Slide 1: 2020 Half Year Results Review and Outlook
Marshalls plc 2020 Half Year Results Review and Outlook Well placed to deliver a strong recovery
Slide 2: Agenda
Agenda Well placed to deliver a strong recovery • Highlights • Actions Taken for COVID-19 • Financial Performance • The Market • Public Sector and Commercial • Domestic • 5 Year Strategy • ESG • Summary • Questions 2 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 3: Highlights
Well placed to deliver a strong recovery Highlights HY 2020 HY 2019 Results before operational restructuring costs and asset impairments Revenue £210.5m £280.1m EBITDA £18.2m £54.9m Operating profit £3.5m £39.0m Profit before tax £1.6m £37.1m Basic EPS 0.12p 15.18p ROCE 10.9% 19.3% Net debt £98.9m £
Slide 4: COVID-19 actions taken: Operational
Well placed to deliver a strong recovery COVID-19 actions taken Operational • Priority given to health and safety • Operational restructuring - covering all parts of the business – Selective site closures – Changes to shift patterns and to the size and structure of support functions – Redundancies r
Slide 5: COVID-19 actions taken: Financial
Well placed to deliver a strong recovery COVID-19 actions taken Financial • Controlled costs and maintained liquidity • Utilised Government tax deferral and furlough schemes • Reduction in remuneration for Board and senior management • Temporary suspension of dividend policy • Additional RCF bank fa
Slide 6: Financial Performance
Financial Performance Half Year 2020 Results
Slide 7: Revenue variance analysis 2019/2020
Well placed to deliver a strong recovery Revenue 300 Revenue variance analysis 2019/2020 280.1 -53.5 -18.4 2.3 210.5 £'m 200 100 2019 HY revenue Public Sector & Domestic International 2020 HY revenue Commercial 7 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 8: Daily sales trend
Well placed to deliver a strong recovery Daily sales trend Group daily turnover February to 26 August (2019 v 2020) £3,000,000 £2,500,000 £2,000,000 £1,500,000 £1,000,000 £500,000 £0 Feb Mar Apr May Jun Jul Aug Turnover 2019 Turnover 2020 8 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 9: Revenue analysis
Well placed to deliver a strong recovery Revenue analysis Revenue analysis: end market Revenue analysis: business area ↑15% ↑15% 8% 8% ↓22% Public Sector & Landscape Products Commercial 13% ↓24% Domestic Emerging UK businesses 28% International International 64% 79% ↓28% ↓28% 9 Marshalls plc 2020 Ha
Slide 10: Operating profit
Well placed to deliver a strong recovery Operating profit HY 2020 HY 2019 £m £m EBITDA* 18.2 54.9 Depreciation / amortisation (14.7) (15.9) Operating profit* 3.5 39.0 Operational restructuring costs and asset impairments (17.6) - Operating (loss) / profit: reported (14.1) 39.0 Note: * Before operati
Slide 11: Operational restructuring costs and asset impairments
Well placed to deliver a strong recovery Operational restructuring costs and asset impairments Total £m Works closure costs 3.2 Redundancy 7.7 Asset impairments 6.7 17.6 Note: Reduction in costs of £1 million per month 11 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 12: Margin reconciliation
Well placed to deliver a strong recovery Margin reconciliation Revenue Operating profit* Impact on margin £m £m % HY 2019 280.1 39.0 13.9 Landscape Products (65.8) (32.1) (10.7) Other (3.8) (3.4) (1.5) HY 2020 210.5 3.5 1.7 Note: * Before operational restructuring costs and asset impairments 12 Mars
Slide 13: Cash flow from operating activities
Well placed to deliver a strong recovery Cash flow from operating activities (as reported) HY 2020 HY 2019 £m £m Cash inflow arising from: Operating profit* 3.5 39.0 Depreciation and amortisation 14.7 15.9 EBITDA* 18.2 54.9 Operational restructuring costs and asset impairments (17.6) - Net financial
Slide 14: Cash flow (as reported)
Well placed to deliver a strong recovery Cash flow (as reported) HY 2020 HY 2019 £m £m Net cash flow from operating activities (18.4) 24.3 Capital expenditure (7.5) (10.1) Net proceeds from sale of surplus assets 0.1 0.1 Dividends paid - (23.8) Lease payments (6.4) (7.7) Proceeds from issue of share
Slide 15: Liquidity
Well placed to deliver a strong recovery Liquidity • Additional 12-month RCF bank facilities of £90 million – £30 million with each of NatWest, Lloyds and HSBC – Each has a 12 month extension option • Renewal of existing maturing RCF and working capital facilities • Total bank facilities now £255 mi
Slide 16: Significant borrowing facilities available
Well placed to deliver a strong recovery Significant borrowing facilities available Committed Uncommitted Total £m £m £m Existing facilities 140 25 165 Additional RCFs 90 - 90 Bank facilities 230 25 255 CCFF - 200 200 Total facilities 230 225 455 Bank facilities Committed facilities Facility Cumulat
Slide 17: Financial flexibility
Well placed to deliver a strong recovery Financial flexibility HY 2020 £m Net bank debt (53.9) Existing bank facilities 165.0 Headroom 111.1 With new bank facilities (£90m) 255.0 Headroom 201.1 Total facilities (including CCFF) 455.0 Headroom 401.1 EBITA: interest charge 18.1 times Net debt: EBITDA
Slide 18: Capital allocation policy
