Slide 1: 2021 Results Review and Outlook
Marshalls plc 2021 Results Review and Outlook Strong growth – positive trading outlook 1
Slide 2: Agenda
Agenda Highlights Financial Performance The Market Domestic Public Sector and Commercial Find out more online www.marshalls.co.uk 5 year Strategy Update Find us on Facebook Continuing ESG Leadership MarshallsGroup Summary and Outlook Follow us on Twitter @MarshallsGroup Questions a
Slide 3: Highlights
STRONG GROWTH – POSITIVE TRADING OUTLOOK Highlights Strong growth with record results reported % change % change 2021 2020 2021/2020 2019 2021/2019 Revenue £589.3m £469.5m 26% £541.8m 9% Adjusted EBITDA £107.1m £57.6m 86% £103.9m 3% Adjusted operating profit £76.2m £27.2m 180% £73.7m 3% Adjusted pro
Slide 4: Highlights: Financial highlights
STRONG GROWTH – POSITIVE TRADING OUTLOOK Highlights Strong growth – positive trading outlook Financial highlights Record sales and adjusted profitability, reflecting the sustained heightened demand post COVID-19 Full year revenue of £589.3 million, an increase of 26% on 2020 and 9% on 2019 Adj
Slide 5: Financial Performance
Financial Performance 5
Slide 6: Revenue bridge
STRONG GROWTH – POSITIVE TRADING OUTLOOK Revenue bridge Record revenue - 9% ahead of 2019 650 38.3 1.9 589.3 600 79.6 541.8 550 500 469.5 4.4 £'m 450 64.3 12.4 400 350 300 2019 PS&C Dom Int 2020 PS&C Dom Int 2021 Strong recovery in revenues from COVID-19 impacted 2020 – 26% ahead of 2020 and 9% ah
Slide 7: Adjusted operating profit and margins
STRONG GROWTH – POSITIVE TRADING OUTLOOK Adjusted operating profit and margins Revenue recovery delivers rebound in operating profit and margins Revenue Operating profit Margin impact £’m £’m % 2020 469.5 27.2 5.8 Landscape Products 111.2 45.4 6.7 Other 8.6 3.6 0.4 2021 589.3 76.2 12.9 2019 541.8 73
Slide 8: Adjusted profit before taxation and earnings per share
STRONG GROWTH – POSITIVE TRADING OUTLOOK Adjusted profit before taxation and earnings per share Continuing growth in profit £’m 2021 2020 2019 Adjusted operating profit 76.2 27.2 73.7 Adjusted net finance costs (4.1) (4.7) (3.8) Adjusted profit before taxation 72.1 22.5 69.9 Adjusted taxation (15.1)
Slide 9: Cash flow
STRONG GROWTH – POSITIVE TRADING OUTLOOK Cash flow Strong cash flow generation delivered reduction in net debt £’m 2021 2020 2019 Adjusted operating profit 76.2 27.2 73.7 Working capital and non-cash items 9.1 1.2 26.6 Finance costs and income tax paid (17.0) (9.1) (12.2) Cash flow from operating ac
Slide 10: Funding and liquidity
STRONG GROWTH – POSITIVE TRADING OUTLOOK Funding and liquidity Significant facility and covenant headroom Banking facilities Cumulative Facility facility Total bank facilities of £165 million – of which £140 million are committed £’m £’m Renewal of existing maturing RCF and working capital facil
Slide 11: Ongoing capital discipline
STRONG GROWTH – POSITIVE TRADING OUTLOOK Ongoing capital discipline Good control of working capital and recovery of returns; flexible capital structure to support growth 2021 2020 2019 Debtor days 51 48 42 Creditor days 58 63 63 Inventory turn (times per annum) 3.1 2.9 3.2 Liquidity ratio (pre-IFRS
Slide 12: Capital allocation policy
STRONG GROWTH – POSITIVE TRADING OUTLOOK Capital allocation policy Clear and consistent policy; good organic and acquisition investment opportunities 1 2 3 4 5 Organic R&D Ordinary Selective Supplementary 3 5 4 growth New product dividends acquisitions dividends development Capital investment Contin
Slide 13: Dividends
STRONG GROWTH – POSITIVE TRADING OUTLOOK Dividends Progressive dividend policy Policy remains to maintain a progressive dividend policy 2021 dividends: - Interim: 4.7 pence - Final: 9.6 pence(*) - Total: 14.3 pence Objective to target two times earnings cover over the business cycle Note: *Pro
Slide 14: Market Update
2021 Market Update 14
Slide 15: Further growth forecast in UK construction
STRONG GROWTH – POSITIVE TRADING OUTLOOK Further growth forecast in UK construction Chain linked volume ― 2018 prices (forecast: CPA % growth on ONS construction output values) CPA forecast ― total construction output Volume (£’m at 2018 prices) Marshalls plc 2021 Results Review and Outlook 15
