Pandora A/S · Havneholmen 17-19 · 1561 Copenhagen V · Denmark · CVR no. 28505116

WE GIVE A VOICE TO PEOPLE'S LOVESA N N UA L R E P O RT 2 02 2

OUR PURPOSEWE GIVE
A VOICE TO
PEOPLE'S
LOVES
Pandora is the world’s largest jewellery
brand. Known by more people andcrafting more jewellery than any otherbrand in our industry, we provide
affordable luxury to consumers in morethan 100 countries.
Made from high-quality materials
and with endless possibilities for
personalisation, millions of people
around the world cherish and collectPandora jewellery to express who they
are and what matters to them.

CONTENTS 34
416

THE BIG PICTURE
5
6
7
10
12
13

At a glance
Letter to the shareholders
Executive summary
Highlights 2022
Five-year summary
Financial guidance 2023

OUR BUSINESS
17
18
23
25
29

Our business model
Our Phoenix strategy
Industry trends
People and sustainability
Managing risks

45

CORPORATEGOVERNANCE
35
39
41
43

Corporate governance
Board of Directors
Executive Leadership Team
Shareholder information

FINANCIALREVIEW
46 Group performance
48 Group profitability
49 	Balance sheet and cash flows

50

FINANCIALSTATEMENTS
51 	Consolidated financial
statements
91 	Management statement92 	Independent auditor's report96 	Parent Company financial
statements

Annual Report
Our Annual Report is our detailed annual
disclosure relating to company performance,
strategy, corporate governance andfinancial results. The report is available atpandoragroup.com/investor/news-andreports/annual-reports and at cvr.dk following
approval at the Annual General Meeting.

Sustainability Report
Our Sustainability Report provides detailed
information on sustainability and our responsible
business behaviour. The Sustainability Reportserves as our supplementary document to theUnited Nations Global Compact Communication
on Progress, which will be submitted later in 2023
using the new CoP digital platform, and as suchis our disclosure in accordance with sections
99(a), 99(b) and 107(d) of the Danish Financial
Statements Act. The report is available atpandoragroup.com/sustainability/resources/
sustainability-reports.

2022
Remuneration Report
Our Remuneration Report includes full
disclosure of Board and Executive Management
remuneration. The report is available atpandoragroup.com/investor/corporategovernance/remuneration-reports.

ANNUAL REPORT 2022

5

At a glance

6

Letter to the shareholders

7

Executive summary

10

Highlights 2022

12

Five-year summary

13

Financial guidance 2023

THE BIGPICTURE

Finishing
touchesAnnika and Yeliz fromour Visual Merchandisingteam putting effort into
the store display aheadof a collection launch.

ANNUAL REPORT 2022

AT A GLANCE

THE WORLD'S LARGESTJEWELLERY BRAND
103

61%

million pieces of jewellery sold,corresponding to three pieces every second

recycled silver andgold purchased in 2022

26.5

32,000

6,500

>600

DKK billion revenue

employees1

points of sale in morethan 100 countries

PandoraJewelry
1

theofficialpandora

Average headcount through the year.

million customer visits toour stores and online

Pandora-a-s

theofficialpandora@Pandora_Corp@theofficialpandora

pandoragroup.com

Pandorain Paris
Our holiday
campaign took
over the streetsof Paris in
December 2022.

ANNUAL REPORT 2022

THE BIG PICTURE

LETTER TO THE SHAREHOLDERSUNLOCKINGOUR POTENTIAL
In a year marked by global instability, Pandora deliveredon its targets and strategy. We successfully grew our largest
platform, Pandora Moments, and pushed the boundaries
of our industry with the launch of Diamonds by Pandora.
We are well positioned to navigate the current economic
downturn and come out strong.

Pandora launched the Phoenix strategy nearly two years ago

set in 100% recycled silver and gold - was a significant– a strategy designed to drive sustainable growth by leverag-milestone that points to the future of luxury.

6

ing our key assets: strong brand awareness, a global distribution network and industry-leading manufacturing capabilities.

We are proud that our efforts are noted, and in 2022 we wereSince then, we have been executing exceptionally well on

one of a small number of global companies to achieve an ‘A’

our strategic priorities, and in 2022 we saw the potential ofscore from the leading climate organisation, CDP, for our cli-

Phoenix begin to unfold.

mate action.

Despite the significant disruptions from war, inflation andPandora reacted quickly to the war in Ukraine, stopping all

the pandemic, we met our guidance from the beginning ofbusiness with Russia and Belarus in February 2022. Pandora

the year, delivering record-high revenue for four consecutive

was also the first corporate partner to answer UNICEF’s callquarters and growth in most key markets. These results showfor support for its Ukraine response with a swift donation of

the strength and resilience of Pandora’s business model.

USD 1 million. Since 2019, Pandora has donated a total of USD
10 million towards UNICEF through donations and special

Our brand awareness remains unrivalled, and Pandora

jewellery collections.

Moments, the core of our business, continues to resonate
with thousands of consumers every day. We also launched

Looking ahead, we see significant growth opportunities both innew platforms, like Diamonds by Pandora, and exciting

mature and less-developed markets. Continuing to deliver oncollaborations like Keith Haring and Marvel.

our Phoenix strategy, we will protect profitability while investingfor growth through network expansion and other initiatives. We

We are also progressing on our digital transformation.

will also keep progressing towards our ambitious sustainability

We are increasingly able to personalise our marketing com-targets.

munications based on our strong customer data. We are also
upgrading our digital infrastructure, which will improve the

Our 2022 results have been achieved thanks to the extraordinarycustomer experience across all touchpoints.

commitment of our colleagues around the world in what has beena very demanding year. We have captured this spirit in our new

Pushing boundaries and reshaping the industry

global employer brand, Craft the Incredible, which helps us attract

We wish to lead the way on sustainability and are rethinking

top talent and build a great workplace. This was reflected in our

how jewellery is designed and produced with the planet andemployee surveys, which showed very high engagement levels,

its people in mind. In 2022, we made important progress on

placing us in the top 5% of benchmark companies worldwide.

our ambition to become a low-carbon, circular, and inclusive,

ALEXANDER LACIKPETER A. RUZICKA

President & Chief Executive Officer

Chair of the Board of Directors

diverse and fair business. Our North America launch of

On behalf of the Board and the Executive Leadership Team,

Diamonds by Pandora - lab-created diamonds that are

we extend our sincere gratitude and thanks to employees, cus-grown, cut and polished using 100% renewable energy andtomers and shareholders for their continued trust in Pandora.

ANNUAL REPORT 2022

THE BIG PICTUREOUR CHANNELSEXECUTIVE SUMMARY

Revenue, DKK, and share of revenue, %DELIVERING GROWTH
DURING EXTRAORDINARYTURBULENCE

Wholesale andthird-party distribution

7,349m

28% share of revenue

Pandora physicalstoresPandora online
stores13,503m

5,612m

51% share of revenue

2022 was another year of growth and significant strategic

challenges seen in 2022, Pandora’s customers remain loyal

progress for Pandora. In a year with unforeseen external

and the brand strong. Our strong foundation, the desirability

challenges, we delivered solid revenue growth in all quartersof our products and our affordable luxury proposition place

and acted as a responsible industry leader as we continued

us in a good position against the uncertain geopolitical andto execute on our Phoenix growth strategy.

economic backdrop of 2023.

In 2022, Pandora delivered record-high revenue of DKKOur efforts to drive sustainability continue to play a central

26.5 billion, corresponding to organic revenue growth of 7%role in creating a resilient business. Our actions to makecompared to 2021. The growth was delivered across most

Pandora low-carbon, circular and inclusive, diverse and fair

product platforms and geographies and is a testimony to theare the right thing to do as a corporate citizen and will help

strategic investments made in the last couple of years. Theseus mitigate against the impacts of climate change, thedevelopments, combined with operational efficiency andsignificant regulatory shift that is underway, and growing

agile execution, laid the foundation for a very strong year.

consumer expectations.

Pandora delivered solid results despite difficult market

On 5 October 2023, we will host a Capital Markets Day toconditions such as COVID-19 in China, inflationary pressure

update our shareholders on our continued execution on

and the war in Ukraine, and managed to deliver on the 2022

and progress of the strategy.

guidance despite these unforeseen headwinds. Despite the7

21% share of revenue

OUR GROWTH JOURNEY1

Revenue

DKK billion

EBIT2

26.5
22.8

23.4

21.9
19.0

6.7

6.4

2018

5.9

2019

3.9

2020

Presented on the basis of the applicable accounting standards at the time.
22
 019 and 2020 figures exclude Programme NOW restructuring costs.
1

5.8

2021

2022

ANNUAL REPORT 2022

OUR SEGMENTS
Share of revenue,% of total

73%

Moments incl. Collabs

THE BIG PICTURE

Growing the core while fuelling with more

Our key markets

Pandora launched the Phoenix strategy in May 2021 andIn 2022, sell-out growth continued to be positive acrossexecution is on track.

most key markets.

In 2022, our Moments incl. Collabs segment represented

Our largest market, the US, saw an expected decline in 2022

73% of total revenue and delivered sell-out growth of 5%.

following extraordinary growth in 2021 fuelled by government

Brand metrics are strong, the core Pandora Moments platform

stimulus cheques. Compared to a cleaner pre-pandemic baseis growing, and important steps to build new product plat-in 2019, the performance in the US remained strong withforms have been taken. Growing Moments is a key pillar in

53% organic growth. Pandora continues to see ample growth

our Phoenix strategy.

opportunities in the US in the mid-term, coming from both

PUSHING THE
BOUNDARIES OFSUSTAINABLE
JEWELLERY

Diamonds by Pandora ismade with 100% recycled
silver and gold, and withlab-created diamonds
produced using 100%
renewable energy.

In order to drive additional revenue growth on top of Pandora
Moments, Pandora is leveraging existing product platforms
and launching new product platforms that are within or close

OUR KEY MARKETS

Share of revenue

to the existing core business. A good example is our lab-2

created diamonds collection, Diamonds by Pandora. Following

1

a test launch in the UK in 2021, we successfully launched the
Diamonds by Pandora collection in North America in August2022. This is our first collection made with 100% recycled
silver and gold. With this collection, we aim to democratise

6

4

3

7

diamond jewellery by making it accessible to a wider audience.
Pandora ME is another product platform designed to drive
additional revenue growth, which primarily targets Generation Z. In 2022, Pandora ME grew 40% compared to 2021.

27%
Style

5

The Diamonds by Pandora and Pandora ME platforms areboth part of our second segment, Style, which represented
a 27% share of our business and delivered sell-out growth1.

of -1%. Style also includes Pandora Timeless and Pandora
Signature.
Read more about
segment and revenue
informationin note 2.1.

2.

3.

4.

5.

6.

7.

US

UK

ITALY

GERMANY

AUSTRALIAFRANCE

CHINA

2022:

30%
DKK 7,907m

14%
DKK 3,802m

10%
DKK 2,580m

5%
DKK 1,307m

5%
DKK 1,271m

4%
DKK 1,190m

3%
DKK 737m

2021:

30%
DKK 7,026m

14%
DKK 3,314m

10%
DKK 2,443m

5%
DKK 1,191m

5%
DKK 1,131m

5%
DKK 1,122m

5%
DKK 1,126m

Read more about our Phoenix growth strategy on page 18.

8

ANNUAL REPORT 2022

Sustainability: top
ambitions and ratings

THE BIG PICTURE

higher brand awareness and network expansion. In 2022, we ac-

key markets. We also launched our new loyalty programme,quired 49 stores from franchise partners in the US and opened

My Pandora, in France and continued our network expansion

net 32 new concept stores. A part of our strategy is to further

to strengthen our brand and business even further. Addition-

strengthen our presence in the US, not least on the West Coast.

ally, Pandora initiated selected and careful price increases
across its portfolio of products.

Our key markets in Europe delivered positive sell-out growthin 2022. In 2021, these markets were impacted by tempo-

Financial performance

As the world’s largest jewellery
brand, we wish to lead our industry
on sustainability – a foundationalpillar of our growth strategy,
Phoenix. Our targets include
halving carbon emissions by 2030,
shifting entirely to recycled silver
and gold by 2025, and achieving
gender parity in our leadershipno later than 2030. With ourlab-created diamond jewellery weshow how a transformative andmore sustainable future of luxury
can take shape. Our sustainability
performance and disclosure hasreceived top ratings from leadingorganisations such as CDP, Sustainalytics, MSCI, Nordea and theDanish Institute for Human Rights.

rary store closures due to COVID-19, but they saw a strong

Total revenue reached DKK 26.5 billion, corresponding torebound in 2022. The UK and Germany delivered double-digit

revenue growth of 8% in local currency. The EBIT margin

sell-out growth rates following solid execution. In Italy, we

remained strong at 25.5% in 2022.

Read more about sustainability
on page 25.

Innovative design, responsible
sourcing and craftsmanship are at
the heart of Pandora. The pictureillustrates the stone-setting
process of crafting a handfinished piece of jewellery.

9

started to see an impact from a weak macro backdrop in
the second half of 2022, and sell-out growth ended at 5% inDistributions to shareholders in 2022, including both divi-

2022. In France, we detoxed the promotional level and ended

dends and share buybacks, totalled DKK 5.1 billion, equal to

the year with sell-out growth of 4%.

11% of the market cap of Pandora at the end of 2022. For
2023, the Board proposes a dividend of DKK 16 per share

Australia delivered sell-out growth of 6%, driven by healthy un-

and a new share buy-back programme of DKK 2.4 billion until

derlying business and an easier comparison due to COVID-19

30 June 2023 with an intention to go up to DKK 5.0 billion

temporary store closures in 2021. Performance in China wasover the course of the next 12 months, assuming no material

significantly impacted by the continued and widespread

deterioration in the macroeconomic climate.

COVID-19 restrictions during 2022 and sell-out growth wasrepresents a significant opportunity for us. We have previously

Pandora in a strong position to manage
uncertain macro environment

communicated that we aim to triple our business in China com-During 2022, the macroeconomic environment continued topared to 2019, but have postponed our investment to trans-

deteriorate. Inflation and higher interest rates are impacting

form our business in China until market conditions stabilise.

consumers across many countries. Up until now, Pandora has-47%. China is the largest jewellery market in the world anddemonstrated a good level of resilience against these headPandora’s business outside of its seven key markets contin-

winds. As a consequence of the macro headwinds, Pandora

ued to grow in 2022. The largest markets outside of the sevenis implementing several preemptive measures. Should a re-key markets are Spain and Mexico, which ended the year withcession scenario become a reality, Pandora will be in a strong

a revenue of DKK 1.1 billion and DKK 1.0 billion respectively.

position to manage macroeconomic turbulence thanks to

Brand momentum remains strong

the company’s robust business model, favourable margin
structure, strong cash generation, low financial leverage

Our strong brand momentum continued in 2022 and Pandora

and conservative capital structure. We have implemented

maintained a leading brand position. Pandora’s global unaided

prudent cost measures and will continue to do so, and ourbrand awareness remained well ahead of the closest com-strong starting point will also enable us to continue to invest

petitor, and Pandora ranked number one in five out of sevenand accelerate during a recession as required.

HIGHLIGHTS
2022

ANNUAL REPORT 2022

THE BIG PICTURE

Pandora stops
business with Russia
and Belarus

Expanding the
Pandora network
In 2022, Pandora opened net 88 new

On the day Russia invaded

concept stores, of which 32 were opened

Ukraine, Pandora decided toin the US, as well as 130 new owned andstop all business with Russia andoperated shop-in-shops, of which the

Belarus. We also informed ourmajority were opened in Latin America.

suppliers and business partners

These openings are part of the roughlythat Pandora will not accept raw

600 locations across our top markets

materials, products or services

identified as part of our Phoenix strategy,

supplied directly or indirectly

where we see potential to drive profitablefrom Russia or Belarus.

growth by opening new stores. Of these

Additionally, we donated USD 1

stores, 50% are in the US and China andmillion towards UNICEF’s human-

80% are concept stores. It is attractive

itarian relief work in Ukraine.

to open new stores, as the EBIT margin isaccretive to the Group. Additionally, there

Pandora brings lab-createddiamonds to North America

Before the war, Russia and Belarus

is a short payback period on the initialaccounted for less than 1% of our

CAPEX investment and an attractive,

total revenue, and the businesslow-risk profile.

was handled by local distributors.
Pandora does not have any

In 2023, we will further capitalise on

remaining assets tied up withthese locations by opening net 50 to 100

these distributors, and we noconcept stores. Read more about our

In August, we launched our highly antic-

longer count their stores as part

network expansion on page 22.

ipated Diamonds by Pandora collectionof the Pandora network.

in the US and Canada. The collection
features lab-created diamonds that aregrown using 100% renewable energy andthat have a carbon footprint that is only
5% when compared to mined diamonds.
It is also the first Pandora collection to be
crafted with 100% recycled silver and gold.

10

ANNUAL REPORT 2022

THE BIG PICTURE

A
parency and performance on climatechange received recognition by the
global environmental non-profit CDP,
securing a place on its annual ‘A List’.
Based on data reported through CDP’s
2022 Climate Change questionnaire,
Pandora was one of around 2% of
CDP-evaluated companies to achieve
an ‘A’ out of nearly 15,000 companiesscored. This was a milestone in ourjourney to become a low-carbon business.

Collaborations to growbusiness and build brandNorth American
headquarters relocatesto New York City

Collaborations with other brands enable

In December, we announced the open-

Pandora to reach more consumers arounding of Pandora's new North American

the globe, and we have increased ourheadquarters located at Times Square infocus in this space. Sales from collabora-

New York City. The new office will create

tions have tripled over the past five years.

around 130 full-time jobs. New York is
the largest commercial market in the US

Recognised with “A”
score for transparency
on climate change
Pandora’s leadership in corporate trans-

11

12

pieces in theKeith Haring X
Pandora collection

2.4%

of our total revenue camefrom the Marvel X Pandora
collection

2022 saw superheroes arriving to ourand one of the largest commercial mar-stores with the popular launch of our firstkets in the world. The new headquarters

Marvel X Pandora collection. By the end ofwill place Pandora in closer proximity of

the year, the 14 carat gold-plated Marvel

leading talent as we continue our long-

Iron Man was the fourth best-selling

term growth ambition in the US, forcharm in Pandora’s full charms assort-example to increase market share andment, and the Marvel Infinity 14 carat

double revenue in the US comparedgold-plated ring saw huge popularity andto 2019. Our North America Hub in

was the top three best-seller in the rings

Baltimore will remain at the current

category.

location through at least 2026, and boththe Baltimore corporate office and theWe also launched our first art collabora-logistics centre in Columbia, Maryland,tion with the aim of expanding our brandremain open and integral to our US

into new cultural universes. The collabora-business operations.

tion was inspired by the late street artist
and activist Keith Haring, who was part ofthe legendary New York art scene during
the 1980s. The collection features Haring’s
colourful and symbolic works, including
the barking dog, angel baby and signaturebold lines.

ANNUAL REPORT 2022

THE BIG PICTURE

12FIVE-YEAR SUMMARYDKK million

2022

2021

2020

2019

20181

Total payout ratio (incl. share buyback), %4

100%

115%

65%

147%

104%

Dividend per share, proposed for the year, DKK

16.0

16.0

-

9.0

9.0

-4%

Dividend per share, paid, DKK

16.0

15.0

-

9.0

9.0

Earnings per share, basic, DKK

54.2

42.1

20.0

30.3

47.2

7,421

Earnings per share, diluted, DKK

53.7

41.7

19.9

30.1

47.0

Total assets

22,013

18,542

19,984

21,571

19,244

Invested capital

13,961

9,884

10,54014,26812,071

2022

2021

2020

2019

20181

26,46323,39419,00921,86822,806

Organic growth, %

7%

23%

-11%

-8%

-2%

Sell-out growth, (like-for-like), %2

4%

20%

-12%

-8%

8,716

7,838

4,999

6,148

DKK million
Stock ratios

Financial highlights
Revenue

Earnings before interest, tax, depreciation
and amortisation (EBITDA)
Operating profit (EBIT)

6,743

5,839

2,684

3,829

6,431

EBIT margin, %3

25.5%

25.0%

20.4%

26.8%

28.2%

Net financials

-210

-461

-190

1

151

Net profit for the period

5,029

4,160

1,938

2,945

5,045

Consolidated balance sheet

Financial ratios
Revenue growth, DKK, %

13%

23%

-13%

-4%

0%

Revenue growth, local currency, %

8%

24%

-11%

-6%

3%

Gross margin, %

76.3%

76.1%

75.6%

72.7%

74.3%

EBITDA margin, %

32.9%

33.5%

26.3%

28.1%

32.5%

EBIT margin, %

25.5%

25.0%

14.1%

17.5%

28.2%

Effective tax rate, %

23.0%

22.6%

22.3%

23.1%

23.4%
33%

Net working capital

1,104-1,181-1,447

-293

1,536

Net interest-bearing debt (NIBD)

6,794

2,882

3,151

9,019

5,652

Equity

7,167

7,001

7,389

5,249

6,419

Cash flows from operating activities

4,434

6,228

5,975

6,775

6,624

Capital expenditure – total

1,290

641

491

822

1,129

Consolidated statement of cash flows

Capital expenditure – property, plant and equipment
Free cash flows incl. lease payments

Equity ratio, %

33%

38%

37%

24%

NIBD to EBITDA, x3

0.8

0.4

0.5

1.1

0.8

Sustainability

Return on invested capital (ROIC), %

48%

59%

25%

27%

53%

Scope 1, 2 & 3 emissions, tonnes CO₂ equivalent5

Cash conversion incl. lease payments, %

39%

88%

183%

133%

86%

Recycled silver and gold, total, %6

Net working capital, % of last 12 months' revenue

4.2%

-5.0%

-7.6%

-1.3%

6.7%

Leadership Team gender ratio, female/male, %7

Capital expenditure, % of revenue

4.9%

2.7%

2.6%

3.8%

5.0%

	Comparative figures have not been restated following the adoption of IFRS 16 Leases.
	Sell-out growth includes sell-out from all concept stores, including partner owned and Pandora online. Sell-out growth is a like-for-like KPI and includes
stores which have been operating for +12 months and stores which are temporarily closed due to COVID-19. Other points of sales are not included insell-out growth.
3
2019 and 2020 figures exclude Programme NOW restructuring costs.

929

341

369

556

753

2,602

5,137

4,908

5,075

5,558

280,370

277,450

266,075

296,777

n/a

61%

54%

57%

60%

n/a

29/71

23/77

n/a

n/a

n/a

Excluding sale of treasury shares amounting to DKK 1.8 billion in Q2 2020.
	Within limited assurance scope. The scope 2 emissions are calculated as market-based emissions. All emissions are in metric tonnes,
as aligned with the Greenhouse Gas Protocol.
6	Within limited assurance scope.
7
The Leadership Team comprises Vice Presidents, Senior Vice Presidents, members of the Executive Leadership Team and the Board of Directors.

1

4

2

5

ANNUAL REPORT 2022

THE BIG PICTURE

FINANCIALGUIDANCE 2023

13

ORGANIC GROWTH GUIDANCE
Percentage point approximations

2-3%

-1%

DKK billion
26.5

1%

-2% to 4%-2%-3% to 3%

DKK billion
25.4-27.0

EBIT MARGIN

ORGANIC GROWTH-3% to 3%

Flattishto midsingle-digit
declineAround 25%
2022
actuals

Sell-out
growth1

Network
expansion

Phasing ofsell-in &
other

2023
guidance

Forwardintegration

Local
currency
growthForeignexchange2023
revenue

Resiliency in an uncertain environment

macroeconomic uncertainty and, as usual, will be narrowed

work expansion is expected to add 2 to 3 percentage points

The economic outlook for 2023 remains highly uncertain. Highas visibility improves through the year. The low end of theto growth and help lift organic growth to -3% to 3%. Forward

inflation and rising mortgage rates suggest that consumer

organic growth range would require a worsening of trading

integration is expected to add around 1% revenue with reve-

spending will come under pressure. The brand has demonstrat-

conditions relative to today.

nue growth in local currency ending at -2% to 4%.

to worsen during 2022, and current trading remains encourag-Whilst predicting near-term sales trends is currently chal-

The organic growth guidance can be illustrated as showning. For now, Pandora has seen some, but only limited, signs of alenging, Pandora’s strong brand position, solid financials, flex-

above.

shift in consumer spending. Nonetheless, Pandora will plan forible business model and position in affordable gifting makea range of scenarios, including a weakening of the current mac-the company well equipped to weather a potential recession

Profitability guidance

roeconomic backdrop. Our guidance considers external factors,

and at the same time seize relevant investment opportuni-

The EBIT margin guidance for 2023 is Around 25% and canour own internal brand initiatives and current trading to form anties which may arise.

be illustrated as shown on the following page. Temporaryed strong resilience since macroeconomic conditions started

initial wide range.

Revenue guidance

Pandora is therefore currently targeting an organic growth

Pandora is currently planning for sell-out growth of flattish toof -3% to 3% and an EBIT margin of Around 25%. The wid-a decline of mid-single digits, depending on how macroeco-

er-than-normal revenue guidance range reflects the elevatednomic conditions progress through the year. Continued net-

and non-recurring costs from 2022 drive a tailwind of 0.8
percentage points. Structural cost reductions and the priceincreases implemented in Q4 2022 will be funding the invest1

Sell-out growth (like-for-like) including temporarily closed stores.

ANNUAL REPORT 2022

THE BIG PICTURE

ments in our Phoenix strategy initiatives and future growth.

mentioned, the impact of these factors on the 2023 CMD

Higher-than-normal salary increases are expected to suppress

targets is uncertain but despite the headwinds the new 2023

the EBIT margin by 1.0 percentage points. Foreign exchange

EBIT margin guidance is just within the targeted range. In

rates and commodity assumptions per 31 January 2023

relation to the organic growth target announced at the CMD,

currently represent a net headwind of 0.4 percentage points.

the outcome is somewhat dependent on macroeconomic

Lastly, operating leverage will mainly decide where Pandora

conditions, but the upper end of the new 2023 guidance

will end the year. The guidance also allows for an additional el-

would also see Pandora within the targeted CMD range.

ement of cost flexibility which could be utilised depending on
is expected to be slightly more skewed towards the second
half than usual. This reflects, among others, phasing of costs,

At the end of 2022, Pandora’s leverage ratio was only 0.8x

hedged silver prices and foreign exchange rates.

NIBD to EBITDA and consequently at the lower end of the2023 guidance – other parameters

1.1%

-1.0%

0.8%

-1.0%

-1.0%
0.6%

0.0%

Around25%

Commodities

Operatingleverage(mid-point)

2023
guidance

capital structure policy range of 0.5x to 1.5x. The increased
leverage of 0.4x versus 2021 primarily reflects significant

Pandora expects to open net 50 to 100 concept stores andcash distributions to the shareholders as well as increased

50 to 100 owned and operated other points of sales in 2023.

inventories and higher CAPEX through the year.

CAPEX is expected to end at around 6% share of revenue,

During 2022, Pandora paid out DKK 5.1 billion to its share-

primarily driven by investments into the store network, dig-holders, equivalent to 11% of market cap as of 31 December

ital initiatives and crafting facilities. The effective tax rate is2022. DKK 1.5 billion was distributed as an ordinary dividend

expected to be 23% to 24%, unchanged from last year.

of DKK 16 per share and DKK 3.6 billion were distributed

Capital Markets Day September
2021– financial targets

EBIT MARGIN GUIDANCE BRIDGE
Percentage point approximations

25.5%

Capital structure policy andcash distribution

the growth outcome. The EBIT margin phasing through the year

14

through share buybacks.
Pandora continues to be highly cash-generative and has ample

2022
actuals

Cost
Temporary/non-recurring reductions& price
costs
increases

Phoenix
investments

FOREIGN EXCHANGE AND COMMODITY
ASSUMPTIONS AND IMPLICATIONS –AS OF 31 JANUARY 2023

Annualsalaryincreases

Foreignexchange

Average
2022

Average
2023

USD/DKK

7.07

6.87

THB/DKK

0.20

0.20

Pandora hosted a Capital Markets Day (CMD) in September

liquidity to continue cash distributions to shareholders. Pan-

GBP/DKK

8.73

8.45

2021 and provided the following financial targets:dora has decided to update its dividend policy from previous-

CNY/DKK

1.05

1.02

ly targeting a 2% dividend yield to now paying a progressive

AUD/DKK

4.91

4.81

• 5-7% organic growth CAGR from 2021 to 2023

dividend (stable to increasing dividend per share). For 2023,

Silver/USD (per ounce)

24.9

22.7

• 25-27% EBIT margin in 2023

the Board proposes a dividend of DKK 16 per share and a new

Revenue (DKK million)

share buyback of DKK 2.4 billion until 30 June 2023 with an inSince the targets were communicated in September 2021,

tention to go up to DKK 5.0 billion over the course of the next

the geopolitical and macroeconomic situation has worsened

12 months, assuming no material deterioration in the macro-significantly. Additionally, the 2023 targets did not include

economic climate. The total cash distribution of DKK 6.4 billion

any impact from COVID-19, which had a severe negative

will be the highest in Pandora’s history. The Board already has

impact on the performance in China in 2022. As previously

the authority to initiate a share buyback at any point in time.

Financial impact
2023 Y-Y

Approx. -500

EBIT (DKK million)

Approx. -225

EBIT margin (foreign exchange)

Approx. -1.0%

EBIT margin (commodities)

Approx. 0.6%

Disclaimer: the guidance contains forward-looking statements, which include estimates of financial performance and targets. These statements are not guarantees of future performance and involve certain risks and uncertainties. Therefore, actual future results and trends
may differ materially from what is forecast in this report due to a variety of factors. Please also refer to the full disclaimer on page 90.

STORYANNUAL REPORT 2022

STORY

LAB-CREATEDDIAMONDS POINT
TO THE FUTURE
OF LUXURY

as mined diamonds, but grown in a

The lab-created diamonds are grown

The new collection is a significant break-lab instead of mined from the ground.

in the US and point to a future ofthrough for Pandora, as the company has

We want to make diamond jewellery

low-carbon diamonds for jewellery. For

committed to craft all its jewellery fromaccessible to a wider audience and for

perspective, if all diamonds were minedrecycled silver and gold by 2025.

more occasions. Diamonds are not onlywith the same low-carbon footprint as

forever, but for everyone,” says Joshua

our lab-created diamonds, it would save

A growing market

Braman, Senior Vice President, Diamond,more than 6 million tonnes of carbon

The global diamond jewellery market is

Pandora.

emissions annually – equivalent toa USD 84 billion industry. Lab-createdreplacing all cars in New York City withdiamonds currently account for aroundelectric cars.

10%, but the segment is growing fasterDiamonds grown in the US
with low carbon emissions

In the 1950s, scientists succeeded in

Pandora, a line of lab-created diamond

actly same optical, chemical, thermalFirst collection with 100%
recycled silver and gold

creating the first diamonds in a lab. The

jewellery currently available in UK, theand physical characteristics as mined

To further reduce the climate impact of

diamonds were initially used mostly for

US and Canada. The US is the world’s

diamonds and are graded by the same

our jewellery, it is the first Pandora col-industrial purposes, but in recent years

largest market for diamond jewellery,standards known as the 4Cs – cut, co-lection crafted with 100% recycled silver

the technology and quality have im-

and we aim to transform the market withlour, clarity and carat. Our lab-createdand gold. This brings the greenhouseproved, and today lab-created diamonds

more affordable products that also havediamonds are grown, cut and polishedgas emissions of the collection’s entry

are a growing part of the market for

reduced carbon emissions.

using 100% renewable energy and haveproduct – a silver ring with a 0.15 carata carbon footprint that is only 5% whenlab-created diamond (USD 300) – down

“A diamond is a diamond. Thanks tocompared to mined diamonds. Pandora

to 2.7 kg CO2e, which is equal to the aver-Following a successful test launch in theinnovation, lab-created diamonds are

no longer uses mined diamonds.

age emissions of a t-shirt.

UK, Pandora introduced Diamonds byexactly the same and just as beautiful

Lab-created diamonds have the ex-diamond jewellery.

15

1

2

3

4

5

6

7

8

Begins with tiny seeds ofhigh-quality lab-createddiamonds

Seeds placed in
vacuum chamber withvery high heat

Chamber filledwith carbon-rich gas

Using 100% renewable energy, microwave energy heats
the gases and gas molecules
break apart

Carbon atoms bond to
the seeds and they growone layer at a time

The lab-created diamonds
are cut and polished using
100% renewable energy

Pandora chooses
lab-created diamondswith high-quality grading

Lab-created diamonds
are set in jewellery crafted
using 100% recycled
silver and gold

than the rest of the market. North
America is the largest market forlab-created diamond jewellery.

“

One of my recent customers
was very excited about
Pandora’s sustainablejewellery, as she was looking
for a gift to celebrate her
granddaughter’s PhD degree
in Environmental Science.
She was stunned by the
0.5ct lab-created diamondnecklace, which became asurprise gift for the occasion.

MELISSAStore Manager

ANNUAL REPORT 2022

17

Our business model18

Our Phoenix strategy

23

Industry trends

25

People and sustainability

29Managing risks“

I love getting to know eachand every customer’s story.
I think it is truly unique formy job. I value every stepof helping my customers
to anchor unforgettable
moments and to findself-expression throughPandora’s jewellery.

ANGIE
Sales Associate, Italy

OUR
BUSINESSANNUAL REPORT 2022

OUR BUSINESSOUR BUSINESS
MODEL
INPUT

Every day, millions of people express who they are and whatmatters to them with their Pandora jewellery. Whether it is a displayof friendship or romance, or a love for art, gardening or our planet.
Our jewellery is a way to show these loves. That is our purpose:
We give a voice to people’s loves.

