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NOTES
112 • Consolidated financial statements
PANDORA ANNUAL REPORT 2016
SECTION 5: OTHER DISCLOSURES, CONTINUED
Contribution from acquisitions in 2016 to Group revenue
and net profit for the period 1 January – 31 December 2016
was insignificant.
Acquisitions in 2015
Strategic alliance in Japan
On 1 January 2015, PANDORA acquired assets related to
distribution in Japan from Bluebell in a business combination.
In addition to the distribution rights, assets included branded
stores – one concept store and nine shop-in-shops. The
acquisition was part of a strategic alliance with Bluebell in
Japan with the intent to jointly distribute PANDORA jewellery
in Japan.
The agreement initially has a five-year term. On termination
of the agreement, PANDORA will take over the full distribution
of PANDORA jewellery in Japan. The total amount to be paid to
Bluebell will depend on the realised revenue in 2019. The fair
value of the put option is estimated at DKK 58 million.
Intangible assets comprise reacquired distribution rights
(remaining lifespan around three years) of DKK 30 million.
The fair value is based on comparison of peer markets and
the EBITDA that can be expected from similar stores in
these markets.
Inventories, DKK 6 million, have been measured at
market value based on the saleability of the inventory.
Goodwill of DKK 20 million is attributable to
the expected synergies from combining PANDORA’s
willingness and ability to invest in the Japanese market with
Bluebell’s in-depth knowledge of the Japanese retail market,
Japanese consumers and insight into the Japanese real
estate market, to build a considerable presence in Japan.
None of the goodwill recognised is deductible for income
tax purposes.
Transaction costs, DKK 3 million, have been recognised
as administrative expenses in profit or loss for 2014.
BUSINESS COMBINATIONS, CONTINUED
5.1
The contribution to Group revenue and net profit for the
period 1 January – 31 December 2015 was insignificant.
Acquisition of PAN ME A/S
On 16 January 2015, PANDORA acquired 100% of the
shares in PAN ME A/S, which holds the rights to distribute
PANDORA jewellery in the United Arab Emirates (UAE),
Bahrain, Qatar and Oman.
The purchase price of DKK 112 million was primarily
related to non-current assets and inventories related to 11
concept stores and three shop-in-shops in the UAE and the
distribution rights.
Intangible assets comprise reacquired distribution rights
(with a remaining lifespan of around one year) of DKK
5 million. The fair value is based on comparison of peer
markets and the EBITDA that can be expected from similar
stores in these markets.
Inventories of DKK 25 million have been measured
at market value based on the saleability of the inventory.
Receivables mainly consist of prepayments and other
receivables, which are recognised at the value of the expected
cash inflow. Goodwill, DKK 55 million, is attributable to the
expected synergies from PANDORA’s direct involvement
in the region and establishing Dubai as the future hub for
PANDORA’s activities in the Middle East and North Africa.
None of the goodwill recognised is deductible for income tax
purposes.
Transaction costs, DKK 2 million, have been recognised as
administrative expenses, mainly in 2014.
The contribution to Group revenue and net profit for the
period 16 January – 31 December 2015 was insignificant.