Signet Jewelers Limited · NYSE:SIG
Signet Jewelers — Investor Day (October 2012)
101 slides from Signet Jewelers's investor day presentation, Oct 1, 2012
Slide 1: New York Investor Day
New York Investor Day Monday, October 1, 2012
Slide 2: Mike Barnes
Mike Barnes Signet Jewelers Ltd. CEO
Slide 3: Forward Looking Statements & Other Disclosure Matters
Forward Looking Statements & Other Disclosure Matters Forward-Looking Statements - This presentation contains statements which are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, based upon management’s beliefs and expectations
Slide 4: Program
Program ‣ Signet overview ‣ UK Division ‣ US Division ‣ Wrap up ‣ Questions ‣ Lunch ‣ Travel to stores ‣ Store tours ‣ Return to Manhattan
Slide 5: The Leading Specialty Retail Jeweler in the US
The Leading Specialty Retail Jeweler in the US
Slide 6: Our mission is to further enhance Signet's position
“Our mission is to further enhance Signet’s position as the market leader in both the US and the UK specialty retail jewelry markets by offering a unique customer experience and driving customer loyalty.”
Slide 7: MatKeunig,
MatKeunig, wet chandisiy, xe Expe,. 3 “ery Customer, Bure. SIGNET JEWELERS ERNEST JONES LOVE & LIFE H.SAMUEL THE JEWELLER
Slide 8: Driving Customer Loyalty
Driving Customer Loyalty Building Brand Equity
Slide 9: Strategic Imperatives
Strategic Imperatives ‣ Training to enhance customer experience ‣ Grow brands & categories to delight customers ‣ Drive competitive strengths & infrastructure ‣ Drive long-term shareholder value Increase Market Share & Drive Profit
Slide 10: Develop & Train Team Members
Develop & Train Team Members ‣ Experienced and well trained team ‣ Sector-leading training methodologies ‣ Focused on enhancing customer experience
Slide 11: Grow Brands & Categories to Delight Customers
Grow Brands & Categories to Delight Customers
Slide 12: Driving Competitive Strengths
Driving Competitive Strengths 1234 5678 9012 3456 John Doe
Slide 13: Investments to Enable Growth
Investments to Enable Growth
Slide 14: Investment to Drive Shareholder Value
Investment to Drive Shareholder Value ‣ Increase productivity within our store space ‣ Build new stores as shopping patterns evolve ‣ Information technology
Slide 15: Management Approach
Management Approach ‣ Execute to trend ‣ Proactively manage expenses & assets ‣ Continuous improvement & innovation ‣ Gain profitable market share
Slide 16: Sector Leader with Sustainable Competitive Strengths
Sector Leader with Sustainable Competitive Strengths in a Very Fragmented Market
Slide 17: UK Division
SIGNET J] Ew ELER S UK Division AiLEO DIAMOND KAY SLGNET ERNEST JONES H.SAMUEL JEWELERS The ia Of Jewelry JEWELERS LOVE & LIFE THE JEWELLER
Slide 18: Sales and Merchandise Mix
Sales and Merchandise Mix Gifts & Other Watches 31% 7% 54% Other Jewelry 13% 46% Gold & Silver 22% Diamonds 27%
Slide 19: Building for the Future
Building for the Future ‣ Objective to deliver 10% plus operating margin by Fiscal 2015 in the UK ‣ Build on market leadership ‣ Innovative merchandising ‣ Rationalize real estate portfolio ‣ Restructure operating costs
Slide 20: Strengthening Brand Differentiation
Strengthening Brand Differentiation
Slide 21: Diamond and Bridal Presentation
