Delicious
Digg
Facebook
LinkedIn
Twitter
INTERIM REPORT FOR Q3 2010
INTERIM REPORT FOR Q3 2010
November 11, 2010
No. 15
COMPANY ANNOUNCEMENT
11 November 2010
INTERIM REPORT FOR Q3 2010
REVENUE AND VOLUME GREW BY 116.7% AND 57.1% RESPECTIVELY IN THE THIRD QUARTER OF
2010 -DRIVEN BY GROWTH ACROSS ALL REGIONS AND JEWELLERY CATEGORIES. NET PROFIT
UP BY 279.7%
• Revenue increased by 116.7% to DKK 1,788 million compared to Q3 2009
Americas grew by 92.8% and constituted 40.5% of total sales
Europe grew by 191.2% and constituted 48.4% of total sales
Asia Pacific grew by 30.3% and constituted 11.1% of total sales
Revenue from Charms grew by 93.6% and Silver & Gold charm bracelets revenue grew
by 83.6%
Other jewellery grew by 345.1% representing 20.4% of revenue in Q3 2010 - up
from 9.9% in the same quarter of 2009
• Gross margin was 73.2% - up from 66.2% in the Q3 2009, where the gross margin
was impacted by an unrealised gain on raw materials derivatives of DKK 3 million
and a negative one-off effect from taking over our Australian distributor of DKK
66 million
• EBITDA increased by 161.2% to DKK 807 million resulting in an EBITDA margin of
45.1% - up from 37.5%
in the same quarter last year
• EBIT increased by 196.0% to DKK 743 million resulting in an EBIT margin of
41.6%, negatively impacted by amortisation of DKK 46 million related to acquired
distribution rights in PANDORA Jewellery Central Western Europe (“PANDORA CWE”)
• Net profit increased by 279.7% to DKK 581 million
• At the end of September 2010, PANDORA employed 4,804 people worldwide and sold
its jewellery and other branded products through 10,386 points of sale (PoS) in
more than 50 countries on six continents
Mikkel Vendelin Olesen, CEO, said: “Our strong performance in the third quarter
of 2010 is a result of our continued success in upgrading our existing
customers, thereby increasing the share of branded sales as well as roll-out of
new stores around the world - particularly in Italy. We have seen continued
strong momentum in the revenue development from our Charms and Silver & Gold
charm bracelets as well as excellent performance from our Other Jewellery
collections. However, it is important to notice that our Q3 also is positively
impacted by early Christmas orders from retailers.”
FINANCIAL OUTLOOK FOR 2010
In line with the financial guidance communicated in connection with the Initial
Public Offering in October, revenue for H2 2010 is expected to be higher than
revenue in H1 2010 and EBITDA margin for H2 2010 is expected to be above 40%.
PANDORA maintains its expectations, which are specified below:
Based on strong Q3 results positively impacted by early Christmas orders,
PANDORA expects revenue of approximately DKK 6.2 billion for the financial year
2010 (DKK 3.5 billion in FY 2009). Including an IPO-bonus to all the employees,
EBITDA is expected to be approximately DKK 2.5 billion (DKK 1.6 billion in FY
2009).
We also expect CAPEX to account for approximately 3% of total group revenue and
the effective tax rate to be approximately 18%.
CONFERENCE CALL
The conference call for investors and financial analysts will be held at 15.00
CET and can be accessed from our website: www.pandoragroup.com. The
corresponding presentation will be available on the website one hour before the
call.
The following numbers can be used by investors and analyst:
DK: +45 3271 4775
UK: +44 (0) 20 7138 0826
US: +1 212 444 0481
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 3495456 when dialling into the conference.
ABOUT PANDORA
PANDORA designs, manufactures and markets hand finished and modern jewellery
made of genuine materials and at affordable prices. The PANDORA jewellery is
sold in more than 50 countries on six continents through approximately 10,000
points of sale, including over 320 PANDORA branded concept stores.
Founded in 1982 and headquartered in Copenhagen, Denmark, PANDORA employs over
4,500 people worldwide of whom more than 3,500 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 2009,
PANDORA's total revenue was DKK 3.5 billion (approximately EUR 465 million). For
more information, please visit www.pandoragroup.com
CONTACT
For further queries, please contact:
--------------------------------------------------------------------------------
| INVESTOR RELATIONS | MEDIA RELATIONS |
| Steen Juul Jensen, Head of Investor | Kasper Riis, Communications Manager |
| Relations | Phone +45 3672 0044 |
| Phone +45 3673 0635 | Mobile +45 3035 6728 |
| Mobile +45 2494 4902 | |
--------------------------------------------------------------------------------
CONSOLIDATED FINANCIAL STATEMENT FOR Q3 2010
--------------------------------------------------------------------------------
| DKK million | Q3 2010 | Q3 2009 | 9M 2010 | 9M 2009 | | FY |
| | | | | | | 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income statement | | | | | | |
--------------------------------------------------------------------------------
| Revenue | 1,788 | 825 | 4,369 | 2,087 | | 3,461 |
--------------------------------------------------------------------------------
| EBITDA | 807 | 309 | 1,827 | 963 | | 1,572 |
--------------------------------------------------------------------------------
| Operating profit | 743 | 251 | 1,635 | 883 | | 1,424 |
| (EBIT) | | | | | | |
--------------------------------------------------------------------------------
| Net financial | -34 | -68 | -108 | -169 | | -235 |
| income and expenses | | | | | | |
--------------------------------------------------------------------------------
| Profit before tax | 709 | 183 | 1,527 | 714 | | 1,189 |
--------------------------------------------------------------------------------
| Net profit | 581 | 153 | 1,252 | 600 | | 1,005 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance sheet | | | | | | |
--------------------------------------------------------------------------------
| Total assets | 7,727 | 5,250 | 7,727 | 5,250 | | 5,816 |
--------------------------------------------------------------------------------
| Invested capital | 5,861 | 3,588 | 5,861 | 3,588 | | 3,799 |
--------------------------------------------------------------------------------
| Net working capital | 1,638 | 430 | 1,638 | 430 | | 520 |
--------------------------------------------------------------------------------
| Shareholders' | 3,391 | 1,175 | 3,391 | 1,175 | | 1,648 |
| equity | | | | | | |
--------------------------------------------------------------------------------
| Net borrowings | 2,021 | 2,413 | 2,021 | 2,413 | | 2,151 |
--------------------------------------------------------------------------------
| Net borrowings | | | | | | |
| excl. subordinated | | | | | | |
| loan | | | | | | |
--------------------------------------------------------------------------------
| from parent company | 2,021 | 1,046 | 2,021 | 1,046 | | 751 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow | | | | | | |
--------------------------------------------------------------------------------
| Cash inflow from | 49 | 142 | 365 | 698 | | 1,066 |
| operating | | | | | | |
| activities | | | | | | |
--------------------------------------------------------------------------------
| Cash outflow from | -45 | -123 | -196 | -149 | | -207 |
| investing | | | | | | |
| activities | | | | | | |
--------------------------------------------------------------------------------
| Free cash flow | 30 | 142 | 471 | 770 | | 1,143 |
--------------------------------------------------------------------------------
| Cash outflow/inflow | 136 | -74 | -727 | -231 | | -343 |
| from financing | | | | | | |
| activities | | | | | | |
--------------------------------------------------------------------------------
| Net increase in | 140 | -55 | -558 | 318 | | 516 |
| cash and cash | | | | | | |
| equivalents | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Ratios | | | | | | |
--------------------------------------------------------------------------------
| Revenue growth, % | 116.7% | | 109.3% | | | |
--------------------------------------------------------------------------------
| Growth in EBITDA, % | 161.2% | | 89.7% | | | |
--------------------------------------------------------------------------------
| Growth in EBIT, % | 196.0% | | 85.2% | | | |
--------------------------------------------------------------------------------
| Growth in net | 279.7% | | 108.7% | | | |
| profit, % | | | | | | |
--------------------------------------------------------------------------------
| EBITDA margin, % | 45.1% | 37.5% | 41.8% | 46.1% | | |
--------------------------------------------------------------------------------
| EBIT margin, % | 41.6% | 30.4% | 37.4% | 42.3% | | |
--------------------------------------------------------------------------------
| Cash conversion, % | 5.2% | 92.8% | 37.6% | 128.3% | | |
--------------------------------------------------------------------------------
| Net debt to EBITDA | 0.8 | | 0.8 | | | |
| * | | | | | | |
--------------------------------------------------------------------------------
| Equity ratio, % | 43.9% | 22.4% | 43.9% | 22.4% | | |
--------------------------------------------------------------------------------
| ROIC, % * | 37.1% | | 37.1% | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other key figures | | | | | | |
--------------------------------------------------------------------------------
| Average number of | 4,665 | 2,266 | 4,150 | 1,895 | | |
| employees | | | | | | |
--------------------------------------------------------------------------------
* Ratio is based on last 12 month rolling (LTM) EBITDA and EBIT respectively.
