Slide 1: 2020 Results Review and Outlook
Marshalls plc 2020 Results Review and Outlook Strong recovery – positioned well for sustainable growth
Slide 2: Agenda
Agenda Strong recovery – positioned well for sustainable growth • Highlights • Financial Performance • The Market • Business Strategy Find out more online • Specification www.marshalls.co.uk • New Product Development • Logistics Find us on Facebook • Operations MarshallsGroup • Sustainable Materials
Slide 3: Highlights
Strong recovery – positioned well for sustainable growth Highlights 2020 2019 Results before operational restructuring costs and asset impairments Revenue £469.5m £541.8m EBITDA £57.6m £103.9m Adjusted operating profit £27.2m £73.7m Profit before tax £22.5m £69.9m Basic EPS 8.60p 29.36p ROCE 8.2% 21
Slide 4: COVID-19 ongoing response
Strong recovery – positioned well for sustainable growth COVID-19 ongoing response • Priority given to health and safety • All operational sites have specific COVID-19 safety plans and measures • The Company has successfully transitioned support services to home-based working, keeping the sales and
Slide 5: Full Year highlights
Strong recovery – positioned well for sustainable growth Full Year highlights Operational • Priority given to health and safety throughout the COVID-19 crisis • Focus on servicing our customers • Operational restructuring exercise completed in H1 2020 • Increased manufacturing efficiency and operati
Slide 6: Financial Performance Full Year 2020 Results
Financial Performance Full Year 2020 Results
Slide 7: Revenue bridge 2019 to 2020
Strong recovery – positioned well for sustainable growth Revenue bridge 2019 to 2020 Revenue variance analysis 2019/2020 600 550 541.8 -67.6 500 -9.1 4.4 469.5 £'m 450 400 350 300 2019 Revenue Landscape Emerging UK International 2020 Revenue Products Businesses 7 Marshalls plc 2020 Results Review an
Slide 8: Revenue sales recovery in H2 2020
Strong recovery – positioned well for sustainable growth Strong sales recovery in H2 2020 Revenue 290.0 270.0 250.0 230.0 £m 210.0 190.0 170.0 150.0 First half Second half Linear (Second half) 8 Marshalls plc 2020 Results Review and Outlook
Slide 9: Daily sales trend
Strong recovery – positioned well for sustainable growth Daily sales trend 9 Marshalls plc 2020 Results Review and Outlook
Slide 10: Revenue analysis
Strong recovery – positioned well for sustainable growth Revenue analysis Revenue analysis: end market Revenue analysis: business area ↑16% ↑16% 7% ↓18% 7% Public Sector and ↓9% Commercial 12% 27% UK Domestic Landscape Products Emerging UK Businesses International International 66% 81% ↓14% ↓17% 10
Slide 11: Impact of furlough repayment on H2 2020
Strong recovery – positioned well for sustainable growth Impact of furlough repayment on H2 2020 Adjusted 2020 2020 2019 HY2 HY2 HY2 £’m £’m £’m Revenue 259.0 259.0 261.7 Operating profit* 23.7 23.7 34.7 Furlough adjustment – 9.4 – Adjusted operating profit* 23.7 33.1 34.7 Margin 9.2% 12.8% 13.3% No
Slide 12: Margin reconciliation
Strong recovery – positioned well for sustainable growth Margin reconciliation Revenue Operating profit* Margin impact £’m £’m % 2019 541.8 73.7 13.6 Landscape Products (67.6) (44.6) (7.5) Emerging UK Businesses (9.1) (4.0) (0.5) International 4.4 2.1 0.2 2020 469.5 27.2 5.8 Note: * Before operation
Slide 13: Cash flow from operating activities
Strong recovery – positioned well for sustainable growth Cash flow from operating activities 2020 2019 £m £m Cash inflow arising from: Operating profit* 27.2 73.7 Depreciation and amortisation 30.4 30.2 EBITDA* 57.6 103.9 Operational restructuring costs (excluding asset impairments) (12.3) – Net fin