Diamond and Bridal Presentation
Slide 22: Delighting Customers
FLOWER CUT FOR GREATER SPARKLE Delighting Customers SIGNET ERNEST JONES H.SAMUEL vewecess The Galleria Of Jewelry JEWELERS LOVE & LIFE THE JEWELLER
Slide 23: Delighting Customers
Delighting Customers EXCLUSIVE FOR H.SAMUEL S GNET ERNEST JONES HSAMUEL JEWELERS The ia Of Jewelry JEWELERS LOVE & LIFE THE JEWELLER
Slide 24: Strengthening Brand Differentiation
Strengthening Brand Differentiation ‣ Luxurious new store design ‣ Increased consultation areas and in-store boutiques
Slide 25: Strengthening Brand Differentiation
Strengthening Brand Differentiation ‣ Stronger brand presence with store-within-a-store
Slide 26: Strengthening Brand Differentiation
Strengthening Brand Differentiation ‣ Branded boutiques featuring watches and jewelry
Slide 27: Strengthening Brand Differentiation
Strengthening Brand Differentiation ‣ Increasing the prominence of LeVian in the UK
Slide 28: Strengthening Brand Differentiation
Strengthening Brand Differentiation ‣ Select locations partnering with prestige watch companies with in-line boutiques
Slide 29: Delighting Customers
Delighting Customers (‘EG DIAMOND bg Lec Shackle. SIGNET ERNEST JONES H.SAMUEL veweress The Galleria Of Jewelry JEWELERS LOVE & LIFE THE JEWELLER
Slide 30: Continuing Our Growth in Digital Sales
Continuing Our Growth in Digital Sales ‣ Developing in-store ‣ Further upgrades capabilities to digital capabilities
Slide 31: Mark Light
Mark Light President & CEO US Division
Slide 32: Our People Are Key to Signet's Success
Our People Are Key to Signet’s Success
Slide 33: Largest in Sales of All Retail Jewelers in the US
is the Largest in Sales of All Retail Jewelers in the US “Ranked by National Jeweler”
Slide 34: Specialty Retail Jewelry Market Share
Specialty Retail Jewelry Market Share
Slide 35: Building Brand Equity
Building Brand Equity Every kiss. begins with Kay® AY DARED SIGNET ERNEST JONES H.SAMUEL JEWELERS LOVE & LIFE THE JEWELLER
Slide 36: Key Initiatives
Key Initiatives TOLKOWSKY LEO DIAMOND Sg LeclSchackle7_ Gn Arete Nel Sone jane eymour DRIDAL S GNET ERNEST JONES HSAMUEL JEWELERS The ia Of Jewelry JEWELERS LOVE & LIFE THE JEWELLER
Slide 37: Merchandising & Marketing Collaborate to Build Brands
Merchandising & Marketing Collaborate to Build Brands & Drive Results
Slide 38: Key Initiatives
Key Initiatives ‣ New stores in FY13 - 48 ‣ 80 Remodeled stores - FY13 ‣ Potential of Kay & Jared space ‣ 880 Kay Mall ‣ 400 Kay Off-Mall ‣ 150 Kay Outlet ‣ 300 Jared
Slide 39: State of the Art Technology
KAY SLGNET ERNEST JONES H.SAMUEL JEWELERS The Galleria Of Jewelry EWELERS LOVE & LIFE THE JEWELLER
Slide 40: Social Media Engagement
Social Media Engagement The Galleria Of Jewelry | je seven years od. From our S vary iret Lize, to tha nomart ka \ proposed, | always knew vd fd be the me, de went to Jared Jared The Galleria of Jewelry dtike | | Message & JARED’ Yok ES Ratings & Reviews KAY nARED SIGNET ERNEST JONES H.SAMUEL LOVE &
Slide 41: Enhances the Superior Customer Experience
Enhances the Superior Customer Experience
Slide 42: Repair Shop Quality Control System
Repair Shop Quality Control System
Slide 43: Driving Store Productivity