Well placed to deliver a strong recovery Capital allocation policy 1 2 3 4 5 Organic R&D Ordinary Selective Supplementary growth New Product dividends acquisitions dividends Development Capital investment Renewed focus on Decision taken to Good pipeline of Supplementary remains core to R&D and NPD r
Slide 19: Maintain capital discipline
Well placed to deliver a strong recovery Maintain capital discipline HY HY HY HY HY HY 2020 2019 2018 2017 2016 2015 Debtor days 48 35 33 34 34 36 Creditor days 47 56 53 52 51 51 Inventory turn (times per annum) 2.9 3.1 3.2 3.3 3.2 3.0 Liquidity ratio (pre-IFRS 16) 2.0 1.5 1.6 1.6 1.5 1.6 (current a
Slide 20: Pensions
Well placed to deliver a strong recovery Pensions Balance Sheet • Company contributions to defined benefit scheme reduced to zero under agreed recovery plan • Surplus of £10.4 million at 30 June 2020 (31 December 2019: surplus of £15.7 million) Income Statement • Scheme closed since 2006 to future a
Slide 21: Dividends
Well placed to deliver a strong recovery Dividends • 2019 final and supplementary dividends withdrawn • Policy remains to target 2 times cover • Supplementary dividend: discretionary and non-recurring • No interim dividend proposed for 2020 • Final dividend position to be reviewed at year end • Boar
Slide 22: The Market
The Market Half Year 2020 Results
Slide 23: CPA accuracy
Well placed to deliver a strong recovery CPA accuracy - generally CPA forecasts are in the mid range of mainstream economists and the industry specialists 23 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 24: Overall CPA economic forecast scenarios
Well placed to deliver a strong recovery Overall CPA economic forecast scenarios ‘V’ Shape; rapid recovery from a low base in June and Q3 before growth rates slow. ‘W’ Shape; recovery in June and Q3 before second wave, with colder weather, in the same strain before a vaccine or in a different strain
Slide 25: CPA main forecast summer 2020
Well placed to deliver a strong recovery CPA main forecast summer 2020 - return to 2019 levels in 2022 25 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 26: ABI recovery chart
Well placed to deliver a strong recovery ABI recovery chart value of delayed, open and restarted projects as of 3 July 2020 26 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 27: Public Sector & Commercial
Public Sector & Commercial Half Year 2020 Results
Slide 28: Markit Purchasing Managers Index
Well placed to deliver a strong recovery Markit Purchasing Managers Index Indexed balance of survey responses 28 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 29: Build Build Build
Well placed to deliver a strong recovery Build Build Build Spring Budget 2020 set out that the public sector will invest £640 billion over 5 years. Now bringing forward £5 billion of capital investment projects. • £1.5 billion this year for hospital maintenance • £100 million this year for 29 road p
Slide 30: Placemaking, social distancing and public spaces
Well placed to deliver a strong recovery Placemaking, social distancing and the importance of public spaces 30 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 31: Social housing build
Well placed to deliver a strong recovery Social housing build £12 billion Affordable Homes Programme will support up to 180,000 new affordable homes, including for shared ownership and social rent Now extended until March 2023 Funds from the £400 million Brownfield Land Fund have been allocated to t
Slide 32: Active travel initiative
Well placed to deliver a strong recovery Active travel initiative – investment in cycling and public health 32 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 33: Domestic
Domestic Half Year 2020 Results
Slide 34: COVID-19 implication: years of acceleration in months
Well placed to deliver a strong recovery COVID-19 implication : 3 years of acceleration in 3 months Working from home Buying from home Socialising at home Relaxing at home Holidaying at home Realising the value of spaces 34 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 35: Builders Merchants Building Index Q2 2020
Well placed to deliver a strong recovery Builders Merchants Building Index : Q2 2020 35 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 36: Consumer intentions for a new garden or driveway
Well placed to deliver a strong recovery Consumer intentions for a new garden or driveway 36 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 37: Strong position in installer order books
Well placed to deliver a strong recovery Strong position in installer order books 37 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 38: COVID-19 impact on core consumers
Well placed to deliver a strong recovery COVID-19 impact on core consumers – Marshalls’ core consumers are those least impacted financially and are the most confident about the future … Marshalls’ core consumers • Typically over 55 • Least financially impacted • Generally more confident 38 Marshalls
Slide 39: Business Strategy Update
Business Strategy Update Half Year 2020 Results
Slide 40: Specification
Specification Half Year 2020 Results
Slide 41: Specifications
Well placed to deliver a strong recovery Specifications 41 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 42: New Product Development
New Product Development Half Year 2020 Results
Slide 43: New products - new ranges, maintenance and installation accessories
