Slide 1: Marshalls plc 2017 Results Review and Outlook
Marshalls plc 2017 Results Review and Outlook Delivering long-term sustainable growth
Slide 2: Agenda
Agenda Delivering long-term sustainable growth • Highlights • Financial Performance • The Market Find out more online • Delivering Sustainable Growth www.marshalls.co.uk • Public Sector and Commercial • Domestic Find us on Facebook • Emerging UK Businesses MarshallsGroup • Strategy Update Follow us
Slide 3: Highlights
Delivering long-term sustainable growth Highlights Increase 2017 2016 % Revenue £430.2m £396.9m 8 EBITDA £67.9m £60.8m 12 Operating profit £53.4m £47.6m 12 Profit before tax £52.1m £46.0m 13 Basic EPS 21.52p 18.95p 14 Total dividends – ordinary and supplementary 14.20p 11.70p 21 Final ordinary divid
Slide 4: Strong track record
Delivering long-term sustainable growth Strong track record 2017 2016 2015 2014 2013 Revenue £430.2m £396.9m £386.2m £358.5m £307.4m EBITDA £67.9m £60.8m £51.8m £38.5m £30.2m Operating profit £53.4m £47.6m £37.5m £25.3m £16.1m Profit before tax £52.1m £46.0m £35.3m £22.4m £13.0m Basic EPS 21.52p 18.
Slide 5: Financial Performance Full Year 2017 Results
Financial Performance Full Year 2017 Results
Slide 6: Revenue Growth
Delivering long-term sustainable growth Revenue Growth 450 1.2 3.7 430.2 28.4 396.9 400 £'m 350 300 2016 Revenue Landscape Emerging UK International 2017 Revenue Products Businesses (including CPM) 6 Marshalls plc 2017 Results Review and Outlook
Slide 7: Revenue Analysis
Delivering long-term sustainable growth Revenue Analysis Revenue analysis: end market Revenue analysis: business area ↑19% ↑19% 5% ↑2% 5% Public Sector & Commercial 16% Landscape Products 32% UK Domestic ↑12% Emerging UK Businesses International International 63% 79% ↑9% ↑6% 7 Marshalls plc 2017 Res
Slide 8: Margin Reconciliation
Delivering long-term sustainable growth Margin Reconciliation Revenue Operating profit Impact on margin £m £m % 2016 396.9 47.6 12.0 Landscape Products 28.4 5.1 0.4 Emerging UK Businesses 1.2 0.4 0.1 International 3.7 0.3 (0.1) 2017 430.2 53.4 12.4 8 Marshalls plc 2017 Results Review and Outlook
Slide 9: Return on Capital Employed
Delivering long-term sustainable growth Return on Capital Employed (1) 24.8% 25.0% 23.0% 20.0% 19.0% 15.0% 12.5% 10.0% 8.1% 5.0% 0.0% 2013 2014 2015 2016 2017 (1) 2017 ROCE has been calculated on a like for like basis, excluding the impact for CPM ROCE : CAGR of 34% over 5 years 9 Marshalls plc 2017
Slide 10: Cash Flow from Operating Activities
Delivering long-term sustainable growth Cash Flow from Operating Activities 2017 2016 £m £m Cash inflow arising from: Operating profit 53.4 47.6 Depreciation and amortisation 14.5 13.2 EBITDA 67.9 60.8 Net financial expenses paid (0.9) (1.0) Taxation paid (10.5) (7.1) Net gain on sale of property, p
Slide 11: Cash Flow
Delivering long-term sustainable growth Cash Flow 2017 2016 £m £m Net cash flow from operating activities 57.3 49.4 Capital expenditure (20.7) (13.9) Net proceeds from sale of property, plant and equipment 3.9 3.8 Acquisition of subsidiary undertaking (44.5) - Dividends paid (24.1) (19.0) Payments t
Slide 12: Significant Borrowing Facilities Available
Delivering long-term sustainable growth Significant Borrowing Facilities Available Cumulative Facility Facility £m £m Expiry date Bank Facility Headroom Committed facilities: 180 160 Q3 2022 20 20 140 120 Q3 2021 20 40 100 £’m 80 Q3 2020 20 60 60 Q3 2019 20 80 40 20 Q3 2018 20 100 0 Jun 2013 Jun 201
Slide 13: Capital Allocation Policy
Delivering long-term sustainable growth Capital Allocation Policy 1 2 3 4 5 R&D Organic Ordinary Selective Supplementary growth NPD dividends acquisitions dividends Capital investment in Increase research Maintain dividend Target selective Supplementary growth projects. Plan and development and cove
