Signet Jewelers Ltd Net Income jumped on 22.7% in 2016 and EBITDA Margin increased slightly on 0.76 pp from 12.7% to 13.4%
24 Mar 2016 • About Signet Jewelers Ltd (
$SIG) • By InTwits
Signet Jewelers Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Signet Jewelers Ltd is a growth stock: FY2016 revenue growth was 14.2%, 5 year revenue CAGR was 13.8% at FY2016 ROIC 15.2%
- Signet Jewelers Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.4%. At the same time it's a lot of higher than industry average of 2.1%.
- CAPEX is quite volatile: 134 in FY2016, 142 in FY2015, 128 in FY2014, 53 in FY2013, 192 in FY2012
- The company has highly profitable business model: ROIC is at 15.2%
- It operates with high leverage: Net Debt/EBITDA is 1.4x while industry average is -0.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Signet Jewelers Ltd ($SIG) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,749 | 3,983 | 4,209 | 5,736 | 6,550 | 14.2% |
| Gross Profit | 1,438 | 1,537 | 1,580 | 2,074 | 2,440 | 17.7% |
| SG&A | 1,057 | 1,138 | 1,197 | 1,713 | 1,988 | 16.0% |
| EBITDA | 600 | 660 | 681 | 726 | 879 | 21.0% |
| Net Income | 324 | 360 | 368 | 381 | 468 | 22.7% |
Balance Sheet
|
|---|
| Cash | 487 | 301 | 248 | 194 | 138 | -28.9% |
| Short Term Debt | 0 | 0 | 19 | 98 | 58 | -40.8% |
| Long Term Debt | 0 | 0 | 0 | 1,364 | 1,321 | -3.1% |
Cash flow
|
|---|
| Capex | 98 | 134 | 153 | 220 | 227 | 2.9% |
Ratios
|
|---|
| Revenue growth | 9.1% | 6.2% | 5.7% | 36.3% | 14.2% | |
| EBITDA growth | 27.5% | 10.0% | 3.2% | 6.7% | 21.0% | |
| Gross Margin | 38.3% | 38.6% | 37.5% | 36.2% | 37.3% | 1.1% |
| EBITDA Margin | 16.0% | 16.6% | 16.2% | 12.7% | 13.4% | 0.8% |
| Net Income Margin | 8.7% | 9.0% | 8.7% | 6.6% | 7.1% | 0.5% |
| SG&A, % of revenue | 28.2% | 28.6% | 28.4% | 29.9% | 30.3% | 0.5% |
| CAPEX, % of revenue | 2.6% | 3.4% | 3.6% | 3.8% | 3.5% | -0.4% |
| ROIC | 21.6% | 21.5% | 20.4% | 15.5% | 15.2% | -0.2% |
| ROE | 15.4% | 15.6% | 15.0% | 14.2% | 15.9% | 1.7% |
| Net Debt/EBITDA | -0.8x | -0.5x | -0.3x | 1.7x | 1.4x | -0.3x |
Revenue and profitability
The company's Revenue jumped on 14.2% in FY2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 6.2 pp from 28.3% to 34.5% in 2016.
Gross Margin increased slightly on 1.1 pp from 36.2% to 37.3% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign showed almost no change in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Signet Jewelers Ltd had CAPEX/Revenue of 3.5%. CAPEX/Revenue showed almost no change from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 3.6%.
Return on investment
The company operates at good ROIC (15.25%) and ROE (15.94%). ROIC showed almost no change in FY2016. ROE increased slightly on 1.7 pp from 14.2% to 15.9% in FY2016.
Leverage (Debt)
Debt level is 1.4x Net Debt / EBITDA and 1.6x Debt / EBITDA. Net Debt / EBITDA dropped on 0.3x from 1.7x to 1.4x in FY2016. Debt decreased on 5.7% in FY2016 while cash dropped on 28.9% in FY2016.
Valuation
The company's trades at EV/EBITDA 1.5x and P/E 0.2x while industy averages are 15.6x and 19.1x. The company's EV/(EBITDA-CAPEX) is 2.0x with the industry average at 19.0x.
