Slide 1: 2018 Half Year Results Review and Outlook
Marshalls plc 2018 Half Year 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 Long-Term Sustainable Growth www.marshalls.co.uk • Public Sector and Commercial • Domestic Find us on Facebook • Emerging UK Businesses MarshallsGroup • CPM Follow us on
Slide 3: Highlights
Delivering long-term sustainable growth Highlights Increase HY 2018 HY 2017 % Revenue £244.3m £219.1m 12 EBITDA £41.6m £36.7m 13 Operating profit £33.5m £29.8m 12 Profit before tax £32.5m £29.1m 12 Basic EPS 13.24p 12.04p 10 Interim dividend 4.00p 3.40p 18 ROCE 20.0% 23.7% Net (debt) / cash £(48.9)
Slide 4: Highlights
Delivering long-term sustainable growth Highlights 500 30 Revenue Basic EPS 450 25 400 20 350 15 pence £m 300 10 250 5 200 0 100 15 EBITDA Dividend per share (excluding 80 supplementary) 10 60 pence £m 40 5 20 0 0 4 Marshalls plc 2018 Half Year Results Review and Outlook
Slide 5: Financial Performance
Financial Performance Half Year 2018 Results
Slide 6: Revenue growth
Delivering long-term sustainable growth Revenue growth £m 6 Marshalls plc 2018 Half Year Results Review and Outlook
Slide 7: Revenue analysis
Delivering long-term sustainable growth Revenue analysis Revenue analysis: end market Revenue analysis: business area ↑1% ↑1% 5% 5% ↓1% Public Sector & 14% Commercial Landscape Products flat 31% UK Domestic Emerging UK Businesses International International 64% 81% ↑15% ↑19% 7 Marshalls plc 2018 Hal
Slide 8: Margin reconciliation
Delivering long-term sustainable growth Margin reconciliation Revenue Operating profit Impact on margin £m £m % HY 2017 219.1 29.8 13.6 Landscape Products 25.3 4.8 0.6 Emerging UK Businesses (0.2) (1.1) (0.5) International 0.1 - - HY 2018 244.3 33.5 13.7 8 Marshalls plc 2018 Half Year Results Review
Slide 9: Cash flow from operating activities
Delivering long-term sustainable growth Cash flow from operating activities HY 2018 HY 2017 £m £m Cash inflow arising from: Operating profit 33.5 29.8 Depreciation and amortisation 8.1 6.9 EBITDA 41.6 36.7 Net financial expenses paid (0.7) (0.5) Taxation paid (6.1) (5.7) Net gain on sale of property
Slide 10: Cash flow
Delivering long-term sustainable growth Cash flow HY 2018 HY 2017 £m £m Net cash flow from operating activities 14.0 19.2 Capital expenditure (14.1) (8.7) Net proceeds from sale of surplus assets 1.6 4.2 Dividends paid (21.3) (17.4) Payments to acquire own shares (1.2) (1.1) Payments in respect of s
Slide 11: Bank debt capacity
Delivering long-term sustainable growth Bank debt capacity • Continued strong cash generation (OCF : EBITDA = 90%) • Net debt of £48.9 million at 30 June 2018 (31 December 2017: £24.3 million net debt) following acquisition of CPM • Final and supplementary dividends of £21.3 million paid on 29 June
Slide 12: Significant borrowing facilities available
Delivering long-term sustainable growth Significant borrowing facilities available Cumulative Facility Facility £m £m Expiry date Committed facilities: Q3 2023 20 20 Q3 2022 20 40 £’m Q3 2021 20 60 Q3 2020 20 80 Q3 2019 20 100 On demand facilities: Available all year 15 115 Seasonal (February to Aug
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. and development and cover of
Slide 14: Strong track record of capital discipline
Delivering long-term sustainable growth Strong track record of capital discipline HY HY HY HY HY 2018 2017 2016 2015 2014 Debtor days 33 34 34 36 42 Creditor days 53 52 51 51 53 Inventory turn (times per annum) 3.2 3.3 3.2 3.0 2.9 Liquidity ratio 1.6 1.6 1.5 1.6 1.5 (current assets: current liabilit
Slide 15: Pensions
Delivering long-term sustainable growth Pensions Balance Sheet • Company contributions to Defined Benefit Scheme reduced to zero under agreed Recovery Plan • Surplus of £11.5 million at 30 June 2018 (31 December 2017: surplus of £4.1 million) Income Statement • Scheme closed since 2006 to future acc
