No. 69 PANDORA. Americas. Free cash flow. corresponding. above 25%

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1 No. 69 COMPANY ANNOUNCEMENT 26 February 2013 PANDORA ANNOUNCES ITS FINANCIAL RESULTS S FOR GROUP REVENUEE WAS DKK 6,652 MILLION. EBITDA MARGIN WAS 24.9%. NET PROFIT WAS DKK 1,2022 MILLION. FREE CASH FLOW WAS DKK 1,151 MILLION. The reported full year figuress in this report are slightly better than anticipated, but adversely impacted by the effect from the t stock balancing campaign launched on 21 February. Group revenue in was DKK 6,6522 million compared to DKK 6,658 million in 2011: Americas increased by 5.3% (2.5%% decrease in local currency) Europe decreased by 3.1% (5.0% decrease in local currency) Asia Pacific decreased by 10.4% (17.5% decrease in local currency) Gross margin decreased to 66.6% in (compared to a gross margin of f 73.0% in 2011) EBITDA margin was 24.9% in (compared to an EBITDA margin of 34.3% in 2011), EBITDA decreased by 27.3% to DKK 1,658 million EBIT margin was 22.2% in (compared to an EBIT margin of 30.9% in 2011), EBIT decreased by 28.3% to DKK 1,475 million Reported net profit decreased by 41.0% to DKK 1,,202 million in (compared to a net profit of DKK 2,037 million in 2011). Excluding the earnout DKK 1,151 million (compared to ann adjusted net profit of provision adjustment for PANDORA CWE, net profit decreasedd by 24.6% too DKK 1,526 million in 2011) Free cash flow was DKK 1,,151 million in (compared to DKK 1,670 million in 2011) For the financial year, the Boardd of Directors proposes a dividend off DKK 5.50 per share corresponding to a payout ratio of 59% (compared to 35% in 2011) PANDORA expects revenue for 2013 to be above DKK 7.2 billion and expects an EBITDA margin above 25% Today PANDORA will initiate a share buyback programme for up to DKK 700 million to be completed during 2013 with the primary purpose of reducing the Company s share capital at the Annual General Meeting in

2 FINANCIAL GUIDANCE FOR 2013 PANDORA expects revenue for 2013 to be above DKKK 7.2 billion and a expects an EBITDA margin above 25%. PANDORA expects CAPEX to be around DKK 300 million and expects an effective tax rate of approximately 19%. During 2013 PANDORA expects to open approximately 150 Concept stores. BOARD OF DIRECTORS EVALUATION OF CAPITAL STRUCTURE As previously communicated the Board of Directors has analysedd what it believes to be an optimal capital structure for the Company, including making a decision onn how to distribute surplus capital to the shareholders. The outcome of thiss analysis is a combination of a change in dividend policy as well as the initiation of a share buyback programme. The Board of Directors has previously targeted an average dividend payout ratio of approximately 35% of the consolidated net profit for thee year defined in accordance with IFRS. Going forward, the Board of Directors aims to maintain a stable and then increasing nominal dividend per share, using the dividend for 2011 of DKK 5.50 per share as the reference point. In addition and taking the above into account, the Board of Directors will, onn an ongoingg basis, determine whether any surplus capital should effectively be distributed through share buyback programmes or as an extraordinary dividend in orderr to reach ann optimal capital structure, which the Board of Directors, at thiss point in time, view as a NIBD/EBITDA ratio of 01x on 12 months rolling basis. This policy and PANDORAs ability to distribute surplus capital to the t shareholders will be dependent upon, amongst other things, the availability of sufficient distributable reserves, the Company s financial condition, results of operations, capital requirements and such other factors as the Board of Directors may deem relevant. Share buyback programme for The Board of Directors of PANDORA has decided to launch a share buyback programme in i 2013 (the Programme ), under which PANDORA expects to buy back its own shares up to DKKK 700 million. According to of the decision made at the Extraordinary General G Meeting held on 17 September 2010, PANDORAs Board is until 17 September 2015 authorised too acquire own shares on behalf of the Company with a total nominal value of up to 10 % of PANDORAs share capital c (the Authorisation ). The Programme will end no later than 31 December The purpose of the share buyback is to reduce PANDORAs share capital and to meett obligationss arising from employee share option programmes. Thee Board of Directors intends to propose to PANDORAs shareholders at the Annual General Meeting in 2014 that PANDORAs share capital be reduced by the shares purchased under the t Programme. PANDORA may alsoo use the shares purchased under the Programme to meet obligations arising from employee sharee option programmes. Deducting existing treasury shares (182,925), the net obligation at 31 December was 925,198 shares. 2 28

3 The Programme is being implemented in accordance with the provisions of the European Commission s regulation no. 2273/2003 of 22 December 2003 ( safe harbour ), which protects listed companies against violation of insider legislation in connection with share buybacks. PANDORA has appointed Nordea Bank Danmark A/S ( Nordea ) as a Lead Manager of the Programme. Nordea will, under a separate agreement with the Company, C buy back shares on behalf of PANDORA and make trading decisions in respect of PANDORA shares independently of and without influence from PANDORA. PANDORA may terminate the Programmee at any time. In the event such decision is taken, PANDORA shall give notice thereof, and Nordea shalll consequently no longerr be entitled to buy shares on behalf of PANDORA. The majority shareholder, Prometheus Invest ApS, has undertaken to participate in the Programme on a pro rata basis, in order to t secure that the current free float percentage is not reduced. The participation is planned so that Prometheus Invest ApS on each day d of trading will sell a number of PANDORA sharess at the volume weightedd average purchase pricee of the shares purchased under the Programme in the market on the relevant day of trading. The Programme will be implemented under the Authorisation and the following framework: The maximumm total consideration forr PANDORA shares bought back in thee period of the t Programme is DKK 700 million The Programme will end no later than 31 December 2013 and a maximumm of 12,831,,400 PANDORA shares will be bought under the Programme, which together with the Company s holding of treasury shares of 182,9255 shares at the date of this announcement will equal 10% of the sharess issued in PANDORA The maximumm number off shares to bee bought per daily market session will be the equivalent to 25% of the average daily volume of shares in the Company traded on NASDAQ OMX Copenhagen during the preceding 20 business days Shares cannot be purchased at pricess higher than the two following prices: a) The price of the latest independent trade b) The price of the highest independent bid on NASDAQ OMX Copenhagen On a weekly basis the Company will issuee an announcement in respect of transactions made under the Programme. 3 28

