PANDORA ANNOUNCES FINANCIAL RESULTS FOR 2013 Group

• Group revenue in 2013 was DKK 9,010 million compared with DKK 6,652 million in 2012, corresponding to an increase of 35.4%:
  • Americas increased by 25.5% (30.0% increase in local currency)
  • Europe increased by 47.9% (49.9% increase in local currency)
  • Asia Pacific increased by 37.1% (46.6% increase in local currency)  

• Gross margin was 66.6% in 2013 and unchanged compared with 2012

• EBITDA increased by 73.8% to DKK 2,881 million in 2013, corresponding to an EBITDA margin of 32.0%, compared with 24.9% in 2012

• EBIT increased by 81.8% to DKK 2,681 million in 2013, corresponding to an EBIT margin of 29.8% compared with 22.2% in 2012 

• Reported net profit increased by 84.7% to DKK 2,220 million in 2013, compared with a net profit of DKK 1,202 million in 2012

• Free cash flow was DKK 1,956 million in 2013, compared with DKK 1,151 million in 2012

• For the financial year 2013, the Board of Directors proposes a dividend of DKK 6.5 per share corresponding to a pay-out ratio of 37.1% and proposes cancellation of 2,027,438 shares equal to 1.6% of the total share capital

• Today PANDORA will initiate a new share buyback programme for up to DKK 2,400 million to be completed during 2014 with the primary purpose of reducing the Company’s share capital at the Annual General Meeting in 2015

In connection with the full year results, CEO Allan Leighton said: “2013 has been a strong year for PANDORA. We recorded our highest revenue ever and increased our profitability. The results were driven by progress across all major regions. Our global store network was improved and the full year effect of our new drop structure delivered with seven strong product collections.”

FINANCIAL GUIDANCE Following a successful 2013, PANDORA expects continued growth in 2014. Revenue is expected to increase to more than DKK 10.0 billion, driven by like-for-like growth in existing stores, expansion of the global store network and further expansion into PANDORA’s new markets. The EBITDA margin is expected to increase from 32% in 2013 to approximately 35% in 2014, tempered by continued investments in infrastructure. The increase includes an expected gain from lower hedged commodity prices compared to 2013.

CAPEX is expected to be approximately DKK 550 million, which includes an expansion of the production facilities in Thailand in order to prepare for future demand.  

 Financial guidance for 2014

PANDORA plans to continue to expand the store network and expects to add more than 175 new Concept stores in 2014.

DIVIDEND As previously communicated, the Board of Directors aims to maintain a stable and then increasing nominal dividend per share, using the 2011 dividend of DKK 5.5 per share as the reference point. Following a strong financial performance in 2013, the Board of Directors proposes a dividend of DKK 6.5 per share for the year. 

PANDORA shares are traded ex-dividend the day after the Annual General Meeting, which will be held on 19 March 2014. The dividend will be paid automatically via VP Securities on 25 March 2014.

SHARE BUYBACK PROGRAMME 2013 In connection with the Annual Report 2012, PANDORA launched a share buyback programme under which PANDORA expected to buy back own shares of up to DKK 700 million during 2013. As of 31 December 2013, a total of 3,356,098 shares have been purchased, corresponding to a transaction value of DKK 699,999,659 and an average purchase price of DKK 208.58. As of 31 December 2013, PANDORA owns a total of 3,539,023 treasury shares, corresponding to 2.7% of the share capital.

The Board of Directors will at the Annual General Meeting 2014 propose that the Company's share capital be reduced by a nominal amount of DKK 2,027,438 by cancellation of 2,027,438 own shares of DKK 1, equal to 1.6% of the Company's total share capital.

1,511,585 treasury shares corresponding to 1.2% of the total share capital will be used to meet obligations arising from employee share option programmes.  

