Signet Jewelers Limited · NYSE:SIG
Signet Jewelers — Investor Presentation (August 2023)
36 slides from Signet Jewelers's investor presentation, August 2023
Slide 1: Investor Presentation August 2023
AUGUST 2023 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 ~2,800 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 3 year s 1 oper ating m ar gin ~ 10 %2 • Utilize scale to capture sourcing benefits • Drive out costs (>$700m) • 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 $7.2 (in millions) 9.1% 9.7% $655.0 $6.1 5.2% 6.
Slide 7: Our Strategy Has Built a Strong Balance Sheet
OUR STRATEGY HAS BUILT A STRONG BALANCE SHEET On a Net Debt to Adj. EBITDA basis, Signet’s lever age is near flat Signet TTM Lever age Ratios 2 Balance Sheet Amount Maturity Unsecured Notes $0.15B Jun CY24 Convertible Preferred 1 $0.65B Nov CY24 5x Annual Rent $2.23B Total Adjusted Debt $3.03B 3 3 3
Slide 8: Signet Jewelers: Our Transformation
SIGNET JEWELERS: OUR TRANSFORMATION
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 and We Now Cover 80% of Jewelry Category
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 personali
Slide 11: Strategic Investments, Acquisitions and Fleet Optimization Have 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 ~ 50% incr ease to FY17 sales PSF Digital Investm ents & Fleet Tr ansfor m ation Investm ents in Fashion Gr owth in Accessible
Slide 12: Investments in Digital Lead Our Retail Footprint Optimization
INVESTMENTS IN DIGITAL LEAD OUR RETAIL FOOTPRINT OPTIMIZATION FY17 FY20 FY23 6 Year Change eCommerce Penetration 6% 12% 20% +1400 bps Number of Stores 3,682 3,208 2,808 (24%) Sales Per Square Foot $1,255 $1,334 $1,864 +49% ~ 2/3 of customers Digital traffic up 54%, 25% of online orders utilize both
Slide 13: Signet Has Shifted from On-Balance Sheet Credit to Strong 3rd 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: 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 1 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 1 - Reflects mid-point of FY24 guidance
Slide 15: Higher Margins Generated by Initiatives & Flexible Model
HIGHER MARGINS GENERATED BY INITIATIVES & FLEXIBLE MODEL Mor e than $700 m illion in cost outs over 4 year s +3.1% (1.7%) (2.6%) +2.9% (2.2%) +2.7% 9.1% +1.3% $655m 5.2% +0 .4% $318m 1 FY20 Op Ser vices Cr edit Optim ized Fleet FY24 Br idal Str ategic Inflation FY24 Guidance 1 In com e Accr etion Tr
Slide 16: Mid-Term Growth Strategy
, SLGNET MID-TERM GROWTH STRATEGY KAY ZALES JARED Banter | O, BlueNile @jwnsrui TOCksbox PEOPLES sioner HSAMUEL sevestiones — GIGNET
Slide 17: Clear Path to Deliver Strong Growth Over the Next 3-5 Years
WE BELIEVE OUR STRATEGY PROVIDES A CLEAR PATH TO DELIVER STRONG GROWTH OVER THE NEXT 3-5 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 ~9.1% Up from 9.7% in in FY20241 in FY20241 FY2023 $14 -
Slide 18: 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 19: Engagement Recovery Expected to Begin Late This Year
ENGAGEMENT RECOVERY EXPECTED TO BEGIN LATE THIS YEAR, WITH MORE THAN 25% GROWTH THROUGH 2026 Engagem ent r ecover y will be dr iven by m ulti- cultur al couples, r eflecting changing dem ogr aphics The 45 pr opr ietar y engagem ent m ilestones that Signet tr acks ar e Signet is well positioned to be
Slide 20: 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 21: 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 Q2 FY24 to Q2 FY24 to Com
Slide 22: 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 that our custom er s desir e Extended Ser vice Agr eem ents (ESAs) Car e and Repair Custom ization Loyalty Increasing Industry leading Engraving ser
Slide 23: Our 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 24: 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 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: Sustainability & Culture
, SLGNET SUSTAINABILITY & CULTURE KAY ZALES JARED Banter | BlueNile jus Auin: TOCKSbOX PEOPLES JO sioner H.SAMUEL sxvesisones GIGNET
Slide 27: Our Purpose: Inspiring Love
OUR PURPOSE: INSPIRING LOVE Our Purpose of Inspiring Love is evident in everything 1 we do, from the ways we empower our 29,660 diverse team members to all the ways we enable our customers to celebrate their lives and express their love. And, as a Purpose-driven and sustainability-focused company, S
Slide 28: Our Three Loves: Our Sustainability Framework
OUR THREE LOVES: OUR SUSTAINABILITY FRAMEWORK 2030 Cor por ate Sustainability Goals Love for Our Planet Love for All People Love for Our Team and Pr oducts Social Change Advocates Employer of Choice Human Rights Signet Love Inspires Foundation Community of Inclusiveness Climate Advocacy Governing wi
Slide 29: Annual Corporate Citizenship and Sustainability Report
ANNUAL CORPORATE CITIZENSHIP AND SUSTAINABILITY REPORT Highlights Signet’s Three Loves Sustainability Framework 1. Love for All People 2. Love for Our Team 3. Love for Our Planet and Products Disclosur es • Human Capital Management and DEI Data • EEO-1 Report • Greenhouse Gas Accounting: Scope 1, 2,
Slide 30: Third Party Recognition
THIRD PARTY RECOGNITION WOMEN IN LEADERSHIP1 As of Fiscal 20 23 Year - en d For the fou r th con secu tive year , Five con secu tive year s selected for OF STORE ASSISTANT OF VICE PRESIDENTS Signet was designated as a the Bloom ber g Gender - Equality MANAGERS AND ABOVE AND ABOVE Gr eat Place to Wor
Slide 31: Appendix
, SLGNET APPENDIX KAY ZALES JARED Banter BlueNile @ousAuiw TOCKsbox PEOPLES JS sioner HSAMUEL senesr jones GIGNET
Slide 32: ~$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 33: 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 34: 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 35: Non-GAAP Reconciliations Tables (cont.)
NON-GAAP RECONCILIATIONS TABLES (cont.) Adjusted debt and adjusted net debt leverage ratios The adjusted debt and adjusted net debt leverage ratios are non-GAAP measures calculated by dividing Signet’s adjusted debt or adjusted net debt by adjusted EBITDAR. Adjusted debt is a non-GAAP measure define
Slide 36: Safe Harbor & Forward-Looking Statement
SAFE HARBOR & FORWARD-LOOKING STATEMENT This release 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 data c
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