Driving Store Productivity KAY SLGNET ERNEST JONES H.SAMUEL JEWELERS The ia Of Jewelry PEWELERS LOVE & LIFE THE JEWELLER
Slide 44: Select Diamontaire with Rio Tinto
Select Diamontaire with Rio Tinto
Slide 45: Each Initiative is Designed to Maintain the Best-Equipped Team
Each Initiative is Designed to Maintain the Best-Equipped, Most Intelligent & Engaged Team in Jewelry Retail
Slide 46: Coffee Break
Coffee Break Presentations are scheduled to resume at 10.40
Slide 47: Ed Hrabak
Ed Hrabak Chief Operating Officer US Division
Slide 48: Delighting Customers
Delighting Customers K nDARED SIGNET ERNEST JONES H.SAMUEL JEWELERS LOVE & LIFE THE JEWELLER
Slide 49: Leo Diamond
LEO DIAMOND Cg Lee: ~ Sch ackier K nDARED SIGNET ERNEST JONES H.SAMUEL JEWELERS LOVE & LIFE THE JEWELLER
Slide 50: Pandora
charmed, memories” Md PANDORA‘ SIGNET ERNEST JONES H.SAMUEL veweress The Galleria Of Jewelry EWELERS LOVE & LIFE THE JEWELLER
Slide 51: bt or
/\ \6 Ap) bt or by haa er mow LCF IGNET ERNEST JONES HSAMUEL JEWELERS The ia Of Jewelry SIGNEI LOVE & LIFE THE JEWELLER
Slide 52: AY SIGNET ERNEST JONES H.SAMUEL
AY SIGNET ERNEST JONES H.SAMUEL vEWELERS The Galleria Of Jewelry JEWELERS LOVE & LIFE THE JEWELLER
Slide 53: Tolkowsky
"| =O. cans re ek SD TOLKOWSKY: INVENTED BY TOLKOWSKY PERFECTED BY TOLKOWSKY"™ KAY SLGNET ERNEST JONES H.SAMUEL JEWELERS The Galleria Of Jewelry EWELERS LOVE & LIFE THE JEWELLER
Slide 54: Blue Diamonds
DIAMONDS‘ Blue Diamonds IGNET ERNEST JONES HSAMUEL JEWELERS The Galleria Of Jewelry SIGNEI LOVE & LIFE THE JEWELLER
Slide 55: tie
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Slide 56: Rare, natural color diamonds. Unique wonders of Australia
Rare, natural color diamonds. Unique wonders of Australia™ SIGNET ERNEST JONES HSAMUEL JEWELERS The ia Of Jewelry JEWELERS LOVE & LIFE THE JEWELLER
Slide 57: Ernest Jones
ERNEST NE . KAY JARED, SIGNET SST.JONES — HSAMUEL JEWELERS
Slide 58: KAY SLGNET ERNEST JONES H.SAMUEL
KAY SLGNET ERNEST JONES H.SAMUEL JEWELERS The Galleria Of Jewelry PEWELERS LOVE & LIFE THE JEWELLER
Slide 59: Virtual Inventory
Virtual Inventor AY SIGNET Jewelers TheGalleria Of Jewelry JEWELERS KAY a | | Some ENS Stn wareHts oie "ewe Find savings of 40% to 60% off a fabulous selection of clearance merchandise. ; — - Start your own ary 8s Fe Tanne Stackable Ring combination here! 20%.60%« | SELECT CLEARANCE Neachanse Browse
Slide 60: Personalized Jewelry is Becoming More and More Popular
Personalized Jewelry is Becoming More and More Popular
Slide 61: Strengthening Our Supply Chain
Strengthening Our Supply Chain Rough Cutting & Polishing Jewelry Manufacturing Independent Retailers Mines Wholesalers Sightholders Traders Cutters & Traders Manufacturers Polishers Signet Process Rough Purchases Polished Design & Manufacture Complete
Slide 62: Excellence in Execution
Excellence in Execution ‣ Merchandising Leadership ‣ Supply Chain ‣ Inventory Management
Slide 63: George Murray
George Murray SVP Marketing US Division
Slide 64: Marketing Leadership
‣ $188M invested in FY12 Marketing ‣ Multiple touch points Leadership ‣ Research driven ‣ CRM database of >25M purchasers
Slide 65: Market Leadership
Market Leadership Customer insight driven across the entire Company to create sustainable competitive strengths He went to Jared!
