Strategisk analyse og værdiansættelse af Pandora A/S

Abstract

The purpose of this thesis is to make a valuation of the Danish jeweler company Pandora. Pandora has made a billion dollars business by their notoriously known signature product Charms- and Charms bracelets. Experiencing headwinds in 2011 due to an increase in raw materials – in particular gold and silver, the Pandora share plunged losing more than 90% of their value in a matter of months. Since then, Pandora has almost solely experienced a rising share prices driven by strong operational performance and ambitious growth expectations. Pandora has of 2015, signed a new CEO and CFO and changed their core strategic pillars as well as mission and vision. This motivates the writer of this thesis to investigate if the current market prices is fair valued or if so how long will it last.
The thesis is based on five steps, where the first step is a strategic analysis of the industry, the macroeconomic environment and the internal value drivers. The second step is a financial statement analysis of the historical financial performance of the company. Third step consolidates the conclusions from the strategic- and financial analysis into a forecast of the future performance of the company. The fourth step exercises the valuation of the company based on the conclusions drawn from the previous steps. Lastly is the fifth step a sensitivity analysis of the valuation.
From the strategic analysis, it can be concluded that the main drivers for future growth are the rising middle class on the emerging markets and a strong like-for-like sales, which emphasizes a strong brand and a sustainable business concept. However Pandora’s revenue origins primarily from the advanced economies – in particular Europa and USA where the economic outlook is stagnant. Pandora’s growth strategy is to penetrate existing markets and expanding in new markets. The main strategic goal and driver for the future is the largest jewelry market in the world China.
The financial statement analysis found that Pandora historically has performed way stronger than its peer-group. Their return on invested capital, ROIC has increased from 43% to 56% in only 5 years, whereas the asset turnover rate has been the main driver for the increase in ROIC.
The strategic and financial analysis founded a substance for a forcast of the fiscal year 2016 and the following 4 years with a terminal period estimating the future revenues and free cash flow. Through the DCF valuation the price of a Pandora share 16th of March 2016 is estimated to 976,5 which is close to the actual market price of 948,5. The sensitivity analysis of the valuation is considered to be high due to the noticebale changes in values when changing WACC, EBITDA- margin and growth in the terminal period.