Slide 14: Bank Debt Capacity
Delivering long-term sustainable growth Bank Debt Capacity • Continued strong cash generation • Net debt of £24.3 million at 31 December 2017 (2016: £5.4 million cash) reflecting cash outflow relating to the CPM acquisition of £41.4 million • Bank debt capacity of £125 million • Significant capacity
Slide 15: Strong Track Record of Capital Discipline
Delivering long-term sustainable growth Strong Track Record of Capital Discipline 2017 2016 2015 2014 2013 ROCE 24.8% 23.0% 19.0% 12.5% 8.1% Debtor days 41 39 39 38 43 Creditor days 58 56 53 59 69 Inventory turn (times per annum) 3.3 3.3 3.2 3.0 2.1 Liquidity ratio 1.6 1.6 1.6 1.6 1.6 (current asset
Slide 16: Pensions
Delivering long-term sustainable growth Pensions Balance Sheet • Company contributions to DB Scheme reduced to zero under agreed Recovery Plan • 31 December 2017 surplus of £4.1 million (2016: surplus of £4.3 million) Income Statement • Scheme closed since 2006 to future accrual • Net service cost:
Slide 17: Dividends
Delivering long-term sustainable growth Dividends • Progressive ordinary dividend policy 16.00 • 2017 dividends 14.00 • Interim and final (1) 10.20p (+17%) 12.00 4.00 • Supplementary (1) 4.00p 10.00 3.00 • Total 14.20p (+21%) 8.00 2.00 6.80 • Supplementary dividend: discretionary and 6.00 5.80 non-r
Slide 18: The Market Full Year 2017 Results
The Market New photo to be provided Full Year 2017 Results
Slide 19: CPA Total Construction Output Forecasts (% growth)
Delivering long-term sustainable growth CPA Total Construction Output Forecasts (% growth) 4.4% 3.8% 3.0% 1.7% 0.2% 2015 2016 2017 2018 2019 19 Marshalls plc 2017 Results Review and Outlook
Slide 20: CPA Total Construction Output Forecasts by Sector
Delivering long-term sustainable growth CPA Total Construction Output Forecasts by Sector 2017, 18, 19 (% growth) New Housing Public All New Work New Housing Private Private Housing RM&I All New Housing New Infrastructure New Private Commercial 20 Marshalls plc 2017 Results Review and Outlook
Slide 21: The UK Government Construction Pipeline
Delivering long-term sustainable growth The UK Government Construction Pipeline Top 20 Sectors in the Government Construction & Value £m Infrastructure Pipeline - December 2017 1 Transport - Rail £36,208 2 Energy - Oil & Gas £30,299 3 Utilities - Water and sewerage £19,695 4 Education - England £19,
Slide 22: Public Sector & Commercial Full Year 2017 Results
Public Sector & Commercial Full Year 2017 Results
Slide 23: Marshalls ABI Lead Indicator
Delivering long-term sustainable growth Marshalls ABI Lead Indicator 23 Marshalls plc 2017 Results Review and Outlook
Slide 24: ABI Contract Awarded by Scape Growth for 2018
Delivering long-term sustainable growth ABI Contract Awarded by Scape Growth for 2018 24 Marshalls plc 2017 Results Review and Outlook
Slide 25: Total New Housing Orders & ONS Output
Delivering long-term sustainable growth Total New Housing Orders & ONS Output 25 Marshalls plc 2017 Results Review and Outlook
Slide 26: NHBC Private Housing Starts by Builder Size
Delivering long-term sustainable growth NHBC Private Housing Starts by Builder Size 26 Marshalls plc 2017 Results Review and Outlook
Slide 27: Commercial Product Penetration in Crossrail
Delivering long-term sustainable growth Commercial Product Penetration in Crossrail Quoted on project and delivered Quoted on project 27 Marshalls plc 2017 Results Review and Outlook
Slide 28: Domestic Full Year 2017 Results
Domestic Full Year 2017 Results
Slide 29: UK Housing Transactions
Delivering long-term sustainable growth UK Housing Transactions 29 Marshalls plc 2017 Results Review and Outlook
Slide 30: GfK Consumer Confidence
Delivering long-term sustainable growth GfK Consumer Confidence 30 Marshalls plc 2017 Results Review and Outlook