Slide 66: National Television Advertising
National ‣ Television remains the most Television influential medium in building Advertising brand awareness ‣ Increasing investment
Slide 67: Network Television – 2012 Holiday Season
Network Television – 2012 Holiday Season ‣ Upfront buy gives better ad placement and rates ‣ Proprietary sponsorships ‣ Product integration
Slide 68: Television is the customer's #1 source for new product information
Television is the customer’s #1 source for new product information
Slide 69: Building Brand Equity
Building Brand Equity He went to Jared!
Slide 70: Goal is to Become Best-in-Class in the Digital Eco-system
Goal is to Become Best-in-Class in all Aspects of the Digital Eco-system
Slide 71: Digital Investment
‣ Complete rebuild and redesign of Digital websites Investment ‣ Improved e-Commerce platforms ‣ Social media ‣ CASSi
Slide 72: KAY } [rapastone]
KAY } [rapastone] < oo. Te craving for chocolate is Start your own al grown up! Stackable Ring combination here! SELECT CLEARANCE MERCHANDISE ! Shop Now $2,699.99 $1,299.99 $2,999.99 LEVIAN ont oav ony Browse Our Jewelry eavcs NECKLACES & PENDANTS EARRINGS BRACEIETS ETT a ee Necktaces & Pendants» ||
Slide 73: Customers use Ratings and Reviews
Customers use Ratings and Reviews to share and discuss their favorite products
Slide 74: Social Media
x —™ * Sikere Jared The Galleria of Jewelry an Every kiss begins with Kay’ & AY JARED SIGNET ERNEST JONES HSAMUEL JEWELERS LOVE & LIFE THE JEWELLER
Slide 75: We Aim To Be Anywhere Our Customers Want Us To Be
We Aim To Be Anywhere Our Customers Want Us To Be
Slide 76: Tryna Kochanek
Tryna Kochanek SVP Field Operations US Division
Slide 77: Why is Signet Different?
Why is Signet Different? ERNEST JONES H.SAMUEL KAY nedAARED,, SIGNET RNESTJONES =H SAMUEL JEWELERS
Slide 78: Our People Make the Difference
Our People Make the Difference ‣ Every piece of jewelry requires personalized service ‣ A Signet Team Member represents the final two feet in the supply chain ‣ Team Members are knowledgeable and actively listen to customer needs
Slide 79: Our People
Our People ‣ Are there to assist in selecting the perfect piece of jewelry ‣ Are committed to delivering a superior customer experience
Slide 80: Specialized Training
Specialized Training DIAMOND COUNCIL of AMERICA L The Diamond Professionals ~ J JEWELERS The Galleria Of Jewelry EWELERS ERNEST JONES LOVE & LIFE H.SAMUEL THE JEWELLER
Slide 81: We are performance-driven, with superior execution
‣ We are performance-driven, with superior execution ‣ We recruit, motivate and retain the most qualified people to delight our customers
Slide 82: Building lifelong careers
‣ Building lifelong careers ‣ Leading levels of retention
Slide 83: Brands that Connect with Customers
Brands that Connect with Customers
Slide 84: Proprietary Standards
Proprietary Standards ‣ Performance monitored on daily basis ‣ Training to support success ‣ Identification of exceptional performance
Slide 85: Promotion From Within
Promotion From Within ‣ Each of our 126 District Managers and 18 Vice Presidents have operated one of our stores
Slide 86: Why Training Matters
Why Training Matters ‣ It’s culturally motivating ‣ Foundation of building a career ‣ Everyone learns about brands, products and policies on day one ‣ Accumulated knowledge embedded in professional DNA
Slide 87: Training Materials
Training Materials ‣ 100% internally developed ‣ Based on research, employee needs and corporate initiatives
Slide 88: We are Training Business Managers and Customer Service Experts
We are Training Business Managers and Customer Service Experts
Slide 89: Why is Signet Different?
