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NOTES
Consolidated financial statements • 113
BUSINESS COMBINATIONS, CONTINUED
5.1
UK
On 2 April 2015, PANDORA acquired 100% of the shares
in four Evernal companies comprising concept stores in
Liverpool, Blackpool, Trafford and Arndale.
The purchase price was DKK 70 million. Assets acquired
mainly consist of inventories and other assets and liabilities
relating to the stores. Of the purchase price, DKK 74 million
was allocated to goodwill. Goodwill is attributable to
the increased margins from owning these already well-
performing stores. None of the goodwill recognised is
deductible for income tax purposes.
Transaction costs, DKK 3 million, have been recognised
as sales expenses.
The contribution to Group revenue and net profit for the
period 2 April – 31 December 2015 was insignificant.
China
On 1 July 2015, PANDORA acquired assets related to
the distribution in China from Oracle Investment (Hong
Kong) Limited in a business combination. In addition to
the distribution rights, assets comprised inventories and
assets related to 49 branded stores - 30 concept stores
and 19 shop-in-shops. The acquisition was part of a
strategic alliance with Oracle in China to jointly distribute
PANDORA jewellery in China until 31 December 2018. On
expiry of the agreement, PANDORA will take over the full
distribution of PANDORA jewellery in China. Some stores
are operated by Oracle under consignment agreements
with PANDORA until licenses and other sanctions are
obtained. PANDORA thus obtained control of all stores at
the acquisition date 1 July 2015.
Assets acquired are mainly inventories, the reacquired
distribution rights (0.5 year remaining) and other non-
current assets related to the acquired stores. The total
price will be calculated based on revenue in 2018 and is
expected to be DKK 208 million. Assets and inventories
acquired will be paid when transferred. The remaining
payment – the put option – will be delayed until the
distribution agreement ends in 2018.
Goodwill of DKK 94 million is attributable to the expected
synergies from PANDORA being able to accelerate the
store roll-out, enhance the retail focus and make significant
marketing investments in the Chinese market. Oracle will
contribute with its in-depth knowledge of the retail market
and the Chinese consumer as well as its insight into the
Chinese real estate market, which will help PANDORA
secure the most attractive locations.
Transaction costs were DKK 13 million, which have
been recognised as administrative expenses.
The contribution to Group revenue and net profit
for the period 1 July – 31 December 2015 was DKK 251
million and a loss of DKK 57 million respectively.
Other business combinations in 2015
PANDORA acquired concept stores in the US and
Germany in 2015. These were accounted for as business
combinations. Assets acquired mainly consist of inventories
and other assets relating to the stores. Of the purchase
price, DKK 38 million was allocated to goodwill. None
of the goodwill recognised is deductible for income tax
purposes.
The contribution to Group revenue and net profit for the
period 1 January – 31 December 2015 from the acquired
stores was insignificant.
If all the acquisitions in 2015 had been made on 1
January 2015, consolidated pro-forma revenue and net
profit would have been DKK 17.0 billion and DKK 3.7
billion respectively.
SECTION 5: OTHER DISCLOSURES, CONTINUED