Pandora A/S : Investor presentation Q4 2020

Investor presentation 04 February 2021

FOURTH QUARTER RESULTS 2020

This presentation contains forward-looking statements, which include estimates of financial performance and targets. These statements are not guarantees of future performance and involve certain risks and uncertainties. Therefore, actual future results and trends may differ materially from what is forecast in this report due to a variety of factors.

AGENDA OF TODAY

1. Executive summary

• 2. Business update incl. Programme NOW

• 3. Q4 2020 Financials

• 4. Financial guidance

• 5. Appendix

DISCLAIMER

CONTINUED BRAND MOMENTUM DRIVES STRONG PERFORMANCE

• • COVID-19 creates elevated uncertainty about 2021

Solid execution of	Digital initiatives	Sell-out growth
social distancing battle	continue to drive	positive in 5 out of 7
plan pays off	strong online growth	key markets
(+104% in Q4)

PROGRAMME NOW NEARING ITS CONCLUSION AND CONTINUE TO IMPROVE THE FOUNDATION OF PANDORA

• • Later in 2021, Pandora will communicate a new strategy, changing focus from transformation to growth

The new operating model	Brand momentum	Cost reset delivering
has proven successful -	continues to improve -	savings of DKK 1.6 billion
visible progress across the	investments in brand,	p.a. - funding the
value chain	digital and organisation	transformation journey
are paying off

AGENDA OF TODAY

1. Executive summary

2. Business update incl. Programme NOW

• 3. Q4 2020 Financials

• 4. Financial guidance

• 5. Appendix

PROGRAMME NOW APPROACHING COMPLETION

Turnaround objectives

InitiativesData-driven growth and personalisation

• • Digital spend optimised and increased to reach a targeted audience

• • Step-changing data-driven e-mail marketing - material performance improvement both in terms of traffic and conversion rate

• • China continues to be challenging, as expected

  Win in China

• • New Chinese management team in place to create and execute on growth plan

• • China remains top priority and a significant growth opportunity for PandoraOmnichannel capabilities

• • "Click & collect" rolled out to more than 400 concept stores in US and UK

• • Endless Aisle implemented in most key markets

  New store concept

• • Newly established team ready to drive development of the new store concept

• • Full-scale testing expected in H2 2021 with first roll-out in 2022

• • DKK 1.6 billion cost reduction target delivered

• • The Cost reset team will remain in place after Programme NOW - leverage further cost reduction opportunities

PROGRAMME NOW TIMELINE

Nov 2018	May 2019	Q4 2019	Q2 2020	Q4 2020
Programme NOW	Early initiatives	Step-change in like-for-	Reorganisation	Back to positive
initiated	unfolding	like trajectory	completed	growth
Programme NOW
rescoped

MAINTAINING OUR INDUSTRY-LEADING BRAND POSITION

Global Share of Search - Google	Global unaided brand awareness
Q4 2020	Q4 2020
1/3 of all Google	Number 1 in 5 out of
searches for branded	7 key markets
jewellery globally was
for PANDORA	#2 in the US
• Two closest global competitors both	• Number 1 in Italy, France, Germany, UK, and
have a ~10% share of searches	Australia
• Number 2 in US

•Source: Google Trends . Share of Search (%) is (Searches Pandora)/(Searches Pandora + Searches relevant competitor brands)

Source Female unaided brand awareness: Internal brand tracker. Old monthly brand tracker (August 2018- June 2020) and new brand tracker setup (August 2020- ) were compared for comparison purposes. Sample sizes: Old setup (n=400 females per month/market) and New setup (n= 300 females per month/market). The tracker looks at women aged 18-64 and includes markets IT, FR, DE, ES, UK, US, CA, AU weighted according to population size

• • Programme NOW is yielding visible results continuing the positive trajectory and momentum in Q4 2020 - China is challenging, as expected

• • Q4 performance was supported by better product availability - the new operating model shows its worth

• • In order to spread our traffic during a peak season with social distancing requirements, Q4 2020 had slightly more promotional days than Q4 2019