NEW SHARE BUYBACK PROGRAMME FOR 2014 The Board of Directors of PANDORA has decided to launch a share buyback programme in 2014 (the ‘Programme’), under which PANDORA expects to buy back its own shares up to DKK 2,400 million. According to the decision made at the Extraordinary General Meeting held on 17 September 2010, PANDORA’s Board is until 17 September 2015 authorised to acquire own shares on behalf of the Company with a total nominal value of up to 10 % of PANDORA’s share capital (the ‘Authorisation’). The purpose of the share buyback is to reduce PANDORA’s share capital and to meet obligations arising from employee share option programmes. The Board of Directors intends to propose to PANDORA’s shareholders at the Annual General Meeting in 2015 that PANDORA’s share capital be reduced by shares purchased under the Programme. PANDORA may also use shares purchased under the Programme to meet obligations arising from employee share option programmes issued in 2014. The total obligation for the 2014 programme is expected to be approximately 240,000 shares. The share buyback Programme will end no later than 31 December 2014.

The Programme is being implemented in accordance with the provisions of the European Commission’s regulation no. 2273/2003 of 22 December 2003 (‘safe harbour’), which protects listed companies against violation of insider legislation in connection with share buybacks.

PANDORA has appointed Nordea Bank Danmark A/S (‘Nordea’) as Lead Manager of the Programme. Nordea will, under a separate agreement with the Company, buy back shares on behalf of PANDORA and make trading decisions in respect of PANDORA shares independently of and without influence from PANDORA.

PANDORA may terminate the Programme at any time. In the event such decision is taken, PANDORA shall give notice thereof, and Nordea shall consequently no longer be entitled to buy shares on behalf of PANDORA.

Three funds controlled by Axcel Management A/S, which today together holds 17.6% of the total share capital in PANDORA, as well as PEWIC Holding ApS and Christian Algot Enevoldsen with their respective share capital, have undertaken to participate in the Programme on a pro rata basis, in order to secure that the current free float percentage is not reduced. The participation is planned so that the Axcel funds, as well as PEWIC and Christian Algot Enevoldsen, on each day of trading will sell a number of PANDORA shares at the volume weighted average price (VWAP) of the shares purchased under the Programme in the market on the relevant day of trading. 

The Programme will be implemented under the Authorisation and the following framework:

• The maximum total consideration for PANDORA shares bought back in the period of the Programme is DKK 2,400 million
• The Programme will end no later than 31 December 2014 and a maximum of 9,475,303  PANDORA shares will be bought under the Programme, which together with the Company’s holding of treasury shares of 3,539,023 shares at the date of this announcement will equal 10% of the shares issued in PANDORA
• The maximum number of shares to be bought per daily market session will be the equivalent to 25% of the average daily volume of shares in the Company traded on NASDAQ OMX Copenhagen during the preceding 20 business days
• Shares cannot be purchased at prices higher than the two following prices:
  1. The price of the latest independent trade
  2. The price of the highest independent bid on NASDAQ OMX Copenhagen

On a weekly basis the Company will issue an announcement in respect of transactions made under the Programme.

ANNUAL REPORT 2013 PANDORA’s Annual Report 2013 has been released today and is available for download in the investor section of www.pandoragroup.com.

CONFERENCE CALL A conference call for investors and financial analysts will be held today at 10.00 CET and can be accessed online at www.pandoragroup.com. The presentation for the call will be available on the website one hour before the call.

The following numbers can be used by investors and analysts:

DK: +45 3272 8018 UK (International): +44 (0) 1452 555 131 US: +1 866 682 8490

To help ensure that the conference begins in a timely manner, please dial in 5 minutes prior to the scheduled starting time. Participants will have to quote confirmation code 46822236 when dialling into the conference.

ABOUT PANDORA PANDORA designs, manufactures and markets hand-finished and modern jewellery made from genuine materials at affordable prices. PANDORA jewellery is sold in more than 80 countries on six continents through approximately 10,300 points of sale, including approximately 1,100 Concept stores.

Founded in 1982 and headquartered in Copenhagen, Denmark, PANDORA employs over 8,500 people worldwide of whom 5,900 are located in Gemopolis, Thailand, where the company manufactures its jewellery. PANDORA is publicly listed on the NASDAQ OMX Copenhagen stock exchange in Denmark. In 2013, PANDORA’s total revenue was DKK 9.0 billion (approximately EUR 1.2 billion). For more information, please visit www.pandoragroup.com.

CONTACT For further queries, please contact: