Well, good morning, everyone, welcome to Pandora's annual general meeting 2023. My name is Peter Ruzicka, and I am Chair of Pandora since first of January 2020. After hosting a virtual AGM last year, I'm very happy to see everyone in person here today. As a reminder, the annual general meeting today will be held in English, and that is provided for by our articles of association. As a service to our shareholders, there will be a simultaneous interpretation to or from Danish during this meeting. I will kindly ask you to pay attention to the disclaimer. The key message is that our presentation may include forward-looking statements, and that these, per definition, are associated with uncertainty. Before we start with today's agenda, I would like to introduce the speakers of today. With me today, I have CEO Alexander Lacik and CFO Anders Boyer.
Alexander and Anders, they constitute executive management of Pandora. In addition to that, most of the board members of board of directors are also present here today. I may ask the board of directors to raise so that you can see them all. Very good. Thank you. Over the past few years, Anders and Alexander have executed on a successful turnaround program and have led Pandora back on a sustainable growth trajectory. Last year, once again, was not without challenges with the war in Ukraine and the weakening consumer sentiment. Pandora continued to navigate through these challenges smoothly. Alexander and Anders will provide more details on the business development later. For now, I would like to thank them both for the great contribution and the great efforts in 2022.
According to the articles of association, the board of directors appoint chair of the Annual General Meeting, and the board of directors has appointed Pernille Dalhoff from Kromann Reumert as chair of the Annual General Meeting, equal to the last years. With this, let me now hand you over to Pernille. She will walk you through today's agenda and make sure all formal requirements are satisfied. Pernille.
Thank you very much, Peter, thank you for the appointment to chair this meeting. I look forward to a good annual general meeting at Pandora here today. Before we start, I would like to inform you that the meeting is live streamed from the cameras you see down in the back. For GDPR reasons, please be informed that if you choose to speak, you will be shown on the screen through Pandora's website. My first task as chair of the meeting is to check that the meeting has been properly convened. According to Pandora's articles of association, general meetings shall be convened giving not less than three and no more than five weeks notice by advertisement on Pandora's website and by email sent to the shareholders who have requested that.
Pandora has informed me that on February 17, notice of this meeting was indeed sent to the shareholders by email and announced in a company announcement and published on Pandora's website. Also, the complete proposals to be discussed here today and draft articles of association, Pandora's annual report for 2022, the remuneration report for 2022, and forms for notification of attendance, proxy, and postal votes have also been available on Pandora's website since February 17. On this basis, I find that all requirements in Pandora's articles of association and the relevant Danish legislation have been fulfilled, and that this ordinary general meeting has been properly convened and is competent for transaction of the business on the agenda. Are there any questions or comments for this? That does not seem to be the case.
I will conclude that the general meeting is properly and lawfully convened and competent to decide on the agenda today. I can inform you that 66% of the share capital is present or represented here at the meeting. We will take a look at the agenda here on the screen. Item two and items four through eight may be passed by a simple majority of votes. Item three, regarding the remuneration report, is an advisory vote only. Item nine includes three proposals by the board. The proposal 9.1, regarding reduction of the share capital, requires that 2/3 of the votes cast and of the share capital represented here today vote in favor, as it includes amendment to the articles of association.
The proposals in 9.2 and 9.3, regarding authorization to the board to purchase own shares. An authorization to me as Chair of the meeting to register decisions made here today can be made by a simple majority of votes. We will deal with items one and two on the agenda regarding the board's report of the company's activities during 2022, and adoption of the annual report for 2022 jointly. The remaining items we will take one by one. I will now give the word back to the Chair to represent the Board of Directors' report on the company's activities during 2022. Please begin.
Thank you, Pernille. Let me start by saying that Pandora is in a very strong position to continue to generate value for the shareholders in the years to come. First of all, Pandora is the world's most known jewelry brand, catering to all women across generations. Pandora's crafting facilities in Thailand is the next key asset. It is the largest branded jewelry facility in the world. It is state-of-the-art when it comes to scale, skill level of our employees, and efficiency. On top of this, we are also on the forefront with regards to how we treat our employees and how we treat the environment. The global store footprint is comprehensive and profitable, and is fully complemented with a strong online channel. With this, we have global mass distribution, both online and offline. Pandora is and will be a sustainable and responsible investment.
We believe we have set ambitious targets to be a low carbon business for circular innovation and to have an inclusive, diverse, and fair culture. The company is highly profitable and has a strong cash generation. Today, we will ask you, the shareholders, to authorize Pandora to distribute DKK 16 per share in dividend. We strongly believe that this is a very solid basis for us to unlock the true potential of Pandora in the years to come. Alexander will tell you more about this shortly. Let me give you some facts to illustrate the scale of Pandora. In 2022, we sold 103 million pieces of jewelry. We had over 600 million visits to our physical and online stores. We sell our jewelry in more than 100 countries through 6,500 points of sale.
We use 61% recycled silver and gold. This was up from 54% in 2021, and our goal is to increase that to 100% in 2025. We employed 32,000 people around the world. If you reflect for a minute over the size of these numbers, you will understand why Pandora is the most well-known jewelry brand in the world. Before I leave the word to Alexander, I also want to comment on the board evaluation. I can confirm that in 2022, the board conducted an evaluation of its performance and its cooperation with executive management. The assessment also included a 360-degree peer review using an online survey across seven areas as value creation and strategy, board agenda and meetings, also including committee meetings, talent and culture, board composition, directors' contribution, Chair's effectiveness, and reporting and risk management.
The report and conclusions of the assessment were shared with the board and executive management, followed by a thorough discussion. The assessment identified that the board continues to consist of individuals who possess relevant competencies and are engaged and well-prepared. The board structure and committee work are effective and well-functioning, including interactions with executive management. Responsibility for strategic direction and risk assessment on ESG sit with the Board of Directors, as signified in the graphic of the Sustainability Report 2022. The board receives a minimum of two updates a year on Pandora's sustainability direction. We will be sure to elaborate more extensively on Board of Directors' oversight of sustainability topics in the future iterations of our sustainability report and on our website.
With that, I would now like to hand over first to Alexander for a business update and then to Anders for an update on the financial performance.
Thank you, Peter. This is my fourth annual general meeting with Pandora, and I have been looking forward to meeting you today. I'll now give you a view of the company's development in the last year. 2022 was a solid year for Pandora. We were in a first year of our growth strategy, which enabled us to execute smoothly despite the challenging macroeconomic environment. Before I remind you of our strategy, let's have a quick look at 2022. We ended the year with record high revenue and earnings per share. We achieved the high end of our guidance range, which was given before all the impacts of the Ukraine war. Revenue grew 7% organically, and the growth was solid across product platforms, and the geographical diversity of the group came through.
The growth, alongside good cost control, allowed Pandora to generate a strong 25.5% EBIT margin, and EPS, as I mentioned, reached a new record of DKK 54. Is this slide eight? Yes. The strategy we launched in 2021 is focused on further developing our existing core business, where we see significant opportunities to generate growth. Our purpose is to give a voice to people's loves. Pandora pursues this purpose by creating affordable, hand-finished branded jewelry for the many rather than the few. With that purpose in mind, we have set an ambitious plan for our company. We want Pandora to become not only the largest, but also the most desirable brand in the affordable jewelry market. We have chosen four distinct growth pillars.
First, our brand is the most widely recognized jewelry brand in the world. We will keep investing in this unique position. Our focus is on growing the brand penetration. Secondly, design. Driving our core, the Moments platform, is the number one priority for us. The third growth pillar is personalization. Here, we're improving the omni-channel experience to offer consumers a more personalized path to purchase journey. Our online channel is among the strongest in the industry. The starting point is very strong. Additionally, we have started to test launch our new store concept. While early days, the results so far are promising. The fourth and last growth pillar is about growing our core markets. We're going to increase and optimize our network in 2023 and beyond.
Our biggest market, U.S., remains in a healthy shape, and while China has been weak, we plan to reposition the brand later this year when conditions stabilize. It's obvious that you need a solid foundation when you build something. We have put in place a good foundation in all critical areas during the last four years, ranging from a much stronger talent pool to sustainability and digital transformation. This means we have a strong starting point, but it doesn't stop here. We will continue developing these areas going forward. Our strategy execution is paying off, which confirms the potential ahead of us. We'll be hosting a Capital Markets Day on October 5 in London, where we'll provide an update on our major initiatives. As mentioned, we saw good growth across our product platforms in 2022. Moments is our largest platform and our key driver of growth.
Our foundation has been built on the Moments platform, which today constitutes 73% of our business. I also want to highlight Timeless, our second-largest platform, which continued to deliver robust growth with overall revenues of over DKK 4 billion. To drive incremental revenue growth, Pandora is launching new product platforms that are within or close to the existing core business. With that, I want to highlight that last year, we launched Diamonds by Pandora in North America. Driving our core, the Moments platform, is the number one priority for us, and I'm happy to say that Moments continues to deliver strong growth. In 2022, Moments delivered sell-out growth of 5% versus 2021. The performance of Moments came despite a weakening consumer backdrop and speaks to the unique captive business model which we have been able to master for this particular collection.
We also want to fuel the brand with more. In 2022, I want to once again highlight the launch of Diamonds by Pandora in North America, which is the biggest diamond market globally. The initial results since our launch have been encouraging, where our best-performing stores have seen a good pickup in growth coming from diamonds. This bodes well for our future, where we plan to add to our assortment and plan further geographical expansion. There we go. Looking at our core markets, the growth was relatively broad-based. In Europe, we saw solid growth across most of our markets despite the weakening consumer sentiment. Our largest market, U.S., declined due to the comping of the impact from the stimulus checks in 2021, but this was better than our initial expectations.
As mentioned previously, our business in China remained challenged due to the COVID-19 situation, and the growth continued to be negative. However, we look forward to the economy reopening and our brand relaunch later this year. I want to highlight that developing our network further is a key growth lever that we have. In 2022, this drove an incremental DKK 1.2 billion revenue split between network expansion and forward integration. We open a total net of 88 new concept stores and look forward to adding between 50 and 100 net openings this year. The financial metrics of expanding our network remain highly attractive, with EBIT margins of 35%-40% and a very high return on capital. We place sustainability at the core of our company.
We aim at being a low carbon business, drive circularity principles in everything we do, and act as an example of what it means to be inclusive, diverse, and fair. Our objective is to halve carbon emissions across the full value chain by 2030, and to be a zero carbon business by 2040. We have taken important new steps in 2022, with a 6% reduction in total greenhouse gas emissions compared to the 2019 baseline. We continue to drive circular innovation in 2022. We launched our first collection using only lab-created diamonds in North America, and we continued our quest to use only recycled silver and gold in our jewelry by 2025. To foster an inclusive, diverse, and fair culture, we have launched a comprehensive strategy addressing gender and underrepresented groups.
We'll not only be working within our own organization, but also evolve the way we market our products and the partners that help us bring our brand to our consumers. I will now hand over to Anders, and thank you for listening.
Thank you, Alexander. Good morning, and thank you for taking the time today. As Alexander already mentioned, our 2022 performance was in the high end of our guidance, in the high end of our expectations for the year. That's not just on the top line and the bottom line, but also across a number of other KPIs, such as our earnings per share. I'll pick out some of the KPIs on this slide here, and first talk a bit about the gross margin. Our gross margin continued to be at a very high level last year in the mid-70s, and even increased a bit, 0.2 percentage points versus the year before, 2021.
This is a testimony to our strong brand, our very good value propositions, as well as the, our disciplined execution of promotional activities last year during a period of macroeconomic weakness. It also is a reflection of initial positive signs of the price increases that we implemented in early Q4 of 2022. The, the progress on the gross margin, the increase in the gross margin, combined with good cost control, allowed us to reach an EBIT margin of 25.5%, last year, up half a percentage points, compared to 2021.
In regards to cash conversion, as you can see on the, on the slide here as well, some of you may remember that one and a half year back, we decided that we wanted to increase our inventories deliberately during last year, during 2022, in order to improve product availability in the stores and online, because that drives revenue. In the year where we do that, it obviously impacts the cash conversion negatively for the full year in 2022, but this is now behind us, and we expect that this year, in 2023, cash conversion will be back to the long-term sustainable level of around 70% in the company.
I can also, I'm pleased to say that in the last quarter of 2022, Q4, we landed the year with a strong cash conversion of 110% in the last quarter of last year. Now let's take a look at our guidance for 2023. As you can see on the slide, we are initially guiding with an organic growth of between -3% and +3% this year. This range is quite clearly wider than normal, and there's a few things to point out in that connection.
First of all, the external macroeconomic environment continues to show that a challenging situation for consumers, with a consensus that the situation will remain weak this year in 2023, with some markets around the world being in a recession, maybe a light version of recession. The low end of our guidance, the -3%, is capturing such an environment with a mild recession across a number of markets, on, in the world. Secondly, as Alexander mentioned, early on, Pandora has remained resilient during the last part of 2022, despite all of the challenges that we've seen from a macro point of view and from a geopolitical point of view. Our quarterly sell out growth has been holding up in the second half of last year.
We also have noted when we announced our annual report that continued into the first part of 2023, where we have continued to see a resilient sell out growth for the first five weeks of this year. Thirdly, in connection to the guidance, I should mention that we will continue to execute on the Phoenix strategy this year. Our growth initiatives have clearly shown that they are working, so we will keep pushing ahead with the Phoenix strategy this year and driving our brand to higher levels. Overall, this leads to a quite wide guidance range on organic growth, and we will obviously be looking towards narrowing that range as the year moves on and visibility, hopefully, is improving as we go further into the year.
On the EBIT margin, we are guiding for a margin of around 25% this year, so we will remain being a very profitable company. This guidance may look a bit narrow given the range on the top line. The way we think about it is that the environment this year, the macroeconomic environment, requires a different approach at different tools. In short, if the macro environment turns out and hits a bit harder this year and growth lands towards the low end of the range, the -3%, then we will be taking cost actions that can keep the margin of around 25%.
If growth lands in the upper end of the range towards the +3%, then we have the flexibility to invest even more in future growth if need be. Another way to read the EBIT margin guidance for 2023 is that despite the macroeconomic headwinds and adverse impact from foreign exchange as well, in fact, then Pandora is actually able to keep the EBIT margin broadly unchanged compared to 2022. On this slide, we have put up a couple of the other parameters that we are guiding you as investors and the capital markets on.
On capital expenditure, CapEx, we expect to invest around 6% of revenue this year, and this mainly reflects our investments in the store network, as Alexander talked about, both new stores but also refurbishing existing stores. It reflects investments in a new ERP platform, SAP platform, and a number of other digital investments and investments in our manufacturing setup. The 6% is in line with what we talked about at the Capital Markets Day back in 2021. As Alexander already mentioned, we will continue expanding the store network this year, that's what you can see in the second bullet point on this slide here.
Finally, we expect that the effective tax rate to be at the same rate as what we guided about last year, being between 23% and 24%. Then I'll finish off on a slide that we are quite happy about, and highlighting our new public credit ratings, and related to that, our issuance of our first ever Euro bond just a few weeks back. We recently obtained two so-called issuer credit ratings of Baa2 from Moody's and what's called a BBB from Standard and Poor's ( S&P), and both with a stable outlook. We, after getting the ratings, we subsequently established a so-called EMTN program, sorry for all of those abbreviations.
Under that program, we successfully issued our first ever sustainability-linked Euro bond of EUR 500 million with a maturity of five years. Following a two-day roadshow in early March, we saw a very strong demand to participate in that bond, buying those bonds from high quality investors with demand for the bond peaking at EUR 2 billion. The proceeds from the transactions have already been used, but and mainly towards a planned refinancing of a bank loan that we wanted to refinance. The bond is linked to our ambitious sustainability goals that Alexander walked through just a minute ago. I'm proud to say that now, with the bond, all of our funding is now linked to our sustainability goals.
That's quite an important milestone in our journey as we strive to be an industry leader in the sustainability field. With that, I'll now hand back to Pernille. Thank you.
Thank you, Anders, and thank you also Peter and Alexander for the report on Pandora's activities during 2022. As mentioned in the introduction, we will deal with items one and two on the agenda at once. Now I will move to the next agenda item, which is adoption of the audited annual report for 2022. You can see here the independent auditor's report, and I will not read it all aloud, but just sum up that EY states that in their opinion, the consolidated financial statements give a true and fair view of the financial position of the group and of Pandora A/S, and of the results and operations and cash flows for the financial year in 2022.
