Signet Jewelers Limited · NYSE:SIG
Signet Jewelers — Investor Presentation (June 2024)
35 slides from Signet Jewelers's investor presentation, Jun 13, 2024
Slide 1: Investor Presentation June 2024
June 2024 INVESTOR PRESENTATION
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT This presentation contains certain forward-looking statements. Any statements that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. We urge you to read the risk factors, cautionary language, and other disclos
Slide 3: A Transformed Signet Presents a Strong Investment Thesis
A TRANSFORMED SIGNET PRESENTS A STRONG INVESTMENT THESIS Gr owth Potential with Unique Scale in the Attr active Jewelr y Categor y A Tr ansfor m ed Unique Advantage Gr owth Attr active Categor y Com pany Thr ough Scale Oppor tunities Within Retail Differentiated banners One of only four retail Engag
Slide 4: Signet Is the Leading Global Diamond Retailer at 3x the Size of Nearest Competitor
SIGNET IS THE LEADING GLOBAL DIAMOND RETAILER AT 3X THE SIZE OF NEAREST COMPETITOR IN US • Signet (NYSE: SIG) operates ~2,700 stores across a diversified banner portfolio in North America and the United Kingdom • Consumer insight and digital led Company • More than $7 billion in annual revenue expec
Slide 5: Our Flexible Operating Model Generates Shareholder Value
OUR FLEXIBLE OPERATING MODEL GENERATES SHAREHOLDER VALUE Widening com petitive advantages: Str ong annual non- GAAP estim ated 3 points shar e gr owth in 4 year s 1 oper ating m ar gin ~ 10 %2 • Utilize scale to capture sourcing benefits • Drive out costs (>$750m) • Leverage acquisition integration
Slide 6: Transformation Over the Last 4 Years Has Doubled Non-GAAP Operating Income
TRANSFORMATION OVER THE LAST 4 YEARS HAS DOUBLED NON- GAAP OPERATING INCOME1 We Believe We’ve Cr eated a Flexible and Sustainable Oper ating Model Revenue $ Non-GAAP Non-GAAP Estimated U.S. (in billions) Operating Income Operating Margin Market Share3 (in millions) 9.0% 9.0% $7.2 $643 $6.1 6.6% $318
Slide 7: Our Strategy Has Built a Strong Balance Sheet
OUR STRATEGY HAS BUILT A STRONG BALANCE SHEET Pr efer r ed m atur ity this year pr ovides oppor tunity to r educe diluted shar e count by ~ 15 % Signet Lever age Ratios 2 Balance Sheet Amount Maturity Unsecured Notes $0.15B Jun CY24 ≤ • Signet’s cash floor is $250 1 to $300 million, which Convertibl
Slide 8: Signet Jewelers: Purposeful Change, Powerful Progress
SIGNET JEWELERS: PURPOSEFUL CHANGE, POWERFUL PROGRESS
Slide 9: Signet Has Fundamentally Transformed Over the Last 5 Years
SIGNET HAS FUNDAMENTALLY TRANSFORMED OVER THE LAST 5 YEARS Old Signet New Signet Banners Overlap and Differentiated Banner Value Propositions Aimed Compete with Each Other at Unique Customer Shopping Journeys Mid-Fine & Diverse Portfolio Across Semi-Fine, Mid-Tier and Primarily Bridal Accessible Lux
Slide 10: Strategic Alignment Drove Banner Differentiation, ~80% of Jewelry Category Covered
STRATEGIC ALIGNMENT DROVE BANNER DIFFERENTIATION AND WE NOW COVER ~80% OF THE JEWELRY CATEGORY Est. Total Confident St at em ent Generous Extroverted Savvy Market Creatives Makers Sentimentalist Romantics Affluents ~$11B ~$10B ~$17B ~$10B ~$8B Express their Seek to be Select and Give Prefer high per
Slide 11: Strategic Investments, Acquisitions and Fleet Optimization Changed Our Business Architecture
STRATEGIC INVESTMENTS, ACQUISITIONS AND FLEET OPTIMIZATION HAVE CHANGED THE ARCHITECTURE OF OUR BUSINESS Optim izing our physical and digital footpr int has helped dr ive a ~ 40% incr ease to FY17 sales PSF Digital Investm ents & Fleet Tr ansfor m ation Investm ents in Fashion & Ser vices Gr owth in
Slide 12: Investments in Digital Lead Our Retail Footprint Optimization
INVESTMENTS IN DIGITAL LEAD OUR RETAIL FOOTPRINT OPTIMIZATION FY17 FY20 FY24 7 Year Change eCommerce Penetration 6% 12% 23% +1700 bps Number of Stores 3,682 3,208 2,698 (27%) Sales Per Square Foot $1,255 $1,334 $1,751 +40% Over 75% of in-store Kay, our largest 30% of online orders buyers also intera
