Pandora’s revenue for the year 2018 stood at DKK 22,806 million as compared to a revenue of DKK 22,781 million earned in 2017. The Company thus saw a revenue increase of 3% y-o-y in local currency terms. 

Revenue for Q4 2018 amounted to DKK 7,890 million as against earnings of DKK 7,603 million in the previous year, also marking a 3% increase.

However, the Company noted that in 2018, “total like-for-like sales-out growth was -4% and was down -7% in Q4 2018”.

Pandora reported an EBITDA margin of 32.5% for the year; and 35.7% for the quarter under discussion. This latter was “at the high end of the expected range, supported by the initial cost reduction initiatives undertaken through Programme NOW”.

Programme NOW, planned as a two-year initiative, is Pandora’s response to its weak performance in 2018. 

“Pandora can return to positive like-for-like growth in the medium term and continue to deliver industry-leading margins,” the Company stated. “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.”

Jeremy Schwartz, Pandora’s COO commented: “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.”  

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

“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,” said Anders Boyer, CFO. “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.” 

Pandora also announced a change to its guidance for 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 Company revealed. “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, the Company stated.