Now at this point, we would like to invite any comments or questions to the report from the board on Pandora's activities during 2022 and on the annual report also for 2022. We will start with ATP, Anders Folmer. Please.
Thank you. Thank you for the floor. My name is Anders Folmer, and I represent ATP. Thank you to the Chair and the CEO and CFO for their reports and presentation of the results for 2022. First, I would like to acknowledge the strong performance for 2022. 2022 was another year with a difficult business environment to operate in with war in Ukraine, higher input prices, COVID, and declining consumer sentiment. Under these turbulent circumstances, Pandora delivered on and exceeded market expectations and financial guidance, showing good execution and that Pandora has become a stronger and more robust company than previously. Looking forward, Pandora has mentioned that they will use the potential economic downturn to execute on the rollout of store openings. In that way, take advantage of a weak property market.
Being on the offense rather than the defense in difficult times underlines that the company is in a very good shape. The Moments platform performed well in 2022 and is one of the greatest assets in jewelry industry. It is crucial for Pandora that the platform is kept strong. The Moments platform's high share of revenue has been stable over the last years. We hope that going forward, we will see higher growth from new platforms to secure long-term growth and robustness. China is the largest jewelry market in the world and represents a significant opportunity for Pandora. You have previously communicated that you aim to triple the business in China, and in connection with a planned large investment in the country, I would like to ask a question. How do Pandora see the political risk in China, including potential geopolitical tensions currently?
Lastly, I would like to give credit for all the hard work put into the sustainability agenda, making Pandora a front runner and highly ranked in the industry, showing the way for circularity, low carbon production, and diversity and inclusion. In an industry with a high ratio of female customers and employees, we also have high expectations of a diverse board and leadership team. With these words, I would like to wish Pandora and the employees all the best for the work ahead in 2023. Thank you for the attention.
Thank you for the generous comments. Of course, we are pleased with the performance of the company and a very relevant question around China. First of all, in the Capital Markets Day, we laid out a long-term ambition to try to triple the size of our market versus the 2019 size of business. We didn't put a timeline on it, clearly because it is quite difficult to be that precise on such a big, ambitious goal. After the Capital Markets Days, we know the country has essentially been very difficult to operate. Meanwhile, also the size of our business has shrunk because there's not been a lot of traffic into the stores due to the COVID restrictions. Having said that, you're rightfully pointing out it is the largest jewelry market in the world.
We have conducted plenty of research in China to ensure that the potential for Pandora to, yet again, start growing is there. Nothing has changed in our ambition. In the Capital Markets Day in October, we'll try to detail maybe a little bit more how we think about the size of that opportunity and maybe put some kind of timelines on that. Then in terms of the political risk, we don't, I mean, comment on geopolitical issues. That's not our place to do. However, what we have been commenting on is, of course, the restrictions that the government has put on due to the pandemic, and those are now lifted, as we all know. I think that those are my comments. The ambition remains. Politically, we don't make any statements. Thank you.
Okay. We also have a comment from Dansk Aktionærforening. I would like to welcome Bjarne Kongstad.
Thank you for the floor. I would also like to start by thanking you. I've been allowed to give my speech in Danish, and I think that's best for all of us.
Thank you for your report, and thank you for taking us through the KPIs. I've asked for the floor as a representative of the Association of Danish Shareholders. We're an organization of 17,000 members representing private investors' interests also at the AGMs of Danish companies. Of course, we are in favor of greater shareholder democracy, and we promote that cause by participating in annual general meetings and giving our comments on the operations of the companies and try to translate and make comments and announcements from companies more easily understood by our shareholders. We are happy to participate here at Pandora's AGM again. Pandora has done a good job paying back its shareholders, and thereby its owners, through share buyback programs. You will do that for the financial year 2022 as well.
In spite of that, certain analysts believe that the share price could increase a bit. Most recently, the French bank BNP raised from DKK 770 to DKK 830 the target for the share price. If that comes to fruition, that would almost be the record share price. The increase in dividend from DKK 15 to DKK 16 this year, plus the share buyback program, gives us a payout ratio of almost 100%. For this year, it doesn't look so good. According to your own guidance that you just talked about, you do not reach the organic growth for 2022. It was only 7%. That was the expectation, but you might end up with a negative figure.
That makes me ask whether you have made any changes since the beginning of the year, to tell us whether you do expect a positive organic growth for 2023. Management has told us that it could go both ways, plus or minus. We've heard about China, which is opening up after COVID restrictions, and I assume that China remains an important market to the company. As you presented the account for 2022, you said that not until the third quarter would you relaunch in the Chinese market after COVID. Is that still your expectation? It's been a challenging year for the company due to the global pandemic, as you mentioned, or especially in the Chinese market, and I want to commend Pandora for the measures taken to navigate in these difficult circumstances.
I'm also pleased to see the latest results from the company, including the fact that you expect to be able to continue to create value and strong financial results. I would like to encourage the board and executive management to keep on focusing on innovation and the development of new markets, all the while taking into account the risks of operating in a global economy. The United States, which is probably still your largest market, is also becoming a very difficult market in which to operate. Recently, we have seen how parts of the financial market in the U.S. have been challenged with several bank collapses. That's an area that might affect the greatest jewelry producer in the world.
We hope not, but how do you assess the current American market, and what financial impact does the increasing exchange rate on the U.S. dollar, what does that mean to you? When it comes to the reporting of sustainability in your annual report, management told us that they found it natural that sustainability initiatives in the industry would mismatch authorities' requirements for reporting. Is that still the way you see it? Finally, let me thank the board of directors and the executive management for their engagement and contributions to this journey that Pandora has been on to the benefit of shareholders, and I would like to wish all the employees in Pandora a good working year in 2023. Thank you very much.
