Slide 1: 2014 Results Review and Outlook
2014 Results Review and Outlook
Slide 2: Marshalls: Creating Better Spaces
Marshalls Creating Retter Spaces WE SUPPORT
Slide 3: 2014 Results Presentation: Driving Growth
2014 RESULTS PRESENTATION DRIVING GROWTH
Slide 4: Agenda
Driving Growth Agenda • Highlights • Financial Performance • Market Trends • Driving Growth – Landscape Products – UK Smaller Businesses – International • Future Growth • Summary • Questions 1
Slide 5: Highlights
Driving Growth Highlights Increase 2014* 2013 % Continuing operations Revenue £358.5m £307.4m 17 EBITDA £38.5m £30.2m 27 Operating profit £25.3m £16.1m 57 Profit before tax £22.4m £13.0m 72 Basic EPS 10.13p 6.94p 46 Dividends - declared 6.00p 5.25p 14 Final dividend - recommended 4.00p 3.50p 14 ROCE
Slide 6: Revenue Growth
Driving Growth Revenue Growth 400 4.5 358.5 10.4 36.2 350 £'m 307.4 300 250 2013 Landscape Other UK smaller Other Smaller International 2014 Products businesses Businesses 3
Slide 7: Revenue Analysis
Driving Growth Revenue Analysis Public Sector and Commercial Revenue ● 64% of Group ● Revenue up 20% ● Price up 4% ● Volume and mix up 16% UK Domestic Revenue ● 30% of Group ● Revenue up 9% ● Price up 3% ● Volume and mix up 6% International Revenue 4 ● 6% of Group ● International sales grew by 27%
Slide 8: Profit for the Financial Period
Driving Growth Profit for the Financial Period 2014* 2013 £m £m Operating profit: Continuing operations EBITDA 38.5 30.2 Depreciation / amortisation (13.2) (14.1) Operating profit 25.3 16.1 Financial income and expense (net) (2.9) (3.1) Profit before tax 22.4 13.0 * After £2.0m restructuring costs i
Slide 9: Margin Reconciliation
Driving Growth Margin Reconciliation Operating Impact on Revenue Profit Margin Continuing operations £m £m % 2013 - reported 307.4 16.1 5.2 Price increases to recover costs (UK) 10.2 2.6 0.5 Volume and mix – Landscape Products 27.1 6.6 1.5 Volume and mix – other UK Smaller Businesses 9.3 2.7 0.7 Org
Slide 10: Cash Flow from Operating Activities
Driving Growth Cash Flow from Operating Activities Cash inflow arising from: 2014 2013 £m £m Operating profit 25.3 16.1 Depreciation and amortisation 13.2 14.1 EBITDA (continuing operations) 38.5 30.2 Discontinued operations - 0.5 EBITDA (total operations) 38.5 30.7 Net financial expenses paid (2.8)
Slide 11: Cash Flow
Driving Growth Cash Flow 2014 2013 £m £m Net cash flow from operating activities 29.1 27.1 Capital expenditure (12.0) (6.1) Net proceeds from sale of surplus assets 3.1 0.2 Net proceeds from disposal of discontinued operations - 17.0 Dividends paid (10.8) (10.3) Payments to acquire own shares (4.3)
Slide 12: Bank Debt Capacity
Driving Growth Bank Debt Capacity ● Strong free cash flow ● 2014 YE net debt - £30.5 million ● Net debt: EBITDA - 0.8 times ● Gearing - 16.8% ● Bank debt capacity of £125 - £150 million using current market ratios ● Significant acquisition capacity 9
Slide 13: Additional Information and Ratios
Driving Growth Additional Information and Ratios 2014 2013 Interest: Charge £2.9m £3.1m Cover 8.8 times 5.3 times Tax rate 18.7% 0.5% EPS: Continuing 10.13p 6.94p Total operations 10.13p 7.20p Dividend: 2014 interim and final announced 6.00p 5.25p Cover 1.7 times 1.3 times Weighted average number of
Slide 14: Slide 14
Slide 15: Market Trends
Marshalls Creating Retter Spaces 12 Market Trends
Slide 16: CPA Forecasts
Driving Growth CPA Forecasts Construction Output (% Growth) 7.4% 5.3% 4.2% 3.9% 3.8% 3.4% 3.3% 0.4% ‐7.5% 2012 2013 2014 2015 2016 2017 2018 13 Source: ONS: Construction Products Association
Slide 17: Contracts Awarded (12 Month Rolling Basis)
Contracts Awarded (12 Month Rolling Basis) Average of Hard Landscape Value Adjusted (ABI with 12 Month Lag) £385,000,000 £330,000,000 £275,000,000 £220,000,000 £165,000,000 £110,000,000 ABI Landscape Value £55,000,000 £0 14
Slide 18: Domestic Market Confidence
Driving Growth Domestic Market Confidence •Highlights •Financial Performance •Market Trends •Driving Growth •Landscape Products •Smaller Businesses •International •Future Growth •Summary •Questions 15
Slide 19: Installer Order Book
Driving Growth Installer Order Book •Highlights •Financial Performance •Market Trends •Driving Growth •Landscape Products •Smaller Businesses •International •Future Growth •Summary •Questions 16
Slide 20: Driving Growth
Marshalls Creating Retter Spaces 17 Driving Growth
Slide 21: Commercial New Product Focus