The present unaudited interim financial report has been prepared in accordance
with IAS 34 “Interim Financial Reporting” and accounting policies set out in the
Annual Report 2009 of PANDORA. Furthermore, the interim financial report and are
prepared in accordance with additional Danish disclosure requirements for
interim report of listed companies. Key figures and financial ratios are
defined and calculated in accordance with the Danish Society of Financial
Analysts' guidelines on the calculation of financial ratios, ‘Recommendations
and Financial Ratios 2010' and the annual report for 2009.
KEY EVENTS IN Q3 2010
In Q3 2010, PANDORA continued to grow across all regions and product categories,
fuelled by continued focus on branded sales, capitalising on our product
offering outside the Charms and Silver and Gold charm bracelets categories,
entrance into new markets, and implementation of our global marketing strategy.
Focus on Branded sales channels
We focus strategically on increasing the number of PANDORA-branded points of
sale in our markets to ensure that we going forward derive a significantly
higher proportion of our revenues from PANDORA branded sales channels.
PANDORA-branded sales channels allow us to strengthen the perception of our
brand in the retail environment and permit an expanded product offering compared
with our unbranded points of sale.
In Q3 2010, we continued the upgrading of our existing customer base as well as
the roll-out of new stores. This has substantially increased the number of
branded points of sale in Q3 2010 compared to Q2 2010. Branded points of sale
include Concept stores, Shop-in-Shops and Gold shops.
The number of points of sale grew by 464 stores from Q2 2010 to Q3 2010 - with
272 of those being branded. Within the branded points of sale, the number of
Concept stores grew by 67, Shop-in-Shops grew by 141 and Gold stores grew by 64.
Approximately 40% of the new branded points of sale are generated by upgrading
existing unbranded points of sale. Most of the upgrading of stores took place in
our established markets.
--------------------------------------------------------------------------------
| | Number | Number | |
--------------------------------------------------------------------------------
| | of PoS | of PoS | |
--------------------------------------------------------------------------------
| | Q3 2010 | Q2 2010 | Change |
--------------------------------------------------------------------------------
| Concept stores1 | 329 | 262 | 67 |
--------------------------------------------------------------------------------
| Shop-in-Shops2 | 866 | 725 | 141 |
--------------------------------------------------------------------------------
| Gold | 1,529 | 1,465 | 64 |
--------------------------------------------------------------------------------
| Total branded | 2,724 | 2,452 | 272 |
--------------------------------------------------------------------------------
| Total Branded as % of Total | 26.2% | 24.7% | - |
--------------------------------------------------------------------------------
| Silver | 2,271 | 2,217 | 54 |
--------------------------------------------------------------------------------
| White and travel retail | 5,391 | 5,253 | 138 |
--------------------------------------------------------------------------------
| Total | 10,386 | 9,922 | 464 |
--------------------------------------------------------------------------------
1 Includes 47 and 49 PANDORA-owned Concept stores at Q2-2010 and Q3 2010
respectively
2 Includes 23 and 24 PANDORA-owned shop-in-shops at Q2-2010 and Q3 2010
respectively
Unbranded points of sale include silver, white and travel retail accounts. The
number of unbranded points of sale grew by 192 in the quarter - with 54 of those
being silver stores and 138 white stores. Most of the new silver and white
stores were opened in new markets, especially in Italy, Europe's largest market
for fine jewellery, a market PANDORA entered in July of this year. Please refer
to the section “Entry into new markets” for further details.
The share of revenue from branded sales, within our own direct distribution, was
77.6% in Q3 2010 compared to 69.9% in Q2 2010.
Capitalising on our broad product offering
In recent years, we have significantly broadened our jewellery offering, via the
introduction of our Compose, LovePods and Liquid Silver collections in 2007,
2008 and 2009, respectively, and watches from Autumn 2010.
In Q3 2010, we continued to see very strong momentum in both Charms and Silver &
Gold charm bracelets as well as in our Other Jewellery collections. Revenue
from Charms and Silver & Gold Charm Bracelets grew by 93.8% and 83.6%,
respectively - the two categories now representing 79.4% of total revenue. Other
jewellery grew by 345.1% and now represents 20.4% of revenue - up from 9.9% in
the same quarter of 2009. Our Ring-Upon-Ring campaign as well as the
introduction of our Touch and Feel Displays for rings and earrings has
contributed to this development.
--------------------------------------------------------------------------------
| DKK million | Q3 2010 | Q3 2009 | % Growth |
--------------------------------------------------------------------------------
| Charms | 1,184 | 611 | 93.8% |
--------------------------------------------------------------------------------
| Silver and gold charm bracelets | 235 | 128 | 83.6% |
--------------------------------------------------------------------------------
| Other jewellery | 365 | 82 | 345.1% |
--------------------------------------------------------------------------------
| Other | 4 | 4 | NM |
--------------------------------------------------------------------------------
| Total | 1,788 | 825 | 116.7% |
--------------------------------------------------------------------------------
Entry into new key markets
We intend to continue entering into new geographical markets and expanding our
presence in existing markets. We expect to enter into and develop our market
presence primarily through existing retail outlets in well-established markets.
We expect to focus more on the launch of PANDORA-branded points of sale
(franchise and directly operated) in emerging markets.
In July, PANDORA entered the Italian market, thereby establishing a presence in
Europe's largest market for fine jewellery. Based in Milan, a team of sales
representatives and visual merchandisers cover the Italian market, focusing on
multi-brand points of sale. By the end of Q3 2010, we sell PANDORA products
through 111 white, 32 silver and 4 Gold stores.
We also entered into a Master Distribution and Franchise Agreement for Russia.
The retail expansion will be based on a cluster strategy to realize optimal
branding exposure. In 2010, focus will be on Moscow, while St. Petersburg will
be added late 2010 or early 2011. Our first shipment to Russia took place in Q3,
with the expected opening of the first shop in Q4 2010.
In China we have signed agreements with four Master Franchisees by the end of
Q3, of which one is currently running a test shop in Beijing. The first official
opening of a shop in China is expected before the end of this year.
In Q4, we also entered into a Master Distribution and Franchise Agreement for
Japan. Market entry in Japan is expected during 2011.
Finally, also in Q4, our partner in Dubai has recently opened two Concept stores
in Dubai.
Implementation of a global marketing strategy
We pursue a global brand strategy focusing on creating consistency of brand
perception across all communication channels and markets. To further strengthen
our brand, we expect to continue spending a high single digit percentage of our
revenues on marketing. In Q3 2010, we spent DKK 169 million on marketing -
corresponding to 9.5% of revenue.
We intend to continue to use the Internet to promote our brand awareness as well
as to attract and retain customers by fostering customer loyalty, through our
PANDORA Club and other on-line media. In August 2010, PANDORA launched a
Facebook application, making it possible to “Build your own bracelet” on the
internet. 270,000 applications were downloaded within the first month. In
addition, the number of members of the PANDORA Club on our web site surpassed
one million members in the third quarter of the year.
Revenue development IN Q3 2010
PANDORA demonstrated significant revenue growth in Q3 2010 compared with Q3
2009. This growth resulted from increasing demand for our products in
established markets and expansion into new markets. The growth also reflected an
increasing level of PANDORA's direct distribution, including the acquisition of
PANDORA CWE in January 2010. The strong growth in Q3 also reflects early
Christmas orders from retailers.
Total revenue increased 116.7% to DKK 1,788 million in Q3 2010 from DKK 825
million in Q3 2009, of this 13.8% was related to structural changes from the
acquisition of PANDORA CWE in January 2010. Volumes sold grew by 57.1% as 15.5
million stock keeping units (SKUs) were sold in Q3 2010 versus 9.8 million SKUs
sold in Q3 2009. The remaining 45.8% of the increase in revenue in Q3 2010 was
related to price and mix change as well as FX movements.
Revenue per point of sale increased by 104.3% compared to same quarter last year
as revenue per point of sale increased to approx. DKK 176,000 in Q3 2010 from
approx. DKK 86,000 in Q3 2009 (calculated by the average of PoS between the
beginning and end of the period). Volume per point of sale increased by 48.1%
compared to last quarter last year as volume per point of sale increased to
1,522 SKUs in Q3 2010 from 1,028 SKUs in Q3 2009 (calculated by the average of
PoS between the beginning and end of period).
The geographical distribution of revenue in Q3 2010 was 40.5% for the Americas,
48.4% for Europe and 11.1% for Asia Pacific. Due to significant organic growth
and structural changes, Europe is now the largest region measured in terms of
revenue.