POSITIVE SELL-OUT
SELL-OUT	Q4	stores due to
GROWTH IN 5 OUT	DEVELOPMENT	2020	COVID-19, %*
OF 7 KEY MARKETS	US	+22%	5%
IN Q4 2020
UK	+1%	24%
Italy	-12%	8% (30%)1
France	1%	30%
Germany	5%	25%
China	-25%	1%
Australia	19%	8%
Group	1%	Around 10%

Temp. closed

*Average closures throughout Q4

1Italy store closures of 8% only include stores closed for a full week, but actual closing days are up to 30% in Q4

SOCIAL DISTANCING BATTLE PLAN PROVED SUCCESSFUL - CERTAIN INITIATIVES TO CONTINUE

Increased online capacity

Operational effectiveness was kept high supported by increased investments in online capacity

Pop-up shops

Temporarily opened around 100 pop-up shops in key cities minimising queues and traffic

Virtual try on

Enabled customers to virtually inspect items outside of the store: using simulated try-on

Redirected traffic

Promoted the online store and the omnichannel service "Endless Aisle" in campaigns and in queues in front of stores

Allowed consumers to call in for a voice appointment to guide them. Was rolled out in UK, US, France and Germany

Remote shopping assistantStretched peak trading periods

Used promotional tactics and media planning to stretch the peak trading period over longer time

Q4 Traffic - growth

-60% +50%

Q4 Conversion rate - growth

+65% +30%

O&O	O&O
concept	concept
stores	stores

Online

Online

DATA-DRIVEN GROWTH INITIATIVES DRIVES TRAFFIC AND CONVERSION

Example | e-mail marketing delivers significant growth rates proving the opportunities within data-driven growth

A combination of utilising the Pandora Club data, intensifying the focus and optimising the ways of working, e-mail marketing will continue to be an important driver of sales

DKK

million revenue in Q4 2020

>110% compared with last year

VISITS THROUGH E-MAILS

YoY

REVENUE PER E-MAIL

YoY

Data-driven growth initiatives such as e-mail marketing support strong online organic growth of 104% in Q4

CONVERSION

SENT

RATE

YoY

YoY

Q4 2020 DIGITAL RESULTS

Global median page	Online conversion rate	Completed the roll out of Click &
loading time	Collect stores in UK & US in Q4
2.7sec	3.2%	7%
(-42% since the start of the year)	(+30% YoY)	(of online sales in US)

Q4 PERFORMANCE -

COVID-19 LOCKDOWNS BLUR THE PICTURE

• • Sell-out growth in Q4 2020 ended in positive territory

• • Sell-out growth was impacted by two opposing COVID-19 factors:

  • 1. Lockdown of stores dragging down revenue

  • 2. A shift in general consumer demand away from travelling etc. and towards among others gifting and jewellery

• • We do not have data suggesting what the net impact of these two factors is

• • Credit card data from the US, however, suggests that the jewellery category grew significantly in Q4 2020 vs prior year - indicating a material and temporary shift in demand

• • Having said that, the scattered market data available indicates that Pandora's overall Q4 performance was better than the market in general

Q4 illustrative performance

Q4 2020	Lost revenue in	Lost revenue	Extra spending	Underlying
Sell-out	physical stores	recovered online	from consumer	performance
growth	wallet shifting

Store operations in Q4 2020

of stores open 100% of stores with reduced opening hours

Around of stores temporarily closed

PREPARING FOR ANOTHER UNCERTAIN QUARTER

• • Pandora will continue to be socially responsible by creating safe environments for store staff and consumers

• • Three important trading events, Valentines, Mothers Day in UK and Chinese New Year lies ahead, and are instrumental for a successful Q1

• • Pandora will to the extent possible continue the successful initiatives from the Social distancing battle plan in Q4

• • Flexibility will be key again this quarter, as the ability to manage inventory between stores and online will secure availability of best sellers in the right channel

• • Continued strong traction on cost reset savings funding investments in Media and Marketing

