PANDORA ANNOUNCES FINANCIAL RESULTS FOR 2014

• Group revenue in 2014 was DKK 11,942 million compared with DKK 9,010 million in 2013, corresponding to an increase of 32.5%:
  • Americas increased by 19.3% (20.6% increase in local currency)
  • Europe increased by 41.1% (38.8% increase in local currency)
  • Asia Pacific increased by 53.5% (58.1% increase in local currency)
  • Revenue from concept stores was 56.4% of revenue and increased 51.4% compared to 2013  
• Gross margin was 70.5% in 2014 compared with 66.6% in 2013  
• EBITDA increased by 49.0% to DKK 4,294 million in 2014, corresponding to an EBITDA margin of 36.0%, compared with 32.0% in 2013  
• EBIT increased by 51.9% to DKK 4,072 million in 2014, corresponding to an EBIT margin of 34.1% compared with 29.8% in 2013  
• Reported net profit increased by 39.5% to DKK 3,098 million in 2014, compared with a net profit of DKK 2,220 million in 2013  
• Free cash flow was DKK 3,868 million in 2014, compared with DKK 1,956 million in 2013, an increase of 97.8% and corresponding to a cash conversion of 124.9%  
• For the financial year 2014, the Board of Directors proposes to increase the annual dividend by 38% compared to 2013 to a dividend of DKK 9.0 per share (approximately DKK 1,100 million) corresponding to a pay-out ratio of 35.5% and proposes cancellation of 5,818,651 shares equal to 4.5% of the total share capital  
• Today PANDORA will initiate a new share buyback programme for up to DKK 3,900 million to be executed during 2015 with the primary purpose of reducing the Company’s share capital at the Annual General Meeting in 2016. The size of the new programme corresponds to an increase of 63% compared to the share buyback programme executed in 2014.

In connection with the full year results Allan Leighton, CEO of PANDORA, said: “The performance in the fourth quarter was our strongest ever, and resulted in 2014 being a very successful year for PANDORA. Again we increased our top-line to record high levels, driven by strong growth across all geographies and product groups. Revenue from charms and bracelets increased more than 25%, while revenue from Rings increased to more than DKK 1 billion. During the year we also opened our concept store number 1,400, as part of our continuous focus on increasing the share of revenue from our concept stores.”

FINANCIAL GUIDANCE FOR 2015 In 2015, PANDORA will continue to focus on driving like-for-like growth in the existing stores, as well as expanding the store network in newer as well as in more penetrated markets. Revenue is expected to increase to more than DKK 14 billion, with these two growth drivers expected to contribute equally. The EBITDA margin is expected to increase from 36,0% in 2014 to approximately 37% in 2015. The increase includes an expected positive impact from lower hedged commodity prices compared to 2014, tempered by continued investments in infrastructure. Expectations are based on current exchange rates.

CAPEX for the year is expected to be approximately DKK 800 million. The expected level of investments includes development of the crafting facilities in Thailand, investments in the Company’s distribution network, including the announced accelerated expansion in Germany, China and Japan, as well as significant IT investments. CAPEX in the period 2016-2017 is expected to continue to stay at an elevated level similar to 2015, due to continued investments in the aforementioned areas.

PANDORA plans to continue to expand the store network and expects to add more than 300 new concept stores in 2015, which include an expected opening of around 60 new owned and operated (O&O) concept stores in Germany following the recent take-over of up to 78 leaseholds in the country. The geographic split of the remaining concept store openings is expected to be similar to the concept store openings in 2014.

DIVIDEND As previously communicated, the Board of Directors aims to increase the nominal dividend per share annually. Following a strong financial performance in 2014, the Board of Directors proposes a dividend of DKK 9.0 per share for the year, corresponding to an increase of 38% compared to last year, and equivalent to DKK 1,088 million, assuming 5,818,651 shares are cancelled at the annual general meeting in March 2015.

PANDORA shares are traded ex-dividend the day after the Annual General Meeting, which will be held on 18 March 2015. The dividend will be paid automatically via VP Securities on 23 March 2015.

SHARE BUYBACK 2014 In the 2013 Annual Report, PANDORA announced its intention to buy back own shares of up to DKK 2,400 million during 2014 in a share buyback programme. As of 31 December 2014, a total of 5,875,257 shares had been bought back, corresponding to a transaction value of DKK 2,400 million and an average purchase price of DKK 408.5. As of 31 December 2014, PANDORA owned a total of 7,216,058 treasury shares, corresponding to 5.6% of the share capital. The purpose of the programme is to reduce PANDORA’s share capital and to meet obligations arising from employee share option programmes. As of 31 December 2014, the total potential obligation amounted to 1,382,800 shares due to the annual allocation of the Company’s employee share option programme.

The Board of Directors will at the Annual General Meeting 2015 propose that the Company's share capital be reduced by a nominal amount of DKK 5,818,651 by cancellation of 5,818,651 own shares of DKK 1, equal to 4.5% of the Company's total share capital.

NEW SHARE BUYBACK PROGRAMME FOR 2015 The Board of Directors of PANDORA has decided to launch a share buyback programme in 2015, under which PANDORA expects to buy back own shares to a maximum consideration of DKK 3,900 million. This corresponds to an increase of 63% compared to the programme for 2014. The share buyback programme is subject to an approval of an extension of the current authorisation to acquire own shares on behalf of the Company on the Annual General Meeting on 18 March 2015. PANDORA has bought back own shares corresponding to 7.2% of the share capital under the current authorisation, which allows the Company to acquire own shares with a total nominal value of up to 10% of PANDORA’s share capital. 

The Board of Directors intends to propose to PANDORA’s shareholders at the Annual General Meeting in 2016 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 2015. The total obligation for the 2015 programme is expected to be approximately 170,000 shares.

The share buyback programme is 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. The Programme will end no later than 31 December 2015. 

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.

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 3,900 million
• The Programme will end no later than 31 December 2015.
• 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 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 Copenhagen

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.

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

ANNUAL REPORT 2014 PANDORA’s Annual Report 2014 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 55228503 when dialling into the conference.

ABOUT PANDORA PANDORA designs, manufactures and markets hand-finished and modern jewellery made from genuine metals at affordable prices. PANDORA jewellery is sold in more than 90 countries on six continents through approximately 9,900 points of sale, including more than 1,400 concept stores.

Founded in 1982 and headquartered in Copenhagen, Denmark, PANDORA employs more than 11,400 people worldwide of whom approximately 7,900 are located in Gemopolis, Thailand, where the company manufactures its jewellery. PANDORA is publicly listed on the NASDAQ Copenhagen stock exchange in Denmark. In 2014, PANDORA’s total revenue was DKK 11.9 billion (approximately EUR 1.6 billion). For more information, please visit www.pandoragroup.com.

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