Sorry, we just need to coordinate who answers which questions. Thank you very much for the words and for the support to the company. In connection to the question about the guidance from -3% organic growth to +3%, there's no doubt that the range of outcomes for 2023 is we see as bigger than normal, not driven by us but by the outside world.
When we announced the full year annual report in the beginning of February, we said that in order to land at the low end of the guidance, at the minus 3%, things would have to turn worse. From a macroeconomic perspective and the logic behind that, I'm not a macroeconomic expert, but if we listen to what macroeconomic experts are saying around the world, then they do on average predict that consumers will be squeezed more than what we've seen last year because of inflation, higher interest rates. We all know the arguments. We have not seen that yet. We didn't see that in Q4. Our revenue was holding up nicely in Q4 of last year.
When we announced our annual report, we also said that for the first five weeks of this year, we have not seen that yet. For the first five weeks of this year, we were still trading in line with what would translate into the +3% organic growth. So far, so good. We'll see how. It's clearly on reading newspapers also for the last couple of days, it is quite turbulent times. In terms in relation to the U.S. dollar, that's the other question I will take. It's quite clear that we have more revenue than cost in U.S. dollars. The U.S. is our biggest by far the biggest market. In a way, fortunately, we have quite some cost in U.S. dollar.
Silver is traded in U.S. dollars, so that kind of offsets balances a bit out the all the revenue that we have in U.S. dollars. Net-net, it's still an advantage for us when the U.S. dollar is strong, and the U.S. dollar did strengthen last year compared to 2021. That translated, that's a long lead into the answering your question, that translated into a 0.7 percentage point, 70 basis points, some would call that, increase of the EBIT margin in 2022 compared to 2021 that the dollar went up. In absolute terms, it was a DKK 900 million increase in revenue and just about DKK 400 million on EBIT because of the stronger U.S. dollar. Thank you.
I'll take the other two questions. One was on China. The answer is the one I gave to our colleague from ATP. Yes, we intend to invest in China this year. We've essentially said that there are two conditions that need to be true. One is that we see that traffic into the physical network somehow starts to resemble what we experienced pre-pandemic. We know that we get return for the investment that we are planning to do. The other one is also a judgment that there won't be a U-turn by the authority in terms of the restrictions imposed on retail business in China. The second question is around the sustainability. There was a remark made on the 2020 annual report.
We issued two reports, one annual report and one sustainability report. In 2020, there was a one-month lag between the two of them. There were some remarks that some of the information in the sustainability report that came 1 month after the annual report should have been included in the annual report. Subsequently, in the report that came out for 2021 and 2022, those reports come out on the same day. That issue is essentially dealt with. Thank you.
Thank you for the questions and comments and for the answers from management. Are there any other questions or comments? Yes.
Hello, my name is Steffen Møjen. As this is a Danish company, as we are in Copenhagen right now, I also would like to speak Danish, of course. I'm sure Pandora has interpreters available. With those initial words, I would like to say that normally a company like Pandora is not a type that I follow closely because I stick to shipping and German companies in general. Pandora has always piqued my interest because it's the largest jewelry brand. The largest company in a sector is often very well run. Now we've also had a CEO who's been here for three or four years, I heard, I must say I have a greatest respect for management. We have one of the greatest CFOs in Copenhagen. Danish Swedish CEOs are often much better than Danish CEOs.
Just look at how many large Swedish companies there are compared to Danish. We are in Denmark great when it comes to toys and jewelry and medicine for diabetics. I think there are things we can do in Denmark as well, and Pandora is an excellent example of that. I also think you have a very good production strategy. You don't produce in China, and that's good because China will continue to be a major problem. China and the U.S. are fighting about being the both the largest economy and also the largest military force. The U.S. is leading that battle, but that annoys the Chinese very much. Of course, the Chinese parliament isn't a democratic parliament. I must say, I think China is quite hopeless when it comes to democracy.
I also understand the question from ATP about how you view China, because China is also a very competitive market. As it's the third or fourth largest market globally for a lot of things, jewelry, pork, and many other things. It's also a very competitive market and a difficult market. I think it's very reasonable that you focus on the rest of the global market first before the Chinese market. I'm also very happy that we have the entire production in Thailand because they're much nicer people and than in certain other parts of the world. I would very much like to thank you for maintaining that strategy. Others would maybe split up and have some in China and some in Vietnam or whatever, but you always stuck to Thailand, and that's very good. You have more than 10,000 employees there.
I would like to know how many employees there are currently in Thailand. I would like to also ask, what's inflation in Thailand? As we have production in Thailand, it would be good to know how the prices are increasing there and how the wage is increasing for our employees in Thailand this year and next year, because I don't think trade unions are very strong in Thailand. I would like to ask how we treat our Thai employees, because they only get about 10% of the wages that we get in Denmark, for instance. I would like to hear what are the wage increases for our Thai employees this year and next year, because it's thanks to their hard work that Pandora has the success it has and that we have this high quality level.
That jewelry is supplied as ordered from Copenhagen, and that everything can be controlled here from Copenhagen. With 12,000-15,000 employees in Thailand shows that the Thai are just as good as the Chinese to produce. You just need to treat them well, and I'm in no doubt that Pandora treats its employees well. But I would like to know the inflation rate in Thailand and the wage situation and what the wage increase is, because I know there's also inflation in Thailand. I would also like to ask about growth. You expect -3%- 3% growth. What's your guidance in the five largest markets? I know you have thorough budgets for everything, and we have large markets in Italy, the U.K., U.S. I'm sure you know best what the other two largest markets are.