REVENUE BREAKDOWN BY GEOGRAPHY
--------------------------------------------------------------------------------
| DKK million | Q3 2010 | Q3 2009 | % Growth | % Growth |
| | | | | in local |
| | | | | currency |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Americas | 725 | 376 | 92.8% | 73.3% |
--------------------------------------------------------------------------------
| United States | 644 | 351 | 83.5% | |
--------------------------------------------------------------------------------
| Other | 81 | 25 | 224.0% | |
--------------------------------------------------------------------------------
| Europe | 865 | 297 | 191.2% | 186.2% |
--------------------------------------------------------------------------------
| United Kingdom | 333 | 106 | 214.2% | |
--------------------------------------------------------------------------------
| Germany1 | 184 | 85 | NM | |
--------------------------------------------------------------------------------
| Other | 348 | 106 | NM | |
--------------------------------------------------------------------------------
| Asia Pacific | 198 | 152 | 30.3% | 9.1% |
--------------------------------------------------------------------------------
| Australia | 171 | 148 | 15.5% | |
--------------------------------------------------------------------------------
| Other | 27 | 4 | 575.0%. | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total | 1,788 | 825 | 116.7% | 102.0% |
--------------------------------------------------------------------------------
1 Includes in 2009 revenue relating to products purchased by our former
independent German distributor for sale in Austria and Switzerland prior to the
formation of PANDORA CWE, established in January 2010. Austria and Switzerland
are from 1 January 2010 included in “Other”.
AMERICAS
In the Americas, the increase in our revenue of 92.8% reflected strong organic
growth as a result of high same store sales growth (including upgrading) in the
United States as well as the establishment of new points of sale in the United
States and in other countries. The substantial same store sales growth
reflected, in part, increased demand for our products, price increases and a
significant trend in the upgrading of stores to devote greater space for PANDORA
products. The United States continues to be our single largest market accounting
for 36.0% of Q3 2010 revenue, with a growth rate of 83.5% in Q3 2010 compared to
same quarter last year.
EUROPE
In Europe, the increase in our revenue of 191.2% was predominantly related to
strong organic growth in the United Kingdom and Other Europe, especially Spain
and Portugal. The increase in Germany reflects organic growth as well as the
establishment of PANDORA CWE in January 2010. The United Kingdom is now our the
largest single market in Europe accounting for 18.6% of Q3 2010 revenue, with a
growth rate of 214.2% in Q3 2010 compared to the same quarter last year.
ASIA PACIFIC
In Asia Pacific, the increase in our revenue of 30.3% was primarily attributable
to the strengthening of the Australian dollar as well as strong growth in the
rest of the Asian region, especially in Hong Kong and Singapore. Measured in
local currency, development in Australia was -4.8% in Q3 2010 compared to Q3
2009. In Q3 2010, Australia constituted 9.6% of total revenue.
REVENUE BY DISTRIBUTON
We mainly derive our revenue from direct distribution of our jewellery products
to our sales channels. After the establishment of direct distribution in PANDORA
CWE in January 2010, direct distribution accounted for 87.8% of revenue in Q3
2010, up from 75.4% in for the full year 2009 and 45.5% for the full year 2008.
However, due to strong growth in third party markets the share of third party
distribution has increased compared to H1 2010.
--------------------------------------------------------------------------------
| Q3 2010 | DKK million | Number of |
--------------------------------------------------------------------------------
| | Revenue | PoS |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Direct distribution | 1,570 | 7,944 |
--------------------------------------------------------------------------------
| Third party distribution | 218 | 2,442 |
--------------------------------------------------------------------------------
| Total | 1,788 | 10,386 |
--------------------------------------------------------------------------------
GROSS PROFIT AND GROSS MARGIN
The principal component of our cost of sales include the direct cost we incur in
respect of the purchasing of raw materials and semi-finished goods that we use
when producing our jewellery, direct wages as well as personnel and other
expenses incurred in connection with production and depreciation of our
production facilities.
Cost of sales amounted to DKK 479 million in Q3 2010 versus DKK 297 million in
Q3 2009.
Gross profit was DKK 1,309 million in Q3 2010 compared to DKK 546 million in Q3
2009, resulting in a gross margin of 73.2% in Q3 2010 compared to 66.2% in Q3
2009, where the gross margin was impacted by an unrealised gain on raw materials
derivatives of DKK 3 million and a negative one-off effect from taking over our
Australian distributor of DKK 66 million. Adjusting for these effects, the gross
margin in Q3 2009 was 74.5% compared to 73.2% in Q3 2010, affected by increasing
raw material prices not completely offset by price increases and the positive
effect from taking over direct distribution in PANDORA CWE.
In accordance with our hedging policy we have hedged 100% of our expected gold
and silver commodity consumption in Q3-2010. The average realized price for gold
was 1,165 USD/oz and 18.7 USD/oz for silver. For the following four quarters we
have hedged 100%, 80%, 60% and 40% of expected gold and silver consumption. Our
hedged prices for the following four quarters for gold is 1,176 USD/oz, 1,213
USD/oz, 1,323 USD/oz, 1,352 USD/oz and for silver 18.0 USD/oz, 22.2 USD/oz 19.8
USD/oz and 24.0 USD/oz.
DISTRIBUTION COSTS
Distribution costs comprise expenses related to the distribution of goods sold
and sales & marketing campaigns, including packaging, brochures, displays and
fixtures and fittings, pay and other expenses relating to sales and distribution
staff and amortisation/depreciation.
Distribution costs increased to DKK 409 million in Q3 2010 from DKK 225 million
in Q3 2009 mainly as a result of increased activity and structural changes. In
Q3 2010, distribution costs were affected by DKK 46 million from amortisation of
acquired distribution rights in PANDORA CWE. These distribution rights will be
fully amortised by 30 June 2011. In Q3 2009, distribution costs were affected by
DKK 39 million from amortisation of acquired distribution rights in the
Australian subsidiary.
Distribution cost as a percentage of revenue was 22.9% in Q3 2010 compared to
27.3% in Q3 of 2009. This decrease primarily relates depreciation and
amortisation allocated to distribution cost. Adjusted for this distribution
costs decreased by 0.9% of revenue.
In Q3 2010, marketing costs amounted to DKK 170 million and corresponded to 9.5%
of revenue resulting from our continuous focus on brand building.
ADMINISTRATIVE EXPENSES
Administrative expenses comprise expenses paid to manage and administer our
operations, including expenses related to administrative staff and depreciation.
Administrative expenses amounted to DKK 157 million in Q3 2010 versus DKK 70
million Q3 2009, representing 8.8% and 8.5% of Q3 2010 and Q3 2009 revenue,
respectively.
The nominal increase is partly attributable to the acquisition of PANDORA CWE
and partly due to strengthening of our central management and administrative
functions. This includes the hiring of staff for our group administrative,
finance, human resources and information technology functions in response to the
overall growth in our business as well as costs related to the implementation of
new systems and processes to assist us in managing the growth.
EBITDA
EBITDA for Q3 2010 increased by 161.2% to DKK 807 million resulting in an EBITDA
margin of 45.1% - up from 37.5%, DKK 309 million, in the same quarter in 2009
before one-off adjustments.
Regional EBITDA margins for Q3 2010 before allocation of central overheads were
53.1% in Americas, 53.4% in Europe and 43.4% in Asia Pacific.
EBIT
EBIT increased by 196.0% to DKK 743 million resulting in an EBIT margin of
41.6%.
NET FINANCIAL INCOME AND EXPENSES
Net financial income and expenses primarily include interest income and
expenses, realised and unrealised exchange gains and losses and allowances under
the advance-payment-of-tax scheme.
Financial expenses were DKK 35 million and financial income was DKK 1 million in
Q3 2010.
INCOME TAX EXPENSES
Income tax expenses increased to DKK 128 million in Q3 2010, implying an
effective tax rate of approximately 18% for Q3 2010 versus DKK 30 million in Q3
2009 (tax rate of 16.4%).
net profit
Net profit in the third quarter 2010 increased by 279.7% to DKK 581 million from
DKK 153 million in the third quarter of 2009. Minority interests to amounted to
DKK 3 million in the third quarter 2010, thus the net profit attributable to the
equity holders of PANDORA was DKK 578 million in the third quarter of 2010.
LIQUIDITY AND CAPITAL RESOURCES
Working capital development is impacted by the consolidation of CWE into PANDORA
and therefore direct comparison between Q3 2009 and Q3 2010 is difficult.
Compared to Q2 2010, inventory in Q3 2010 has increased in line with the
increase in revenue.
In Q3 2010, cash flow from operating activities was DKK 49 million compared to
DKK 142 million in Q3 2009. The negative effects on cash flow from changes in
working capital are primarily attributable to an increase in trade receivables
as a result of early sale and delivery of Christmas orders to retailers and a
significant part of sales in the quarter taking place in the last part of the
quarter.
In Q3 2010, PANDORA generated a free cash flow of DKK 30 million and invested a
total of DKK 25 million in property, plant and equipment, approximately 1.4% of
revenue. The majority of this was invested in our fourth production facility in
Gemopolis, expected to start production in November 2010.
