Pandora A/S (OMX: PNDORA) revenue decreased by 15% in Q4 2011 to dip below 2 billion DKK. The decline was robust across all geographies with the biggest drop in Europe and the smallest in Americas. Asia Pacific sales were down by 14.5% (16.5% in local currencies). Gross margin was up to 72.6% on price increases but EBITDA and EBIT margins were down to 26.8% (37.3%) and 24.3% (34%) respectively. Reported fourth quarter net profit was 555 million whilst adjusted numbers were down to 340 million. Free cash flow increased to 930 million.
In 2011 the jewellery maker had revenues of 6.7 billion, an EBITDA margin of 34.3% and net profit of just over 2 billion. The Board of Directors proposes a 5.50 DKK dividend per share, which is 10% more than for 2010. The dividend policy is to distribute 35% of net profits as dividends and this is in line with that.
The stock is down 7% after the report to trade below 80 DKK. This is mainly due to less-than stellar outlook calling for a mid-single digit revenue growth and low 60’s gross margin due to commodities prices and upcoming selling price reductions. EBITDA margin is expected to be in the mid 20’s and CAPEX around 300 million. The assumptions are based on certain currency levels and gold price of 1,534 USD/oz plus a silver price of 32.7 USD/oz.
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