COST SAVINGS RUN-RATE TARGET OF DKK 1.6B DELIVERED

COST CATEGORIES

COST INITIATIVES & IMPROVEMENTS

ANNUAL RUN RATE TARGET BY END 2020 (DKK billion)

SAVINGS ACHIEVED

(RUN RATE END 2020, DKK billion)

Cost of sales

• • Continued incremental savings through optimisation of production of existing assortment and existing production methods

• • Design to value review of high-running products done

  0.45 - 0.48

  Retail expenses

• • Improved productivity in store (sales per labour hour)

• • Further lease cost reductions driven by newly established Global Network team

  0.35 - 0.38

  Administrative expenses

• • New ways of working and travel norms has reduced travel expenses

• • Global Business Services organisation launched - savings to materialise from 2022

  0.25

  IT

• • IT Transformation completed

• • Efficiencies and savings delivered as planned

  0.20

• • Higher efficiency of marketing and media spending from global/local tenders

  Other

• • Insourcing of critical capabilities reducing external spend

• • Optimisation and retendering of packaging material

• • Introduction of sustainability initiatives e.g. 'ask for bags' in store

0.3-0.34

AGENDA OF TODAY

• 1. Executive summary

• 2. Business update incl. Programme NOW

3. Q4 2020 Financials

• 4. Financial guidance

• 5. Appendix

SOLID FINANCIAL RESULTS DESPITE CONTINUED NEGATIVE COVID-19 IMPACT

Revenue

Sell-out growth incl. temporarily closed stores

Organic growth

EBIT margin excluding restructuring costsFree cash flow incl.

lease payments

7.9

1%

4%

31.8%

3.8

DKK billion

(4% YoY growth in local currency)

(-5% in Q4 2019)

(-1% in Q4 2019)

(35.3% in Q4 2019)

DKK billion

(DKK 2.8 billion in Q4 2019)

• • Strong performance continues in Q4 despite 10% of the stores being closed due to COVID-19

• • Uplift from consumer spending away from traveling and services towards gifting and discretionary goods

• • Five out of seven key markets delivered positive sell-out growth despite negative COVID-19 impact

• • Social distancing battle plan pays off contributing to the solid Q4 performance

• • Material organic growth improvement in Q4 2020 - first quarter with positive organic growth since Q4 2017

• • Performance supported by online growth of +104% - both traffic and conversion rate are strong

• • Higher than anticipated EBIT margin driven by operating leverage from top-line growth

• • Gross margin remains strong - 1.5pp drag from raw materials and FX development compared with last year

• • Operating working capital ended in negative by the end of 2020 - lowest level ever

• • 2020 was the second consecutive year with cash conversion well above 100%

BACK TO POSITIVE GROWTH IN Q4 - FIRST TIME SINCE Q4 2017

Organic growth supported by phasing of sell-in and shift in channel mix

DKK million, %-p growth (approximately)

Revenue, Q4 2019

7,956

1%

1.5%

2.5%

4%

-5%

-1%Network expansion

Sell-out growth incl. temporarily closed storesPhasing of sell-in from Q3 to Q4

Channel mix & otherOrganic growth, Q4 2020

Forward integrationTotal revenue growth in

LC, Q4 2020

FXTotal revenue growth in

DKK, Q4 2020

• • Network expansion has a 1pp negative impact due to net 80 store closures

• • Sell-in to Wholesale partners was boosted by the phasing from Q3 to Q4 (equivalent negative impact in Q3 2020)

• • Channel mix supported the organic growth by 1pp (wholesale revenue converting to online revenue) and online freight income also supported organic growth by around 1pp

STRONG EBIT MARGIN IN A DIFFICULT ENVIRONMENT

EBIT margin at strong level despite COVID-19 headwind

%-p growth (approximately)

35.3%

1.5%

28.1%EBIT margin excl. Restructuring costs, Q4 2019

organic growth commoditiesLeverage fromFX &Non-recurring & COVID-19 costs

NOW investmentsProgrammeProgramme NOW cost reductions

EBIT margin excl. restructuring costs, Q4 2020

Restructuring costs

Reported EBIT margin, Q4 2020

• • Adverse foreign exchange development impacted the EBIT margin by -1pp driven by depreciation of the USD and GBP against the Danish krone, partly offset by a positive impact from weakening of the THB