Total interest bearing loans and borrowings were DKK 2,323 million as at 30
September 2010 - Long-term interest-bearing loans and borrowings were DKK 1,346
million and short-term interest-bearing loans were DKK 977 million.
Cash and short-term deposits amounted to DKK 302 million.
Net interest bearing debt as at 30 September 2010 was DKK 2,021 million
corresponding to 0.8x LTM EBITDA.
Financial outlook for 2010
In line with the financial guidance communicated in connection with the Initial
Public Offering in October, revenue for H2 2010 is expected to be higher than
revenue in H1 2010 and EBITDA margin for H2 2010 is expected to be above 40%.
PANDORA maintains its expectations, which are specified below:
Based on strong Q3 results positively impacted by early Christmas orders,
PANDORA expects revenue of approximately DKK 6.2 billion for the financial year
2010 (DKK 3.5 billion in FY 2009). Including an IPO-bonus to all the employees,
EBITDA is expected to be approximately DKK 2.5 billion (DKK 1.6 billion in FY
2009).
We also expect CAPEX to account for approximately 3% of total group revenue and
the effective tax rate to be approximately 18%.
Financial expectations for full year 2011 will be published in March 2011, when
PANDORA releases its Annual Report for 2010.
SUBSEQUENT EVENTS
On 5 October, PANDORA announced an offer price of DKK 210 per share for its
Initial Public Offering of new and existing shares corresponding to a market
capitalisation of DKK 27.33 billion. Admission to trading and official listing
on NASDAQ OMX Copenhagen took place on October 5, 2010, under the symbol
“PNDORA”.
2,857,142 new shares were issued by the Company, raising gross proceeds of
approximately DKK 600 million; 44,552,785 existing shares were sold by
Prometheus Invest ApS (the “Selling Shareholder”); an over-allotment option of
additional 6,682,917 existing shares at the Offer price, granted by the Selling
Shareholder to the Joint Global Coordinators (on behalf of the Managers) was
fully exercised.
After the exercise of the over-allotment option on 8 October, the Offering
amounted to DKK 11,359 million.
The free float, representing the proportion of the share capital held by new
investors, was 42.6% after exercise of over-allotment option and exercise of
warrants. Number of shares is 130,143,258.
In connection with the Initial Public Offering PANDORA exercised the call option
to buy out the minority interest in Ad Astra Holdings Pty Ltd. and PANDORA CWE.
In Ad Astra Holdings Pty Ltd. PANDORA purchased the remaining 40% of the shares
for AUD 40 million.
PANDORA has purchased the remaining 49% of the shares in PANDORA CWE. The
purchase price is based on an earn-out model, currently estimated at a total net
present value of DKK 883 million. DKK 385 million hereof was payable upon the
Initial Public Offering. The remaining part of the earn-out payment is to be
settled in 2015.
In addition, PANDORA has purchased DKK 40 million of treasury shares for the
purpose of PANDORA's long-term incentive program.
As announced in the prospectus in connection with the Initial Public Offering,
an employee bonus corresponding to two month salary, DKK 91 million, will be
paid in Q4 2010. This bonus is a one time, discretionary payment offered to
employees funded by the Selling Shareholder, Prometheus Invest ApS, in order to
reward the contribution made by employees during the time since the Acquisition
in 2008. The employee bonus will impact EBITDA in Q4 2010, but will, besides a
tax effect, have no influence on the cash flow.
RISKS AND UNCERTAINTIES
Other than as stated in this interim report, no material changes have occurred
in the risks and uncertainties facing PANDORA as compared with the information
stated in the prospectus issued 20th September 2010 in connection with the
Initial Public Offering of PANDORA.
Management statement
The board of directors and the executive management have considered and approved
the interim report of Pandora A/S for the period 1 January - 30 September 2010.
The interim report is presented in accordance with IAS 34 “Interim financial
reporting” as adopted by the EU and additional Danish disclosure requirements
for interim reports for listed companies.
In our opinion, the interim report gives a true and fair view of the Group's
assets, liabilities and financial position at 30 September 2010 and of the
results of the Group's operations and cash flows for the period 1 January 2010 -
30 September 2010 and for the period 1 July - 30 September. Furthermore, in our
opinion the Management report includes a fair review of the development and
performance of the business and the financial position of the Group, the results
for the 9-month period ended 30 September 2010 and of the Group's financial
position in general as well as describes the principal risks and uncertainties
facing the Group.
Copenhagen, 11 November 2010
Executive management
Mikkel Vendelin Olesen Henrik Holmark
Chief executive officer Chief financial officer
Board of directors
Allan Leighton Torben Ballegaard Sørensen
Chairman
Andrea Alvey Marcello V. Bottoli
Sten Daugaard Christian Frigast
Erik D. Jensen Nikolaj Vejlsgaard
Table of content
Page
Income statement 15
Statement of comprehensive income 15
Statement of financial position 16
Statement of changes in equity 18
Statement of cash flows 19
Notes 20
Quarterly overview 28
Income statement
1 January - 30 September
--------------------------------------------------------------------------------
| | | 2010 | 2009 | 2010 | 2009 |
--------------------------------------------------------------------------------
| DKK million | Notes | Q3 | Q3 | 9 | 9 mths |
| | | | | mths | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Revenue | 3 | 1,788 | 825 | 4,369 | 2,087 |
--------------------------------------------------------------------------------
| Cost of sales | | -479 | -297 | -1,25 | -709 |
| | | | | 4 | |
--------------------------------------------------------------------------------
| Gain and losses on raw material | | - | 18 | - | 80 |
| derivatives | | | | | |
--------------------------------------------------------------------------------
| Gross profit | | 1,309 | 546 | 3,115 | 1,458 |
--------------------------------------------------------------------------------
| Distribution costs | | -409 | -225 | -1,05 | -441 |
| | | | | 3 | |
--------------------------------------------------------------------------------
| Administrative expenses | | -157 | -70 | -427 | -134 |
--------------------------------------------------------------------------------
| Operating profit | | 743 | 251 | 1,635 | 883 |
--------------------------------------------------------------------------------
| Financial income | | 1 | 24 | 38 | 54 |
--------------------------------------------------------------------------------
| Financial expenses | | -35 | -92 | -146 | -223 |
--------------------------------------------------------------------------------
| Profit before tax | | 709 | 183 | 1,527 | 714 |
--------------------------------------------------------------------------------
| Income tax expense | | -128 | -30 | -275 | -114 |
--------------------------------------------------------------------------------
| Net profit for the period | | 581 | 153 | 1,252 | 600 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to | | | | | |
--------------------------------------------------------------------------------
| Equity holders of PANDORA A/S | | 578 | 147 | 1,227 | 594 |
--------------------------------------------------------------------------------
| Non-controlling interests | | 3 | 6 | 25 | 6 |
--------------------------------------------------------------------------------
| Net profit for the period | | 581 | 153 | 1,252 | 600 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share | | | | | |
--------------------------------------------------------------------------------
| Profit for the period attributable | | 5 | 294 | 29 | 1,188 |
| to ordinary equity holders of the | | | | | |
| parent, basic | | | | | |
--------------------------------------------------------------------------------
| Profit for the period attributable | | 5 | 293 | 29 | 1,184 |
| to ordinary equity holders of the | | | | | |
| parent, diluted | | | | | |
--------------------------------------------------------------------------------
Statement of comprehensive income
1 January - 30 September
--------------------------------------------------------------------------------
| | | 2010 | 2009 | 2010 | 2009 |
--------------------------------------------------------------------------------
| DKK million | Notes | Q3 | Q3 | 9 | 9 |
| | | | | mths | mths |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net profit for the period | | 581 | 153 | 1,252 | 600 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Exchange differences on translation | | -221 | -41 | 222 | -20 |
| of foreign subsidiaries | | | | | |
--------------------------------------------------------------------------------
| Value adjustment of hedging | | 107 | - | 151 | - |
| instruments | | | | | |
--------------------------------------------------------------------------------
| Income tax effect for the year | | -20 | - | -19 | - |
--------------------------------------------------------------------------------
| Other comprehensive income | | -134 | -41 | 354 | -20 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive income for the | | 447 | 112 | 1,606 | 580 |
| period, net of tax | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to | | | | | |
--------------------------------------------------------------------------------
| Equity holders of PANDORA A/S | | 437 | 106 | 1,549 | 574 |
--------------------------------------------------------------------------------
| Non-controlling interests | | 10 | 6 | 57 | 6 |
--------------------------------------------------------------------------------
| Total comprehensive income for the | | 447 | 112 | 1,606 | 580 |
| period, net of tax | | | | | |
--------------------------------------------------------------------------------
