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70 • FINANCIAL REVIEW
PANDORA ANNUAL REPORT 2016
PANDORA generated a free cash flow of DKK 5,358
million in 2016 compared with DKK 2,449 million in 2015,
corresponding to a cash conversion of 72.4% compared
with 42.1% in 2015. The increase was primarily driven by
an increase in profit as well as 2015 being impacted by
tax and interest payment of DKK 995 million related to a
settlement made with the Danish tax authorities.
Operating working capital at the end of 2016 was
13.7% of revenue, compared with 14.3% at the end of
2015.
Inventories were DKK 2,729 million, an increase of
16% compared with 2015, and corresponding to 13.5%
of revenue compared with 14.1% for 2015. The nominal
increase was primarily driven by higher activity and an
increase in PANDORA-owned and stores. Compared with
2015, silver and gold prices affected inventories with a
decrease of around 7%, partially offset by an increase from
currency of 4%.
Trade receivables increased to DKK 1,673 million, an
increase of 23% compared with 2015 and corresponding
to 8.2% of revenue compared with 8.1% in 2015.
Trade payables increased to DKK 1,622 million in 2016
compared with DKK 1,329 million in 2015. The increase in
receivables and payables was primarily related to a higher
level of activity.
PANDORA invested a total of DKK 1,199 million in
CAPEX in 2016, including intangible assets of DKK 371
million mainly related to key money in connection with the
opening of PANDORA-owned stores and IT investments.
Investments in property, plant and equipment of DKK 828
million mainly consisted of investments in the crafting
facilities in Thailand and leasehold improvements related
to the opening of several stores during the year. CAPEX was
5.9% of 2016 revenue compared with 6.6% in 2015.
Interest-bearing debt was DKK 3,345 million at the end
of 2016 compared with DKK 2,810 million at the end of
2015, and cash amounted to DKK 897 million compared
with DKK 889 million at the end of 2015.
Net interest-bearing debt (NIBD) at the end of 2016
was DKK 2,448 million, corresponding to a NIBD to
EBITDA ratio of 0.3x of the last twelve months’ EBITDA
compared with DKK 1,921 million at the end of 2015, also
corresponding to a NIBD to EBITDA ratio of 0.3x.
DEVELOPMENT IN OPERATING WORKING CAPITAL
Share of
Share of
revenue revenue
DKK million
2016
2015 Growth
2016
2015
Inventories
2,729
2,357
16% 13.5% 14.1%
Trade receivables
1,673
1,360
23% 8.2% 8.1%
Trade payables
-1,622
-1,329
22% -8.0% -7.9%
Total
2,780
2,388
16% 13.7% 14.3%
BALANCE SHEET AND
CASH FLOW STATEMENT