• • Higher silver prices dragged down the margin by 1pp

• • COVID-19 related costs - mainly additional costs to mange social distancing requirements in the stores - combined with other non-recurring costs negatively impacted the margin by 2pp

• • Cost savings delivered were reinvested into driving the top-line and strengthening the organisation. In Q4 2020, significant investments in additional online capacity as well as in improved online customer service were made

• • Restructuring costs of DKK 0.3 billion represent the final one-off costs under Programme NOW. No further restructuring costs will be reported separately in 2021

CONTINUED STRONG FREE CASH FLOW IN Q4

Free cash flow increased from last year and leverage at low end of policy range

Q4 2019

Q4 2020

171%

120%

Cash conversion excl. IFRS 16

Record low working capital dipping into negative levels

Q4 2019

Q4 2020

3.1%

-2.1%

Working capital

3.8

Free cash flow incl. lease payments

(DKK billion)

%, last 12 months rolling revenue

1.1x

0.5x

NIBD to EBITDA excl. restructuring costs

2.3%

1.6%

CAPEX (% of revenue)

-16.9%

Trade receivables

Trade payables

20

Inventories

Strong free cash flow

• • Strong free cash flow again in Q4 2020 closing the quarter better than Q4 2019, coming from a continued solid development in operating working capital, a relatively lower CAPEX level and lower tax payments

Working capital turn negative - not a sustainable level

• • Inventories ended 2020 almost 10% below last year and below our targeted weeks of coverage. An increase in inventories in 2021 is planned

• • Trade receivables significantly down compared with 2019 as DSO close at an all time low in Q4

• • Trade payables at high level boosted by non- recurring payables related to restructuring costs

AGENDA OF TODAY

• 1. Executive summary

• 2. Business update incl. Programme NOW

• 3. Q4 2020 Financials

4. Financial guidance

5. Appendix

STABILISING THE TOP-LINE:

• • In 2021, Pandora expects to reach an important milestone: returning to top-line growth after three years of decline

• • In the absence of COVID-19 impact, Pandora would guide for slightly positive organic growth in 2021 versus 2019

  OFFICIAL 2021

  GUIDANCE

  Including impact from

  COVID-19

  ORGANIC REVENUE

  GROWTH

  Above 8%

  (Above -3% vs 2019)

  EBIT MARGIN Above 21%

• • Having said that, 2021 will be impacted by COVID-19 lockdowns and performance therefore remains highly uncertain. Around 6% drag on revenue is assumed in 2021

  Excluding impact from

  COVID-19

  ORGANIC REVENUE

• • In order to increase transparency on Pandora's thinking about the underlying business and as a reflection of the high level of uncertainty on the materiality and duration of the COVID-19 impact, Pandora therefore provides supplementary information about what the guidance would have been in the absence of COVID-19 lockdowns

GROWTH

Above 14%

(Above 2% vs 2019)

EBIT MARGIN Above 23%

2021 vs 2019

FULL YEAR 2021 ORGANIC GROWTH GUIDANCE BRIDGE

2021 vs 2020

>14%

2020 revenue

Above 14%

~-6%

Above 8%

Network development

Sell-out growth in own channels & sell-in to partners

2021 expectations pre COVID-19 impact

COVID-19 impact

2021 incl. COVID-19

Above -3%

>3%

Above 2%

~-5%

2019 revenueNetwork development

Sell-out growth in own channels & sell-in to partners

2021 expectations pre COVID-19 impact

COVID-19 impact

2021 incl. COVID-19

GUIDANCE ASSUMPTIONS 2021

• • The guidance is based on the assumption that approximately 25% of the stores will be temporarily closed during the first half of 2021 and that organic growth will be negatively impacted by around -6% for the full year