What do you expect growth in the 5 largest individual markets? The U.S., U.K., Italy, et cetera. Guidance for the 5 largest markets. Another important thing is share buyback. I invest in companies with a high dividend, at least 30%-50% of the earnings a year. Many companies have followed the trend of the past 10 years. It's a bit like a group of sheep following each other. Here we pay out dividends, more and more people do that, and we should also do that. Dividend is one of the least documented factors for promoting the share price in a company. You have data for everything when it comes to finance and the economy for the past 100 years, what it means for macroeconomics, et cetera, but there's no documentation for the effects of share buyback programs.
I think it's just like pouring water into the sea. I mean, once you've spent the DKK 4 billion or whatever it is, every year, then the money is gone. Then maybe us shareholders are about 2% more of the company, but only if the shares are canceled. It would be much better to pay out cash dividends to shareholders. DKK 20 per share is DKK 20 for each shareholder. You don't differentiate between people. It's the most democratic way of doing things. I would like to encourage Pandora to pay out. I mean, you pay out a great amount every year, but it should be much more as dividends. If I could just give you 2 examples of 2 successful companies in Denmark doing that. It's shipowner Norden and shipowner Torm.
They are very successful in that, paying out over more than 50% of their earnings every quarter. That was Torm, and Norden does more or less the same thing. More than 50% of earnings every year is paid out as cash dividends to the shareholders. You have to be able to trust the board of directors, and you can in those two shipowner companies. Torm will bring out its fourth quarter result now, $222 million. Lead to a payout of 18 DKK per share, and that's just for the fourth quarter in Torm. Two DKK more than the dividends paid out for the entire year in Pandora, and that's something shareholders respect. Also the large shareholders, they also get money through dividends. I would recommend...
You don't need to answer me now, but I would recommend that you move towards cash dividends instead of buyback programs. I'm sure it also has a positive influence on the share price. Just imagine if every year we could expect 60%-80% of the company Pandora were paid out in dividends, it would be much more interesting to be a shareholder. With those questions and comments, I would like to wish you all the best for this coming year.
Thank you for the question. In Thailand, the inflation, what it's gonna be next year, I just wish I know. I don't. For this year, we're increasing salaries round about 5 percentage points. That's not the only thing to consider when it comes to producing in Thailand. Roughly 25% of our cost of goods is conversion cost, i.e. mostly salaries. 75% is raw material input. As you know, silver price fluctuates quite a bit. The whole story is not only about the salary level, it's also about the cost of essentially of silver, which is the largest input raw material we have. To counteract that over the years, we have lots of programs in order to drive productivity improvements.
Actually, when Anders previously spoke about gross margin performance of the company, you can go back over the years and see it's rather flat. That comes on the back of a lot of productivity improvements that we do continuously. I think Peter mentioned it also, a state-of-the-art facility that we have. We continuously work on developing new process technologies and techniques in order to keep our cost of goods in control. That whole 5% would not go through straight to the pricing. That's it. I'll leave the other two questions for Anders to answer.
Thank you for the other questions as well. In relation to the growth expectations for the biggest markets as a starting point, I should say that we are not guiding specifically on the individual markets. That's not to be secretive, but simply operating in 100 different markets across the world, there will always be some that perform better than planned and some perform worse than planned and some do as expected. What we can say is that we do expect that the range of growth across different markets this year is gonna be wider than normal given the macroeconomic environment.
If you look at the macroeconomic environment, again, I'm just quoting what the average macroeconomic experts would say, then there will be quite a number of pockets of growth across the world still. China, as I think as you mentioned as well, I think consensus is that they will probably be growing quite nicely. That's also the statement from the Chinese government themselves. Australia, Latin America, less hit by the macroeconomic environment. Europe, on the other hand, on a general note, could be a bit harder hit than the rest of the world, due to inflation and higher interest rates. We do also have mentioned that we do see that Italy has been struggling a bit from a macro perspective.
We have also been in a bit negative revenue growth for a couple of quarters in Italy, with the Italian consumer being hit a bit more than in the rest. The U.K. could get into the same camp. That's, that's the expectations that the U.K. consumer will be, have a difficult time as well. We have not seen that so far last, the last year, but the market is clearly getting more difficult in the U.K. The U.S. lands somewhere in the middle between Europe and countries like Australia, China, Latin America. I think that that's what we can say on growth across different markets.
Net-net, it lands around an average of a flat revenue growth, 0% organic growth this year in the midpoint of our guidance. I'll comment on your thoughts about dividend and share buybacks anyways, even though you didn't necessarily expect an answer. I've been CFO of listed companies for almost 20 years, and this has always been one of the big dilemmas, because we obviously ask investors, "What do you prefer?" The good starting point is that we generate a lot of profit, a lot of cash, so there's something to pay out. That's the nice starting point as a minimum. The dilemma, so to speak, is that gonna be dividend or share buybacks?
The dilemma comes because when we are on investor roadshow and meet investors like here today, there's someone say, "I want it all as share buybacks." Then you go to the next meeting and have a conversation with the next investor and say, "I want everything as dividend." Then there's someone in between. It, it becomes a nice compromise between different thoughts. Again, I'm just happy that there's something to be paid out. That's the... We'll keep... That's a promise we can do. We will keep trying to make sure that there's a lot to pay out, one way or the other. Thank you.
Thank you for that. [crosstalk]
There was a question without a microphone, and the chair, the CEO said he couldn't answer that.
Thank you for that. We have another speaker.
