News Details


February 5, 2019

Pandora today announces the next steps of Programme NOW, following the important changes in 2018 with a new joint interim leadership team and a refocusing of the network strategy.

A thorough analysis of the challenges facing the company has found that: the brand has high awareness, but lacks a clear positioning; Pandora can improve its relevance to consumers and better deliver on their demands for an inspiring shopping experience; Pandora has an opportunity to leverage its unique product assortment for more impact. These challenges are within the control of the company and by addressing these issues with determination, Pandora can return to positive like-for-like growth in the medium term and continue to deliver industry-leading margins. Programme NOW will deliver the transformation required, including the change of the network expansion strategy as announced in November 2018, significant investments to “Reignite a Passion for Pandora”, a necessary commercial reset, DKK 1.2 billion in cost reductions, and a new global-local operating model.

A key part of Programme NOW will be to Reignite a Passion for Pandora, building on our strong fundamentals and Pandora’s unique position as the world’s biggest jewellery brand. Pandora will infuse new energy to the brand, and inspire and attract more people with a passion to collect and wear Pandora jewellery.


  • Pandora delivered within its latest 2018 full year guidance with 3% total revenue growth in local currency (DKK 22.8 billion revenue) and a 32.5% EBITDA margin
  • In 2018, total like-for-like sales-out growth was -4% and was down -7% in Q4 2018, underlining the need for Programme NOW
  • In Q4 2018, the EBITDA margin was 35.7% and at the high end of the expected range, supported by the initial cost reduction initiatives undertaken through Programme NOW
  • In 2018, Pandora generated the highest cash conversion since 2014 and returned DKK 5.9 billion to shareholders in 2018 – equivalent to around 20% of the current market cap
  • PANDORA changes its guidance metrics from 2019 to focus on organic growth and EBIT margin. Pandora expects organic growth in 2019 to be -3% to -7% including a one-off negative impact of 3 to 5 percentage points related to the commercial reset. The EBIT margin guidance, before restructuring costs, is 26%-28%, corresponding to a 30.5%-32.5% EBITDA margin excluding the accounting impact from IFRS 16. Restructuring costs are expected to be up to DKK 1.5 billion in 2019
  • Pandora will return DKK 4 billion to shareholders in 2019

“Through Programme NOW, we are taking immediate and forceful action to address the disappointing aspects of our financial performance in 2018. We are confident that this company-wide business transformation will reignite Pandora, restore sustainable growth and support our industry-leading margins.” says Jeremy Schwartz, COO.

“We are pleased to have returned DKK 5.9 billion to shareholders in 2018, and we will continue to return significant cash to shareholders in 2019. It is also encouraging that we have identified significant cost saving opportunities of DKK 1.2 billion that will fund our growth initiatives and support our margins.” says Anders Boyer, CFO.


DKK millionQ4 2018Q4 2017FY 2018FY 2017
  Revenue growth, % local currency3%20%3%15%
  Total like-for-like, %-7%2%-4%0%
EBITDA margin, %35.7%40.1%32.5%37.3%
EBIT margin, %32.0%37.1%28.2%34.2%
Cash conversion, %115.2%103.6%86.4%68.0%

During H2 2018, Pandora carried out a thorough analysis of the challenges facing the company. The diagnosis points to four key issues which, when corrected, holds the potential to restore long-term sustainable growth:

  1. Blurred brand experience: the Pandora brand benefits from high industry awareness, but lacks a sharp brand identity and promise that is exciting for today’s consumer. The concept store and eSTORE experience can be significantly enhanced to drive consumers to engage with the brand
  2. Weak initiatives on charms collecting: in spite of the recent focus on new products, the marketing, visual merchandising and retail execution have not provided new and existing consumers sufficiently strong incentives to buy, wear and collect multiple bracelets and charms, which is the backbone of Pandora’s offering
  3. Over push: increased promotional activity has diluted the brand equity and led consumers to wait for the next promotion instead of buying at full price. Additionally, the increase of new product introductions coupled with an immature merchandising process has led to a cluttered assortment presentation in the stores and a further build-up of inventory
  4. Executional inconsistency: decentralised structures have compromised execution excellence between global direction and local execution and led to a slow upgrading of for example merchandising, omnichannel, store design and loyalty programmes

Programme NOW is a comprehensive two-year roadmap designed to respond to the above challenges and to support sustainable long-term growth. As a first step in the programme, Pandora announced a change in its network expansion strategy in November 2018 by significantly reducing franchise acquisitions and new store openings. The change of strategic direction has been successfully executed and no new acquisition deals were signed in Q4 2018.

The next four steps for Programme NOW are described below.

1: Commercial reset
Pandora will address the ‘push effect’ through a commercial reset to significantly reduce  non-value added promotions and improve the level and ageing of inventories at wholesale partners.

