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ANNUAL REPORT 2010

PANDORA - DENMARK

PANDORA – A TRUE NEW INTERNATIONAL JEWEL How do you manage to almost double the size of an already large company with profits keeping pace?

Quartz+Co

PANDORA’S GROWTH CURVE Number of produced units in millions

Active markets

50

50

40

40

30

30

20

20

10

10

1982

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2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Active markets Produced units

PANDORA seems to have found the way. The company was founded in 1982 by Danish goldsmith Per Enevoldsen and his wife Winnie. In 1989, own production was established in Thailand, and in 2000 their now well-known charm bracelet concept was launched in Denmark. These were the first in a long series of impressive milestones resulting in one of the most successful IPOs in recent European history. PANDORA is the third-largest jewellery brand in the world (measured on 2009 estimated retail sales) with an expected turnover of DKK 6.2 billion (Q3 2010 outlook) for the 2010 financial year. With an estimated EBITDA margin above 40% for 2010, the profits are no less impressive.

Entering a new league PANDORA has been on a long journey from being a productoriented supplier to becoming a global jewellery brand.

Today, the company’s products are sold not only through more than 10,000 points of sale, but also in more than 1,000 PANDORA branded concept stores and shop-in-shops where the assortment, service and brand experience can be controlled. Peers are no longer local players, but super brands like Cartier and Tiffany & Co. with a century-long heritage.

PANDORA has entered a new high-profile league with stores located in the most exclusive high street locations in the world’s most lively shopping destinations. Here, consistent high performance, brand building and retail execution are the entry tickets along with the product itself.

majority of franchise stores and selected own stores.

Reaction time as well as lines of communication from the “front line” to production and supply chain are short and effective

•

Strong financial performance. PANDORA has reinvested their positive cash flow to continuously develop the business in new markets, new product lines and categories, retail support, etc.

Keeping the right balance Naturally, the mere speed of growth and “the rules in the new league” have set new expectations to PANDORA’s production capacity, ways of working, best practice tools, systems, organisational design, people and culture. It has therefore been crucial to PANDORA to keep the right balance between maintaining and fuelling the entrepreneurial spirit that created PANDORA while building scalable business structures and creating transparency.

PANDORA has become a true new international jewel – for women (and their husbands), retailers, investors and employees. Although PANDORA’s development is a unique story of success and immense growth with the latest IPO as the culmination of their journey, the dish of the day is still crystal clear focus and sticking to the strategy that has been defined to retain both the high growth levels and PANDORA’s impressive market position.

Clearly, PANDORA’s great success can be attributed to persistent hard work and to consumers’ unmatched fondness for the PANDORA jewellery. However, the stable growth would not have been possible had it not been for a number of commercial building blocks: ABOUT • A global footprint and successful new market entries.

Today, you can find PANDORA in more than 50 markets across six continents • A vertical business model. Today, PANDORA owns and controls design, production, distribution and sales subsidiaries, and controls retail sales via a

PANDORA was established in 1982. Eighteen years later, in 2000, the famous charm bracelet concept was launched on the Danish market. The PANDORA brand with its collection of currently over 1,600 unique jewellery designs is sold directly or through third-party distributors to around 10,000 points of sale worldwide, including more than 320 PANDORA branded concept stores.

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