Slide 1: 2012 Results Review and Outlook
2012 RESULTS REVIEW AND OUTLOOK ne, @ ee Marshalls
Slide 2: Highlights
Highlights 2012 2011 Revenue* £309.7m £334.1m EBITDA* £30.0m £35.0m Operating profit* £13.9m £16.7m Profit before tax* £10.4m £13.7m Basic EPS* 5.87p 6.30p Dividends declared 5.25p 5.25p Final dividend recommended 3.50p 3.50p Net debt £63.5m £77.1m Net debt to EBITDA** 2.1 times 2.2 times * Continui
Slide 3: Revenue
Revenue £m 334.1 308.8 309.7 Revenue £309.7m Revenue Movement 2010 2011 2012 Revenue £m 2011 334.1 Exceptional weather in UK (13.0) -4% 321.1 UK (13.1) -4% International 1.7 +1% 2012 309.7 -7%
Slide 4: Revenue Analysis
Revenue Analysis Public Sector and Commercial Revenue z 64% of Group z Revenue lower by 6% z Price up 4%, weather impact down 3% and volume down 7% Domestic UK Revenue z 32% of Group z Revenue lower by 12% z Price up 4%, weather impact down 6% and UK volume down 10% International Revenue z Approachi
Slide 5: Operating Profit
Operating Profit 2012 2011 £m £m EBITDA * 30.0 35.0 Depreciation / amortisation (16.1) (18.3) Operating profit * 13.9 16.7 * Excluding operational restructuring costs and asset impairments
Slide 6: Margin Reconciliation
Margin Reconciliation Movement in Impact on Revenue Operating Margin Profit £m £m % 2011 334.1 16.7 5.0 Property disposals and other one-off items - (0.2) (0.1) Weather impact (13.0) (3.3) (0.8) 321.1 13.2 4.1 Price increases to recover costs 13.6 3.5 0.9 Volume (26.7) (5.3) (1.3) Organic Internatio
Slide 7: Restructuring Costs and Asset Impairments
Restructuring Costs and Asset Impairments Cash Non-cash Total £m £m £m Business Area: £m Landscape Products 9.0 Restructuring costs 10.2 - 10.2 Natural Stone Walling 8.0 Asset impairments z Intangible - 2.8 2.8 Scottish Operations 4.5 z Tangible - 8.5 8.5 2012 10.2 11.3 21.5 21.5 Profit improvement:
Slide 8: Cash Actions
Cash Actions Original plan Actual H2 H2 2012 2012 £m £m Cash actions Profit improvement 1.0 2.1 Inventory reduction 2.0 4.9 Property and asset sales 9.0 6.8 Reduced capital expenditure 2.0 2.0 Pension recovery payments 3.0 3.0 17.0 18.8 Cash cost of actions (7.0) (7.4) Net cash benefit 10.0 11.4
Slide 9: Cash Flow from Operating Activities
Cash Flow from Operating Activities Cash inflow arising from: 2012 2011 £m £m Operating profit 13.9 16.7 Depreciation and amortisation 16.1 18.3 EBITDA (continuing operations) 30.0 35.0 Discontinued operations - (0.5) EBITDA (total operations) 30.0 34.5 Net financial expenses paid (4.2) (3.5) Taxati
Slide 10: Cash Flow
Cash Flow 2012 2011 £m £m Net cash flow from operating activities 24.7 15.9 Investment z Capital expenditure (9.5) (13.6) z Proceeds from sale of surplus assets 8.6 5.4 z Investments and International expansion* - (8.2) z Disposals 0.2 0.6 Dividends paid (10.3) (10.3) Sub-total 13.7 (10.2) Finance l
Slide 11: Additional Information and Ratios
Additional Information and Ratios 2012 2011 Interest charge: Charge £3.5 m £3.0 m Cover* 3.9 times 5.6 times Tax rate* (10.7)% 11.1% EPS: Adjusted* 5.87p 6.30p Total operations (2.91)p 3.78p Dividend: 2012 interim and final announced 5.25p 5.25p Cover (continuing operations) 1.1 times 1.2 times Weig
Slide 12: Significant Borrowing Facilities
Significant Borrowing Facilities £m 220 200 Expiry Date Facility Cumulative 180 Facility 160 £m £m 140 Committed facilities: 120 Q3 2016 50 50 100 Q3 2015 75 125 80 Q3 2014 20 145 60 40 On demand facilities: 20 Available all year 25 170 0 Seasonal Dec 2012 Dec 2013 * (February to August inclusive) 2
Slide 13: Operating Flexibility
Operating Flexibility Managing Capacity Geographic Coverage Maintained z Excellent geographic coverage z Modern, efficient well invested 97%of population covered factories z Over 97% of our customers within a Falkirk Carluke¢ 2 hour drive time ¢ z Capacity reduced to release Eaglescliffe ¢ inventory
Slide 14: Sustainable Growth Initiatives
