Signet Jewelers Limited · NYSE:SIG
Signet Jewelers — Soleil Securities Conference Call July 2009
15 slides from Signet Jewelers's conference presentation, July 2009
Slide 1: Competitive Advantages Reinforcing Sector Leadership
“Competitive Advantages Reinforcing Sector Leadership” Soleil Securities July 2009
Slide 2: Safe Harbor Statement
Safe Harbor Statement (Private Securities Litigation Reform Act of 1995) This presentation include 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 as well as on assumptions m
Slide 3: World's Largest Specialty Jeweler
World’s Largest Specialty Jeweler Group sales $3,344 million – 76% US / 24% UK Kay Jewelers - #1 mid market brand H.Samuel - #1 in UK Sales: $1,439m Stores: 926 in 50 states Sales: £250m Stores: 352 Jared - #1 Off-Mall “Category Killer” Ernest Jones - #1 UK upper middle market Sales: $726 Stores: 17
Slide 4: Market Leader in US & UK
Market Leader in US & UK Ö $65.7 billion total US jewelry market Ö Signet US 3.9% share Ö $28.3 billion US specialty jewelry market Ö Signet US market leader with 9.0% share Ö 1.5x size of second largest operator Ö UK market Ö £5.5 billion total jewelry market Ö Signet UK market share about 10% Ö bi
Slide 5: Signet's Strengths
Signet’s Strengths Ö People will continue to buy jewelry Ö bridal, gift giving, self reward Ö Sustainable competitive advantages based on: Ö scale Ö expertise & consistency of execution Ö financial strength Ö Accelerated rationalization in fragmented specialty sector Ö some 22,600 firms with sales o
Slide 6: Sector Leading Expertise
Sector Leading Expertise Ö Excellence in customer service Ö staff training, development and incentivization programs Ö Superior merchandising Ö leading middle market supply chain expertise and merchandising systems Ö ability to develop differentiated ranges Ö Strong brands and largest marketing spen
Slide 7: Outperformance of US Sector
Outperformance of US Sector Q4 Fiscal 09 Q1 Fiscal 10 Same Store Gross Same Store Gross Sales Margin Sales Margin Signet US (16.1)% c.+250 bptsa (2.6)% +90 bptsa Zale Corp (inc Canada) (17.9)% -530 bpts (20.0)% +260 bpts Finlay specialty jewelry c.(35.0)% n/a c.(20.0)% n/a Blue Nile (US)b c.(28.0)%
Slide 8: Signet US Leading Performance
Signet US Leading Performance Operating EBIT/Total Average 2002 to 2007 Margin Assetsa Signet USb 12.0% 14.9% Zale Corpc 5.3% 8.8% Typical US Specialty Jewelerd 5.5% 7.7% Signet US 2008e 6.8% 7.5% Zale Corp 2008f (5.5)% (8.8)% a Total assets excludes goodwill b To y.e. February 2, 2008 c To y.e. Jan
Slide 9: Accelerated Consolidation
Accelerated Consolidation Sales $m No. of stores Calendar 2008 2007 2002 2008 2007 2002 Kaya 1,439 1,490 1,011 926 894 676 Zalesab Gordonsab 1,554 { 1,089 329 1,004 321 1,045 { 789 282 757 298 Jareda 726 756 259 171 154 67 Fred Meyerde 410 465 475 386 400 442 Helzbergd 400 500 550 235 268 254 Friedm
Slide 10: Industry Leader in UK
Industry Leader in UK Operating EBIT/Total Average 2002 to 2007 Margin Assetsa Signet UKb 12.7% 23.5% Typical UK Specialty Jewelersc 7.1% 10.3% Signet UK 2008d 8.8% 20.8% a Total assets excludes goodwill b To y.e. February 2, 2008 c Based on latest Companies House filings for 5 largest specialty jew
Slide 11: Financial Strength
Financial Strength Ö Robust coverage ratios Ö interest cover 7.9x Ö fixed charge cover 1.9x Ö net debt / shareholders equity 29.2% Ö Committed borrowing facilities Ö current availability $650 million versus net debt of $471 million at January 31, 2009 Ö term to 2013 and beyond 11
Slide 12: Group Strategy & Objectives
Group Strategy & Objectives Ö Group Strategy Ö enhance position as strongest middle market specialty retail jeweler Ö focus on profit & free cash flow maximization to further strengthen balance sheet Ö reduce business risk Ö Group Objectives in fiscal 2010 Ö $100 million US cost saving program Ö $10
Slide 13: Encouraging Start to Fiscal 2010
Encouraging Start to Fiscal 2010 Ö Significant progress towards achieving financial objectives for fiscal 2010 Ö Total sales (1.1)% at constant exchange rates, (7.3)% as reported Ö Gross merchandise margin up in US (+90 bpts) and UK (+40 bpts) Ö Operating income up 14.2% to $52.4m(1) Ö EPS of 31 cen
Slide 14: Improving Free Cash Flow Trend
Improving Free Cash Flow Trend Fiscal Fiscal Consensus $ million 2008 2009 Fiscal 2010 Adjusted net income(1) 333.6 259.8 ≈215 Change in operating assets & liabilities (ex new US stores) (74.1) (28.9) ≈85 Investing activities (ex new US stores) (79.3) (74.3) ≈(45) Investment in new US stores(2) (178
Slide 15: Outlook
Outlook Ö Economic outlook remains very uncertain Ö Further significant capacity reductions from competitors Ö Opportunity to increase sector leadership by Ö focusing on reinforcing competitive advantages Ö gaining profitable market share in existing stores Ö quickly responding to changing condition
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