Promotions. To protect long-term brand equity, increase full-price sell-out over time, and create the commercial environment that allows our innovation and new marketing initiatives to thrive, we will reduce promotional activities between the major gifting-retail-promotional periods. The big and relevant gifting promotional periods will remain. This will lead to healthier and more sustainable revenue for the long-term but will have a short-term negative revenue impact.

  • Pandora expects organic growth and like-for-like to be negatively impacted in 2019 by 2-4 percentage points. This is a one-time impact resetting revenue to a lower but sustainable level

Wholesale inventories. Pandora will support the reduction of slow-moving stock and initiate an inventory buyback programme in selected markets.

Furthermore, to strengthen the focus on sell-out and reduce slow-moving stock and overall stock levels, Pandora changes the size of the New Product Introductions (NPI) sell-in packages. The changed NPI sell-in packages will benefit franchise partners from day one as it frees up cash and limits the risk of building excess inventory, while allowing Pandora to respond faster and replenish in line with actual consumer demand.

  • The inventory buyback programme is expected to negatively impact the reported EBIT margin by around 2 percentage points in 2019. The extraordinary cost for this effort will be included directly in cost of sales and will be reported as a restructuring cost
  • Reduced NPI sell-in packages is expected to negatively impact organic revenue growth in 2019 by around 1 percentage point. This is a one-time impact in 2019

2: Reignite a Passion for Pandora
While Pandora has successfully built the best known brand in the jewellery industry, there is a need to clarify the brand expression to reignite the traction and heat of the brand, and inspire further desire for charm collecting. This requires a positive brand disruption, Reignite a Passion for Pandora, and a change in the balance between commercial push (promotions etc.) and consumer pull driven demand. In short, Pandora will materially change the investment and ambition level of all elements of the consumer experience.

The historical DNA of Pandora is focused on the product. While products remain a highly important component of the growth recipe, they cannot stand alone. In 2019, Pandora has planned for additional investments of DKK 0.5 billion in OPEX and around DKK 0.2 billion in CAPEX. The incremental spend will be focused on improving key elements in the consumer experience from product to store and marketing. In 2019, Pandora will launch the following initiatives:

  • Brand: A new brand promise and visual identity are under development. From late 2019 this will be unfolded in a new, different and modernised campaign platform for all touchpoints that will appeal across generations of consumers
  • Product: In 2019, a new bracelet platform will be launched to support making Q4 bigger and better. Reducing the promotional level will provide more time and space for new collections to be visible to consumers in stores, and an online bracelet builder will be made to recruit more customers to buy, wear and collect more bracelets and charms
  • Media and channel execution: Pandora will increase marketing spend significantly to increase traffic and mitigate the temporary drag expected from the commercial reset. Pandora’s social media channels will undergo a facelift with an increased focus on inspirational and shoppable content
  • Store experience: A new store concept is under development and will be piloted in selected stores before year-end 2019
  • eSTORE and omnichannel: Substantial improvements of the existing eSTORE are being developed including better navigation, more inspirational product descriptions and imagery. Furthermore, a complete facelift of the eSTORE will transform the perception and way consumers engage with the brand digitally. Some omnichannel elements have already been piloted in the US and these will be progressively rolled out across both owned and operated and franchise stores

3: Reduce costs
To fund the growth initiatives and support profitability a total of DKK 1.2 billion annual costs will be eliminated as a run rate by the end of 2020. Pandora targets cost reductions of around DKK 0.6 billion OPEX and cost of sales in the calendar year 2019. These cost reductions come on top of the DKK 0.35 billion cost reductions communicated in connection with the Q2 2018 announcement.

Cost reduction opportunities have been identified across the company. Among the larger cost reduction areas are cost of sales, IT, costs in own concept stores and administrative expenses.

4: Implement new ways of working
Pandora has evaluated its organisational design and operating model, how and where decisions are made, how the company operates, and in which areas to lift capabilities to match the organisational design to meet the business needs. This work will be ongoing, but the following four immediate elements will make an impactful change:

  • Chief Creative & Brand Officer to lead combined Product & Marketing organisation. To support ‘Reignite a Passion for Pandora’, and provide one holistic strong customer experience across markets and channels, Pandora will combine its creative and brand efforts. Stephen Fairchild, Chief Creative & Brand Officer, will have full responsibility for the global brand expression and execution across all touchpoints. A forceful shift to a sharper global-to-local execution where local markets execute excellently on a global lead
  • Global merchandising function. Pandora is setting up a global end-to-end merchandising function to optimise the assortment and inventory in stores to aid full price sell-out, improve inventory management and increase traffic to stores through improved visual merchandising. A new Senior Vice President, Global Merchandising, has been recruited.
  • One global trading calendar. Beginning 2019, Pandora will operate with one global-to-local consumer-centric trading calendar, seamlessly accommodating both product launches, promotions, local holidays and celebrations. Pandora will no longer focus its efforts around 7-10 ‘drops’ or product launches, but rather 14 trading events where the product, promotions and local events are amplified in their own right
  • Performance management. Pandora is changing its performance management routines including business review cadence, globalising its standard reporting and data, and aligning incentive programmes to shareholder value creation

Execution: Total restructuring costs of up to DKK 2.5 billion over the period 2019 and 2020
Pandora expects up to DKK 2.5 billion in restructuring costs during 2019 and 2020 of which up to DKK 1.5 billion will be expensed in 2019. The majority of the restructuring costs will be cash based.

