Signet Jewelers Ltd reports 36.3% revenue growth in FY2015 and 3.5 pp EBITDA Margin decline from 16.2% to 12.7%
26 Mar 2015 • About Signet Jewelers Ltd (
$SIG) • By InTwits
Signet Jewelers Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Signet Jewelers Ltd is a growth stock: FY2015 revenue growth was 36.3%, 5 year revenue CAGR was 11.9% at FY2015 ROIC 15.5%
- Signet Jewelers Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.0%. At the same time it's in pair with industry average of 3.3%.
- CAPEX is quite volatile: 220 in FY2015, 153 in FY2014, 134 in FY2013, 97.8 in FY2012, 57.5 in FY2011
- The company has highly profitable business model: ROIC is at 15.5%
- It operates with high leverage: Net Debt/EBITDA is 1.7x while industry average is -3.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Signet Jewelers Ltd ($SIG) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,437 | 3,749 | 3,983 | 4,209 | 5,736 | 36.3% |
| Gross Profit | 1,243 | 1,438 | 1,537 | 1,580 | 2,074 | 31.2% |
| SG&A | 980 | 1,057 | 1,138 | 1,197 | 1,713 | 43.1% |
| EBITDA | 470 | 600 | 660 | 681 | 726 | 6.7% |
| Net Income | 200 | 324 | 360 | 368 | 381 | 3.6% |
Balance Sheet
|
|---|
| Cash | 302 | 487 | 301 | 248 | 194 | -21.8% |
| Short Term Debt | 31 | 0 | 0 | 19 | 98 | 405.2% |
| Long Term Debt | 0 | 0 | 0 | 0 | 1,364 | |
Cash flow
|
|---|
| Capex | 58 | 98 | 134 | 153 | 220 | 44.2% |
Ratios
|
|---|
| Revenue growth | 5.0% | 9.1% | 6.2% | 5.7% | 36.3% | |
| EBITDA growth | 26.0% | 27.5% | 10.0% | 3.2% | 6.7% | |
| Gross Margin | 36.2% | 38.3% | 38.6% | 37.5% | 36.2% | -1.4% |
| EBITDA Margin | 13.7% | 16.0% | 16.6% | 16.2% | 12.7% | -3.5% |
| Net Income Margin | 5.8% | 8.7% | 9.0% | 8.7% | 6.6% | -2.1% |
| SG&A, % of revenue | 28.5% | 28.2% | 28.6% | 28.4% | 29.9% | 1.4% |
| CAPEX, % of revenue | 1.7% | 2.6% | 3.4% | 3.6% | 3.8% | 0.2% |
| ROIC | 17.2% | 21.6% | 21.5% | 20.4% | 15.5% | -4.9% |
| ROE | 11.0% | 15.4% | 15.6% | 15.0% | 14.2% | -0.9% |
| Net Debt/EBITDA | -0.6x | -0.8x | -0.5x | -0.3x | 1.7x | 2.1x |
Revenue and profitability
Signet Jewelers Ltd's Revenue jumped on 36.3% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 8.8 pp from 19.5% to 28.3% in 2015.
Gross Margin decreased slightly on 1.4 pp from 37.5% to 36.2% in FY2015. SG&A as a % of Revenue increased slightly on 1.4 pp from 28.4% to 29.9% in FY2015.
Net Income marign decreased on 2.1 pp from 8.7% to 6.6% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Signet Jewelers Ltd had CAPEX/Revenue of 3.8%. CAPEX/Revenue increased slightly on 1.2 pp from 2.6% in FY2012 to 3.8% in FY2015. It's average level of CAPEX/Revenue for the last three years was 3.6%.
Return on investment
The company operates at good ROIC (15.49%) and ROE (14.19%). ROIC decreased on 4.9 pp from 20.4% to 15.5% in FY2015. ROE decreased slightly on 0.85 pp from 15.0% to 14.2% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.7x and Debt / EBITDA is 2.0x. Net Debt / EBITDA surged on 2.1x from -0.3x to 1.7x in FY2015. Debt surged on 7,472% in FY2015 while cash dropped on 21.8% in FY2015.
Valuation
The company's trades at EV/EBITDA 1.9x and P/E 0.3x while industy averages are 10.5x and 26.1x. Signet Jewelers Ltd's EV/(EBITDA-CAPEX) is 2.7x with the industry average at 4.7x.
