Signet Jewelers Limited · NYSE:SIG
Signet Jewelers — Q3 Fiscal 2010 Earnings Presentation
18 slides from Signet Jewelers's earnings presentation, Nov 24, 2009
Slide 1: Fiscal 2010 Q3 Results
Fiscal 2010 Q3 Results November 24, 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: Further Progress in Executing Strategy
Further Progress in Executing Strategy Ö Maximize profit and cash flow Ö Strengthen balance sheet Ö Reduce business risk Ö Focus on competitive advantages Ö Increase market share in a consolidating sector Ö Well placed for Holiday Season and recovery in consumer confidence 3
Slide 4: Some Improvement in Sales Trends in Q3
Some Improvement in Sales Trends in Q3 Q3 Year to Date US UK Group US UK Group % % % % % % Same store sales (2.4) (0.2) (1.9) (3.5) (3.0) (3.4) Change in store space 0.7 4.7 1.7 1.3 3.8 1.8 Constant exchange rate (1.7) 4.5 (0.2) (2.2) 0.8 (1.6) Exchange impact - (9.2) (2.3) - (18.4) (4.4) As reporte
Slide 5: Another Quarter of Improvement
Another Quarter of Improvement Q3 Year to Date 2010 2009 2009 2010 2009 2009 $m CER GAAP $m CER GAAP $m $m $m $m Sales 613.7 615.1 629.3 2,087.1 2,121.0 2,220.7 Operating (loss) / income (3.1) (12.8) (14.2) 95.9 71.3 69.2 Interest expense (7.4) (9.4) (9.4) (26.5) (21.9) (22.1) (Loss) / Income before
Slide 6: Movement in Operating Margin
Movement in Operating Margin Quarter 3 Year to Date US UK Group US UK Group Operating margin fiscal 2009 (1.3)% (2.4)% (2.3)% 5.4% 0.3% 3.1% Relisting costs 0.5% Operating margin excluding relisting cost (1.3)% (2.4)% (2.3)% 5.4% 0.3% 3.6% Gross merchandise margin 1.4% (0.1)% 1.1% 0.8% 0.3% 0.7% Ope
Slide 7: Good Progress Against Financial Objectives
Good Progress Against Financial Objectives Ö Gross merchandise margin Ö YTD: US up 80 bpts: UK up 30 bpts Ö Objective • US: at least at last year’s level • UK: little below last year Ö Slightly ahead of US cost reduction program Ö $70 million achieved YTD Ö $100 million full year objective* Ö UK cos
Slide 8: Good Progress Against Financial Objectives
Good Progress Against Financial Objectives Ö Capital expenditure Ö YTD $30.3 million (YTD fiscal 2009: $96.4 million) Ö full year target $55 million (fiscal 2009: $114.9 million) Ö 20% IRR criteria maintained Ö Inventory Ö successfully realigned Ö full year objective $100 million reduction further i
Slide 9: Continued Improvement in Free Cash Flow & Net Debt
Continued Improvement in Free Cash Flow & Net Debt YTD 10 YTD 09 $m $m Adjusted net income† 135.9 120.2 Change in operating assets* 217.4 (72.6) Investing activities* (26.8) (55.7) Investment in new US stores (17.0) (89.6) Dividends - (107.4) Issue of shares 0.9 - Foreign exchange impact (0.4) 1.9 C
Slide 10: US Jewelry
US Jewelry “Further growth from a proven strategy” 10
Slide 11: US Operating Results
US Operating Results Q3 Year to Date Change Change Total sales $459.3m (1.7)% $1,636.7m (2.2)% Same store sales (2.4)% (3.5)% ASP(a) $448 (3.7)% $392 (8.0)% Operating income $4.8m up $11.0m $111.6m up $20.9m Operating margin 1.0% up 230 bpts 6.8% up 140 bpts a excluding new product launch b Includes
Slide 12: Well Prepared For Holiday
Well Prepared For Holiday Ö Well trained and motivated staff Ö Increased selection of differentiated ranges Ö Robust supply chain flexibility Ö Additional targeted promotional activity Ö National television impressions broadly similar to last year Ö Increased focus on differentiated merchandise in m
Slide 13: In-house Receivables a Competitive Advantage
In-house Receivables a Competitive Advantage Ö YTD credit metrics Ö participation up 70 bpts Ö approval rate up 160 bpts Ö net bad debt to total sales 6.0% - up 120 bpts Ö collection rate 12.9% - down by 50 bpts Ö Performance driven by macro-economic factors Ö Credit offer unchanged while many compe
Slide 14: Opportunities in a Very Challenging Environment
Opportunities in a Very Challenging Environment Ö Poor economic environment Ö high levels of unemployment Ö low hours worked Ö increased savings rate Ö Opportunities in fourth quarter Ö significant specialty jewelry sector consolidation during last two years Ö no major jewelry liquidations in fourth
Slide 15: UK Jewelry
UK Jewelry “Making existing space work harder” 15
Slide 16: UK Operating Results
UK Operating Results Q3 Year to Date Change Change Total sales * $154.4m 4.5% $450.4m 0.8% Same store sales* (0.2)% (3.0)% ASP £80 7.6% £81 6.6% Operating loss $(3.6)m up $0.3m $(3.9)m down $(5.8)m Operating margin (2.3)% 10 bpts (0.9)% down 120 bpts * At constant exchange rates 16
Slide 17: Drivers of Q4 Performance
Drivers of Q4 Performance Ö Very challenging economic environment Ö Strengthened competitive position Ö further improvements in customer service Ö over 25% of holiday sales on new tested product Ö increase in key volume lines Ö utilization of 10 second TV advertising spots by H.Samuel Ö greater focu
Slide 18: Group Competitive Advantages Reinforcing Sector Leadership
Group Competitive Advantages Reinforcing Sector Leadership Ö Gaining profitable market share in sector undergoing accelerated rationalization Ö Effective strategy in tough environment Ö Strong balance sheet and cash flow Ö Strengthening significant competitive advantages Ö Well positioned for recove
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