4 CEO Bjørn Gulden, said: 2 was a year of resetting the business. We started the year with two major initiatives: realigning the products and prices and improving the quality of stock with our retailers by replacing slow moving items with best sellers. Afterr a difficult first half where we worked hard on implementing these initiatives, it is encouraging to see the positive developments in Q3 and. The new innovative products at commercial prices launched in have soldd in and out very well. The retailers have reacted very positively y to our stock balancing programme p and we can now see that their stock have improved, both in terms of quality and valuee compared to a year ago. The salesout has improved in all major markets and we are especially pleased to see the development in Australia and the UK. Thee US has continued to perform well. The German market has improved in salesout butt it will take more time and consistent execution until we improve our salesin. The Asian strategic review is continuing, the first result of this being that we have changed our distributor in Japan. We are continuing to invest in new markets and have in seen a very positive development in markets like Russia, Italy and France. The results achieved in is a confirmation of the strength of the t PANDORA brand, ourr positioning in the segment for branded affordable luxury jewellery as well as a solid verification of our highly cash generative business model. The latter is also the reason r why the Board off Directors and Management feel comfortable with increasing our payout ratio significantly at the same s time as we are initiating a share buyback programme up to DKK 700 million m in order to pay back excess cash to our shareholders. 4 28

5 ANNUAL REPORT AND FINANCIAL STATEMENT A fulll version of PANDORAs Annual Report has been released today andd is available for download in the investor section of Financial highlights for are presented as an appendix to this release. CONFERENCE CALL A conference calll for investors and financial analysts hosted by CEO Bjørn Gulden and CFO Henrik Holmark will be held today at CETT and can be accessed from our website: The corresponding presentation will bee available on the website one hour before the call. The following numbers can be used by investors and analysts: DK: UK (International): +44 (0) US: To help ensure that the conference begins in a timely manner, please dial in 5 minutes prior to the scheduled starting time. Participants will have to quote confirmation code when dialling into the conference. ABOUT PANDORAA PANDORA designs, manufactures and markets handfinished and modern jewellery made from genuine materials at affordable prices. PANDORA jewellery is soldd in more than 70 countries on six continents through over 10,300 points of sale, including approximately 900 Concept stores. Founded in 1982 and headquartered in Copenhagen, Denmark, PANDORA employs over 6,000 people worldwide of whom 4,000 are located in Gemopolis, Thailand, where the company manufactures its jewellery. PANDORA is publicly listed on the NASDAQ OMX Copenhagen stock exchange in Denmark. In, PANDORAs total revenue was DKKK 6.7 billion (approximately EUR 893 million). For more information, please visit CONTACT For further queries, please contact: INVESTOR RELATIONS Morten Eismark, VP Group Investor I Relations Phone Mobile MEDIA RELATIONS Jakob Risom, Press Officer Phone Mobile

6 APPENDIX FINANCIAL HIGHLIGHTS 2011 Full year 2011 Full year Income statement Revenue Gross profit EBITDA Operating profit (EBIT) Net financial income and expenses Profit before tax Net profit 2, 174 1, 403 1,952 1, ,652 4,429 1,658 1, ,479 1,202 6,658 4,860 2,281 2, ,369 2,037 Balance sheet Total assets Invested capital Net working capital excluding derivatives Shareholders' equity Net interestbearing debt 8, 414 8,051 5, 900 5,923 1, 277 1,327 6, 038 5, ,414 5,900 1,277 6, ,051 5,923 1,327 5, Cash flow statement Net cash flow from operating activities Net cash flow from investing activities Free cash flow Cash flow from financing activities Net cash flow for the period 1, 098 1, , , , , , ,670 2,502 1,043 Ratios Revenue growth, % Gross Profit, growth % EBITDA growth, % EBIT growth, % Net profit growth, % Gross margin, % EBITDA margin, % EBIT margin, % Tax rate, % Cash conversion, % Capex Net interestbearing debt to EBITDA * Equity ratio, % ROIC, % * 11.4% 15.0% 1.2% 11.8% 1.9% 38.9% 2.3% 39.2% 24.1% 10.3% 64.5% 72.7% 24.6% 26.8% 22.4% 24.3% 20.0% 10.5% 244.7% 167.6% % 67.2% 25.0% 34.7% 0.1% 8.9% 27.3% 28.3% 41.0% 66.6% 24.9% 22.2% 18.7% 95.8% % 25.0% 0.1% 2.9% 15.0% 14.8% 8.9% 73.0% 34.3% 30.9% 14.0% 82.0% % 34.7% Other key figures Average number of employees Dividend per share, DKK ** Earnings per share, basic Share price at end of period 6, 054 5, , , * Ratio is based on 12 months rolling EBITDA and EBIT respectively. **Proposed dividend per share, DKK Key figures and financial ratios are defined and calculated in accordance with the Danish Society of Financial Analysts' guidelines on the calculation of financial ratios, "Recommendations and Financial Ratios 2010" ". Pleasee refer to note 25 in the Annual Report. 6 28