Appendix 1: Peers in General Retailers
Below you can find Signet Jewelers Ltd benchmarking vs. other companies in General Retailers industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 7Digital Group ($7DIG) | -9.7% | -27.7% | 16.6% | 171.6% | |
| Caffyns ($78GL) | | | -3.1% | 17.1% | 8.9% |
| Aa ($AA.) | | 3.1% | -0.6% | 0.6% | 1.0% |
| Just Eat ($JE.) | | | | | 57.7% |
| Lotte Shopping Co Ltd ($LOTS) | 17.0% | 12.5% | 12.6% | -0.4% | |
| |
|---|
| Median (6 companies) | 17.0% | 0.7% | 6.0% | 0.6% | 5.0% |
|---|
| Signet Jewelers Ltd ($SIG) | | 9.1% | 6.2% | 5.7% | 36.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Just Eat ($JE.) | | | | 89.7% | 90.2% |
| Aa ($AA.) | 62.0% | 60.4% | 63.9% | 64.7% | 64.8% |
| 7Digital Group ($7DIG) | 25.6% | 16.5% | 13.9% | 59.0% | |
| French Connection Group ($FCCN) | 51.7% | 48.1% | 47.9% | 47.6% | 46.7% |
| Lotte Shopping Co Ltd ($LOTS) | 31.5% | 30.5% | 30.7% | 31.2% | |
| |
|---|
| Median (6 companies) | 38.7% | 37.1% | 37.0% | 53.3% | 55.8% |
|---|
| Signet Jewelers Ltd ($SIG) | 36.2% | 38.3% | 38.6% | 37.5% | 36.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Aa ($AA.) | 43.2% | 35.5% | 37.0% | 42.2% | 37.9% |
| Just Eat ($JE.) | | | | 16.3% | 21.0% |
| Lotte Shopping Co Ltd ($LOTS) | 10.7% | 8.8% | 8.2% | 7.4% | |
| Caffyns ($78GL) | | 10.8% | 3.0% | 2.0% | 6.5% |
| French Connection Group ($FCCN) | 5.1% | 2.8% | -4.1% | -1.7% | 0.4% |
| |
|---|
| Median (6 companies) | 10.7% | 9.8% | 5.6% | 4.7% | 13.8% |
|---|
| Signet Jewelers Ltd ($SIG) | 13.7% | 16.0% | 16.6% | 16.2% | 12.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lotte Shopping Co Ltd ($LOTS) | 7.2% | 7.1% | 6.5% | 6.6% | |
| Caffyns ($78GL) | | 1.6% | 2.2% | 3.9% | 1.4% |
| Just Eat ($JE.) | | | | 3.4% | 2.3% |
| 7Digital Group ($7DIG) | 2.4% | 2.2% | 0.3% | 3.4% | |
| Aa ($AA.) | 3.0% | 2.7% | 0.7% | 1.0% | 3.8% |
| |
|---|
| Median (6 companies) | 2.4% | 1.9% | 1.0% | 3.4% | 1.9% |
|---|
| Signet Jewelers Ltd ($SIG) | 1.7% | 2.6% | 3.4% | 3.6% | 3.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Aa ($AA.) | | 138.0% | 134.4% | 61.1% | 34.9% |
| Just Eat ($JE.) | | | | 16.4% | 9.1% |
| Caffyns ($78GL) | | 60.8% | 15.4% | 11.1% | 37.3% |
| Lotte Shopping Co Ltd ($LOTS) | 7.3% | 5.3% | 4.9% | 3.8% | |
| Stanley Gibbons Group ($SGI) | 23.3% | 21.3% | 8.9% | 0.0% | |
| |
|---|
| Median (7 companies) | 8.9% | 13.3% | 6.9% | 3.8% | 22.0% |
|---|
| Signet Jewelers Ltd ($SIG) | 17.2% | 21.6% | 21.5% | 20.4% | 15.5% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Aa ($AA.) | 0.3x | 0.6x | -0.0x | 7.7x | 7.9x |
| Caffyns ($78GL) | | 0.5x | 2.0x | 3.0x | 0.7x |
| Just Eat ($JE.) | | | | -6.4x | -3.7x |
| French Connection Group ($FCCN) | -3.1x | -5.6x | | | -33.1x |
| |
|---|
| Median (4 companies) | -0.1x | 0.5x | 1.0x | 4.1x | -1.5x |
|---|
| Signet Jewelers Ltd ($SIG) | -0.6x | -0.8x | -0.5x | -0.3x | 1.7x |