• • The guidance is also based on the assumption that the positive impact seen in late 2020 of reallocation of consumer spending away from travelling and services towards gifting and discretionary goods was not larger than the negative impact from temporary store closures

• • The impact from forward integration is expected to be around 1% in 2021. Finally, Pandora expects headwind from foreign exchange rates of approximately -1% taking total revenue growth in DKK to above 8% in 2021

FULL YEAR 2021 EBIT MARGIN GUIDANCE BRIDGE

%-points approximations

EBIT MARGIN GUIDANCE 2021

• • As illustrated on the left there is significant positive operating leverage in the business model

• • In the EBIT margin guidance this is not directly visible due to continued COVID-19 headwind and higher commodity prices

• • The assumed COVID-19 lockdowns in H1 2021 drags down the margin by 2pp

• • The quarterly phasing of the EBIT margin obviously depends on the COVID-19 development. As in prior years and in line with normal seasonality, Q4 is expected to be by far the most profitable quarter of the year

• • CAPEX for the year is expected to be in the range of DKK 1.0-1.2 billion

• • No major changes to the overall concept store network are expected

• • The effective tax rate is expected to be 22-23%, in line with 2020

CASH DISTRIBUTION IS SUSPENDED DUE TO UNCERTAINTY AROUND COVID-19

Ending 2020 with solid financials

Ample liquidity

DKK 10 billion (DKK 3 billion in cash)NIBD to EBITDA ratio

0.5x

(Low end of capital structure policy)

Cash distribution development since 2015 (DKK billion)

Share buyback (cancelled due to COVID-19)

2015

• • Pandora continues to be highly cash generative and has ample liquidity to initiate cash distribution to shareholders

• • By the end of 2020, financial leverage was 0.5x. This is in the low end of the capital structure policy (NIBD to EBITDA between 0.5 and 1.5x)

• • However due to the unprecedented uncertainty caused by COVID-19, Pandora considers it appropriate and prudent to await further certainty about the pandemic before re-initiating cash distribution to the shareholders

• • At the Annual General Meeting in March 2021, Pandora will ask shareholders to authorise Pandora to distribute up to DKK 15 extraordinary dividend per share

• • The Board of Directors already has the authority to initiate a share buyback at any point in time

  2016

  2017

  2018

  2019

  2020

  2021

• • The capital structure policy remains unchanged

EXCITING PRODUCT LINE-UP FOR KEY TRADING EVENTS IN Q1 2021

January 2021

February 2021

March 2021

CLOSING REMARKS

APPENDIX

PANDORA CONSUMERS ARE ACROSS GENERATIONS

Age distribution of our consumers who have purchased Pandora within the last 12 months

Source: Pandora Brand Tracker 2020 (n=2508)

Note: Markets include IT, ES, FR, UK, DE, RU, CA, CN, AU *Age range stops at 54 in China and Russia.

PANDORA'S ONLINE BUSINESS & PRESENCE

Online store development

Online platforms

DKK million

2,600

Online store % of Group RevenueOnline store revenue %

2,000

2,400

2,200

1,800

1,000

1,400

1,600

1,200

800

600 400 200 0

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020

55

50

45

40

35

30

25

20

15

10

5

0

Pandora online stores available in 20 markets across all regions, incl. China (own and Tmall distribution), Australia, Italy, the UK, the US etc.

