to 4 February 2022, Pandora bought back 4.8 million shares at an average price of around DKK 829 equivalent to a total value of DKK 4.0 billion.
Based on the strong results for 2021, Pandora continues distributions to shareholders with a proposed dividend of DKK 16 per share and a new share buyback programme of DKK 3.3 billion.