Signet Jewelers Limited · NYSE:SIG
Signet Jewelers — FY2012 Earnings Presentation
30 slides from Signet Jewelers's earnings presentation, Mar 22, 2012
Slide 1: Fiscal 2012 Results
Fiscal 2012 Results Thursday, March 22, 2012
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: Fiscal 2012 Results Highlights
Fiscal 2012 Results Highlights Same store sales up 9.0% US division up 11.1% UK division up p 0.9% Income before income taxes $502.1 million, up 67.1%1 Diluted earnings per share $3.73, up 60.8%1 1. There was a non-recurring item in the 52 weeks ended January 29, 2011 (“Fiscal 2011”) of $4
Slide 4: Shareholder Distribution
Shareholder Distribution $0.10 per share dividend initiated in Fiscal 2012 Quarterly dividend increased in first quarter of Fiscal 2013 to $0.12, up 20.0% $300 million share buy buy-back back program commenced in January 2012 4
Slide 5: US Performance
US Performance Sales Change in same Change in store sales sales Fiscal 2012 Kay $1,786.8m 11.8% 12.2% Jared $956.8m 12.1% 12.8% R i Regionals l $290 5 $290.5m 4 1% 4.1% (4 1)% (4.1)% US division $3,034.1m 11.1% 10.6% Operating income income, net $478 0m $478.0m up 39 39.5% 5% Operating margin 15.8%
Slide 6: US Performance Drivers - Merchandise
US Performance Drivers - Merchandise Bridal & fashion initiatives Strong watch performance Differentiated and exclusive brands up 400 bpts to 26% of merchandise sales Maintained gross merchandise margin rate 6
Slide 7: US Performance Drivers – Marketing
US Performance Drivers – Marketing Marketing up 16 16.7% 7% to $188.4 million Increased focus on bridal category g y Major improvements to Kay & Jared websites 7
Slide 8: US Performance Drivers – In-House Customer Finance
US Performance Drivers – I -House In- In H C Customer t Fi Finance Tailored to our customer’s needs Participation up 190 bpts to 56.1% 8
Slide 9: UK Performance
UK Performance S l Sales Change in Ch i Change in Ch i same store sales at sales CER1 Fiscal 2012 H.Samuel $389.0m 1.6% 0.9% Ernest Jones $326 1m $326.1m 0 0% 0.0% (1 1)% (1.1)% UK division $715.1m 0.9% (0.1)% Operating income, net $56.1m down 4.8% at CER1 Operating margin 7.8% down 40 bpts 1. Chang
Slide 10: UK Performance Drivers
UK Performance Drivers Outperformance by branded jewelry, fashion as o watches, a c es, a and d bridal Marketing up 21.7% eCommerce up 15.5% 10
Slide 11: UK Performance Drivers – Store Environment
UK Performance Drivers – Store Environment New Ernest Jones store design g development of watch boutiques q Testing new H.Samuel store design 11
Slide 12: Our mission is to further enhance Signet's position as the market leader
“Our mission is to further enhance Signet’s position as the market leader in both the US and the UK specialty retail jewelry markets by offering a unique customer experience and driving customer loyalty.” 12
Slide 13: Strategic Imperatives
Strategic Imperatives Develop & train our team members to consistently enhance the retail experience of our customers Grow new & existing brands & categories to delight customers Drive competitive strengths & infrastructure to enable growth g Optimize capital structure to manage risk & make
Slide 14: Developing & Training Team Members
Developing & Training Team Members Recruit R it and d retain t i the best Training to support initiatives merchandising in-store systems digital environment 14
Slide 15: Brands Delighting Customers
Brands Delighting Customers Bridal Leo® Diamond Neil Lane Bridal ® Tolkowsky ® Diamond Fashion jewelry Open Hearts by Jane Seymour® Charmed Memories ® Le Vian ® Watches 15
Slide 16: Drive Competitive Strengths & Infrastructure to Enable Growth
