Marshalls plc · LSE:MSLH
Marshalls — FY2008 Earnings Presentation
29 slides from Marshalls's earnings presentation, 2008
Slide 1: Transforming Britain’s Landscapes
Transforming Britain’s Landscapes
Slide 2: Transforming Britain’s Landscapes
Transforming Britain’s Landscapes Transforming Britain’s Landscapes
Slide 3: Revenue
Revenue Transforming Britain’s Landscapes £m 378.1 402.9 378.1 Revenue (6.2)% 2006 2007 2008 Revenue Movement Revenue Growth £m % 2007 402.9 Acquisitions 1.4 0.3 Like for like (26.2) (6.5) 2008 378.1 (6.2)
Slide 4: Revenue Analysis
Revenue Analysis Transforming Britain’s Landscapes Public Sector and Commercial Revenue z 59% of Group z Like for like revenue up 1% z Price and mix up 5%, volume down 4% Domestic Revenue z 41% of Group z Like for like revenue down 15% z Price and mix up 5%, volume down 20%
Slide 5: Operating Profit
Operating Profit Transforming Britain’s Landscapes 2008 2007 £m £m Operating profit: Underlying 33.9 51.1 Strategic business initiatives z Strategic initiatives expensed z Domestic expansion (4.1) (3.6) z Commercial expansion (1.4) (0.7) (5.5) (4.3) z Property / other 2.2 2.0 (3.3) (2.3) Operating p
Slide 6: Closures and Impairments
Closures and Impairments Transforming Britain’s Landscapes Cash Non- Total Cash £m £m £m Closures Operational sites and further capacity reductions 8.6 4.0 12.6 Managed Installations 2.4 2.7 5.1 Goodwill / Intangible asset impairment - 9.3 9.3 11.0 16.0 27.0 Closures include:- Plant and related asse
Slide 7: Underlying Margin Reconciliation
Underlying Margin Reconciliation Transforming Britain’s Landscapes Movement in Impact on Revenue Operating Margin Profit* £m £m % 2007 * 402.9 51.1 12.7 Acquisitions 1.4 - - Cost increases recovered in sales prices 20.0 (2.0) (1.1) Volume / other (46.2) (15.2) (2.6) 2008 * 378.1 33.9 9.0 * Operating
Slide 8: Tax, EPS, Dividends and Ratios
Tax, EPS, Dividends and Ratios Transforming Britain’s Landscapes 2008 2007 Tax rate * 27.8% 28.2% EPS: Reported (4.46)p 21.28p Adjusted * 11.61p 21.28p Weighted average number of shares 139.6m 142.2m Dividend: 2008 Interim and final announced 6.00p 13.85p Cover * 1.9 times 1.5 times IFRS disclosure
Slide 9: Free Cash Flow
Free Cash Flow Transforming Britain’s Landscapes Cash inflow arising from: 2008 2007 £m £m Operating profit * 30.6 48.8 Depreciation and amortisation 22.3 21.7 EBITDA * 52.9 70.5 Net financial expenses paid (7.8) (6.7) Taxation (4.7) (9.3) Pensions (contributions paid / other items) (6.6) (5.5) Inve
Slide 10: Cash Flow
Cash Flow Transforming Britain’s Landscapes 2008 2007 £m £m Free cash flow 28.2 27.7 Investment: z Capex: Replacement / improvement (14.0) (17.6) z Capex: Growth capital (8.0) (14.1) z Acquisitions (6.1) (12.8) z Sale proceeds 11.5 2.9 Payment to acquire own shares (0.6) (8.4) Works closure costs (6
Slide 11: 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 Q4 2012 50 70 80 Q3 2011 48 118 60 Q3 2010 20 138 40 Q3 2009 23 161 20 0 On demand facilities: y/e 2008 y/e
Slide 12: Borrowing Ratios
Borrowing Ratios Transforming Britain’s Landscapes 2008 Headroom 2009 Actual % Consensus EBITA: Interest charge 4.2 times >50% 3.5 times Net Debt: EBITDA 2.0 times >50% 2.3 times
Slide 13: Pensions
Pensions Transforming Britain’s Landscapes 25 Risk Management Surplus £16.5m 2000 closed to new members 15 2006 closed to future service accrual 5 2007 2007 investment strategy -5 2008 Investment Strategy Moved from equities to LDIs -15 Closer matching to liability Deficit £17.8m profile -25 Balance
Slide 14: Public Sector and Commercial
Public Sector and Commercial Transforming Britain’s Landscapes Strategy: Further development of the integrated product offer for the Public Sector and Commercial market z 59% of Group sales z Public resilient z Industrial and commercial: delays and cancellations z Sophisticated analysis to focus sal
Slide 15: Public Sector and Commercial ABI Monthly Change in Contract Awarded Values