BUSINESS ACTIVITIESOUTPUT

Natural resources:
Raw materials,
water and energy

Natural resources:
Processed materials,
emissions, waste andwaste waterCommunity:
Employees andstakeholder engagement

Community:
Job creation andtax contribution

Innovation:
Data anddesignBUY

Manufacturing:
Crafting facilities
Supply chain:
Supplier partnering
Financial:
Cash flows

Innovation:
Relevant andpersonalised products
Manufacturing:High-quality products

Designinspired byart and data

Responsible andcircular sourcing

Crafting
at scale

Efficientdistribution

Strongmarketingand brand

Omnichannel
retailoperations

Supply chain:
Sustainable supply chain
Financial:
Shareholder returns

OUTCOME

Affordable
luxury withsustainability
integrated fromsource to saleIndustry-leading
profitable
growth17

ANNUAL REPORT 2022

C

RKETS

MA
RE

O

C
FOUNDATIONVALUES

SC

A

e

CE

D

ar

r

GROWTH ILLARS
P

LE

BR

W
E

PLE
P EO

AT
L

decision-making and the allocation of resources.

iv e

N

S

N

LIS

deliberately prioritised the most important to guideCEbusiness. The gross list of opportunities is rich, and we have

LE

N

el

the significant untapped opportunities within Pandora’s coreDED

WE GIVE
A VOICE TO
PEOPLE’S
LOVES
IO

EX

personalisation and core markets. Phoenix centres aroundDsustainable and profitable revenue growth: brand, design,

WE

Phoenix has four growth pillars aiming at delivering

D

IG

A

N

PERSONAIn 2021, we launched our Phoenix growthstrategy with our purpose, We give a voice
to people’s loves. During 2022, we saw good
progress across our Phoenix initiatives,
which we will continue to build on in 2023.
On 5 October 2023, we will host a CapitalMarkets Day to give an update on our
Phoenix strategy.

e
ar

W
E

A L I SAT I O N
DIGIT

LITY
ABI
am
re SUSTAINOUR PHOENIXSTRATEGYOUR BUSINESS

W

E

18

Phoenix builds
on our strong
foundation andis focused on
the significant
untapped
opportunities
in Pandora's
core business.

ANNUAL REPORT 2022

OUR BUSINESS

19

Growth pillar 1: Brand

No. 1
Pandora’s
globalunaided brandawarenessremainedwell ahead of
the closest
competitor,
and we ranked
number one
in five outof seven key
markets.

Pandora is a global affordable luxury brand with a high levelof consumer awareness, strong brand equity, and a loyal
customer base.
Our strong brand momentum continued in 2022 andPandora maintained a leading brand position. Pandora’s
global unaided brand awareness remained well ahead of theclosest competitor, and we ranked number one in five outof seven key markets.
To ensure that Pandora continues to excite customers andwin the hearts of the new generations, we focus on increasing
brand desirability. Using behavioural science, data analytics
and social listening to understand our consumers, we cancreate more engaging, authentic and culturally relevant brandexperiences across all touchpoints, including products,
campaigns, stores, the selling ceremony, online and more.
Over the past years, we have increased our media investments considerably, and we will continue to invest at acompetitive level to maintain brand awareness leadership intoday’s complex and fragmented media landscape.

ANNUAL REPORT 2022

OUR BUSINESS

20

Growth pillar 2: Design
Pandora has three clear design priorities: drive the core

The Pandora
product universe(Moments), fuel the brand with more platforms, and establish
dedicated support models for each platform.
Pandora’s original charms and bracelet offering, Moments, hasformed the basis for the company’s success over the past two

Moments incl. Collabs

Style

Pandora Moments, home of our iconic snake chain
bracelet and ten different jewellery themes, is thecore of our business. It allows for self-expression,modern storytelling and collectability. We also collaborate with well-known brands to create jewellery
with characters and icons from universes like Marvel,
Walt Disney and Pixar. In total, Moments incl. Collabs
accounts for 73% of revenue.

To fuel our brand with incremental growth, we offer our consumers
additional collections. In total, Style accounts for 27% of revenue.
Pandora Timeless offers sparklingmodern classic design with a twist andincludes Pandora Timeless Wish with
its wishbone motifs and distinct meshbracelets from Pandora Reflexions.

decades. Today, Moments incl. Collabs accounts for 73% of total

Another collection is Pandora Signature,
characterised by the Pandora logo, pavé,hearts and beads adding a geometricdimension and linear aesthetic.

revenue. We see ample opportunities to continue growing theMoments business by ensuring a strong pipeline of innovation
behind charms and charm carriers, personalisation and collaborations. Combined with commercial focus and visibility, this will
ensure we build on our core strength.
To fuel the brand with more, we added new product platforms
to our assortment which are designed to target specific consumer segments and drive incremental growth. New platforms
are considered low-risk opportunities, as they are built on
existing assets and infrastructure. When going to market, we introduce new platforms in steps to test, learn and adjust before
potentially scaling up. In 2022, we continued to roll out new
platforms such as Pandora ME and Diamonds by Pandora. In
2022, Pandora ME generated 40% in sell-out growth compared

Pandora ME pays tribute to a Generation Z mindset in a uniquely bold andcustomisable link chain design andstyling accents to reflect every aspectof their personality.

Diamonds by Pandora seeks to democratise diamonds by using lab-createddiamonds elevated in designs of floating
and unique shapes lending a stand-alone
luxurious expression.

to 2021 and we continued to diversify the platform’s proposition by launching the first gold-plated pieces in October. These
gold-plated pieces accounted for a 16% share of revenue
within Pandora ME in the fourth quarter. Diamonds by Pandora
delivered sell-out growth of 130% and ended the year at DKK
213 million in revenue. In 2022, the 0.15 carat lab-createddiamond ring was the bestseller among our customers.
In addition, strategic collaborations continue to drive growth.
The Marvel collaboration was successfully launched with thegoal of further expanding brand awareness and building
other co-created universes. In 2022, two Marvel collections
were launched and accounted for 2.4% of our total revenue.

ANNUAL REPORT 2022

OUR BUSINESS

Growth pillar 3: Personalisation

markets. We also see growth opportunities outside our key

Sustainability — We believe high-quality jewellery, strong

A key strength at Pandora is the direct relationship to mil-markets, for example in Spain, Canada and Latin America.

business performance and high ethical standards go hand inlions of consumers through our strong owned and operated

Mexico is one example of a market in which growth opportuni-

hand, and we craft our jewellery with respect for resources,

retail network and online touchpoints. This connection pro-ties have been successfully exploited. Pandora entered Mexico

environment and people. Our ambition is to be an industry

vides rich insights on purchase history, website visits, email

in 2017 and has achieved strong growth in a relatively shortleader in sustainability. We strive to become a low-carbon

and paid media, allowing Pandora to offer a better and moretime span: revenue increased from DKK 122 million in 2017 toand circular business that is also inclusive, diverse and fairpersonalised service throughout the customer journey.

DKK 994 million in 2022.

with a positive impact across our entire supply chain.

In 2022, we launched the Personalisation Centre of Excellence

Read more about our geographical performance in our

Read more about sustainability on page 25.

as the focal point for these efforts. The team works in

Financial review on page 45.

cross-functional “pods” based on mixed disciplines spanningmarketing, data science and technology. Each pod is respon-

Our strong foundation

sible for a critical customer group (for example repeat buyers

To succeed with the four growth pillars in our Phoenix

or gifters) and has specific goals to achieve (for example thestrategy, we are building on our strong foundation.

number of occasions where a gifter buys Pandora).

Excellence — We will continue to improve our operational
excellence, expand and leverage our profitable store networkand continue embedding a cost-conscious mindset.
Scale — Pandora is the largest jewellery manufacturer in the

People — We work as a world-class team, leveraging our global

world, and we will continue to strengthen this part of our

To further drive personalisation, we launched the loyalty

presence. Our operating model enables us to deliver a strongorganisation to benefit from our scale. Through an integrated

programme My Pandora in France. By offering members

and consistent customer shopping experience while weand sustainable supply base we will enable consumer-centric,

exclusive benefits and effectively gathering customer data,

constantly refine our ability to work as one global company

innovative products while at the same time driving continuous

the programme has proven to significantly increase customer

with one brand expression, shared processes and clear roles.

optimisation of cost, quality and service. In 2022, we took thevalue. My Pandora has over 520,000 members in France andWe strive to create a healthy performance culture powered byfirst steps towards our new factory in Vietnam. As a result, we

will be rolled out to more markets in 2023.

innovative digital solutions where we craft the incredible.

decided to reorganise the legal structure and consolidate our

Growth pillar 4: Core markets

Read more about people efforts on page 25.

crafting activities into a separate manufacturing

across the world. There are ample opportunities to grow

Digitalisation — The solid digital foundation we have built

both our seven key markets and other markets.

enables us to deliver on our strategy. This includes more useof data and advanced analytics, modern IT solutions, and

The markets with the highest potential for growth are the US

many other aspects of digitalising our business. We are also

and China, where our network footprints are underpenetrat-

unifying the tech and data platform that drives Pandora

ed. Additionally, the Pandora brand is not as strong in these

today. We also invest in the back-end systems at our crafting

markets as in the UK, Italy and Australia, so there is potential

facilities, in our supply chain and in a new Enterprise

to drive revenue growth through higher brand awareness.

Resource Planning (ERP) system, which will support andMarkets like France and Germany also represent opportunities

further enhance our digital foundation.

for growth, as brand awareness is relatively low in these

sub-group. Read more about the intra-group
restructuring in note 3.3

Pandora has a rich and diversified geographical presencein the Parent

Company financial statements.

21

Best-sellingbraceletwith 1.2
millionpieces sold
Our bracelets remain
popular among ourconsumers as they
enable them toexpress themselves
through beautiful
Pandora charms. In
2022, our heart-lockMoments bracelet
was our best-sellingbracelet with morethan 1.2 million
pieces sold.

ANNUAL REPORT 2022

STORY

22

STORY

EXPANDING
THE PANDORANETWORKWe see significant potential in making

accretive, have a short payback period,

In 2022, we added 80 owned and oper-

have resulted in a record number ofour brand more accessible in many of ourand the risk is low.

ated concept stores through forward

new openings with stellar performance

integration, including two large franchiseacross the board while simulataneously

markets, and in 2022 Pandora opened

Central store in
New York City

net 88 new concept stores and net 130

Another element in Pandora’s network

acquisitions in North America. We took

improving the quality of our existing

owned and operated shop-in-shops.

strategy is forward integration by taking

over 37 stores from Ben Bridge Jeweler,

physical footprint. We expect this to

These stores are part of approximately

over partner stores. We assess possible

primarily on the US West Coast, and 13

continue during 2023 with most of the

The new incredible Evoke
store on Fifth Avenue in
New York City is a great
addition to our networkin the US. It is strategically
positioned to increase
brand accessibility to ourcustomers in the southernpart of Manhattan.

600 locations across our top 40 markets

transactions on a case-by-case basis,stores from Panbor in Las Vegas.

activities taking place in North America,that we have identified as the most at-for example when a franchise contract

tractive opportunities to drive profitable

expires or if a partner wishes to exit theWe also acquired 25 concept stores and

Kai Aejmelaeus, Senior Vice President,

growth. The locations were selectedbusiness. We evaluate each opportunity

nine shop-in-shops from our Portuguese

Omnichannel Network, Pandora.

based on a detailed mapping andon a number of parameters, including

distributor, Visão do Tempo, to assume

evaluation of 13,000 global locations.

performance, future potential, opera-

full ownership of the business in Portugal.

Latin America and parts of Asia,” says

The business case for opening new storesis attractive. New stores are EBIT margin

stores, and scale.

In 2023, we expect to open net 50 to 100
concept stores and net 50 to 100 owned

tional set-up, proximity to other Pandora“Our strong store network expansion
and optimisation efforts during 2022

and operated shop-in-shops.

ANNUAL REPORT 2022

INDUSTRY TRENDSRESPONDING
TO A CHANGINGWORLD
Changes and global trends emerge that requirebusinesses to adapt and respond. For Pandora,
four major industry trends are of particular
relevance to our Phoenix growth strategy.

OUR BUSINESS

23

Macroeconomic uncertainty
The business landscape continues to undergo changes,
some of which have been accelerated by uncertainty shocks
like the pandemic, the Russian invasion of Ukraine, and global
supply chain disruptions and product shortages. According
to McKinsey’s Consumer Pulse1 conducted in the US, consumers are twice as pessimistic about the economy today as
they were throughout the pandemic.

PANDORA’S RESPONSE
Even though Pandora relies on discretionary consumer
spending, the fact that the majority of our revenue is gener-

A seamless customer experienceated from gifting and our affordable positioning provides a

While the physical store experience remains essential in anlevel of resilience. Pandora is also in a healthy position due

industry that is all about experiencing the product, consum-

to our favourable margin structure, strong cash generationer demand for digital shopping has accelerated significantly

and low financial leverage. A stress-test of Pandora’s financial

during the pandemic, and so has consumers’ expectations tocapacity shows the company would still be highly profitableomnichannel services. Not least mobile shopping is moving

even in a deep recession scenario. We saw proof of that in

rapidly, with the global mobile commerce market valued at

2020, when the pandemic hit the hardest and yet the EBIT

USD 268 billion in 2021, expected to grow at a Compound

margin for 2020 landed above 20%. We have fully variable ex-

Annual Growth Rate (CAGR) of 27% until 2030.

penses that are mainly related to cost of goods sold, pointof-sale materials, variable rent, freight costs and variable

PANDORA’S RESPONSE

salary. Additionally, most of our marketing expenses, which

To provide a seamless omnichannel shopping experienceaccounted for 14.1% of revenue in 2022, can be adjusted

that meets our customers’ preferences, Pandora has invested

with short notice.

significantly in digital capabilities in recent years. In 2022, we
migrated our largest market to a new e-commerce platform

To mitigate risk related to macroeconomic uncertainty, we

optimised for mobile usage, and remaining markets are

already took several precautionary measures in 2022 by re-scheduled for 2023. Reflecting a positive consumer response,

ducing costs and reprioritising non-urgent initiatives such as

our online Net Promoter Score was 5 percentage points higher

postponing expansion plans in Thailand. Further cost actions

compared to 2021 and exceeded our target for 2022.

are currently being taken. We also announced plans to build

In 2022, we announced plans to build a newcrafting facility in Vietnam, our first outside Thailand.

a new crafting facility in Vietnam, our first outside Thailand.

In 2022, we also optimised our Click & Collect process

By diversifying our geographical footprint, we become more

further so that we are now able to deliver to customers inresilient to potential supply disruptions. Read more about

as little as two hours to meet last-minute gifting needs andmanagement’s judgements and estimates on page 58.

launched our new loyalty programme, My Pandora, in France.

1

McKinsey 2022.

ANNUAL REPORT 2022

OUR BUSINESS

24

Running the business, sustainably

we made strong progress on our ambitious targets. We

New ways of working

The requirements on global brands to operate with highlaunched the Diamonds by Pandora collection in North

COVID-19 has changed office routines across the world.

standards of responsible business across the sustainabil-

America, featuring lab-created diamonds that are grown,

Flexible ways of working were born in response to the

ity agenda continue to increase. Local governments are

cut and polished using 100% renewable energy and set inpandemic but have since become a desirable job feature that

increasing regulation, investors assess the sustainability

100% recycled silver and gold. We formalised our humanmany employees expect their employer to provide. McKinsey’s

performance, and many consumers are highly engaged in therights programme with a focus on key business areas where

American Opportunity Survey2 conducted among American

debate. The correlation between average consumer pref-

impacts to people are highest. In 2022, we also conducted

respondents shows that when people have the opportunity

erence and brand credentials in sustainability is still largely

a global employee listening survey with focus on inclusivity.

to work flexibly, 87% take it. To attract and retain talent, many

uncharted, but indications are that groups of consumers

The survey showed an 86% inclusion score, above ourcompanies are introducing solutions that meet employees’

attach increasing importance to the subject when making

2025 target of 85%.

expectations to flexibility and a healthy work-life balance.

their purchasing decisions. Research from Boston Consulting
Group1 found that 38% of consumers switched from their

Through Pandora’s long-standing partnership with UNICEF,

PANDORA’S RESPONSE

preferred clothing brand to one with better environmental

we support children and adolescents around the world

Pandora is investing in the long-term well-being of ourand social practices.

through learning and skills development, rights awarenessemployees, and our FutureWork principles for office

and gender equality activities, just as we supported

employees support new ways of working. New flexible

UNICEF’s emergency relief work in Ukraine.

working policies include guidelines for virtual meetings,

PANDORA’S RESPONSE

a new e-learning platform, and a new digital people portal

As part of the Phoenix strategy, we wish to lead the way onsustainability in the industry by becoming a low-carbon,

For the seventh consecutive year, we received the highestthat focuses on development, goal setting and career growth.

circular, and inclusive, diverse and fair business. In 2022,

ranking in MSCI’s annual sustainability rating.

We have also introduced role model awards, expanded
our incentive programme, and launched digital tools forday-to-day work and career growth.
Hiring top talent is essential for the continued growth of
Pandora, and in 2022 we launched a new employer brand,
Craft the Incredible, to attract great talent. We also built a

Recyclable
silver dust
Silver dust is aby-product of ourcrafting process. Silver
dust is just as valuable
as silver grains and ispart of our recycled
metals process.

strong global recruitment team, opened a global Digital Hub
in London and moved our North American headquarters to
New York City to access an even larger talent pool.
Read more about our people efforts on page 25.

1
2

Watchwire 2021.
McKinsey 2022.

ANNUAL REPORT 2022

OUR BUSINESSPEOPLE AND
SUSTAINABILITY
8.3

Leadership
Effectiveness Score

86%
Inclusion
Score

58

Employee Net
Promoter Score

Creating strong results starts with our people
and is founded on responsible business practices.
That is why Pandora nurtures its people and drives
a strong sustainability agenda.
Innovative and agile organisation

World-class talent

Pandora operates and is organised to combine art andPandora is a global workplace with more than 32,000

innovation in a way that delivers strong results. Cross-func-

employees representing more than 125 nationalities andtional teams are responsible for developing and marketing

spanning disciplines such as crafting, distribution, retailour products using consumer insights and data. Closely

and office.

aligned with the business, our supply organisation boosts
speed and agility when delivering to customers. We have two

Attracting top external talent is imperative to supporting

powerful digital hubs in London and Copenhagen to acceler-

Pandora’s growth agenda, and during 2022 we worked toate and strengthen our digital journey.

achieve ambitious recruitment goals in a highly dynamic

Five integrated people
and sustainability priorities
as part of Phoenix
Leveraging synergies across a combined people
and sustainability agenda, our work is focusedon five key areas underpinned by an advanced
digital platform.

Innovative &agile organisation

World-classtalentSustainability
leaderDigitalplatform

employment market.
To bring leadership closer to customers and ensure strong
execution, we have designed a flat organisation and have

In August, our new employer brand, Craft the Incredible,

created direct connections between our nine clusters andcame to life to express what it means to work at Pandora

our Global Office.

and to attract external talent to our teams around the world.

Healthy
performance
cultureEmpowering& transformational
leadership25

ANNUAL REPORT 2022

OUR BUSINESS

26

Healthy performance culture
Pandora’s purpose, We give a voice to people’s loves, pairedwith our four core values – We Care, We Dream, We Dare, andWe Deliver – set a shared direction for our work. Businessresults are important, but just as important is how we getthere. And part of this is building a workplace where employees
thrive and feel compelled to recommend it to others.
For example, we have set an Employee Net Promoter Score(eNPS), a measure of employee sentiment and engagement,
as a core indicator for the company. In 2022, the eNPS was 58,

3,900 >350
leaders to enrol in
our Global Leadership
Programme, Pandora
RISE, over the coming
two years

top leaders havebeen trained on ourtalent approachan increase of 20 compared to 2021, and in the top 5% ofPandora’s benchmark in the consumer sector.

To heighten and globalise our leadership standards,
we launched our first global leadership development

Building an amazing company where we can achieve incred-programme, RISE, in 2022. Pandora RISE guides and inspires

ible things also means nurturing a culture where we can be

people leaders on how to develop, coach and enable perfor-

ourselves. Twice yearly, employees are asked to provide

mance for their team members. It is important that leaders

feedback on their inclusion and diversity experience at

at Pandora feel empowered to create the best conditions

Pandora. In 2022, Pandora had an inclusion score of 86%, infor our employees and enable the realisation of the Phoenix

the top quartile of Pandora's benchmark in the consumer

strategy. The programme will be rolled out to 3,900 leaders

sector. We believe that inclusion, diversity and fairness areover the next two years. In addition, more than 350 top

core tenets of a responsible growing business, and they areleaders are continually trained on our talent approach to

We Darekey in our strategic sustainability priorities.

ensure solid leadership growth and succession for the

We Deliver

Driving transformational and courageous leadership that canpinned by continuous investments in a global digital infra-

inspire and empower colleagues is a top priority. In 2022,

structure that supports and empowers our employees. In

employees scored Leadership Effectiveness at 8.3, which is a

2022, we rolled out several new components in the areas ofsignificant increase compared to 7.9 in 2021. This has led tolearning, performance management and recruitment, withThrough activating this campaign, Pandora has been able toan increase in employee engagement overall. In line with ourmore to follow in 2023. With investments made in 2022, we

attract highly skilled talent from leading brands and acrossdiversity and inclusion target, we increased the ratio of wom-

will fully digitise our core people processes and start wider

other industries. Our new employer brand was integral to at-

en in the Leadership Team from 23% in 2021 to 29% in 2022.

utilisation of data through our enhanced analytics capabili-

tracting around 1,100 office colleagues in 2022 and the hiring

A good improvement, which underlines our commitment toties. Our digital platform serves as our foundation to deliverof more than 4,500 retail colleagues for our peak trading

make Pandora an even more equitable and fair workplace.

on each of our people and sustainability priorities.

We are guided
by four values:

We Dream

Empowering and transformational
leadership

We Careperiod in the fourth quarter.

years to come.
Our efforts to create a world-class workplace are under­ANNUAL REPORT 2022

OUR BUSINESS

27

Sustainability leader
As the global leader in affordable jewellery, we believe that
we have a responsibility to rethink how jewellery is designed
and produced with the planet and its people in mind.
Therefore, sustainability is one of five foundational elementsof Pandora’s Phoenix strategy, contributing to long-term

Oursustainability
priorities

growth ambitions and aligning actions with values. Placing
sustainability at the core of our business is a natural pathfor us to take as a responsible global brand and a means of
future-proofing our company.
Our sustainability strategy has three priorities:
low-carbon business, circular innovation and inclusive,
diverse and fair culture. We have set long-term targets anddeveloped detailed roadmaps for each of these priorities.

LOW-CARBON
BUSINESS

Read more about our sustainability targets on thefollowing page.
Additionally, our sustainability strategy is a commitment
to responsible business operations and adhering to local
regulation and international guidelines.
To deliver on our ambition and targets, in 2022 we continued
to expand the number of people dedicated to this work withteams at our Global Office in Denmark, in our crafting and

CIRCULARINNOVATION

supply activities in Thailand and in other strategic locations.
We are proud that our efforts are noted, and in 2022 we were

Sustainability Report 2022

one of a small number of global companies to achieve an

Read more about Pandora's reporting to the Task
Force on Climate-Related Financial Disclosuresand EU taxonomy disclosures in our

climate action.

Sustainability Report 2022.

‘A’ score from the leading climate organisation, CDP, for our

INCLUSIVE,
DIVERSE AND FAIRCULTUREANNUAL REPORT 2022

OUR BUSINESS

28

Achieved progress against target

OUR SUSTAINABILITY TARGETS
LOW-CARBON
BUSINESSBY 2030 – Reduce total greenhousegas emissions by 50% from a 2019baseline (Scopes 1, 2 and 3) by:- Reducing emissions in own operations by at least 90% to becomecarbon neutral (Scopes 1 and 2
market-based).
- Reducing value chain emissions
by 42% (Scope 3).
BY 2040 – Achieve net zero
emissions.

Increase in emissions compared to baseline

PROGRESS AND STATUS

Yet to be achieved

SCOPES 1, 2 AND 3
2030

2019

2022: 6%SCOPES 1 AND 2 (tonnes CO2e)
20192021: 22,160

2025

SCOPE 3 (tonnes CO2e)
2030

2019
2022: 264,224

BY 2025 – Use only recycled silver
and gold in the crafting of ourjewellery.

RECYCLED SILVER AND GOLD2019

2021: 54%2025

2022: 61%

INCLUSIVE,
DIVERSE AND
FAIR CULTURE

BY 2025 – Create an inclusive
workplace and increase the shareof underrepresented groups.
BY 2030 – Achieve full gender
parity1, reaching 1/3 womenin leadership by 2025.

We have decreased our total greenhouse gas emissions
by 6% compared to our 2019 baseline.
In 2022, we reduced emissions from own operations
by 27% compared to 2021. This was achieved primarily
through the purchase of Renewable Energy Certificates
to cover most of our owned and operated stores andoffices in Europe and 100% of electricity consumption
at our crafting facilities in Thailand.

• Scopes 1 and 2: We will continue the geographic
roll-out of purchasing Renewable Energy Certificates
to cover more markets in the short term, while also
exploring other opportunities to source renewableenergy (for example, Power Purchase Agreements).

In 2022, our Scope 3 emissions increased by 4% since2021, largely due to a higher level of purchased goods
and services. We saw reductions in other areas thanks
to increased supplier-specific data. The overall Scope 3
increase was expected and reductions will materialise in
the coming years.

• Scope 3: In 2023 and beyond, we will continue the

The share of recycled silver and gold purchased in
2022 was 61%. Over the course of 2022, we transitioned procured silver and gold for in-house production to recycled sources, and we completed third-party
audits for most of our component suppliers andcontract manufacturers to strengthen end-to-end
traceability.

• In 2023, we will focus on transitioning ourcomponent and contract manufacturers andsuppliers to recycled sources, expanding our options
for recycled sources, and begin phasing out any
non-recycled stock in our inventory.

2022: 16,146

2021: 255,290

CIRCULARINNOVATIONINCLUSION

—

2

2021

86%
2022

85%
2025

We achieved an inclusion score of 86% in our latest
employee survey. The resulting score ranks us in the
top quartile within our global benchmark, and has us on
track for our 85% target by 2025.

WOMEN IN LEADERSHIPBY 2025 – Reflect societal diversity
in our customer engagement.

23%
2021

29%
2022

33%
2025

50%
2030

We made good progress in 2022 byimproving gender parity in leadershipby 6 percentage points to 29%.

	Gender parity in leadership refers to an equal number (50/50) of men and women in leadership positions from Vice President and up (including the Board) with a +/- 5 percentage points variation.
We use '-' to indicate that data for the data point has not previously been disclosed.
3
Read more to our commitment and targets to the United Nations’ Sustainable Development Goals in our Sustainability Report 2022.
1
2

OUR NEXT STEPS

development and implementation of our supplierengagement programme and scale our outreach tosuppliers on collection of carbon footprint data anddialogue on carbon reduction initiatives.

• We have achieved our inclusion score target, so our
focus will be on maintaining and improving our score.
For example, we are analysing survey data to have abetter understanding of how we can best support
underrepresented groups.
• We have developed and designed an additional learning
module to address the importance of inclusive leadership. We are working to integrate the module as part ofour global leadership programme, Pandora RISE.
• We will be reviewing inclusion within our recruitment
process and succession planning to ensure a sustainable approach towards achieving gender parity.
• We will continue to build guidelines and reporting
systems to track progress on our customer engagement targets.

UN SDGs3

ANNUAL REPORT 2022

OUR BUSINESSMANAGING
RISKS

Our approach to risk management

mitigations and next milestones. To read more about our enterprise

Our enterprise risk management is focused on early identification

risk management efforts, please visit pandoragroup.com.

and assessment of risks followed by mitigating actions to protect
the business. We see a well-functioning risk management process

Our key risks

as key to maintaining and building Pandora’s position as the world’s

The Board of Directors reviews and discusses key risks that could

largest jewellery brand.

threaten our business model or the future performance, solvency or
liquidity of Pandora. Key risks and our responses are further described

Pandora’s Chief Financial Officer heads up the company’s Risk

At Pandora, we carefully monitor andassess potential risks to the company
on an ongoing basis.

29

on the following pages.

Management Board, which consists of senior management representatives from across our value chain. All areas of our business report

The key risks do not represent all the risks associated with our busi-

their most significant risks to the Global Insurance & Risk Office,ness. Other risks not presently identified or ones currently deemed toalong with assessments of those risks and an overview of implemented

be less material may also have an adverse effect on our business.

AREA

DESCRIPTIONRISKMITIGATION

Brand andproduct relevanceAs a large, global brand, the strength andintegrity of our brand is a fundamental
asset. It is important that our productofferings remain relevant to ourcustomers.

A lack of brand or product relevance or a severe
break of good business practices constitute asignificant business risk that could result in lower
traffic to our stores and online shopping sites andreduce revenue.

•
•
•
•
•
•

Brand accessWe sell our products globally and rely
on a strong channel network and solid
insights to engage with consumers in theirpreferred marketplace. A personalised
and unique shopping experience is important for developing customer loyalty.

Not being able to engage consumers and provide
them with a relevant omnichannel shopping experience can result in a decline in revenue.

• Engage store associates by continuing to develop the selling ceremony and offer relevant training
programmes• Strengthen focus on personalisation of shopping experiences across channels• Invest in improving digital and omnichannel customer experiences• Continuously optimise the store network by relocating, opening and closing stores.

Global businessdisruptions

As a consumer brand with a fully integrated value chain, we depend on a fully
operational supply chain and unhindered
access to our sales channels.

Global disruptive events such as pandemics,
lockdowns, extreme climatic events, geopolitical orsocial unrest can result in both lower revenue andhigher costs through changing consumer behaviour,
temporary store and crafting facility closures, labour
shortages and supply chain disruptions.

•
•
•
•

Create consumer-centric innovation, fuelled by consumer insights and rigorous testing
Build brand awareness and desirability through competitive media investments
Strengthen capabilities within data analytics and technology
Deliver 360-degree brand experience across all consumer touchpoints online and offline
Continue monitoring trademarks and patents and fighting infringements
Continue Code of Conduct training in support of good business behaviour.

Expansion of online distribution capacity
Geographical and channel diversification
Global Crisis Management team and increased focus on business continuity
Ongoing review of supply chain - see mitigating actions under “Supply chain disruptions” below.

ANNUAL REPORT 2022

OUR BUSINESSAREA

DESCRIPTIONRISKMITIGATION

Supply chain
disruptions

Pandora operates a fully integrated
value chain and most production is
in-house. Procurement of raw materials
and the ability to produce and distribute
finished products are critical for
meeting customer demand.

Breakdowns, political unrest, fire, natural catastrophes etc. at Pandora’s or key suppliers’ sites may
result in disruption of our supply chain and have asignificant impact on our financial performance.
Having crafting facilities located exclusively in
Thailand elevates the risk of supply disruption.

•
•
•
•
•
•

IT security
breaches

Reliable IT systems and infrastructure
are critical to the company’s ability tooperate effectively. We also have a duty
to safeguard the data of our customers,
partners and employees as well as ourown data.

Breaches of IT security, for example caused bymalware attacks, could have a severe impact on
Pandora’s ability to maintain operations for aperiod of time and, hence, its financial performance. The disclosure of confidential information
could compromise the privacy of customers orother individuals.

• Comprehensive Cyber Security Programme to upgrade existing capabilities and regularly reportprogress to the Board of Directors and the Executive Leadership Team
• Ongoing security monitoring supported by incident response teams• Third-party vulnerability and security maturity assessments• Cyber and information security awareness training and phishing tests for all business areas• Specialised training for high-risk teams, including the Executive Leadership Team
• Data Ethics Policy established and Privacy Board operational.

Breakdownof IT systems

Operating a global company with a fully
integrated value chain is dependent on
stable and efficient IT systems.

Pandora operates a number of legacy IT systems,
including ERP. If Pandora were to fail or otherwise
be unable to upgrade its IT systems in a timely,
precise and efficient manner, this could have anegative effect on Pandora's operations andfinancial results. Furthermore, a lack of interoperability and an obsolescence of core IT systems
could have consequences in terms of operational
efficiency and business continuity.

• Investment in technology upgrades, including an ongoing upgrade of the ERP platform• Cross-functional alignment and project groups to ensure timely implementationof technology upgrades• Ongoing standardisation and consolidation of IT systems across geographies• Increased focus on business continuity plans.

Talent attraction
and succession

Pandora needs highly talented andcapable people across all key functions
and markets to drive growth andsustainable performance and enable us
to deliver on our strategy.

Failure to attract, develop and retain the righttalent as well as maintaining a strong succession
pipeline for leadership and critical roles could be arisk to delivery of our strategy.

• Frequent employee advocacy surveys to measure employee engagement and leadershipeffectiveness to facilitate retention• Chief Talent Officer Programme to get to know our talent, develop them for future roles and build
succession depth• Launch of Global Leadership Programme (Pandora RISE)• Enhanced focus on employer branding with the targeted Employee Value Proposition, Craft the
Incredible• Inclusion & Diversity goals as part of our strategic priorities linked to the Long-term Incentive
programme for senior leaders.

Responsible
businessbehaviour

Pandora has a reputation for responsible
business behaviour. This reputation
benefits the company in several ways,
from attracting new employees tomeeting consumer expectations.

If Pandora violates legislation, disregards
principles of good corporate citizenship or fails toadhere to social or environmental standards, it
could damage our brand reputation.

•
•
•
•
•
•

Dual sourcing where feasible
Buffers of production components and finished goods
Crafting at two separate locations in Thailand
A new crafting facility in Vietnam
Engagement of external manufacturers to provide flexibility
Optimised B2B and B2C distribution capacity.

Mandatory ethics and compliance training
Upgraded external access to our whistleblowing hotline
Responsible Supplier Programme, including training and vendor audits
Environmental, social and governance reporting to ensure transparent and credible disclosure
Commitment to ambitious climate targets and other sustainability initiatives
A tax strategy aimed at paying fair taxes in all markets where Pandora operates.

30

ANNUAL REPORT 2022

31

AREA

DESCRIPTIONRISKMacroeconomic
development

As a global jewellery brand, Pandora
operates in a discretionary consumer
spending category and is exposed to a
weak macroeconomic environment andgeneral changes in consumer behaviour.

Adverse macroeconomic conditions and generalchanges in consumer behaviour may result in
lower demand for our products and impact ourrevenue.

••••

Marketfluctuations

Our products are made of precious
metals, mainly silver and gold. As a global
business, Pandora has significant revenue
in USD, USD-related currencies and GBP.
Our crafting facilities are based in
Thailand and consequently we havesignificant net cost in THB.