Why is Signet Different? ‣ A culture of building fulfilling, passionate, lasting careers ‣ Exceptional training and proven performance metrics ‣ Team Members who genuinely work to continuously improve
Slide 90: Ron Ristau
Ron Ristau Signet Jewelers Ltd. CFO
Slide 91: Credit: Enabling Sales
Credit: Enabling Sales K AY JARED SLGNET ERNEST JONES H.SAMUEL JEWELERS LOVE & LIFE THE JEWELLER
Slide 92: Benefits of In-House Credit
Benefits of In-House Credit ‣ Credit decisions are made in the context of the overall business ‣ Highly specialized credit decision models ‣ Process designed for rapid repayment and creating open-to-buy credit ‣ 12% - 14% of outstanding AR balance collected monthly ‣ Strong credit performance ‣ Cred
Slide 93: Managing Commodity Costs
Managing Commodity Costs ‣ Goal is to maintain merchandise margin rate over time ‣ It is our responsibility to provide merchandise that meets customers’ budget and quality requirements ‣ Innovative designs and materials assist us in maintaining key price points
Slide 94: Best-in-Class Inventory Management
Best-in-Class Inventory Management Fiscal Fiscal Fiscal Fiscal Fiscal 2008 2009 2010 2011 2012 Inventory $1,453.6 $1,364.4 $1,173.1 $1,184.2 $1,304.1 (Millions) % of Sales 39.9% 41.0% 35.8% 34.5% 34.8%
Slide 95: Key Points on Financial Business Model
Key Points on Financial Business Model ‣ 94% of operating income generated in US in Fiscal 2012 ‣ US main driver of value ‣ UK performance stabilized and expect improvement in performance ‣ Proven business model delivering profit growth and cash generation
Slide 96: Proven Financial Performance
Proven Financial Performance Gross Margin (%) SG&A to Sales (%) 40 29.5 38 29 36 38.3 28.5 29.1 34 36.2 28 28.5 28.2 32 33.9 27.5 28.0 30 32.0 32.6 27 27.5 28 26.5 FY08 FY09 FY10 FY11 FY12 FY08 FY09 FY10 FY11 FY12 Operating Income ($ Millions) Diluted EPS ($) 600 4 500 3.73 507.4 3 400 300 372.5 2 2
Slide 97: Growth in US Store Productivity
Growth in US Store Productivity FY12 $1.899 Million FY09 $1.525 Million FY12 FY09 $5.157 Million $4.473 Million
Slide 98: Operating Margin Expansion
Operating Margin Expansion Operating Margin Milestone – >15% Driven by: ‣ Customer Experience ‣ Merchandising ‣ Marketing ‣ Investment in Productivity Technology ‣ Credit Operating Margin (%) * Excludes goodwill impairment and relisting costs (“items”) of $516.9M and $10.5M, respectively. Operating
Slide 99: Cash Generation & Management
Cash Generation & Management ‣ Proven ability to generate cash ‣ Top priority is re-investing in the business ‣ Shareholder returns ‣ Dividends ‣ Share repurchase program ‣ Purchased 7.7% of outstanding equity ‣ Year end cash target of 7% - 9% of sales
Slide 100: Drivers of Future Earnings Growth
Drivers of Future Earnings Growth ‣ Long term industry sales growth ~4% ‣ Committed to gaining profitable market share ‣ Proven ability to prudently & thoughtfully manage expenses ‣ Distribution expansion through space growth and digital environment ‣ Business model drives free cash flow and creates
Slide 101: Questions and Answers
Mike Barnes Questions and Answers