NOTES
94•Consolidated financial statements
PANDORAANNUAL REPORT2014
BUSINESSCOMBINATIONS
5.1
Acquisitions in2014
Acquisitionof a net total of 22 concept stores from
Hannoush
On 22 September 2014, PANDORA acquired 27 stores
fromUS jeweller Hannoush in a business combination.
With the acquisition of the 27 stores PANDORAwill
execute its strategy to refresh its network in theNortheast
region of theUS.
Thepurchase considerationwasDKK162million and
was paid in cash.Therewerenoother significant terms or
payments related to the acquisition.The transaction costs,
DKK1million, havebeen recognised as administrative
expenses inprofit or loss for 2014.
Fiveof the acquired stores locatedoutside theNortheast
regionwere re-sold to an existing franchiseeon22
September 2014.The saledidnot have any effect onprofit or
loss.Thenet cash effect from theHannoush acquisitionwas
anoutflowofDKK143million.
Assets acquired and liabilities assumedmainly comprise
inventories, equipment andobligations to restore the leased
premises. Inventories havebeenmeasured atmarket value
basedon the saleabilityof the individual items.
Goodwill from the acquisition amounted toDKK81
million (excluding goodwill ofDKK6million related to
thefive stores thatwere re-sold), and is attributable to the
expected synergies from an increasedpresence in the region,
including the effect from a refreshednetwork.Noneof the
goodwill recognised is deductible for income taxpurposes.
The22 stores contributed approximatelyDKK95million
in revenue andDKK22million innet profit since the
acquisitionon22 September 2014. If the stores hadbeen
acquiredon1 January2014, revenue andnet profitwould
havebeenDKK115million andDKK4millionhigher
respectively.
Other business combinations in 2014
PANDORA acquired concept stores in theUK, Germany
and theNetherlands in2014.Thesewere accounted for as
business combinations. Assets acquiredmainly consist of
keymoney and other assets relating to the stores. Of the
purchase price, DKK6millionwas allocated to goodwill.
None of the goodwill recognised is deductible for income
tax purposes.
The impact on revenue and net profit for 2014 from
the acquired storeswas insignificant. If the stores had
been owned from the beginning of the year, the impact
on PANDORA’s revenue and net profit would have been
equally insignificant.
2014
2013
DKKmillion
Hannoush
Other
Total
Brazil
Other intangible assets
-
1
1
13
Property, plant and equipment
4
5
9
9
Receivables
2
-
2
3
Inventories
77
-
77
12
Other current assets
-
-
-
4
Assets acquired
83
6
89
41
Non-current liabilities
3
-
3
5
Payables
3
-
3
18
Other non-current liabilities
2
-
2
5
Deferred tax
-
-
-
3
Liabilities assumed
8
-
8
31
Total identifiable net assets acquired
75
6
81
10
Goodwill arising from acquisition
87
6
93
30
Purchase consideration
162
12
174
40
Cashmovements on acquisition:
Purchase consideration transferred
162
12
174
40
Deferred payment
-
-
-
-2
Net cashflows on acquisition
162
12
174
38
Cash flow sale of businesses
1
19
-
19
-
Net cashflow from business combinations
143
12
155
38
1
The sale of businesses includedmainly inventories, DKK 12million, assets related to stores, DKK1million, and goodwill, DKK 6million.
SECTION 5: OTHER DISCLOSURES, CONTINUED
