Marshalls Plc · LSE:MSLH
Marshalls — Investor Day (September 2022)
66 slides from Marshalls's investor day presentation, Sep 22, 2022
Slide 1: Capital Markets Day, Burton-on-Trent
Capital Markets Day Burton-on-Trent 22 September 2022 1
Slide 2: Today's agenda
CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Today’s agenda A Strategic progress and ongoing priorities – Martyn Coffey, CEO B Marley 1. An introduction to Marley – David Speakman, CEO Marley 2. Deriving value from integration - Simon Bourne, Chief Operating Officer C Marshalls 1. Marshalls Landscape Pro
Slide 3: Welcome and key takeaways
CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Welcome and key takeaways ▪ The Group has transformed into a significantly more robust and resilient business since 2013 ▪ Demonstrable track record of consistent outperformance against UK construction output growth ▪ Medium term prospects across all target en
Slide 4: Strategic progress and ongoing priorities
Strategic progress and ongoing priorities Martyn Coffey, CEO 4
Slide 5: Marshalls plc – our Five-year strategy
CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Marshalls plc – our Five-year strategy 5
Slide 6: Capital allocation policy
AA A CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 A Capital allocation policy Clear and consistent policy has supported strategy delivery and is unchanged going forward 1 2 3 4 5 Organic R&D Ordinary Selective Supplementary 3 5 4 growth New product dividends acquisitions dividends development Capital inv
Slide 7: Diversification of the Group – product range evolution
AA A CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Diversification of the Group – product range evolution Landscape Products Building Products Roofing Products 2013 2017 and 2018 2022 7
Slide 8: Diversification of the Group – revenues by reporting segment & end market
A AA CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Diversification of the Group - revenues by reporting segment & end market Revenue by reporting segment: 2013 and June 2022 LTM Revenue by end market: 2013 and June 2022 LTM £799m £195 £'millions 23% 31% £181 37% £307m 39% £46 £423 40% £261 30% 2013 June 2
Slide 9: Track record of delivering shareholder value
AA A CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Track record of delivering shareholder value – outperforming construction output Adjusted PBT and ONS construction output Adjusted EPS 90 200,000 35.0 80 180,000 30.0 160,000 70 Value £'m at 2019 constant prices EPS - pence per share 140,000 25.0 60 120,0
Slide 10: Acquisition of Marley – 'The Marshalls of Roofing'
AA A A CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Acquisition of Marley – ‘The Marshalls of Roofing’ Acquisition drivers ▪ Accelerated our five-year strategy to become the UKs leading manufacturer of products for the built environment ▪ Complementary, extensive range of products across the full roofing
Slide 11: Marley – value extraction opportunities
AA A CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Marley – value extraction opportunities Commercial ▪ Evaluating the opportunity for manufacturing brick slips (estimated market of £40 million to £50 million) on the Marley tile machines to sell through Marshalls Building Products ▪ Leverage Marley’s trad
Slide 12: Group focus and key near term objectives
AA A CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Group focus and key near term objectives ▪ Continue to differentiate Marshalls from the competition ▪ Fully integrate Marley into the Group, extract synergies and operational improvements and capitalise on the solar opportunity ▪ Balance manufacturing cap
Slide 13: Marley Roofing Products
Marley Roofing Products An introduction to Marley – David Speakman, CEO Marley 13
Slide 14: Performance evolution – Marley Roofing Products
AA B1 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Performance evolution – Marley Roofing Products Revenue, adjusted operating profit and margin growth £195m LTM Revenue 24% of Group 200 30% +88% 194.6 180 26.0% 25.8% 160 172.5 25% Operating margin LTM vs 2019 140 144.7 20% 18.5% 19.3% 80%+ £-M 120 118.8
Slide 15: Attractive end market dynamics
AA B1 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Attractive end market dynamics New housing market in structural undersupply Commentary Housing supply in structural deficit ▪ UK housing market in a structural deficit, ensuring a long-term residential new build growth requirement ▪ 200k homes built in 2
Slide 16: The UK has a rapidly ageing housing stock
AA B1 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 The UK has a rapidly ageing housing stock RMI structurally supported by the home’s renovation cycle Ageing housing stock Roofing context to RMI ▪ The UK has an ageing housing stock, requiring significant ▪ The residential roofing sector is dominated by p
Slide 17: Introduction to Marley
Introduction to Marley Video placeholder 17
Slide 18: Most comprehensive roofing system on the market
AA B1 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Most comprehensive roofing system on the market Concrete tiles ▪ Market leader 1 ▪ Under-supply ▪ Significant number of profile, pitch and colour options ▪ Leverage of roofing range & system Clay tiles ▪ Market leader in Plain tiles 1 ▪ Only 2nd manufact
Slide 19: Market leadership in core products