7 HIGHLIGHTS IN GROUP REVENUEE WAS DKK 2,174 MILLION. EBITDA MARGIN WAS 24.6%. NET PROFIT WAS DKK 421 MILLION. Group revenue increased by 11.4% in (6. 9% increase in local currency) to DKK 2,174 million compared to DKK 1,952 millionn in 2011: Americas increased by 6.3% (1.5%% increase in local currency) Europe increased by 24.0% (20.7% increase in local currency) Asia Pacific decreased by 7.2% (13.4% decrease in local currency) Gross margin decreased to 64.5% in (compared to a gross marginn of 72.7% in 2011) mainly impacted by increasing raw material prices EBITDA margin was 24.6% in (compared EBITDA increased by 1.9% to DKK 534 million to an EBITDAA margin of 26.8% in 2011), EBIT margin was 22.4% in (compared to an EBIT margin of 24.3% % in 2011) ), EBIT increased by 2.3% to DKK 486 million Reported net profit decreased by 24.1% to DKK 421 million in (compared to a net profit of DKK 555 million in 2011). Excluding the CWE earnout provision adjustment based on a revised outlook for PANDORA CWE, net profit increased by 8.8% to DKK 370 million (compared to an adjusted net profit of DKK 340 million) Free cash flow was DKK million in (compared to DKK 930 million in 2011) 7 28

8 REVENUE DEVELOPMENT IN Total revenue increased by 11.4% to DKK 2,174 million in from DKK 1,,952 million in Revenue was positively impacted by the generation of a larger proportion of revenue in Owned & Operated stores (including online revenue), strong revenue development in the UK, Other Europe and Australia as well as a positive impact from currencies. Revenue was negatively affected by the development in Germany, delivery of Valentine s Day collection in Q instead of historically in the fourth quarter and a provision for buying back inventory in connection with the change of distributor in Japan. Excluding foreign exchange movements, revenue increased by 6.9% consistingg of price decreases (3.8 percentage point), volume (14.1 percentage point), market mix m (1.3 percentage point) and mix effects (4.7 Percentage point). The geographical distribution of revenue in was 43.2% for the Americas (45.2% in 2011), 44.4% for Europe (39.9% in 2011) and 12.4% for Asia Pacific (14.9% in 2011). Based on data from Concept stores, which have been operating for f 12 months or more, likeforlike l salesout in PANDORAs four major markets have experienced a positive p development in, whichh PANDORA believes is due to the success of new innovativee products launched and generally better execution in stores during. REVENUE BREAKDOWN BY GEOGRAPHY 2011 % Change % Change in local currency Received * Replaced * Americas United States Other Europe United Kingdom Germany Other Asia Pacific Australia Other Total , , % 5.3% 10.4% 24.0% 11.6% 16.3% 70.5% 7.2% 15.7% 67.5% 11.4% 1.5% 20.7% 13.4% 6.9% * Received means value of discontinued products returned to PANDORA in. Replaced means value of new products returned to retailers FY 2 FY 2011 % Growth in % Growth local currency Received FY * Replaced FY * Americas United States Other Europe United Kingdom Germany Other Asia Pacific Australia Other Total 3,312 2, , , ,652 3,144 2, , , , % 1.7% 20.8% 3.1% 8.6% 26.5% 16.4% 10.4% 5.8% 23.4% 0.1% 2.5% 5.0% 17.5% 5.5% * Received means value of discontinued products returned to PANDORA in. Replaced means value of new products returned to retailers

9 On 21 February, PANDORA initiatedd a oneoff, time limited stock balancing campaign with the aim to improve the quality off the stock att its key retail partners. The T campaign has now been successfully completed. During PANDORA received discontinued products with a wholesale value of DKKK 0 million and, products worth DKK 10 million weree replaced with new bestsellers. For the numbers totalled DKK 609 million and DKK 609 million, respectively. In order to reduce the risk of slow moving excess stock at retailers going forward, PANDORA has implemented a number of initiatives. Thee more frequent and smaller drops of new product launches should reduce the risk r related to excess stock at retail. Additionally, A the ability to t more closely monitor daily salesout development at SKU level from Concept stores will provide earlier insight into nonperforming items with a possibility to ensure a better b balance between salesin s and salesout and thereby reduce the riskk of excess stock at retailers. Going forward, when PANDORA discontinues products, two mainn avenues will be pursued in order to address discontinued stock at retailers. One is to introduce sales campaigns on discontinued items twice a year and to clear items through online as well as offline outlet channels. A second avenue is to take back discontinued stockk from retailers and on an a ongoing basis to take a provision for returns of discontinued items in markets where returns of products from customers are customary. These optionss are appliedd differently in the various geographical regions. Generally in the Americas, PANDORA currently takes back stock from f retailers and are, starting in, actively announcing to retailerss when items are discontinued. Other regions, ass a general rule, pursue saless campaigns or clearancee through outlet channels. Based on the experience from promotingg return policies towardss retailers when conducting our stock balancing campaign in and thee fact that PANDORA now actively communicate to retailers when products are discontinued d, PANDORA has decidedd to provisionn DKK 416 million for returns (DKK 225 million in 2011) in the annual accounts (refer to note 21 in PANDORA Annual Report ), with a corresponding impact on gross margin. The revenue impact of the provision corresponds to 9% of Group revenue in compared to 5% in AMERICAS Revenue in Americas increased by 6.3% to DKK 939 million in from DKK 883 million in Excluding foreign exchange movements, the revenue increased by 1.5% compared to In the United States (accounting for 34.0% % of Group revenue) revenue was up 5.3% in versus 2011 (an increase of 0.8% % measured in local currency). Based on Concept stores, which have been operating for 12 months or more,, like forlike salesout in the US increased by 6.9% in compared to Concept stores likeforlike salesout US Stores of same category open more than 12 months Salesout 2011 to 2 6.9% Q to Q % Q to Q2 3.0% Q to Q1 6.7% 9 28