Slide 14: Cash flow
Strong recovery – positioned well for sustainable growth Cash flow 2020 2019 £m £m Net cash flow from operating activities 19.3 88.1 Exceptional restructuring costs paid (6.9) – Capital expenditure (14.7) (22.9) Net proceeds from sale of surplus assets 11.4 0.5 Dividends paid – (33.2) Lease payments
Slide 15: Liquidity
Strong recovery – positioned well for sustainable growth Liquidity • Total bank facilities of £255 million – of which £230 million are committed • No intention to renew the £90 million short-term RCF facilities • Strong cash generation in HY2 – OCF: EBITDA of 93.6% in H2 2020 • Reported net debt of
Slide 16: Significant borrowing facilities available
Strong recovery – positioned well for sustainable growth Significant borrowing facilities available Cumulative Facility facility £m £m Expiry date Committed facilities: Q3 2024 35 35 Q1 2024 25 60 £’m Q3 2023 20 80 Q2 2023 20 100 Q4 2022 20 120 Q3 2021 20 140 Q2 2021 90 230 On demand facilities: • B
Slide 17: Capital allocation policy
Strong recovery – positioned well for sustainable growth Capital allocation policy 1 2 3 4 5 Organic R&D Ordinary Selective Supplementary growth New Product dividends acquisitions dividends Development Capital investment Continued focus on Furlough and Good pipeline of Supplementary remains core to
Slide 18: Capital discipline maintained
Strong recovery – positioned well for sustainable growth Capital discipline maintained 2020 2019 2018 2017 2016 Debtor days 41 36 43 41 39 Creditor days 56 55 61 58 56 Inventory turn (times per annum) 2.9 3.3 3.4 3.3 3.3 Liquidity ratio (pre-IFRS 16) 2.0 1.4 1.5 1.6 1.6 (current assets: current liab
Slide 19: Pensions
Strong recovery – positioned well for sustainable growth Pensions Balance Sheet • Company contributions to Defined Benefit Scheme reduced to zero under the agreed Recovery Plan • Surplus of £2.7 million at 31 December 2020 (31 December 2019: surplus of £15.7 million) • Main driver of decrease in the
Slide 20: Dividends
Strong recovery – positioned well for sustainable growth Dividends • Re-instatement of final dividend: 4.30 pence (2 times covered by earnings) • Dividend payable on 1 July 2021, subject to shareholder approval at the AGM • Policy remains to maintain a progressive dividend policy • Objective to targ
Slide 21: The Market Full Year 2020 Results
The Market Full Year 2020 Results
Slide 22: V-shape construction recovery so far …
Strong recovery – positioned well for sustainable growth V-shape construction recovery so far … 22 Marshalls plc 2020 Results Review and Outlook
Slide 23: … for some sectors
Strong recovery – positioned well for sustainable growth … for some sectors 23 Marshalls plc 2020 Results Review and Outlook
Slide 24: CPA Total Construction Output
Strong recovery – positioned well for sustainable growth CPA Total Construction Output Chain Linked Volume – 2018 prices (Forecast: CPA % Growth on ONS Construction Output Values) CPA 2021 £20.9bn (14.0%) Total Construction Output 190,000 20.0% 14.0% 15.0% 180,000 Volume (£millions at 2018 Prices)
Slide 25: CPA cumulative growth forecasts
Strong recovery – positioned well for sustainable growth CPA cumulative growth forecasts Chain Linked Volume – 2018 prices (Forecast: CPA % Growth on ONS Construction Output Values) 25 Marshalls plc 2020 Results Review and Outlook
Slide 26: Registered installer order books spread
Strong recovery – positioned well for sustainable growth Registered installer order books spread c11 weeks / 13 weeks c12 weeks / 17 weeks 26 Marshalls plc 2020 Results Review and Outlook
Slide 27: Who is saving?
