Signet Jewelers Limited · NYSE:SIG
Signet Jewelers — Q2 2012 Earnings Presentation
20 slides from Signet Jewelers's earnings presentation, Aug 25, 2011
Slide 1: Fiscal 2012 Q2 Results
Fiscal 2012 Q2 Results August 25, 2011
Slide 2: 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 3: Q2 Fiscal 2012 Results Highlights
Q2 Fiscal 2012 Results Highlights Same store sales up 9.9% US division +12.2% (Q2 Fiscal 2011 +6.0%) UK division +1.4% (Q2 Fiscal 2011 -0.5%) 12.8% operating margin, +430 bpts record for Q2 Income before taxes $99.8 million, +$45.1 million or +82.4% Diluted eps $0.76, +$0.31 or +68.9%
Slide 4: Q2 US Performance
Q2 US Performance Changes in Sales Same store Sales ASP1 sales Q2 Fiscal 2012 Kay $367.5m 13.5% 13.5% 12.0% Jared $213.8m 12.6% 12.7% 8.6% Regionals $61.7m 4.0% (4.1)% 13.3% US division $643.0m 12.2% 11.3% 13.5% Operating income, net $104.4m up $43.7 million , +72.0% Operating margin 16.2% + 570 bpt
Slide 5: Superior In-Store Customer Experience
Superior In-Store Customer Experience Best-in-class customer service Focus on training & development of sales associates 5
Slide 6: Brands Driving Bridal Sales
Brands Driving Bridal Sales Continuing to roll out exclusive bridal ranges Bridal contributing to growth in ASP 6
Slide 7: Exclusive & Differentiated Brands
Exclusive & Differentiated Brands Strong performance by branded merchandise Creates a unique store destination Powerful selling proposition for sales associates 7
Slide 8: Effective Advertising Execution
Effective Advertising Execution 8
Slide 9: UK Performance
UK Performance Changes in Sales Same store Sales at ASP2 sales CER1 Q2 Fiscal 2012 H.Samuel $81.4m 3.3% 1.9% 6.9% Ernest Jones $73.2m -0.7% -1.8% 5.7% UK division $154.6m 1.4% 0.1% 5.3% Operating income $2.8m down by $1.9 million Fiscal 2011 included $0.9 million disposal gain Operating margin 1.8%
Slide 10: UK Initiatives
UK Initiatives Focused on providing a superior in-store experience Greater emphasis on differentiated & exclusive branded merchandise Increased marketing 10
Slide 11: Q2 Fiscal 2012 Sales Performance
Q2 Fiscal 2012 Sales Performance US UK Total Sales Q2 Fiscal 2012 $m 643.0 154.6 797.6 Sales Q2 Fiscal 2011 $m 557.7 142.0 719.7 Change in sales % % % Same store sales 12.2 1.4 9.9 Space impact (0.9) (1.3) (0.9) Change in total sales at constant 11.3 0.1 9.0 exchange rate1 Exchange translation impac
Slide 12: Reconciliation
Q2 Fiscal 2012 Reconciliation % of sales Income before tax Q2 Fiscal 2011 $54.7m 7.6% Gross margin movement $57.6m 4.0% Selling, general & admin. expense movement $(20.8)m 0.1% Other operating income movement $4.8m 0.2% Operating income movement $41.6m 4.3% Net interest movement $3.5m 0.6% Income be
Slide 13: SG&A Reconciliation
SG&A Reconciliation Q2 YTD % of Fiscal % of Fiscal $m 2011 SG&A $m 2011 SG&A SG&A Q2 Fiscal 2011 203.7 442.2 Net advertising investment 4.0 2.0% 10.6 2.4% Currency movement 3.5 1.7% 6.1 1.4% 401(k) increase 1.5 0.7% 3.0 0.7% Store staff flex 7.6 3.7% 15.8 3.6% Change in other items 4.2 2.1% 10.6 2.3
Slide 14: Receivables Trend Shows Continued Improvement
Receivables Trend Shows Continued Improvement 8.0 15.0 7.0 6.0 12.0 5.0 Net bad 9.0 Average debt 4.0 monthly as % of total 3.0 6.0 collection rate % US sales 2.0 3.0 1.0 Q2 Fiscal 2002 to Q2 Fiscal 2008 net bad debt range 3.2% to 4.2% 0.0 0.0 14
Slide 15: YTD Fiscal 2012 Highlights
YTD Fiscal 2012 Highlights Same store sales up 10.1% US division +12.4%, YTD Fiscal 2011 +6.7% UK division +0.8%, YTD Fiscal 2011 –0.4% 13.1% operating margin, +370 bpts record for period Income before taxes $217.6 million, +$88.8 million or +68.9% Diluted eps $1.63, +$0.60 or +58.3%
Slide 16: Cash Flow
Cash Flow YTD Fiscal YTD Fiscal 2012 2011 $m $m Net cash provided by operating activities 192.1 254.6 Net cash used in investing activities (38.3) (14.4) Free cash flow1 153.8 240.2 Net cash used in financing activities (15.5) (70.2) Increase in cash and cash equivalents 138.3 170.0 Cash and cash eq
Slide 17: Financial Outlook
Financial Outlook Fiscal 2012 Financial Objectives gain profitable market share improve gross margin ratio maintain broadly similar SG&A ratio planned capex in Fiscal 2012 of $110 million to $130 million Free cash flow now expected to be $175 million to $225 million 17
Slide 18: Regulation G Disclosures
Regulation G Disclosures JEWELERS
Slide 19: Exchange Translation Impact on Results
Exchange Translation Impact on Q2 Fiscal 2012 Results Signet has historically used constant exchange rates to compare period-to-period changes in certain financial data. Management considers this a useful measure for analyzing and explaining changes and trends in Signet’s results. The impact of the
Slide 20: Free Cash Flow
Free Cash Flow Free cash flow is a ―non-GAAP financial measure‖ defined as the net cash provided by operating activities less net cash flows used in investing activities. Management considers that it is helpful in understanding how the business is generating cash from its operating and investing act