Slide 1: Strong growth in first half - positive trading outlook
Marshalls plc 2021 Half Year Results Review and Outlook Strong growth in first half - 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 Find us on Facebook Continuing ESG Leadership MarshallsGroup Summary and Outlook Follow us on Twitter @MarshallsGroup Questions Find us
Slide 3: Highlights
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Highlights We remain committed to the 2025 strategy as our driver for growth Increase % HY 2021 HY 2020 HY 2019 2021/2019 Results before operational restructuring costs and asset impairments Revenue £298.1m £210.5m £280.1m 6% EBITDA £56.4m £18.2
Slide 4: Half year highlights
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Half year highlights Strong growth in first half – positive trading outlook Strong first half performance – return to growth over pre-COVID-19 trading Half year revenue of £298.1 million – up 6% against 2019 Operating margin in line with 2
Slide 5: Financial Performance
Financial Performance 5
Slide 6: Revenue
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Revenue Return to growth – revenue 6% ahead of 2019 Strong recovery in revenues from COVID-impacted H1 2020 – 6% ahead of 2019 and 42% ahead of 2020 Strong Domestic demand delivered sales growth of 54% on 2020 and 17% on 2019 Public Sector
Slide 7: Operating profit and margins
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Operating profit and margins Revenue recovery delivers rebound in operating profit and margins Revenue Operating profit * Margin impact £m £m % HY 2020 210.5 3.5 1.7 Landscape Products 81.4 33.4 11.0 Other 6.2 4.1 1.1 HY 2021 298.1 41.0 13.8 HY
Slide 8: Profit before taxation and earnings per share
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Profit before taxation and earnings per share Growth in profit and earnings per share despite higher tax rate £m HY 2021 HY 2020 HY 2019 Operating profit before restructuring costs and asset impairments 41.0 3.5 39.0 Operational restructuring co
Slide 9: Cash flow
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Cash flow Strong cash flow generation delivered reduction in net debt £m 2021 2020 2019 Profit before taxation 38.9 (16.0) 37.1 Working capital and non-cash items 4.1 4.0 (6.2) Finance costs and income tax paid (8.9) (6.4) (6.6) Cash flow from o
Slide 10: Funding and liquidity
STRONG GROWTH IN FIRST HALF – 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 c
Slide 11: Ongoing capital discipline
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Ongoing capital discipline Good control of working capital and recovery of returns; flexible capital structure to support growth HY 2021 HY 2020 HY 2019 HY 2018 Debtor days 32 29 35 33 Creditor days 48 47 56 53 Inventory turn (times per annum) 3
Slide 12: Capital allocation policy
STRONG GROWTH IN FIRST HALF – 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 inv
Slide 13: Dividends
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Dividends Return of interim dividend 2020 full year dividend of 4.30 pence paid on 1 July 2021 Recovery in profit before tax and strong cash generation in the first half underpin the return of interim dividends The Board has declared an in
Slide 14: 2021 HY Market Update
2021 HY Market Update Marshalls plc 2021 Half Year Results Review and Outlook 14
Slide 15: CPA main scenario – summer 2021
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK CPA main scenario – summer 2021 £20.1bn (13.7%) Total Construction Output All New Infrastructure CPA 2021 forecast: £167.6bn CPA 2021 forecast: £26.1bn ▲ £20.1bn £20,143m(13.7%) (13.7%) ▲ £4.9bn (23.4%) £4,947m (23.4%) Total Construction Output
Slide 16: CPA construction output forecast – summer 2021
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK CPA construction output forecast – summer 2021 CPA Forecast – total construction output Marshalls plc 2021 Half Year Results Review and Outlook 16
Slide 17: ABI lead indicator rolling – twelve month lag
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK ABI lead indicator rolling – twelve month lag ABI total – next twelve months total project value % change Marshalls plc 2021 Half Year Results Review and Outlook 17
Slide 18: Total construction workers in the UK
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Total construction workers in the UK Total construction employment in the UK Marshalls plc 2021 Half Year Results Review and Outlook 18
Slide 19: CLC product availability Group headlines – June 2021
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK CLC product availability Group headlines – June 2021 Cement Aggregates Production at normal levels Production “normal” though overall supply reducing Demand significantly greater than available supplies Fewer demolitions reduced supply o
Slide 20: Installer order books spread – June 2021 v June 2020
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Installer order books spread – June 2021 v June 2020 Marshalls plc 2021 Half Year Results Review and Outlook 20
Slide 21: Imported natural stone (moving annual total)
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Imported natural stone (moving annual total) HMRC natural stone imports – MAT tonnage 3 codes like for like Marshalls plc 2021 Half Year Results Review and Outlook 21
Slide 22: Consumer intentions – Q2 2021
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Consumer intentions – Q2 2021 GfK consumer intentions – household income £50k+ Which of the following improvements are you likely to make to your homes over the next twelve months? Marshalls plc 2021 Half Year Results Review and Outlook 22
Slide 23: RIBA Future Trends Index – May 2021
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK RIBA Future Trends Index – May 2021 RIBA Future Trends Index Marshalls plc 2021 Half Year Results Review and Outlook 23
Slide 24: Household savings value
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Household savings value Household savings, current prices, gross £ millions (seasonally adjusted) 12 Months to March 2020 £109bn 12 Months to March 2021 £283bn Growth 160% Value of Growth £174bn Source: ons.gov.uk Marshalls plc 2021 Half Year Re
Slide 25: CPA cumulative growth forecasts – cumulative value of growth