My name is Keld Bayer. It's about share buyback. It's not directly related to Pandora, but at the Novo AGM, they had a share buyback of DKK 20 million a year, that affected the share price a great deal. They geared the share price that way, that's the dangerous thing about share buyback programs. As long as there's money, you can control the share price like that. When things going the other way, you don't have that option, you get a very large drop in share price. I agree with the previous speaker that it's better to pay out as dividends instead of influencing the share price.
It's also difficult for the shareholders to understand how many shares are actually available, because they do have a value. The moment you have buyback programs, you reduce that particular share to zero. There's a number here in the accounts that a normal shareholder can't really see through. You can't see the price the shares are bought back at and what the share price would be if you sold all of them. I think there's actually a legislative issue here, because it's very difficult for shareholders to interact with companies that have very large share buyback programs. I was also careful about the company DSV because of that, because it's impossible to see through what the actual share price should actually be.
I also support, I do support a certain degree of share buybacks, but you shouldn't use it to actually influence the share price. That was my comment.
Thank you for those comments. Anything else from the shareholders at this point? There will be an opportunity also later on if anybody else has any questions or comments. I will consider this to be no further comments to the board's report for 2022 and also an approval of the annual accounts for 2022. We will move on to the next agenda item. Thank you very much. The next agenda item is presentation of the Remuneration Report for 2022, and the report has been available on Pandora's website since February 8. I will invite the Chair, Peter, to present the report.
Thank you, Pernille. This report was reviewed by the independent auditors, EY, and the auditors have not reported on any deficiencies in the report. Yeah, you see the report here from the independent auditors. When it comes to the, yeah, board of directors' executive management remuneration, the total fee for the board of directors increased marginally by 2% in 2022 versus 2021 due to higher travel expenses resulting from the majority of the board and committee meetings being held in person versus what it was done during the pandemic, where we mostly had. There were a lot of Teams meetings.
The change in total remuneration of executive management in 2022 from 2021 is explained primarily due to short-term incentive plan 2022 being paid at lower achievement than 2021, at 94.6% versus 100% of base pay in 2021. That is the report approved by EY, and I will now give the word back to Pernille.
Thank you, Peter, for that. I would like to ask if there are any questions or comments. As mentioned in the beginning, the remuneration report is subject to an advisory vote only. I can tell you it was approved also last year, there are no comments for this year's report. Okay, no questions or comments. I will conclude that the remuneration report for 2022 has been approved, move on to the next agenda item, which concerns similar subject, which is adoption of proposal on the board's remuneration for this year. The board has asked me to present this item. The board's proposal is to increase the fixed base fee by 10% to DKK 550,000, Pandora has informed me that the fixed fee has remained unchanged since 2010.
The travel allowance is proposed to increase to DKK 33,000 for continental travels and DKK 66,000 for intercontinental travels. The chair of the board would receive 3 times the fixed base fee and deputy chair 1.5x the fixed base fee. The fee to chair, the chair and the members of the Remuneration and Nomination Committee is 0.5 times the fixed base fee to the chair and 0.25 times the fixed base fee to the other members. In the audit committee, the chair receives 0.8 times the fixed base fee and other members of the audit committee 0.4 times the fixed base fee. These multiples remain unchanged from last year and in accordance with Pandora's remuneration policy.
Apologize for all of the figures, but hopefully it's all clear from the slide and the presentation and the notice for the meeting. I would like to know if there are any questions or comments for this agenda item. That does not seem to be the case. I will consider the Board's remuneration for 2023 approved by the general meeting. For the next agenda item, I will give the word back to the Chair of the Board. Peter, please.
Thank you. We already had questions and discussions and answers to the distribution policy. I will not start discussing dividend versus share buyback now, but just present the proposal. Based on the strong performance in 2022, the low leverage and ample liquidity, we propose continuing cash distributions to our shareholders. As part of today's agenda, the board proposed to shareholders to approve a dividend of 16 DKK per share. This is a flat dividend versus last year, it reflects the new progressive dividend policy at Pandora. The board of directors already has the authority to initiate a share buyback at any point in time. In February, we announced a new share buyback program of up to 5 billion, which will run until early February next year.
Initially, we will execute on a DKK 2.4 billion share buyback until 30th of June. Following an assessment of the macroeconomic climate, we have the option to scaling the share buyback up further to DKK 5 billion in total. The capital structure policy remains unchanged, and the leverage of the company remains low. I will give the word back to Pernille.
Thank you for that. In addition to the questions and comments we already have heard about distribution of dividend and share buyback, I think there is another comment here from. Maybe this time I get a chance to get also your last name. Thank you.
Omkring det.
Yes, about the share buyback program of DKK 2.4 billion, I would like to ask, does the Board of Directors has an authorization, just like the shipping companies, to pay out a quarterly dividend to shareholders? In cash dividend instead of all of these share buyback programs that, in my view, does not make any sense. You try to benefit large international shareholders that you talk to on your international roadshows, that you meet at the seminars of the large banks.
The large banks hold these seminars with the jewelry industry in the U.S. They will invite the 10 largest jewelry companies. Then our CEO or CFO, of course, have to participate at these conferences and at JP Morgan or the other companies in New York. They have to explain why they are better than the other 9 big jewelry brands in the U.S. In the U.S., they're really hooked on these share buyback programs. Then the management of Pandora tries to align with the interests of the Americans because 20% or 30% of our shareholders are American. It doesn't lead anywhere.
When it comes to revenue, what you need to look at is the daily revenue, the trading to the Copenhagen Stock Exchange and how much is 2 or 4 or 5 billion of that turnover? Is it 1% or 2%? It's so little, it has no significance whatsoever. 20 DKK to each shareholder is really significant to all shareholders. I would recommend you that you stick to the share buyback of DKK 2.4 billion, and if you have an authorization to pay out a quarterly dividend, I would recommend that you would pay out a cash dividend in August instead.
