Marshalls plc · LSE:MSLH
Marshalls — H1 2009 Earnings Presentation
26 slides from Marshalls's earnings presentation, July 2009
Slide 1: Transforming Britain’s Landscapes
Transforming Britain’s Landscapes Transforming Britain’s Landscapes
Slide 2: Revenue Growth
Revenue Growth Transforming Britain’s Landscapes £m 209.9 211.1 166.0 Revenue (21.3)% Revenue Movement 2007 2008 2009 Revenue £m H1 2008 211.1 Working days: 2 fewer in H1 2009 (3.4) 207.7 Merchant de-stocking (estimated) (2.4) Like for like (40.0) (19.3)% Acquisitions 0.7 H1 2009 166.0 2
Slide 3: Revenue Analysis
Revenue Analysis Transforming Britain’s Landscapes Public Sector and Commercial Revenue 56% of Group Like for like revenue down 21% Price and mix up 5%, volume down 26% Domestic Revenue 44% of Group Like for like revenue down 16% Price and mix up 3%, volume down 19% 3
Slide 4: Operating Profit
Operating Profit Transforming Britain’s Landscapes 2009 2008 £m £m Operating profit: before works closure 11.3 26.8 Works closure costs (5.0) - Operating profit: reported 6.3 26.8 4
Slide 5: Underlying Margin Reconciliation
Underlying Margin Reconciliation Transforming Britain’s Landscapes Movement in Impact on Revenue Operating Margin Profit* £m £m % 2008 * 211.1 26.8 12.7 Workings days: 2 fewer in 2009 (3.4) (1.0) (0.3) 207.7 25.8 12.4 Sales volume (inc. merchant de-stocking) (49.7) (16.1) (6.3) Under-recovered overh
Slide 6: Additional Information and Ratios
Additional Information and Ratios Transforming Britain’s Landscapes 2009 2008 Interest charge: £2.3m £4.1m Tax rate: Reported 10.9% 27.6% Adjusted * 20.4% EPS: Reported 2.19p 10.51p Adjusted * 4.41p Dividend: 2009 Interim Announced 1.75p 4.07p Weighted average number of shares: 163.1m 156.3m Net ass
Slide 7: Free Cash Flow
Free Cash Flow Transforming Britain’s Landscapes Cash inflow arising from: 2009 2008 £m £m Operating profit * 11.3 26.8 Depreciation and amortisation 10.2 11.3 EBITDA 21.5 38.1 Net financial expenses paid (2.3) (4.6) Taxation received / paid 1.5 (2.8) Pensions paid (1.9) (3.3) Net gain on sale of pr
Slide 8: Cash Flow
Cash Flow Transforming Britain’s Landscapes 2009 2008 £m £m Free cash flow 10.9 2.9 Capital Expenditure: Replacement / improvement (3.9) (6.9) Growth capital (0.6) (6.0) Proceeds from sale of surplus assets 0.2 11.1 Acquisitions / investments - (1.5) Payment to acquire own shares - (0.6) Works closu
Slide 9: Significant Borrowing Facilities
Significant Borrowing Facilities Transforming Britain’s Landscapes £m 220 200 Expiry Date Facility Cumulative 180 Facility 160 £m £m 140 Committed facilities: 120 Q2 2014 (debenture) 20 20 100 Q1 2013 50 70 80 Q4 2012 25 95 60 Q3 2011 48 143 40 Q3 2010 20 163 20 0 On demand facilities: H1 2009 y/e 2
Slide 10: Equity Rights Issue
Equity Rights Issue Transforming Britain’s Landscapes Bonus factor 89.4% Comparative EPS: Half year - 10.51 pence (originally 11.76 pence) Full year * - 10.38 pence (originally 11.61 pence) Comparative dividend 8.31 pence (originally 9.30 pence) Weighted average number of shares Basic EPS Fully Dilu
Slide 11: Financial Flexibility
Financial Flexibility Transforming Britain’s Landscapes H1 2009 H1 2009 Year End Actual Pre-Rights 2009 Consensus EBITA: Interest charge 3.0 times 3.0 times 4.1 times Net Debt: EBITDA 1.9 times 2.7 times 1.7 times EBITA to interest charge must be greater than 2.5x Net debt to EBITDA must be less tha
Slide 12: Pensions
Pensions Transforming Britain’s Landscapes YE Risk Management 20 2008 2000 closed to new members 2006 closed to future service accrual 10 2007 investment strategy 0 Investment Strategy -10 Moved from equities to LDIs H1 Closer matching to liability profile of -20 2008 YE pension scheme 2007 -30 Bala
