Financial highlights

• As expected, Q1 2019 financials were weak and impacted by the commercial reset initiated as part of Programme NOW. The commercial reset includes fewer promotional activities (discounting) and reduced size of sell-in packages
• Financial guidance for 2019 is unchanged
• Total like-for-like sales-out growth (like-for-like) was -10% driven by lower traffic in physical stores. Like-for-like in the eSTORE was 7%. Organic growth ended at -12% reflecting the decrease of wholesalers’ inventory partly driven by the reduced sell-in packages
• EBIT margin excluding restructuring costs was 22.5%. As expected, the EBIT margin was negatively impacted by operational deleverage (partly non-recurring)

Business highlights
During Q1 2019, Pandora progressed well with Programme NOW – Pandora’s business transformation programme that has comprehensive impact on the organisation, operations and culture. As a foundation for the upcoming important brand re-launch, Pandora initiated a commercial reset including fewer promotional activities, reduction of sell-in packages and improvement of inventory levels. The reduced sell-in packages and other wholesale inventory movements are estimated to have impacted organic growth by -5 percentage point in Q1 2019.

While Programme NOW will mainly support revenue growth from late 2019, Pandora is currently testing a number of commercial initiatives as preparation for the brand re-launch. The initiatives show encouraging results and include pilots with celebrity and influencer collaborations. The most important test is the initiation of significant marketing investments in key countries, which are launching in May 2019. The investments are expected to demonstrate the potential to drive profitable revenue growth. 

Programme NOW cost reduction initiatives tracked well in the first quarter. Pandora is rapidly changing the cost mindset and performance culture and has made significant progress in several areas including productivity improvements in Thailand.

Alexander Lacik, President and CEO of Pandora, says:
“I’m very excited to join Pandora. We have some very strong fundamentals in terms of a world-class supply chain, a strong product proposition as well as a deep reaching distribution network that gives consumers all around the globe quality access to Pandora. The brand as well as the company has reached a point of maturity and it is not without some serious challenges. The recently announced transformation programme NOW, which I fully support, is a great transition into the future.“

Anders Boyer, CFO of Pandora, says:
“Programme NOW is progressing rapidly and is creating a real transformation of our business, culture and organisation. As expected, the first quarter was characterised by continued weak like-for-like further burdened by our deliberate commercial reset. While the first quarter emphasises the need for our planned brand re-launch, it is encouraging to see that our initial commercial pilots and marketing tests to Reignite a Passion for Pandora show good results.”

CONFERENCE CALL
A conference call for investors and financial analysts will be held today at 11.00 CEST and can be joined 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 35 44 55 83
UK (International): +44 (0) 203 194 0544
US: +1 855 269 2604

ABOUT PANDORA
Pandora designs, manufactures and markets hand-finished and contemporary jewellery made from high-quality materials at affordable prices. Pandora jewellery is sold in more than 100 countries on six continents through more than 7,500 points of sale, including more than 2,700 concept stores.

Founded in 1982 and headquartered in Copenhagen, Denmark, Pandora employs more than 28,000 people worldwide of whom more than 13,000 are located in Thailand, where the Company manufactures its jewellery. PANDORA is publicly listed on the Nasdaq Copenhagen stock exchange in Denmark. In 2018, Pandora’s total revenue was DKK 22.8 billion (approximately EUR 3.1 billion).

For more information, please contact:

INVESTOR RELATIONS  Michael Bjergby VP, Investor Relations, Tax & Treasury +45 7219 5387 miby@pandora.net	CORPORATE COMMUNICATIONS Mads Twomey-Madsen VP, Corporate Communications & Sustainability +45 2510 0403 madt@pandora.net
Brian Granberg Senior Investor Relations Officer +45 7219 5344 brgr@pandora.net	Johan Melchior Director, External Relations +45 4060 1415 jome@pandora.net
Christian Møller Investor Relations Officer +45 7219 5361 chmo@pandora.net

Attachments

• Pandora Q1 2019 Interim Report_Company Announcement_No_522
• Pandora Appendix_Company Announcement_No_522