Slide 16: Dividends
Delivering long-term sustainable growth Dividends • Progressive ordinary dividend policy 16.00 14.00 • 2018 interim dividend 4.0p (up 18%) 12.00 4.00 • Target of 2x cover 10.00 3.00 • Supplementary dividend: 8.00 2.00 discretionary and non-recurring 6.80 6.00 5.80 • CAGR growth of 18% over 5 years 4
Slide 17: The Market
The Market New photo to be provided Half Year 2018 Results
Slide 18: CPA construction output forecasts – Summer 2018
Delivering long-term sustainable growth CPA construction output forecasts – Summer 2018 All Work Central Forecast % Growth on Last Year 10.0% 8.8% 8.0% 7.1% 6.0% 4.4% 4.1% 4.0% 2.3% 1.9% 2.0% 1.5% 0.0% -0.6% -2.0% 2013 2014 2015 2016 2017 2018 2019 2020 Note: Historic numbers are the latest ONS adju
Slide 19: CPA 2018 to 2020 cumulative sector forecasts
Delivering long-term sustainable growth CPA 2018 to 2020 cumulative sector forecasts 30.0% 24.5% 25.0% Key sectors for Marshalls 20.0% 15.0% 10.0% 8.2% 7.9% 6.1% 6.4% 4.4% 5.1% 4.0% 3.6% 5.0% 2.0% 2.2% 1.9% 1.7% 0.0% -5.0% -4.7% -5.0% -5.0% -10.0% -9.8% -15.0% New Public Other All New Work Public Ho
Slide 20: Focus on the sectors with greatest growth and scale
Delivering long-term sustainable growth Focus on the sectors with greatest growth and scale Marshalls are focused on these sectors New Build Housing Infrastructure Private Housing RMI • 22% of Construction • 15% of Construction • 13% of Construction Market by Value Market by Value Market by Value •
Slide 21: Public Sector & Commercial
Public Sector & Commercial Half Year 2018 Results
Slide 22: ABI lead indicator
Delivering long-term sustainable growth ABI lead indicator Positive one year out All Scapes Next 12 Months Hard Landscaping Value % Change 30.0% 12.0% MAT Hard Landscaping Value Lagged 12 Months 7.9% 10.0% Hard Landscaping Value Lagged 12 Months 20.0% 8.0% 6.0% 3.4% 10.0% 4.0% 2.0% 0.0% 0.0% -2.0% -
Slide 23: Private and public housing statistics and CPA forecasts
Delivering long-term sustainable growth Private and public housing statistics and CPA forecasts New Housing Starts & CPA Forecast Growth in New Housing Starts & CPA Forecast 250,000 25.0% 20.6% 20.0% 200,000 15.0% 13.3% 10.0% 150,000 5.4% 5.1% 5.0% 3.6% 2.0% 1.7% 0.5% 0.8% 100,000 0.0% -5.0% 50,000
Slide 24: Housing contract awards by region June 2017-18
Delivering long-term sustainable growth Housing contract awards by region June 2017-18 24 Marshalls plc 2018 Half Year Results Review and Outlook
Slide 25: Landscape Products - new products for housing
Delivering long-term sustainable growth Marshalls Landscape Products - new products for housing Increasing sales • ‘Key’ package launched: premium complimentary block, paving, kerb and edging product specifically for the housebuilder • Urbex Rivien paving launched: economy paving designed for the ho
Slide 26: New infrastructure
Delivering long-term sustainable growth New infrastructure Projects giving growth Value £ Millions NB: A Project can contain more than 1 scape 26 Marshalls plc 2018 Half Year Results Review and Outlook
Slide 27: Update on Cross Rail specs, orders and sales
Delivering long-term sustainable growth Update on Cross Rail specs, orders and sales Marshalls share increasing Quoted on project and delivered Quoted on project No activity as yet 27 Marshalls plc 2018 Half Year Results Review and Outlook
Slide 28: Domestic
Domestic Half Year 2018 Results
Slide 29: Positive for 2019 and 2020 support growth
Delivering long-term sustainable growth Positive for 2019 and 2020 support growth CPA Private Housing RM&I Forecast 30,000 12.0% 25,000 10.0% 20,000 8.0% Value £ Millions Growth % v LY 15,000 6.0% 10,000 4.0% 5,000 2.0% - 0.0% 2013 2014 2015 2016 2017 2018 2019 2020 Value Growth % v LY 29 Marshalls