Slide 16: Supportive market backdrop
STRONG GROWTH – POSITIVE TRADING OUTLOOK Supportive market backdrop Chain linked volume ― 2018 prices (forecast: CPA % growth on ONS construction output values) CPA forecasts cumulative growth from 2020 CPA forecasts 2022 share of total construction output Forecast % growth in volume (£’m at 2018 pr
Slide 17: Registered installer order books remain at historically high levels
STRONG GROWTH – POSITIVE TRADING OUTLOOK Registered installer order books remain at historically high levels Installer order books – February 2022 Number of week’s work Marshalls plc 2021 Results Review and Outlook 17
Slide 18: Supportive UK Housing market
10% 15% 20% 25% 30% 35% 40% 0% 5% 2012 Q1 2012 Q3 2013 Q1 Number of Dwellings in Quarter 2013 Q3 2014 Q1 - 2014 Q3 Last 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 5,000 2015 Q1 Last 2015 Q3 2012 Q4 10 10 2016 Q1 Detached Ter-Houses 2016 Q3 years 2013 Q4 2017 Q1 2017 Q3 2014 Q4 20
Slide 19: Core consumers
STRONG GROWTH – POSITIVE TRADING OUTLOOK Core consumers , Marshalls plc 2021 Results Review and Outlook 19
Slide 20: Unprecedented levels of household savings supports demand
STRONG GROWTH – POSITIVE TRADING OUTLOOK Unprecedented levels of household savings supports demand Household savings, current prices, gross £’m (SA) In the six quarters since the start of the pandemic £331bn Previous six quarters £113bn Difference £218bn Source: ONS Marshalls plc 2021 Results Review
Slide 21: Barbour ABI – projected share of work by Scape to Dec 2024
STRONG GROWTH – POSITIVE TRADING OUTLOOK Barbour ABI – projected share of work by Scape to Dec 2024 ABI outline planning MAT value of projects under £100m ― projection Dec 2024 Medical & Healthcare 0.5% Rail 0.1% Civic & Public 0.1 % Marshalls plc 2021 Results Review and Outlook 21
Slide 22: 5 year Strategy Update
5 year Strategy Update =3 Marshalls
Slide 23: Marshalls' 5 year Strategy update
STRONG GROWTH – POSITIVE TRADING OUTLOOK Marshalls’ 5 year Strategy update Marshalls plc 2021 Results Review and Outlook 23
Slide 24: Brand preference for product specification
STRONG GROWTH – POSITIVE TRADING OUTLOOK Brand preference for product specification Superbrand status Sustainability and ESG Brand campaigns Made in Britain 12th consecutive year Affiliated partnerships Share of voice Design and thought Marshalls plc 2021 Results Review and Outlook leadership 24
Slide 25: Digital transformation
STRONG GROWTH – POSITIVE TRADING OUTLOOK Digital transformation Tailored user experience Optimised conversion Product selection Visualisation My Account area launched to enhance Re-branded site with improved Commercial introduction of new AR visualiser across all product customer experience.
Slide 26: Operational excellence
STRONG GROWTH – POSITIVE TRADING OUTLOOK Operational excellence Marshalls plc 2021 Results Review and Outlook 26
Slide 27: Dual block plant research – new product development
STRONG GROWTH – POSITIVE TRADING OUTLOOK Dual block plant research – new product development 87 100+ “Really unique looking product” “Looks like stone” sessions customers “Great range of textures - never seen as much breadth” Qualitative research: In-depth interviews Concept 2 “Love the subtle, neut
Slide 28: The Emerging Businesses
STRONG GROWTH – POSITIVE TRADING OUTLOOK The Emerging Businesses Sustainability ― mitigation Climate change: Sea waters rising Redi Slot Flooding has spread inland through estuaries Highways solutions The UK coastline is no longer recognisable Collect. Convey. Control. Release. Sustain. Marshalls’ m
Slide 29: Continuing ESG Leadership
Continuing ESG Leadership 29
Slide 30: Our approach to sustainability
Our approach to sustainability Our journey so far… 2000 2004 2005 2006 2008 Began trading in Carbon Joined the FTSE4Good Joined the Ethical Product carbon imported stone reporting started index of sustainable Trading Initiative footprint started shares 2015 2014 2011 2010 2009 First Fair Tax Mark Fi
Slide 31: Creating better net positive futures for everyone
AIM: Creating better net positive futures for everyone Marshalls plc 2021 Results Review and Outlook 31
Slide 32: Climate action strategy