Statement of financial position
30 September 2010/2009 and 31 December 2009
--------------------------------------------------------------------------------
| Assets | | 30 | 30 | 31 |
| | | Septembe | September | December |
| | | r | | |
--------------------------------------------------------------------------------
| DKK million | Notes | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current assets | | | | |
--------------------------------------------------------------------------------
| Goodwill | | 1,862 | 1,189 | 1,208 |
--------------------------------------------------------------------------------
| Brand | | 1,048 | 1,032 | 1,048 |
--------------------------------------------------------------------------------
| Distribution network | | 376 | 403 | 396 |
--------------------------------------------------------------------------------
| Distribution rights | | 1,064 | 900 | 884 |
--------------------------------------------------------------------------------
| Property, plant and equipment | | 304 | 199 | 205 |
--------------------------------------------------------------------------------
| Deferred tax asset | | 67 | 24 | 76 |
--------------------------------------------------------------------------------
| Other non-current assets | | 42 | 7 | 21 |
--------------------------------------------------------------------------------
| Total non-current assets | | 4,763 | 3,754 | 3,838 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | | |
--------------------------------------------------------------------------------
| Inventories | | 1,204 | 365 | 433 |
--------------------------------------------------------------------------------
| Trade receivables | | 998 | 380 | 622 |
--------------------------------------------------------------------------------
| Other receivables | | 407 | 61 | 58 |
--------------------------------------------------------------------------------
| Tax receivables | | 53 | 66 | 41 |
--------------------------------------------------------------------------------
| Cash and short-term deposits | | 302 | 624 | 824 |
--------------------------------------------------------------------------------
| Total current assets | | 2,964 | 1,496 | 1,978 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | | 7,727 | 5,250 | 5,816 |
--------------------------------------------------------------------------------
Statement of financial position
30 September 2010/2009 and 31 December 2009
--------------------------------------------------------------------------------
| Equity and liabilities | | 30 | 30 | 31 |
| | | Septembe | September | December |
| | | r | | |
--------------------------------------------------------------------------------
| DKK million | Notes | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity | | | | |
--------------------------------------------------------------------------------
| Issued capital | | 126 | 1 | 1 |
--------------------------------------------------------------------------------
| Share premium | | - | - | - |
--------------------------------------------------------------------------------
| Foreign currency translation | | 328 | 99 | 164 |
| reserve | | | | |
--------------------------------------------------------------------------------
| Other reserves | | 161 | 8 | 11 |
--------------------------------------------------------------------------------
| Retained earnings | | 2,198 | 899 | 1,275 |
--------------------------------------------------------------------------------
| Equity attributable to equity | | 2,813 | 1,007 | 1,451 |
| holders of the parent company | | | | |
--------------------------------------------------------------------------------
| Non-controlling interests | | 578 | 168 | 197 |
--------------------------------------------------------------------------------
| Total shareholders' equity | | 3,391 | 1,175 | 1,648 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | | |
--------------------------------------------------------------------------------
| Subordinated loan from parent | | - | 1,335 | 1,363 |
| company | | | | |
--------------------------------------------------------------------------------
| Interest-bearing loans and | | 1,346 | 1,331 | 1,340 |
| borrowings | | | | |
--------------------------------------------------------------------------------
| Provisions | | 13 | 5 | 4 |
--------------------------------------------------------------------------------
| Deferred tax liability | | 540 | 596 | 559 |
--------------------------------------------------------------------------------
| Other liability | | 449 | - | |
--------------------------------------------------------------------------------
| Total non-current liabilities | | 2,348 | 3,267 | 3,266 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | | | |
--------------------------------------------------------------------------------
| Subordinated loan from parent | | - | 32 | 37 |
| company | | | | |
--------------------------------------------------------------------------------
| Interest-bearing loans and | | 977 | 339 | 235 |
| borrowings | | | | |
--------------------------------------------------------------------------------
| Provisions | | 95 | 40 | 64 |
--------------------------------------------------------------------------------
| Payable to parent company | | - | - | |
--------------------------------------------------------------------------------
| Trade payables | | 187 | 61 | 106 |
--------------------------------------------------------------------------------
| Income tax payable | | 403 | 177 | 207 |
--------------------------------------------------------------------------------
| Other payables | | 326 | 159 | 253 |
--------------------------------------------------------------------------------
| Current liabilities | | 1,988 | 808 | 902 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total liabilities | | 4,336 | 4,075 | 4,168 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total equity and liabilities | | 7,727 | 5,250 | 5,816 |
--------------------------------------------------------------------------------
Statement of changes in equity
1 January - 30 September
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | |
--------------------------------------------------------------------------------
| | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| | Share | Foreign | Other | Retained |
| DKK million | capita | currency | reserves | earnings |
| | l | translati | | |
| | | on | | |
| | | reserve | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | |
--------------------------------------------------------------------------------
| Non- controlling inter-ests | Total |
| | equity |
--------------------------------------------------------------------------------
| | Attri | |
| | but-a | |
| | ble | |
| | to | |
| | equit | |
| | y | |
| | holde | |
| | rs of | |
| | the | |
| | paren | |
| | t | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity | - | 119 | 2 | 306 | 427 | - | 427 |
| at 1/1 2009 | | | | | | | |
--------------------------------------------------------------------------------
| Net profit for the | | | | 594 | 594 | 6 | 600 |
| period | | | | | | | |
--------------------------------------------------------------------------------
| Other comprehensive | | -20 | | | -20 | | -20 |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Capital increase | 1 | | | -1 | - | | - |
--------------------------------------------------------------------------------
| Share-based payments | | | 6 | | 6 | | 6 |
--------------------------------------------------------------------------------
| Non-controlling | | | | | | 162 | 162 |
| interest arising on | | | | | | | |
| business | | | | | | | |
--------------------------------------------------------------------------------
| Shareholders' equity | 1 | 99 | 8 | 899 | 1,007 | 168 | 1,175 |
| at 30/9 2009 | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity | 1 | 164 | 11 | 1,275 | 1,451 | 197 | 1,648 |
| at 1/1 2010 | | | | | | | |
--------------------------------------------------------------------------------
| Reclassification | | -14 | | 21 | 7 | -7 | - |
--------------------------------------------------------------------------------
| Net profit for the | | | | 1,227 | 1,227 | 25 | 1,252 |
| period | | | | | | | |
--------------------------------------------------------------------------------
| Other comprehensive | | 178 | 144 | | 322 | 32 | 354 |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Share-based payments | | | 6 | | 6 | | 6 |
--------------------------------------------------------------------------------
| Capital increase | 125 | | | 675 | 800 | | 800 |
--------------------------------------------------------------------------------
| Declared dividend | | | | -1,00 | -1,00 | -40 | -1,04 |
| | | | | 0 | 0 | | 0 |
--------------------------------------------------------------------------------
| Non-controlling | | | | | | | |
| interest arising on | | | | | | | |
| business | | | | | | | |
--------------------------------------------------------------------------------
| combination | | | | | - | 820 | 820 |
--------------------------------------------------------------------------------
| Minority shareholder | | | | | | | |
| with put-option | | | | | | | |
| reclassified | | | | | | | |
--------------------------------------------------------------------------------
| to non-current | | | | | - | -410 | -410 |
| liabilities | | | | | | | |
--------------------------------------------------------------------------------
| Remeasurement of | | | | | - | -39 | -39 |
| put-option | | | | | | | |
--------------------------------------------------------------------------------
| Shareholders' equity | 126 | 328 | 161 | 2,198 | 2,813 | 578 | 3,391 |
| at 30/9 2010 | | | | | | | |
--------------------------------------------------------------------------------
There were 125,500.000 shares at DKK 1 per share end Q3 2010. After the Initial
Public Offering number of shares is 130.143.258.