Slide 30: GFK consumer confidence and project intentions
Delivering long-term sustainable growth GFK consumer confidence and project intentions Which of the following improvements are you likely to make 40 GFK Consumer Confidence Index, 10 Years to Jun 2018 to your home over the next 12 months? 30 20 10 - 2 -10 -9 -20 -30 -40 -50 Index Confidence 50K+ Con
Slide 31: Pensions release
Delivering long-term sustainable growth Pensions release Continuing to grow Moving Annual Total Value & Annual Value per Individual (£) of Flexible Payments from Pensions Number of Individuals £7.00 250,000 £6.00 200,000 Moving Annual Total Value £bn £5.00 £4.00 150,000 £3.00 100,000 £2.00 50,000 £1
Slide 32: Equity release – over 55's
Delivering long-term sustainable growth Equity release – over 55’s Funding Domestic growth Equity Release over 55's Total Equity Release Value (£millions) (Lifetime Mortgage Values) £2,500 £2,000 £1,500 £1,000 £500 £0 2015 2016 2017* *2017 Proportions based on half year results Sources: Equity Relea
Slide 33: Domestic new products
Delivering long-term sustainable growth Domestic new products Increasing part of the business New Products in the Domestic range from innovative stone & vitrified paving to uniquely blended block paving and the move into adjacent categories such as artificial grass Domestic % Sales from New Products
Slide 34: The Marshalls Register
Delivering long-term sustainable growth The Marshalls Register Continues to grow The Marshalls Register continues to go from strength to strength. Recent census with all members saw a satisfaction rating of 8.5 out of 10. The primary reason for joining the Register is the brand association with the
Slide 35: Emerging UK Businesses
Emerging UK Businesses Half Year 2018 Results
Slide 36: Landscape Protection
Delivering long-term sustainable growth Landscape Protection Market growing quickly • Specifications up 291% vs LY 2017 H1 36 Marshalls plc 2018 Half Year Results Review and Outlook
Slide 37: Premier Mortars and Screeds
Delivering long-term sustainable growth Premier Mortars and Screeds Expanding nationally • UK market leader in supply of RTU mortar and screeds Current Mortar Sites and • 14 UK plants with expansion opportunities in the South Expansion Opportunities East • New Product Development : New mortars to
Slide 38: Recon Walling
Delivering long-term sustainable growth Recon Walling Growing in New Build Sales Growth 2012 2013 2014 2015 2016 2017 4 Distinct Colours 4 Finishes 38 Marshalls plc 2018 Half Year Results Review and Outlook
Slide 39: CPM brand alignment
Delivering long-term sustainable growth CPM brand alignment 39 Marshalls plc 2018 Half Year Results Review and Outlook
Slide 40: CPM integration
Delivering long-term sustainable growth CPM integration On target • Acquired in October 2017 for £41.4 million including £3 million of assumed CPM debt • Integration plan well advanced – now fully part of Landscape Products • Strong trading since acquisition with half year performance in line with o
Slide 41: CPM major project wins
Delivering long-term sustainable growth CPM major project wins • M20 Smart Motorway Programme Junctions 3-5 • M23 Smart Motorway Programme Junctions 8-10 • M6 Smart Motorway Programme Junctions 2-4 41 Marshalls plc 2018 Half Year Results Review and Outlook
Slide 42: CPM: the perfect manhole system
Delivering long-term sustainable growth CPM : the perfect manhole system Continues to grow 42 Marshalls plc 2018 Half Year Results Review and Outlook
Slide 43: CPM new factory due to be completed November 2018
Delivering long-term sustainable growth CPM new factory due to be completed November 2018 Increased efficiency … Increased capacity 43 Marshalls plc 2018 Half Year Results Review and Outlook