Drive Competitive Strengths & Infrastructure to Enable Growth Add appropriate senior management expertise Establish permanent international capabilities in selected locations Seeking further improvements in sourcing capabilities 16
Slide 17: Investing in Sales-Enhancing Technology
Investing in Sales- Sales-Enhancing Technology 17
Slide 18: Investing in the Future
Investing in the Future Store investment of $95 - $105 million planned plan to open 45 US stores 110 major store refurbishments or relocations scheduled – 90 US & 20 UK $40 - $45 million for sales-enhancing t h l technology and d IT infrastructure i f t t 18
Slide 19: Fiscal 2012 Sales Performance
Fiscal 2012 Sales Performance US UK Total Sales Fiscal 2012 $m 3,034.1 715.1 3,749.2 Sales Fiscal 2011 $m 2,744.2 693.2 3,437.4 Ch Change in i sales l % % % Change in same store sales 11.1 0.9 9.0 g in store space, Change p , net ((0.5)) ((1.0)) ((0.6)) Change in total sales at constant 10.6 (0.1) 8
Slide 20: Fiscal 2012 Reconciliation
Fiscal 2012 Reconciliation % of sales Income before tax Fiscal 2011 $300.4m 8.7% Gross margin movement $194.7m 2.1% Selling, general & admin. expense movement $(76.3)m 0.3% Other operating income movement $16.5m 0.3% Operating income movement $134.9m 2.7% Net interest movement inc. Make Whole $66.8m
Slide 21: Fiscal 2012 SG&A Reconciliation
Fiscal 2012 SG&A Reconciliation $m % of sales SG&A Fiscal 2011 980.4 28.5% Incremental advertising investment 30.1 Store staff flex 26.9 ( ) increase 401(k) 6.5 Currency movement 6.2 Change in other items 6.6 SG&A Fiscal 2012 1,056.7 28.2% 21
Slide 22: US Customer Finance Statistics
US Customer Finance Statistics Fiscal Fiscal 2012 2011 Customer finance participation 56.1% 54.2% Average g outstanding g balance at yyear $1,068 $ , $1,029 $ , end Average monthly collection rate 12.7% 12.6% Net bad debt to US sales 3.4% 4.2% Closing receivables $1,155.5m $995.5m 22
Slide 23: Cash Flow
Cash Flow Fiscal Fiscal 2012 2011 $m $m Net cash provided by operating activities 325.2 323.1 Net cash used in investing activities (97.8) (55.6) 227.4 267.5 Net cash used in financing activities (40.0) (282.3) Increase/(decrease) in cash & cash 187.4 (14.8) equivalents Cash and cash equivalents, en
Slide 24: Current Trading
Current Trading g February February Fi Fiscal l 2013 Fi Fiscal l 2012 Kay 8.4% 11.4% Jared 8.1% 9.4% Regional brands 1.2% 3.5% Total US 7.6% 10.0% H.Samuel -2.3% -1.0% Ernest Jones -4.1% -4.4% Total UK -3.1% -2.6% Total Consolidated 6.2% 8.1% 24
Slide 25: Calendar Shifts
Calendar Shifts Impact of movement of Mother’s Day transfers sales from Q1 to Q2 Impact of 53rd week Fiscal 2014 Valentine’s Day marketing starts in Fiscal 2013 25
Slide 26: Fiscal 2013 Financial Objectives
Fiscal 2013 Financial Objectives j Signet’s goal is to deliver record results & make strategic investments for future growth increase sales & gain profitable market share maintain gross margin rate while offsetting commodity costs at a minimum to maintain SG&A to sales ratio i invest $145
Slide 27: Fiscal 2012 Results
Fiscal 2012 Results Thursday, March 22, 2012
Slide 28: Appendix Regulation G
Appendix Regulation G 28
Slide 29: Impact of Non-recurring Item
Impact of Non Non--recurring Item On November 26, 2010, Signet incurred a $47.5 million non-recurring ‘Make Whole’ payment arising from the prepayment in full of its private placement notes. Management considers it useful to exclude this significant, unusual and non-recurring item to analyze and exp
Slide 30: Exchange Translation Impact on Fiscal 2012 Results
Exchange Translation Impact on 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 f analyzing l i and d explaining l i i changes h and d ttrends d iin Si Signet’s t’ re