Appendix 1: Peers in General Retailers
Below we provide Signet Jewelers Ltd benchmarking against other companies in General Retailers industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Just Eat ($JE.) | | | | 57.7% | 51.7% |
| AO World ($AO.) | 27.6% | 31.3% | 40.0% | 23.8% | |
| Caffyns ($78GL) | | -3.1% | 17.1% | 8.9% | 10.5% |
| Entu (Uk) Ltd ($ENTU) | 36.5% | 4.1% | -3.4% | 7.3% | |
| Mysale Group ($MYSL) | 96.8% | 62.1% | 23.4% | 5.1% | |
| |
|---|
| Median (8 companies) | 12.5% | 12.6% | 8.9% | 6.2% | 10.5% |
|---|
| Signet Jewelers Ltd ($SIG) | | 6.2% | 5.7% | 36.3% | 14.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Just Eat ($JE.) | | | 89.7% | 90.2% | 90.6% |
| Aa ($AA.) | 60.4% | 63.9% | 64.7% | 64.8% | |
| Stanley Gibbons Group ($SGI) | 43.7% | 43.2% | | 51.5% | |
| French Connection Group ($FCCN) | 48.1% | 47.9% | 47.6% | 46.7% | 46.3% |
| Entu (Uk) Ltd ($ENTU) | 32.4% | 36.4% | 31.6% | 32.5% | |
| |
|---|
| Median (9 companies) | 32.4% | 30.7% | 31.6% | 32.5% | 46.3% |
|---|
| Signet Jewelers Ltd ($SIG) | 38.3% | 38.6% | 37.5% | 36.2% | 37.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Aa ($AA.) | 35.5% | 37.0% | 42.2% | 37.9% | |
| Just Eat ($JE.) | | | 16.3% | 21.0% | 25.8% |
| Entu (Uk) Ltd ($ENTU) | 7.4% | 6.7% | 10.3% | 8.6% | |
| Stanley Gibbons Group ($SGI) | 17.3% | 13.9% | | 8.6% | |
| Caffyns ($78GL) | 10.8% | 3.0% | 2.0% | 6.5% | 2.2% |
| |
|---|
| Median (9 companies) | 7.4% | 3.7% | 2.3% | 6.5% | 2.2% |
|---|
| Signet Jewelers Ltd ($SIG) | 16.0% | 16.6% | 16.2% | 12.7% | 13.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Aa ($AA.) | 2.7% | 0.7% | 1.0% | 3.8% | |
| Lotte Shopping Co Ltd ($LOTS) | 7.1% | 6.5% | 6.6% | 3.8% | |
| Stanley Gibbons Group ($SGI) | 1.0% | 1.1% | | 2.4% | |
| Just Eat ($JE.) | | | 3.4% | 2.3% | 2.5% |
| Caffyns ($78GL) | 1.6% | 2.2% | 3.9% | 1.4% | 1.6% |
| |
|---|
| Median (9 companies) | 1.2% | 0.7% | 1.0% | 1.4% | 1.6% |
|---|
| Signet Jewelers Ltd ($SIG) | 2.6% | 3.4% | 3.6% | 3.8% | 3.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Entu (Uk) Ltd ($ENTU) | 144.6% | 68.6% | 134.8% | 461.3% | |
| Caffyns ($78GL) | 60.8% | 15.4% | 11.1% | 37.3% | 10.4% |
| Aa ($AA.) | 138.0% | 134.4% | 61.1% | 34.9% | |
| Just Eat ($JE.) | | | 16.4% | 9.1% | 9.8% |
| Stanley Gibbons Group ($SGI) | 21.3% | 8.9% | 0.0% | 4.4% | |
| |
|---|
| Median (9 companies) | 13.3% | 12.1% | 6.9% | 4.4% | 9.8% |
|---|
| Signet Jewelers Ltd ($SIG) | 21.6% | 21.5% | 20.4% | 15.5% | 15.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Aa ($AA.) | 0.6x | -0.0x | 7.7x | 7.9x | |
| Lotte Shopping Co Ltd ($LOTS) | 5.1x | 4.9x | 5.2x | 6.7x | |
| Stanley Gibbons Group ($SGI) | -1.1x | -3.0x | | 2.3x | |
| Caffyns ($78GL) | 0.5x | 2.0x | 3.0x | 0.7x | 2.2x |
| Entu (Uk) Ltd ($ENTU) | -0.8x | 0.3x | -0.6x | -0.2x | |
| |
|---|
| Median (8 companies) | -0.8x | -0.0x | 1.2x | 0.3x | 0.4x |
|---|
| Signet Jewelers Ltd ($SIG) | -0.8x | -0.5x | -0.3x | 1.7x | 1.4x |
