Signet Jewelers Limited · NYSE:SIG
Signet Jewelers — Bank of America Securities Consumer Conference 2009
14 slides from Signet Jewelers's conference presentation, Mar 11, 2009
Slide 1: Competitive Advantages Reinforcing Sector Leadership
“Competitive Advantages Reinforcing Sector Leadership” March 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 Kay Jewelers - #1 in US H.Samuel - #1 in UK Sales: c.$1.4bn Stores: 926 in 50 states Sales: c.£250m Stores: 352 Jared - #1 Off-Mall “Category Killer” Ernest Jones - #1 UK upper middle market Sales: c.$700m Stores: 171 in 35 states Sales: c.£205m Stores: 206 3 As at
Slide 4: Very Challenging Environment
Very Challenging Environment Ö General consumer weakness Ö US specialty jewelry sales down 18.5% over Holiday Ö second poor Christmas for middle market Ö Volatile commodity costs Ö Weak operators causing short term disruption Ö Outlook uncertain, concerns over increasing unemployment 4
Slide 5: Reasons to Invest in Sector
Reasons to Invest in Sector Ö People will continue to buy jewelry Ö bridal Ö gift giving Ö self reward Ö Accelerated sector rationalization underway Ö fragmented market • c.25,000 specialty doors in US • 22,623 firms with sales of $29 billion Ö Sustainable competitive advantages can be established b
Slide 6: Our Competitive Advantages in US
Our Competitive Advantages in US Ö Quality of customer service Ö 3.8 diamontologists per store on average Ö leading in-store operations Ö Direct source c.50% of polished diamonds Ö Successful, exclusive merchandise Ö Kay and Jared advertise on national TV Ö High quality real estate Ö In-house credit
Slide 7: Our Competitive Advantages in US
Our Competitive Advantages in US Ö Quality of customer service Ö 3.8 diamontologists per store on average Ö leading in-store operations Ö Direct source c.50% of polished diamonds Ö Successful, exclusive merchandise Ö Kay and Jared advertise on national TV Ö High quality real estate Ö In-house credit
Slide 8: Outperformance over Holiday 2008
Outperformance over Holiday 2008 Same Store Sales Gross Margin Signet US (16.1)% c.+250 bptsa Zales (inc Canada) (17.9)% -530 bpts Finlay specialty jewelry c.(35.0)% na Blue Nile (US) c.(28.0)%b c.-50 bptsc Birks & Mayors (US) (28.0)% -590 bptsc Shane (32.0)%d na Tiffany (US) (35.0)% na a Gross merc
Slide 9: Signet's Leading Performance
Signet’s Leading Performance Sales Operating EBIT/Total Growth Margin Assetsa 5 year 5 year 5 year c.a.g.r. average average Signet USb 9.4% 12.0% 14.9% Zale Corpc (0.9)% 4.8% 8.2% Typical US Specialty 4.4% 5.5% 7.7% Jewelerd a Total assets excludes goodwill b To y.e. February 2, 2008 c To y.e. Janua
Slide 10: Competitors Under Pressure
Competitors Under Pressure Sales $m No. of stores 2007 2002 2007 2002 Kaya 1,490 1,011 894 676 Zalesab 1,089 1,004 789 757 Jareda 756 259 154 67 Helzbergd 500 550 268 254 Fred Meyerde 465 475 400 442 Gordon’sab 329 321 282 298 Friedman’scd 300 674 Liquidated 2008 665 Bailey Banks & Biddleab 284 315
Slide 11: Industry Leader in UK
Industry Leader in UK Öc.60% larger than 3rd largest US mid market jeweler ÖSimilar sustainable competitive advantage to US division ÖBigger than next 5 UK competitors combined ÖStrong financial performance 5 year average Operating Margin EBIT/Total Assetsa Signet UKb 12.7% 23.5% Typical UK Specialt
Slide 12: Financial Strength
Financial Strength Ö EBIT / interest of about 7 timesa Ö Cash flow positive before financing activitiesa Ö Net debt / tangible net worth of around 30%a Ö Market capitalisation / tangible net wortha of about 40% Ö Store investment requires 20% IRR over 5 years Ö In compliance with borrowing agreement
Slide 13: Priorities in Fiscal 2010
Priorities in Fiscal 2010 Ö Action to realign trading stance in extremely challenging marketplace Ö work with suppliers to offset impact of input cost increases Ö maximize gross margin dollars in highly promotional environment Ö cut costs Ö decrease inventory Ö lower capital expenditure & a small sp
Slide 14: Competitive Advantages Reinforcing Sector Leadership
“Competitive Advantages Reinforcing Sector Leadership” March 2009
Signet Jewelers — Bank of America Securities Consumer Conference 2009 on 6ix