More than 345 million visits on the Pandora online stores in 2020

18 million Pandora club members worldwide

16.9 million Facebook followers

8.3 million followers on Instagram

REVENUE DEVELOPMENT BY CHANNEL AND BY PRODUCT CATEGORY

Channel development

DKK million

Q4 2020

Growth, Q4/Q4, LC

Q4 2020 share of revenue

FY 2020

Growth, FY/FY, LC

FY 2020 share of revenue

FY 2020 share of

Pandora owned retail

- of which concept stores

- of which online stores - of which other points of sale

Wholesale

- of which concept stores

- of which other points of sale

5,525 2,725 2,533 266 2,143 1,182 961 223

12% -21% 104% 7% -10% -14% -5%

70% 35% 32% 3% 27% 15% 12%

13,426 7,321

• -2% 71%

• -29% 39%

  5,483 622 4,949

• 103% 29%

• -18% 3%

• -25% 26%

  2,714 2,235 634

• -28% 14%

• -21% 12%

  Third-party distribution Total revenue

  -10%

  3%

• -33% 3%

  7,891

  4%

  100%

  19,009

• -11% 100%

Product category development

DKK million	Q4 2020	Growth, Q4/Q4, LC	Q4 2020 share of revenue	FY 2020	Growth, FY/FY, LC	FY 2020 share of revenue
Charms Bracelets Rings Earrings Necklaces & Pendants	3,936 1,614 1,113 580 649	1% 9% 5% 8% 10%	50% 20% 14% 7% 8%	9,646 3,751 2,774 1,319 1,519	-13% -8% -8% -9% -6%	51% 20% 15% 7% 8%
Total revenue	7,891	4%	100%	19,009	-11%	100%

FY 2020 share of

STORE NETWORK DEVELOPMENT

Number of points of sale
Concept stores	2,690	1	-80
- of which Pandora owned	1,382	3	-15
- of which franchise owned	797	-12	-59
- of which third-party distribution	511	10	-6
Other points of sale	4,402	-61	-255
- of which Pandora owned	235	3	28
- of which wholesale	3,602	-53	-210
- of which third-party distribution	565	-11	-73
Total points of sale	7,092	-60	-335

KEY MARKETS REVENUE AND SELL-OUT GROWTH OVERVIEW

DKK million

Q4 2020

Sell-out growth	Share of	Sell-out growth	Share of
Organic Growth	incl. temporarily	revenue,	Organic Growth	incl. temporarily	revenue,
Q4/Q4	closed stores	Q4 2020	FY 2020	FY/FY	closed stores	FY 2020

UK Italy France Germany US Australia China	1,345 9% 1% 17% 2,960 6% -2% 16% 825 -3% -12% 10% 2,021 -11% -16% 11% 494 418 1,982 537 1% 7% 20% 24% 1% 5% 22% 19% 6% 5% 25% 7% 1,154 1,014 4,505 1,120 -1% 6% 0% 2% -4% 6% 4% 5% 1% 24% -2% 6% 322 -23% -25% 4% 1,261 -35% -35% 7%
Group 7,891 4% -2% 100% 19,009 -11% -12% 100%