10 Other Americas sales were up 10.4% and now constitute 9.3% of Group revenue, with Canada as the largest contributor. During the number of branded stores in the Americas increased by 67 stores (versus 137 branded stores in 2011 and 81 branded stores in Q3 ) to a total of 1,,572 stores. Branded stores accounted for 48.5% of the total number of stores compared to 47.4% % at the end of Q3. AMERICAS Concept stores 1 ShopinShops 2 Gold Total branded Total branded as % of Total Silver White and Travel Retail Total Number of PoS , % 1, ,242 Number of PoS Q , % 1, ,172 Number of PoS , % 1, ,017 Delta and Q % Delta and % Includes 2 and 1 PANDORAowned Concept stores at and Q3 2 respectively 2 Includes 0 and 0 PANDORAowned ShopinShops at and Q3 2 respectively EUROPE In Europe, PANDORA experienced an increase in revenue of 24.0% (an increase of 20.7% in local currency) in versus 2011, driven by the UK and Other Europe. Revenue in the UK, our largest single European market (accounting for 17.7% % of 2 Group revenue) increased by 11.6% (5.0% increase measured in local currency). Based on Concept stores which have been operating for 12 months or more, likeforlike salesout in the UK increased by 12.3% in compared to Concept stores likeforlike salesout UK Stores of same category open more than 12 months Salesout 2011 to % Q to Q % Q to Q2 4.0% Q to Q1 15.6% Revenue in Germany, PANDORAs secondd largest market in Europe (accounting for 7.1% of Group revenue), decreased 16.3% in compared to While many initiatives have been activated in Germany and salesoutt of Concept stores has improved, it will, as previously announced, take time beforee initiatives impact PANDORAs revenue. Based on Concept stores, which have been operating for 12 months or more,, likeforlikee salesout in Germany, increased by 4.5% in compared to

11 Concept stores likeforlike salesout Germany Stores of same category open more than 12 months Salesout 2011 to 2 4.5% Q to Q % Q to Q2 8.9% Q to Q1 1.8% The category Other Europe increased by 70.5% in compared to 2011, positively affected by Russia, Spain and Italy. During the number of branded stores in Europe increased by 206 stores to a total of 2,409 stores, accounting for 37.0% of the total number of stores compared to 34.2% % at the end of Q3. EUROPE Concept stores 1 ShopinShops 2 Gold Total branded Total branded as % of Total Silver White and Travel Retail Total 3 Number of PoS ,386 2, % 1,873 2,224 6,506 Number of PoS Q ,269 2, % 1,741 2,504 6,448 Number of PoS , % 1,456 3,625 6,965 Delta and Q % Delta and % 417 1, Includes 77 and 73 PANDORAowned Concept stores at and Q3 respectively 2 Includes 56 and 51 PANDORAowned ShopinShops at and Q3 respectively 3 Includes for 86 Concept stores, 151 ShopinShops, 260 Gold, 219 Silver and 1,001 White stores respectively relating to 3rd party distributors ASIAA PACIFIC In Asia Pacific, revenue decreased 7.2% inn compared to Excluding currency movements, the underlying revenue r in the region decreased by 13.4% 1 year on year. Revenue development was positively impacted byy strong performance in Australia A butt more than offset by a negative oneoff effect from buying back inventory in connection with the change of distributor in Japan. Reported revenue in Australia (accounting for 11.2% of Group revenue) was up 15.7% year on year whereas revenue increased 7.9% % in local currency. In Australia PANDORA experienced a positive trend in both salesin and salesout driven by changes too the distribution network as well as the success of new innovative products launched during.. Based on Concept stores which have been operating for 12 months or more, likeforlike salesout in Australia increased by 10.1% in compared to Concept stores likeforlike salesout Australia Stores of same category open more than 12 months Salesout 2011 to % Q to Q %% Q to Q2 7.4% Q to Q1 20.1% 11 28

12 In the category Other Asia Pacific, constituting 1.2% of total Group revenue, revenue wass down by 67.5% in 2 compared to the same quarter last year. PANDORA has terminated its arrangements with its former Japanese distributor, Vérité Co. Ltd. and simultaneously entered into an agreement with Bluebell Japan Limited. The termination of the agreement with Vérité will initially lead to store closures in Japan in i a transition period which had also lead PANDORA to provision for taking back inventory from Vérité Co. Ltd, worth DKK 38 million with a corresponding negative impact on the revenue line in Other Asia in. Excluding this effect, Other Asia revenue decreased by 20.0% in Q compared to 2011, the decline is mainly explained by fewer store openings and weaker salesin s in compared to ASIA PACIFIC Concept stores 1 ShopinShops 2 Gold Total branded Total branded as % of Total Silver White and Travel Retail Total Number of PoS % Number of PoS Q % Number of PoS % Delta and Q % Delta and % Includes 33 and 32 PANDORAowned Concept stores at and Q3 respectively 2 Includes 0 and 0 PANDORAowned ShopinShops at and Q3 2 respectively PANDORA SALES CHANNELS Direct distribution accounted for 96.2% of revenue in compared to 97.3% in Branded sales in markets with direct distribution accounted for 82.3% 8 in (80.2% in 2011). Concept stores accounted for 57.1% of the branded sales in (59.5% in 2011) Received * Replaced * Number of POS Number of POS 2011 Concept stores ShopinShops Gold Total Branded Silver White and Travel Retail Total Unbranded Total Direct 3rd party Total , , , , , , ,114 2,034 3,957 2,854 1,846 4,700 8,657 1,717 10,374 * Received means value of discontinued products returned to PANDORA in. Replaced means value of new products returned to retailers ,036 1,612 3,252 2,515 3,134 5,649 8,901 1,831 10,732 Branded stores in direct distribution markets accounted for 45.7% % of the total number off stores at the end of compared to 36.5% at the end of