  • The largest components of the restructuring costs are the inventory buyback programme, expenses related to cost reductions, costs associated with a range of commercial restructurings to develop and implement the ‘brand disruption’ and the use of consultants. Further details of the commercial initiatives will be communicated in connection with the Q1 2019 announcement
  • In addition to the restructuring costs, revenue and earnings will be temporarily negatively impacted in 2019 by the commercial reset

2019 will be a transition year for Pandora, and the financial outlook will be significantly impacted by the actions taken in Programme NOW.

To strengthen performance management and better reflect where shareholder value is created, Pandora changes its revenue guidance metric from total revenue growth in local currency to organic revenue growth1 (which excludes all impacts from forward integration and M&A activities). Pandora will also change its profitability metric to EBIT margin (from EBITDA margin) thereby sharpening the focus on cash allocation and minimising fluctuations related to the new accounting standard for leases (IFRS 16) which is effective from 1 January 2019. As a rule of thumb, the EBIT margin will be around 0.3 percentage points higher going forward while the EBITDA margin will be around 4.5 percentage points higher due to IFRS 16.


  • Organic revenue growth is expected to be in the range from -3% to -7%, which includes negative one-offs of 3-5 percentage points from the combined impact of the reduced sell-in packages (1 percentage point) and the decision to reduce promotional activities (2-4 percentage points).
  • The EBIT margin is expected to be between 26%-28% excluding restructuring costs of up to DKK 1.5 billion related to Programme NOW. For comparison, this corresponds to an EBITDA margin – before IFRS 16 impact – of 30.5%-32.5%. Including restructuring costs, the reported EBIT margin in 2019 is expected to be 20%-22%.
Guidance development
FY 2018
Q3 2018
Q2 2018
Organic revenue growth, %-3% to -7% Total revenue growth (local currency)3%2-4%4-7%7-10%
  EBITDA margin, approximately %32.5%32%32%35%
EBIT margin excl. restructuring costs26%-28%EBIT margin, %28.2%NANANA
  CAPEX, approximately % of revenue5%5%5%5%


*Please find the chart in the enclosed company announcement
In 2019, Pandora expects to add around net 75 concept stores to the network. The store openings will mainly be in Latin America and China. The expansion of the network is expected to add around 4 percentage points of organic growth.

Forward integration – which is not included in organic growth – will positively impact total revenue growth by around 2 percentage points, which mainly includes acquisitions already completed in 2018, as well as Taiwan. Consequently total revenue growth in local currency is expected to be -1% to -5%.

Total like-for-like is expected to be negative mid-single digit before the impact from the commercial reset. It is expected that the initiatives in Programme NOW will mainly impact like-for-like from late 2019 and forward. Excluding the impact from the commercial reset, organic growth is expected to be between 0% and -2%. The NPI sell-in packages impact organic growth by around -1 percentage point while the reduction of promotions will impact total like-for-like and organic growth equally by negative 2-4 percentage points. In 2019, total reported like-for-like could therefore be down to negative high-single digit.

*Please find the chart in the enclosed company announcement
The waterfall chart above outlines the most important building blocks of the EBIT margin development in 2019, supported by the following explanations:

  • In connection with the Q2 2018 announcement, Pandora stated the opportunity to improve the margin by 3 percentage points due to among others less forward integration, lapping wholesale destocking, cost reductions etc. That is still the case, except that wholesale inventories are expected to destock further and thus the margin improvement in 2019 from these factors is only 2 percentage points
  • “Other” includes margin impact from among others higher production time on new products, inflation etc.
  • Restructuring costs of around 6 percentage points (up to DKK 1.5 billion) in 2019, consists of:
    • The wholesale inventory buyback programme for selected markets will be  impacting the EBIT margin negatively by around 2 percentage points
    • Around 4 percentage points will be related to programme execution. The majority of the restructuring costs will be recognised as OPEX

CAPEX for the year is expected to be in the range of DKK 1.2-1.5 billion. This includes investments in both Pandora’s own distribution network, IT and continued optimisation of the company’s crafting facilities in Thailand. CAPEX directly related to Programme NOW is expected to be around DKK 200 million and relates primarily to the investments in e-commerce and omnichannel features as well as commercial projects related to Reigniting a Passion for Pandora.