Slide 31: GfK Consumer Intentions for Driveways and Patio Projects
Delivering long-term sustainable growth GfK Consumer Intentions for Driveways and Patio Projects 31 Marshalls plc 2017 Results Review and Outlook
Slide 32: UK Profile of Home Ownership
Delivering long-term sustainable growth UK Profile of Home Ownership 32 Marshalls plc 2017 Results Review and Outlook
Slide 33: UK Pensions Release Data
Delivering long-term sustainable growth UK Pensions Release Data 0 33 Marshalls plc 2017 Results Review and Outlook
Slide 34: Installer Order Books
Delivering long-term sustainable growth Installer Order Books 34 Marshalls plc 2017 Results Review and Outlook
Slide 35: Emerging UK Businesses Full Year 2017 Results
Emerging UK Businesses Full Year 2017 Results
Slide 36: Recon Walling and Mortars add value to New Housebuilding
Delivering long-term sustainable growth Recon Walling and Mortars add value to New Housebuilding 36 Marshalls plc 2017 Results Review and Outlook
Slide 37: Street Furniture - Clarity and Focus on Growth Markets
Delivering long-term sustainable growth Street Furniture - Clarity and Focus on Growth Markets Landscape Furniture Landscape Protection 37 Marshalls plc 2017 Results Review and Outlook
Slide 38: International Markets Growing Strongly
Delivering long-term sustainable growth International Markets Growing Strongly Court of Final Appeal, Hong Kong, Retail Complex, Belgium, Grassguard HVM Bollards Retail Complex, Italy, Hotel Complex, Ohio, USA, Retail Complex, Dubai, HVM Bollards Fairstone Drainage 38 Marshalls plc 2017 Results Revi
Slide 39: Digital Integration across the Specification Chain
Delivering long-term sustainable growth Digital Integration across the Specification Chain 39 Marshalls plc 2017 Results Review and Outlook
Slide 40: Strategy Update Full Year 2017 Results
Strategy Update Full Year 2017 Results
Slide 41: The 2020 Strategy Remains on Track
Delivering long-term sustainable growth The 2020 Strategy Remains on Track • EBITDA growth continues alongside improved ROCE and strengthened brand • Self help programme well advanced • Organic capital investment continues • Research and development expenditure increased in the period • Focus on inn
Slide 42: Domestic New Product Developments
Delivering long-term sustainable growth Domestic New Product Developments 42 Marshalls plc 2017 Results Review and Outlook
Slide 43: Product Sector Expansion and Systematisation
Delivering long-term sustainable growth Product Sector Expansion and Systematisation 43 Marshalls plc 2017 Results Review and Outlook
Slide 44: Commercial Product Innovation - Taking Cost out of the Installation
Delivering long-term sustainable growth Commercial Product Innovation - Taking Cost out of the Installation 44 Marshalls plc 2017 Results Review and Outlook
Slide 45: Increasing Self Help Capital Investment
Delivering long-term sustainable growth Increasing Self Help Capital Investment • Important part of the organic growth story • Original plan to invest additional £15m over 3 years to reduce cost base by £5m per annum • Further opportunities led to capital expenditure of £22.5m in 2017, with further
Slide 46: Self Help Projects – Investing in Stone
Delivering long-term sustainable growth Self Help Projects – Investing in Stone Customer Advantages Post-Investment • Improved capacity and shorter lead times • Improved flexibility – new machinery allows greater than 600mm paving to be produced • Improved flexibility – new size paving units such as
Slide 47: Acquisition of CPM
Delivering long-term sustainable growth Acquisition of CPM 47 Marshalls plc 2017 Results Review and Outlook
Slide 48: Acquisition of CPM