13 Total number of points of sale increased by 154 in compared to Q3 to a total of 10,374 globally. In the same period, PANDORA addedd a net total of 297 branded points of sale. Of these, 72 were Concept stores, 61 were ShopinShops and 164 were w Gold stores. GROUP Concept stores 1 ShopinShops 2 Gold Total branded Total branded as % of Total Silver White and Travel Retail Total 3 Number of PoS 895 1,265 2,294 4, % 3,073 2,847 10,374 Number of PoS Q ,204 2,130 4, % 2,935 3,128 10,220 Number of PoS ,182 1,821 3, % 2,698 4,359 10,732 Delta and Q % Delta and % 375 1, Includes 110 and 106 PANDORAowned Concept stores at and Q3 respectively 2 Includes 57 and 51 PANDORAowned ShopinShops at and Q3 respectively 3 Includes for 86 Concept stores, 151 ShopinShops, 260 Gold, 219 Silver and 1,001 White stores respectively relating to 3rd party distributors PRODUCT OFFERING In revenue from Charms increased by 15.1% compared to t Revenue from Silver and gold charms bracelets decreased by 0.7% compared to The twoo categories represented 84.0% of total revenue in 4 compared to 83.3% in Rings increased by 18.4%, as a result of a more commercial offering compared to last year s assortment. Rings represented 6.2% of total revenuee compared to t 5.8% in Other Jewellery decreased by 0.5%.. Other Jewellery represented 9.8% of o total revenue compared to 10.9% in Product mix Charms Silver and gold charms bracelets Rings Other jewellery Total 1, , Change Share of Received Replaced vs total in % * * 1, , % 0.7% 18.4% 0.5% 11.4% 71. 6% 12. 4% 6. 2% 9. 8% % * Received means value of discontinued products returned to PANDORAA in. Replaced means value of new products returned to retailers. The average saless price per item in has decreased to DKK 132 from DKK 136 in 2011 mainly driven by lower price points on new product introductions and general price reductions during partially offset by positive currency movements

14 NEW MARKETS In, PANDORA has succeeded in opening 30 Concept stores in PANDORAs key new markets (Italy, France, Russia and Asia), bringing net openings to 80 in. Number of stores new markets Concept stores ShopinShops Total End of Russia China Japan Rest of Asia France Italy Total Net Openings Net Openings Q PANDORAs strategy in Russia, China and Japan is to primarily open branded stores mainly Concept stores and ShopinShops. PANDORAs strategy in Italy iss to utilise the large and wellestablished network of multibrand jewellery retailers. In Italy, the Company was selling PANDORA products through 972 points of sale (13 Concept store, 8 ShopinShops, is to upgrade the quality of our distribution network since we took over the 255 Gold stores, 313 Silver stores and 383 White stores) at the end of. Our strategy in France distribution in France from our former 3rd party distributor on 1 July 2011, with a particular emphasis on department store ShopinShops and Concept stores. In France,, the Company was selling PANDORAA products through 298 points of sale (12 Concept stores, 30 ShopinShops, 13 Gold store, 136 Silver stores and 107 White stores) at the end of. GROSS PROFIT AND GROSS MARGIN Grosss Margin Development 64.5% Q3 64.1% Q2 67.9% Q1 71.6% % Grosss profit was DKK 1,403 million in compared to DKK 1,420 millionn in 2011, resulting in a gross margin of 64.5% in compared to 72.7% in The average realised price for gold was 1,690 USD/oz and USD/oz U for silver in. Compared with 2011 the gross margin was negatively impacted by increasing raw material prices (7.1 percentage point), price changes (1.1 percentage point) ), product and market mix ( 1.3 percentage point) and currencies (1.3 percentage point). Product and market mix includes approximately a one percentage point negative impact on gross margin due to the expiration of the suspension of certain import duties of goods manufactured in Thailand under the U.S. Generalized System of Preferences program. Compared with Q3, the gross margin increase is explained by increasing raw material prices (1.4 percentage point), price changes (0.0 percentage point), product t and markett mix (1.6 percentage point) and currencies (3.4 percentage point). It is PANDORAs policy to hedge 100%, 80%, 60% and 40% of expected gold and silver consumption in the following four quarters. Our hedged prices for the following four quarters for gold are 1,