Pandora is exposed to a weakening of the USD,
USD-related currencies and GBP and a strengthening of the THB and precious metal prices. Currency
fluctuations and increases in the price of precious
metals can have a significant impact on the company’s financial performance and cash flows.

• Hedging at least 50% of the combined annual commodity, exchange rate and interest rate risk.
However, at least 70% of the annual commodity exposure must be hedged• Ongoing review of sales prices.

Facing up to environmental risks
We understand the need to prepare for the risks thatwill arise from changing weather patterns, rising sea levels
and other climate impacts. In 2022, we carried out aclimate change scenario analysis as recommended by
the Task Force on Climate-Related Financial Disclosures.
In 2023, we will consider relevant mitigation actions.
Read more in our Sustainability Report 2022.

MITIGATION
Continuous monitoring of the macroeconomic landscapeContinuous monitoring of consumer behaviour and trends
Pursuing flexibility in cost base, including frequent break options in store leases
Continued pursuit of cost savings, including preemptive measures already
implemented in late 2022
• Geographical diversification of revenue streams• Stressing our affordable price positioning• Option of “buy now, pay later” payment models.

ANNUAL REPORT 2022

1982

1982
STORY

40 YEARSOF PANDORAJEWELLERY

Pandora is founded as asmall goldsmith shop called
Populair Smykker in
Copenhagen, Denmark.

2000BEGINNING
2006
THE
Pandora’s signature charm

The first Pandora concept store

bracelet concept is launched

opens its doors in Hamburg,and Pandora gets its name. Ten

Germany.

of the original charms are stillpart of our collection today.

In a small jeweller’s shop in modest surroundings in central
Copenhagen, Denmark, goldsmith Per Enevoldsen and his wife
Winnie set out on the journey of what will later become one of
the world’s
largest jewellery Pandora
brands.is listed on the
Pandora’s
first fully-owned

2005

2010

crafting facility opens in

Nasdaq Copenhagen stock

exchange.
From Bangkok.
the beginning, they are driven
by a desire
to offer women a universe of high-quality, hand-finishedand contemporary jewellery at affordable prices.

In 2022, Pandora celebrated its
40th anniversary. An exceptional
journey from a small shop in
Copenhagen to the world’s
largest jewellery brand.

1989
Pandora starts crafting jewellery
in Thailand, where Per Enevoldsen
holds the very first ring crafted.

2014
Pandora enters a ten-year
strategic alliance with The
Walt Disney Company.

ANNUAL REPORT 2022

STORY

2019

33

STORY CONTINUES

Pandora enters long-term
partnership with UNICEF.

It all began in 1982. Per Enevoldsen andcreate their own unique piece of jewel-

his wife Winnie Liljeborg opened a smalllery that would express their individual-

goldsmith's shop on the Danish shopping

ity and celebrate personal milestones.

street Nørrebrogade to sell jewellery un-

The business grew quickly and expand-

der the name Populair Smykker, Danish fored beyond Denmark’s borders into

"popular jewellery". The first product was

important new markets, including the US

a ring crafted from solid sterling silver.

and Canada in 2003 and Australia and

2017

2020

2021

Our state-of-the-art, resource-

Our crafting facilities run on

We introduce jewellery with

Per and Winnie soon expanded into aefficient, LEED Gold-certified

100% renewable energy and welab-created diamonds to reachwholesale business and started sourcing

In 2022 alone, around 65 million charms

crafting facility opens in

set the ambition to become

new customers and deliver on ourits jewellery from Thailand, a country

were crafted, that is six million more

Lamphun in Northern Thailand.

carbon neutral in our own

sustainability commitments.

well-known for its craftsmanship tradi-charms than in 2021.

Germany in 2004.

operations by 2025.

tion. In 1989, they established their own
them to scale up production while keep-

A truly global jewellery
brand

ing quality high and prices affordable,

Having become the world’s largest jewel-

paving the way for our future success.

lery brand, Pandora today offers a widecrafting facility in Bangkok, which allowed

An icon that changed
jewellery2022
Pandora reaches record-highrevenue and employs morethan 32,000 people worldwide.

selection of jewellery collections craftedwith a commitment to having the lowest
possible impact on the environment,

In 2000, Populair Smykker changed its

people and communities. We sell prod-name to Pandora and launched theucts in more than 100 countries throughiconic charm bracelet that sparked our

6,500 physical and online stores, as wellinternational breakthrough. Pandora

as social media and other platforms.

Moments invited customers to collectand combine charms on a bracelet toANNUAL REPORT 2022

35

Corporate governance

39

Board of Directors

41

Executive Leadership Team43

Shareholder information

CORPORATEGOVERNANCE>900
Pandora’s Global Officeat Havneholmen in
Copenhagen employs
more than 900 people.

ANNUAL REPORT 2022

CORPORATEGOVERNANCE

Our governance structure
The Board supervises Executive Management’s
work and is responsible for Pandora’s generaland strategic direction.
Annual General Meeting

Board of Directors

Leadership structure

Executive Management

Board of Directors

Corporate authority is divided between the Board of Directors(the Board) and Executive Management. The Board outlines

Composition

the overall vision, strategy and objectives of Pandora’s

The Board currently has seven members, all of whom werebusiness activities and supervises the performance ofelected at the Annual General Meeting for a term of one

Executive Management.

year. With the exception of Christian Frigast, all Board

Executive Leadership Team

members are independent in the context of the Danish
The Board has established Audit, Remuneration and Nomina-

Recommendations on Corporate Governance. At the time oftion Committees, and members and Chairs to these commit-

his reelection to the Board in March 2022, Christian Frigast

tees are appointed from within the Board. The committees’

could still be considered as independent. However, sinceterms of reference are available at pandoragroup.com.

August 2022 Christian Frigast has been a member of theBoard for more than 12 years and can no longer be regarded

Members of Executive Management are appointed by theas an independent Board member in the context of theBoard. Executive Management is responsible for the day-to-Danish Recommendations on Corporate Governance.

day management and for the execution of Pandora’s strategy.
The composition of the Board is intended to ensure
In addition, the Group has an Executive Leadership Team. The

complementary competencies and diversity to effectively

team members are responsible for the day-to-day operations

support Pandora’s strategy and ensure that all decisionsof their respective business areas and also serve as a part ofare well considered.

Pandora’s overall leadership.

Clusters• North America• Latin America• Pacific/Greater Asia
• Western Europe• Greater China• Southern Europe & MEA• Eastern Europe• Northern Europe• British Isles

A connectedorganisation
Fast execution andcollaboration acrossclusters and global
functions. The nineclusters report to theChief Commercial
Officer.

ANNUAL REPORT 2022

MEETINGS
IN 2022CORPORATE GOVERNANCE

Board evaluation

Markets Day on 14 September 2021. Furthermore, the Board

Each year, the Board conducts an internal self-evaluation

spent time on sustainability and compliance matters as wellfocusing on the effectiveness and skills of the Board.

as risk management.

Peter A. Ruzicka1

Audit Committee

Heine Dalsgaard

The Audit Committee currently has four members,

Birgitta Stymne Göransson

The ideal mix of skills and experience required of Board
members includes:

9

Board ofDirectors

Audit
Committe

5
Remuneration
Committee

3Nomination
Committee

Board meetings attended

Christian Frigast2• Board experience• Executive management

appointed for a one-year term. The Audit Committee's

Marianne Kirkegaard• Sectoral experience• Digitalisation

responsibilities include assisting the Board in monitoring theCatherine Spindler• Sustainability• Retail

effectiveness of the internal control and risk management• Marketing and brand• Financesystems and reviewing Pandora’s financial reporting and

Jan Zijderveld
1

audit process. The Audit Committee conducts its work
An external assessment of the Board’s skills and effective-

6

BOARD MEMBERS

36

Chair

2

Deputy Chair

Meeting attended

according to its Terms of Reference.

Meeting not attended

ness is conducted every three years to ensure objectivity andbenchmarking.

In 2022, the Audit Committee met six times. Its main
activities were to:

AUDIT COMMITTEE
Heine Dalsgaard1

In 2022, an internal Board effectiveness self-evaluation was• review key accounting principles, significant accounting

conducted across seven areas: value creation and strategy,

estimates, key financial risks and compliance with tax

Birgitta Stymne Göransson

Board agenda and meetings (including committees), talent

regulations;

Catherine Spindler

and culture, Board composition, Board members’ contribu-• monitor the external financial reporting process;

Jan Zijderveld

tions, Chair's effectiveness, and reporting/risk management.

• monitor the effectiveness of Pandora’s internal control

1

The conclusions are shared with the Chair, the Board mem-and risk management systems, including internal audit;

bers and Executive Management, followed by a thorough• monitor the external auditors and their independence;

discussion.

• review Pandora’s whistleblowing reporting system and

The assessment of the last self-evaluation held in 2022

• review Pandora’s treasury policy;

identified that the Board continues to consist of individuals• review Pandora’s tax policy.

whistleblowing cases;

who possess relevant skills and experience, and are engaged
and well-prepared. The Board structure and committee work

Independent auditor

are effective and well-functioning, including interactions with

Pandora’s independent auditors are appointed for a term of

Executive Management.

one year at the Annual General Meeting following a proposal
from the Board, which is based on a recommendation from

Board activities in 2022

the Audit Committee. The framework for the auditors’ duties,

The Board held nine meetings in 2022. Its primary focus was

including their remuneration, audit and non-audit services, isto oversee the executional progress of Pandora’s Phoenix

agreed annually between the Board and the auditors follow-

strategy following its announcement at Pandora’s Capitaling the recommendation of the Audit Committee.

Committee meetings attended

Chair
Meeting attended

Meeting not attended

ANNUAL REPORT 2022

REMUNERATION COMMITTEECORPORATE GOVERNANCE

Committee meetings attended

Remuneration Committee
The Remuneration Committee currently has three members,Peter A. Ruzicka1

appointed for a one-year term. The Remuneration Committee

Christian Frigast

assists the Board in ensuring that Pandora’s remuneration

Jan Zijderveld

policies strike an appropriate balance between the

Chairinterests of Pandora’s shareholders and a rewarding andMeeting attended

motivating remuneration of Executive Management and1senior employees.

• review cultural enablers that have driven colleague
engagement, including our Employee Value Proposition
and Leadership development;• assess performance of Executive Management and the cooperation between the Board and Executive Management;• review succession planning for Executive Management roles.

Additional information
The Corporate Governance Statement for 2022, cf. section

NOMINATION COMMITTEE
Christian Frigast1
Birgitta Stymne Göransson

Committee meetings attended

In 2022, the Remuneration Committee met five times. Its107(b) of the Danish Financial Statements Act, is available atmain activities are described in the Remuneration Report

our website: pandoragroup.com/investor/corporate-gover-available at our website: pandoragroup.com/investor/cor-nance/governance-statement.

porate-governance/remuneration-reports.

Marianne Kirkegaard

Pandora's full sustainability disclosure, cf. section 99(a),Peter A. Ruzicka

Nomination Committee

Chair

The Nomination Committee currently has four members,

available in our Sustainability Report 2022 at pandoragroup.

appointed for a one-year term. The Nomination Commit-

com/sustainability/resources/sustainability-reports.

1

Meeting attended

99(b) and 107(d) of the Danish Financial Statements Act, is

tee works according to its Terms of Reference and its main
responsibilities are assessment and evaluation of the Board

Pandora's Global Data Ethics Policy, cf. section 99(d) of theand Executive Management, including performance, skills andDanish Financial Statements Act, available at pandoragroup.

experience, and nomination of candidates to the Board andcom/investor/corporate-governance/data-ethics,

Executive Management. Further, the committee monitors

built on our care and respect for consumer and employee

talent and succession policy and ensures compliance when

privacy. We apply equality and fairness in our processing of

making Board, Executive Management and Executive Lead-data, we respect the person behind the data, and we focus

ership Team appointments. Finally, it deals with succession

on sustainable data practices.

isplanning for Executive Management positions and reviews aswell as monitors diversity policy to ensure compliance.

We also recognise the importance of Artificial Intelligence
Safety. For this purpose, we have created a Global AI Safety

In 2022, the Nomination Committee met three times andStandard, which came into force on 1 August 2022. As a

had a few additional ad hoc exchanges relating to the Board’s

company we have committed to conduct business in fullself-evaluation. Its main activities were to:compliance with the principles for the safe use of AI as set• prepare and conduct the Board assessment in accordanceout in the AI Safety Standard, and we will begin implemen-with the Danish Corporate Governance Recommendations;37

tation of these principles in 2023.

See Pandora's
Global Data
Ethics Policy

ANNUAL REPORT 2022

The Audit
Committee
assists theBoard insupervising
the financial
reportingprocess.

CORPORATE GOVERNANCE

Internal control and risk management
systems in relation to the financial
reporting process

and assess measures to manage, reduce or eliminate iden-

The Audit Committee monitors internal control and thetified risks. The IACC function assists Pandora’s Executive

risk management process to ensure that identified risks

Management and the Audit Committee in identifying andare mitigated.

The Board and Executive Management are responsible formonitoring financial risks in the financial reporting process.
In addition to monitoring of procedures and systems,

Pandora’s internal control and risk management systems in
relation to the financial reporting process.

Control environment

38

The Audit Committee reviews selected high-risk areas on afinancial risks are reviewed through audits performed byfrequent basis, including significant accounting estimates

the IACC function.

and material changes to accounting policies.

Information and communication

The Group’s internal control framework identifies key
processes, inherent risks and control procedures to reduce

Control activities

Group entities are assigned dedicated controllers within

and mitigate financial risks and ensure reliable financial

The financial information reported by Pandora A/S and its

Corporate Finance to ensure a direct line of communication.

reporting.

subsidiaries follows a formalised and structured process and

The Corporate Finance function reports to the Chief Financial

is controlled by local controllers with local market knowledge

Officer.

The Audit Committee assists the Board in supervising theas well as the controlling function within Pandora Global

financial reporting process and monitoring the effectivenessBusiness Services and Corporate Finance. The Group con-

In addition, the IACC function is present at all Audit Commit-of the internal control and risk management systems.

trolling function is continuously trained in new accounting

tee meetings and provides regular status updates on the

Executive Management is responsible for maintaining andand reporting requirements and monitors compliance with

control environment. Furthermore, the head of IACC has

strengthening the overall control environment, identifying

relevant legislation on an ongoing basis.

regular meetings with the Chief FInancial Officer and meet-

weaknesses and ensuring necessary steps are taken to

ings with the Audit Committee without the presence of the

mitigate financial risks through standardisation and process

The financial reporting process is dependent on the

Leadership Team. This set-up ensures transparency and that

optimisation.

Group’s IT systems. Any weaknesses in system controls

communication is shared with the Audit Committee on aand related risks to the financial reporting are mitigatedtimely basis.

A central Internal Audit and Compliance Controlling (IACC)

by manual controls.

function has been established to help Pandora accomplish

The Board has adopted an Investor Relations Policy thatits objectives by bringing a systematic and disciplined

Each entity and Global Business Services assesses its control

requires all communication to stakeholders, including financial

approach to evaluating and improving the effectivenessenvironment through a self-assessment of the effectiveness

reporting, to be conducted adequately, timely and openly –of internal control, compliance and governance processes.

of the implemented controls. The IACC function evaluates

both internally and externally – and to be conducted factually

The head of the IACC function reports directly to Pandora’s

the effectiveness of the Group's control environment on an

and truthfully and in compliance with laws and applicable

Corporate Finance function with a dotted reporting line toongoing basis and reports its findings to the Audit Committee.

regulations.

the Audit Committee Chair.

Monitoring
Risk assessment

Pandora’s internal control procedures and risk management

The Board and Executive Management assess risks on an on-

systems, including the whistleblowing function, are continu-

going basis, including risks related to the financial reporting,ously monitored, tested and documented.

ANNUAL REPORT 2022

CORPORATE GOVERNANCE

BOARD OF DIRECTORSPeter
A. Ruzicka

ChristianFrigastHeine
Dalsgaard

Birgitta
StymneGöransson

Marianne
Kirkegaard

Catherine
SpindlerJan
Zijderveld

39

ANNUAL REPORT 2022

BOARD OFDIRECTORSCORPORATE GOVERNANCE

Peter A. Ruzicka

Christian Frigast

Chair

Deputy Chair

Year of birth: 1964

The Board members’ full CVs are available
at pandoragroup.com.

Member since: 2019Year of birth: 1951

Heine
Dalsgaard
Member since: 2010

Year of birth: 1971

Member since: 2021

Professional position:
Non-executive Board member.

Professional position:
Executive Chair of Axcel Management A/S.

Professional position:
Chief Financial Officer of IVC Evidensia Ltd.

Non-executive functions:
Chair of Royal Unibrew A/S and member of theBoards of Axfood AB, Aspelin Ramm Gruppen AS
and AKA AS.

Non-executive functions:
Chair of Aktive Ejere (Active Owners Denmark), EKF
Danmarks Eksportkredit (Denmark’s Export Credit
Agency), Eksport Kredit Finansiering A/S and Danmarks
Skibskredit Holding A/S and member of the Board of its
subsidiary; Vice Chair of PostNord and Axcel Advisory
Board; member of the Boards of Frigast A/S, Nissens
A/S, Danmarks Eksport- og Investeringsfond and CBS
Executive Fonden; adjunct professor at Copenhagen
Business School.

Non-executive functions:
Member of the Board of Novozymes A/S.

Skills and experience:
Vast operational experience with strategy execution and transformation as well as retail and brand
optimisation at executive level. Furthermore, Peter
A. Ruzicka contributes with experience from other
Board positions and insight into capital markets.

40

Skills and experience:
Experience within areas such as international financial
and executive management from large corporate
multinationals.

Skills and experience:
Experience within areas such as general management,
capital markets, consumer sales and retail execution.

Birgitta
Stymne Göransson

Marianne
Kirkegaard

Year of birth: 1957

Year of birth: 1968

Member since: 2016

Jan
Zijderveld

Catherine
Spindler
Member since: 2020

Year of birth: 1977

Member since: 2020

Year of birth: 1964

Member since: 2021

Professional position:
Non-executive Board member.

Professional position:
Executive chairman in Baker & Baker UK Ltd.

Professional position:
Deputy Chief Executive Officer of Lacoste.

Professional position:
Non-executive Board member.

Non-executive functions:
Chair of Industrifonden and Min Doktor AB and memberof the Boards of Asker AB, Elekta AB and Bure Equity AB.

Non-executive functions:
Member of the Boards of Faerch Group, Salling Group
A/S, BioMar and AKK AB.

Non-executive functions:None.

Non-executive functions:
Member of the Board of Ahold Delhaize N.V. and
Senior Advisor to a number of private equity firms.

Skills and experience:
Experience within areas such as consumer goods,
retail execution, IT, digital, financial insights and capital
markets.

Skills and experience:
In-depth international insight into the consumer market,
experience advancing the social sustainability agenda andexperience of the complete value chain within large corporate multinationals.

Skills and experience:
Experience within international brand strategy,
digital transformation and vast experience in beautyand cosmetics, high-growth pureplay digital environments and lifestyle apparel retail.

Skills and experience:
International consumer market insight, extensive experience advancing environmental and social sustainability, and exposure to the full value chain.

ANNUAL REPORT 2022

CORPORATE GOVERNANCEEXECUTIVE LEADERSHIP TEAM

Alexander
Lacik

AndersBoyer

StephenFairchild

Mary Carmen
Gasco-Buisson

MartinoPessina

Jeerasage
Puranasamriddhi

Byron
ClaytonDavid
Walmsley

41

ANNUAL REPORT 2022

CORPORATE GOVERNANCEEXECUTIVE
LEADERSHIP TEAMThe Executive Leadership Team
members’ full CVs are available at

Alexander
Lacik

AndersBoyer

President & Chief Executive Officer (CEO)Executive Vice President & Chief Financial Officer (CFO)

Year of birth: 1965

Year of birth: 1970

Member since: 2019

Member since: 2018

pandoragroup.com.
Registered Executive Management.

Registered Executive Management.

Alexander Lacik has more than 30 years’ experience from large
global consumer goods companies. Before joining Pandora, he
was Chief Executive Officer of Britax Ltd., a British manufacturer of childcare products. He has also held Chief Executive Officer and senior management positions at Kasthall Golv & Mattor,
Procter & Gamble and Reckitt Benckiser, where he held anumber of positions, including head of Reckitt Benckiser North
America. He has a Bachelor’s degree in Business Administrationfrom the University of Växjö, Sweden.

Anders Boyer has more than 20 years’ experience in finance,business management and turnarounds. Prior to joining Pandora,
Anders held positions as Chief Financial Officer at Hempel and
GN Store Nord, and Finance Director and subsequently Regional
Director of ISS. Anders started his career at A.P. Moller-Maersk,
where he worked for ten years. He has an MSc in Finance andAccounting from Copenhagen Business School, Denmark.

StephenFairchild

Mary Carmen
Gasco-Buisson

MartinoPessina

Jeerasage
Puranasamriddhi

Byron
ClaytonDavid
WalmsleyChief Product Officer

Chief Marketing Officer

Chief Commercial Officer

Chief Supply Officer

Chief Human Resources Officer

Chief Digital & Technology Officer

Member since: 2011

Member since: 2022

Member since: 2020

Member since: 2020

Member since: 2023

Member since: 201942

ANNUAL REPORT 2022

CORPORATE GOVERNANCE

SHAREHOLDERINFORMATION

43

In 2022, reflecting macroeconomic concerns, the Pandora

Pandora’s capital structure policy is to maintain NIBD toshare price decreased by 40% and ended the year with a clos-

EBITDA between 0.5x and 1.5x. At the end of 2022, Pandora’s

ing price of DKK 488. The active capital allocation policy meantleverage ratio was only 0.8x NIBD to EBITDA and thus at thethat Pandora returned DKK 5.1 billion through cash distribu-

low end of the capital structure policy range. The increased

tions to shareholders in the calendar year, totalling 11% of theleverage of 0.4x versus 2021 primarily reflected significant

total market capitalisation as of 31 December 2022.

cash distributions to the shareholders and increased inventories and higher CAPEX through the year.

The liquidity in the Pandora share remains strong with a free
float of 100% of total shares outstanding and around 86

Proposed distributions

million shares traded in 2022, corresponding to 89% of

Pandora continues to be highly cash-generative and has ample

shares outstanding.

liquidity to continue cash distribution to shareholders. For
2023, the Board proposes a dividend of DKK 16 per share andPandora shares have been listed on the Nasdaq
Copenhagen stock exchange since 2010. Pandora isincluded in the blue chip OMX C25 index and has around36,000 registered shareholders.

In addition to being listed in Copenhagen, Pandora has

a new share buyback of DKK 2.4 billion until 30 June 2023 witha sponsored level 1 American Depository Receipt (ADR)

an intention to go up to DKK 5.0 billion over the course of the

programme. The ADRs are traded in the US over-the-counter

next 12 months, assuming no material deterioration in theunder the symbol PANDY. Further information regarding

macroeconomic climate. The total cash distribution of DKK

the ADR programme can be found on our website:

6.4 billion will be the highest in Pandora’s history. The Board

pandoragroup.com.

already has the authority to initiate a share buyback at any
point in time.

Capital structure and cash allocationpany has sufficient financial flexibility to pursue its strategic

Review of 2022 share buybackand dividends

goals and preserve a stable financial structure based on a

In 2022, Pandora paid out an ordinary dividend of DKK 16

strong balance sheet.

per share. The total amount paid was around DKK 1.5 billion.

Pandora’s capital structure serves to ensure that the com-

SHARE PRICE DEVELOPMENT 2022
DKK
1,000

800

ANNUAL DISTRIBUTIONSDKK billion

600

400

200
Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

FY 2022
Actual

FY 2021
Actual

FY 2020
Actual

FY 2019
ActualDividend (ordinary + interim)

1.4

1.5

1.5

0.8

1.8

Nominal dividend per share, DKK

16.0

16.0

15.0

9.0

18.0

Share buyback programme

5.01

3.6

3.3

-

2.2

Total cash return

6.4

5.1

4.8

0.8

4.0

1

Jan

FY 2023
ProposedIncludes DKK 0.4 billion from already announced share buyback running until February 2023 and DKK 4.6 billion of new share buyback (with an intention to go up to DKK 5.0 billion)
expected to be paid out in 2023 calendar year, assuming no material deterioration in the macroeconomic climate.

ANNUAL REPORT 2022

CORPORATE GOVERNANCE

44

In addition, Pandora repurchased shares at a total price ofis in place. In addition, members of the Board of Directors andShare information

DKK 3.6 billion in 2022, including DKK 0.7 billion from the pre-Executive Management are only allowed to trade shares in a

vious buyback programme finalised on 4 February 2022.

four-week trading window following the announcement of in-

Exchange

Shareholders

NasdaqCopenhagen

terim and annual reports. Pandora will ensure that the company is perceived as visible, accessible, reliable and professional

As of 31 December 2022, Pandora had two major sharehold-by the capital markets and that Pandora is regarded amongers. Parvus Asset Management1 has disclosed holding rights

the best relative to peers. This will be achieved by complying

to shares corresponding to 5.4% of the total outstanding

with the rules and legislation for listed companies on Nasdaq

voting rights, and Blackrock2 has disclosed holding rights to

OMX as well as Pandora’s internal policies.

Trading symbol

PANDORA

Identification
number/ISIN

DK0060252690

Number ofshares 5,500,000 of DKK 1,
9each with one voteshares corresponding to 8.6%.

Share classes

1

As of 31 December 2022, the geographical split of

Our website (pandoragroup.com

GICS

25203010

institutional investors was (% of share capital):

sive information about the company, its activities, share

SectorApparel,Accessories & Luxury
Goods• UK 34%		

performance and shareholders. Additionally, all company• US 23%		

announcements, including interim and annual reports, as• Denmark 13%

well as investor presentations, webcasts and conference call

Segment) provides comprehen-transcripts are made available on the website in due time.

Large

ADR information

Company website

As of 31 December 2022, Pandora’s Board of Directors andFurthermore, the website contains a constantly updated

Executive Management held a total of 95,616 and 280,098

financial and event calendar showing events and activities

Pandora shares respectively, corresponding to 0.39% of therelated to investors. A comprehensive list of the 23 analysts

total share capital.

covering the Pandora share is maintained, including names,

Investor Relations

institutions and contact details.

The Executive Management is responsible for the existence of

ADR trading
symbol

PANDY

Programmetype ponsored level 1
S
programme(J.P. Morgan)

ing compliance with Pandora’s Investor Relations Policy. Inves-

Ratio (ADR:ORD) ADRs : 1 ordinary
4
share (4:1)

The purpose of Pandora’s investor relations activities is to

ADR ISIN

US 698 341 2031

available to the capital markets to serve as a basis for regularan Investor Relations function, which is responsible for ensurtor Relations reports directly to the Chief Financial Officer.

ensure that relevant, accurate and timely information is madetrading and a fair pricing of the share. Prior to the announcement of interim and annual reports, a four-week silent period
12Parvus Asset Management Europe Limited, London, UK.
BlackRock, Inc., Wilmington, Delaware, US.

Financialcalendar 2023
08 Feb08 Feb16 Mar
03 May15 Aug05 Oct08 NovAnnual Report 2022
Sustainability Report 2022
Annual General Meeting
Interim Report Q1 2023
Interim Report Q2 2023
Capital Markets Day
Interim Report Q3 2023

ANNUAL REPORT 2022

46

Group performance48

Group profitability

49

Balance sheet and cash flows

FINANCIALREVIEW88
net concept stores
opened in 2022. The store
openings were mainly in
the US and China andare part of our ambition
to increase our overall
footprint in thesemarkets, closely linked to
our Phoenix strategy.

ANNUAL REPORT 2022

FINANCIAL REVIEW

46

GROUP PERFORMANCE
2022 was yet another record-breaking year for Pandora as
revenue reached an all-time high. Pandora slightly exceeded
the financial guidance on organic growth and reached thehigh end of the financial guidance on EBIT margin. This was
despite an increasingly challenging macroeconomic backdrop
throughout the year, COVID-19 restrictions in China
and the impact from a high comparative base in the US
owing to government stimulus cheques in 2021.
In the second year of the Phoenix growth strategy, organic
growth was 7% compared to 2021 and 17% compared to 2019.

REVENUE BY KEY MARKET, YTD
DKK million

2022

2021

US

7,907

7,026

-7%

-3%

30%

737

1,126

-47%

-39%

3%

5%

UK

3,802

3,314

10%

15%

14%

14%

Italy

2,580

2,443

5%

6%

10%

10%

Australia

1,271

1,131

6%

9%

5%

5%

France

1,190

1,122

4%

6%

4%

5%

Germany

1,307

1,191

18%

10%

5%

5%

Total top-7 markets

18,795

17,353

-2%

1%

71%

74%

China

Sell out growth(like-for-like)

Organic Share of revenue Share of revenue
growth
FY 2022
FY 2021
30%

Rest of Pandora

7,669

6,041

21%

23%

29%

26%

Total revenue

26,46323,394

4%

7%

100%

100%

years have been paying off whilst the launch of new platforms,

backdrop. France saw positive sell-out growth of 4%,

declined for Pandora and sell-out growth ended at -7%

such as Diamonds by Pandora, has been well received.

however Pandora is not satisfied with the performance. In

compared to 2021, following the effect of government

2022, Pandora focused on detoxing the promotional levelstimulus cheques in 2021.

Growth was driven by continued strong brand momentum
across major markets. Brand-specific investments in digital,commercial and personalised marketing over the past three

Good momentum across most
key markets

in France, with the aim of building a stronger base business tocapitalise on future ambitions.

Moments incl. Collabs compounds
solid growth

Pandora delivered strong performance in most of its key

Throughout 2022, China remained a drag on performance.

The Moments incl. Collabs segment continued its solid per-markets. The UK, our second-largest market, delivered strong

The COVID-19 restrictions in the market further delayed theformance in 2022. Despite a challenging macro environment,

sell-out growth of 10% compared to 2021, driven by strong

relaunch of the Pandora brand. China remains of high strate-

Pandora Moments incl. Collabs delivered positive sell-out

demand for the Pandora Moments platform. Italy and Germany

gic importance for Pandora.

growth of 5% in 2022, underpinning its position as a leading

saw solid sell-out growth and ended the year at 5% andproduct category in the jewellery market, even in uncertain

18%, respectively. In the second half of the year, Italy started

Organic growth compared to 2019 remained very strong intimes. Growing Pandora Moments is the number one priority

to see negative impact from the challenging macroeconomic

the US and ended at 53%. As expected, the US market

in the Phoenix strategy.

ANNUAL REPORT 2022

Diamonds by Pandora shows potential

FINANCIAL REVIEW

2022

2021

Sell-out growth(like-for-like)

Moments incl. Collabs

19,192

16,610

5%

11%

73%

71%

- Moments

16,578

14,699

3%

9%

63%

63%

- Collabs

2,614

1,911

20%

30%

10%

8%

significant opportunity for growth. Style also includes

Style

7,272

6,784

-1%

3%

27%

29%

- Timeless

4,362

4,091

-2%

2%

16%

17%

Pandora ME, which is designed to target Generation Z and- Signature

1,883

1,990

-12%

-9%

7%

9%

grew 40% compared to 2021. Another product platform

- ME

815

656

40%

21%

3%

3%

within Style is Diamonds by Pandora, a collection of lab-

- Diamonds by Pandora

213

48

130%

298%

1%

0%

created diamond jewellery made out of 100% recycled

Total revenue

26,46323,394

4%

8%

100%

100%

REVENUE BY CHANNELDKK million

2022

2021

Organic
growthPandora owned1 retail19,115

15,922

11%

16%

72%

68%

- of which concept stores

12,150

9,133

21%

29%

46%

39%

- of which online stores

5,612

5,977

-10%

-10%

21%

26%

- of which other points of sale

1,353

812

55%

57%

5%

3%

Wholesale

6,628

6,705

-2%

-7%

25%

29%

- of which concept stores

3,508

3,737

-3%

-13%

13%

16%

- of which other points of sale

3,120

2,968

-1%

0%

12%

13%

721

767

0%

-7%

3%

3%

26,46323,394

7%

8%

100%

100%

Pandora's second product segment, Style, delivered sell-out
growth of -1% in 2022, mainly dragged down by Signature.
The largest product platform within Style is Timeless, which
offers classical jewellery to our consumers. Timeless is also
Pandora's second-largest product platform and represents

REVENUE BY SEGMENTS
DKK million

47

Growth in Share of revenue Share of revenue
local currency
FY 2022
FY 2021silver and gold. Pandora took the platform to North America
in August 2022, across 269 Pandora stores in the US andCanada as well as online. The US is the world’s largest market for lab-created diamond jewellery, estimated at around
USD 1.2 billion. The market is expected to continue to grow,and lab-created diamonds are outpacing the diamondindustry's overall growth. In 2022, total revenue was DKK
213 million. The collection is available in the UK, the US
and Canada.

Store network development
In 2022, Pandora opened net 88 concept stores. The store
openings were mainly located in the US and China and arepart of Pandora’s ambition to increase its overall footprintin these markets. The expansion comes with a significant

Third-party distribution
Total revenue
1

Growth in Share of revenue Share of revenue
local currency
FY 2022
FY 2021

Pandora does not own any of the premises (Land and buildings) where stores are operated. Pandora exclusively operates stores from leased premises.

opportunity for further value creation, and we expect toopen an additional net 50 to 100 concept stores in 2023.

STORE NETWORK
Number of points of sale1

2022

2021

stores and nine shop-in-shops in Portugal from third-party

Concept stores

2,542

2,454

88

distribution stores to Pandora-owned stores. Pandora also

- of which Pandora owned2

1,653

1,423

230

took over 13 concept stores in Las Vegas from Panbor, and 37- of which franchise owned

588

700

-112

concept stores from Ben Bridge Jeweler, primarily on the US- of which third-party distribution

301

331

-30

West Coast.

