Capital structure policy and cash distribution
At the end of 2022, Pandora’s leverage ratio was only 0.8x NIBD to EBITDA and consequently at the lower end of the capital structure policy range of 0.5-1.5x. The increased leverage of 0.4x versus 2021 primarily reflects significant cash distributions to the shareholders as well as increased inventories and higher CAPEX through the year.
During 2022, Pandora paid out DKK 5.1 billion to its shareholders, equivalent to 11% of market cap as of 31 December 2022. DKK 1.5 billion was distributed as anordinary dividend of DKK 16 per share and DKK 3.6 billion were distributed through share buybacks.
Pandora continues to be highly cash-generative and has ample liquidity to continue cash distributions to shareholders. Pandora has decided to update its dividend policy from previously targeting a 2% dividend yield to now paying a progressive dividend (stable to increasing dividend per share). For 2023, the Board proposes a dividend of DKK 16 per share and a new share buyback of DKK 2.4 billion with an intention to go up to DKK 5.0 billion, assuming no material deterioration in the macroeconomic climate. The total cash distribution of up to DKK 6.4 billion will be the highest in Pandora’s history. The Board already has the authority to initiate a share buyback at any point in time. For further details on the share buyback programme please refer to the separate company announcement.