15 USD/ /oz, 1,646 USD/oz, 1,753 USD/oz, 1,730 USD/oz and for silver USD/ /oz, USD/oz, USD/oz and USD/oz. However, current inventory means a delayed impact off these hedge prices on our cost of goods sold. The combined effect of the time lag from inventory and the 12month rolling hedges effectively means that PANDORA is already hedged into H Excluding our hedging and the time lag effect from our inventory, the underlying gross margin would have been approximately 65.0% based on average gold (1,718 USD/oz) and silver (32.57 USD/ /oz) market prices in. Underr the same assumptions,, a 10% deviation in quarterly average gold and silver pricess would impact our gross margin by approximately +/ 23 percentage points. DISTRIBUTION EXPENSES Distribution expenses were DKK 686 million in compared to DKK 6999 million in 2011, representing 31.5% of revenue in compared to 35.8% in Sales and distribution expenses increasedd to DKK 3933 million in Q fromm DKK 307 million in 2011, representing 18.1% of revenue in compared to 15.7% The increase is mainly caused by entry into new marketss as well as an increase in PANDORAowned Concept stores and ShopinShops in compared to 2011 (167 and 136, respectively). Marketing expenses decreased to DKK 293 million in from DKK 392 million in 2011, corresponding to 13.4% of revenue in 4, compared to an unusually u high level of 20.1% in ADMINISTRATIVE EXPENSES Administrative expenses amounted to DKK 231 million in versus DKKK 246 million 2011, representing 10.6% of revenue in, down from 12.6% of 2011 revenue. COST RATIOS Cost Ratio (Including depreciations & amortisations*) Sales and distribution expenses Marketing expenses Administrative expenses Total Cost * Including gains/losses from sales of assets 18.1% 13.4% 10.6% 42.1% 2 Q3 16.0% 10.6% 11.7% 38.3% 2 Q2 23.4% 13.6% 17.2% 54.2% Q1 20.1% 11.9% 14.9% 46.9% % 20.1% 12.6% 48.4% Please note that the cost ratios for are affected by the negative impact on revenue from the stock balancing campaign. EBITDA EBITDA for increased by 1.9% too DKK 534 million resulting in an EBITDA margin of 24.6%, down from 26.8% in

16 Regional EBITDA margins for before allocation of central costs weree 36.0% in Americas (46.1% in 2011), 26.8% in Europe (34.9% in 2011) and 31.2% in Asia Pacific (33.4% in 2011). Unallocated costs decreased to minus 6.8% in compared to minus 12.9% in EBITDA margins in all regionss are significantly affected by the lower gross margin reported in. The Americas region EBITDA margin is lower than last year, additionallyy affected by the expiration of the suspension of certain import duties of goods manufacturedd in Thailand under the U.S. Generalized System of Preferences program. The margin decrease in Europe is furthermore affected by the costs related to the development of direct operations in Italyy and France. The decrease in EBITDA margin in Asia Pacificc is impacted by the provision for inventory take back in Japan which is only partially offset by an increase in revenue in Australia. A EBITDA Margin Americas Europe Asia Pacific Unallocated costs Group EBITDA margin 36.0% 26.8% 31.2% 6.8% 24.6% % 34.9% 33.4% 12.9% 26.8% vs 2011 (% pts) 10.1% 8.1% 2.2% 6.1% 2.2% EBIT EBIT for increased to DKK 486 million an increase of 2..3% compared to the same quarter 2011, resulting in an EBIT margin of 22.4% % for versus 24.3% in NET FINANCIAL INCOME AND EXPENSES Net financial income amounted to DKK 400 million in against net financial income of DKK 145 million in Financial income is positively affected byy DKK 51 million from adjustment of the CWE earnout provision based on the revised outlook for PANDORAA CWE. Whilee the Italian market has developed positively compared to expectations, Germany, although showing positive signs, has not developed fully in accordance with expectations which impact the forecasted value of the earnout liability related to CWE. Following this adjustment the balance sheet no longer includes a provision for the CWE earnout. INCOME TAX EXPENSES Income tax expenses were DKK 105 million in, implying an effective tax rate of 20.0% for compared to 10.5% for

17 NET PROFIT Net profit in decreased by 24.1% % to DKK 421 million fromm DKK 555 million in Excluding the CWE earnout provision adjustment, net profit p increased by 8.8% to DKK 370 million (compared to an adjusted net profit of DKK 340 million in 2011). LIQUIDITY AND CAPITAL RESOURCES S In, PANDORA generated free cash flow of DKK 1,030 million corresponding to a cash conversion of 244.7% compared to 167.6% in The increase in cash conversion iss driven by an improvement in our cash flow, f primarily due to a reduction in inventory levels in. Operating working capital (defined as inventory and accounts receivables less accounts payables) at the end of was 30.7% of preceding twelve months revenue compared to 33.4% at the end of 2011 and 42.5% at the end of Q3. Inventory decreased significantly to DKK 1,318 million at the end of from DKK 1,,609 million at the end of Q3 2 and decreased by DKK 604 million versus v Q3. The significant decrease in inventory level from Q3 2 to 2 can be explained by improved inventory management and remelting of obsolete inventory from the 2 stock balancing campaign totalling DKK 135 million, which have countered the soaring gold and silver prices (increased approximately 20%). Inventory Development Inventory () % of last 12 mth revenue 1, % Q3 1, % Q2 1, % Q1 1, % , % Trade receivables decreased to DKK 940 million in (14.1% of preceding 12 month revenue) from DKK 982 million in Q3 (15.3% of preceding 12 month revenue) r duee to seasonal effects and extended terms on Christmas orderss in Q3. In, PANDORA invested a total off DKK 67 million in property, plant and equipment, approximately 3. 1% of revenue. The increase in investments in Q was related to our factory in Thailand moving forward investments in the Innovation & Design Centre at PANDORAss production facilities in Gemopolis, Thailand. Total interestbearing debt was DKK 158 million at the end of (compared to DKKK 385 million at the end of 2011). Cash and shortterm depositss amounted to DKK 341 million at the end of (compared to DKK 176 million at the end off 2011). Net interestbearing debt at the t end of was DKK 183 million corresponding to 0.1 LTM EBITDA (compared to DKK 209 million at the end of 2011 corresponding to 0.1 LTM EBITDA)