Strong recovery – positioned well for sustainable growth Who is saving? Higher-income households and retirees are more likely to have increased savings during COVID-19 Source: 2020 H2 NMG Household Survey & Bank Calculations: How has Covid affected household savings? | Bank of England 27 Marshalls p
Slide 28: K shaped recovery: Marshalls core consumers
Strong recovery – positioned well for sustainable growth K shaped recovery: Marshalls core consumers 28 Marshalls plc 2020 Results Review and Outlook
Slide 29: UK housing market fundamentals
Strong recovery – positioned well for sustainable growth Strong UK housing market fundamentals 29 Marshalls plc 2020 Results Review and Outlook
Slide 30: NHBC starts by dwelling type – quarterly
Strong recovery – positioned well for sustainable growth NHBC starts by dwelling type – quarterly NHBC starts by dwelling type NHBC share of starts by dwelling type 30 Marshalls plc 2020 Results Review and Outlook
Slide 31: Business Strategy Full Year 2020 Results
Business Strategy Full Year 2020 Results
Slide 32: Strong recovery – positioned well for sustainable growth
Strong recovery – positioned well for sustainable growth 32 Marshalls plc 2020 Results Review and Outlook
Slide 33: Our goal is to be the UK's leading manufacturer
Strong recovery – positioned well for sustainable growth Our goal is to be the UK’s leading manufacturer of products for the built environment Supplying a comprehensive range of products for our chosen Market Sectors 33 Marshalls plc 2020 Results Review and Outlook
Slide 34: Brand preference for product specification
Strong recovery – positioned well for sustainable growth Brand preference for product specification The Strand & Aldwych, London May 2018 34 Marshalls plc 2020 Results Review and Outlook
Slide 35: New product development
Strong recovery – positioned well for sustainable growth New product development Containing up to 65% recycled material content, Conservation X is manufactured in mainland UK and is a unique blend of natural crystalline aggregates that are uniquely exposed to achieve a contemporary, granite-look fin
Slide 36: Operational excellence – £20 million block plant
Strong recovery – positioned well for sustainable growth Operational excellence – £20 million block plant CIRCA. £20 MILLION INVESTMENT INCORPORATING THE LATEST ADVANCED UNIQUE INLINE TECHNOLOGIES SECONDARY GENERATING AN PROCESSING ADDITIONAL VALUE CAPABILITY DESIGNED AS A SINGLE ADDED PRODUCT MACHI
Slide 37: Sustainable materials supply strategy
Strong recovery – positioned well for sustainable growth Sustainable materials supply strategy Research & Development trials on cement free products underway. Comparative data of kg embodied carbon of Ordinary Portland Cement (OPC) against ground granulated blast furnace slag (GGBS), pulverised fuel
Slide 38: Logistics excellence
Strong recovery – positioned well for sustainable growth Logistics excellence Euro 6 standards impose the toughest vehicle emissions limits yet, pushing the boundaries of emissions technologies to produce ever-lower levels of the exhaust pollutants that impact air quality. 38 Marshalls plc 2020 Resu
Slide 39: Digital transformation
Strong recovery – positioned well for sustainable growth Digital transformation From landscaping to creating your brand new driveway, learn all the techniques and gain knowledge in order to start your new project. 39 Marshalls plc 2020 Results Review and Outlook
Slide 40: Marshalls Civils & Drainage
Strong recovery – positioned well for sustainable growth Marshalls Civils & Drainage 192 10cm of Olympic Flood Water swimming pools Concrete pipeline systems have a lower whole life carbon footprint than plastic pipelines. For DN2100 pipes where plastic resin is sourced from outside the EU, concrete
Slide 41: Marshalls Bricks & Masonry
Strong recovery – positioned well for sustainable growth Marshalls Bricks & Masonry 41 Marshalls plc 2020 Results Review and Outlook