Driving Growth Commercial New Product Focus • NEW Myriad Concrete Block Paving • NEW Yorkstone Pave Drain, Holborn London 18 • Needles Lighting, Barclaycard Arena, Birmingham • NEW Conservation Priora Permeable Flag
Slide 22: Linear Drainage
Driving Growth Linear Drainage •Highlights •Financial Performance •Market Trends •Driving Growth Linear Drainage •Landscape Products 180.0 170.0 •Smaller Businesses 160.0 Sales Value Indexed •International 150.0 2013Q2=100 140.0 •Future Growth 130.0 •Summary 120.0 110.0 •Questions 100.0 2013‐Q2 2013
Slide 23: Domestic New Product Focus
Driving Growth Domestic New Product Focus 14 Patented systems 12 % of sales 10 Target 8 Actual % of product Driveways Patios sales 6 2013 6.6% 9.4% 20 2014 11.1% 14.8% 4 2013 2014 2015
Slide 24: Pavesys Patented Paving System
Driving Growth Pavesys Patented Paving System • Cutting installation time in half! • Engineered flag design and innovative installation process 21
Slide 25: Fairstone
Driving Growth Fairstone •Highlights •Financial Performance •Market Trends •Driving Growth •Landscape Products •Smaller Businesses Fairstone •International 140.0 135.0 •Future Growth 130.0 125.0 •Summary Sales Value Indexed 120.0 2013Q2=100 115.0 •Questions 110.0 105.0 100.0 95.0 90.0 22 2013‐Q2 201
Slide 26: The New Marshalls Stone Standard
The New Marshalls Stone Standard Majority of competitors’ sandstone that we tested did not comply with the British Standard Marshalls exceeds the Standard Low Flexural Strength Not Frost Resistant High Water Absorbency The Marshalls Stone Standard mark gives our customers full assurances that all Ma
Slide 27: UK Smaller Businesses – Street Furniture/Cladding/Mineral Products
Driving Growth UK Smaller Businesses – Street Furniture/Cladding/Mineral Products • Sales increase - £10.4m (+ 21%) • Operating profit - £2m loss to £1.5m profit • Market share increasing but all still single digit • Restructuring complete – now driving growth 24
Slide 28: International
Driving Growth International • Sales growth + 27% • Belgium restructuring cost £2m • Reducing manufacturing capacity - increasing distributed products • International business expected to breakeven in 2015 • US office operational, Dubai office next 25
Slide 29: Future Strategy
Driving Growth Future Strategy • Driving organic growth • Continuing to invest in new product development • Strong free cash flow • Up to 2 x dividend cover over the business cycle • LEK are assessing 5 key areas – Street Furniture – Cladding – Drainage – Internal Natural Stone – Walling • Acquisiti
Slide 30: Summary
Driving Growth Summary • Good revenue growth – up 17% • Strong PBT growth – up 72% • Target to achieve pre-recession results well underway • CPA forecast 13% growth in the next 3 years • Continue to drive organic growth • Good start to 2015 – revenue YTD + 13% 27
Slide 31: Appendices
erro, @ e oe Marshalls Creating Retter Spaces 28 Appendices
Slide 32: Construction Products Association
Construction Products Association 2013 2014 2015 2016 2017 2018 £m/% change Actual Actual Forecast Forecast Forecast Forecast Housing 21,617 26,587 28,908 30,119 30,603 31,097 8.3% 23.0% 8.7% 4.2% 1.6% 1.6% Other New Work 47,968 48,182 51,060 54,064 57,177 61,205 -2.5% 0.4% 5.9% 5.8% 5.7% 6.9% Repai
Slide 33: Financial Flexibility
Financial Flexibility 2014 Actual EBITA: Interest charge 11.5 times Net Debt: EBITDA 0.8 times EBITA to interest charge must be greater than 2.5 times Net debt to EBITDA must be less than 3.0 times Net assets must be greater than £100 million 30
Slide 34: Pensions
Pensions 20 Risk Management 2000: Closed to new members 10 2006: Closed to future service accrual 0 2007: Investment strategy -10 Investment Strategy -20 Moved from equities to LDIs -30 Closer matching to liability profile -40 Balance Sheet -50 YE 2014 surplus £3.4m (YE 2013: deficit £4.
Slide 35: Net Assets
Net Assets £m £m 2013 Year End Net Assets 175.4 Impact of movements in year: Profit for the financial year 19.9 Ordinary dividends (10.8) Actuarial movement on pensions (after tax) 2.6 Hedging reserve (2.3) Share-based expenses (after tax) 3.3 Purchase of own shares (4.3) Foreign currency translatio
Slide 36: Disclaimer
Disclaimer • For the purposes of the following disclaimer, references to this “presentation” shall be deemed to include references to the presenters’ speeches, the question and answer session and any other related verbal or written communications. • This presentation, which is personal to the recipi