Pandora is in a strong financial position to sustain a prolonged COVID-19 crisis - Positive organic growth in early 2020 and triple-digit online growth in April
Q1 2020 Highlights
- Brand momentum drove positive organic growth in January and February and triple-digit online growth in April
- Q1 2020 organic growth was -14% and EBIT-margin of 15.3%, negatively impacted by COVID-19
- Immediate cost and cash initiatives have been initiated to protect the financial position. Execution of Programme NOW continues with focus on leveraging the brand momentum when demand returns
- To protect the business during the pandemic and preserve a conservative balance sheet during these uncertain times, Pandora has arranged funding for a stress-test scenario. Pandora thereby has liquidity to sustain a stress-test scenario where all physical stores are temporarily closed throughout 2020
- Additional committed loan facilities of DKK 3.0 billion with the main relationship banks have been established. Additionally, Pandora intends to sell 8 million treasury shares in an accelerated book-building
The COVID-19 pandemic has had a material negative impact on the financial performance in the quarter; initially in China and subsequently in all other key markets during March. In the last week of March, sell-out growth (including temporarily closed stores) was around -70%. It has since then improved to approximately -55% by the end of April based on strong online performance and a gradual re-opening of physical stores, so far mainly in Germany.
The financial performance was strong in the first two months of 2020. Organic growth was +1% driven by key markets including the US, the UK, Italy, France and Germany. The development indicated an effective turnaround before the COVID-19 escalation. The brand momentum that was built during 2019 continued to improve in early 2020 driven by media investments and stronger and more consistent marketing message.
Alexander Lacik, President and CEO of Pandora, says:
“We are focused on managing the current crisis, and we do our utmost to protect our employees and create a safe environment for them and our customers. Among our 28,000 employees, we have only had a few reported cases of COVID-19. The Group is now preparing for the recovery after the pandemic, and our strong performance in January and February makes us confident in the underlying brand momentum. We have implemented cost and cash initiatives to ensure that we have the necessary financial strength for a strong commercial comeback when demand starts normalising.”
Financial overview (excluding restructuring costs)
||Q1 2020||Q1 2019|
|Sell-out growth incl. temporarily closed stores, %||-17%||-10%|
|Like-for-like (excl. closed stores), %||-11%||-10%|
|Organic growth, %||-14%||-12%|
|Revenue, DKK million||4,172||4,804|
|EBIT margin, %||15.3%||22.5%|
A conference call for investors and financial analysts will be held today at 11.00 CEST and can be joined online at www.pandoragroup.com. The presentation for the call will be available on the website one hour before the call.
The following numbers can be used by investors and analysts:
DK: +45 35 44 55 77
UK (International): +44 33 33 000 804
US: +1 855 85 70 686
Please use PIN: 212 296 04#
Link to webcast: https://pandora.eventcdn.net/2020q1
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 7,300 points of sale, including more than 2,700 concept stores.
Founded in 1982 and headquartered in Copenhagen, Denmark, Pandora employs around 28,000 people worldwide of whom more than 12,300 are located in Thailand, where the Company manufactures its jewellery. Pandora is publicly listed on the Nasdaq Copenhagen stock exchange in Denmark. In 2019, Pandora’s total revenue was DKK 21.9 billion.
For more information, please contact:
VP, Investor Relations, Tax & Treasury
+45 7219 5387
VP, Corporate Communications & Sustainability
+45 2510 0403
Investor Relations Officer
+45 7219 5361
Director, External Relations
+45 4060 1415