CONCEPT STORES PER MARKET

Number of concept stores

Q4 2020

Number of concept stores

Q3 2020

Number of concept stores

Q4 2019

Growth

Q4 2020

/Q3 2020

Growth

Q4 2020 /Q4 2019

Growth O&O storesNumber of O&O

Q4 2020

Growth O&O storesNumber of O&O

Q3 2020

Number of O&O

Q4 2019

/Q3 2020

Q4 2020

Q4 2020 /Q4 2019

Greece 11 11

14

0 -3 0 0 0 0 0

217 138 121 55 29 25 26 23 19 11 7 7

Ireland 26 26

29

0 -3 21 21 24 0 -3

United Arab Emirates 17 18

18

-1 -1 17 18 18 -1 -1

Italy 146 146

148

0 -2 107 107 107 0 0

South Africa 30 30

30

0 0 28 28 28 0 0

Spain 92 90

87

2 5 70 70 70 0 0

Russia 174 173

184

1 -10 0 0 0 0 0

Israel 17 17

17

0 0 0 0 0 0 0

Ukraine 31 31

29

0 2 0 0 0 0 0

Belgium 22 23

24

-1 -2 14 14 15 0 -1

UK

Germany

France

Poland

Turkey

Netherlands

Portugal

Romania

Czech Republic

Austria

Saudi Arabia 13 13

13

0 0 0 0 0 0 0

Sweden

Denmark

217 139 121 52 30 25 26 23 19 11 7 10

230 146 122 52 30 26 26 23 19 14 12 10

0 -1 0 3 -1 0 0 0 0 0 0 -3

-13 -8 -1 3 -1 -1 0 0 0 -3 -5 -3

139 134 77 38 29 25 0 12 10 9 7 7

139 135 77 37 30 25 0 12 10 9 7 10

126 140 77 37 30 26 0 12 10 9 12 10

0 13

-1 -6

0 0

1 1

-1 -1

0 -1

0 0

0 0

0 0

0 0

0 -5

-3 -3

Nigeria US 8 8 403 401

10 402

0 2 -2 1 0 154 0 153 0 158 0 1 0 -4

Brazil

84 77

Canada 77 78

79

-1 -2 30 23 23 7 7

87 77

Mexico

95 69

-3 0

-11 8

54 49

54 48

57 45

0 -3

1 4

Caribbean 27 26

27

1 0 0 0 0 0 0

China

234

236

237

-2

-3

222

225

226

-3 -4

Australia 122 123

128

-1 -6 38 37 39 1 -1

Philippines

36 24 18

Malaysia 27 28

31

-1 -4 0 0 0 0 0

34 23 18

Thailand 21 21

20

0 1 0 0 0 0 0

New Zealand

Hong Kong

36 30 18

2 1 0

0 -6 0

0 22 9

0 21 9

0 28 9

0 0

1 -6

0 0

Singapore 11 11	12	0 -1 11 11 11 0 0
Rest of the World 264 260	273	4 -9 49 49 50 0 -1
All markets 2,690 2,689	2,770	1 -80 1,382 1,379 1,397 3 -15

DKK million

Q4 2020 reported

Q4 2020 Restructuring costs

Q4 2020 excl. restructuring costs

Q4 2019 reported

Gross profit 5,950	-21 5,971	6,032
Gross margin 75.4% Operating expenses (incl. D&A) -3,738 - of which sales, distribution and marketing expenses -3,060 - of which administrative expenses -678	- 75.7% -276 -3,462 -42 -3,018 -234 -444	75.8% -3,730 -2,933 -797
EBIT 2,212	-296 2,508	2,302
EBIT margin 28.0%	31.8%	28.9%

DKK million

FY 2020 reported

FY 2020 Restructuring costs

FY 2020 excl. restructuring costs

FY 2019

PROFITABILITY DEVELOPMENT
Revenue	7,891	-	7,891	7,956
Cost of sales	-1,941	-21	-1,920	-1,924
Revenue	19,009	-	19,009	21,868
Cost of sales	-4,634	-159	-4,475	-5,966

Gross profit 14,375	-159 14,534	15,903
Gross margin 75.6% Operating expenses (incl. D&A) -11,691 - of which sales, distribution and marketing expenses -9,155 - of which administrative expenses -2,536	76.5% -1,039 -10,652 -204 -8,951 -834 -1,702	72.7% -12,074 -9,305 -2,770
EBIT 2,684	-1,197 3,881	3,829
EBIT margin 14.1%	20.4%	17.5%

WORKING CAPITAL AND CASH MANAGEMENT

DKK million

Q4 2020

Q3 2020

Q2 2020

Q1 2020

Q4 2019

Inventory

- Share of revenue (last 12 months)

Trade receivables

- Share of revenue (last 12 months)

Trade payables

- Share of revenue (last 12 months)

Operating working capital

1,949

10.3%

870

4.6%

-3,211

-16.9%

-392

- Share of revenue (last 12 months)

Free cash flow excl. IFRS16

CAPEX % of revenue

NIBD to EBITDA excl. restructuring costs (last 12 months)

-2.1%

3,780

124

1.6%

0.5x

2,619 13.7% 607 3.2% -2,425 -12.7% 801 4.2% 457 117 2.9% 1.1x

Selected KPIs

Days Sales of Inventory

- last 6 months of COGS (183 days)

Days Sales of Outstanding

- last 3 months of wholesale and third-party distribution revenue (90 days)