Statement of cash flows
1 January - 30 September
--------------------------------------------------------------------------------
| | Note | 2010 | 2009 | 2010 | 2009 |
--------------------------------------------------------------------------------
| DKK million | | Q3 | Q3 | 9 mths | 9 mths |
| | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit before tax | | 709 | 183 | 1,527 | 714 |
--------------------------------------------------------------------------------
| Net financials | | 34 | 68 | 108 | 169 |
--------------------------------------------------------------------------------
| Amortisation/depreciation | 3 | 64 | 58 | 192 | 80 |
| | | | | | |
--------------------------------------------------------------------------------
| Warrants | | 2 | 2 | 6 | 6 |
--------------------------------------------------------------------------------
| Changes in inventories | | 207 | -5 | -645 | -73 |
--------------------------------------------------------------------------------
| Changes in receivables | | -524 | -43 | -548 | -56 |
--------------------------------------------------------------------------------
| Changes in current liabilities | | -65 | 26 | 15 | 123 |
--------------------------------------------------------------------------------
| | | 13 | 289 | 655 | 963 |
--------------------------------------------------------------------------------
| Adjustments, exchange rates, | | 115 | -1 | 123 | 13 |
| etc. | | | | | |
--------------------------------------------------------------------------------
| Net Interest paid | | -20 | -49 | -227 | -146 |
--------------------------------------------------------------------------------
| Income taxes paid | | -59 | -97 | -186 | -132 |
--------------------------------------------------------------------------------
| Cash inflow from operating | | 49 | 142 | 365 | 698 |
| activities | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Investing activities | | | | | |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries, | 4 | - | -74 | 8 | -75 |
| net of cash acquired | | | | | |
--------------------------------------------------------------------------------
| Investment in receivable | | -6 | - | -83 | |
--------------------------------------------------------------------------------
| Purchase of property, plant and | | -25 | -49 | -107 | -74 |
| equipment | | | | | |
--------------------------------------------------------------------------------
| Purchase of other non-current | | -14 | - | -14 | |
| assets | | | | | |
--------------------------------------------------------------------------------
| Cash outflow from investing | | -45 | -123 | -196 | -149 |
| activities | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financing activities | | | | | |
--------------------------------------------------------------------------------
| Dividend paid | | -74 | | -240 | |
--------------------------------------------------------------------------------
| Proceeds from selling warrants | | | | | 1 |
--------------------------------------------------------------------------------
| Proceeds from borrowings | | 210 | | 983 | |
--------------------------------------------------------------------------------
| Repayment of borrowings | | | -74 | -1,470 | -232 |
--------------------------------------------------------------------------------
| Cash outflow/inflow from | | 136 | -74 | -727 | -231 |
| financing activities | | | | | |
--------------------------------------------------------------------------------
| Net increase in cash and cash | | 140 | -55 | -558 | 318 |
| equivalents | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and short-term deposits | | | | | |
--------------------------------------------------------------------------------
| Cash and short-term deposits at | | 178 | 680 | 824 | 305 |
| 1/1 | | | | | |
--------------------------------------------------------------------------------
| Net foreign exchange difference | | -16 | -1 | 36 | 1 |
--------------------------------------------------------------------------------
| Net increase in cash and cash | | 140 | -55 | -558 | 318 |
| equivalents | | | | | |
--------------------------------------------------------------------------------
| Cash and short-term deposits at | | 302 | 302 | 624 | 624 |
| end of period | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Unutilised credit facilities | | 431 | 659 | 431 | 659 |
| inclusive cash and cash | | | | | |
| equivalents | | | | | |
--------------------------------------------------------------------------------
NOTES
NOTE 1 - SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS
In preparing the consolidated financial statements, management makes various
accounting estimates and assumptions, which form the basis of presentation,
recognition and measurement of the Group's assets and liabilities.
In addition to the significant accounting estimates and judgements in the annual
report for 2009, the Group has in the first 3 quarters of 2010 made significant
accounting estimates and judgements in connection to the acquisition of the
former German distributor described below. All other significant accounting
estimates and judgements are consistent with the description in the annual
report for 2009. We refer to the description in PANDORA A/S' annual report for
2009, from page 31.
Acquisition of the former German distributor
On 5 January 2010, the Group acquired 51% of the activities in the business of
the former German distributor through a business combination. PANDORA has chosen
to measure the value of the 49% non-controlling interest at fair value. The
measurement is based on a call option for the remaining 49% of the shares and a
put option for half of the remaining 49% of the shares. Consequently,
significant judgements have been performed in connection with the measurement of
the purchase price which is equal to the fair value of the non-controlling
interest, the distribution rights for the PANDORA products on the German, Swiss
and Austrian markets (for the remaining 1.5 years) and the residual goodwill.
The recognized amounts regarding the acquisition have been restated compared to
the amounts disclosed in the notes to the annual report for 2009 due to updated
estimates.
Please refer to Note 4 for further information on the business combination.
Put option
In connection to the acquisition of the activities in the business of the former
German distributor, PANDORA entered into a put option with one of the minority
shareholders for 50% of the 49% non-controlling interest. In accordance with
IFRS, the put option is considered a financial liability for PANDORA.
Management has chosen to account for the put option as a reclassification from
the non-controlling interest (within equity) and to other liability in
non-current liabilities. The financial liability has been measured as the
present value of the estimated future cash flow if the option is exercised.
As of 30 September 2010 the carrying amount of the financial liability for the
put option is DKK 449 million.
Please refer to Note 4 and Note 7 for further information on the put-option.
NOTE 2 - Seasonality of operations
Due to the seasonal nature of the jewellery business, higher revenue is
historically realised in the second half of the year.
NOTE 3 - Operating segment information
PANDORA's activities are segmented on the basis of geographical areas in
accordance with management's reporting structure. In determining the reporting
segments, a number of operating segments have been aggregated. All segments
derive their revenues from the sale of our jewellery products.
Management monitors the segment profit of the operating segments separately for
the purpose of making decisions about resource allocation and performance
management. Segment profit is measured consistently with the operating profit in
the consolidated financial statements before non-current assets are
amortised/depreciated (EBITDA).
--------------------------------------------------------------------------------
| Q3 2010 | | | | Unalloc | Total |
| | | | | ated | |
--------------------------------------------------------------------------------
| DKK million | Americ | Europe | Asia | cost | group |
| | as | | Pacific | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income statement | | | | | |
--------------------------------------------------------------------------------
| External revenue | 725 | 865 | 198 | | 1,788 |
--------------------------------------------------------------------------------
| Segment profit (EBITDA) | 385 | 462 | 86 | -126 | 807 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Adjustments | | | | | |
--------------------------------------------------------------------------------
| Amortisation/depreciation | | | | | -64 |
--------------------------------------------------------------------------------
| Consolidated operating profit | | | | | 743 |
| according to IFRS | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Q3 2009 | | | | Unalloc | Total |
| | | | | ated | |
--------------------------------------------------------------------------------
| DKK million | Americ | Europe | Asia | cost | group |
| | as | | Pacific | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income statement | | | | | |
--------------------------------------------------------------------------------
| External revenue | 376 | 297 | 152 | | 825 |
--------------------------------------------------------------------------------
| Segment profit (EBITDA) | 172 | 123 | 71 | -57 | 309 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Adjustments | | | | | |
--------------------------------------------------------------------------------
| Amortisation/depreciation | | | | | -58 |
--------------------------------------------------------------------------------
| Consolidated operating profit | | | | | 251 |
| according to IFRS | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 9 mths 2010 | | | | Unalloc | Total |
| | | | | ated | |
--------------------------------------------------------------------------------
| DKK million | Americ | Europe | Asia | cost | group |
| | as | | Pacific | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income statement | | | | | |
--------------------------------------------------------------------------------
| External revenue | 1,912 | 1.903 | 554 | | 4,369 |
--------------------------------------------------------------------------------
| Segment profit (EBITDA) | 1,009 | 878 | 246 | -306 | 1,827 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Adjustments | | | | | |
--------------------------------------------------------------------------------
| Amortisation/depreciation | | | | | -192 |
--------------------------------------------------------------------------------
| Consolidated operating profit | | | | | 1,635 |
| according to IFRS | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 9 mths 2009 | | | Asia | Unalloc | Total |
| | | | | ated | |
--------------------------------------------------------------------------------
| DKK million | Americ | Europe | Pacifi | cost | group |
| | as | | c | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income statement | | | | | |
--------------------------------------------------------------------------------
| External revenue | 995 | 739 | 353 | | 2,087 |
--------------------------------------------------------------------------------
| Segment profit (EBITDA) | 520 | 379 | 200 | -136 | 963 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Adjustments | | | | | |
--------------------------------------------------------------------------------
| Amortisation/depreciation | | | | | -80 |
--------------------------------------------------------------------------------
| Consolidated operating profit | | | | | 883 |
| according to IFRS | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| DKK million | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Product information | | | | | |
--------------------------------------------------------------------------------
| Revenue from external | | 2010 | 2009 | 2010 | 2009 |
| customers | | | | | |
--------------------------------------------------------------------------------
| | | Q3 | Q3 | 9 mths | 9 mths |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Charms | | 1,184 | 611 | 2,991 | 1,569 |
--------------------------------------------------------------------------------
| Silver and gold charms | | 235 | 128 | 652 | 319 |
| bracelets | | | | | |
--------------------------------------------------------------------------------
| Other jewelry | | 365 | 82 | 708 | 189 |
--------------------------------------------------------------------------------
| Other | | 4 | 4 | 18 | 10 |
--------------------------------------------------------------------------------
| Revenue | | 1,788 | 825 | 4,369 | 2,087 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Geographical information | | | | | |
--------------------------------------------------------------------------------
| Revenue from external | | 2010 | 2009 | 2010 | 2009 |
| customers | | | | | |
--------------------------------------------------------------------------------
| | | Q3 | Q3 | 9 mths | 9 mths |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| United States | | 644 | 351 | 1,698 | 934 |
--------------------------------------------------------------------------------
| Australia * | | 171 | 148 | 494 | 349 |
--------------------------------------------------------------------------------
| United Kingdom | | 333 | 106 | 675 | 259 |
--------------------------------------------------------------------------------
| Germany * | | 184 | 85 | 488 | 223 |
--------------------------------------------------------------------------------
| Other countries ** | | 456 | 135 | 1,014 | 322 |
--------------------------------------------------------------------------------
| Revenue | | 1,788 | 825 | 4,369 | 2,087 |
--------------------------------------------------------------------------------
* 2009 9 mths comparison figures are partly sales to local distributor.
