Slide 1: 2012 Half-Yearly Results Review and Outlook
2012 HALF-YEARLY RESULTS REVIEW AND OUTLOOK
Slide 2: Marshalls
Marshalls
Slide 3: Marshalls Highlights
o3 “ecae” Marshalls Highlights Half year Half year ended ended 30 June 2012 30 June 2011 Revenue* £167.5m £177.2m EBITDA* £18.1m £22.9m Operating profit* £9.5m £13.7m Profit before tax* £7.6m £12.2m Basic EPS* 3.63p 5.47p Basic EPS (total operations) (3.82)p 2.96p Net debt £ 83.8m £70.4m *Continuing
Slide 4: Marshalls Background
on} % ‘a Marshalls Background Deterioration in economic outlook Exceptionally wet weather for prolonged period Improvement in underlying trading margins Decisive action to reduce output, release cash and reduce cost base
Slide 5: Marshalls Market Forecasts
ree “osee” Marshalls Market Forecasts Construction Products Association Forecast for Construction Output Index 2010 = 100 115 7 7 CL 7 110 > a“ y a a 7 7 a 105 2 2 yw a 7 a > wee aa - L 7 a 100 - < - a a - - ~~ - _— — -” 95 : 1 2010 2011 2012 2013 2014 2015 2016 —Spring 2012 | — Summer 2012 |
Slide 6: Marshalls Revenue
on} Marshalls Revenue Revenue £167.5m Revenue Movement H1 2011 Exceptional weather in UK UK International H1 2012 Revenue &m 162.6 2010 £m 177.2 167.5 2011 2012 -5% -1% +1% -5%
Slide 7: Marshalls Revenue Analysis
£23 Marshalls Revenue Analysis Public Sector and Commercial Revenue @ 62% of Group @ Revenue lower by 2% e@ Price up 4%, weather impact down 3% and volume down 3% Domestic UK Revenue @ 34% of Group @ Revenue lower by 14% @ Price up 4%, weather impact down 11%, UK volume down 7% International Revenue
Slide 8: Marshalls Operating Profit
2 Marshalls Operating Profit Before operational restructuring costs and asset impairments EBITDA Depreciation/Amortisation Operating profit Net gain on property disposals included in operating profits: @ H1 2011: £2.0m e@ H1 2012: £0.6m 2012 £m 18.1 (8.6) 9.5 2011 £m 22.9 (9.2) 13.7
Slide 9: Marshalls Margin Reconciliation
E ry ean “ecae” Marshalls Margin Reconciliation Movement in Impact on Revenue Operating Margin Profit £m £m % H1 2011 177.2 13.7 7.7 Property disposals - (1.4) (0.7) Weather impact (10.0) (2.5) (1.1) 167.2 9.8 5.9 Price increases to recover costs 7.1 1.7 0.7 Volume (8.3) (2.0) (0.9) Organic Internat
Slide 10: Restructuring Costs and Asset Impairments
fo “cnet Marshalls Restructuring Costs and Asset Impairments H1 Restructuring costs H1 Asset impairments e Intangible e Tangible H1 2012 H2 Restructuring costs Profit improvement: Cash Non-Cash Total £m £m £m 6.6 - 6.6 - 2.7 2.7 - 9.2 9.2 6.6 11.9 18.5 2.5 - 2.5 9.1 11.9 21.0 Annualised savings of £
Slide 11: Marshalls Cash Actions
ry ean “ecae” Marshalls Cash Actions Cash actions Profit improvement Inventory reduction Property and asset sales Reduced capital expenditure Pension recovery payments Cash cost of actions Net cash benefit 2012 Year 2013 10
Slide 12: Marshalls Cash Flow from Operating Activities
o3 “ecae” Marshalls Cash Flow from Operating Activities Cash inflow arising from: 2012 £m Operating profit 9.5 Depreciation and amortisation 8.6 EBITDA (continuing operations) 18.1 Discontinued operations - EBITDA (total operations) 18.1 Net financial expenses paid (2.2) Taxation paid (1.1) Pensions
Slide 13: Marshalls Cash Flow
£23 Marshalls Cash Flow Net cash flow from operating activities Capital expenditure Proceeds from sale of surplus assets Investments and International expansion* Disposals Sub-total Finance leases / exchange differences Movement in net debt Net debt at 1 January Net debt at 30 June Gearing (%) * Inc
Slide 14: Significant Borrowing Facilities
o eae” Marshalls Significant Borrowing Facilities Expiry Date Facility £m Committed facilities: Q3 2016 50 Q3 2015 75 Q3 2014 20 On demand facilities: Available all year 25 Seasonal (February to August inclusive) 20 Cumulative Facility 190 * Note: 2012 based on consensus information £m 220 - 200 4 1
Slide 15: Marshalls Pensions
rea Marshalls Pensions Risk Management e 2000 closed to new members e 2006 closed to future service accrual e@ 2007 investment strategy Investment Strategy e Moved from equities to LDIs e@ Closer matching to liability profile of pension scheme Balance Sheet Values e HYE 2012 surplus £2.1m e Net of d
Slide 16: Additional Information and Ratios
2 “eeee” Marshalls Additional Information and Ratios 2012 2011 Interest charge: Charge £1.8m £1.4m Cover* 5.2 times 9.5 times Tax rate* 7.4% 12.4% EPS: Adjusted* 3.63p 5.47p Total operations (3.82)p 2.96p Weighted average number of shares 195.4m 195.4m Net asset value £179.5m £199.0m *Continuing ope