Other points of sale

3,985

4,080

-95

Furthermore, through 2022, Pandora converted 25 concept

Growth s of Q1 2022, Pandora excludes concept stores andAother points of sales from third-party distribution related
to Russia and Belarus. Comparative figures for 2021 wererestated accordingly.
2P andora does not own any of the premises (Land andbuildings) where stores are operated. Pandora exclusively
operates stores from leased premises.
1

ANNUAL REPORT 2022

FINANCIAL REVIEW

48

GROUP PROFITABILITY
Pandora delivered strong profitability again in 2022 with

Highlyprofitablebusiness

EBIT increasing by 15%, a testimony to the operating
leverage in Pandora’s business model.
Moments incl. Collabs generated a gross margin of 75.6% while
Style generated a gross margin of 78.2% compared to 75.3%

COST OF SALES AND GROSS PROFITDKK million

2022

2021

Growth inconstant FX

Share ofrevenue 2022

Share ofrevenue 2021

Revenue

26,46323,3948%

100.0%

100.0%

Cost of sales-6,273-5,5907%-23.7%-23.9%

Gross profit

20,19017,803

9%

76.3%

76.1%

OPERATING EXPENSES
DKK million

2022

2021

Growth inconstant FX

Share ofrevenue 2022

Share ofrevenue 2021

Sales and distribution expenses-7,602-6,352

16%

28.7%

27.2%

Marketing expenses-3,720-3,587

0%

14.1%

15.3%

Administrative expenses-2,125-2,026

3%

8.0%

8.7%

Total operating expenses-13,448-11,965

9%

50.8%

51.1%

and 78.1% in 2021, respectively. Overall, gross margin was

25.5%
EBIT margin

slightly up compared to 2021. The increase was mainly due
to favourable channel mix and overall efficiencies in production. The increase was delivered despite the negative impacts
from higher commodity prices, which impacted gross margin
negatively by 0.9 percentage points. Furthermore, temporary
headwind of 0.5 percentage points from inventory buybacks
in connection with franchise acquisitions and non-recurring

76.3%
Gross margin

COVID-19 cost in Thailand also depressed gross margin in
2022. Lastly, the impact on Pandora’s gross margin fromforeign exchange rates was neutral compared to 2021.

million of trade receivables related to Pandora’s exit fromThe OPEX ratio decreased by 0.3 percentage points compared

the Russian market.

to 2021, despite higher sales and distribution expenses fromEBIT
DKK million

2022

2021

EBIT
marginEBITmarginOperating profit (EBIT)

6,743

5,839

25.5%

25.0%

the expansion of owned and operated stores. Marketing

Net financial items ended at a cost of DKK 210 million com-

expenses ended at 14.1% of revenue in 2022, compared topared to DKK 461 million in 2021. The development was due

15.3% in 2021, and administrative expenses ended at 8.0% of

to favourable exchange rate movements. Total tax expenses

sets. Lastly, net profit improved to DKK 5.0 billion comparedrevenue compared to 8.7% in 2021. The EBIT margin ended at

amounted to DKK 1.5 billion (2021: DKK 1.2 billion), corre-

to DKK 4.2 billion in 2021.

25.5%, up 0.5 percentage points compared to 2021, despite

sponding to an effective tax rate of 23.0% in 2022 comparedheadwinds from rising inflation, higher interest rates andto 22.6% in 2021. The increase was a reflection of an overall

Pandora lifted earnings per share (EPS) by 29% compared togeopolitical uncertainty. Pandora also wrote down DKK 50

stronger performance combined with non-capitalised tax as-

2021, with EPS ending at DKK 54.2 in 2022.

ANNUAL REPORT 2022

FINANCIAL REVIEW49

BALANCE SHEET AND CASH FLOWS
Solid capital position

29%
EPS growth

Net working capital ended at 4.2% of revenue in 2022. The
increase in net working capital of DKK 2.3 billion was mainly
driven by deliberate inventory build-up to protect availability,
in order to mitigate risk of stock-outs and disruptions in the
supply chain. In addition, the increase on inventory was also
driven by more openings of owned and operated stores and

48%
ROIC

revenue growth.

NET WORKING CAPITAL
Share of preceding 12 months' revenue

2022

2021

2020

2019

2018
13.8%

Inventories

15.9%

12.8%

10.3%

9.8%

Trade receivables

4.8%

4.3%

4.6%

7.5%

7.2%

Trade payables-11.8%-14.0%-16.9%-14.2%-9.9%

Other net working capital elements

-4.7%

-8.2%

-5.6%

-4.5%

-4.5%

Total

4.2%

-5.0%

-7.6%

-1.3%

6.7%

Free cash flows ended the year at DKK 2.6 billion, down fromROIC remained strong, landing at 48% in 2022 compared to

to inventory build-up, which had reached a sustainable level

DKK 5.1 billion, and is a reflection of the before mentioned

59% in 2021. The decrease was mainly a function of higher

at the end of 2022.

increases in inventory as well as higher CAPEX. Pandora

invested capital due to the before mentioned inventory build-increased CAPEX from a 3% share of revenue in 2021 to a 5%

up and increased right-of-use assets as a consequence of net

Net interest-bearing debt amounted to DKK 6.8 billion atshare of revenue in 2022, equal to a DKK 649 million increase

opened Pandora owned and operated concept stores at thethe end of 2022 (2021: DKK 2.9 billion), corresponding to ain absolute CAPEX. The increase in CAPEX was mainly due

end of 2022. On a run-rate basis, new Pandora concept stores

financial leverage of 0.8x (2021: 0.4x). The increase in net inter-to network expansion as Pandora opened net 88 concept

are ROIC-accretive. The investments made support Pandora's

est-bearing debt was mainly driven by significant cash returns

stores and 130 owned and operated shop-in-shops in 2022.

execution on the Phoenix growth strategy and Pandora sees

to shareholders in 2022 through a combination of dividends

Additionally, taxes paid ended at DKK 1.8 billion in 2022

potential for expanding the ROIC going forward.

and share buybacks, equivalent to 11% of market cap at thecompared to DKK 0.8 billion in 2021, also impacting bothend of 2022, and increasing inventory levels.

free cash flows and cash flows from operating activities neg-

Balance sheet

atively. The increase in taxes paid related to tax from priorTotal non-current assets increased to DKK 14.3 billion at

At the end of 2022, equity in Pandora amounted to DKK 7.2

year and higher tax paid for 2022. Cash flows from investing

the end of 2022 (2021: DKK 12.6 billion), mainly due to an

billion, roughly in line with DKK 7.0 billion in 2021. The increase

activities increased to DKK 1.8 billion compared to DKK 0.6

increase in goodwill from acquisitions, an overall higher

was driven by profit for the year offset by payout of DKK 5.1

billion in 2021, due to increasing acquisition activity and

CAPEX spend across all asset types, higher right-of-use

billion to the company’s shareholders. In 2022, we paid out

higher CAPEX from network expansions and investments

assets coming from network expansion, and higher deferred

DKK 1.5 billion in ordinary dividend and bought back own

in digital capabilities.

tax assets. The increase in current assets was mainly relatedshares for a total of DKK 3.6 billion.

51 	Consolidated financial statements
91 	Management statement92 	Independent auditor's report96 	Parent Company financial statements“

I love working with
Pandora’s exciting
digital transformation.
Considering theambitious journey
we are on, there areimmense opportunities
for everyone to growand I really enjoy being
part of the company’s
success.
PRASHANT
Delivery Manager,
Denmark

FINANCIALSTATEMENTS

ANNUAL REPORT 2022

FINANCIAL STATEMENTS

51

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBERCONSOLIDATED INCOME STATEMENTDKK million
Revenue
Cost of sales

2022

2021

2.1

26,46323,394

2.3, 3.1, 3.2-6,273-5,59020,19017,803

Other comprehensive income:Items that may be reclassified to profit/loss for the year

Gross profit
Sales, distribution and marketing expenses

2.3, 3.1, 3.2-11,322-9,939Administrative expenses

2.3, 3.1, 3.2-2,125-2,026

Operating profit

2.1

6,743

5,839

Finance income

4.6

412

152

Finance costs

4.6

Profit before tax
Income tax expense

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
DKK million

Notes

2.5

Net profit for the year

-622

-613

6,533

5,378

Notes

Net profit for the year

Exchange rate adjustments of investments in subsidiaries

2022

2021

5,029

4,160

-196

370

Commodity hedging instruments:- Realised in net cost of sales-1-4- Realised in net financials

46

-16

- Realised in inventories

241

-141

- Fair value adjustments

-39

-219

-1,504-1,218

5,029

4,160

Foreign exchange hedging instruments:- Realised in net financials

110

249

- Fair value adjustments

-61

-287

23

83

123

36

12

10

Items not to be reclassified to profit/loss for the year, net of tax

12

10

Other comprehensive income, net of tax

135

46

Total comprehensive income for the year

5,164

4,206

Earnings per share, basic (DKK)

4.2

54.2

42.1

Earnings per share, diluted (DKK)

4.2

53.7

41.7
Tax on other comprehensive income, income/expense

2.5

Items that may be reclassified to profit/loss for the year, net of tax
Items not to be reclassified to profit/loss for the year
Actuarial gain/loss on defined benefit plans, net of tax

2.3

ANNUAL REPORT 2022

FINANCIAL STATEMENTS

52

CONSOLIDATED BALANCE SHEETAT 31 DECEMBERASSETS
2022

2021

EQUITY AND LIABILITIESDKK million

Goodwill

4,822

4,418

Share capital

4.1

96

100

Brand

1,057

1,057

Treasury shares

4.1-3,320-3,416

Distribution

1,047

1,080

Reserves

642

538

Proposed dividend

7,568

7,094

Retained earnings

8,044

8,007

Total equity

7,167

7,001

DKK million

Notes

Other intangible assets
Total intangible assets

3.1

Notes

2022

2021

918

795

1,430

1,516

Property, plant and equipment

3.2

2,226

1,816

Right-of-use assets

3.3

2,978

2,532

3.7

363

416

Deferred tax assets

2.5

1,261

891

Loans and borrowings

4.3, 4.4

3,130

2,765

249

222

Deferred tax liabilities

2.5

172

113

14,282

12,555

Total non-current liabilities

3,665

3,295

Other financial assets
Total non-current assets

Provisions

Inventories

3.5

4,211

2,991

Provisions

3.7

21

26

Trade receivables

3.6

1,262

1,009

Refund liabilities

3.8

628

724

Right-of-return assets
Derivative financial instruments
Income tax receivable
Other receivables
Cash
Total current assets
Total assets

3.8

54

70

Contract liabilities

4.4, 4.5

231

69

Loans and borrowings

2.5

3.8

136

163

4.3, 4.4

4,458

1,161

155

68

Derivative financial instruments

4.4, 4.5

74

209

1,024

738

Trade payables

3.9, 4.4

3,131

3,267
1,003

794

1,043

Income tax payable

2.5

1,068

7,731

5,988

Other payables

4.4

1,666

1,694

Total current liabilities

11,181

8,246

Total liabilities

14,846

11,541

Total equity and liabilities

22,013

18,54222,013

18,542

ANNUAL REPORT 2022

FINANCIAL STATEMENTS

53

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBERDKK million

Notes

Share
capitalTreasurysharesTranslation­reserve

Hedging
reserve

Dividend­proposed

Retained­earnings

Total­equity100-3,416

905

-110

1,516

8,007

7,001

2022
Equity at 1 January
Net profit for the year

-

-

-

-

-

5,029

5,029

Other comprehensive income, net of tax

-

-

-108

231

-

12

135

Total comprehensive income for the year

-

-

-108

231

-

5,041

5,164

The Board of Directors will propose at the Annual General
Meeting that an ordinary dividend of DKK 16 per share,
corresponding to DKK 1.4 billion (2021: DKK 16 per share,
corresponding to DKK 1.5 billion), be distributed for 2022.
In 2021, an extraordinary dividend of DKK 15 per share waspaid, corresponding to DKK 1.5 billion.

2.3, 2.4

-

199

-

-

-

-95

104

In 2022, Pandora continued the share buyback programmes,

Purchase of treasury shares

4.1--3,588-----3,588which resulted in repurchases of 6,595,620 treasury shares,

Cancellation of treasury shares

4.1

-5

3,486

-

-

-

-3,481-

corresponding to DKK 3.6 billion (2021: 3,943,797 treasury

Dividend paid

4.2

-

-

-

-

-1,5162-1,514

Dividend proposed

4.2

-

-

-

-

1,430

-1,430-96-3,320

797

121

1,430

8,044

7,167

Share-based payments

Equity at 31 December

shares, corresponding to DKK 3.3 billion).
For further shareholder information on dividend payments,
see page 43.

2021
Equity at 1 January

100

-93

535

215

-

6,632

7,389
4,160

Net profit for the year

-

-

-

-

-

4,160

Other comprehensive income, net of tax

-

-

370

-325

-

1

46

Total comprehensive income for the year

-

-

370

-325

-

4,161

4,206

Share-based payments
Purchase of treasury shares

2.3, 2.4

-

1

-

-

-

209

210

4.1

-

-3,325-----3,325-1,479Dividend paid

4.2

-

-

-

-

-1,481

2

Dividend proposed

4.2

-

-

-

-

2,997

-2,997-100-3,416

905

-110

1,516

8,007

7,001

Equity at 31 December

ANNUAL REPORT 2022

FINANCIAL STATEMENTS

54

CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 31 DECEMBERDKK million

2022

2021

DKK million

Operating profit

6,743

5,839

Cash and cash equivalents at 1 January

Depreciation and amortisation

1,973

1,999

Exchange gains/losses on cash

4

18

87

166

Net increase/decrease in cash

-452

-1,887

Change in inventories-1,012-799

Cash and cash equivalents at 31 December

595

1,043

Change in receivables

-531

-77

-559

327

Cash balances

794

1,043

-18

70

Overdraft

-199

-

7

3

Cash and cash equivalents at 31 December

595

1,043

-466

-468
4,434

6,228

Share-based payments

Notes

2.4

Change in payables and other liabilities
Other non-cash adjustments

4.7

Finance income received
Finance costs paid
Income tax paid

2.5

Cash flows from operating activities, net-1,790-832

Cash flows from operating activities, net

4,434

6,228

- Finance income received

Notes- Finance cost. paid
Acquisition of subsidiaries and activities, net of cash acquired

-562

-66

Cash flows from investing activities, net

Purchase of intangible assets

3.4

-353

-289

- Acquisition of subsidiaries and activities, net of cash acquired

Purchase of property, plant and equipment

-838

-296

Change in other assets

-36

17

Proceeds from sale of property, plant and equipment
Cash flows from investing activities, net

52-1,785-631

4.2-1,514-1,479Purchase of treasury shares

4.1-3,527-3,325

Proceeds from loans and borrowings

4.3

4,994

1,315

Repayment of loans and borrowings

4.3-1,985-3,004

Repayment of lease commitments

4.3-1,068-991-3,100-7,484-452-1,887

Cash flows from financing activities, net
Net increase/decrease in cash

2021

1,043

2,912

-7

-3

466

468

-1,785

-631

562

66

Free cash flows excl. lease payments

3,670

6,128

Free cash flows incl. lease payments

2,602

5,137

6,693

6,023

Unutilised committed credit facilities
Dividend paid

2022

4.4

The above cannot be derived directly from the income statement and the balance sheet.

ACCOUNTING POLICIESCash flows from operating activities are presented using the indirect method.
Cash flows in currencies other than the functional currency are translated at the average exchange rates for themonth in question, unless these differ significantly from the rates at the transaction dates.

CONTENTS

ANNUAL REPORT 2022

FINANCIAL STATEMENTS

SECTION 1

55

SECTION 4

BASIS OF PREPARATION		

56

1.1 Principal accounting policies 		
1.2 New accounting policies and disclosures
1.3 	Management’s judgements andestimates under IFRS		

57
58
58

SECTION 2

RESULTS FOR THE YEAR		

59

2.1 Segment and revenue information
2.2 Government grants		
2.3 Staff costs		
2.4 Share-based payments		
2.5 Taxation		

60
62
62
63
64

SECTION 3

INVESTED CAPITAL AND
WORKING CAPITAL ITEMS		

68

3.1 Intangible assets		
3.2 Property, plant and equipment		
3.3 Leases		
3.4 Business combinations		
3.5 Inventories		
3.6 Trade receivables		
3.7 Provisions		
3.8 Contract assets and liabilities		
3.9 Trade payables		

69
72
73
74
76
76
77
77
78

CAPITAL STRUCTURE AND
NET FINANCIALS		

79

4.1 Share capital		
4.2 Earnings per share and dividend		
4.3 Net interest-bearing debt		
4.4 Financial risks		
4.5 Derivative financial instruments		
4.6 Net financials 		
4.7 Other non-cash adjustments		

80
80
81
82
84
86
86

SECTION 5

OTHER DISCLOSURES		87

5.1 Contingent assets and liabilities		
5.2 Related parties		
5.3 Fees to independent auditor		
5.4 	Events occurring after the reporting period
5.5 Companies in the Pandora Group
5.6 Financial definitions		

88
88
88
88
89
90

Notes
The notes are grouped into five sections related to key
figures. The notes contain the relevant financial information
as well as a description of accounting policies applied for the
topics of the individual notes.

ANNUAL REPORT 2022

FINANCIAL STATEMENTS

SECTION 1

BASIS OFPREPARATIONThis section introduces Pandora’s accounting policies
and significant accounting estimates.
A more detailed description of accounting policies
and significant estimates related to specific reported
amounts is presented in the respective notes. The
purpose is to provide transparency on the ­disclosed
amounts and to describe the relevant accounting
policy, significant estimates and ­numerical disclosurefor each note.

Best-selling charmin 2022
In 2022, our absolute best-seller charm was
the Murano Glass Sea Turtle Dangle Charmwhich sold almost 300,000 pieces.

56

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 1.1

are tagged using eXtensible Business Reporting Language

and expenses, unrealised gains and losses and dividends re-

PRINCIPAL ACCOUNTING POLICIES(iXBRL), which complies with the ESEF taxonomy included in thesulting from intercompany transactions are eliminated in full.

ESEF Regulation. The Annual Report submitted to the Danish

Pandora A/S is a public limited company with its registeredNotes
2.1	Segment and revenue
information
2.2	Government grants
2.3 Staff costs
2.4	Share-based
payments
2.5	Taxation
3.1	Intangible assets
3.2	Property, plant andequipment
3.3 Leases
3.4	Businesscombinations
3.5 Inventories
3.6 Trade receivables

office in Denmark.

The consolidated financial statements are presented in DKK,

named PAND-2022-12-31-en.zip.

which is also the functional currency of the Parent Company.
Each subsidiary determines its own functional currency, anditems recognised in the financial statements of each entity
are measured using that functional currency.

Pandora presents financial measures in the Annual Report

2022 comprises the consolidated financial statements ofthat are not defined according to IFRS. Pandora believes these

Pandora A/S and its subsidiaries (the Group) as well as sep-

non-GAAP measures provide valuable information to investors

Transactions and balances

arate financial statements for the Parent Company, Pandora

and Pandora’s management when evaluating performance.

Transactions in foreign currencies are initially ­recognised in

A/S. The financial statements have been prepared in accor-

Since other companies may calculate these differently fromthe Group entities at their respective functional currency

dance with International Financial Reporting Standards (IFRS)

Pandora, they may not be comparable to the measures used

rates prevailing at the date of the transaction. Monetaryas adopted by the EU and additional requirements of theby other companies. These financial measures should there-

assets and liabilities denominated in foreign currencies are

Danish Financial Statements Act.

fore not be considered to be a replacement for measures de-translated at the functional currency spot rate of exchange

fined under IFRS. For definitions of the performance measuresruling at the reporting date. All adjustments are recognised

used by Pandora, see note 5.6 Financial definitions.

in the income statement.

cost basis, except for derivative financial instruments, whichhave been measured at fair value.

Non-monetary items that are measured in terms of historical

The Annual Report is presented in Danish kroner (DKK) and allamounts are in millions unless otherwise stated. Due to rounding, numbers presented throughout this report may not add
up precisely to the totals, and percentages may not precisely

3.8	Contract assets andliabilities

reflect the absolute figures.

4.2	Earnings per share anddividend

Apart from changes due to the implementation of new or

4.3	Net interestbearing debt

1.2 New accounting policies and disclosures,

4.6 Net financials

Functional and presentation ­currency

ment together with certain technical files, all included in a file

The Annual Report for the period 1 January to 31 December

3.7 Provisions

4.5	Derivative financial
instruments

Financial Supervisory Authority consists of the XHTML docu-

Alternative performance measures

The financial statements have been prepared on a historical57

ACCOUNTING POLICIESThe overall accounting policies applied to the Annual
Report as a whole are described below. The accounting
policies related to specific line items are described in thenotes to which they relate.
The description of accounting policies in the notes forms partof the overall description of Pandora’s accounting policies.

amended standards and interpretations as described in note
accounting

policies are unchanged from last year.

iXBRL reporting

cost in a foreign currency are translated using the exchange
rates at the dates of the initial transactions. Non-monetary
items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value
is determined.
Foreign exchange rate adjustments arising on monetary
items which are considered part of the net investment in foreign entities are recognised in other comprehensive income.

Consolidated financial statements
The consolidated financial statements comprise the financial

Group companies with another functional currency
than DKK

statements of the Parent Company and its subsidiaries. Sub-

The assets and liabilities of foreign subsidiaries are translat-

Pandora A/S has filed the Annual Report 2022 in the European

sidiaries are fully consoli­dated from the date of acquisition,

ed into DKK at the rate of exchange prevailing at the report-

Single Electronic Format (ESEF), XHTML, which can be displayed

being the date on which Pandora obtains ­control, until the dateing date, and their income statements are translated at thein a standard browser. The consolidated financial statementsthat such control ceases. All intercompany balances, income

exchange rates prevailing at the dates of the transactions.

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 1.1

NOTE 1.2

PRINCIPAL ACCOUNTING POLICIES (CONTINUED)

NEW ACCOUNTING POLICIESAND DISCLOSURES

in other comprehensive income. On disposal of a foreign sub-Implementation of new or amended
standards and interpretations

sidiary, the component of other comprehensive income relating

Pandora has adopted all new or amended standards (IFRS)

to that particular foreign operation is recognised in the income

and interpretations (IFRIC) as adopted by the EU and whichstatement.

are effective for the financial year 1 January to 31 December

Exchange rate adjustments arising on translation are recognised

Consolidated income ­statement

2022. The implementation of these new or amended standards and interpretations had no material impact on the

The consolidated income statement is presented based on

financial statements for the year. The new standards thatcosts classified by function. Cost of sales comprises direct

are not yet effective are not expected to have any material

and indirect expenses incurred to generate revenue for the

impact on Pandora.

year, comprising raw materials, consumables, production staff,
depreciation, amortisation and impairment losses in respectof production equipment.
Sales, distribution and marketing expenses comprise expenses related to the distribution of goods sold and sales campaigns, including packaging materials, brochures, wages andsalaries and ­other expenses related to sales and distribution
staff as well as depreciation, amortisation and impairment

NOTE 1.3

MANAGEMENT’S JUDGEMENTS
AND ESTIMATES UNDER IFRS

losses in respect of distribution equipment.
Administrative expenses comprise expenses incurred in theyear to manage Pandora, including expenses related to administrative staff and depreciation, amortisation and impair-Notes

ment losses in respect of assets used in the administration.

2.1	Segment and revenue
information

The allocation of amortisation and impairment losses from in-

2.5	Taxation

tangible assets is presented in note 3.1

3.3 Leases

and the allocationof depreciation and impairment losses from property, plantand equipment in note 3.2.

3.5 Inventories
3.8	Contract assets
and liabilities
5.1	Contingent assets
and liabilities

SIGNIFICANT ACCOUNTING ESTIMATES
In preparing the consolidated financial statements, management makes various judgements, accounting estimates and assumptions that form the basis of the presentation,
recognition and measurement of Pandora’s
assets and liabilities.
Determining the carrying amounts of someassets and liabilities requires judgement, estimates and assumptions concerning future
events. Judgements, estimates and assumptions are based on historical experience andother factors, which management assesses
to be reasonable, but which by their nature
involve uncertainty and unpredictability.
These assumptions may have to be revised,and unexpected events or circumstances
may occur.
Pandora is subject to risks and uncertainties that may lead to actual results differingfrom these estimates, both positively andnegatively.
Climate change
In preparing the consolidated financial
statements, management has considered theimpact of climate change, particularly in thecontext of the Group’s sustainability targets
to the extent possible. Pandora’s targets to
reduce its greenhouse gas emissions by 50%
by 2030 and achieve net zero emissions by
2040 as well as to only use recycled silver andgold in its jewellery by 2025 are included in
the Group’s financial forecasts. These considerations did not have a material impact onmanagement’s judgements and estimates,consistent with the assessment that climatechange is not expected to have a significant
impact on the Group’s future cash flows orgoing concern assessment.
In addition, consideration has been given to
the potential financial impacts of climate-related risks on the carrying value of goodwill
through a qualitative review of the Group’s
climate change risk assessment. This review
did not identify any material financial impacts.
Pandemic and macroeconomic uncertainty
The pandemic and macroeconomic uncertainty caused by the Russian invasionof Ukraine continue to affect the global
economy. Pandora continues to assess thevalue of intangible assets and property, plantand equipment, and internal forecasts haveconsidered the ongoing impacts on income
and expenses from the pandemic, inflationary pressure and higher interest rates.
Changes in selling prices and direct costs are
based on past experience and management’s
expectation of future changes in the markets
where the Group operates.
Specific risks for Pandora are discussed in therelevant sections of the Management’s review
and in the notes.
The areas that involve a high degree of judgement and estimation and are material to thefinancial statements are described in moredetail in the related notes.

58

ANNUAL REPORT 2022

FINANCIAL STATEMENTS

SECTION 2

RESULTS FOR
THE YEAR

26,463
Revenue
DKK million
2021: 23,394

25.5%This section comprises notes related to the results
for the year, including reporting segment disclosures,and provides additional information related to two of
Pandora’s performance measures: revenue and EBIT.
A detailed description of the results for the year isgiven in the Financial review on page 45.

EBIT margin
2021: 25.0%

5,029
Net profit
DKK million
2021: 4,160

23.0%
Effective tax rate2021: 22.6%

59

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 2.1

REVENUE BY SEGMENTS

SEGMENT AND REVENUE INFORMATIONDKK million

Pandora’s activities are segmented into two reportable segments, each responsible for theend-to-end performance of collections. One includes Moments incl. Collabs, while the other,
Style, covers newer collections and innovations.
The two operating segments include all channels relating to the distribution and sale ofPandora products.
Management monitors the profitability of the operating segments separately for the purposeof making decisions about resource allocation and performance management. Segment results
are measured at gross profit as presented in the table below.
INCOME STATEMENT BY SEGMENTS
DKK million

Style

Group

19,192- Moments

16,578- Collabs

2022

2021

16,610

US

7,907

7,026

14,699

China

737

1,126

2,614

1,911

UK

3,802

3,314

Style

7,272

6,784

Italy

2,580

2,443

- Timeless

4,362

4,091

Australia

1,271

1.131

- Signature

1,883

1,990

France

1,190

1,122

- ME

815

656

Germany

1,307

1,191

- Diamonds by Pandora

213

48

Denmark

28

32

Total revenue

26,46323,394

Rest of world

7,641

6,009

Goods transferred at a point in time

26,38623,321

Total revenue

26,46323,39477

73

26,46323,394

DKK million

2022

2021

US

Services transferred over time

The use of sales channels for the distribution of Pandora
varies within markets but is consistent when viewed between-1,586-6,273segments.

5,686

20,190

7,272

Cost of sales-4,688Gross profit

14,504

Operating expenses-13,448

Consolidated operating profit (EBIT)

6,743

Profit margin (EBIT margin)

25.5%

2021
Revenue

16,6106,784

23,394

Cost of sales-4,106-1,485-5,590Gross profit

12,5045,300

17,803-11,965

Consolidated operating profit (EBIT)

5,839

Profit margin (EBIT margin)

25.0%

Non-unit driven revenue, comprising mainly franchise fees, is allocated proportionately to thedifferent revenue categories.

Moments incl. Collabs

DKK million

26,46319,192

Operating expenses

2021

jewellery depends on the underlying market maturity and2022
Revenue

GEOGRAPHIC INFORMATION, REVENUE
2022

Total revenue
Momentsincl. Collabs

60

GEOGRAPHIC INFORMATION, ASSETS

2,073

1,754

Australia

450

453

Germany602

602

Denmark

2,117

1,983

ThailandREVENUE BY SALES CHANNEL

495

516

Rest of world

1,832

1,785

2022

2021

Total intangible assets1

7,568

7,094

Pandora physical stores

13,503

9,945

Property, plant and equipment2

2,226

1,816

Pandora online stores

5,612

5,977

Right-of-use assets3

2,978

2,532

Wholesale and third-party distribution

7,349

7,472

Deferred tax assets

1,261

891

Total revenue

26,46323,394

Other non-current financial assets

DKK million

249

222

Current assets

7,731

5,988

Total consolidated assets

22,013

18,542	The allocation of intangible assets in the table above reflects the country in which
the assets were acquired, including goodwill, in the functional currency in which it isdenominated. This is different from the presentation in note 3.1 Intangible assets,
where goodwill is allocated in accordance with ­management reporting and monitoring.
2	The crafting facilities in Thailand accounted for DKK 1,045 million (2021: DKK 1,025
million), corresponding to 46.9% of property, plant and equipment (2021: 56.4%).
3
Right-of-use assets mainly relate to stores and offices.
1

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 2.1
SEGMENT AND REVENUE INFORMATION (CONTINUED)SIGNIFICANT ACCOUNTING ESTIMATES
Recognition and measurement of revenue is based on estimates and judgements relating to expected sales returns
allowed to customers in most countries. These judgements
can have a material impact on the timing and measurementof recognised revenue as well as the level of the refund
liability. Reductions in revenue from expected sales returns
are calculated based on historical return patterns and on acase-by-case basis for commercial and other reasons.

ACCOUNTING POLICIESRetail sales – products
Revenue from the sale of products through Pandora
owned and operated stores is recognised when astore sells a product to the customer. Payment isusually due when the customer picks up the product in the store or the product is delivered from an
online store. However, in some instances collection
is delayed and a receivable recognised, see note 3.6
Trade receivables.
A refund liability and a right-of-return asset are recognised for products expected to be returned, see note
3.8 Contract assets and liabilities. The estimate for
returned products is based on historical experienceand expectations. Based on knowledge of the natureof returns, it is considered highly probable that asignificant reversal of cumulative revenue recognised
will not occur. Rebates and discounts granted to customers are recognised as a reduction in revenue.
The Group’s obligation to repair or replace faulty
products is part of the standard terms and is therefore recognised as a contract liability, see note 3.8
Contract assets and liabilities. Revenue is further
measured excluding sales taxes and duties whenthese are passed on to customers. Sales taxes andduties incurred on sales that are not recoverablefrom the local taxation authorities are reported
gross as part of revenue and cost of sales.

Wholesale and third-party distributors – products
Pandora manufactures and sells jewellery towholesalers and third-party distributors. Revenue isrecognised when control of the products has beentransferred to the wholesaler or third-party distributor. Change of control of the products occurs
when they have been delivered to the wholesaler
or distributor and no further obligation exists that
can affect the transfer of control. Delivery has takenplace when the products have been shipped to
the location of the wholesaler or distributor andcontrol of the goods has been transferred to thebuyer. Revenue from the sale is recognised basedon the price specified in the contract. Revenue isonly recognised to the extent it is highly probablethat a significant reversal will not occur. A refund
liability and a right-of-return asset are recognisedfor products expected to be returned, see note 3.8
Contract assets and liabilities. The estimate for
returned products is based on historical experienceand expectations. Based on knowledge of the natureof returns in the wholesale and distributor channels,
it is considered highly probable that a significant
reversal of cumulative revenue recognised will notoccur. Provisions for rebates and discounts granted
to wholesalers and franchisees are recognised as a
reduction in revenue.

The Group’s obligation to repair or replace faulty
products is recognised on a gross basis in theincome statement as both a reduction in revenue
and a decrease in cost of goods sold. This is dueto the handling of warranty claims, which leads toreplacements instead of repairs. Revenue is further
measured excluding sales taxes and duties whenthese are passed on to customers. Sales taxes andduties incurred on sales that are not recoverablefrom the local taxation authorities are reported
gross as part of revenue and cost of sales.
When control has been transferred, a receivable is recognised as the consideration to be paid is conditional
only on the passage of time. The price specified in thecontract is not adjusted for any financing element as
payment terms never exceed 12 months.
Loyalty programme
Revenue related to the loyalty programme points
value is deferred up to the time the points areused. The stand-alone selling price of loyalty points
issued is calculated by multiplying the estimatedredemption rate and the monetary value assigned
to the loyalty points. In estimating the redemption
rate, Pandora considers breakage, which represents the portion of points issued that will never be
redeemed.

61

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 2.2

NOTE 2.3

GOVERNMENT GRANTS

STAFF COSTS

62

DKK million

2022

2021

Wages and salaries

4,883

4,041

Pensions

208

177

Share-based payments

87

166

Social security costs

341

256

Other staff costs

545

395

Total staff costs

6,064

5,034

Pandora did not receive any significant government subsidies

The Group’s pension plans are primarily defined contribution

in 2022 as a result of the pandemic (2021: DKK 152 million).

plans. Pandora has defined benefit plans relating to employ-

The majority of the subsidies received in 2021 were related

ees in Thailand. The defined benefit plans are recognised at

to employee retention and facility cost and included the gov-

the present value of the actuarially measured obligations. In

ernment programmes “Coronavirus Job Retention Scheme”

2022, these obligations amounted to DKK 80 million (2021:

Cost of sales

1,177

1,063

and “Business Rates Relief” in the UK, “Unemployment Ben-DKK 81 million).

Sales, distribution and marketing expenses

3,777

3,010

Administrative expenses

1,109

961

Subsidy” in Germany. There are no unfulfilled conditions or

In 2022, the actuarial gain was DKK 12 million (2021: gain of

Total staff costs

6,064

5,034

other contingencies attached to the subsidies recognised.