** PANDORA A/S' country of domicile is Denmark, which is included in “other
countries”.
NOTE 4 - Business combinations
Acquisition of the German distributor
On 5 January 2010, the Group formed PANDORA Jewelry Central Western Europe A/S
together with the former German distributor. The formation was done through
contributions from the two shareholders. PANDORA contributed distribution rights
in the Netherlands and Italy, the latter being a new market, and extended the
term of the distribution right for Germany, Austria and Switzerland, while the
former German distributor contributed the ongoing business in Germany, Austria
and Switzerland, including the distribution rights for PANDORA products for the
remaining 1.5 years of the distribution agreement. Following the formation, the
Group owns 51% and therefore has a controlling interest in PANDORA Jewelry
Central Western Europe A/S, while the former German distributor owns 49% and
therefore has a non-controlling interest. PANDORA has an option in place for the
non-controlling interest. In accordance with IFRS 3, the formation constitutes
an acquisition of the activities in the business of the former German
distributor, whereas the contribution of the PANDORA assets is an intra-group
transaction and does not impact the consolidated financial statements.
The formation and acquisition took place as part of the Group's plans to expand
operations in both new and existing markets.
PANDORA has elected to measure the 49% non-controlling interest in the acquiree
at fair value.
Currently, not all aspects of the business combination have been finalised. The
material used for the measurement of the cost price and the distribution
agreement is based on budgeted and forecast amounts. Therefore, the measurement
of these items and the residual goodwill is determined only provisionally since
they are based on future profit and debt in respect to PANDORA CWE that are
indeterminable at the present.
The provisionally recognised amounts of the identifiable assets and liabilities
of the former German distributor at the date of acquisition are:
--------------------------------------------------------------------------------
| | Amounts |
--------------------------------------------------------------------------------
| | recognised |
| | at |
--------------------------------------------------------------------------------
| DKK million | 5 January |
| | 2010 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Intangible assets | 274 |
--------------------------------------------------------------------------------
| Property, plant and equipment | 19 |
--------------------------------------------------------------------------------
| Receivables | 26 |
--------------------------------------------------------------------------------
| Inventories | 76 |
--------------------------------------------------------------------------------
| Tax receivables | 4 |
--------------------------------------------------------------------------------
| Other current assets | 8 |
--------------------------------------------------------------------------------
| Cash and short-term deposits | 1 |
--------------------------------------------------------------------------------
| | 408 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | 16 |
--------------------------------------------------------------------------------
| Payables | 81 |
--------------------------------------------------------------------------------
| Other current liabilities | 13 |
--------------------------------------------------------------------------------
| Deferred tax | 69 |
--------------------------------------------------------------------------------
| | 179 |
--------------------------------------------------------------------------------
| Recognised net assets | 229 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-controlling interest measured at fair value | -820 |
--------------------------------------------------------------------------------
| Goodwill arising on acquisition | 591 |
--------------------------------------------------------------------------------
| Cash consideration | 0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash movements on acquisition | |
--------------------------------------------------------------------------------
| Purchase consideration transferred (included in cash outflow | 0 |
| from investing activities) | |
--------------------------------------------------------------------------------
| Transaction costs of the acquisition (included in cash inflow | -2 |
| from operating activities) | |
--------------------------------------------------------------------------------
| Net cash acquired with the subsidiary (included in cash outflow | 8 |
| from in investing activities) | |
--------------------------------------------------------------------------------
| Net cash outflow on acquisition | 6 |
--------------------------------------------------------------------------------
Measurement of non-controlling interest
As stated above, the non-controlling interest in the former German distributor
is measured at fair value including goodwill. As the 51% interest was acquired
by contributing own distribution rights, no cash consideration was transferred
on the formation of the entity. The fair value of the non-controlling interest
is estimated based on a combined put and call option for the remaining 49% of
the shares and a put option for half of the remaining 49% of the shares with a
shared strike price.
Transactions recognised separately from the acquisition
In connection with the business acquisition, the Group paid transaction costs to
advisors of DKK 2 million. These costs are expensed as administrative expenses
in the consolidated income statement for the period.
In connection with the acquisition, employment contracts with former
shareholders were entered into. The contracts were entered into on an arm's
length basis, including remuneration and other terms.
No such other arrangements were entered into either before or in connection to
the business combination as should be considered in the overall evaluation of
the accounting treatment of the business combination.
Description of the acquired assets and liabilities
Goodwill is stated at the amount by which the acquisition cost for the business
combination exceeds the acquired share of the recognised amounts of the
identifiable assets, liabilities and contingent liabilities. Goodwill comprises
know-how, future growth expectations and synergies. None of the goodwill
recognised is to be deductible for income tax purposes.
In the business combination, one intangible asset was identified and measured
separately from goodwill: the distribution right for the PANDORA products on the
German, Swiss and Austrian markets, totalling DKK 274 million. The distribution
right is measured based on the Multi-period Excess Earnings Model and is to be
amortised over its useful life of 1.5 years.
Acquired gross contractual receivables totalled DKK 31 million and consisted of
trade receivables, which had been written down by DKK 5 million. The net
receivables acquired of DKK 26 million are considered to be stated at fair value
and are expected to be collected.
Put option
In connection to the formation of PANDORA CWE, one minority shareholder was
granted a put-option, entitling the shareholder to sell 50% of the remaining 49%
of shares in PANDORA CWE to PANDORA under certain conditions not under PANDORA's
control. This put option is recognised as a financial liability in the
consolidated financial statements at the amount of the present value of the
amount payable upon exercise of the option. At 5 January 2010, the liability was
measured at DKK 410 million, which has been deducted from the non-controlling
interest within equity and reclassified to non-current liabilities.
NOTE 5 - CONTINGENT LIABILITIES
PANDORA is a party to a number of minor legal proceedings, which are not
expected to significantly influence the Group's future earnings.
NOTE 6 - Related party transactions
Related parties of the Group with a controlling interest are the principal
shareholder Prometheus Invest ApS and the ultimate parent, Axcel III K/S 2.
Related parties further comprise Axcel III K/S 2's other portfolio enterprises,
as they are subject to the same controlling interest as the Group. There have
not been any transactions with these other entities during 2009 or 2010.
Related parties of the Group with material interests include the board of
directors and the executive management of the companies and key employees and
their family members. Furthermore, related parties include companies in which
the aforementioned persons have a material interest.
Members of the board of directors and the executive management have purchased
products from the Group in both 2009 and 2010. As none of the members of
management is neither a distributor nor a retailer, all purchases have been for
own use.
The table below provides the total amount of transactions which were entered
into with related parties for the relevant financial quarter.
In February 2010, PANDORA completed a refinancing through borrowing DKK 2,200
million under a new senior facility agreement. The proceeds were used to repay
existing credit facilities, to repay the subordinated loan from the parent
company, Prometheus Invest ApS, to pay related fees and expenses and to pay DKK
113 million of a declared dividend to Promtheus Invest ApS. The total declared
dividend was DKK 1,000 million and June 2010, DKK 800 million of the remaining
unpaid dividend to Prometheus Invest ApS was converted into equity and DKK 53
million was paid out to Prometheus Invest ApS. The remaining DKK 34 million was
paid during the third quarter of 2010.
The obligations of the Group related to the Senior Facility Agreement are
guaranteed by Prometheus Invest ApS.
--------------------------------------------------------------------------------
| | Prometh | Prometh | Promethe | Promethe |
| | eus | eus | us | us |
--------------------------------------------------------------------------------
| | Invest | Invest | Invest | Invest |
| | ApS | ApS | ApS | ApS |
--------------------------------------------------------------------------------
| DKK million | Q3 2010 | Q3 2009 | 9 mths | 9 mths |
| | | | 2010 | 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consolidated income statement | | | | |
--------------------------------------------------------------------------------
| Financial expenses | - | 20 | 25 | 60 |
--------------------------------------------------------------------------------
| Total | - | 20 | 25 | 60 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | Prometh | Promethe | Promethe |
| | | eus | us | us |
--------------------------------------------------------------------------------
| | | Invest | Invest | Invest |
| | | ApS | ApS | ApS |
--------------------------------------------------------------------------------
| | | 30 | 30 | 31 |
| | | Septemb | Septembe | December |
| | | er | r | |
--------------------------------------------------------------------------------
| DKK million | | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consolidated balance sheet | | | | |
--------------------------------------------------------------------------------
| Payables | | - | | |
--------------------------------------------------------------------------------
| Subordinated loan | | - | -1,367 | -1,400 |
--------------------------------------------------------------------------------
| Total | | - | -1,367 | -1,400 |
--------------------------------------------------------------------------------
NOTE 7 - Accounting policies
The interim financial report is prepared in accordance with IAS 34 “Interim
Financial Reporting” as adopted by the EU and additional Danish disclosure
requirements for interim reports for listed companies.