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Slide 18: Creating Our Own Certainty
on} Marshalls Creating Our Own Certainty 17
Slide 19: Marshalls Operating Flexibility
og “osee” Marshalls Operating Flexibility Managing Capacity Excellent geographic coverage Modern, efficient well invested factories Over 97% of our customers within a 2 hour drive time Capacity reduced to _ release inventory of £10m by the end of 2013 Fixed cost reductions of £5m pa and efficiency s
Slide 20: Marshalls Sustainable Growth Initiatives
on} Marshalls Sustainable Growth Initiatives e Public Sector and Commercial - targeted marketing and partnerships, investment in street furniture, security products, water management and sustainable urban drainage (“SUDS’), internal paving e Domestic - installer initiatives and distributor merchandi
Slide 21: a ? S B vw — i] = www.amarshalls.co.uk
2 a ? 2 S B vw — i] = www.amarshalls.co.uk
Slide 22: Marshalls Olympics - Early Engagement and the Legacy Opportunity
C3 Marshalls Olympics - Early Engagement and the Legacy Opportunity BR a ———~ CARBON TRUST y STANDARD REDUCING CO2 YEAR ON YEAR Ethical Trading Initiative Respect for workers worldwid~ 24
Slide 23: Marshalls Olympics - Early Engagement and the Legacy Opportunity
£33 “eeoe” Marshalls Olympics - Early Engagement and the Legacy Opportunity Athletes’ Village 22
Slide 24: Marshalls Product Innovation
er Marshalls Product Innovation e Integrated Street Furniture e Water Management and SUDS he e Commercial Internal Natural e Domestic Internal Natural Stone Stone 23
Slide 25: Domestic Market Installers
o “eeee” Marshalls Domestic Market Installers 1900 1800 1700 - 1600 1500 - 1400 - Marshalls Register - Growth in number of Installer Teams Customer service remains excellent
Slide 26: Marshalls Product Innovation
Marshalls Product Innovation
Slide 27: Marshalls International Opportunity
“© ae “ecee” Marshalls International Opportunity Two operating sites, 40 million people within a 2 hour drive time Natural sandstone, granite and limestone from India and China Specialist manufactured products and street furniture from the UK Key synergies -— marketing and sales collateral, sales pr
Slide 28: Marshalls Public Sector and Commercial
oo} “cone” Marshalls 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) 300 250 gangrene Pe ead 200 £Emillions 150 100 50
Slide 29: Domestic Market Consumer Confidence and Installer Order Books
Marshalls 4 a Domestic Market Consumer Confidence and Installer Order Books Consumer confidence Rolling 6 Months Consumer Confidence v Installer Order Book (3 Month Lag) SEEESEES LS HGS FL GH LF FSG SF WS 8 wo ho ah BY SY YP OD 0.0 -5.0 -10.0 -15.0 -20.0 -25.0 -30.0 -35.0 - -40.0 FIFE VIL CPF F LEVI
Slide 30: Marshalls Market Outlook
ty ean “eee” Marshalls Market Outlook Revenue First Proportions Half 2011 2012 2013 Commercial 35% Vu Wa Public 23% AF | Do it for me 28% Vv ~~ DIY 5% y — New build 6% 4 1) International 3% uN * 100% {\ a 29
Slide 31: Marshalls Summary
£23 Marshalls Summary Continuing uncertainty about the market environment Decisive action to reduce output, release cash and reduce fixed costs Excellent brand, market position and geographical coverage Growth initiatives and product innovation are delivering Operating flexibility — significant capa
Slide 32: Appendices
on} Marshalls Appendices
Slide 33: Construction Products Association
fo “cnet Marshalls Construction Products Association 2009 2010 2011 2012 2013 2014 2015 2016 £m/% change Actual Actual Actual Forecast Forecast Forecast Forecast Forecast Housing 13,721 17,181 18,453 17,757 17,809 18,554 19,741 21,600 -26.3% 25.2% 7.7% -3.8% 0.3% 4.2% 6.4% 9.4% Other New Work 46,772
Slide 34: Marshalls Financial Flexibility
2 “eeee” __| Marshalls _ Financial Flexibility H1 2012 Actual EBITA: Interest charge 3.8 times Net Debt: EBITDA 2.7 times e EBITA to interest charge must be greater than 2.5 x e Net debt to EBITDA must be less than 3.0 x e Net assets must be greater than £100 million 33
Slide 35: Marshalls Net Assets
£23 Marshalls Net Assets 2011 Year End Net Assets Impact of movements in year: Trading profit Operational restructuring costs and asset impairments (net of tax) Ordinary dividends Actuarial movement on pensions (after tax) Hedging reserve Share based expenses Foreign currency translation differences
Slide 36: Marshalls Disclaimer
o3 “ecae” Marshalls 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 person
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