Signet Jewelers Ltd reports 17.7% EBITDA decline in 2018 and 2.4% Revenue decline
14 Mar 2018 • About Signet Jewelers Ltd (
$SIG) • By InTwits
Signet Jewelers Ltd reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Signet Jewelers Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.8%. At the same time it's a lot of higher than industry average of 2.7%.
- CAPEX is quite volatile: 226 TRYm in 2018, 164 TRYm in 2017, 180 TRYm in 2016, 240 TRYm in 2015, 717 TRYm in 2014
- The company has highly profitable business model: ROIC is 13.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 2.4%. During FY2014-FY2018 Revenue growth topped in FY2015 at 36.3% and was decelerating since that time. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 2.3 pp from 14.9% to 12.5% in FY2018.
Gross Margin decreased slightly on 1.8 pp from 36.8% to 35.0% in FY2018. SG&A as a % of Revenue increased slightly on 0.60 pp from 29.3% to 29.9% in FY2018.
Net Income margin showed almost no change in FY2018.
Investments (CAPEX, working capital and M&A)
Signet Jewelers Ltd's CAPEX/Revenue was 3.8% in FY2018. Signet Jewelers Ltd's CAPEX/Revenue showed almost no change from FY2015 to FY2018. For the last three years the average CAPEX/Revenue was 3.9%.
Return on investment
The company operates at good ROIC (13.0%) and ROE (19.7%). ROIC decreased on 3.0 pp from 16.0% to 13.0% in FY2018. ROE showed almost no change in FY2018. ROE grew at 1.4 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.6x and Debt / EBITDA is 0.9x. Net Debt / EBITDA dropped on 0.7x from 1.4x to 0.6x in FY2018. Debt dropped on 48.0% while cash jumped on 128%. During FY2014-FY2018 Net Debt/EBITDA topped in FY2015 at 1.7x and was declining since that time.
Signet Jewelers Ltd has no short term refinancing risk: cash is higher than short term debt (511.6%).
Financial and operational results
FY ended 03 Feb 2018
Signet Jewelers Ltd ($SIG) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 4,209 | 5,736 | 6,550 | 6,408 | 6,253 | -2.4% |
| Gross Profit | 1,580 | 2,074 | 2,440 | 2,361 | 2,190 | -7.2% |
| SG&A | 1,197 | 1,713 | 1,988 | 1,880 | 1,872 | -0.4% |
| EBITDA | 681 | 726 | 879 | 952 | 783 | -17.7% |
| Net Income | 368 | 381 | 468 | 543 | 519 | -4.4% |
Balance Sheet
|
|---|
| Cash | 248 | 194 | 138 | 99 | 225 | 128.1% |
| Short Term Debt | 19 | 98 | 58 | 91 | 44 | -51.7% |
| Long Term Debt | 0 | 1,364 | 1,321 | 1,318 | 688 | -47.8% |
Cash flow
|
|---|
| Capex | 153 | 220 | 227 | 278 | 237 | -14.6% |
Ratios
|
|---|
| Revenue growth | 5.7% | 36.3% | 14.2% | -2.2% | -2.4% | |
| EBITDA growth | 3.2% | 6.7% | 21.0% | 8.3% | -17.7% | |
|
|---|
| Gross Margin | 37.5% | 36.2% | 37.3% | 36.8% | 35.0% | -1.8% |
| EBITDA Margin | 16.2% | 12.7% | 13.4% | 14.9% | 12.5% | -2.3% |
| SG&A, % of revenue | 28.4% | 29.9% | 30.3% | 29.3% | 29.9% | 0.6% |
| Net Income Margin | 8.7% | 6.6% | 7.1% | 8.5% | 8.3% | -0.2% |
| CAPEX, % of revenue | 3.6% | 3.8% | 3.5% | 4.3% | 3.8% | -0.5% |
|
|---|
| ROIC | 20.4% | 15.5% | 15.2% | 16.0% | 13.0% | -3.0% |