STRONG GROWTH – POSITIVE TRADING OUTLOOK Climate action strategy Marshalls plc 2021 Results Review and Outlook 32
Slide 33: Our journey to net zero
STRONG GROWTH – POSITIVE TRADING OUTLOOK Our journey to net zero We pledge our commitment to become a net zero business by 2030 This is the second consecutive year that we have beaten our science-based target, in line with our net zero commitment. Marshalls plc 2021 Results Review and Outlook 33
Slide 34: Carbon footprints
STRONG GROWTH – POSITIVE TRADING OUTLOOK Carbon footprints All manufactured products feature carbon footprints generated by the Carbon Trust according to methodology in BSI’s PAS 2050. Our footprints were first published in 2008 and revised in 2016. The latest data, including products launched s
Slide 35: Carbon capture and sequestration R&D
STRONG GROWTH – POSITIVE TRADING OUTLOOK Carbon capture and sequestration R&D Concrete absorbs (or “sequesters”) carbon as it cures. If we could capture carbon (extract it from the atmosphere or collect at source) and introduce it into our curing process we would: permanently prevent that carbon f
Slide 36: Diversity, Equity, Respect and Inclusion
STRONG GROWTH – POSITIVE TRADING OUTLOOK Diversity, Equity, Respect and Inclusion First year of Workforce Disclosure Initiative (“WDI”) engagement Marshalls plc 2021 Results Review and Outlook 36
Slide 37: Accreditation and validation
STRONG GROWTH – POSITIVE TRADING OUTLOOK Accreditation and validation Approved carbon reduction targets from Science Based Targets initiative Active participant of UN Global Compact Accredited to BES 6001 (responsible sourcing) and BES 6002 (ethical labour sourcing) Accredited to ISO 45001 (
Slide 38: Summary and outlook
STRONG GROWTH – POSITIVE TRADING OUTLOOK Summary and outlook • Strong growth – positive trading outlook • Strong trading in the first two months of 2022 • DIY and home improvement markets remain strong • Installer order books at record levels at 17.4 weeks at end of February • New Build Housing and
Slide 39: Appendices
Appendices 39
Slide 40: Construction Products Association
STRONG GROWTH – POSITIVE TRADING OUTLOOK Construction Products Association 2019 2020 2021 2022 2023 Actual Actual Estimate Forecast Projection Housing (£’m) 46,205 36,349 42,387 43,658 44,968 6.2% -21.3% 16.6% 3.0% 3.0% Other new work (£’m) 69,278 59,526 65,871 70,693 73,513 0.1% -14.1% 10.1% 7.3% 4
Slide 41: Results Summary
STRONG GROWTH – POSITIVE TRADING OUTLOOK Results Summary Strong growth with record results reported % change % change 2021 2020 2021/2020 2019 2021/2019 Adjusted results Revenue £589.3m £469.5m 26% £541.8m 9% Adjusted EBITDA £107.1m £57.6m 86% £103.9m 3% Adjusted operating profit £76.2m £27.2m 180%
Slide 42: Adjusted profit before taxation and earnings per share
STRONG GROWTH – POSITIVE TRADING OUTLOOK Adjusted profit before taxation and earnings per share Bridge of reported result to adjusted result 2021 2021 2021 2020 2020 2020 £’m Reported Adjusting Adjusted Reported Adjusting Adjusted Operating profit 76.2 ― 76.2 9.4 17.8 27.2 Net finance costs (6.9) 2.
Slide 43: Disclosure of adjusted items
STRONG GROWTH – POSITIVE TRADING OUTLOOK Disclosure of adjusted items Year ended 31 December 2021 – adjusting items Financial Profit before Operating profit expenses (net) tax £’m £’m £’m Statutory performance 76.2 (6.9) 69.3 One-off items: 1. Write-off of assets at St Ives 1.7 ― 1.7 2. Closure cost
Slide 44: Pensions
STRONG GROWTH – POSITIVE TRADING OUTLOOK Pensions Balance Sheet Company contributions to defined benefit scheme reduced to zero under agreed recovery plan Surplus of £25.8 million as at 31 December 2021 (31 December 2020: surplus of £2.7 million) Income Statement Scheme closed since 2006 to fu
Slide 45: Net assets
STRONG GROWTH – POSITIVE TRADING OUTLOOK Net assets £’m 2020 YE net assets 287.8 Impact of movements in the period: Profit for the financial period 54.9 Actuarial movement on pensions (after tax) 19.8 Hedging reserve 0.5 Dividends (17.9) Share-based payments (after tax) 2.4 Purchase of own shares (3
Slide 46: Disclaimer
STRONG GROWTH – POSITIVE TRADING OUTLOOK 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