DKK 10 million) recognised in other comprehensive income.
Average number of full-time employees during the year

26,98622,441efits” and “Tax Credit Rental” in Italy, and “Short-Time Work

During the pandemic, Pandora retained all staff, including

Staff costs have been recognised in the consolidated income statement:

store staff while stores were closed. The government subsidies partially funded the associated cost, and related mainly
to sales and distribution.

ACCOUNTING POLICIES
Government grants are recognised where there is reasonable assurance that the grant will be received and all
attached conditions complied with.
Income from government subsidies as a result of the pandemic has been recognised as a deduction in the expense
item the subsidies were intended to compensate.

ACCOUNTING POLICIESWages and salaries, social security contributions, leave andsick leave, bonuses and non-monetary benefits are recognised in the financial year in which services are rendered by
employees of Pandora. Whenever Pandora provides longterm employee benefits, the costs are accrued to matchthe rendering of the services by the ­employees.
Termination benefits are recognised at the time an agreement between Pandora and the employee is made and no
future service is rendered by the employee in exchange
for the benefits.

DKK million

Base pay

Bonus

SharesBenefits

Other

Total

17.1

16.2

23.2

2.6

-

59.0

16.2

16.6

26.6

2.4

-

61.9

2022
Total remuneration to Executive
Management
2021
Total remuneration to Executive
Management

The 2021 remuneration includes the DKK 1.2 million cost of shares related to the former Executive Management.
DKK million
Total remuneration to Board of Directors

2022

2021

8.1

7.9

Board members receive a fixed travel fee when attending Board meetings abroad. Total travel
fee for 2022 amounted to DKK 0.9 million (2021: DKK 0.4 million). For further details, see ourRemuneration Report.

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 2.4

targets which will be assessed against objectives based on

SHARE-BASED PAYMENTS

Pandora’s internal projections. As financial KPIs are commercially sensitive, Pandora’s practice is to communicate theseafter the end of the performance period. For further details,

SHARES OUTSTANDING

Executive­
Management

Other
employees

63

Average exercise
price perperformance
Total
share, DKK

see our Remuneration Report.

2022
Shares outstanding at 1 January279,306

869,598

1,148,904

made by the Board of Directors in accordance with general

Assumptions on fair value of shares

Shares granted during the year

42,106214,252

256,358-

guidelines on incentive pay for Pandora.

The volatility of the shares is based on the historical volatility

Shares exercised during the year-

-252,971-252,971

2.6

of the price of Pandora A/S shares. The risk-free interest rate

Shares lapsed during the year-

-80,830-80,830-

The total cost related to share-based payments was DKK 87

is based on a Danish government bond with similar maturity.

Shares outstanding at 31 December

321,412750,049

1,071,461

0.3

million (2021: net cost of DKK 166 million). The programmes

The dividend yield applied is equal to 2.5% for the 2022 pro-for 2021 and 2020 were recorded at the maximum level asgramme and is based on the assumed future dividend overthe maximum performance is expected to be met, whilethe vesting period and the share price on the date of the

Shares outstanding at 1 January

229,018

707,613936,631

1.1

the programme for 2022 was recorded at target. The cost

grant. Actual paid dividends may differ from the assumptions

Shares granted during the year

50,288205,415

255,703-of share-based payments is included in staff costs. In theapplied in the valuation of the market value. Given that the

Shares exercised during the year-

-4,754-4,754-

remaining vesting periods, an amount of DKK 87 million

exercise price for one performance share equals up to 1%

Shares lapsed during the year-

-38,676-38,676

0.8(2021: DKK 174 million) is expected to be recognised inof the market price of one share at grant date, the fair value

279,306

869,598

1,148,904

0.9respect of the current programmes. The weighted averagealmost equals the market value of one share at grant date.

remaining contractual life of the shares at the end of the

The assumptions therefore have very limited impact on the

period was 1.3 years (2021: 1.5 years).

estimated fair value of the performance shares granted.

Decisions to grant share-based incentive programmes are

For shares exercised in 2022, the average share price at thetime of exercise was DKK 692.

0.9

2021

Shares outstanding at 31 December

NUMBER OF SHARES INPANDORA A/S

Vestingdate

Maximum Accumulated
Shares 31 market value
cost
Decemberat launchrecognised
2022 (DKK million) (DKK million)

Remaining
value to be
expensed(DKK million)

Programme start dateNovember 2018 1,2

2021

7,865

2

2

-

Long-term incentive programmes

March 2019 1,2

2022

105,66227

16-

Pandora is launching annual incentive programmes targeting

July 2020 3

2023

373,711

152

133

-

Executive Management and other employees. The calculat-

July 2020 2

2023

115,491

36

36-

ed value of each programme is recognised over the vesting

April 2021 3

2024

172,760

154

70

31

period (three years) based on the likelihood that programme

April 2021 2

2024

50,28826

17

9targets will be met. For Executive Management, a further

April 2022 3

2025

203,578

130

18

39

two-year holding period applies.

April 2022 2

2025

Total number of shares outstanding

Vesting of the performance shares granted in 2022 is subject
to achievement of Pandora’s earnings per share (EPS) for thefinancial year 2024 and on the achievement of sustainability

42,10626

4

91,071,461

552

296

87

 lthough technically structured as options for legacy Danish tax treatment reasons, the awards have the characteristics ofA
Performance Share Units because the option exercise price is 1% of the share price.
Programme related to Executive Management, where a two-year holding period applies.
3
Programme related to other employees.
12ANNUAL REPORT 2022

NOTE 2.4

NOTE 2.5

SHARE-BASED PAYMENTS (CONTINUED)TAXATION
Income taxes

ACCOUNTING POLICIES
Selected Pandora employees receive remuneration in
the form of share-based payment transactions, whereby
programme participants render services as considerationfor equity instruments (“equity-settled transactions”).
Equity-settled transactions
The cost of equity-settled transactions with employees
is measured by reference to the fair value at the grant
date. The calculated fair values are based on either theBlack-Scholes model or the Monte Carlo model according
to the performance conditions of each programme. The
cost of equity-settled transactions is recognised as staff
costs together with a corresponding increase in equity
over the period in which the performance and/or service
conditions are fulfilled.
The cumulative expense recognised for equity-settled
transactions at each reporting date until the vesting datereflects the extent to which the vesting period has expired
and management’s best estimate of the number of equity
instruments that will ultimately vest. The income statement
expense or income for a period represents the movementin cumulative expenses recognised at the beginning andend of that period.

Income tax expense
Income tax expense was DKK 1.5 billion in 2022, corresponding toan effective tax rate of 23.0% (2021: DKK 1.2 billion, 22.6% for theGroup). As in 2021, the effective tax rate of 23.0% was negatively
impacted by paid withholding taxes on dividend and other payments, non-deductible expenses and non-capitalised tax assets

FINANCIAL STATEMENTS

64

DKK million

2022

2021

Current income tax charge for the year1

1,799

1,500

Change in deferred tax for the year

-355

-201

INCOME TAX EXPENSE

Adjustment to current tax for prior years

58

-42

Adjustment to deferred tax for prior years

2

-39

1,504

1,218
-92

Total income tax expense
Deferred tax on other comprehensive income

65

Current income tax on other comprehensive income-889Total tax on other comprehensive income

-23

-83

1

Withholding taxes are included in current income tax charge for the year.

from limitation in deduction for marketing expenses in China andother expenses with no tax deduction.
The effective tax rate was reduced as part of the investment
agreement entered into with the Thai Authorities, Board of In-

2022
RECONCILIATION OF EFFECTIVE
TAX RATE AND TAX

2021

%

(DKK
million)%(DKK
million)

22.0%

1,183

vestment (BOI), where a specific part of the profit is treated asProfit before tax

non-taxable profit for an agreed period.

Corporate tax rate in Denmark, 22%

22.0%

1,437

6,533

5,378

Deviation in foreign subsidiaries’ tax rates
compared with the Danish rate

-0.6%

-41

0.3%

17

Non-deductible expenses

1.3%

87

3.1%

166

Tax incentives

-2.4%

-158

-2.9%

-157

Adjustment to tax for prior years

0.9%

60

-1.6%

-82

Non-capitalised tax assets, net

1.1%

76

0.6%

30

Withholding taxes/other taxes

0.7%

43

1.1%

60

Effective income tax rate/income tax expense

23.0%

1,504

22.6%

1,218

ANNUAL REPORT 2022

NOTE 2.5
TAXATION (CONTINUED)FINANCIAL STATEMENTS

Deferred tax

DEFERRED TAX

At the end of 2022, deferred tax assets amounted to DKKDKK million

2022

2021

Deferred tax at 1 January

778

396

Exchange rate adjustments

6

6

Recognised in the income statement

353

240

Recognised in other comprehensive income

-65

92

Recognised in equity, share-based payments

17

44

Deferred tax at 31 December

1,089

778

the utilisation of which depends on future positive taxable

Deferred tax assets

1,261

891

income exceeding realised deferred tax liabilities. It is

Deferred tax liabilities

-172

-113

management’s opinion that these tax loss carryforwards

Deferred tax, net

1,089

778

1,261 million (2021: DKK 891 million) and deferred tax liabilities amounted to DKK 172 million (2021: DKK 113 million). Net
deferred tax assets amounted to DKK 1,089 million (2021:
DKK 778 million).

ACCOUNTING POLICIESIncome tax expense for the year comprises current tax
and changes in deferred tax, including changes in tax rate,adjustment to prior years and changes in provision for
uncertain tax positions. Tax is recognised in the income
statement, except to the extent that it is related to items
recognised in equity or other comprehensive income. The
tax rates and tax laws used to compute the amounts arethose enacted or substantively enacted, by the reporting date, in the countries in which Pandora operates andgenerates taxable income.

Of the total deferred tax assets recognised, DKK 35 million(2021: DKK 23 million) related to tax loss carryforwards,

can be utilised.
Tax assets not recognised were DKK 142 million (2021: DKK 62

BREAKDOWN OF DEFERRED TAX

million), of which DKK 66 million (2021: DKK 36 million) relate

DKK million

2022

2021

Intangible assets

-686

-633

to tax loss carryforwards that are not expected to be utilisedin the foreseeable future. Tax losses that can expire amounted to DKK 24 million (2021: DKK 18 million).

SIGNIFICANT ACCOUNTING ESTIMATES
Pandora is subject to income tax in the countries in which
the Group operates, comprising various tax rates worldwide. Significant judgements are required in determining
the accrual for income taxes, deferred tax assets and liabilities, and provision for uncertain tax positions. Provision for
uncertain tax positions is measured according to IFRIC 23.
As part of Pandora conducting business globally, tax andtransfer pricing disputes with tax authorities may occur.
Any unresolved disputes with local tax authorities arerecognised as income tax payable/receivable based on the
expected value method or the most likely amount. Management believes that the provision made for uncertain tax
positions is adequate. However, the actual obligation may
deviate from this and is dependent on the result of litigations and settlements with the relevant tax authorities.

65

No deferred tax has been recognised in respect of entities’
earnings that are intended for distribution in the short term,
as no material tax expense will be payable on distribution.
Only insignificant latent tax liabilities remained at 31 December 2022. These liabilities are not recognised as the Group isable to control this liability and it is considered probable thatthe liability will not crystallise in the foreseeable future.

Property, plant and equipment

42

7

Right-of-use assets

20

16

Current assets

1,434

999

Non-current assets and liabilities

244

366

Tax loss carryforwards

35

23

1,089

778

Deferred tax, net

ANNUAL REPORT 2022

NOTE 2.5
TAXATION (CONTINUED)FINANCIAL STATEMENTS

66

Our approach to taxes and taxes paid

chain remains with Pandora A/S. With a principal tax model,With our significantly expanded work on sustainability, we are building this important part of

Pandora by nature has a significant number of intercompany

the foundation for Pandora’s growth journey. Our sustainability strategy is reflected in our tax

transactions.

approach and we aim at paying a fair tax in all markets where we operate. Pandora considers

ACCOUNTING POLICIESDeferred tax on all temporary differences between the
carrying amounts for financial reporting purposes andthe tax base of assets and liabilities is measured using
the balance sheet liability method. No deferred tax isrecognised on temporary differences that arise from theinitial recognition of goodwill or of an asset or liability in atransaction that is not a business combination and, at thetime of the transaction, affects neither accounting profit
nor taxable profit or loss.

tax to play a key role for societies and an important contribution in order to reach the goals ofIntercompany transactions are based on arm’s length stan-

the global sustainability agenda. Pandora is committed to ensure compliance with the letter

dard and therefore priced on a basis consistent with theand spirit of tax law in the markets where we operate, while striving to maximise shareholder

way unrelated parties would have priced such transactions.

value in a responsible way. The Group tax policy, which has been approved by the Board of Di-

This impacts the taxes we pay in the countries in which we

rectors of Pandora, is available at pandoragroup.com/investor/corporate-governance/tax-in-

do business. Pandora understands the need for more trans-

formation

parency by both taxpayers and tax administrations, and theand includes more information on our approach to taxes.

need to provide more clarity about Pandora’s position on
Pandora operates globally under a vertically integrated business model, and we own a signifi-

tax. In doing so we provide insight in accordance with thecant part of our value chain from production to retail. Pandora’s transfer pricing policy follows a

EU Directive to be adopted, which introduces public coun-so-called principal tax model, where profit follows risk and value creation throughout the value

try-by-country reporting for our key markets. The full coun-chain. While all steps of the value chain are important to Pandora, Pandora A/S is the principal

try-by-country report for all markets, including definitions, isvalue driver and also assumes the majority of business risks. Pandora allocates a profit margin,available at pandoragroup.com/investor/corporate-gover-

The recognition of deferred tax assets includes the
expected tax value of tax loss carryforwards to the extent
that these tax assets can be offset against positive taxable
income in the foreseeable future. The same applies todeferred tax assets related to investments in subsidiaries.
Management has considered future taxable income andapplied judgements to determine whether deferred tax
assets should be recognised.

based on benchmark studies, to entities in the Group, and the residual profit (or loss) in the value

nance/tax-information.

UK

3,988

3,802

375

Italy

2,744

2,580

110

Deferred tax assets and liabilities are measured according
to current tax rules and at the tax rates expected to beeffective on elimination of the temporary differences.
Deferred tax assets and liabilities are offset if the Group
has a legally enforceable right to offset current tax assets
against current tax liabilities and the deferred tax relates tothe same taxable entity and the same tax authority.

France

1,297

1,190

49

29

Germany

1,679

1,307

88

Denmark

17,89028

14,002

US

17,126

7,907

212

Australia

1,803

1,271

352

COUNTRY-BY-COUNTRYOVERVIEW FOR KEY MARKETS1
DKK million

Business
activities

Total revenue
incl. related
party2

Third-party
revenue
in P&L

Profitbefore tax

Current income
tax charge
for the year

Employees(FTE)

Accumulated
earnings

44

25

1,764

415

39

41

851

78

18

562

103

21

26

907

64

1,217

1,294

913

15,148

140

56

2,022

60

76

107

302

160

Tax
paid

China

739

737

-123

39

0

1,124

-77

Thailand

6,788

-

976

64

38

14,186425

Rest of world

8,495

7,641

137

122

111

4,356

233

387

-

-9,646-83--7,547-

26,463

6,533

1,790

1,799

26,987

9,063

Crafting facilities

Distribution

IFRS eliminations
Total Group1

 he country-by country overview for key markets is based on the accounting information collected forT
the Pandora Group Annual Report for 2022.

2

Total revenue includes third-party revenue, related party revenue, other income and financial income.

Headquarters

WarehouseANNUAL REPORT 2022

NOTE 2.5
TAXATION (CONTINUED)FINANCIAL STATEMENTS

MOVEMENT IN NET TAX PAYABLEDKK million

At the beginning of the year, net income tax payable byPandora amounted to DKK 934 million. The net income tax
payable decreased to DKK 913 million during the year, as
shown in the bridge “Movement in net tax payable”. The

1,799

In 2022, we paid corporate taxes in the amount of DKK 1,790

decrease is reflected in the higher tax paid for 2022. The

million (2021: DKK 832 million). The increased tax payments

higher profit before tax in 2022 compared to 2021 increase

mainly relate to Denmark and Pandora’s key markets as thethe tax to be paid, which is due for payment in 2023.

58

88

1,790

profit in these markets has increased significantly. The majorpart of the taxes paid is attributable to Denmark and Pando-

The difference between income tax expense in the income

ra’s key markets and the main part of the tax payments relatestatement and income tax paid is explained in the bridgeto the current year.

“From income tax expense to tax paid”. The income tax

Paid income tax

934

913

expense in the income statement for 2022 has been calculated at DKK 1,504 million. The income tax expense includes

Income tax paid reflects the cash tax payments made in thetaxes on other income posted on equity and adjustments

year and relates to taxes on account for the current year as

to taxes for timing differences. Adding the tax payable fromwell as payments regarding prior years. For the majority of the2021 of DKK 934 million, we have a total tax payable of DKK

countries, the final taxes are paid in the year following the fi-

2,703 million. Of this amount DKK 913 million is due to benancial year, creating a timing difference in cash tax payments.

paid in 2023 or later, and the remaining DKK 1,790 million

Net tax payable,
start of year

Current income
tax charge forthe year

Adjustments tocurrent tax inprior years

Income tax oncomprehensive
incomeIncome tax paidin the year asreflected in our
cash flows

934

913

Net tax payable,
year-end

were settled as cash tax payments in 2022.
FROM INCOME TAX EXPENSE TO TAX PAID
DKK million

CASH INCOME TAX PAID
DKK million

2022

2021

Income tax expense in income statement-1,504-1,218Tax on other comprehensive income

88-9Adjustments regarding deferred taxes

-353

-240

Movement in income tax receivable/payable

-21

635

-1,790-832

Income tax paid in the year
- of which relates to prior years

-658

9

- of which relates to current year

-1,132-841

Income tax paid in the year

-1,790

-832

353

88

Adjustments
regardingdeferred taxes

Income tax oncomprehensive
income

1,790

1,504

Income tax
expense in income
statement

Net tax payable,
start of year

Net tax payable,
year-end

Income tax paid in
the year as reflectedin our cash flows

67

ANNUAL REPORT 2022

FINANCIAL STATEMENTS

68

SECTION 3

INVESTED CAPITAL
AND WORKINGCAPITAL ITEMSWORKING CAPITALDKK million

Notes

2022

2021

Inventories

3.5

4,211

2,991

Trade receivables

3.6

1,262

1,009

Trade payables

3.9-3,131-3,267

2,342

732

Operating working capital
Other receivables

1,078

808

-649

-750

Commodity derivatives, net

133

-113

Contract liabilities

-136

-163

Other payables-1,666-1,694

Net working capital

1,104-1,181

Notes

2022

2021

Intangible assets

3.1

7,568

7,094

Property, plant and equipment

3.2

2,226

1,816

Right-of-use assets

3.3

2,978

2,532

Current provisions

The notes in this section describe the assets that form the basis
for the activities of Pandora and the related liabilities. Financial
risks are described in note 4.4.
In 2022, the increase in net working capital was mainly driven bya deliberate inventory build-up to protect availability, in order tomitigate risk of stock-outs and disruptions in the supply chain.

3.7, 3.8

INVESTED CAPITALDKK million

Other non-current financial assets

1,290
CAPEX
DKK million
2021: 641

4.2%
Net working
capital/revenue
2021: -5.0%

13,961
Invested capital
DKK million
2021: 9,884

Non-current provisions

3.7

Net working capital
Deferred tax, net
Currency derivatives, net
Income tax receivables/payable, net
Invested capital

2.5

249

222

-363

-416

1,104

-1,181

1,089

778

23

-27

-913

-935

13,961

9,884

ANNUAL REPORT 2022

FINANCIAL STATEMENTS

69

NOTE 3.1

INTANGIBLE ASSETSDKK million

Goodwill

Brand Distribution

Other
intangible
assets

Total

Acquisition of subsidiaries and activities
Additions
Disposals
Exchange rate adjustments
Cost at 31 December
Amortisation and impairment losses at 1 January

Goodwill

Brand Distribution

Total

8,652

2021

2022
Cost at 1 January

DKK million

Other
intangible
assetsCost at 1 January

4,418

1,057

1,609

2,059

9,143

364

-

-

-

364

Acquisition of subsidiaries and activities

-

-

-

361

361

Additions

-

-

-

-5

-5

Disposals

39

-

4

19

62

Exchange rate adjustments

4,822

1,057

1,613

2,434

9,925

Cost at 31 December

-

-

528

1,521

2,049

4,247

1,057

1,601

1,747

12

-

13

-

25

-

-

-

300

300

-

-

-

-6

-6

161

-

-5

18

173

4,418

1,057

1,609

2,059

9,143

Amortisation and impairment losses at 1 January

-

-

491

1,218

1,708

Amortisation for the year

-

-

33

219

251

Amortisation for the year

-

-

33

263

297

Impairment loss for the year

-

-

-

-

-

Impairment loss for the year1

-

-

-

85

85

Disposals

-

-

-

-4

-4

Disposals

-

-

-

-5

-5

Exchange rate adjustments

-

-

4

11

15

Exchange rate adjustments

-

-

5

4

8

Amortisation and impairment losses at 31 December

-

-

566

1,791

2,357

Amortisation and impairment losses at 31 December

-

-

528

1,521

2,049

4,822

1,057

1,047

642

7,568

4,418

1,057

1,080

538

7,094

Carrying amount at 31 December

Carrying amount at 31 December
1

The majority of the intangible assets have been acquired through business combinations.
DKK million

2022

2021

Amortisation and impairment losses have been recognisedin the income statement as follows:
Cost of sales

46

46

Sales, distribution and marketing expenses

107

146

Administrative expenses

143

144

Total

297

337

The impairment loss of DKK 85 million relates to write-down of software applications. The loss is mainly recognised as sales, distribution and marketing
expenses in the income statement.

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 3.1
INTANGIBLE ASSETS (CONTINUED)

Goodwill
Additions in 2022 relate to acquisitions of activities.
Note 3.4 Business combinations

includes an overview

of acquired goodwill for the year.

Brand
The ‘Pandora’ brand is the only brand of the Group that is
capitalised in the consolidated financial statements. It comprises a group of complementary intangible assets relating

ACCOUNTING POLICIESGoodwill
Goodwill is initially recognised at the amount by which the purchase price for abusiness combination exceeds the recognised value of the identifiable assets andliabilities acquired. Goodwill comprises future growth expectations, buyer-specific synergies, the workforce in place and know-how. Subsequent to initial recognition, goodwill is measured at cost less accumulated impairment losses. Goodwill
is not amortised, but is tested for impairment annually or if an impairment indication arises. Impairment losses charged in previous years cannot be reversed.
Brand
Brand is initially recognised at cost based on the “Relief from Royalty” method, whichis considered to have an indefinite useful life and is impairment tested annually.

brand. The brand was acquired as part of the Pandora core

Distribution
The distribution network is initially recognised at fair value based on an estimation of
the costs the entity avoids by owning the intangible assets and therefore the entity
does not need to rebuild the network (the cost approach).

business in 2008.

The distribution network is amortised over an expected useful life of 15 years.

Distribution

The distribution rights for Pandora products in the North American market aremeasured based on a residual model, since the distribution agreement underlying
the distribution rights is non-­terminable. Consequently, the distribution rights are
considered to have an indefinite useful life.

to the brand, domain name, products, image and customer
experience related to products sold under the Pandora

Distribution includes distribution network and distribution rights.
The distribution network covers Pandora’s ­relations with its
distributors. The main part of the distribution network was
acquired with the Pandora core business in 2008.
Distribution rights mainly relate to the distribution rights for
Pandora products in North America. These were acquiredwith the American distributor in 2008 and the carrying
amount at 31 December 2022 was DKK 1.0 billion (2021:
DKK 1.0 billion).

Other intangible assets
Other intangible assets mainly comprise software.

Other acquired distribution rights are initially recognised at cost based on the “Multi-period ­Excess Earnings” model and amortised over their expected useful lives.
Other intangible assets
Software is initially recognised at cost and amortised over 2-5 years. Software
obtained through a Software-as-a-Service (SaaS) arrangement is capitalised to theextent that IAS 38 criteria are met and amortised over the contract period.
Amortisation is allocated to segments on a pro rata basis based on the standard
cost per segment.

Impairment
At each reporting date, Pandora assesses whether there is any indication that an
asset may be impaired.
If any such indication exists, or when annual impairment testing of an asset is required, Pandora estimates the recoverable amount of the asset.
The recoverable amount of an asset is the higher of the fair value of the asset or
cash-generating unit (CGU) less costs to sell and its value in use. The recoverable
amount is determined for the smallest group of assets that is independent fromother assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is written down to its recoverable amount.
In assessing the value in use, the estimated future cash flows are discounted totheir present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used.
The most significant factors when assessing the potential need for impairment are:— decreasing revenue;— increasing production cost;— decreasing brand value;— changes to the product mix.
The indicators above should be viewed in the context of Pandora’s relatively highmargins and low asset base.
The brand is applied and supported globally in all of the Group’s entities. The brandis maintained and preserved through common strategy and p­ roduct development
at Group level and marketing in the individual sales entities. The brand is consequently tested for impairment at Group level.
Like the brand described above, goodwill is reported and managed internally atGroup level. Due to the constraint in IAS 36, goodwill is allocated to the grouped
CGUs in the two operating segments for impairment testing purposes. It is management’s opinion that this best reflects Pandora’s value creation.

70

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 3.1

DISCOUNT RATES AND GROWTH RATESIN TERMINAL PERIODINTANGIBLE ASSETS (CONTINUED)

Discount rate
before tax

Growth rate in
terminal period

In the impairment test, the recoverable amount is compared• revenue development taking into account development in
network (stores, retail/wholesale share), product mix andmarket share;

2022

Method for impairment testing71

Moments incl. Collabs

12.6%

2%

Style

12.7%

2%

Group

12.6%

2%

• cost of sales based on raw materials consumption affectedby mix of materials (stones, gold and silver), salaries andaverage lagged hedge commodity prices at the time thebudget is prepared;• development in operating expenses;

with the carrying amount. The recoverable amount is based2021

on a calculation of the value in use using cash flow estimates

Moments incl. Collabs

11.7%

2%

based on the budget for 2023 and a forecast for the two

Style

11.7%

2%

subsequent years. The long-term growth rate in the terminal

Group

11.7%

2%

• currency rates are based on actual rates at the time thebudget is prepared;• increasing inflation and interest rates.

period has been set so that it equals the expected long-term
rate of inflation.

Assumptions

Net working capital in the budget for next year, relative to therevenue of each group of CGUs, is based on historical expe-

All intangible assets are tested for impairment if there is any

The calculations of the recoverable amounts of CGUs or groups of CGUs are based on therience and is maintained for the remainder of the expectedindication of impairment. Intangible assets with indefinite

following key assumptions.

useful economic lives. Net working capital thus increases ona linear basis as the level of activity increases.

useful life are tested at least annually.
Discount rates reflect the current market assessment of the risks specific to each CGU or
ALLOCATION OF INTANGIBLE ASSETS TO CGUS
DKK million

Goodwill

Brand Distributiongroup of CGUs. The Group discount rates have been estimated based on a weighted average

The impairment test of the brand at Group level is based on

cost of capital for the industry. The rates have also been adjusted to reflect the market assess-the "Relief from Royalty" method.

ment of any risk specific to each group of CGUs.

2022

The impairment tests did not identify any need for impairment

Moments incl. Collabs

3,505

766

758

The EBIT figures used in the impairment test are based on the budget for next year, preparedlosses to be recognised. Based on sensitivity analysis, it is man-

Style

1,316

291

289

and approved by management, and a forecast for the two subsequent years.

agement’s opinion that no probable change in any key assump-

Total

4,822

1,057

1,047

tions would cause the carrying amounts of the two operating
Higher inflation rates were observed in 2022, affecting the estimates for the upcoming years.

2021
Moments incl. Collabs

3,204

766

783

Style

1,214

291

298

Total

4,418

1,057

1,080

segments or at Group level to exceed the recoverable amounts.

Pandora expects the long-term inflation rate to stabilise and the 2% growth rate applied is thus
an estimate of the expected average inflation in the terminal period. As such, no real growth has

Even with a significant reduction in growth rate and an in-been applied to the terminal period when calculating the recoverable amounts.

crease in discount rate, management has not identified any
likely impairment.

The EBIT margin in the budget of each group of CGUs is based on historical experience andexpectations concerning:

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 3.2

PROPERTY, PLANT AND EQUIPMENTDKK million

Land and­buildings

Plant and­equipment

Assets under­construction

Total

DKK million

1,193

3,582

91

4,866

Depreciation has been recognised in theincome statement as follows:

2022
Cost at 1 January

2022

2021

-

32

-

32

Cost of sales

167

176

Additions

55

211

663

929

Sales, distribution and marketing expenses

359

364

Disposals

-15

-350

-

-365

Transfers

43

425

-468

-

Acquisition of subsidiaries and activities

Exchange rate adjustments
Cost at 31 December

26

39

3

68

1,302

3,937

289

5,529

Depreciation and impairment losses at 1 January

366

2,684

-

3,050

Depreciation for the year

89

474

-

563

Disposals

-14

-341

-

-355

8

37

-

45

Depreciation and impairment losses at 31 December

449

2,854

-

3,303

Carrying amount at 31 December

853

1,083

289

2,226

Exchange rate adjustments

Acquisition of subsidiaries and activities

37

42

563

582

ACCOUNTING POLICIESProperty, plant and equipment is stated at cost, net ofaccumulated depreciation and accumulated impairment
losses. Depreciation is calculated on a straight-line basis
over the estimated useful life according to the tablebelow.
Asset

2021
Cost at 1 January

Administrative expenses
Total

Land

Useful life
Indefinite

1,238

3,461

44

4,742

-

-

11

11

Buildings

20-50 years
Lease term

Additions

11

129

199

339

Leasehold improvements

Disposals

-40

-249

-

-289

Plant and equipment

3-5 years

Transfers

14

150

-164

-

Exchange rate adjustments

-30

91

2

64

Other fixtures and fittings

3-5 years

1,193

3,582

91

4,866
2,689

Cost at 31 December
Depreciation and impairment losses at 1 January

323

2,366

-

Depreciation for the year

90

492

-

582

Disposals

-38

-242

-

-280

Exchange rate adjustments

-8

68

-

59

Depreciation and impairment losses at 31 December

366

2,684

-

3,050

Carrying amount at 31 December

827

898

91

1,816

72

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 3.3

Many of the Group’s property leases contain variable payment

Amounts recognised in the income statement:

LEASES

terms that are linked to the volume of sales made from leased
stores according to normal market practice. In 2022, around

RECOGNISED DEPRECIATION AND IMPAIRMENT LOSSES ON RIGHT-OF-USE ASSETS CHARGED TO
THE INCOME STATEMENT

Pandora leases stores, various offices, office equipment
and cars.
Amounts recognised in the balance sheet:

24% (2021: 18%) of the lease payments recognised in the in-

2022

2021

Property

1,098

1,066

IT

1

1

The average standard store leases are three to five years with

Cars

11

9

a three to five-year option to extend in approximately 21%

Other

4

4

(2021: 18%) of current leases, typically with one or more termi-

1,114

1,081

RIGHT-OF-USE ASSETSDKK million

2022

2021

Property

2,960

2,507

IT

2

3

Cars

11

14

Other

5

8

2,978

2,532

Additions of right-of-use assets were DKK 1,717 million in
2022 (2021: DKK 690 million).
LEASE LIABILITIESDKK million

2022

2021

Non-current

2,113

1,724

950

886

3,063

2,610

Current
Total lease liabilities

a 1% increase in annual physical store revenue would consequently result in a 0.5% (2021: 0.5%) increase in lease payments.

nation options. Approximately 25% of current leases were up
for renegotiation in 2022. The estimated value of lease options
that Pandora is not reasonably certain of executing, is around
DKK 0.3 billion (2021: DKK 0.4 billion).

The vast majority of depreciation relates to leased stores and is presented in the sales,
distribution and marketing expenses.
Costs recognised in the period for short-term and low-value leases were DKK 60 million

SIGNIFICANT ACCOUNTING ESTIMATES(2021: DKK 39 million). Expenses are recognised on a straight-line basis.

OTHER ITEMS RELATING TO LEASESDKK million

2022

2021

Interest expense

162

99

Total interest for the period

162

99

Due to the pandemic, Pandora received rent concessions from landlords in 2021 amounting
to DKK 56 million, which was recognised under sales and distribution expenses in the income
statement in 2021. The impacts in 2022 were insignificant due to limited COVID-19 closures.
Total cash outflows for the year relating to leases was DKK 1,702 million (2021: DKK 1,377 mil-Lease liabilities are recognised in loans and borrowings.

come statement were variable rent. Pandora has estimated that

DKK million

Total depreciation and impairment losses onright-of-use assets for the period

Total right-of-use assets

73lion), comprising fixed lease payments in scope of IFRS 16 of DKK 1,068 million (2021: DKK 991
million), variable lease payments of DKK 412 million (2021: DKK 248 million), interest paid of
DKK 162 million (2021: DKK 99 million), and short-term and low-value leases of DKK 60 million(2021: DKK 39 million).

When assessing the lifetime of leases, Pandora considers
the non-cancellable lease term and options to extend or
terminate the lease where Pandora is reasonably certain
to extend or not to terminate. Leases in Pandora mainlycomprise stores, office buildings, cars, IT and other officeequipment. Most lease contracts for stores average three
to five years with a three to five-year option to extend in
approximately 21% of current leases, typically with one ormore termination options. The lease term for stores has
been assessed to be up to ten years, depending on location, revenue and earnings. For office buildings, the leaseterm is usually five to 15 years. For other assets, the life isequal to the non-cancellable lease term, and extensions
are not considered for these.