Sustainable Growth Initiatives Public Sector and Commercial - targeted marketing and partnerships, investment in street furniture, security products, water management and sustainable urban drainage (“SUDS”), internal stone paving, stone cladding Domestic - installer initiatives and distributor merch
Slide 15: Public Sector and Commercial Targeted Marketing and Partnering
Public Sector and Commercial Targeted Marketing and Partnering
Slide 16: Integrated Product Offer: Exhibition Road
Integrated Product Offer Exhibition Road
Slide 17: Natural Stone Cladding
Natural Stone Cladding
Slide 18: Domestic Market Installers
Domestic Market Installers Marshalls Register - Emphasis on Quality 1900 1800 1700 Customer Customer serviceservice remainsremains excellentexcellent 1600 1500 1400 1300 9 0 1 2 09 10 11 12 13 9 0 1 2 09 10 11 12 l-0 l-1 l-1 l-1 -0 -1 -1 -1 n- n- n- n- n- r- r- r- r- ct ct ct ct Ju Ju Ju Ju Ja Ja Ja
Slide 19: Product Innovation: Cobbletech Driveway System
Product Innovation Cobbletech Driveway System
Slide 20: International Opportunity
International Opportunity z Two operating sites, 40 million people within a 2 hour drive time z Natural sandstone, granite and limestone from India and China z Specialist manufactured products and street furniture from the UK z Key synergies – marketing and sales collateral, sales processes Drive Zo
Slide 21: Public Sector and Commercial New Work Sales Lead Indicator
Public Sector and Commercial New Work Sales Lead Indicator Contract Awarded 12 Month Rolling Average of Hard Landscape Value Adjusted (ABI with 12 Month Lag) 330 275 220 £millions 165 110 55 2 3 9 0 1 7 8 5 6 12 13 10 11 08 09 06 07 05 l ‐1 l ‐0 l ‐1 l ‐1 l ‐1 l ‐0 l ‐0 l ‐0 l ‐0 n‐ n‐ n‐ n‐ n‐ n‐ n
Slide 22: Domestic Market Consumer Confidence and Installer Order Books
Domestic Market Consumer Confidence and Installer Order Books Rolling 6 Months Consumer Confidence and Installer Order Book (3 month lag) - 10.0 9.5 -5.0 9.0 -10.0 Installer Order Books (6 month Average) Consumer confidence (6 month average) 8.5 -15.0 8.0 -20.0 7.5 7.0 -25.0 6.5 -30.0 6.0 -35.0 5.5
Slide 23: Market Outlook
Market Outlook Revenue Proportions 2013 Commercial 35% Public 20% New build 8% Do it for me 27% DIY 5% International 5% 100%
Slide 24: Summary
Summary z Excellent brand, market position and geographical coverage z Decisive action taken to reduce output, release cash and reduce fixed costs z Continuing uncertainty about the market environment z Growth initiatives and product innovation are delivering z Operating flexibility – significant ca
Slide 25: Appendices
Appendices
Slide 26: Construction Products Association
Construction Products Association 2009 2010 2011 2012 2013 2014 2015 2016 £m/% change Actual Actual Actual Estimate Forecast Forecast Forecast Forecast Housing 13,721 17,181 18,444 17,136 16,767 17,263 18,213 19,858 -26.3% 25.2% 7.6% -7.1% -2.1% 3.0% 5.5% 9.0% Other New Work 46,772 52,435 52,734 45,
Slide 27: Pensions
Pensions Risk Management 20 2000 closed to new members 2006 closed to future service accrual 10 2007 investment strategy 0 Investment Strategy -10 Moved from equities to LDIs Closer matching to liability profile of -20 pension scheme -30 Balance Sheet Values YE 2012 surplus £8.2m (2011: £13.0m) -40
Slide 28: Financial Flexibility
Financial Flexibility 2012 Actual EBITA: Interest charge 3.7 times Net Debt: EBITDA 2.2 times z EBITA to interest charge must be greater than 2.5 times z Net debt to EBITDA must be less than 3.0 times z Net assets must be greater than £100 million
Slide 29: Net Assets
Net Assets £m £m 2011 Year End Net Assets 206.1 Impact of movements in year: Loss for the financial period (5.7) Ordinary dividends (10.3) Actuarial movement on pensions (after tax) (6.6) Hedging reserve (0.9) Share based expenses 0.4 Foreign currency translation differences 0.1 Non-controlling inte
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