Well placed to deliver a strong recovery New products - new ranges, maintenance and installation accessories 43 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 44: Digital Transformation
Digital Transformation Half Year 2020 Results
Slide 45: Digital transformation - continued investment
Well placed to deliver a strong recovery Digital transformation - continued investment 45 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 46: Logistics
Logistics Half Year 2020 Results
Slide 47: Logistics - the strength of our own fleet
Well placed to deliver a strong recovery Logistics - the strength of our own fleet showed throughout the pandemic Never stopped working … … always serving the customer • Implemented new processes on our sites to allow our colleagues to work in a safe environment • Reviewed, changed and quickly imple
Slide 48: Operations
Operations Half Year 2020 Results
Slide 49: Optimising the network - increasing operational efficiencies
Well placed to deliver a strong recovery Optimising the network - increasing operational efficiencies Group-wide R&D capabilities increased with mini block plant 49 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 50: Sustainable Materials
Sustainable Materials Half Year 2020 Results
Slide 51: Plastics and packaging
Well placed to deliver a strong recovery Plastics and packaging - balancing health and safety, legal requirements and plastics use Reduced plastic R&D projects have packaging film identified a further per pack by 60% 85% reduction 51 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 52: Customer Centricity
Customer Centricity Half Year 2020 Results
Slide 53: Customer centricity
Well placed to deliver a strong recovery Customer centricity Our ambition is to get 9 out 10 customers to recommend Marshalls Currently at 8.3/10 53 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 54: Emerging Businesses
Emerging Businesses Half Year 2020 Results
Slide 55: Marshalls Civils & Drainage
Well placed to deliver a strong recovery Marshalls Civils & Drainage 55 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 56: Marshalls Edenhall
Well placed to deliver a strong recovery Marshalls Edenhall - focused on aesthetics, product quality and low carbon walling 56 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 57: ESG
Marshalls ESG Half Year 2020 Results
Slide 58: ESG: ratings
Well placed to deliver a strong recovery ESG : ratings 58 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 59: Our priorities
Well placed to deliver a strong recovery Our priorities ETHICAL SOCIAL NATURAL CLIMATE CLEAN RESPONSIBILITY, VALUE CAPITAL CHANGE WATER PARTICULARLY MODERN-DAY SLAVERY • 01 Embedding • 01 Social value of • 01 Security of • 01 Mitigation: • 01 Site-based actions responsible Marshalls plc materials su
Slide 60: ESG: environmental
Well placed to deliver a strong recovery ESG : environmental “We commit to reduce scope 1 and 2 greenhouse gas emissions 40% per tonne of production by 2030 from a 2018 base year. For scope 3, we also commit that 73% of our suppliers by emissions, covering purchased goods and services and upstream t
Slide 61: ESG: governance - Fair Tax Mark
Well placed to deliver a strong recovery ESG : governance - Fair Tax Mark for the 6th consecutive year UK & international supply chains 61 Marshalls plc 2020 Half Year Results Review and Outlook
Slide 62: Summary
Well placed to deliver a strong recovery Summary • Financial flexibility - strong balance sheet • Significant headroom against facilities • Decisive action taken to reduce costs and conserve cash • Public Sector and Commercial end market recovering • Domestic end market strong - installer order book
Slide 63: Appendices
Appendices Half Year 2020 Results
Slide 64: Profit for the financial period
Well placed to deliver a strong recovery Profit for the financial period Pre-IFRS 16 Reported Pre-IFRS 16 Reported HY 2020 HY 2020 HY 2019 HY 2019 £m £m £m % EBITDA 11.8 18.2 47.3 54.9 Depreciation / amortisation (9.0) (14.7) (8.9) (15.9) Operating profit 2.8 3.5 38.4 39.0 Financial income and expen
Slide 65: Construction Products Association
Well placed to deliver a strong recovery Construction Products Association 2017 2018 2019 2020 2021 £m / % change Actual Actual Actual Scenario Scenario Housing 38,611 40,231 42,461 28,371 33,965 9.2% 4.3% 5.5% -33.2% 19.7% Other new work 66,779 64,738 65,425 54,729 66,594 5.9% -3.1% 1.1% -16.3% 21.
Slide 66: Key financial metrics
Well placed to deliver a strong recovery Key financial metrics HY 2020 HY 2019 Interest: Charge £1.9m £1.9m Cover (rolling annual) 14.8 times 32.4 times EPS 0.12p 15.18p Weighted average number of shares 198.6m 198.3m Net asset value £275.8m £278.2m 66 Marshalls plc 2020 Half Year Results Review and
Slide 67: Net assets
Well placed to deliver a strong recovery Net assets £m 2019 YE net assets 295.8 Impact of movements in the period: Loss for the financial period (14.4) Actuarial movement on pensions (after tax) (4.5) Hedging reserve (0.6) Share-based payments (after tax) 1.2 Purchase of own shares (2.0) Foreign cur
Slide 68: Disclaimer
Well placed to deliver a strong recovery 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 pres
Slide 69: Marshalls - Coating Better Spaces
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