Slide 13: Shift from On-Balance Sheet Credit to Third-Party Partnerships
SIGNET HAS SHIFTED FROM ON-BALANCE SHEET CREDIT TO STRONG 3RD PARTY PARTNERSHIPS TO PROVIDE FINANCING OPTIONS FOR CONSUMERS No consumer credit on balance sheet | Provides guaranteed commitment levels | Reflects historically stable delinquency rates among finance partners Pr ovides cr edit to the lar
Slide 14: Mid-Term Growth Strategy
, SLGNET MID-TERM GROWTH STRATEGY KAY ZALES JARED Banter | O, BlueNile @jwnsrui TOCksbox PEOPLES sioner HSAMUEL sevestiones — GIGNET
Slide 15: Clear Path to Deliver Strong Growth Over the Next 4 Years
WE BELIEVE OUR STRATEGY PROVIDES A CLEAR PATH TO DELIVER STRONG GROWTH OVER THE NEXT 4 YEARS Signet’s Mid- ter m Goals $9–10 B 11–12% 11–12% In To t a l Re ve n u e Non - GAAP U.S. Mar ket Sh ar e Op er at in g Mar gin Up from $7.2B Up from 9.0% in Up from 9.0% in in FY2024 FY2024 FY2024 $14 - $16 N
Slide 16: Significant Runway for Growth Driven by Strategic Investments, Engagement Recovery
SIGNIFICANT RUNWAY FOR GROWTH DRIVEN BY STRATEGIC INVESTMENTS, ENGAGEMENT RECOVERY Mid- ter m Revenue Gr owth Pillar s Shar e Gains: Engagem ent Recover y Accessible Luxur y Banner s Ser vices Mar keting, Digital, Data Gr o w t h $0 .6B $1B+ $0 .5B ~ $0 .5B Dr ive r s Ad d it io n a l Re ve n u e Ad
Slide 17: Engagement Recovery Under Way, More Than 25% Growth Expected Through 2026
ENGAGEMENT RECOVERY UNDER WAY, WITH MORE THAN 25% GROWTH EXPECTED THROUGH 2026 Engagem ent r ecover y will be dr iven by m ulti- cultur al couples, r eflecting changing dem ogr aphics Incidents of engagem ents tr oughed in the Fall of Fiscal 20 24 and ar e Signet is well positioned to benefit fr om
Slide 18: Accessible Luxury Represents an Attractive Growth Category
ACCESSIBLE LUXURY REPRESENTS AN ATTRACTIVE GROWTH CATEGORY Executing our Str ategy to Gr ow Accessible Luxur y by $1+ Billion & Doubling Pace of Openings Leveraging Our Scale Capitalizing on Our Digital by Expanding to New & Market Insights Capabilities Markets Customization Innovations Wide-scale D
Slide 19: Leaning Into Accessible Luxury Is Improving Average Transaction Value
LEANING INTO ACCESSIBLE LUXURY IS IMPROVING AVERAGE TRANSACTION VALUE PRIMARILY BASED ON ASSORTMENT ARCHITECTURE Higher pr ice point item s dr iven by pr em ium quality m etals, fancier cuts and lar ger car ats N. Am er ica ATV Jar ed ATV Diam onds Dir ect ATV +~40% +~60% >3x FY20 to FY20 to Compare
Slide 20: Accelerating Margin Accretive Services to Drive Growth
ACCELERATING MARGIN ACCRETIVE SERVICES TO DRIVE GROWTH We believe we can gr ow Ser vices by $500 m illion thr ough continued investm ent and innovation Extended Ser vice Agr eem ents (ESAs) Car e and Repair Custom ization Loyalty Increasing Industry leading Engraving services >6 million members P r
Slide 21: Digital Innovation Creates a Unique Connected Commerce Experience
OUR DIGITAL INNOVATION CREATES A UNIQUE CONNECTED COMMERCE EXPERIENCE FOR JEWELRY CUSTOMERS Lever aging our gr owing Custom er Data Platfor m and AI capabilities will pr ovide for per sonalized shopping exper iences Past Cur r ent In- Pr ogr ess AI & data driven content pushes Standard self-directed
Slide 22: Margin Expansion Initiatives Fuel Growth
MARGIN EXPANSION INITIATIVES FUEL GROWTH Strategic Revenue Management Optimizing Pricing & Promotions Advanced Assortment Planning and Merchandise Planning Demand Forecasting Driven by AI/Machine Learning NextGen Flexible Fulfillment Supply Chain Reverse Logistics and Inventory Management Acquisitio
Slide 23: Recent Developments
RECENT DEVELOPMENTS Q1 Revenue & Adjusted Q1 FY25 Inventory Operating Income down 9% to Q1 of Results in top half of FY24 guidance range Reduction includes investing in more new merchandise inventory Repurchased half of Further Preferred Preferred shares in shares 22 repurchased in April May ~1/3 of