Slide 42: Marshalls Landscape Protection
Strong recovery – positioned well for sustainable growth Marshalls Landscape Protection Requiring just a 50mm excavation depth, the RhinoGuard® Ultra Shallow 50™ bollard series has been successfully crash tested on both a typical footpath installation, and cycle segregation foundation. The bollard s
Slide 43: Committed to people and talent development
Strong recovery – positioned well for sustainable growth Committed to people and talent development We have 99 apprentices within Marshalls all working towards different qualifications, some at Degree level across many different functions including Finance, Digital and IT, Marketing, Engineering, Sa
Slide 44: Strong recovery – positioned well for sustainable growth
Strong recovery – positioned well for sustainable growth 44 Marshalls plc 2020 Results Review and Outlook
Slide 45: ESG sustainability: set in stone
Strong recovery – positioned well for sustainable growth ESG sustainability: set in stone 50% reduction in Carbon since 2008 2000 ISO14001 for environmental management 2004 Carbon Reporting started 2006 Joined the ETI 2008 Product Carbon Footprinting 2009 Signatories of the UNGC 2010 CDP Disclosures
Slide 46: The sustainable development goals
Strong recovery – positioned well for sustainable growth The sustainable development goals • 100% of natural • 100% of concrete • 60% cement • 30% total reduction in stone products & natural stone replacement in carbon in the last 5 now have products are now block paving years and over 50% Ethical R
Slide 47: Respecting people: climate action: made to last
Strong recovery – positioned well for sustainable growth Respecting people: climate action: made to last 47 Marshalls plc 2020 Results Review and Outlook
Slide 48: Strong recovery – positioned well for sustainable growth
Strong recovery – positioned well for sustainable growth 48 Marshalls plc 2020 Results Review and Outlook
Slide 49: Summary
Strong recovery – positioned well for sustainable growth Summary • Financial flexibility – strong balance sheet • Significant headroom against facilities • Strong cash generation has continued • Full repayment of furlough and deferred VAT • New Build Housing, Road, Rail and Water Management remain a
Slide 50: Appendices Full Year 2020 Results
Appendices Full Year 2020 Results
Slide 51: Sales analysis
Strong recovery – positioned well for sustainable growth Sales analysis 2020 2019 Change Analysis of sales by end market HY1 HY2 Full year HY1 HY2 Full year HY2 Full £’m £’m £’m £’m £’m £'m % year % UK Domestic 58.1 70.6 128.7 76.5 64.6 141.1 9 -9 Public Sector and Commercial 134.8 174.7 309.5 188.2
Slide 52: Construction Products Association
Strong recovery – positioned well for sustainable growth Construction Products Association 2018 2019 2020 2021 2022 £m / % change Actual Actual Estimate Scenario Scenario Housing 42,291 44,890 36,101 41,660 44,386 4.4% 6.1% -19.6% 15.4% 6.5% Other new work 62,275 67,278 58,523 68,720 71,777 -3.3% 0.
Slide 53: Key financial metrics
Strong recovery – positioned well for sustainable growth Key financial metrics 2020 2019 Interest: Charge £4.7m £3.8m Cover* 5.8 times 19.2 times EPS* 8.60p 29.36p Weighted average number of shares 198.6m 198.4m Net asset value £287.8m £295.8m Note: * Before operational restructuring costs and asset
Slide 54: Net assets
Strong recovery – positioned well for sustainable growth Net assets £m 2019 YE net assets 295.8 Impact of movements in the period: Profit for the financial period 2.4 Actuarial movement on pensions (after tax) (10.6) Hedging reserve (0.3) Share-based payments (after tax) 3.2 Purchase of own shares (
Slide 55: Disclaimer
Strong recovery – positioned well for 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 communicati
Slide 56: Marshalls
Marshalls Creating Rerter Spaces barrepoeal Ethical > SCIENCE Pet re 3 Trading Wa ) BASED Ff ie} Initiative VA, / TARGETS ! =r ad namwermomcunen YET Y wee ores Fair Tax MADEIN — FTSE4Good