Delivering long-term sustainable growth Acquisition of CPM • Acquired in October 2017 for £41.4 million including £3 million of CPM debt taken on • Growing business with a strong track record of quality and service • Specialist manufacturer of underground concrete pipes, conveyance and water managem
Slide 49: Water Management from on the Ground to Below Ground: Linear Drainage Systems
Delivering long-term sustainable growth Water Management from on the Ground to Below Ground: Linear Drainage Systems Channel Drainage COLLECT Combined Kerb & Drainage CONVEY Pipes Manholes Hydrocarbon Silt CLEAN Separators Traps HOLD Hydrocarbon Attenuation Perforated Separators Flow Control RELEASE
Slide 50: Water Management from on the Ground to Below Ground: Linear Drainage Systems
Delivering long-term sustainable growth Water Management from on the Ground to Below Ground: Linear Drainage Systems COLLECT Permeable Paving Crushed Aggregates CLEAN Permeable Membranes Impermeable Membranes HOLD RELEASE Attenuation Crates Flow Control CONVEY Pipes Manholes Natural Attenuation area
Slide 51: Future Acquisitions
Delivering long-term sustainable growth Future Acquisitions Minerals Water Landscape Management Protection 51 Marshalls plc 2017 Results Review and Outlook
Slide 52: 2020 Strategy Update
Delivering long-term sustainable growth 2020 Strategy Update • 2017 PBT of £52.1m + 13% • 2017 EBITDA of £67.9m +12% • Self help programme well underway – savings of £5 million • NPD continuing strongly • Digital strategy providing real benefits • Strong start at CPM and integration on track • Conti
Slide 53: Summary
Delivering long-term sustainable growth Summary • Revenue growth – +8% (2013-17: +40%, CAGR: 9%) • Strong PBT growth – +13% (2013-17: +301%, CAGR: 41%) • Improving operating margins – up to 12.4% • Continued strength in ROCE – 24.8% (like for like basis) (2013-17: +1670 basis points, CAGR: 32%) • St
Slide 54: Appendices Full Year 2017 Results
Appendices Full Year 2017 Results
Slide 55: Profit for the Financial Year
Delivering long-term sustainable growth Profit for the Financial Year 2017 2016 Increase £m £m % EBITDA 67.9 60.8 12 Depreciation / amortisation (14.5) (13.2) Operating profit 53.4 47.6 12 Financial income and expense (net) (1.3) (1.6) Profit before tax 52.1 46.0 13 55 Marshalls plc 2017 Results Rev
Slide 56: Construction Products Association
Delivering long-term sustainable growth Construction Products Association 2016 2017 2018 2019 £m / % change Actual Estimate Forecast Forecast Housing 34,582 36,552 37,648 38,456 10.4% 5.7% 3.0% 2.1% Other New Work 61,110 62,355 61,819 63,648 2.3% 2.0% -0.9% 3.0% Repair, Maintenance and Improvement P
Slide 57: Additional Information and Ratios
Delivering long-term sustainable growth Additional Information and Ratios 2017 2016 Interest: Charge £1.3m £1.6m Cover 41.1 times 29.9 times EPS 21.52p 18.95p Dividend: 2017 interim and final recommended 10.20p 8.70p Cover (ordinary) 2.1 times 2.2 times Supplementary dividend recommended 4.00p 3.00p
Slide 58: Financial Flexibility
Delivering long-term sustainable growth Financial Flexibility 2017 Actual EBITA: Interest charge 72.2 times Net Debt: EBITDA 0.35 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 58 Marshal
Slide 59: Net Assets
Delivering long-term sustainable growth Net Assets £m 2016 Net Assets 217.1 Impact of movements in the year: Profit for the financial year 42.5 Dividends (24.1) Actuarial movement on pensions (after tax) 0.3 Hedging reserve (0.2) Share-based payments (after tax) 3.6 Purchase of own shares (1.1) Fore
Slide 60: Disclaimer
Delivering long-term sustainable growth 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 prese
Slide 61: Q&A Full Year 2017 Results
ett, @ e e Marshalls Q&A Full Year 2017 Results
Slide 62: Marshalls
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