Compared to the accounting policies applied in the annual report for 2009, the
Group has begun to use hedge accounting for commodity contracts designated as
cash flow hedges from 1 January 2010, since from this date the Group formally
designates and documents hedge relationships between commodity contracts and
transactions. The accounting policies have therefore been updated with regard to
the description of hedge accounting as shown below.
Furthermore in 2010 the Group entered in a put option with a minority
shareholder, entitling the shareholder to sell equity instruments of fully
consolidated companies to the Group. IAS 32 stipulates that this is no longer
equity, with the result that the put option leads to a financial liability for
PANDORA for the amount of the present value of the obligation, and the Group's
equity is decreasing accordingly. In accordance with IAS 32, the probability of
the option being exercised has not been taken into account in the evaluation of
the recognition and measurement of the financial liability, since the Group does
not have an unconditional right to avoid delivering cash or other assets. The
accounting policies have therefore been updated with regard to the description
of the accounting treatment of the put option as shown below.
All other significant accounting policies are consistent with those applied in
the annual report for 2009. We refer to the description in PANDORA A/S' annual
report for 2009, page 55 ff.
Hedge accounting
For hedge accounting purposes, hedges are classified as:
Cash flow hedges when hedging exposure to a highly probable forecast transaction
Hedges which meet the strict criteria for hedge accounting as laid down by IAS
39 are accounted for as follows:
Cash flow hedges
The effective portion of the gain or loss on the hedging instrument is
recognised directly as other comprehensive income in the cash flow hedge
reserve, while any ineffective portion is recognised immediately in the income
statement.
Amounts recognised in the cash flow hedge reserve are transferred to the income
statement when the hedged transaction affects profit or loss. Where the hedged
item is the cost of a non-financial asset, the amounts recognised in the cash
flow hedge reserve are transferred to the initial carrying amount of the
non-financial asset.
If the forecast transaction is no longer expected to occur, the cumulative gain
or loss previously recognised in the cash flow hedge reserve is transferred to
the income statement. If the hedging instrument expires or is sold, terminated
or exercised without replacement or rollover, or if its designation as a hedge
is revoked, any cumulative gain or loss previously recognised in the cash flow
hedge reserve remains in the cash flow hedge reserve until the forecast
transaction affects profit or loss.
Put option
Potential purchase price obligations from put options granted to minority
shareholders of fully consolidated companies are recognised at their present
value of the amount payable upon exercise of the option in other liability, if
the Group does not have an unconditional right to avoid delivering cash or other
assets. If the Group still has present access to the benefits associated with
the interest, the non-controlling interest is still attributed its share of
profits and losses (and other changes in equity) of CWE. The financial liability
is recognised at the acquisition date and reclassified from the non-controlling
interest to financial liabilities. At the end of all subsequent reporting
periods, the financial liability is remeasured as if the option had been
exercised at that date. Subsequent changes to measurement are accounted for as a
change in the non-controlling interest.
New standards and interpretations
PANDORA has implemented changes in standards and interpretations effective 1
January 2010. None of the changes have any impact on the Group.
NOTE 8 - event after the reporting period
Please refer to the subsequent events section on page 11 for information
regarding event after reporting period.
Quarterly overview - last seven quarters
--------------------------------------------------------------------------------
| DKK million | Q3 2010 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| | | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income statement | | | | | | | |
--------------------------------------------------------------------------------
| Revenue | 1,788 | 1,34 | 1,23 | 1,37 | 825 | 675 | 587 |
| | | 3 | 8 | 4 | | | |
--------------------------------------------------------------------------------
| EBITDA | 807 | 546 | 474 | 609 | 309 | 320 | 334 |
--------------------------------------------------------------------------------
| Operating profit | 743 | 480 | 412 | 541 | 251 | 309 | 323 |
| (EBIT) | | | | | | | |
--------------------------------------------------------------------------------
| Net financial income | -34 | 9 | -83 | -66 | -68 | -32 | -69 |
| and expenses | | | | | | | |
--------------------------------------------------------------------------------
| Profit before tax | 709 | 489 | 329 | 475 | 183 | 277 | 254 |
--------------------------------------------------------------------------------
| Net profit | 581 | 401 | 270 | 405 | 153 | 232 | 215 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance sheet | | | | | | | |
--------------------------------------------------------------------------------
| Total assets | 7,727 | 7,00 | 6,37 | 5,81 | 5,250 | 4,691 | 4,525 |
| | | 1 | 3 | 6 | | | |
--------------------------------------------------------------------------------
| Invested capital | 5,861 | 5,41 | 4,83 | 3,79 | 3,588 | 3,070 | 3,156 |
| | | 5 | 9 | 9 | | | |
--------------------------------------------------------------------------------
| Net working capital | 1,638 | 1,07 | 648 | 520 | 430 | 229 | 247 |
| | | 9 | | | | | |
--------------------------------------------------------------------------------
| Shareholders' equity | 3,391 | 2,99 | 1,51 | 1,64 | 1,175 | 899 | 724 |
| | | 6 | 2 | 8 | | | |
--------------------------------------------------------------------------------
| Net borrowings | 2,021 | 1,95 | 2,06 | 2,15 | 2,413 | 2,171 | 2,432 |
| | | 0 | 0 | 1 | | | |
--------------------------------------------------------------------------------
| Net borrowings excl. | | | | | | | |
| subordinated loan | | | | | | | |
--------------------------------------------------------------------------------
| from parent company | 2,021 | 1,95 | 2,06 | 751 | 1,046 | 824 | 1,105 |
| | | 0 | 0 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow | | | | | | | |
--------------------------------------------------------------------------------
| Cash inflow from | 49 | 260 | 56 | 368 | 142 | 296 | 260 |
| operating activities | | | | | | | |
--------------------------------------------------------------------------------
| Cash outflow from | -45 | -122 | -29 | -58 | -123 | -14 | -12 |
| investing activities | | | | | | | |
--------------------------------------------------------------------------------
| Free cash flow | 30 | 229 | 212 | 374 | 142 | 339 | 289 |
--------------------------------------------------------------------------------
| Cash outflow/inflow | 136 | -263 | -600 | -112 | -74 | -57 | -100 |
| from financing | | | | | | | |
| activities | | | | | | | |
--------------------------------------------------------------------------------
| Net increase in cash | 140 | -125 | -573 | 198 | -55 | 225 | 148 |
| and cash equivalents | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Ratios | | | | | | | |
--------------------------------------------------------------------------------
| Revenue growth, % | 116.7% | 99.0 | 110. | | | | |
| | | % | 9% | | | | |
--------------------------------------------------------------------------------
| Growth in EBITDA, % | 161.2% | 70.6 | 41.9 | | | | |
| | | % | % | | | | |
--------------------------------------------------------------------------------
| Growth in EBIT, % | 196.0% | 55.3 | 27.6 | | | | |
| | | % | % | | | | |
--------------------------------------------------------------------------------
| Growth in net profit, | 279.7% | 72.8 | 25.6 | | | | |
| % | | % | % | | | | |
--------------------------------------------------------------------------------
| EBITDA margin, % | 45.1% | 40.7 | 38.3 | 44.3 | 37.5% | 47.4% | 56.9% |
| | | % | % | % | | | |
--------------------------------------------------------------------------------
| EBIT margin, % | 41.6% | 35.7 | 33.3 | 39.4 | 30.4% | 45.8% | 55.0% |
| | | % | % | % | | | |
--------------------------------------------------------------------------------
| Cash conversion, % | 5.2% | 57.1 | 78.5 | 92.3 | 92.8% | 146.1 | 134.4 |
| | | % | % | % | | % | % |
--------------------------------------------------------------------------------
| Net debt to EBITDA * | 0.8 | 1.0 | 1.2 | 1.4 | | | |
--------------------------------------------------------------------------------
| Equity ratio, % | 43.9% | 42.8 | 23.7 | 28.3 | 22.4% | 19.2% | 16.0% |
| | | % | % | % | | | |
--------------------------------------------------------------------------------
| ROIC, % * | 37.1% | 31.1 | 31.3 | 37.5 | | | |
| | | % | % | % | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other key figures | | | | | | | |
--------------------------------------------------------------------------------
| Average number of | 4,665 | 4,23 | 3,54 | 2,88 | 2,266 | 1,793 | 1,626 |
| employees | | 9 | 5 | 8 | | | |
--------------------------------------------------------------------------------
* Ratio is based on last 12 month rolling (LTM) EBITDA and EBIT respectively.