2,250 11.6% 602 3.1% -2,316 -11.9% 535 2.8% 943 121 4.2% 1.1x

2,155 10.1% 1,081 5.1% -2,337 -11.0% 899 4.2% -272 129 3.1% 1.3x

2,137 9.8% 1,643 7.5% -3,095 -14.2% 684 3.1% 2,760 184 2.3% 1.1x

126

288

228

134

109

23

30

89

46

36

HEDGING POLICY AND RAW MATERIALS SHARE OF PRODUCTION COSTS

Commodity hedging policy is to hedge around 70% of future 12 months use in production

For illustrative purposes

Raw material share of cost of goods sold

OtherOther raw materialsGoldSilver

HedgedRealised

100%

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Q4 2021

• • With an additional 2-4 months time lag from production to sale of the product and effect on the income statement, the impact of the recent increase in metal prices will be gradual.

• • Other cost of goods sold consist of labour, cost to third-party set-ups (i.e. plating) and licence, customs, freight cost, remelt and minor provisions

2016

2017

2018

2019

2020

• • 'Other raw materials' decreased in 2020 as plating is done in-house and expensed mainly through 'Other'.

OVERVIEW OF THE GLOBAL JEWELLERY MARKET

Source: Euromonitor

SUSTAINABILITY

We believe high-quality jewellery, superior business performance and high ethical standards go hand in hand, and we craft our jewellery with respect for resources, environment and people. We will become carbon neutral in our operations by 2025 and have committed to set Science Based Targets for reducing greenhouse gas emissions across the full value chain.

Climate and As the world's largest jewellery maker, we are

environment

determined to reduce our climate footprint and help set an example for the wider industry.

We are committed signatories of the United Nations Global Compact and certified member of the Responsible Jewellery Council since 2012.

Carbon neutral in own operations by 2025

100% renewable energy at our crafting facilities achieved in 2020

Committed to set Science Based Targets to reduce emissions across full value chain

Pandora supports the UN Sustainable Development Goals Four goals in particular guide our strategy as this is where we can contribute the most.

Frontrunner in ESG Investment Performance

90%

For the fifth consecutive year, we received the top rating of AAA in the MSCI ESG Ratings assessment.

of waste was recycled at our crafting facilities

Our two largest crafting facilities and global office are Leadership in Energy and

Environmental Design (LEED) Certified.

Data per Dec. 31, 2020

SUSTAINABLE PRODUCTS

From 60%1 recycled in 2020 to 100% in 2025

WORKPLACE AND SOCIETY

Partnering with UNICEF to empower young people

of all stones are man-made

By 2025, 100% of products will be made from recycled silver and gold

Pandora and UNICEF have launched a global partnership to support the most vulnerable children, especially girls, around the world to lead healthier and safer lives and fulfil their potential. Through sale of Jewellery and other initiatives, Pandora will raise funds for UNICEF's important work.

100% certified silver and gold grain suppliers

Pandora is committed to ensuring that our business practices, including our suppliers, live up to high social and environmental standards.

At Pandora, we are committed to fostering a culture of diversity and inclusion in and beyond our own operations. We will not tolerate any form of discrimination and are committed to gender diversity in our organisation. We will continue to advance our approach to diversity and inclusion.

75%

of our Board of Directors are women and 25% are men

Executive Leadership Team

12.5% are women 87.5% are men

Responsible

Sourcing

Programme

Inclusive workspace

Data per Dec. 31, 2020

INVESTOR RELATIONS CONTACT DETAILS

Investor Relations team

Share information

ADR information

John Bäckman

VP, Investor Relations, Tax & Treasury [phone]

Kristoffer Aas Malmgren Director, Investor Relations [phone]

Mikkel Johansen

Analyst, Investor Relations [phone]

Trading symbol

Identification number/ISIN

GICS

Number of shares

Sector

Share capital Nominal value, DKK

Free float (incl. treasury shares)

PNDORA

DK0060252690

25203010

100,000,000

Apparel, Accessories & Luxury

Goods

100,000,000

1 100%PANDY

Sponsored level 1 programme (J.P. Morgan)

4 ADRs : 1 ordinary share

(4:1)

US 698 341 2031

Pandora Q4 2020 - Investor presentation