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 3.3

NOTE 3.4

LEASES (­ CONTINUED)

BUSINESS COMBINATIONS74

The contribution from the acquisitions as highlighted below includes retail revenue and net
profit after the acquisition date. Lost revenue and net profit from the franchise channel have

ACCOUNTING POLICIES
Pandora applies a single recognition and measurement approach
to all leases, except for short-term leases and low-value leases.
Pandora recognises right-of-use assets at the commencement
date of the lease when the asset is available for use. Right-of-use
assets are measured at cost, less any accumulated depreciationand impairment losses, and adjusted for any remeasurementof lease liabilities. The cost of right-of-use assets includes theamount of lease liabilities recognised, initial direct costs incurred,lease payments made at or before the commencement date, key
money, less any lease incentives received. Key money is measured
at cost and amortised over the term of the contract. Right-of-use
assets are depreciated on a straight-line basis over the shorter of
the asset’s useful life and the lease term. At each reporting date,
Pandora assesses whether there is any indication that a right-ofuse asset may be impaired. If any such indication exists, Pandora
carries out impairment testing for the relevant CGU.
Pandora recognises lease liabilities at the commencement dateof the lease, measured at the present value of lease payments
to be made over the lease term. Lease payments include fixed
payments less any lease incentives receivable. Some leases are
exposed to potential future increases in variable lease payments
based on an index or rate, which are not included in the lease liability until they take effect. Payments relating to services are notincluded in lease liabilities. Some property leases contain variable
payment terms that are linked to sales generated from a store.
Variable lease payments that depend on sales are recognised
in profit or loss in the period in which the condition that triggers
those payments occurs and are not included in the lease liability.
In calculating the present value of lease payments, Pandora uses
its incremental borrowing rate at the lease commencement

date because the interest rate implicit in the lease is not readily
determinable. After the commencement date, the amount oflease liabilities is increased to reflect the accretion of interest
and reduced for the lease payments made. In addition, thecarrying amount of lease liabilities is remeasured if there isa modification, for example a change in the lease term or achange in the lease payments. Lease payments are classified infinancial activities in the statement of cash flows.
Pandora applies the short-term lease recognition exemption
to its short-term leases. Payments related to short-term leases
and leases of low-value assets continue to be recognised ona straight-line basis as an expense in the income statement.
Short-term leases are leases with a lease term of 12 months orless. Low-value assets comprise some IT equipment and otheroffice equipment.
In March 2021, the IASB issued COVID-19-Related Rent Concessions beyond 30 June 2021 - amendment to IFRS 16 Leases.
The IASB extended the period of the relief for lessees arising asa direct consequence of the pandemic from 30 June 2021 to
30 June 2022. As a practical expedient, a lessee may elect not toassess whether a COVID-19 pandemic-related rent concession
from a lessor is a lease modification. A lessee that makes thiselection accounts for any change in lease payments resulting
from the COVID-19 pandemic-related rent concession the sameway it would account for the change under IFRS 16, if the change
was not a lease modification. Pandora applied the extension of
the practical expedient to all contracts with rent concessions
occurring as a direct consequence of the pandemic and where
they meet all conditions of the practical expedient.

not been adjusted, thus the highlighted contributions cannot be directly linked to the income
statement from a performance perspective.

Acquisitions in 2022
Ben Bridge
In Q1 2022, Pandora took over 37 concept stores in the US and Canada (32 concept stores in the
US acquired on 3 March and five concept stores in Canada acquired on 25 February) from Ben
Bridge in two business combinations. Net assets acquired mainly consisted of store properties,
inventories and related liabilities. The total purchase price for the acquisitions was DKK 291 million. Based on the purchase price allocations, goodwill was DKK 194 million. Excluding the temporary drag on gross margin from inventory buybacks, the contributions to the Group’s revenue andnet earnings from the acquisition were DKK 445 million and DKK 186 million respectively.
PanborOn 13 July 2022, Pandora took over 13 concept stores in Las Vegas from Panbor. Net assets
acquired mainly consisted of store properties, inventories and related liabilities. The total purchase price for the acquisitions was DKK 166 million. Based on the purchase price allocations,
goodwill was DKK 95 million. Excluding the temporary drag on gross margin from inventory buybacks, the contributions to the Group’s revenue and net earnings from the acquisition were
DKK 121 million and DKK 55 million respectively.
Portugal
On 20 July 2022, Pandora acquired the distribution in Portugal from the previous distributor, Visão
do Tempo. The acquisition comprised mainly inventories, non-current assets and liabilities relating
to 25 concept stores and nine shop-in-shops. The total purchase price for the acquisitions was
DKK 99 million. Based on the purchase price allocations, goodwill was DKK 64 million. Excluding the
temporary drag on gross margin from inventory buybacks, the contributions to the Group’s reve-ANNUAL REPORT 2022

NOTE 3.4
BUSINESS COMBINATIONS (­ CONTINUED)FINANCIAL STATEMENTS

Acquisitions in 2021

On a pro forma basis, if the acquisitions had been effective

In 2021, Pandora took over 29 concept stores in the US in two business combinations. Net

from 1 January 2021, the impact on Group revenue and net

assets acquired mainly consisted of store properties, inventories and related liabilities. The

profit for the period 1 January to 31 December 2021 would

total purchase price for the acquisitions was DKK 66 million. Based on the purchase price allo-

have been approximately DKK 358 million and DKK 112 mil-cations, goodwill was DKK 12 million. Goodwill from the acquisitions was mainly related to thelion respectively.

nue and net earnings from the acquisition were DKK 99 million

synergies from converting the stores from wholesale to Pandora owned retail. Of the goodwill

and DKK 51 million respectively.

acquired, DKK 12 million is deductible for income tax purposes.

Other business combinations in 2022

Cost relating to the acquisitions was immaterial and is recognised as operating expenses

Pandora acquired five more concept stores in the US andin the income statement. The contributions to the Group’s revenue and net profit from

Italy in 2022. The purchase price was DKK 20 million. Assets

acquisitions for the period 1 January to 31 December 2021 were DKK 307 million and DKK 93

acquired mainly consisted of inventories and other assets

million respectively.

Acquisitions after the ­reporting period
No acquisitions to an extent of significance to Pandora
took place after the reporting period.

ACCOUNTING POLICIES

and liabilities relating to the stores. Of the purchase price,
DKK 11 million was allocated to goodwill.
Total business combinations in 2022

ACQUISITIONSDKK million

2021

-

13

Property, plant and equipment and right-of-use assets

159

84

was DKK 364 million. Goodwill from the acquisitions was main-

Inventories

195

34

ly related to the synergies from converting the stores from

Assets acquired

354

131

Non-current liabilities

78

50

Payables3-

Other current liabilities

61

27

Liabilities assumed

141

77

Total identifiable net assets acquired

213

54

buybacks, the contributions to the Group’s revenue and net

Goodwill arising on acquisitions

364

12

earnings from the acquisitions for the period 1 January to 31

Purchase consideration

577

66

The total purchase price for the acquisitions in 2022 was DKK
577 million. Based on the purchase price allocations, goodwill

wholesale and distribution to Pandora owned retail. All the
goodwill recognised was deductible for income tax purposes.
Cost relating to the acquisitions was immaterial and has beenrecognised as operating expenses in the income statement.
Excluding the temporary drag on gross margin from inventory

December 2022 were DKK 693 million and DKK 305 million
respectively. On a pro forma basis, if the acquisitions had been

Distribution rights

2022

Cash movements on acquisitions:effective from 1 January 2022, the impact on Group revenue

Deferred payment-14-

and net earnings for the period 1 January to 31 December 2022

Net cash flows on acquisitions

562

66

would have been approximately DKK 825 million and DKK 346
million respectively.

Business combinations are accounted for in accordancewith the IFRS 3 acquisition method. The cost of an acquisition is measured as the aggregate of the considerationtransferred, measured at acquisition date fair value, and theamount of any non-controlling interests in the acquiree.
For each business combination, the acquirer measures the
non-controlling interests in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are expensed.
Subsequent to initial recognition, goodwill is measured atcost less any accumulated impairment losses.
As goodwill is reported and managed internally at Grouplevel, goodwill acquired should also be allocated to theGroup. However, goodwill acquired is allocated to thegrouped CGUs in the two operating segments for impairment testing purposes due to the constraint in IAS 36.
If any part of the cost of an acquisition is contingent on
future events or performance, the cost is recognised atfair value at the time of acquisition. Changes to the fairvalue of the contingent payment are recognised in net
financials in the income statement.

75

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 3.5

Net realisable value

NOTE 3.6

INVENTORIESNet realisable value is based on the estimated s­ elling price

TRADE RECEIVABLES

less estimated costs of completion and distribution. Alter-

76

natively, for inventories that are not expected to be sold, net
realisable value is based on the remelt value of the reusable
DKK million

2022

2021

Raw materials and consumables

743

779

Work in progress

151

148

Finished goods
Point-of-sale materials
Total inventories at 31 December

3,088

1,911

229

153

4,211

2,991

Inventory write-downs at 1 January

765

740

Write-downs during the year

118

154

Utilised in the year

-148

-129

Inventory write-downs at 31 December

735

765

raw m
­ aterials (primarily silver and gold).

ACCOUNTING POLICIESInventories are valued at the lower of cost and net realisable value. Costs are accounted for on a ­first-in, first-out
basis (FIFO). Besides raw materials, costs include labour
and a proportion of production overheads based on normal operating capacity, but excluding borrowing costs.
Point-of-sale materials comprise purchase costs regarding
equipment, displays and packaging materials etc. and arealso accounted for on a FIFO basis.

DKK million

2022

2021

Receivables related to third-party distribution and wholesale

747

672

Receivables related to retail revenue sales

515

337

Total trade receivables at 31 December

1,262

1,009

Ageing of trade receivables at 31 December
Not past due

1,035

850

Up to 30 days

176

159

Between 30 and 60 days

31-

Between 60 and 90 days

12-

Over 90 days

8

-

227

159

1,262

1,009

121

Total past due, not impaired
Total trade receivables at 31 December

Write-downs
Inventory write-downs primarily relate to finished goods andare recognised in cost of sales, DKK 97 million (2021: DKK 141
million), and operating expenses, DKK 21 million (2021: DKK
13 million). Write-downs include mainly the cost of remelting
obsolete jewellery.
Remelting of goods (realised and unrealised) negatively impacted gross profit by DKK 63 million (2021: DKK 103 million).

Development in impairment losses on trade receivables
SIGNIFICANT ACCOUNTING ESTIMATES
Estimates relating to write-downs are impacted by forecasting accuracy in the number of obsolete products thatwill need to be remelted. The impact from remelt is also
influenced by fluctuations in the market prices of silver
and gold. Further, significant management judgements
are required with regards to the calculations of internal
gain on inventory when goods are sold from production
entities to sales entities.

Impairment at 1 January

86

Additions

61

12

Utilised-11-20

Unused amounts reversed

-55

-30

Exchange rate adjustments

2

3

Impairment at 31 December

83

86

Trade receivables are amounts due from the sale of goods sold to wholesalers and distribu-

Production overheads

tors, or due from landlords, malls or e-commerce providers responsible for the collection of

Production overheads are calculated using a standard costcash on behalf of Pandora related to retail sales.

method, which is reviewed regularly to ensure relevant
assumptions concerning capacity utilisation, lead times and

The impairment on receivables decreased by DKK 3 million for the year. Realised losses were notother relevant factors.

material and remained low.

ANNUAL REPORT 2022

NOTE 3.6
TRADE RECEIVABLES (­ CONTINUED)Management continues to assess credit risk in order to ensure credit risk never exceeds the recognised write-down on
trade receivables. For a further description of credit risk, seenote 4.4 Financial risks.
In view of the low historical loss rates on receivables, adjusting these rates to reflect current and forward-looking
information on macroeconomic factors such as GDP and unemployment rates affecting the ability of customers to settle
receivables will not increase the risk of losses significantly.

ACCOUNTING POLICIESFINANCIAL STATEMENTSNOTE 3.7

NOTE 3.8

PROVISIONSCONTRACT ASSETS AND LIABILITIES77

DKK million

2022

2021

DKK million

Provisions at 1 January

442

399

Contract assets

Additions in the year

77

127

Receivables from sale of products, see note 3.6

Utilised in the year

-15

-11

Right-of-return assets

54

70

Unused provisions reversed

-120

-77

Total contract assets

1,316

1,078

11

Exchange rate adjustments-

5

Provisions at 31 December

384

442

Provisions are recognised in the
consolidated balance sheet as follows:

2022

2021

1,262

1,009

Contract liabilities
Prepayments from customers

16

Coupons, gift cards etc.

102

92

Loyalty programme

1860

Current

21

26

Refund liabilities

628

724

Non-current

363

416

Total contract liabilities

763

887

Provisions at 31 December

384

442
Warranty

Total

Trade receivables are initially recognised at the amountof consideration that is unconditional unless they containsignificant financing components, and consequently recognised at fair value. The Group holds trade receivables
with the objective of collecting the contractual cash flows
and therefore measures them subsequently at amortised
cost using the effective interest method.

Provisions are liabilities of uncertain timing or amount and

DKK million

consist of defined benefit pension plans of DKK 80 million

2022

Pandora applies the simplified approach to measure expected credit losses, using a lifetime expected loss allowance.

relating to litigation.

(2021: DKK 81 million), obligations to restore leased property

RefundLiability at 1 January

478

246

724

of DKK 163 million (2021: DKK 132 million), and other legal and

Performance obligations for which consideration has been received

982

327

1,309

constructive obligations of DKK 141 million (2021: DKK 203

Revenue recognised, included in the contract liability

-897

-214

-1,111

million). See note 5.1 Contingent liabilities

Contract liabilities reversed

-243

-66

-308

Exchange rate adjustments

19

-5

14

Refund and warranty liability at 31 December

339

288

628

for estimates

ACCOUNTING POLICIESProvisions are recognised when Pandora has a present
obligation (legal or constructive) as a result of a past event
and it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of theobligation. The expense relating to any provision is recognised in the income statement net of any reimbursement.

2021
Liability at 1 January

382

273

654

Performance obligations for which consideration has been received

1,238

218

1,456

Revenue recognised, included in the contract liability

-974

-171

-1,145Contract liabilities reversed

-189

-80

-269

Exchange rate adjustments

21

6

27

Refund and warranty liability at 31 December

478

246

724

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 3.8
CONTRACT ASSETS AND LIABILITIES (­ CONTINUED)ACCOUNTING POLICIES
Pandora recognises a refund and warranty liability related
to return rights provided to customers in most countries.
A corresponding right-of-return asset is also recognisedas part of contract assets. The value of the right-of-returnasset is determined by how many of the returned products
are expected to be sold. Remaining products are written
down to remelt value together with returns covered bywarranties.
The refund liability for estimated sales returns is recognised
when there is historical experience or when a reasonably
accurate estimate of expected future returns can otherwise be made. The income effect recognised is the grossmargin of the expected returns and the potential effect ofwriting down parts of the returned goods to remelt value.
Changes to the right-of-return asset and refund liability arerecognised gross in the income statement, as both revenue
and cost of sales.
Refund liability to cover warranty claims is based on expected replacements provided for products still coveredby warranty at the end of the period. The liability is recognised gross in the income statement, as both a reduction
in revenue and in cost of goods sold. This is due to thehandling of warranty claims, which lead to replacements
instead of repairs.
As a common practice in Pandora, no costs to obtain
contracts with customers were capitalised in 2022
or previous years.

SIGNIFICANT ACCOUNTING ESTIMATES
In most countries, Pandora has provided return and warranty rights to customers. The handling of warranty claims
leads to replacements instead of repairs. The recognised
refund liability relating to return and warranty rights is
assessed to a large extent on the basis of historical return
patterns.

NOTE 3.9

TRADE PAYABLES
The Group generally accepts that vendors sell off theirreceivables arising from the sale of goods and services
to the Group to a third party. Pandora has established a
supply chain financing programme where vendors can sell
off their receivables from Pandora on attractive terms,
based on invoices approved by Pandora, but at the bank'ssole discretion. Pandora is not directly or indirectly a party
to these agreements. The amounts payable to suppliers
included in the supply chain financing programme areclassified as trade payables in the balance sheet as well as
in the statement of cash flows (working capital within cash
flows from operations) and amounted to DKK 79 million at 31
December 2022 (2021: DKK 24 million).

78

ANNUAL REPORT 2022

FINANCIAL STATEMENTS

79

SECTION 4

CAPITAL STRUCTURE
AND NET FINANCIALSThis section includes notes related to Pandora’s capital structure and net
As a consequence of its
financials, including financial risks (see note 4.4).
operations, investments and financing, Pandora is exposed to a number offinancial risks that are monitored and managed by Pandora’s Group Treasury. Pandora uses a number of derivative financial instruments to hedge its
exposures to fluctuations in commodity prices and currencies. Derivative
financial instruments are described in note 4.5.
Pandora’s capital structure policy is to maintain a leverage ratio (NIBD to
EBITDA ratio) between 0.5x and 1.5x (including leases in accordance withIFRS 16). At 31 December 2022, the ratio was 0.8x (2021: 0.4x), reflecting
Pandora’s continued strong cash generation. In 2022, cash conversion ended
at 39% as a result of a deliberate decision to build up inventory.

DKK 6.7bn
Undrawn committed facilities of
DKK 6.7 billion underpin Pandora’s
strong liquidity position.

NET INTEREST-BEARING DEBTDKK million

2022

2021

Loans and borrowings, non-current

1,017

1,041

Lease liabilities, non-current

2,113

1,724

Loans and borrowings, current

3,508

274

Lease liabilities, current

950

886

Cash

-794

-1,043

Net interest-bearing debt

6,794

2,882

ANNUAL REPORT 2022

FINANCIAL STATEMENTS

80

NOTE 4.1

shares. At 31 December 2022, the share capital comprised

6,595,620 treasury shares, corresponding to a total purchase price of DKK 3.6 billion (DKK 0.7 billion

SHARE CAPITAL

95,500,000 shares with a par value of DKK 1. No shares haverelated to the share buyback programme launched in 2021 and DKK 2.9 billion related to the sharespecial rights.

buyback programme launched in 2022). At 31 December 2022, Pandora had yet to repurchase own
shares at a total purchase price of DKK 0.4 billion as part of the share buyback programme.

In 2022, Pandora launched a new share buyback programme
At the Annual General Meeting of Pandora A/S on 10 March

under which Pandora expects to buy back own shares up to a2022, the shareholders resolved to cancel 4,500,000 treasury

maximum value of DKK 3.3 billion. In 2022, Pandora purchased

SHARE CAPITAL

Number of shares

Nominal value (DKK)

Balance at 1 January

100,000,000

Cancellation of shares-4,500,000-4,500,000

Balance at 31 December

95,500,000

95,500,000

All treasury shares are owned by Pandora A/S. Treasury shares include hedges for share-based

100,000,000

2021
Balance at 1 January

100,000,000

100,000,000

Balance at 31 December

100,000,000

100,000,000

Numberof shares

Nominalvalue (DKK)NOTE 4.2

EARNINGS PER SHARE AND DIVIDENDDKK million

2022

2021

Profit attributable to equity holders

5,029

4,160

92,746,543

98,775,946

949,850

898,708

93,696,393

99,674,654

Weighted average number of ordinary shares
Purchase price% of shares

2022
Balance at 1 January

4,261,882

4,261,882

3,416,201,836

4.3%

Used to settle share-based
incentive plans-252,971-252,971-198,579,700-0.3%

Purchase of treasury shares

6,595,620

6,595,620

3,588,038,037

6.7%

Cancellation of treasury shares-4,500,000-4,500,000-3,485,684,600-4.5%

Balance at 31 December

6,104,531

6,104,531

3,319,975,573

6.4%

322,839

322,839

92,742,356

0.3%

Used to settle share-based
incentive plans-4,754-4,754-1,264,761

0.0%

Purchase of treasury shares

3,943,797

3,943,797

3,324,724,241

3.9%

Balance at 31 December

4,261,882

4,261,882

3,416,201,836

4.3%

2021
Balance at 1 January

Treasury shares
incentive plans granted to the Executive Management and other employees.

2022

TREASURY SHARES

Own shares of DKK 0.4 billion have been repurchased after 31 December 2022.

Effect of performance shares
Weighted average number of ordinary shares adjusted
for the effect of dilution
Basic earnings per share, DKK

54.2

42.1

Diluted earnings per share, DKK

53.7

41.7

There have been no transactions between the reporting date and the date of completion of theAnnual Report involving shares that would have significantly changed the number of shares or
potential shares in Pandora A/S.

Dividend
The Board of Directors will propose at the Annual General Meeting that a dividend of DKK 16
per share (2021: DKK 16), corresponding to DKK 1.4 billion, be distributed for 2022. No dividend is paid on treasury shares.

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 4.2

NOTE 4.3

EARNINGS PER SHARE AND DIVIDEND (­ CONTINUED)

NET INTEREST-BEARING DEBT

In 2022, a dividend of DKK 1.5 billion in total was paid. Dividend
paid had no effect on the Group’s tax expense for the year.
For further shareholder information on dividend payments,

TOTAL LIABILITIES FROM FINANCING ACTIVITIESDKK million

Financial liabilities
1 January

Cash flows, net

New leases, etc.

Other1

Foreign exchange
adjustments

81

Financial liabilities
31 December2022

see page 43.

Non-current borrowings

1,041

74

-

-99

-

1,017

Non-current lease liabilities

1,724

-

1,253

-857

-6

2,113

Distributable reserves

Current borrowings

274

2,935

-

299

-

3,508

Current lease liabilities

886-1,068

465

665

2

950

3,926

1,941

1,717

7

-3

7,588

Cash distribution to the shareholders is, by law, limited to theamount of the free reserves of the Parent Company.

Total liabilities from financing activities
2021

As at 31 December 2022, free reserves in the Parent Compa-

Non-current borrowings

-

1,315

-

-273

-

1,041

ny amounted to DKK 15.2 billion, of which DKK 5.9 billion was

Non-current lease liabilities

2,066

-

495

-899

61

1,724

derived from an intra-group restructuring to bring together

Current borrowings

3,003-3,004

-

274

1

274

its crafting activities into a separate crafting sub-group,

Current lease liabilities

993

-991

215

637

32

886

which will oversee all crafting activities across the Group.

Total liabilities from financing activities

6,063-2,680

710

-262

94

3,926

For further information on the intra-group restructuring see

1

note 3.3 Investments in subsidiaries and business combinationsI ncludes the effect of the reclassification of the non-current portion of interest-bearing loans and borrowings to the current portion due to the passage of time. Also includes the effect of accrued but not yet paid interest
on interest-bearing loans and borrowings, upfront prepayment of lease liabilities and the effect of the lease modification and reassessment. The Group classifies interest paid as cash flows from operating activities.

in the Parent Company financial statements.

When calculating the amount available for distribution ofdividend and share buyback, treasury shares are deductedfrom distributable reserves.

ACCOUNTING POLICIESDividend proposed is recognised as a liability at the dateof the adoption at the Annual General Meeting (declaration date). Extraordinary dividend is recognised as aliability at the declaration date.

ACCOUNTING POLICIESOn initial recognition, interest-bearing debt and borrowings are measured at fair value less transaction costs. Subsequent to initial recognition, interest-bearing loans and borrowings are measured at amortised cost using the effective interest rate method. Gains and losses are recognisedin the income statement when the liabilities are derecognised and through the effective interest
rate method. Amortised cost is calculated by taking into account any discount or premium at
inception, and fees and other costs.

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 4.4

Purchases are hedged from 1 to 12 months forward with a hedge ratio target that decreases

FINANCIAL RISKS

with time to maturity as illustrated to the right. Any deviation from the policy must be ap-

COMMODITY HEDGERATIO TARGET (%)

proved by the Audit Committee.

Min

REVENUE BREAKDOWNBY CURRENCY (%)

Max

USD
EUR
Other

Commodity hedging is updated at the end of each month or in connection with revised
As a consequence of its operations, investments and finan-

12-month rolling production plans. Actual production may deviate from the 12-month rolling

cing, Pandora is exposed to a number of financial risks that

production plan. In case of deviations, the realised commodity hedge ratio may deviate fromare monitored and managed by Pandora’s Group Treasury.

the estimated hedge ratio. The effective portion of the realised gain or loss from commodity

cial instruments, such as forward contracts, silver and gold
swaps, currency and interest rate swaps, options and similar

GBP
AUD
CNY

MXN
CAD

1 – 3 MONTHS AHEAD

hedging is recognised in Group inventories and subsequently in cost of sales. For the fair value of
To manage financial risks, Pandora may use a number of finan-82

hedging instruments, see note 4.5 Derivative financial instruments.

32%

32%

27%

27%

14%

14%

12%

12%

6%

5%

3%

5%

3%

2%
3%

70 – 100 %4 – 6 MONTHS AHEAD

Foreign currency risk

70 – 90 %7 – 9 MONTHS AHEAD

instruments within the framework of its current policies.

Pandora’s presentation currency is DKK, but the majority of Pandora’s activities and invest-

Financial risks are divided into commodity price risk, foreign

ments are denominated in other currencies. Consequently, exchange rate fluctuations may

currency risk, credit risk, liquidity risk and interest rate risk.

have a substantial impact on Pandora’s cash flows, profit (loss) and/or financial position in DKK.

50 – 70%
10 – 12 MONTHS AHEAD

It is Pandora’s policy to hedge at least 50% of the combined

The majority of Pandora’s revenue is denominated in USD, EUR, GBP, AUD, MXN, CAD and CNY.

commodity, exchange rate and interest rate risk. However, at

The functional currency of subsidiaries is generally the local currency, and a substantial portion

least 70% of estimated commodity purchases for the next 12of Pandora’s costs relates to raw materials purchased in USD. In addition, Pandora incurs costs

30 – 50%months must be hedged.
2022

The table to the right illustrates the sensitivity on 2022 reve-

SENSITIVITY ANALYSIS ON EXCHANGERATES AND COMMODITY PRICES1
DKK million

Change inexchange rate andcommodity prices

Revenue

USD

+10%

CAD

+10%

Commodity price risk

AUD

Raw material risk is the risk of fluctuating commodity prices
resulting in additional production costs. The most important

2021

EBIT

EBIT
marginimpactRevenue

EBIT

858

367

0.5%

748

350

0.7%

80

47

0.1%

65

38

0.1%

+10%

167

117

0.3%

127

81

0.2%

GBP

+10%

382

252

0.6%

333

235

0.6%

EUR

+1%

71

44

0.1%

62

39

0.1%

raw materials are silver and gold, which are priced in USD.

CNY

+10%

73

-9

-0.1%

111

7

-0.1%

MXN

+10%

86

47

0.1%

48

22

0.0%

It is the policy of Pandora to ensure stable, predictable raw

THB

+10%

-

-220

-0.8%

-

-238

-1.0%

material prices. Based on a rolling 12-month production plan,

GOLD and SILVER

+10%

-

-218

-0.8%

-

-182

-0.8%

nue, EBIT and EBIT margin from exchange rates and commodity price movements. In addition, the sensitivity of assets andliabilities as at 31 December from currency movements is
illustrated on the next page.

the general policy is for Group Treasury to hedge at least 70%of the Group’s expected purchases.

EBIT
marginimpact	Revenue and EBIT would have been impacted by the above amounts if exchange rates and commodity prices in 2022 had been higher than the realised exchange rates andcommodity prices. The impact would have been the opposite if exchange rates and commodity prices had been decreasing by similar percentages. The analysis is based on thetransaction currency. The analysis excludes the effects of hedging and time-lag of inventory.

1

3%
2022

2021

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 4.4
FINANCIAL RISKS (CONTINUED)

83

It is Pandora’s policy to hedge foreign currency risks related

risk related to financial assets corresponds to the carrying amounts recognised in the consoli-

to the risk of declining net cash flows resulting from exchange

dated balance sheet.

rate fluctuations. ­Pandora does not hedge balance sheet items
or ownership interests in foreign ­subsidiaries. For 2022, 70% of

It is Pandora’s policy for subsidiaries to be responsible for credit evaluation and credit risk on

the cash flows from the main currencies were hedged based

their trade receivables. Any deviations from standard agreements must be approved by Groupdenominated in THB. Changes in the exchange rate of theseon a rolling 12-month liquidity forecast. Cash flows are hedged

Treasury and/or the Chief Financial Officer.

currencies versus DKK will result in changes to the translated

from 1 to 12 months forward with a hedge ratio that decreases

value of future EBIT and cash flows.

with time to maturity. Foreign currency hedging is updated at

Note 3.6 Trade receivables

the end of each month or in connection with revised 12-monthables. Rating of trade receivables does not differ materially either by type of customer or

Pandora finances the majority of its subsidiaries’ cash re-rolling cash forecasts. The realised profit (loss) from exchange

geographic location. The risk of further impairment is considered to be limited.

quirements via intercompany loans ­denominated in therate hedging is taken to financial items.

local currency of the ­individual subsidiary. A devaluation ofincludes an overview of the credit risk related to trade receiv-

Credit risk related to Pandora’s other financial assets mainly includes cash and unrealised gains

these currencies against DKK will in general result in a foreign

The table below illustrates the currency revaluation impact

on financial contracts. The credit risk is related to default of the counterparty with a maximum

exchange loss in the Parent Company.

in DKK million on net profit and changes in equity resulting

exposure corresponding to the carrying amount of the assets. Group Treasury is responsible

from a change in the Group’s primary foreign currencies

for managing these credit risks.

Exchange rate fluctuations may lead to a decrease in revenue
and an increase in costs and thus declining margins. In addition,

after the effect of hedge accounting.

Liquidity risk

exchange rate fluctuations affect the translated value of theCredit risk

profits or losses of foreign subsidiaries and the translation ofCredit risk is primarily related to trade receivables, cash andlised credit facilities to meet financial obligations when due. Pandora’s liquidity risk is consid-

foreign currency assets and liabilities.

unrealised gains on financial contracts. The maximum credit

ered to be low.

Pandora’s cash conversion is high and Pandora maintains an adequate level of cash and unuti-

Pandora has two new term loans of DKK 3.7 billion committed until December 2023 and May

31 December 2022

31 December 2021

Change in­exchange rate

Profit (loss)
before tax

EquityProfit (loss)
before tax

Equity

USD

+10%

-22

240

38

-188

CAD

+10%

33

-

28

-8

AUD

+10%

11

-64

8

-43

GBP

+10%

-

-64

-47

-159

CURRENCY EXPOSURE FROMASSETS AND LIABILITIES1
DKK million

2030, respectively. Pandora has uncommitted credit facilities to ensure efficient and flexible
local ­liquidity management. The credit facilities are managed by Group Treasury.

OUTSTANDING COMMITTEDLOAN FACILITIES(END OF DECEMBER 2022)

Availablefacilities
DKK million

Maturity dateDrawn
amount
DKK million

Availableliquidity

EUR

+1%

-9

-34

3

3

Revolving credit facilities1

7,065

April 2027

372

6,693

CNY

+10%

-17

-9

-21

-35

Term loan maturing in 20301

744

May 2030

744

-

MXN

+10%

52

52

11

11

Term loan maturing in 2023

3,000

December 2023

3,000

-

THB

+10%

-46

247

-71

170

Total

10,808

4,116

6,693

The movements in the income statement arise from monetary items (cash, borrowings, receivables and payables) where the functional currency of the entity differs from the currency that the monetary items are denominated in. The movements in equity arise from monetary items and hedging instruments where the functional currency of the entity differsfrom the currency that the hedging instruments or monetary items are denominated in. The impact would have been the opposite if exchange rates had been decreasing by similar
percentages. The analysis is based on the transaction currency.

1	1

The revolving credit facility and the term loan maturing in 2030 are both sustainability-linked facilities.

ANNUAL REPORT 2022

NOTE 4.4
FINANCIAL RISKS (CONTINUED)FINANCIAL STATEMENTS

84

All else being equal, it is estimated that a general increase in• all non-derivative financial liabilities;

interest rates by 1.0 percentage point would lead to a DKK 49• net and gross settled derivative financial instruments for which the contractual maturities

million decrease in profit before tax and equity, excluding tax

are essential for an understanding of the timing of the cash flows.

effect (2021: DKK 6 million decrease).
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due

Interest rate risk

Contractual maturities of financial ­liabilities

Interest rate risk is the risk of interest rate fluctuations

The table below breaks the Group’s financial liabilities down

resulting in changed interest rate payments and market value

into relevant maturity groupings based on contractual ma-

Based on the Group’s expectations for the future operation and the Group’s current cashof net borrowings. At the reporting date, all interest-bearing

turities for:resources, no significant liquidity risks have been identified.

within 12 months equal their carrying amounts as the impact of discounting is insignificant.

loans and borrowings were based on floating interest rates.

LIABILITIES FALL DUE AS FOLLOWSDKK million

NOTE 4.5

Within1 yearWithin1 and 5 years

After more than
5 years

Total

DERIVATIVE FINANCIAL INSTRUMENTS

Loans and borrowings

3,615

813

253

4,681

Pandora uses a number of derivative financial instruments to hedge its exposure to fluctua-

Lease liabilities

1,134

2,046

539

3,718

tions in commodity prices and exchange rates.

Trade payables

3,131

-

-

3,131

Other payables

239

-

-

239

2022
Non-derivatives

contracts.

Derivatives
Derivative financial instruments
Total at 31 December

Derivative financial instruments include silver and gold swaps and foreign exchange forward

74

-

-

74

8,193

2,859

792

11,844
AssetsLiabilities

Carrying
amountHedge reserve,
net of tax

Commodities

166

-33

133

103

Foreign exchange

65

-42

23

18

Total derivative financial instruments

231

-74

157

121

-90

DKK million
2021

2022

Non-derivatives
Loans and borrowings

274

1,050

-

1,324

Lease liabilities

977

1,600

275

2,851

Trade payables

3,267

-

-

3,267

Other payables

289

-

-

289

209

-

-

209

5,016

2,650

275

7,941

Derivatives
Derivative financial instruments
Total at 31 December

2021
Commodities

8

-121

-113

Foreign exchange

61

-88

-27

-20

Total derivative financial instruments

69

-209

-140

-110

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 4.5

unrealised foreign exchange instruments is tested against

DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)

For information about risk management strategy, see note 4.4
The value of financial instruments recognised in other com-

It is Pandora’s policy to hedge at least 70% of the Group’s

prehensive income is recycled from equity at the time theexpected gold and silver consumption based on a rolling

instrument is settled, within 12 months.

12-month production plan. The table below illustrates thefor production, excluding the time-lag effect from inventory

Derivative financial instruments that qualify
for cash flow hedge accounting

to cost of sales (when the product is sold). The time-lag fromThe hedges are expected to be highly effective due to theuse in production to impact on cost of sales is usually 2 to 7

nature of the economic relation between the exposure andmonths.

the hedge.