Slide 13: Transforming Britain’s Landscapes
Transforming Britain’s Landscapes
Slide 14: Retain Effective Geographic Coverage
Retain Effective Geographic Coverage Transforming Britain’s Landscapes Majority of customers within 2 hour drive time of Marshalls regional manufacturing and distribution sites 14
Slide 15: Medium Term Manufacturing Capability Intact
Medium Term Manufacturing Transforming Britain’s Landscapes Capability Intact Overtime Working 17% Latent Capacity 17% Operating 66% 15
Slide 16: Operations: Balance Short Term and Medium Term
Operations: Balance Short Term and Medium Term Transforming Britain’s Landscapes Continue with selective innovation for future success Technology Products People Balance overhead reduction with the need to retain capability for the medium term Increase operating flexibility 16
Slide 17: Public Sector and Commercial
Public Sector and Commercial Transforming Britain’s Landscapes 56% of Group sales (2008: 57%) Public: education, health and public realm positive Industrial and commercial: weaker CPA forecast -16.2% in 2009, -5.5% in 2010 Experienced sales and marketing teams Integrated offer delivering growth in:
Slide 18: Olympic Site
Olympic Site Transforming Britain’s Landscapes 18
Slide 19: Public Sector and Commercial: Sub Sectors
Public Sector and Commercial: Sub Sectors Transforming Britain’s Landscapes Leisure, 5% Civic, 6% Education, 21% Sport, 6% Medical, 7% Civil, 9% Commerce, 16% Industry, 9% Retail, 11% 19 Hotel, 10%
Slide 20: ABI Lead Indicator July 2009
£ Millions £0 £55 £110 £165 £220 £275 £330 Dec-03 Feb-04 Apr-04 Jun-04 Aug-04 Oct-04 Dec-04 Feb-05 Apr-05 Transforming Britain’s Landscapes Jun-05 Aug-05 Oct-05 Dec-05 Feb-06 Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 July 2009 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb-08 ABI Lead Indicator Apr-08 Jun-0
Slide 21: Domestic Market
Domestic Market Transforming Britain’s Landscapes 44% of Group sales (2008: 43%) Consumer confidence improving from low base Target customer group: 8.9 million existing homes “Don’t move, improve”. Generally older, equity in property and savings Approved installers key – additional support Order boo
Slide 22: Group Development
Group Development Transforming Britain’s Landscapes Market conditions create opportunities Financial flexibility from cash conservation and Rights Issue Clear target list Natural Stone Additional product areas with similar channels/geography Timing and pricing important 22
Slide 23: Marshalls Defining Strengths
Marshalls Defining Strengths Transforming Britain’s Landscapes Well known brand Market leaders - strong positions in core markets National manufacturing and distribution network Efficient, well invested, latest technology Industry leading customer service and lowest cost to market Continuing innovat
Slide 24: Summary
Summary Transforming Britain’s Landscapes Public Sector and Commercial market – challenging but comparatives easing Domestic market stabilising – installer order books 7.1 weeks Decisive action taken, operating flexibility established Financial flexibility - balance sheet robust and borrowings reduc
Slide 25: Disclaimer
Disclaimer Transforming Britain’s Landscapes • This presentation, which is personal to the recipient and has been issued by Marshalls plc (“Marshalls”), comprises slides for a presentation in relation to Marshalls half-yearly results, and is solely for use at such presentation. • This presentation a
Slide 26: Transforming Britain’s Landscapes
Transforming Britain’s Landscapes