| ROE | 15.0% | 14.2% | 15.9% | 19.2% | 19.7% | 0.4% |
| Net Debt/EBITDA | -0.3x | 1.7x | 1.4x | 1.4x | 0.6x | -0.7x |
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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Just Eat ($JE.) | | 57.7% | 51.7% | 45.4% | |
| AO World ($AO.) | 40.0% | 23.8% | 25.7% | 17.0% | |
| Mysale Group ($MYSL) | 23.4% | 5.1% | 7.0% | 6.4% | |
| Aa ($AA.) | 0.6% | 1.0% | -5.0% | -0.2% | |
| Shoe Zone ($SHOE) | -10.8% | -3.5% | -4.2% | -1.3% | |
| |
|---|
| Median (9 companies) | 2.0% | 3.7% | -0.7% | -1.3% | 0.5% |
|---|
| Signet Jewelers Ltd ($SIG) | | 36.3% | 14.2% | -2.2% | -2.4% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Just Eat ($JE.) | 89.7% | 90.2% | 90.6% | 82.4% | |
| Aa ($AA.) | 64.7% | 64.8% | 64.0% | 63.5% | |
| French Connection Group ($FCCN) | 47.6% | 46.7% | 46.3% | 45.8% | 45.2% |
| Lotte Shopping Co Ltd ($LOTS) | 31.2% | 30.6% | 32.6% | 42.0% | |
| Stanley Gibbons Group ($SGI) | | 51.5% | 40.3% | 31.6% | |
| |
|---|
| Median (9 companies) | 31.2% | 31.5% | 32.0% | 31.6% | 28.3% |
|---|
| Signet Jewelers Ltd ($SIG) | 37.5% | 36.2% | 37.3% | 36.8% | 35.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aa ($AA.) | 42.2% | 37.9% | 37.4% | 37.6% | |
| Shoe Zone ($SHOE) | 9.3% | 8.4% | 8.5% | 8.1% | |
| Lotte Shopping Co Ltd ($LOTS) | 7.4% | 6.3% | 7.2% | 7.8% | |
| Mysale Group ($MYSL) | 2.3% | -4.7% | 1.8% | 2.0% | |
| Caffyns ($78GL) | 2.0% | 6.5% | 2.2% | 1.9% | 1.6% |
| |
|---|
| Median (9 companies) | 3.5% | 7.4% | 0.4% | 1.9% | 0.7% |
|---|
| Signet Jewelers Ltd ($SIG) | 16.2% | 12.7% | 13.4% | 14.9% | 12.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aa ($AA.) | 1.0% | 3.8% | 8.0% | 7.6% | |
| Lotte Shopping Co Ltd ($LOTS) | 6.6% | 3.8% | 5.0% | 4.9% | |
| Shoe Zone ($SHOE) | 1.2% | 1.1% | 2.0% | 3.3% | |
| Just Eat ($JE.) | 3.4% | 2.3% | 2.5% | 2.7% | |
| Caffyns ($78GL) | 3.9% | 1.4% | 1.6% | 2.2% | 2.6% |
| |
|---|
| Median (9 companies) | 1.2% | 1.7% | 1.6% | 2.2% | 1.9% |
|---|
| Signet Jewelers Ltd ($SIG) | 3.6% | 3.8% | 3.5% | 4.3% | 3.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aa ($AA.) | 61.1% | 34.9% | 32.0% | 30.8% | |
| Shoe Zone ($SHOE) | 34.2% | 30.0% | 30.6% | 30.7% | |
| Caffyns ($78GL) | 11.1% | 37.3% | 10.4% | 7.1% | 5.5% |
| Lotte Shopping Co Ltd ($LOTS) | 3.8% | 2.6% | 2.3% | 1.9% | |
| Mysale Group ($MYSL) | 10.0% | -19.0% | 0.3% | -0.0% | |
| |
|---|
| Median (10 companies) | 6.9% | 6.8% | 0.3% | -0.0% | 0.9% |
|---|
| Signet Jewelers Ltd ($SIG) | 20.4% | 15.5% | 15.2% | 16.0% | 13.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aa ($AA.) | 7.7x | 7.9x | 8.0x | 7.6x | |
| Lotte Shopping Co Ltd ($LOTS) | 5.2x | 6.7x | 7.1x | 3.5x | |
| Caffyns ($78GL) | 3.0x | 0.7x | 2.2x | 2.2x | 4.0x |
| Shoe Zone ($SHOE) | -0.6x | -1.0x | -1.1x | -0.9x | |
| Mysale Group ($MYSL) | -14.4x | | -6.0x | -1.7x | |
| |
|---|
| Median (5 companies) | -0.6x | -0.7x | 0.5x | 2.2x | 4.0x |
|---|
| Signet Jewelers Ltd ($SIG) | -0.3x | 1.7x | 1.4x | 1.4x | 0.6x |