Classification according to the fair value
hierarchy

The effective portion of the unrealised gain or loss on all hedg-

The fair value at 31 December 2022 of Pandora’s derivative

income in the equity hedging reserve. The ineffective portion

financial instruments was measured in accordance with lev-is recognised in net financials.

timing of the hedges related to the purchase of gold and silver

ing instruments is recognised directly as other comprehensiveel 2 in the fair value hierarchy (IFRS 13). Level 2 is based on
non-quoted prices, observable either directly (as prices) or

The effective portion of the realised gain or loss on a com-indirectly (derived from prices). Pandora uses input frommodity hedging transaction is recognised in Group inventories

third-party valuation specialists to quote prices for unrealised

and subsequently in cost of sales whereas the ineffective

derivative financial instruments. The value of unrealised silver

portion is realised in net financials. The realised gain or loss on

and gold instruments is tested against the prices observableall foreign exchange contracts is recognised in net financials.

at London Bullion Market Association (LBMA). The value of

The ineffectiveness impact in net financials was a loss of

HEDGED AND REALISED PURCHASE PRICESAt use of the gold and silver for production (USD/OZ)

Realised in
2022

Hedged
Q1 2023

HedgedQ2 2023

HedgedQ3 2023

HedgedQ4 2023

Gold price

1,806

1,835

1,839

1,793

1,847

Silver price

24.29

23.48

21.75

20.42

22.27

Realised70-100%70-90%

50-70%

30-50%

Commodity hedge ratio, %DKK 46 million (2021: gain of DKK 16 million).

observable foreign exchange forward rates.
Financial risks.

ACCOUNTING POLICIES
Derivative financial instruments are initially recognised atfair value at the date on which a contract is entered into
and are subsequently measured at fair value. For derivative
financial instruments not traded in an active market, the fairvalue is determined using appropriate valuation methods.
Such methods may include comparison with recent arm’s
length market transactions, reference to the current fairvalue of another instrument that is substantially the same, ordiscounted cash flow analysis.
Pandora has designated certain derivative financial instruments as cash flow hedges as defined under IFRS 9. Hedge
accounting is classified as a cash flow hedge when thehedges of a particular risk is associated with the cash flowsof recognised assets and liabilities and highly probable
forecast transactions.
Pandora designates and documents all hedging relationships
between commodity contracts and purchase transactions.
The effective portion of the unrealised gain or loss on all
hedging instruments is recognised directly as other comprehensive income in the equity hedging reserve. The ineffective portion is recognised in net financials. The effective
portion of the realised gain or loss from commodity hedging is recognised in Group inventories and subsequently incost of sales. The realised profit (loss) from exchange rate
hedging is taken to financial items.

85

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 4.6

NET FINANCIALSACCOUNTING POLICIESFinance income and costs comprise interest
income and expenses, realised and unrealised gains and losses on payables/receivables and transactions in foreign currencies.

FINANCE INCOME
DKK million

is recognised using the effective interest rate,
which is the rate that discounts the estimated future cash payments or receipts over the
expected life of the financial instrument ora shorter period, where appropriate, to the
net carrying amount of the financial asset or
liability.

2022

2021

Reclassified from equity hedge reserves

1253

Total finance income from derivative financial instruments

1253

Foreign exchange gains

393

78

NOTE 4.7

Interest income, bank

5

19Interest income, loans and receivables

2

2

OTHER NON-CASH ADJUSTMENTS

Total finance income from loans and receivables

400

99

Total finance income

412

152

For all financial instruments measured atamortised cost, interest income or expense

Finance income from loans and receivables measured
at amortised cost:

OTHER NON-CASH ADJUSTMENTS
DKK million

FINANCE COSTSDKK million

2022

2021

Reclassified from equity hedge reserves

167

286

Total finance costs from derivative financial instruments

167

286

Foreign exchange losses

134

116

Interest on loans and borrowings

100

34

Interest on lease liabilities

162

99

Other finance costs

59

78

Total finance costs from loans and borrowings

455

327

Total finance costs

622

613

Finance costs from financial liabilities measured at amortised cost:

2022

2021

Effects from exchange rate adjustments

16

129

Effects from IFRS16 rent concessions

-30

-56

Other, incl. gains/losses from the sale of property,
plant and equipment-4-4

Total other non-cash adjustments

-18

70

86

ANNUAL REPORT 2022

FINANCIAL STATEMENTS

SECTION 5OTHER
DISCLOSURES

Third best-sellingring in 2022
The Marvel Infinity ring from the Marvel X
Pandora collection was among our top three
best-selling rings overall in 2022. Since thering was introduced in early 2022, Marvelfans and excited consumers have bought a
total of almost 135,000 pieces.

87

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 5.1

located in Hamburg, Germany, was affected by a fire. The

NOTE 5.3

CONTINGENT ASSETS AND
LIABILITIES

extent of any potential insurance compensation is being

FEES TO INDEPENDENTAUDITOR

Litigationassessed, and discussions are ongoing with the insurers. Dueto the premature state of discussions and the associated88

uncertainties, Pandora has not recognised an indemnity claim
under the business interruption insurance policy as of 31

DKK million

2022

2021

Pandora is a party to various legal proceedings with current

December 2022. No other material insurance compensation

business partners, authorities and other third parties, related

has been recognised in 2022.

Fee for statutory audit

11

10

Other assurance engagements

2

1

Total audit related services

13

11

Tax consultancy--

Other services

1-

Total non-audit services

1-

Total fees to independent auditor

14

11

to copyright, marketing conduct and pricing. None of theseproceedings is expected to have a material effect on Pandora’s
financial position or future earnings.

SIGNIFICANT ACCOUNTING ESTIMATES
The factors taken into account when estimating a potential liability in connection with litigation include the natureof the litigation or claim. Other factors taken into accountare the development of the case, the judgements andrecommendations of legal or other advisers, experiencefrom similar cases, and management’s decision on how
the Group will react to the litigation or claim.

NOTE 5.2

RELATED PARTIES
Related parties with significant ­interests
At 31 December 2022, treasury shares accounted for 6.4%of the share capital (2021: 4.3%), for further information see
note 4.1 Share capital.

The costs are recognised in the consolidated income statement as administrative expenses.

Other related parties of Pandora include the Board, Execu-

Pandora has implemented a policy regarding non-audit services provided by the auditor

tive Management and their close family members. Related

appointed at the Annual General Meeting. The policy states which services are allowed

parties also include companies in which the aforementioned

or prohibited.

persons have control or significant interests.
Other non-audit services include fees for advisory services. All non-audit services have been

Contractual obligations

Transactions with related parties

Pandora has entered into a number of long-term purchase,

As part of the share buyback carried out in 2022, Pando-

sales and supply contracts in the course of the Group’s

ra purchased own shares from shareholders. The sharesordinary business. Contractual obligations amounted to DKK

were purchased at the volume-weighted average purchase

827 million at 31 December 2022 (2021: DKK 500 million) andprice for the shares purchased under the share buyback

relate mainly to commercial collaborations and IT contracts.

­programme in the market on the relevant day of trading.

NOTE 5.4

Apart from the liabilities already recognised in the balance

Pandora did not enter into any significant transactions withsheet, no significant financial losses are expected to bemembers of the Board or the Executive Management, except

EVENTS OCCURRING AFTER THE
REPORTING PERIOD

incurred as a result of these contracts.

for compensation and benefits received as a result of their

Contingent assets
In October 2022, Pandora’s European Distribution Center,approved according to the policy for non-audit services and within the 70% fee cap restrictions.

membership of the Board, employment with Pandora or
shareholdings in Pandora. For further information see noteNo subsequent events have occurred after the balance sheet date that required adjustment

2.3 Staff costs

to or disclosure in the consolidated financial statements.

and note 2 .4 Share-based payments.

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 5.5

Company

COMPANIES IN THE PANDORA GROUP

Ownership

Registered office

Date of c­ onsolidation

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

Argentina
Austria
BelgiumBrazilCanadaChile
Colombia
Denmark
Denmark
Denmark
Denmark
EnglandFinlandFranceGermany
Germany
Hong Kong
Ireland
Italy
Japan
Macau
MexicoMexicoMexicoPanamaPanamaPeru
PolandPoland27 September 201723 May 201213 April 201724 October 2013
7 March 2008
7 May 201717 January 2019
1 October 200916 January 201518 May 2018
3 May 2022
1 December 2008
1 January 2012
25 February 2011
5 January 2010
5 December 2011
1 November 200910 January 201823 May 2012
29 October 2014
1 January 2016
8 March 20178 March 2017
4 April 2018
5 July 201614 April 2021
10 July 2018
1 March 2009
7 February 2012

OWNED BY PANDORA A/S
Pandora Jewelry Argentina SRL
Pandora Österreich GmbH
Pandora Jewellery Belgium NV
Pandora do Brasil Participações Ltda.
Pandora Jewelry Ltd.
Pandora Jewelry Chile SpA
Pandora Jewelry Colombia S.A.S
Pandora Int. ApS
Pan Me A/S
Pandora Jewelry Taiwan A/S
Pandora Production Holding A/S
Pandora Jewellery UK Limited
Pandora Jewelry Finland Oy
Pandora France SAS
Pandora Jewelry GmbH
Pandora EMEA Distribution Center GmbH
Pandora Jewelry Asia-Pacific Limited
Pandora Jewelry Limited
Pandora Italia SRL
Pandora Jewelry Japan Ltd.
Pandora Jewelry Macau Company Ltd.
Pandora Jewelry Mexico, S.A. de C.V.
Pandora Jewelry Mexico Servicios, S.A. de C.V.
Pandora Jewelry Mexico Import, S.A. de C.V.
Pandora Jewelry Panama S.A.
Pandora Jewelry Panama Retail, S.A.
Pandora Jewelry Peru S.A.C
Pandora Jewelry CEE Sp. z.o.o.
Pandora Jewelry Shared Services Sp. z.o.o.

Ownership

Registered office

Date of ­consolidation

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

Portugal
Singapore
Slovakia
South Africa
Spain
SwedenSwitzerland
ThailandTurkeyUnited States
United States

4 April 2022
1 January 2016
6 September 201631 January 201728 September 2017
4 November 2013
6 December 201115 October 2010
4 November 2013
1 July 2008
20 October 2021

Ownership

Registered office

Date of ­consolidation

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

Australia
Australia
Australia
BrazilCanadaCanadaChina
China
Czech Republic
Dubai
Hong Kong
Hungary
Netherlands
NorwayRomania
Thailand
United States
United States
United States
United States

1 July 2009
1 July 2009
1 July 2009
24 October 201319 January 2011
4 February 2014
4 February 2015
1 March 2016
2 December 200916 January 2015
4 February 2015
2 June 2010
20 September 201017 August 201018 August 2011
7 March 2008
7 March 2008
1 November 2009
10 May 2012
21 August 2014

OWNED BY PANDORA A/S

The table below shows information about the Group entities at 31 December 2022.
Company89

Pandora Portugal, Unipessoal LDA
Pandora Jewelry Singapore Pte. Ltd.
Pandora Jewelry Slovakia s.r.o.
Pandora Jewellery South Africa Pty Ltd.
Pandora Jewellery Spain S.L
Pandora Sweden AB
Pandora Schweiz AG
Pandora Services Co. Ltd.
Pandora Jewelry Mücevherat Anonim Şirketi
Pandora Jewelry Inc.
Pandora Jewelry Latam LLC
Company
OWNED BY OTHER COMPANIES IN THE PANDORA GROUPAD Astra Holdings Pty Ltd.
Pandora Jewelry Pty Ltd.
Pandora Retail Pty Ltd.
Pandora do Brasil Comércio e Importação Ltda.
Pandora Franchise Canada Ltd.
Pandora Retail Canada Ltd.
Pandora Jewelry (Shanghai) Company Ltd.
Pandora Jewelry Design (Beijing) Company Ltd.
Pandora Jewelry CR s.r.o.
Panmeas Jewellery LLC
Pandora Jewelry Hong Kong Company Ltd.
Pandora Jewelry Hungary Ltd.
Pandora Jewelry B.V.
Pandora Norge AS
Pandora Jewelry Romania SRL
Pandora Production Co. Ltd.
Pandora Jewelry LLC
Pandora Franchising LLC
Pandora Ventures LLC
Pandora ECOMM LLC

Pandora Group has seven dormant companies, which have been omitted from the table.
Pandora A/S has no dormant companies.

ANNUAL REPORT 2022

FINANCIAL STATEMENTSNOTE 5.6

Pandora presents the following alternative performance measures not deﬁned according to IFRS (­ non-GAAP measures) in

FINANCIAL DEFINITIONS

the Annual Report:

Key ﬁgures and ﬁnancial ratios stated in the consolidated ﬁnancial statements have been
calculated in accordance with the CFA Society Denmark guidelines.

Revenue growth, % (The current year’s revenue - last year’s revenue)
Last year’s revenue
Revenue growth, (The current year’s revenue at last year’s exchange rates - last year’s revenue)
local currency, % Last year’s revenue
Gross margin, % Gross profit / revenue
Effective tax rate, % Income tax expense / profit before tax
Equity ratio, % Equity / total assets
Payout ratio, % Dividends paid for the year / net profit
Total payout ratio, % Dividends paid for the year plus value of share buyback / net profit
EPS basic Net profit / average number of shares outstanding
EPS diluted Net profit / average number of shares outstanding, including the dilutive
effect of share options ‘in the money’Forward-looking statements

This Annual Report contains forward-looking statements, including, but not limited to, guidance, expectations, strategies, objectives andstatements regarding future events or prospects with respect to the Company’s future financial and operating results. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or
achievements, and may contain words such as “expect”, “estimate”, “intend”, “will be”, “will continue”, “will result”, “could”, “may”, “might”
or any variations of such words or other words with similar meanings. Forward-looking statements are subject to risks and uncertainties that could cause the Company’s actual results to differ materially from the results discussed in such forward-looking statements.
Prospective information is based on management’s then current expectations or forecasts. Such information is subject to the risk thatsuch expectations or forecasts, or the assumptions underlying such expectations or forecasts, may change. The Company assumes noobligation to update any such forward-looking statements to reflect actual results, changes in assumptions or changes in other factors
affecting such forward-looking statements. Some important risk factors that could cause the Company’s actual results to differ materially from those expressed in its forward-looking statements include, but are not limited to: economic and geopolitical uncertainty(including interest rates and exchange rates), financial and regulatory developments, general changes in market trends and end-consumer preferences, demand for the Company’s products, competition, the availability and pricing of materials used by the Company,
production and distribution-related issues, IT failures, litigation, pandemics, and other unforeseen factors. The nature of the Company’sbusiness means that risk factors and uncertainties may arise, and it may not be possible for management to predict all such risk factors,
nor to assess the impact of all such risk factors on the Company’s business or the extent to which any individual risk factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Accordingly, forward-looking statements should not be relied on as a prediction of actual results.

Sell-out Like-for-like including stores which havegrowth, been operating for +12 months and(like-for-like) % stores which are temporarily closed due
to COVID-19
Organic Revenue growth in local currency relative
growth, % to the same period in the comparative
year adjusted for the acquisition/divestment of distributors and franchisee
stores (the effect of converting wholesale
to retail revenue and vice versa)
EBITDA Earnings before interest, tax, depreciation
and amortisation
EBITDA margin, % EBITDA / revenue
EBIT Earnings before interest and tax
EBIT margin,% EBIT / revenue
Free Cash Flows Cash flows from operating activities,
excluding financial items and cash flows
from investing activities excluding acquisitions of subsidiaries and activities

90

Capital expenditure Purchase of intangible assets and(CAPEX) property, plant and equipment for theyear, excl. acquisitions of subsidiaries
Days sales­ Last three months of wholesale andoutstanding (DSO) third-party distribution revenue relative
to trade receivables from these channels
and not adjusted for VAT
Return on invested EBIT / invested capital incl. goodwill
capital (ROIC), %NIBD Loans, borrowings, capitalised leases andother liabilities relating to obligations toacquire non-controlling interests (current
and non-current) less cash
NIBD to EBITDA NIBD / EBITDA (rolling 12 months)
Cash conversion Free cash flows before acquisitions / EBIT
incl. lease
payments, %Furthermore, a breakdown of ‘Operating working capital’, ‘Net working capital’ and ‘Invested c­ apital’ is given on the section 3 divider.

ANNUAL REPORT 2022

MANAGEMENT STATEMENTSTATEMENT BY THE EXECUTIVE MANAGEMENT
AND THE BOARD OF DIRECTORSThe Board of Directors and the Executive Management havefair view of the financial position of the Group and the Par-

In our opinion, the Annual Report of Pandora A/S for thetoday discussed and approved the Annual Report of Pandora

ent Company at 31 December 2022 and of the results of thefinancial year 1 January to 31 December 2022 with the file

A/S for 2022.

Group's and the Parent Company's operations and cash flowsname PAND-2022-12-31-en.zip has been prepared, in all

for the financial year 1 January to 31 December 2022.

material respects, in compliance with the ESEF Regulation.

International Financial Reporting Standards as adopted by the

Further, in our opinion, the Management's review gives a fair

We recommend that the Annual Report be approved at the

EU and additional requirements of the Danish Financial State-review of the development in the Group's and the Parent

Annual General Meeting.

ments Act.

Company's activities and financial matters, results of oper-

The Annual Report has been prepared in accordance withations, cash flows and financial position as well as a descripIt is our opinion that the consolidated financial statementstion of material risks and uncertainties that the Group and

Copenhagen,and the Parent Company financial statements give a true and

the Parent Company face.

8 February 2023

Executive
Management

Board ofDirectors

Alexander Lacik

Peter A. Ruzicka

Christian Frigast

Chief Executive Officer

Chair

Deputy Chair

Heine
Dalsgaard

Anders Boyer

Marianne
Kirkegaard

Catherine
SpindlerJan
Zijderveld

Chief Financial Officer

Birgitta Stymne
Göransson

91

ANNUAL REPORT 2022

I NDEPENDENT AUDITOR’S REPORTINDEPENDENT AUDITOR’S REPORTTo the shareholders of Pandora A/S
Our opinion

Basis for opinion

8 April 2011. We have been reappointed annually at theWe have audited the consolidated financial statements andWe conducted our audit in accordance with International

General Meeting for a total consecutive period of 12 years

the Parent Company financial statements of Pandora A/SStandards on Auditing (ISAs) and additional requirements

up to and including the financial year 2022. Subsequent to afor the financial year 1 January to 31 December 2022, whichapplicable in Denmark. Our responsibilities under thosetender process, we were re-appointed at the Annual Generalcomprise statement of comprehensive income, balance sheet,standards and requirements are further described in the

Meeting on 11 March 2021.

statement of changes in equity, statement of cash flows and“Auditor’s responsibilities for the audit of the financial

notes, including accounting policies, for the Group and thestatements” section of our report. We believe that the audit

Key audit matters

Parent Company. The consolidated financial statements andevidence we have obtained is sufficient and appropriate to

Key audit matters are those matters that, in our profession-

the Parent Company financial statements are prepared in ac-

provide a basis for our opinion.

al judgement, were of most significance in our audit of thecordance with International Financial Reporting Standards asfinancial statements for the financial year 2022. These mat-adopted by the EU and additional requirements of the Danish

Independence

ters were addressed during our audit of the financial state-

Financial Statements Act.

We are independent of the Group in accordance with thements as a whole and in forming our opinion thereon. We do

International Ethics Standards Board for Accountants’ Inter-not provide a separate opinion on these matters. For each

In our opinion, the consolidated financial statements and thenational Code of Ethics for Professional Accountants (IESBA

matter below, our description of how our audit addressed

Parent Company financial statements give a true and fair viewCode) and the additional ethical requirements applicable inthe matter is provided in that context.

of the financial position of the Group and the Parent Com-

Denmark, and we have fulfilled our other ethical responsibil-pany at 31 December 2022 and of the results of the Group’s

ities in accordance with these requirements and the IESBA

We have fulfilled our responsibilities described in the “Au-and the Parent Company’s operations and cash flows for thecode.

ditor’s responsibilities for the audit of the financial state-financial year 1 January to 31 December 2022 in accordance

ments” section, including in relation to the key audit matterswith International Financial Reporting Standards as adopted

To the best of our knowledge, we have not provided any

below. Our audit included the design and performance ofby the EU and additional requirements of the Danish Financial

prohibited non-audit services as described in article 5(1) ofprocedures to respond to our assessment of the risks of ma-

Statements Act.

Regulation (EU) no. 537/2014.

terial misstatement of the financial statements. The results

Our opinion is consistent with our long-form audit report toAppointment of auditor

to address the matters below, provide the basis for our audit

the Audit Committee and the Board of Directors.

Subsequent to Pandora A/S being listed on Nasdaq OMX

opinion on the financial statements.

of our audit procedures, including the procedures performed

Copenhagen, EY was appointed auditors of Pandora A/S on

92

CONSIDERATION OF THE
MATTER IN THE AUDITDESCRIPTION OF
MATTER

ANNUAL REPORT 2022



INDEPENDENT AUDITOR’S REPORTRevenue recognition and measurementof expected sales returns

Income tax recognition and provisions
for uncertain tax positions

Inventory valuation

Revenue is recognised when control of the goods has been transferredto the buyer and it is measured at fair value of the expected consideration to be received, less rebates, discounts, sales taxes, duties andexpected sales returns. Revenue recognition and measurement of therelated expected sales returns was a matter of most significance in our
audit due to the inherent risk in the estimates and judgements which
Management makes in the normal course of business as to timing ofrevenue and measurement of expected sales returns.

The Group has extensive international operations and consequently, Management makes judgements and estimates indetermining the recognition of income taxes, deferred taxes andprovisions for uncertain tax positions. In Thailand, the Group is
subject to Board of Investment (BOI) agreements, where many,
but not all, types of net income are tax-exempt, and therefore,changes in profit allocation could significantly impact the Group’s
consolidated tax expense. On this basis, income tax recognitionand provisions for uncertain tax positions were a matter of mostsignificance in our audit. Additional details on income taxes areprovided in note 2.5 of the consolidated financial statements, towhich we refer.

The Group carries inventory in the balance sheet at the lower ofcost and net realisable value. Significant management judgements
are required with regards to valuation of inventories due to theuncertainty associated with the estimate of slow-moving items andexpected value of the reusable raw materials, as well as calculations of elimination of internal gain. Given the level of management
judgements and estimates, inventory valuation was a matter ofmost significance in our audit. Additional details on the valuation of
inventories are provided in note 3.5 of the consolidated financial
statements and in note 3.4 of the Parent Company financial statements, to which we refer.

Our procedures in relation to recognition of income taxes, deferred taxes and provisions for uncertain tax positions included
assessing the Group’s processes for recording and assessment ofprovisions for uncertain tax positions. Our procedures also covered
evaluating the assumptions applied by Management in determining
the recognition and measurement of income taxes and deferredtaxes while taking into account relevant correspondence with
relevant tax authorities. Our own tax specialists performed an assessment of the Group’s recognition of income taxes and deferredtaxes, including correspondence with relevant tax authorities toconsider the completeness of the tax provisions. In addition, we
assessed the assumptions applied, taking into consideration our
own tax specialists’ knowledge and experience. Further, we evaluated the disclosures provided by Management in the consolidated
financial statements and the Parent Company financial statements
to applicable accounting standards.

Our procedures in relation to inventory valuation included assessing the Group’s processes related to inventory valuation including
on a sample basis testing of direct costs related to raw materials,
labour costs and attributable overhead costs incurred in thecrafting process, recording of write-downs and understanding of
the process for internal gain elimination. We assessed the basis
for write-downs and performed analytical procedures to assess
slow-moving items. We assessed the key assumptions applied by
Management regarding items’ life-cycle status and expected valueof the reusable raw materials based on our knowledge of the business, and on a sample basis tested the supporting documentation.
Further, on a sample basis we tested the calculation of eliminationof internal gain at Group level. Furthermore, we evaluated thedisclosures provided by Management in the consolidated financial
statements and the Parent Company financial statements to applicable accounting standards.

Details on revenue recognition and expected sales returns are provided
in notes 2.1 and 3.8 of the consolidated financial statements and innotes 2.1 and 3.5 of the Parent Company financial statements, to which
we refer.

Our procedures in relation to revenue recognition and measurementof expected sales returns included considering the Group’s accounting
policies for revenue recognition, including those related to measurementof expected sales returns, and assessing compliance of policies withapplicable accounting standards. We identified and assessed internal
controls related to the timing of revenue recognition and measurement of
expected sales returns. We tested the effectiveness of the Group’s internal
controls in relation to calculation of expected sales returns and timing ofrevenue recognition. On a sample basis, we tested sales transactions taking
place at either side of the balance sheet date as well as credit notes issued
after the balance sheet date to assess whether those transactions wererecognised in the correct period. We assessed the key assumptions appliedby Management regarding expected sales returns based on our knowledgeof the business and by reviewing the supporting documentation preparedby Management. As part of our audit we have utilised data analytics, analysing the relationship between revenue, trade receivables and cash receipts.
Furthermore, we evaluated the disclosures provided by Management in
the consolidated financial statements and the Parent Company financial
statements to applicable accounting standards.

93

ANNUAL REPORT 2022

I NDEPENDENT AUDITOR’S REPORTStatement on the Management’s review

In preparing the financial statements, Management is re-is higher than for one resulting from error, as fraud may

Management is responsible for the Management’s review.

sponsible for assessing the Group’s and the Parent Com-involve collusion, forgery, intentional omissions, misrepre-

pany’s ability to continue as a going concern, disclosing, as

sentations or the override of internal control.

Our opinion on the financial statements does not cover theapplicable, matters related to going concern and using theManagement’s review, and we do not express any form ofgoing concern basis of accounting in preparing the financial• Obtain an understanding of internal control relevant to theassurance conclusion thereon.

statements unless Management either intends to liquidate

audit in order to design audit procedures that are appro-

the Group or the Parent Company or to cease operations, or

priate in the circumstances, but not for the purpose ofhas no realistic alternative but to do so.

expressing an opinion on the effectiveness of the Group’s

In connection with our audit of the financial statements,
our responsibility is to read the Management’s review and,and the Parent Company’s internal control.

materially inconsistent with the financial statements or our

Auditor’s responsibilities for the auditof the financial statements

knowledge obtained during the audit, or otherwise appears

Our objectives are to obtain reasonable assurance as toand the reasonableness of accounting estimates and relat-

to be materially misstated.

whether the financial statements as a whole are free fromed disclosures made by Management.

in doing so, consider whether the Management’s review is• Evaluate the appropriateness of accounting policies usedmaterial misstatement, whether due to fraud or error, andMoreover, it is our responsibility to consider whether theto issue an auditor’s report that includes our opinion. Rea-

• Conclude on the appropriateness of Management’s use

Management’s review provides the information required

sonable assurance is a high level of assurance, but is not aof the going concern basis of accounting in preparing theunder the Danish Financial Statements Act.

guarantee that an audit conducted in accordance with ISAs

financial statements and, based on the audit evidence

and additional requirements applicable in Denmark willobtained, whether a material uncertainty exists related toBased on the work we have performed, we conclude that thealways detect a material misstatement when it exists. Mis-

events or conditions that may cast significant doubt on theManagement’s review is in accordance with the financial state-statements can arise from fraud or error and are consideredGroup’s and the Parent Company’s ability to continue as aments and has been prepared in accordance with the require-material if, individually or in the aggregate, they could rea-going concern. If we conclude that a material uncertainty

ments of the Danish Financial Statements Act. We did notsonably be expected to influence the economic decisions ofexists, we are required to draw attention in our auditor’s

identify any material misstatement of the Management’s review.

users taken on the basis of the financial statements.

report to the related disclosures in the financial state-

Management’s responsibilities for thefinancial statements

As part of an audit conducted in accordance with ISAs andopinion. Our conclusions are based on the audit evidence

additional requirements applicable in Denmark, we exercise

obtained up to the date of our auditor’s report. However,Management is responsible for the preparation of consol-

professional judgement and maintain professional scepti-

future events or conditions may cause the Group and theidated financial statements and Parent Company financial

cism throughout the audit. We also:

Parent Company to cease to continue as a going concern.

ments or, if such disclosures are inadequate, to modify ourstatements that give a true and fair view in accordance with
International Financial Reporting Standards as adopted by• Identify and assess the risks of material misstatement of• Evaluate the overall presentation, structure and contents

the EU and additional requirements of the Danish Financial

the financial statements, whether due to fraud or error,of the financial statements, including the note disclosures,

Statements Act and for such internal control as Management

design and perform audit procedures responsive to those

and whether the financial statements represent the under-

determines is necessary to enable the preparation of finan-risks and obtain audit evidence that is sufficient and ap-

lying transactions and events in a manner that gives a true

cial statements that are free from material misstatement,

propriate to provide a basis for our opinion. The risk of not

and fair view.

whether due to fraud or error.

detecting a material misstatement resulting from fraud

94

ANNUAL REPORT 2022

I NDEPENDENT AUDITOR’S REPORT• Obtain sufficient appropriate audit evidence regarding theto 31 December 2022 with the file name PAND-2022-12-

dures selected depend on the auditor’s judgement, including

financial information of the entities or business activities

31-en.zip is prepared, in all material respects, in compliancethe assessment of the risks of material departures from thewithin the Group to express an opinion on the consolidatedwith the Commission Delegated Regulation (EU) 2019/815

requirements set out in the ESEF Regulation, whether due tofinancial statements. We are responsible for the direction,on the European Single Electronic Format (ESEF Regulation)

fraud or error. The procedures include:

supervision and performance of the Group audit. We re-which includes requirements related to the preparation of

main solely responsible for our audit opinion.

the Annual Report in XHTML format and iXBRL tagging of theconsolidated financial statements, including notes.

• Testing whether the Annual Report is prepared in XHTML
format;We communicate with those charged with governance regarding, among other matters, the planned scope and tim-

Management is responsible for preparing an Annual Report• Obtaining an understanding of the company’s iXBRL tagging

ing of the audit and significant audit findings, including any

that complies with the ESEF Regulation. This responsibility

process and of internal control over the tagging process;significant deficiencies in internal control that we identify

includes:during our audit.

• Evaluating the completeness of the iXBRL tagging of the• The preparing of the Annual Report in XHTML format;

consolidated financial statements, including notes;

We also provide those charged with governance with a statement that we have complied with relevant ethical require-• The selection and application of appropriate iXBRL tags,• Evaluating the appropriateness of the company’s use ofments regarding independence, and to communicate withincluding extensions to the ESEF taxonomy and the anchor-iXBRL elements selected from the ESEF taxonomy and the

Copenhagen,them all relationships and other matters that may reasonably

ing thereof to elements in the taxonomy, for all financial

creation of extension elements where no suitable element

8 February 2023

be thought to bear on our independence, and where applica-

information required to be tagged using judgement wherein the ESEF taxonomy has been identified;

EY Godkendt

ble, actions taken to eliminate threats or safeguards applied.

necessary;

Revisionspartnerselskab• Evaluating the use of anchoring of extension elements to

From the matters communicated with those charged with• Ensuring consistency between iXBRL tagged data and thegovernance, we determine those matters that were of mostconsolidated financial statements presented in humansignificance in the audit of the consolidated financial state-readable format; andments and the Parent Company financial statements of the

CVR no. 30 70 02 28

elements in the ESEF taxonomy; and• Reconciling the iXBRL tagged data with the audited
consolidated financial statements.

Torben Bendercurrent period and are therefore the key audit matters. We• For such internal control as Management determines nec-

describe these matters in our auditor’s report unless law or

essary to enable the preparation of an Annual Report that

In our opinion, the Annual Report of Pandora A/S for the

Public Accountant

regulation precludes public disclosure about the matter.

is compliant with the ESEF Regulation.

financial year 1 January to 31 December 2022 with the filemne21332

State Authorised

name PAND-2022-12-31-en.zip is prepared, in all material

Report on compliance with the ESEF Regulation

Our responsibility is to obtain reasonable assurance on

As part of our audit of the consolidated financial statements

whether the Annual Report is prepared, in all material re-Jens Thordahl Nøhrand Parent Company financial statements of Pandora A/S wespects, in compliance with the ESEF Regulation based on

State Authorised

performed procedures to express an opinion on whether thethe evidence we have obtained, and to issue a report that

Public Accountant

Annual Report of Pandora A/S for the financial year 1 January

includes our opinion. The nature, timing and extent of proce-mne32212

respects, in compliance with the ESEF Regulation.

95

PARENTCOMPANY
ANNUAL REPORT 2022

PARENT COMPANY

96

ANNUAL REPORT 2022

PARENT COMPANY97

PANDORA A/SFINANCIAL REVIEW

16.7
DKK billion
revenue 2022

12.7
DKK billion
net profit 2022

The Parent Company operates as the principal of Pandora,

Revenue was DKK 16.7 billion (2021: DKK 13.6 billion), while• In 2022, Pandora initiated the expansion of the Group’s

and all inventories are consequently traded from thenet profit was DKK 12.7 billion (2021: DKK 5.4 billion). The

crafting capacity in Vietnam to support the company’s

crafting facilities in Thailand to wholesalers and sales

increase in net profit was mainly related to the increasing

long-term growth. By diversifying its geographical footprint,

subsidiaries through the Parent Company. Similarly, allactivity and gain from intra-group share transfer. In 2022,

Pandora will become more resilient to potential supply

inventories are returned from subsidiaries through thePandora A/S received dividends from subsidiaries of DKK

disruptions as well as strengthen its business continuity plans.