Public Sector and Commercial ABI 12 Monthly Change in Contract Transforming Britain’s Landscapes Awarded Values Education Utilities Leisure Medical Conservation Sports Civic Industrial Transport Hotels Retail Commercial Civils (250) (200) (150) (100) (50) - 50 100 £ Millions
Slide 16: ABI Lead Indicator and Landscape Projects Value
£ Millions 0 55 110 165 220 275 330 Dec-03 Feb-04 Apr-04 Jun-04 Aug-04 Oct-04 Dec-04 Feb-05 Transforming Britain’s Landscapes Apr-05 Jun-05 Aug-05 Oct-05 Dec-05 Feb-06 Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 ABI Lead Indicator Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 D
Slide 17: Domestic Market
Domestic Market Transforming Britain’s Landscapes Strategy: To create the “pull through” by investing in sales and marketing direct to the consumer to drive more sales through the quality approved installers and distributors of our products z 41% of Group sales z Target customer groups: 8.9 million
Slide 18: Manufacturing and Distribution
Manufacturing and Distribution Transforming Britain’s Landscapes Strategy: Deliver sustainable shareholder value by continuing to develop, innovate, improve and reduce cost in our unique manufacturing and distribution network z Geographic spread and automation delivers lowest cost to market z Four s
Slide 19: Retain Effective Geographic Coverage
Retain Effective Geographic Transforming Britain’s Landscapes Coverage Majority of customers within 2 hour drive time of Marshalls regional manufacturing and distribution sites
Slide 20: Medium Term Manufacturing Capability Intact
Medium Term Manufacturing Transforming Britain’s Landscapes Capability Intact Overtime Working 17% Productivity Gain 4% Temporary Closure 13% Operating 66%
Slide 21: Well Invested Business
Well Invested Business Transforming Britain’s Landscapes Capital Expenditure & Depreciation - History & Target 20,000 18,102 18,000 16,000 13,605 14,000 12,838 12,852 11,726 12,000 £000 10,000 9,193 8,000 6,000 6,000 4,000 4,000 2,000 - 2006 1st Half 2006 2nd Half 2007 1st Half 2007 2nd Half 2008 1s
Slide 22: Cash Outflows
Cash Outflows Transforming Britain’s Landscapes 2007 2008 2009 £m £m £m Capital expenditure 31.7 22.0 10.0 Acquisitions 12.8 6.1 0.8 Inventory movement 13.8 7.7 (6.0) Taxation 9.3 4.7 - Pensions 4.4 6.6 2.1 Dividends 19.1 19.4 4.8 Total 91.1 66.5 11.7
Slide 23: Summary: Decisive Action
Summary: Decisive Action Transforming Britain’s Landscapes Reduce capacity and cost base Conserve cash Continue innovation Marketing, products, services Production technology and materials technology Rebased dividend
Slide 24: Summary: Marshalls Defining Strengths
Summary: Marshalls Defining Transforming Britain’s Landscapes Strengths Well known brand Strong positions in core markets National manufacturing and distribution network Efficient, well invested, latest technology Industry leading customer service and lowest cost to market Experienced management tea
Slide 25: Appendices
Transforming Britain’s Landscapes Appendices
Slide 26: Construction Products Association
Construction Products Association Transforming Britain’s Landscapes 2004 2005 2006 2007 2008 2009 2010 £m/% change Actual Actual Actual Actual Estimate Forecast Forecast Housing 12,763 13,072 13,699 13,849 11,425 8,519 8,467 13.9% 2.4% 4.9% 1.3% -17.5% -25.4% -0.6% Other New Work 30,041 29,139 30,49
Slide 27: Historical Perspective
Historical Perspective Transforming Britain’s Landscapes Operating Capital Revenue Profit Margin Expenditure £000 £000 % £000 1990 181,447 28,630 15.8 36,143 1991 184,370 18,697 10.1 11,959 1992 174,355 17,317 9.9 3,786 1993 169,492 12,437 7.3 5,712 1994 191,495 21,683 11.3 20,384 1995 229,496 31,19
Slide 28: Net Assets
Net Assets Transforming Britain’s Landscapes £m £m 2007 Net Assets 200.6 Impact of movements in year: Trading (before works closure / asset impairments) 16.2 Works closure costs and asset impairments (22.4) Dividends (19.4) Actuarial movement on pensions (after tax) 19.9 Purchase of own shares / emp
Slide 29: Transforming Britain’s Landscapes
Transforming Britain’s Landscapes