Slide 44: Strategy Update
Strategy Update Half Year 2018 Results
Slide 45: Digital journey gaining pace
Delivering long-term sustainable growth Digital journey gaining pace Progression of user minutes spent on Marshalls online Mins 45 Marshalls plc 2018 Half Year Results Review and Outlook
Slide 46: Digitising the specification journey
Delivering long-term sustainable growth Digitising the specification journey 46 Marshalls plc 2018 Half Year Results Review and Outlook
Slide 47: Self help improvement projects
Delivering long-term sustainable growth Self help improvement projects Sittingbourne New Press AGV Phase 1 completed Splay Kerb Improvements Robot Self Cleaning 47 Marshalls plc 2018 Half Year Results Review and Outlook
Slide 48: Acquisitions
Delivering long-term sustainable growth Acquisitions Future acquisitions – water management, perimeter protection, housebuilding and natural stone 48 Marshalls plc 2018 Half Year Results Review and Outlook
Slide 49: Strategy update
Delivering long-term sustainable growth Strategy update • Adverse weather impact in first 4 months – reduced sales of £9 million • Strong recovery recently with half year PBT + 12% • Recent trading very strong – both June and July revenues +21% v 2017 • CPM continuing to trade strongly and integrati
Slide 50: 2020 Strategy update
Delivering long-term sustainable growth 2020 Strategy update • Strong PBT growth +12% • 2018 H1 EBITDA £41.6 million +13% • Self help programme - savings of £5 million p.a. increasingly certain • NPD continuing strongly • Interim dividend – +18% • Digital strategy in full implementation. Commercial
Slide 51: Summary
Delivering long-term sustainable growth Summary • Strong financial performance; despite adverse weather impact in first 4 months • New Build Housing, Road, Rail and Water Management remain attractive markets • Increasing market share through service/product • Strong start at CPM and integration on t
Slide 52: Q&A
ett, @ e e Marshalls Q&A Half Year 2018 Results
Slide 53: Appendices
Appendices Half Year 2018 Results
Slide 54: Profit for the financial period
Delivering long-term sustainable growth Profit for the financial period HY 2018 HY 2017 Increase £m £m % EBITDA 41.6 36.7 13 Depreciation / amortisation (8.1) (6.9) Operating profit 33.5 29.8 12 Financial income and expense (net) (1.0) (0.7) Profit before tax 32.5 29.1 12 54 Marshalls plc 2018 Half
Slide 55: Construction Products Association
Delivering long-term sustainable growth Construction Products Association 2016 2017 2018 2019 2020 £m / % change Actual Actual Estimate Forecast Forecast Housing 34,578 37,966 39,754 40,606 40,953 10.4% 9.8% 4.7% 2.1% 0.9% Other New Work 61,243 63,584 61,185 63,161 65,092 2.5% 3.8% -3.8% 3.2% 3.1 Re
Slide 56: Additional information and ratios
Delivering long-term sustainable growth Additional information and ratios HY 2018 HY 2017 Interest: Charge £1.0m £0.7m Cover 34.0 times 42.4 times EPS 13.24p 12.04p Interim dividend 4.00p 3.40p Weighted average number of shares 197.6m 197.4m Net asset value £244.6m £222.6m 56 Marshalls plc 2018 Half
Slide 57: Financial flexibility
Delivering long-term sustainable growth Financial flexibility HYE 2018 Actual EBITA: Interest charge 62.6 times Net Debt: EBITDA 0.66 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 57 Mar
Slide 58: Net assets
Delivering long-term sustainable growth Net assets £m 2017 YE Net Assets 237.6 Impact of movements in the period: Profit for the financial period 26.2 Dividends (21.3) Actuarial movement on pensions (after tax) 6.4 Hedging reserve 0.2 Share-based payments (after tax) (3.2) Purchase of own shares (1.
Slide 59: 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 60: Marshalls
Marshalls Creating QRerter Spaces Oe E Gita ® fyatiess K COMMUNITY MADE IN Fair Tax