Slide 1: 2024 Half Year Results Review and Outlook
Marshalls plc 2024 Half Year Results Review and Outlook Positioning the Group for outperformance over the medium term 12 August 2024
Slide 2: Agenda
Agenda ▪ Half year in review ▪ Half year financial results Find out more online www.marshalls.co.uk ▪ Strategy update Find us on Facebook MarshallsGroup ▪ Summary and outlook Follow us on X @MarshallsGroup ▪ Q&A Find us on LinkedIn Marshalls Find us on YouTube MarshallsTV Matt Pullen, Justin Lockwoo
Slide 3: Half year in review
Half year in review Marshalls
Slide 4: Six-month reflections
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Six-month Title reflections ▪ First impressions confirmed – very optimistic for the medium term ▪ Building Products and Roofing Products in good shape ▪ Landscape Products has been challenging – Steps being taken to strengthen and build o
Slide 5: Half year 2024 in review – a resilient Group performance
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Half Title year 2024 in review – a resilient Group performance ▪ Resilient Group result in weak end markets; however, more challenged performance in Landscape Products – Partly mitigated through self-help measures and tight cost managemen
Slide 6: Financial headlines
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Highlights Financial Contributionheadlines of Marley contributed to record performance despite significant challenges £306.7m 7.9p Adjusted Revenue 13% basic 23% EPS Adjusted operating profit £34.0m 19% Interim dividend 2.6p none £26.6m £
Slide 7: Half year financial results
Half year financial results
Slide 8: Group revenue
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Group revenue Revenue contracted due to weak end market demand ▪ Revenue contracted by 12 per cent on a like-for- like basis Revenue (£'m) ▪ Landscape Products like-for-like revenue contracted by 19 per cent due to lower volumes and impac
Slide 9: Group adjusted operating profit
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Group adjusted operating profit Resilient Group performance in weak end markets ▪ Group operating profit contracted by £7.9 million principally due to lower profitability in Landscape Adjusted operating profit (£'m) Products ▪ Roofing Pro
Slide 10: Landscape Products
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Landscape Products Weaker performance due to lower volumes and tougher pricing environment ▪ Reduced end market demand adversely impacted business volumes exacerbated by some loss in 2024 £’m Change % market share Revenue 137.0 19%* ▪ Rev
Slide 11: Building Products
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Building Products Continued weak new build housing activity reduced volumes and profitability ▪ Challenging trading conditions driven by continuation of weak new build housing demand 2024 £’m Change % ▪ Revenue contracted by six per cent
Slide 12: Roofing Products
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Roofing Products Resilient performance demonstrating benefits of less discretionary RMI market and integrated solar growth ▪ Continued weak new build housing activity together with more resilient RMI and growth in 2024 £’m Change % Viridi
Slide 13: Adjusted profit before taxation and earnings per share
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Adjusted profit before taxation and earnings per share Profitability impacted by weak construction market ▪ Operating profit was £34.0 million, representing a 19 per cent reduction YoY contraction 2024 £’m Change % ▪ Lower financing costs
Slide 14: Cash flow
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Cash flow Reduction in net debt delivered by strong management of cash and logistics outsourcing ▪ Strong annualised cash conversion with 111 per cent 2024 £’m Change £m of EBITDA due to strong management of working Operating profit 34.0
Slide 15: Ongoing capital discipline
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Ongoing capital discipline Good control of working capital; medium-term target to rebuild ROCE to c.15 per cent; progressive deleveraging ▪ Continued focus on maintaining capital discipline through active working capital management 2024 £
Slide 16: Funding and liquidity
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Funding and liquidity Material YoY reduction in drawn borrowings; significant liquidity and covenant headroom ▪ Syndicated bank facility of £340 million - principally matures in April 2027 Pre-IFRS 16 net debt (£’m) ▪ Net debt of £183.0 m
Slide 17: Capital allocation
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Capital allocation Clear and unchanged policy 1 2 3 4 5 Organic R&D and new product Ordinary Balance sheet Selective growth development dividends deleveraging acquisitions Capital investment Continued focus Maintaining dividend Target to
Slide 18: Strategy update
Strategy update £3 Marshalls
Slide 19: Encouraging backdrop to developing our new five-year strategy
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Encouraging Title backdrop to developing our new five-year strategy ▪ Medium term outlook for the UK construction industry is positive with modest improvement expected in H2 and progressive recovery anticipated from 2025 ▪ Supported by th
Slide 20: Review of strategy is deepening our understanding of value creation opportunities
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Review of strategy is deepening our understanding of value creation opportunities Title Enviable market leading positions and models in our core scale businesses ▪ Landscape Products has a unique and distinctive national model providing s
Slide 21: Review of strategy is deepening our understanding of value creation opportunities
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Review of strategy is deepening our understanding of value creation opportunities Title Recent acquisitions increased exposure to attractive markets with strong tailwinds ▪ Integrated solar and energy transition – Strong growth through up
Slide 22: The Group is competitively advantaged for future growth
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Review of strategy is deepening our understanding of value creation opportunities Title The Group is competitively advantaged for future growth ▪ Scale and national footprint ▪ Operational excellence and gearing in our core scale business
Slide 23: Summary and outlook
Summary and outlook Pat *.¢ Marshalls
Slide 24: Positioning the Group for outperformance over the medium term
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Positioning Title the Group for outperformance over the medium term ▪ Resilient Group performance in challenging markets in H1 2024 ▪ Modest market recovery expected to commence in H2 2024 against an improving macro-economic backdrop ▪ Pr
Slide 25: Appendices
Appendices £3 Marshalls
Slide 26: Structural under-investment in construction expected to drive medium-term market outperformance
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Structural under-investment in construction expected to drive medium-term market outperformance UK’s housing stock continues to age, underpinning RMI Material structural deficit in new build housing demand going forward House building vol
Slide 27: Group well positioned for when markets recover
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Group well positioned for when markets recover 20 per cent recovery in sales volumes has potential to double PBT ▪ Market recovery and volume growth will drive stronger returns with improved operational 2023 10% Growth 20% Growth leverage
Slide 28: Ingredients in place to drive significant shareholder returns
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Ingredients in place to drive significant shareholder returns Our key strategic goals define our medium-term targets Execution of strategic goals ▪ Group growth ahead of the market as structural under- delivers sustainable profit investme
Slide 29: Results summary
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Results summary Challenging end market conditions continue to impact Group’s financial performance Change 2024 2023 % Revenue £306.7m £354.1m (13%) Adjusted results EBITDA £50.6m £58.8m (14%) Operating profit £34.0m £41.9m (19%) Profit be
Slide 30: Adjusted profit before taxation and earnings per share
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Adjusted profit before taxation and earnings per share Bridge of reported result to adjusted result 2024 2024 2024 2023 2023 2023 £’m Reported Adjusting Adjusted Reported Adjusting Adjusted Operating profit 28.9 5.1 34.0 26.8 15.1 41.9 Ne
Slide 31: Adjusting items charged to profit before taxation
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM Adjusting items charged to profit before taxation 2024 2023 £’m £’m 1. Amortisation of acquired intangible assets (5.2) (5.2) 2. Contingent consideration (1.6) (1.2) 3. Profit from significant property sale 1.7 -- 4. Impairment charges, r
Slide 32: Disclaimer
POSITIONING THE GROUP FOR OUTPERFORMANCE OVER THE MEDIUM TERM 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 commun