18 MANAGEMENT STATEMENT The Board of Directors and the Executive Board have reviewed and approved the interim report of PANDORA A/S for the period 1 January 31 December. The interim report, which hass not been audited or reviewed by the Company' 's auditor, has been prepared in accordance with IAS 34 Interim Financial Reporting, as adoptedd by the EU, and additional Danish interim reporting requirements for listed companies. In our opinion, the interim report gives a true and fair view of the PANDORA Group s assets, liabilities and financial position at 31 December, and of the results r of thee PANDORA Group s operations and cash flow for the period 1 January 31 Decemberr. Further, in our opinion the Management' s review (p. 117) gives a true and fair review of the development in the Group's operations and financial matters, thee result of thee PANDORA Group for the period and the financial position as a whole, and describes thee significant risks and uncertainties pertaining to the Group. Copenhagen, 26 February 2013 EXECUTIVE BOARD Björn Gulden Chief Executive Officer Henrik Holmark Chief Financial Officer Sten Daugaard Chief Development Officer BOARD OF DIRECTORS Allan Leighton Chairman Marcello V. Bottoli B Andrea Alvey Anders BoyerSøgaard Christian Frigast Torben Ballegaard Sørensen Nikolaj Vejlsgaard Ronica Wangg 18 28

19 CONSOLIDATED INCOME STATEMENT Notes Full year Full year Revenue Cost of sales Gross profit Distribution expenses Administrative expenses Operating profit Financial income Financial expenses Profit before tax Income tax expenses Net profit for the period 3 2, , , , ,652 6,658 2,223 1,798 4,429 4,860 2,084 2, , , , , , ,037 Attributable to: Equity holders of PANDORA A/S Net profit for the period ,202 2,037 1,202 2,037 Earnings per share Profit for the period attributable to ordinary equity holders of the parent, basic Profit for the period attributable to ordinary equity holders of the parent, diluted CONSOLIDATED COMPREHENSIVE INCOME STATEMENT Full year 2011 Full year Net profit for the period ,202 2,037 Exchange differences on translation of foreign subsidiaries Value adjustment of hedging instruments Income tax on other comprehensive income Other comprehensive income, net of tax Total comprehensive income for the period ,322 1,746 Attributable to: Equity holders of PANDORA A/S Total comprehensive income for the period ,322 1,322 1,746 1,

20 CONSOLIDATED BALANCE SHEET ASSETS Noncurrent assets Goodwill Brand Distribution network Distribution rights Other intangible assets Property, plant and equipment Deferred tax assets Other noncurrent financial assets Total noncurrent assets Current assets Inventories Trade receivables Other receivables Tax receivables Cash and shortterm deposits Total current assets Total assets EQUITY AND LIABILITIES Shareholders' equity Share capital Share premium Treasury shares Foreign currency translation reserve Hedge reserve Other reserves Proposed dividend Retained earnings Total shareholders' equity Noncurrent liabilities Interestbearing loans and borrowings Provisions Deferred tax liabilities Other noncurrent liabilities Total noncurrent liabilities Current liabilities Interestbearing loans and borrowings Provisions Trade payables Income tax payables Other payables Current liabilities Total liabilities Total equity and liabilities 31 December 1,,922 1,, ,, ,,175 1,, ,,239 8,, ,, ,,331 6,, ,,664 2,,376 8,, December 1,928 1, , ,148 1, ,903 8, , ,736 5, ,647 2,640 8,

21 CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY 1 January 31 December Foreign currency Share Share Treasury translation capital premium shares reserve Hedge reserve Other Proposed Retained reserves dividend earnings Total equity Shareholders' equity at 1 January 130 1, ,736 5,411 Comprehensive income Net profit for the period 1,202 1,202 Exchange differences on translation of foreign subsidiaries Value adjustment of hedging instruments Income tax on other comprehensive income Other comprehensive income, net of tax Total comprehensive income for the period ,202 1,322 Transfer to retained earnings Sharebased payments Dividend paid Proposed dividend Shareholders' equity at 31 December 130 1, ,331 6,038 Shareholders' equity at 1 January , ,414 4,315 Comprehensive income Net profit for the period 2,037 2,037 Exchange differences on translation of foreign subsidiaries Value adjustment of hedging instruments Income tax on other comprehensive income Other comprehensive income, net of tax Total comprehensive income for the period ,037 1,746 Dividend paid Proposed dividend Shareholders' equity at 31 December , ,736 5,

22 CONSOLIDATED CASH FLOW STATEMENT Profit before tax Financial income Financial expenses Amortisation/depreciation Options Change in inventories Change in receivables Change in trade payables Change in other liabilities Other noncash adjustments Interest etc. received Interest etc. paid Income tax paid Cash flow from operating activities Acquisition of subsidiaries, net of cash acquired Purchase of intangible assets Purchase of property, plant and equipment Change in other noncurrent assets Proceeds from sale of property, plant and equipment Cash flow from investing activities Dividend paid Dividend paid to noncontrolling interests Proceeds from borrowings Repayment of borrowings Cash flow from financing activities Net cash flow for the period Cash and shortterm deposits Cash and shortterm deposits at beginning of period Net exchange rate adjustment Net cash flow for the period Cash and shortterm deposits at end of period Full year Full year ,479 2, ,, , , , ,, , , , , , ,376 2, , , , Unutilised credit facilities inclusive cash and cash equivalents 2,,898 2,492 2,8988 2,492 The above cannot be derived directly from the income statement and the balance sheet