The effective tax rate in 2019 is expected to be around 22%-23%.

Assuming current exchange rates versus the Danish Krone, growth reported in DKK is expected to be 0-1 percentage point higher than in local currency.

All financial targets including all of the sub-components communicated in relation to the Capital Markets Day on 16 January 2018 are cancelled as a result of Programme NOW.

Pandora’s aspiration for the mid-term horizon is to deliver sustainable positive organic growth and industry-leading profitability. Organic growth will be driven by low- to mid-single digit total like-for-like growth combined with a continued controlled expansion of the store network in less penetrated areas.

With the implementation of IFRS 16, fixed lease obligations (e.g. rent) will be classified as debt. Consequently, Pandora’s net interest-bearing debt increases by approximately DKK 4.2 billion. Furthermore, lease expenses previously recognised as OPEX will primarily be recognised as depreciations going forward. This will increase EBITDA by around DKK 1 billion.

The combined effect will increase the NIBD to EBITDA ratio by roughly 0.5. Reflecting the accounting impact of IFRS 16, the company’s capital structure policy will be adjusted accordingly from currently 0 to 1 times NIBD to EBITDA to 0.5 to 1.5 times.

Pandora will continue to generate significant cash during Programme NOW and distribute excess cash to shareholders. During the transition, the financials will be impacted by significant restructuring costs. As these are of temporary nature only, Pandora is also looking at the leverage ratio excluding restructuring costs when determining the level of cash to be distributed to the shareholders. Based on the reported leverage ratio, Pandora expects to temporarily exceed the upper end of the capital structure interval in 2019.

For 2019, the Board of Directors proposes a total cash return to shareholders amounting to DKK 4 billion, which is around 13% of the company’s market cap based on the time of writing.

In line with the cash distribution policy announced with the Annual Report 2016 – a stable to growing nominal dividend and all excess cash to be distributed via share buybacks – the Board of Directors proposes a dividend of DKK 18 per share (DKK 1.8 billion) and a share buyback programme of up to DKK 2.2 billion.

DKK billion, annual commitmentFY 2019
FY 2018
FY 2017
FY 2016
Dividend (Ordinary + interim)
Nominal dividend per share, DKK18183613
Share buy-back programme2.
Total cash return4.

In 2018, Pandora paid out an ordinary dividend of DKK 9 per share and an interim dividend of DKK 9 per share in relation to the H1 2018 results. In total, Pandora paid out DKK 18 per share (DKK 1.9 billion) in 2018.

Based on the financial results in 2018, the Board of Directors proposes to return DKK 1.8 billion in dividend during 2019. This includes an ordinary dividend of DKK 9 per share and one additional interim dividend of DKK 9 per share in relation to the H1 2019 results.

In connection with the Annual Report 2017, Pandora announced its intention to buy back own shares of up to DKK 4.0 billion in a share buyback programme from 14 March 2018 to 13 March 2019. In 2018, a total of 7,437,025 shares have been bought back, corresponding to a transaction value of DKK 3.2 billion. The purpose of the programme is to reduce Pandora’s share capital and to meet obligations arising from employee incentive programmes. At the Annual General Meeting 2019, The Board of Directors will propose to reduce the company's share capital by a nominal amount of DKK 10,029,003 by cancellation of 10,029,003 own shares of DKK 1, equal to 9.1% of the company's total share capital.

The Board of Directors proposes to launch a new share buyback programme in 2019, under which Pandora will buy back own shares to a maximum consideration of DKK 2.2 billion. The shares acquired during the programme will as in previous years primarily be used to reduce Pandora’s share capital and to meet obligations arising from employee incentive programmes. The share buyback programme will run from the Annual General Meeting (13 March 2019) to 19 March 2020 at the latest.

A conference call for investors and financial analysts will be held today at 11.00 CET and can be joined online at The presentation for the call will be available on the website one hour before the call.

The following numbers can be used by investors and analysts:
DK: +45 35 44 55 83
UK (International): +44 (0) 203 194 0544
US: +1 855 269 2604

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

Founded in 1982 and headquartered in Copenhagen, Denmark, Pandora employs more than 29,000 people worldwide of whom more than 14,000 are located in Thailand, where the Company manufactures its jewellery. Pandora is publicly listed on the Nasdaq Copenhagen stock exchange in Denmark. In 2018, Pandora’s total revenue was DKK 22.8 billion (approximately EUR 3.1 billion).

For more information, please contact:

Brian Granberg
Senior Investor Relations Officer
+45 7219 5344


Christian Møller
Investor Relations Officer
+45 7219 5361



Johan Melchior
Director External Relations
+45 4060 1415


1 Organic growth is an alternative financial measure not defined by IFRS, see note 1.1 in the Annual Report 2018