To that, I think. As Anders also mentioned, we talk with different investors, different shareholders. We need to find a balance between dividend, share buyback. I can assure you that we will take all inputs and views from shareholders into account going forward. The proposal is as it is was presented here today. No, we don't have that authority today.
Thank you for that. Keld Bayer for a new remark.
Keld Bayer again. How many own shares do you own? What would the trade price be if you sold them today?
We had by the end of February, unless now I might can remember in my head, 7.4, 7.5% own shares. 7.5% of the company that we owned ourselves, so to speak. That's what's that in number of shares? That would be around 6 million shares. If you translate that into a value of today, well, that would then be something like DKK 3.6 billion, I guess something to that, to that tune.
To one of the comments earlier today. As you will see in a second from Pernille, we are proposing to cancel by far the majority of the shares that we own. We're thereby reducing the share capital if the board at the AGM approves today.
Thank you, Anders. Any further comments for the cash distribution proposal? Okay, I will conclude that the general meeting has approved the board's proposal to distribute dividend and also given the board some input to how the distribution process can be handled in the future. Thank you for a good dialogue on this. We will move to the next item, which is election of members to the board. According to Pandora's articles of association, all members of the board are elected here at the general meeting and hold office until the next annual general meeting. Everybody is up for re-election today. Furthermore, the board has also a new candidate, we'll show the pictures here.
A detailed description of all of the board candidates, including the proposed new candidate, have been available on Pandora's website in connection with the notice of this annual general meeting. The formal requirements for this proposal have been met, and I would like to know if there are any questions or comments regarding the proposal to elect a new board of directors for the company. I will conclude that the proposed re-elections and the election of Lilian Fossum Biner have been approved by the shareholders, and congratulate the board on re-election and Lilian on the new appointment. For this next agenda item concerning election of auditor, the board has proposed re-election of EY.
I've been informed by Pandora that the audit committee has not been influenced by third parties and has not been subject to agreement with any third parties, which limits the general meeting to the election of certain auditors or audit firms. Are there any comments regarding the proposal to re-elect EY as Pandora's auditor? You've already seen a number of statements from them earlier on the screen today. I will consider this an approval of the board's proposal, and EY has been re-elected as auditor for Pandora.
The next item on the agenda is a proposal from the board that the general meeting discharges the board and executive management from liability. This is a, you know, a formality, and I can inform you that only matters that had either been discussed here today, which were none, or which were included in the annual report that we just approved, are included in this item. Are there any questions or comments for this? I will conclude that the general meeting has granted discharge to the board and to the executive management. Thank you for that. Item nine on the agenda includes proposal by the board and shareholders, and no shareholder proposals were made to the company, there are three proposals from the board of directors. The first one has already been discussed a little bit earlier today.
It regards reduction of the company's share capital, and it includes a proposal to cancel 6.5 million shares that were bought back under the two share buyback programs that were last launched in 2021 and 2022. According to the practice by the Danish Business Authority, the cancellation of these treasury shares is compared to a capital reduction by distribution to the shareholders only. The distribution has been made already when the shares were bought back by the company. In the notice to this meeting, the board stated that these 6.5 million shares were acquired between January 2022 and January 2023. Also prior to February 9, under a share buyback program launched on May 4, 2021.
The total amount that was used was DKK 3 million, or sorry, DKK 3,407,438,682. This means that in addition to the nominal reduction amount of DKK 6.5 million, an amount of DKK 3,400,938,682 has been distributed to shareholders who elected to participate in the share buyback. Any further questions or comments for this actual proposal? Does not seem to be the case. I will then consider the board's proposal adopted by the general meeting, and can inform you that we will register this decision with the Danish authorities, and we will have to wait for a period of four weeks, and then we can finalize the capital reduction.
You will see new articles of association approximately 4 weeks from now. There you see the figures. The next proposal is an authorization to the board to let the company buy back own shares. We have already heard the motivation behind this, providing flexibility to the board. I would like to know if there are any questions or comments to the proposal by the board to acquire own shares. It's for 10% of the company's share capital and provided that the purchase price does not exceed 10% or deviate with more than 10% from the listed price on Nasdaq at the time of acquisition. This is in accordance with the boundaries under Danish corporate law.
No questions or comments for this, I will consider this board's proposal to be approved also by the general meeting and move to the final agenda item for today, which is an authorization to me as chair of the meeting, to register the decisions you made here today. For the sake of good order, I can inform you that it is not an authorization for me to change anything or to register anything else than what you have actually decided here today. Are there any comments or questions for this? I thank you for this authorization. Now we have dealt with all of the agenda items for today's meeting. We have a final point called any other business.
I would like to open the floor if there are any further comments, any business that needs to be addressed here at the meeting other than what we have heard already. Please note at this point, it will not be possible to make any proposals for adoption, but only comments are welcome. No further comments are requested by the shareholders, I will conclude that there is no further business to be transacted here at the general meeting today. I would like to thank the board and management of Pandora, and of course, also the participating shareholders for a lively debate here today. Would like to close the general meeting and give the word to you, Peter, as Chair of Pandora.
Well, thank you, Pernille, for navigating us safely through this year's AGM. Also thank you to all you shareholders who attended our annual meeting today. I really appreciate the feedback and comments, questions, that you give us. It makes us better. It's also been a great pleasure to see you all physically, and I look forward to seeing you again next year. The only thing left for me to say is that this meeting is adjourned, thank you very much.