Parent Company for the purpose of remelting any excess

2.4 billion (2021: DKK 2.8 billion). At the end of 2022, equity

inventory. Gross profit is therefore impacted by realisedamounted to DKK 15.6 billion (2021: DKK 7.9 billion). The

As a result, Pandora decided to reorganise its crafting

losses from remelting activities and unrealised losses fromincrease was primarily driven by profit for the year partly

activities into a separate crafting sub-group by establishinginventory write-downs. Fluctuations in market prices ofoffset by paid dividend of DKK 16 per share, corresponding

a new intermediate holding company, Pandora Production

silver and gold also have a material impact on gross profit.

to DKK 1.5 billion (2021: DKK 1.5 billion). Free cash flows

Holding A/S, which will oversee the crafting activities acrossincluding lease payments ended at DKK 8.2 billion (2021:

the Group’s crafting facilities. Consequently, Pandora A/S

DKK 3.0 billion) driven mainly by a strong result for the year.

transferred its controlling equity investment in Pandora

Apart from the sale of jewellery, the Parent Company

Production Co. Ltd. to Pandora Production Holding A/S as amaintains and develops Group functions, including
administration, distribution, business development, retail

Other events and impacts in 2022:

all determine the activity level in the Parent Company.

contribution in-kind against shares in Pandora Production
Holding A/S. The intra-group transaction was carried out

set-up, product development and risk management, which• In 2022, Pandora A/S continued its existing shareat fair value, which resulted in a gain of DKK 5.9 billion and

The risk management activities carried out by the Parent

buyback programmes and launched a new share buyback

is described in more detail in note 1.1 Principal accounting

Company include hedging the Group’s risk relating toprogramme under which Pandora expects to buy back own

policies

commodity prices and exchange rates.

shares up to a maximum value of DKK 3.3 billion. A total ofand business combinations,

6,595,620 treasury shares were acquired during the year,

assumptions in measuring fair value.

corresponding to a total purchase price of DKK 3.6 billion.

and note 3.3 Investments in subsidiaries
including the significant

ANNUAL REPORT 2022

PARENT COMPANY

98

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBERINCOME STATEMENTDKK million
Revenue

STATEMENT OF COMPREHENSIVE INCOME
Notes

2022

2021

2.1

16,686

13,583

Cost of sales-7,226-6,440Gross profit

9,460

7,143

Sales, distribution and marketing expenses

2.2, 3.1-2,295-2,082Administrative expenses

2.2, 3.1-1,261-1,259

5,904

3,802

Operating profit
Gain from intra-group share transfer

3.3

5,917

-

Dividends from subsidiaries

3.3

2,437

2,848

Impairment of investments in subsidiaries

3.3

-60

-135

Finance income

4.5

652

222

Finance costs

4.5

Profit before tax
Income tax expense
Net profit for the year

2.4

-799

-509

14,051

6,228-1,380-808

12,671

5,420

DKK million

Notes

Net profit for the year

2022

2021

12,671

5,420

Other comprehensive income:Items that may be reclassified to profit/loss for the year
Commodity hedging instruments:- Realised in net cost of sales-1-4- Realised in net financials-2-4- Fair value adjustments-48Foreign exchange hedging instruments:- Realised in net financials

110

249

- Fair value adjustments

-61

-287

Tax on other comprehensive income, hedging instruments,
income/expense-98

Other comprehensive income, net of tax

2.4

33

-29

Total comprehensive income for the year

12,7055,391

ANNUAL REPORT 2022

PARENT COMPANY

99

BALANCE SHEETAT 31 DECEMBERASSETS
DKK million
Intangible assets

EQUITY AND LIABILITIES
Notes

2022

2021

DKK million

Notes

3.1

3,705

3,573

Share capital

4.1

23

31

Treasury shares
Reserves

Property, plant and equipment

2022

2021

96

100

-3,320-3,416

Right-of-use assets

3.2

99

104

Investments in subsidiaries

3.3

11,1405,257

Dividend proposed

Loans to subsidiaries

5.2

5,035

878

Retained earnings

17,051

9,462

26

12

Total equity

15,586

7,877

20,028

9,855

3.4

1,023

687

Loans and borrowings

4.2, 4.4

14

13

Deferred tax liabilities

2.4

5.2

3,690

6,829

3.5

258

216

4.3, 4.4

231

69

Refund liabilities

Income tax receivable

37

27

Loans and borrowings

Other receivables

403

116

Derivative financial instruments

Cash

37

142

Other financial assets
Total non-current assets
Inventories
Trade receivables
Receivables from subsidiaries
Right-of-return assets
Derivative financial instruments

Total current assets

5,692

8,099

Total assets

25,721

17,953

Provisions

329

216

1,430

1,516

52

51

1,090

1,124

163

93

1,306

1,269

3.5

1,941

1,674

4.2, 4.4

3,506

298

4.3, 4.4

74

209

Payables to subsidiaries

4.4, 5.2

1,455

4,937

Trade payables

3.6, 4.4

786

831

580

488

Total non-current liabilities

Income tax payable
Other payables

4.4

486

371

Total current liabilities

8,829

8,807

Total liabilities

10,135

10,076

Total equity and liabilities

25,721

17,953

ANNUAL REPORT 2022

PARENT COMPANY

100

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER

SharecapitalTreasurysharesHedging
reserve

Other
reserves1

Dividend
proposed

Retainedearnings

Total
equity100-3,416

-20

236

1,516

9,462

7,877

Net profit for the year

-

-

-

-

-

12,671

12,671Other comprehensive income, net of tax

-

-

33

-

-

-

33

Total comprehensive income for the year

-

-

33

-

-

12,671

12,705

-

-

-

80

-

-80

-

-

199

-

-

-

-93

106

DKK million

Notes

2022
Equity at 1 January

Transfers
Share-based payments

2.3

Purchase of treasury shares

4.1--3,588-----3,588Cancellation of treasury shares

4.1

-5

3,486

-

-

-

-3,481

-

-

-

-

-

-1,5162-1,514

Dividend paid
Dividend proposed
Equity at 31 December

-

-

-

-

1,430

-1,430-96-3,320

13

316

1,430

17,051

15,586The Board of Directors will propose at the Annual General
Meeting that a dividend of DKK 16 per share, corresponding
to DKK 1.4 billion (2021: DKK 16 per share, corresponding to
DKK 1.5 billion), be distributed for 2022.
In 2021, an extraordinary dividend of DKK 15 per share waspaid, corresponding to DKK 1.5 billion.
In 2022, Pandora continued the share buyback programmes,
which resulted in repurchases of 6,595,620 treasury shares,
corresponding to DKK 3.6 billion (2021: 3,943,797 treasury
shares, corresponding to DKK 3.3 billion).
For further shareholder information on dividend payments,
see note 4.1 Share capitalstatements.

2021
Equity at 1 January

100

-93

Net profit for the year-

Other comprehensive income, net of tax-

Total comprehensive income for the year-

Transfers

9

198

-

6,830

7,044

-

-

-

-

5,420

5,420

-

-29

-

-

-

-29

-

-29

-

-

5,420

5,391

-

-

-

38

-

-38

-

Share-based payments

2.3

-

1

-

-

-

202

203

Effect of merger with subsidiary

3.3

-

-

-

-

-

45

45

Purchase of treasury shares

4.1--3,325-----3,325

Dividend paid

-

-

-

-

-1,4812-1,479Dividend proposed

-

-

-

-

2,997

-2,997-100-3,416

-20

236

1,516

9,462

7,877

Equity at 31 December¹ Other reserves include non-distributable reserves under Danish legislation relating to the capitalisation of internal development projects.

to the consolidated financial

ANNUAL REPORT 2022

PARENT COMPANY

101

STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 31 DECEMBERDKK million

Notes

Operating profit
Depreciation and amortisation
Share-based payments

2.3

2022

2021

DKK million

5,904

3,802

Cash and cash equivalents at 1 January

142

2,228

238

286

Net increase/decrease in cash

-277

-2,086

Cash and cash equivalents at 31 December

-135

142

37

142

58

106

Change in inventories

-335

-268

Change in intercompany receivables/payables

3,815-1,629Change in receivables-344

Change in payables and other liabilities

171-

Cash and cash equivalents at 31 December

-135

142
2,098

97
384

Finance income received

239

31

Finance costs paid

-295

-369

Income tax paid

-1,219-513

Cash flows from operating activities, net

7,922

2,098

3

138

-325

-253

-3

-

Acquisitions of subsidiaries and activities, net of cash acquired

3.3

Purchase of intangible assets
Purchase of property, plant and equipment
Change in other financial assets-1-

Dividends received1

575

858

Cash flows from investing activities, net

249

743

Dividend paid

-1,514-1,479Purchase of treasury shares

4.1-3,527-3,325

Proceeds from loans and borrowings

4.2

4,939

1,315

Repayment of loans and borrowings

4.2-8,319-1,412

Repayment of lease commitments

4.2

Cash flows from financing activities, net
Net increase/decrease in cash

2021

-172

269
4.6

2022

Overdrafts-408

Other non-cash adjustments

Cash balances

Notes

-28

-26

-8,449-4,927-277-2,086

Cash flows from operating activities, net

7,922- Finance income received

-239

-31

- Finance costs paid

295

369

Cash flows from investing activities, net

249

743

-3

-138

Free cash flows

8,225

3,041

Unutilised committed credit facilities2

6,693

6,023

- Acquisition of subsidiaries and activities, net of cash acquired1
2

Non-cash dividends received amounted to DKK 1.9 billion (2021: DKK 2.0 billion).
See note 4.4 Financial risks to the consolidated financial statements.

The above cannot be derived directly from the income statement and the balance sheet.

CONTENTS

ANNUAL REPORT 2022

PARENT COMPANYSECTION 1

SECTION 4

BASIS OF PREPARATIONCAPITAL STRUCTURE AND
NET FINANCIALS

1.1 Principal accounting policies 		
1.2 New accounting policies and disclosures
1.3 	Management’s judgements andestimates under IFRS		

103
103
103

SECTION 2

RESULTS FOR THE YEAR
2.1 Revenue from contracts with customers
2.2 Staff costs		
2.3 Share-based payments		
2.4 Taxation		

104
104
104
104

SECTION 3

4.1 Share capital		
4.2 Liabilities from financing activities
4.3 Derivative financial instruments		
4.4 Financial risks		
4.5 Net financials 		
4.6 Other non-cash adjustments		

102

107
108
108
108
109
109

SECTION 5

OTHER DISCLOSURES
5.1 Contingent assets and liabilities		
5.2 Related parties		
5.3 Fees to independent auditor		

109
110
110

INVESTED CAPITAL AND
WORKING CAPITAL ITEMS
3.1 Intangible assets		
105
3.2 Leases		106
3.3 	Investments in subsidiaries and businesscombinations		1063.4 Inventories		
107
3.5 Contract assets and liabilities		
107
3.6 Trade payables		107

Notes for the Parent Company
The notes are grouped into five sections related to key
figures. The notes contain the relevant financial information
as well as a description of accounting policies applied for the
topics of the individual notes. For some notes, reference ismade to notes in the consolidated financial statements.

ANNUAL REPORT 2022

PARENT COMPANY

103

NOTE 1.1

Investments in subsidiaries

NOTE 1.2

PRINCIPAL ACCOUNTINGPOLICIES

Investments in subsidiaries are measured at cost. Impair-

NEW ACCOUNTING POLICIES AND DISCLOSURES

ment testing is carried out if there is any indication of
impairment, as described in Pandora's consolidated financial
statements. The carrying amount is written down to the

The Parent Company financial statements show the finan-

recoverable amount whenever the carrying amount exceeds

The description in note 1.2 New accounting policies and disclosures

cial position, results and cash flows of Pandora A/S on a

the recoverable amount. If the Parent Company has a legal

financial statements regarding new standards issued effective for the Annual Report for 2022

non-consolidated basis for the financial year 1 January to 31

or constructive obligation to cover a deficit in subsidiaries, afully covers the Parent Company as well.

December 2022.

provision for this is recognised.

Parent Company financial statements

Intra-group restructuring

NOTE 1.3

changed from last year and identical to the accounting

Transfer of shares for shares

policies in Pandora’s consolidated financial statements, with

Pandora A/S accounts for transactions in which an investment

MANAGEMENT’S JUDGEMENTS AND
ESTIMATES UNDER IFRS

the following exceptions:in a subsidiary is acquired in exchange for shares in subsidiar-

The accounting policies of the Parent Company are un-

Foreign currency translationies, at the fair value of the shares transferred. As of the dateof the transfer of the shares, the investment in the subsidiary

Foreign exchange adjustments of balances accounted for as

is disposed of at fair value and the gain/loss is recognised inpart of the total net investment in entities that have a func-

the income statement.

tional currency other than DKK are recognised in profit for
the year as net financials in the Parent Company financial

Mergers

statements.

Mergers are accounted for at booked value based on the

Derivative financial i­ nstruments

consolidated accounts. As of the date of the transfer of thebusiness, the investment in the subsidiary is replaced by

The effective portion of realised and unrealised gains andthe consolidated carrying amounts of underlying assets andlosses on all commodity hedging instruments is reconised

liabilities. The difference between the consolidated carrying

as cost of goods sold, while the ineffective portion is rec-amounts and investment in subsidiary is recognised in equity.

ognised in net financials. Derivative financial instruments

Transfer of businesses without consideration are reflected

are treated as economic hedging if the hedge accounting

in the financial statements of the Parent Company fromrequirements in IFRS 9 are not met.

the date of transfer, hence comparative information for the

Dividends from subsidiaries
Dividends from investments in subsidiaries are recognised in
the financial year in which they are declared.

to the consolidated

transferred business has not been adjusted.

SIGNIFICANT ACCOUNTING ESTIMATES
In the process of preparing the Parent Company financial statements, a number of accounting estimates and judgements have been made that affect assets and liabilities at the reporting date andincome and expenses for the reporting period. Management regularly reassesses these estimatesand judgements, partly on the basis of historical experience and a number of other factors in theto thegiven circumstances, see note 1.3 Management’s judgements and estimates under IFRS
consolidated financial statements.
For the significant accounting estimates related to the impairment of subsidiaries see noteand for the return and warranty
3.3 Investments in subsidiaries and business combinations
and note 3.5 Contract
provision see note 2.1 Revenue from contracts with customers
assets and liabilities.
Profit for the year was significantly impacted by gain from intra-group transfer of shares. Significant
accounting estimates are described in note 3.3 Investments in subsidiaries and businesscombinations.

ANNUAL REPORT 2022

PARENT COMPANYNOTE 2.1

NOTE 2.3

REVENUE FROM CONTRACTSWITH CUSTOMERS
2022

SHARE-BASED PAYMENTS

ACCOUNTING POLICIESREVENUE BY SALES CHANNELDKK million

104

2021

Third-party distribution

16,686

13,583

Total revenue

16,686

13,583

Revenue is recognised when control of the products has been transferred to the subsidiaries.
Change of control of the products occurs when they have been delivered to the subsidiary andno further obligation exists that can affect the transfer of control. The Parent Company provides
return rights to subsidiaries, which cover products received in subsidiaries for both returns andwarranty, based on historical return rates and current return liabilities in subsidiaries.

The performance share programmes described in note 2.4
Share-based payments

employees in the Parent Company’s subsidiaries is recognised
in investments in subsidiaries. As described in note 2.4 Sharebased payments

Revenue mainly comprises sales of jewellery to subsidiaries
carrying out the distribution. All sales are thus intra-groupsales. Contracts are generally five-year distribution con-to the consolidated financial state-ments are issued by Pandora A/S. The value of shares granted toto the consolidated financial statements,

NOTE 2.2

the costs related to share-based payments were DKK 87 million

STAFF COSTS

Pandora A/S (2021: DKK 106 million).

(2021: DKK 166 million), of which DKK 58 million relates totracts.
REVENUE BY SEGMENTS
DKK million

2022

2021

Moments incl. Collabs

12,117

9,496- Moments

10,404

8,504- Collabs

1,714

992

Style

4,569

- Timeless- Signature

DKK million

2022

2021

NOTE 2.4

Wages and salaries

850

760

TAXATION

Pensions

64

54
106

Share-based payments

58

Social security costs

16

7

4,087

Other staff costs

103

65

2,540

2,266

Total staff costs

1,090

993

1,136

1,183

- ME

575

567

- Diamonds by Pandora

318

70

Total revenue

16,686

13,583

Goods transferred at a point in time

16,684

13,580Staff costs have been recognised in the income statement:
Sales, distribution and marketing expenses

530

497

Administrative expenses

561

496

1,090

993

898

797

Total staff costs
Services transferred over time
Total revenue

2

4

16,686

13,583

Average number of full-time employees during the year

Key management personnel at Pandora A/S represent the same individuals as key management
personnel of the Pandora Group. For information regarding remuneration of key management
personnel of Pandora A/S, see note 2.3 Staff costs

to the consolidated financial statements.

ACCOUNTING POLICIESIncome tax
Pandora A/S is taxed jointly with its Danish subsidiaries.
These subsidiaries are included in the joint taxation fromthe date they are recognised in the consolidated financial
statements and up to the date on which they are no longer
consolidated. The jointly taxed Danish companies aretaxed under the on-account tax scheme.
Further information is provided in note 2.5 Taxation
the consolidated financial statements.

toANNUAL REPORT 2022

PARENT COMPANYNOTE 2.4

NOTE 3.1

DEFERRED TAX
DKK million

TAXATION (­ CONTINUED)INCOME TAX EXPENSE
DKK million

2022

2021

1,291

1,009

Change in deferred tax for the year

83

-180

Adjustment to current tax for prior years

9-21

Adjustment to deferred tax forprior years

-3

-

1,380

808

Current income tax charge for the year

1

Total income tax expense

2022

2021

Deferred tax at 1 January

-93

-318

Recognised in the income statement

-80

180

Recognised in othercomprehensive income-98

Recognised in equity,
share-based payments

19

37

-163

-93

Deferred tax at 31 December
Deferred tax liabilities

-163

-93

Deferred tax, net

-163

-93

DKK million
9-8Intangible assets

9-8Property, plant and equipment

Withholding taxes are included in current income tax charge for the year.

1,139

1,044

1,541

1,273

4,997

Additions

Cost at 1 January

-

-

-

337

337

Disposals

-

-

-

-2

-2

1,139

1,044

1,541

1,608

5,332

Cost at 31 December

-

-

457

967

1,424

-

30

173

203

-605

-552

9

10

Amortisation and impairment losses
at 31 December

-

-

487

1,140

1,627

1,139

1,044

1,054

467

3,705

Cost at 1 January

549

1,044

1,541

1,011

4,144

Additions from merger

590

-

-

-

590

-

-

-

270

270

25

6

380

329

Other assets and liabilities

28

114

-163

-93

%

Carrying amount at 31 December
2021

Profit before tax

Disposals

2021
DKK million%

14,051

Total-

Provisions

2022

Brand1

2022

Additions
RECONCILIATION OF EFFECTIVE
TAX RATE AND TAX

Goodwill1

Other­intangible
assetsAmortisation for the year

Inventories

Deferred tax, net

DKK million

Distribution

2021

2022

Tax on other comprehensive income

INTANGIBLE ASSETS

Amortisation and impairment losses
at 1 January

BREAKDOWN OF DEFERRED TAX

Deferred tax on other comprehensive
income

1

105

DKK million

Cost at 31 December

6,228

Amortisation and impairment losses
at 1 January

-

-

-

-8

-8

1,139

1,044

1,541

1,273

4,997

-

-

427

755

1,182

Corporate tax rate in Denmark, 22%

22.0%

3,091

22.0%

1,370

Amortisation for the year

-

-

30

130

160

Non-taxable dividend income

-3.9%

-536

-10.1%-627

Impairment loss for the year2

-

-

-

82

82

Non-deductIble impairment expenses

0.1%

13

0.5%

30

Gain from intra-group share transfer-9.3%-1,302--

Amortisation and impairment losses
at 31 December

-

-

457

967

1,424

Non-deductible expenses and non-taxable income

0.5%

67

0.1%

3

1,139

1,044

1,084

306

3,573

Other adjustments incl. adjustment to tax for prior years

0.1%

9

-0.2%

-14

Withholding taxes

0.3%

38

0.7%

46

Effective income tax rate/income tax expense

9.8%

1,380

13.0%

808

Carrying amount at 31 December

The impairment test did not identify any need for impairment losses to be recognised, and no probable change in any key assumptions that would cause the carrying amount to exceed the recoverable amounts.
2
The impairment loss of DKK 82 million in 2021 relates to write-down of software applications. The loss has mainly been recognised
as sales, distribution and marketing expenses in the income statement.
1

ANNUAL REPORT 2022

PARENT COMPANYNOTE 3.1

In 2022, Pandora A/S received a total of DKK 2.4 billion in

Amortisation and impairment losses have been recognised in theincome statement as follows:
2022

2021

93

125

Administrative expenses

110

117

Total

203

242

Sales, distribution and marketing expenses

Dividend received

Lease liabilities are recognised in loans and borrowings.

INTANGIBLE ASSETS (­ CONTINUED)DKK million

106

Depreciation on right-of-use assets charged to the income statement for the period was

dividends, mainly from subsidiaries in ­Thailand (DKK 1.1

DKK 26 million (2021: DKK 26 million).

billion), the UK (DKK 0.5 billion), and the US (DKK 0.3 billion).

Interest expense for the period was DKK 1 million (2021: DKK 1 million). Total cash outflows

In 2021, Pandora A/S received a total of DKK 2.8 billion in div-

relating to leases was DKK 29 million in 2022 (2021: DKK 26 million).

idends, mainly from subsidiaries in ­Thailand (DKK 0.9 billion),
the US (DKK 0.7 billion), the UK (DKK 0.4 billion) and Spain(DKK 0.3 billion).

NOTE 3.3

Annual impairment test

INVESTMENTS IN SUBSIDIARIES AND B­ USINESSCOMBINATIONS

As at 31 December 2022, the cost price of investments
in subsidiaries was assessed for impairment and Pandora
identified an indication of impairment. The impairment test
identified impairment charges for 2022 amounting to DKK 60

NOTE 3.2

LEASES

million (2021: DKK 135 million). The impairment was related

INVESTMENTS IN SUBSIDIARIES

Amounts recognised in the balance sheet:

DKK million

2022

2021

to investment in the subsidiary in South Africa.

Cost at 1 January

5,499

6,457

The impairment test was based on a three-year forecast

Additions1

7,120

4

and an applied market-specific discount rate in the range

Disposals2-1,202-1,02225

60

of 18% to 22%. The growth rate applied was an estimate of

11,442

5,499

Additions relating to share-based payments
RIGHT-OF-USE ASSETSDKK million

2022

2021

Property

94

98

Cars

5

6

Total right-of-use assets

99

104

Additions of right-of-use assets were DKK 20 million in 2022

Cost at 31 December
Impairment at 1 January

242

107

Impairment for the year

60

135

Impairment at 31 December

302

242

11,1405,257

Carrying amount at 31 December	In 2022, mainly relating to the investment into Pandora Production Holding A/S of DKK 7,114 million.
	In 2022, mainly relating to the intra-group share transfer of Pandora Production Co. Ltd., Thailand, of DKK 1,197 million. In 2021,
DKK 899 million related to the merger of Pandora Jewelry Central Western Europe A/S into Pandora A/S, and DKK 114 million related to the capital reduction in Pandora Jewelry Mexico.

1(2021: DKK 3 million).

2

LEASE LIABILITIESDKK million

2022

2021

Non-current

74

83

Current

26

24

Total lease liabilities

100

107

the expected growth for the market in the terminal period,
including the expected average inflation.

Transfer of Pandora Production Co. Ltd to
Pandora Production Holding A/S
In 2022, Pandora A/S made an intra-group restructuring whereby its controlling equity investment in Pandora
Production Co. Ltd., Thailand, was transferred as a contribution-in-kind to a newly established intermediate holding
company, Pandora Production Holding A/S.

ANNUAL REPORT 2022

NOTE 3.3
INVESTMENTS IN SUBSIDIARIES AND B­ USINESSCOMBINATIONS (­ CONTINUED)PARENT COMPANY107

NOTE 3.4

Refund liabilities

INVENTORIESThe Parent Company recognises a refund liability related toreturn rights provided to subsidiaries. A corresponding rightof-return asset is also recognised as part of contract assets.
The value of the right-of-return asset is determined by how

The commercial and strategic rationale is explained in the Management’s review. For those reasons, and the fact that the new holding structure impacts future cash flows for the Parent Company, it is management’s judgement that the transaction should be accounted for at fair value.

DKK million

2022

2021

Finished goods

868

588

155

99

Total inventories at 31 December

1,023

687

amounted to DKK 7.1 billion using a generally accepted valuation method in the form of a re-Inventory write-downs at 1 January

253

259

turn-based discounted cash flow valuation model. A gain of DKK 5.9 billion is recognised within

Write-downs during the year

163

113

Gain from intra-group share transfer in the income statement. The transaction is non-cash andUtilised in the year

-142

-119

there is no impact on the statement of cash flows.

Inventory write-downs at 31 December

274

253

Input and assumptions applied in the discounted cash flow valuation model comprise

Inventory write-downs are recognised in cost of sales, DKKlevel 3 inputs only, as there are no quoted prices in active markets for an identical asset or

152 million (2021: DKK 99 million), and operating expenses,

other observable market inputs.

DKK 11 million (2021: DKK 14 million).

The intra-group transfer was carried out at the fair value of Pandora Production Co. Ltd, which

Point-of-sale materials

NOTE 3.5

in Vietnam. In addition, the valuation is affected by the Group’s transfer pricing setup, a terminal

CONTRACT ASSETS
AND LIABILITIES

valuation by approximately +/- DKK 0.6 billion.

Pandora to a third party. Pandora has established a supply
chain financing programme where vendors can sell off

included in the supply chain financing programme areclassified as trade payables in the balance sheet as well as
in the statement of cash flows (working capital within cash
2022

2021

December 2022 (2021: DKK 24 million).

Contract assets
1,046

5,430

Right-of-return assets

258

216

In 2021, Pandora A/S merged with the 100%-owned subsidiary Pandora Jewelry Central

Total contract assets

1,304

5,646

1,176 million) and total liabilities (DKK 839 million).

receivables arising from the sale of goods and services toflows from operations) and amounted to DKK 54 million at 31
DKK million

Receivables from sale of products

merger consisted of goodwill (DKK 590 million), cash (DKK 17 million), other current assets (DKK

Pandora generally accepts that vendors sell off theirto these agreements. The amounts payable to suppliers

Merger with Pandora Jewelry Central Western Europe A/S in 2021
Western Europe A/S, with Pandora A/S as the surviving company. Assets obtained through the

TRADE PAYABLES

discretion. Pandora is not directly or indirectly a party

As an illustration of the sensitivity of the assumptions, a 0.5 percentage points increase/deand a 1.0 percentage point increase/decrease in the forecasted EBIT margin would affect the

NOTE 3.6

on invoices approved by Pandora, but at the bank's solemacroeconomic uncertainties as well as the cannibalisation effect from the new crafting facility

crease in the discount rate would affect the valuation by approximately +/- DKK 0.4 billion,

Remaining products are written down to remelt value.

their receivables from Pandora on attractive terms, based

The valuation is based on internal financial forecasts for the period 2023 to 2027, reflecting the

growth rate of 1.6% and an applied market specific discount rate post tax of 10%.

many of the returned products are expected to be sold.

NOTE 4.1

SHARE CAPITAL

Contract liabilities
Refund liabilities

1,941

1,674

See note 4.1 Share capital

Total contract liabilities

1,941

1,674

statements.

to the consolidated financial

ANNUAL REPORT 2022

PARENT COMPANYNOTE 4.2

NOTE 4.4

made in note 4.4 Financial risks

LIABILITIES FROM FINANCING ACTIVITIESFINANCIAL RISKS

cial statements, unless otherwise stated below.

108

to the con­solidated finan-

Credit risk
The Parent Company’s credit risk includes the risk related to
TOTAL LIABILITIES FROM ­FINANCING ACTIVITIESDKK million

Financialliabilities
1 JanuaryCashflows,
net1

New
leasesOther2Financialliabilities
31 December

1,041

74

-

-99

1,017

Non-current lease liabilities

83

-

13

-23

74

Current borrowings

274

2,935

-

272

3,481

Current lease liabilities

24

-28

7

23

26

1,423

2,981

20

173

4,597

Total liabilities from financing
activities

Non-current borrowings

-

1,315

-

-273

1,041

105

-

2

-23

83

2,976

-2,975

-

273

274

27

-26

1

22

24

3,107

-1,687

3

-1

1,423

Non-current lease liabilities
Current lease liabilities
Total liabilities from financing
activities

are monitored and managed by Pandora's Group Treasury.

receivables from subsidiaries.

Contractual maturities of financial liabilities

The Parent Company’s financial risks and the management of­financial liabilities similar to note 4.4 Financial risks

these are in all material respects identical to the disclosuresconsolidated financial statements.

LIABILITIES FALL DUE AS FOLLOWSDKK million

to theWithin1 yearWithin1 and 5 years

After morethan 5 years

Total

3,588

813

253

4,654

27

75

-

102

1,455

-

-

1,455

Trade payables

786

-

-

786

Other payables

77

-

-

77

2022
Non-derivatives

2021

Current borrowings

ing, Pandora A/S is exposed to a number of financial risks that

The table below provides a breakdown of ­Pandora A/S’

2022
Non-current borrowings

As a consequence of its operations, investments and financ-	Cash flows from loans and borrowings in the statement of cash flows include internal loan movements. The effect was an outflow
of DKK 6.4 billion in 2022 (2021: inflow of DKK 1.6 billion).

1

2 

Includes the effect of the reclassification of the non-current portion of interest-bearing loans and borrowings to current due to thepassage of time. Further, it includes the effect of accrued but not yet paid interest on interest-bearing loans and borrowings andupfront prepayment of lease liabilities. The Parent Company classifies interest paid as cash flows from operating activities.

NOTE 4.3

DERIVATIVE ­FINANCIAL ­INSTRUMENTS
All hedging is carried out by the Parent Company’s Treasury department. As all instruments

Loans and borrowings
Lease liabilities
Payables to subsidiaries

Derivatives
Derivative financial instruments

74

-

-

74

6,007

888

253

7,148

Loans and borrowings

274

1,050

-

1,324

Lease liabilities

25

75

9

109

4,937

-

-

4,937

Trade payables

831

-

-

831

Other payables

112

-

-

112

Total at 31 December
2021
Non-derivatives

Payables to subsidiaries

Derivatives

are also recorded in the Parent Company, all effects from financial instruments are shown in

Derivative financial instruments

note 4.5 Derivative financial instruments

Total at 31 December

to the consolidated financial statements.

209

-

-

209

6,388

1,125

9

7,522

ANNUAL REPORT 2022

PARENT COMPANY

109

NOTE 4.5

NOTE 4.6

to DKK 794 million at 31 December 2022 (2021: DKK 491

NET FINANCIALSOTHER NON-CASH
ADJUSTMENTS

million) and relate mainly to commercial collaborations andIT contracts. Apart from the liabilities already recognised in
the balance sheet, the company does not expect to incur any
significant financial losses as a result of these contracts.

FINANCE INCOME
DKK million

OTHER NON-CASH ADJUSTMENTS
2022

2021

DKK million

2022

2021

Reclassified from equity hedge reserves

19

53

Effects from exchange rate adjustments

-146

5

Total finance income from derivative financial instruments

19

53

Effects from derivative financial instruments

-255

380

Other, incl. gains/losses from sale ofproperty, plant and equipment-7-

Total other non-cash adjustments

-408

384

Finance income from loans and receivables measured at amortised cost:

Other contingent liabilities
The Parent Company has issued guarantees totalling DKK 270
million at 31 December 2022 in favour of certain subsidiaries
related to securing local credit lines and rental agreements(2021: DKK 508 million).

Interest income from subsidiaries

300

31

Foreign exchange gains

330

138

The Parent Company is jointly taxed with Danish subsidiaries.

Interest income, bank

2-

The company is jointly and severally liable with other jointly

Total finance income from loans and receivables

633

169

Total finance income

652

222

2022

2021

FINANCE COSTSDKK million
Reclassified from equity hedge reserves

127

298

Total finance costs from derivative financial instruments

127

298

NOTE 5.1

CONTINGENT ASSETS
AND LIABILITIES
Litigation
Pandora is a party to various legal proceedings with current

2

11

to copyright, marketing conduct and pricing. None of these

Foreign exchange losses

524

120

proceedings is expected to have a material effect on Pando-Interest on loans and borrowings

100

34

ra A/S’ financial position or future earnings.

1

1

Interest costs to subsidiaries

Interest on lease liabilities

and withholding taxes due on or after 1 July 2012 in the joint
taxation.

Contingent assets
See note 5.1 Contingent assets and liabilities

business partners, authorities and other third parties, related

Finance costs from financial liabilities measured at amortised cost:

taxed Danish companies within the Group for income tax

Other finance costs

46

45

Contractual obligations

Total finance costs from loans and borrowings

673

211

Pandora A/S has entered into a number of long-term pur-

Total finance costs

799

509

pany’s ordinary business. Contractual obligations amountedchase, sales and supply contracts in the course of the com-solidated financial statements.

to the con-

ANNUAL REPORT 2022

PARENT COMPANYNOTE 5.2

NOTE 5.3

RELATED PARTIESFEES TO INDEPENDENTAUDITOR

TRANSACTIONS ENTERED INTO WITH RELATED PARTIESDKK million

2022

2021

Sales to subsidiaries

16,67913,577Purchases from subsidiaries-6,739-5,977

Recharges from subsidiaries

-737

-589

Income statement:

Gain from intra-group share transfer

5,917

-

Dividends from subsidiaries

2,437

2,848

Finance income

300

31

Finance costs

-2

-11

17,855

9,880

Total

2022

2021

Fee for statutory audit

3

3

Other assurance engagements

1

1

Total audit related services

44

Other services

1-

Total non-audit services

1-

Total fees to independent auditor

5

4

The costs are recognised in the income statement as

Balance sheet:
Loans to subsidiaries, non-current

5,035

878

Trade receivables from subsidiaries

1,032

5,418

Loans to subsidiaries, current

2,658

1,411

Right-of-return assets

258

216

Payables to subsidiaries-1,455-4,937

Refund liabilities-1,941-1,674

Total

5,587

1,312

Development in impairment losses on trade receivables
Impairment at 1 January

39

24

Additions

515

Impairment at 31 December

44

39

In addition to the related parties disclosed in note 5.2 Related parties

to the consolidated

financial statements, related parties of Pandora A/S include the subsidiaries listed in note 5.5
Companies in the Pandora GroupDKK million

to the consolidated financial statements.

administrative expenses.

110Pandora A/S
Havneholmen 17-19
1561 Copenhagen V
Denmark
CVR no. 28505116
Phone +45 3672 0044
www.pandoragroup.com