Slide 24: Re-Affirmed FY 2025 Guidance
Re-Affirmed FY 2025 Guidance 1 Full Year Fiscal 2025 Second Quarter Fiscal 2025 Total sales1 $6.66 billion to $7.02 billion Total sales1 $1.46 billion to $1.52 billion Same Store Sales1 -4.5% to +0.5% Same Store Sales1 -6% to -2% Operating income1 $590 million to $675 million Operating income1 $50 m
Slide 25: A Transformed Signet Presents a Strong Investment Thesis
A TRANSFORMED SIGNET PRESENTS A STRONG INVESTMENT THESIS Gr owth Potential with Unique Scale in the Attr active Jewelr y Categor y A Tr ansfor m ed Unique Advantage Gr owth Attr active Categor y Com pany Thr ough Scale Oppor tunities Within Retail Differentiated banners One of only four retail Engag
Slide 26: Appendix
, SLGNET APPENDIX KAY ZALES JARED Banter BlueNile @ousAuiw TOCKsbox PEOPLES JS sioner HSAMUEL senesr jones GIGNET
Slide 27: FY24 Revenue Gains Are from Core Market Share Growth & Acquisitions
SIG’S FY24 REVENUE GAINS ARE FROM CORE MARKET SHARE GROWTH & ACQUISITIONS, NOT A SUSTAINING COVID IMPACT Str ategic or ganic investm ents and acquisitions dr ove m ar ket shar e gr owth, par tially offset by pandem ic r educed engagem ent activity in FY20 24 A1
Slide 28: Higher Margins Generated by Initiatives & Flexible Model
HIGHER MARGINS GENERATED BY INITIATIVES & FLEXIBLE MODEL Mor e than $750 m illion in cost outs over 4 year s +3.1% (1.7%) (2.8%) +3.1% (1.5%) +2.0 % 9.0 % +1.1% $643m 5.2% +0 .4% $318m 1 FY20 Op Ser vices Cr edit Optim ized Fleet FY24 Br idal Str ategic Inflation FY24 Op In com e Accr etion Tr an sf
Slide 29: ~$17B Annual Spend on Jewelry Gifting Creates Attractive Opportunities
~$17B ANNUAL SPEND ON JEWELRY GIFTING CREATES ATTRACTIVE OPPORTUNITIES The engagem ent categor y is one of the ‘stickiest’ entr y points, cr eating lifelong custom er s for var ious gifting occasions RELATIONSHIP SPECIAL EVENT BIRTHDAY ANNIVERSARY MILESTONE GRADUATION (E.G., PROM/ RELIGIOUS) REMEMBR
Slide 30: Dating Has Returned to Pre-COVID Levels
Search Index 100 20 30 40 50 60 70 80 90 2019-01 2019-02 2019-03 2019-04 2019-05 2019-06 2019-07 2019-08 2019-09 2019 Avg: 74 2019-10 2019-11 2019-12 2020-01 lockdown April 2020 2020-02 2020-03 2020-04 2020-05 2020-06 2020-07 2020-08 2020-09 2020-10 2020-11 2020-12 2021-01 2021-02 2021-03 2021-04 ca
Slide 31: Non-GAAP Reconciliations Tables
NON-GAAP RECONCILIATIONS TABLES Non-GAAP operating income and non-GAAP operating margin Non-GAAP operating income is a non-GAAP measure defined as operating income excluding the impact of certain items which management believes are not necessarily reflective of normal operational performance during
Slide 32: Non-GAAP Reconciliations Tables (cont.)
NON-GAAP RECONCILIATIONS TABLES (cont.) Free cash flow, adjusted free cash flow and free cash flow conversion Free cash flow is a non-GAAP measure defined as the net cash provided by operating activities less purchases of property, plant and equipment. Adjusted free cash flow, a non-GAAP measure, ex
Slide 33: Non-GAAP Reconciliations Tables (cont.)
NON-GAAP RECONCILIATIONS TABLES (cont.) Adjusted EBITDA and adjusted EBITDAR EBITDA is a non-GAAP measure defined as earnings before interest, income taxes, depreciation and amortization. Adjusted EBITDA is a non-GAAP measure, defined as earnings before interest, income taxes, depreciation and amort
Slide 34: Non-GAAP Reconciliations Tables (cont.)
NON-GAAP RECONCILIATIONS TABLES (cont.) Adjusted debt and adjusted net debt Debt and net debt leverage ratios leverage ratios The debt and net debt leverage ratios are non-GAAP measures calculated by The adjusted debt and adjusted net debt leverage ratios are non-GAAP measures dividing Signet’s debt
Slide 35: Safe Harbor & Forward-Looking Statement
SAFE HARBOR & FORWARD-LOOKING STATEMENT This presentation contains statements which are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon management's beliefs and expectations as well as on assumptions made by and d