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK CPA cumulative growth forecasts – cumulative value of growth CPA forecasts cumulative value of growth from 2020 – £ millions, 2018 prices Marshalls plc 2021 Half Year Results Review and Outlook 25
Slide 26: Construction Materials Price Index
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Construction Materials Price Index Source: gov.uk Marshalls plc 2021 Half Year Results Review and Outlook 26
Slide 27: 5 year Strategy Update
5 year Strategy Update =33 Marshalls
Slide 28: Marshalls 5 year Strategy Update
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Marshalls 5 year Strategy Update Marshalls plc 2021 Half Year Results Review and Outlook 28
Slide 29: Brand preference and customer centricity
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Brand preference for product Customer centricity specification Product specifications are increasingly being used to underpin customers’ own commitments to sustainability, in particular for lower embedded carbon, flood prevention and human right
Slide 30: Logistics excellence and operational excellence
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Logistics excellence Operational excellence Following the announcement of significant investment and upgrades to our concrete block paving technologies, flag paving is now the focus New flag presses are being installed producing four units per c
Slide 31: Sustainable materials supply and new product development
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Sustainable materials supply New product development NPD continues to be driven by Marshalls’ long-standing sustainable thinking and by anticipating future trends The current trend for outdoor living spaces and kitchen gardens is one Marshalls h
Slide 32: Digital transformation and The Emerging Businesses
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Digital transformation The Emerging Businesses All businesses are now operating under the The New Housebuilders website Marshalls Brand and digital tools are integrating group-wide products and services “Create a house your clients will love, fr
Slide 33: Continuing ESG Leadership
Continuing ESG Leadership 33
Slide 34: Sustainability approach
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Sustainability approach Strong foundations, meaningful actions Marshalls plc 2021 Half Year Results Review and Outlook 34
Slide 35: Addressing climate change
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Addressing climate change Science based targets and individual product carbon footprints Over 5,000 individual product carbon footprints Up to 50% lower than direct AND indirect competitor products Marshalls plc 2021 Half Year Results Review and
Slide 36: Climate change strategy
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Climate change strategy Mitigation and adaptation Marshalls plc 2021 Half Year Results Review and Outlook 36
Slide 37: NPD for lower carbon footprints
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK NPD for lower carbon footprints Climate change adaptation based on data 33% Lower 49.1% Lower Marshalls plc 2021 Half Year Results Review and Outlook 37
Slide 38: Climate change mitigation
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Climate change mitigation Next steps… reducing urban heat island effect Marshalls plc 2021 Half Year Results Review and Outlook 38
Slide 39: Ongoing focus on ESG leadership – ratings
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Ongoing focus on ESG leadership Ratings agency performance Agency Current score (Apr 21) Next score due MSCI AAA (Leadership) June 22 FTSE4Good 3.2 out of 5 December 21 CDP (Carbon Disclosure B (Management) December 21 Project) ISS C (Highest in
Slide 40: Ongoing focus on ESG leadership – accreditations
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Ongoing focus on ESG leadership Maintaining accreditations and validations Approved science based targets for climate change Signatory to UN Global Compact Accredited to BES 6001 (responsible sourcing) and BES 6002 (ethical labour sourcing
Slide 41: Summary and outlook
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Summary and outlook • Strong first half – revenue, profit and cash generation • ESG embedded throughout the business - Source of competitive advantage - SBTi targets set – clear climate change strategy • Continued strong growth in Domestic - DIY
Slide 42: Appendices
Appendices £3 Marshalls ee —_ |
Slide 43: Construction Products Association
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Construction Products Association 2019 2020 2021 2022 2023 Actual Actual Estimate Forecast Projection Housing (£m) 44,882 35,461 41,231 44,643 46,429 6.1% -21.0% 16.3% 8.3% 4.0% Other new work (£m) 67,286 58,387 66,455 70,634 72,906 - -13.2% 13.
Slide 44: Key financial metrics
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Key financial metrics HY 2021 HY 2020 HY 2019 Interest Charge £2.1m £1.9m £1.9m Cover (rolling annual) 13.5 times 10.7 times 25.5 times EPS 15.30p 0.12p 15.18p Weighted average number of shares 199.0m 198.6m 198.3m Net asset value £320.1m £275.8
Slide 45: Revenue by end market and business area
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Revenue by end market and business area Strong growth in Domestic, improved trading in Public Sector and Commercial Revenue analysis: end market Revenue analysis: business area ↑11% ↑15% 6% (2020: 8%) 16% (2020: 21%) Public Sector and Commercial
Slide 46: Pensions
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Pensions Balance Sheet Company contributions to defined benefit scheme reduced to zero under agreed recovery plan Surplus of £9.5 million at 30 June 2021 (31 December 2020: surplus of £2.7 million) Income Statement Scheme closed since 2006
Slide 47: Net assets
STRONG GROWTH IN FIRST HALF – POSITIVE TRADING OUTLOOK Net assets £m 2020 YE net assets 287.8 Impact of movements in the period: Profit for the financial period 30.6 Actuarial movement on pensions (after tax) 5.2 Hedging reserve (1.4) Share-based payments (after tax) 1.1 Purchase of own shares (3.5)
Slide 48: Disclaimer
STRONG GROWTH IN FIRST HALF – 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 communication