23 NOTES NOTE 1 Significant accounting estimates and judgements In preparing the consolidatedd financial statements, management makes various accounting estimates and assumptions, which form the basis of presentation, recognitionn and measurement of PANDORAs assetss and liabilities. All significant accounting estimates and judgements are consistent with the description in the Annual Report for. We refer r to the description in note 1 of the consolidated financial statement in PANDORAs Annual Report for. NOTE 2 Seasonality of operations Due to the seasonal nature off the jewellery business, higher revenue are historically realised in the second half of the year. NOTE 3 Operating segment informationn PANDORAs activities are segmented on the basis of geographical areas in accordance with management s reporting structure. In determining the reporting segments, s a number of operating segments have been aggregated. All segments derive their revenues from thee types of products shown in the product information provided below. Management monitors the segment profit of the operating segments separately for the purpose of making decisions about resource allocation and performance management. Segment profit is measured consistently with the operatingg profit in the consolidated financial statements before noncurrent assets are amortised/ /depreciatedd (EBITDA)

24 NOTE 3 Operating segment information Americas Europe Asia Pacific Unallocated cost Total Group Income statement: External revenue ,174 Segment profit (EBITDA) Adjustments: Amortisation/depreciation Gain/loss from sale of noncurrent assets Consolidated operating profit Americas Europe Asia Pacific Unallocated cost Total Group Income statement: External revenue ,952 Segment profit (EBITDA) Adjustments: Amortisation/depreciation Gain/loss from sale of noncurrent assets Consolidated operating profit Full year Americas Europe Asia Pacific Unallocated cost Total Group Income statement: External revenue 3,312 2, ,652 Segment profit (EBITDA) 1, ,658 Adjustments: Amortisation/depreciation Gain/loss from sale of noncurrent assets Consolidated operating profit ,475 Full year 2011 Americas Europe Asia Pacific Unallocated cost Total Group Income statement: External revenue 3,144 2, ,658 Segment profit (EBITDA) 1, ,281 Adjustments: Amortisation/depreciation Gain/loss from sale of noncurrent assets Consolidated operating profit ,

25 NOTE 3 Operating segment information, continued Product information: Revenue from external customers Full year Full year Charms Silver and gold charms bracelets Rings Other jewellery Revenue 1, ,174 1, ,952 4,958 4, ,652 6,658 Geographical information: Revenue from external customers Full year Full year United States Australia United Kingdom Germany Other countries Revenue , ,952 2,579 2, ,117 1,876 6,652 6,

26 NOTE 4 Contingent liabilities PANDORA is a party to a number of minor legal proceedings, which are not expected to influence PANDORAs future earnings. NOTE 5 Related party transactions Related parties of PANDORA with a controlling interest are the principal shareholder Prometheus Invest ApS (50.49% interest) and the ultimate parent, Axcel III K/SS 2 (32.34% interest). Related parties further comprise Axcel III K/S 2 s other portfolio enterprises, as they are subject to the same controlling interests. There havee not been any transactions with Axcel III K/S 2 or its portfolio enterprises during and Related parties of PANDORA with significant interestss include the Board of Directors and the t Executive Board of the companies and their close family members. Furthermore, related parties include companies in which the aforementioned persons have control or significant interest. Except for compensation and benefits received as a result of the membershipm p of the Board of Directors, employment with PANDORA orr shareholdings in PANDORA, PANDORA has not undertaken any significant transactions with the Board of Directors and Executive Management. We refer r to the description in note 23 of the consolidatedc d financial statement in PANDORAs P Annual Report for. Theree have been no other transactions than dividends between PANDORA and Prometheus Invest ApS during and NOTE 6 Accounting policiess The present unaudited interim financial report has been preparedd in accordance with IAS 34 Interim Financial Reporting and accounting policies set out in the Annual Report of PANDORA. Furthermore, the interim financial report and Management s review are prepared in accordance with additional Danish disclosure requirements for interim reports of listed companies. PANDORA has adopted all new, amended or revisedd accounting standards and interpretations ( IFRS ) endorsed by the EU effective for the accounting period beginning on 1 January. These IFRSs have not had any significant impact on the Group s interim financial report

27 QUARTERLY OVERVIEW QUARTERLY OVERVIEW Q Q2 Q1 Income statement Revenue Gross Profit EBITDA Operating profit (EBIT) Net financial income and expenses Profit before tax Net profit 2,174 1, ,794 1, ,260 1,424 1, ,020 1, Balance sheet Total assets Invested capital Net working capital Shareholders' equity Net interestbearing debt 8,414 5,900 1,277 6, ,967 6,632 2,037 5, ,358 8,129 8,051 6,220 5,938 5,923 1,630 1,400 1,327 5,223 5,070 5, Cash flow statement Net Cash Flow from operating activities Net Cash Flow from investing activities Free Cash Flow Cash Flow from financing activities Net Cash Flow for the period 1, , , , Ratios Revenue growth, % Gross profit growth, % EBITDA growth, % EBIT growth, % Net profit growth, % Gross margin, % EBITDA margin, % EBIT margin, % Effective tax rate, % Cash conversion, % Capex Net interestbearing debt to EBITDA * Equity ratio, % ROIC, % * * Ratio is based on 12 months rolling EBITDA and EBIT respectively. 11.4% 1.2% 1.9% 2.3% 24.1% 64.5% 24.6% 22.4% 20.0% 244.7% % 25.0% 14.3% 0.4% 6.2% 8.5% 11.4% 64.1% 28.0% 25.8% 18.1% 23.2% 9.5% 17.3% 57.0% 60.7% 89.9% 67.9% 17.5% 13.7% 18.2% 144.4% 18.4% 18.4% 43.4% 44.6% 34.4% 71.6% 28.2% 24.8% 18.0% 34.9% 15.0% 11.8% 38.9% 39.2% 10.3% 72.7% 26.8% 24.3% 10.5% 167.6% % 22.1% % 24.2% % 29.9% % 34.7% 27 28