AA B1 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Market leadership in core products Leading GB manufacturer with high market share across the roofing sector GB concrete tile manufacturers GB clay plain tile manufacturers Marley is the #1 GB concrete tile manufacturer by volume Marley has most spare cap
Slide 20: Highly recognised and most frequently preferred roofing brand
AA B1 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Highly recognised and most frequently preferred roofing brand Marley’s brand reputation Preferred roofing brands Brand awareness (unprompted) – top 5 Prompted awareness and preference Unprompted consideration and awareness over time Marley MAT website vi
Slide 21: Sustainable operating margins
AA B1 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Sustainable operating margins Sustainability of operating margins underpinned by market structure and demand drivers ▪ UK housing market is in a structural deficit, ensuring a long-term residential new build growth requirement ▪ Annual price increases wi
Slide 22: Solar PV and Marley Smart energy opportunities
Solar PV and Marley Smart energy opportunities 22
Slide 23: Large growth opportunity in solar PV roofing
AA B1 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Large growth opportunity in solar PV roofing Growing GB solar market Currently ~10% of new build housing include solar PV >70% in Scotland! Marley & Viridian have the highest share of integrated installations Majority of UK homeowners are concerned about
Slide 24: Roof integrated solar PV: high performing and significant growth opportunities
AA B1 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Roof integrated solar PV: high performing and significant growth opportunities Changing regulations in favour of solar PV Marley’s product offering Scottish regulation changes have energised solar on new build housing Marley Smart Energy solutions Buildi
Slide 25: Deriving value from integration
Marley Roofing Products Deriving value from integration – Simon Bourne, Chief Operating Officer 25
Slide 26: Value add opportunities with low capital requirements in all production facilities
AA B2 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Value add opportunities with low capital requirements in all production facilities Strategically located sites … 95% Current utilisation across all metric ▪ Provide efficient coverage for both supply and distribution Concrete tiles tile production lines
Slide 27: Well placed to unlock value from the expanded geographical footprint
AA B2 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Well placed to unlock value from the expanded geographical footprint 4 Strong combined geographical spine for Landscape Products x 10 Distinct regions across North, Central, South East & South West future development or amalgamation … Building Products x
Slide 28: Value extraction opportunities through synergies and best practice
B2 AA CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Value extraction opportunities through synergies and best practice operational improvements Synergies Technical Expertise Operational best practice ▪ There are synergies with our operational ▪ Marshalls' industry leading concrete technology ▪ We will dep
Slide 29: Marshalls Landscape Products
Marshalls Landscape Products Ian Dean, MD Marshalls Landscape & Building Products 29
Slide 30: Performance evolution – Marshalls Landscape Products
AA C1 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Performance evolution – Marshalls Landscape Products Revenue, adjusted operating profit and margin £423m 450 18% LTM revenue 53% of Group 400 424.8 422.9 16% 15.7% 14.7% 350 384.5 14% 13.5% 1.2ppt 300 340.6 12% margin compression due to lower volumes £’m
Slide 31: Landscape Products – coverage of construction end markets
AA C1 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Marshalls Landscape Products – coverage of construction end markets Balanced exposure across the construction market but higher weighting to private housing RMI than other reporting segments 28% 34% 38% New build housing Commercial, infrastructure, indus
Slide 32: Our products: Concrete flags, blocks & edgings
AA C1 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Our products Concrete flags, blocks & edgings From design-driven paving and permeable options to complementary tactile, kerbs and ancillary ranges, we offer our customers the most complete landscaping range in Great Britain. Our products all meet British
Slide 33: Our products: Natural Stone
AA C1 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Our products Natural Stone From paving to completely bespoke solutions - the possibilities are endless for specifiers when including our Natural Stone products in their public realm designs. All Marshalls natural stone is responsibly sourced with complet
Slide 34: Our products: Landscape Protection & Furniture
AA C1 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Our products Landscape Protection & Furniture To complement our Concrete and Natural Stone ranges, we offer both protective and non-protective street furniture solutions which blend seamlessly into urban landscape design. This includes: ▪ Bollards ▪ Stre
Slide 35: Commercial Excellence framework sets the improvement priorities
AA C1 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Commercial Excellence framework sets the improvement priorities Marshalls Landscape Products Digitisation of people and talent “Shine” customer centricity management process improves programme drives performance and retention. improvements in Net Ease an
Slide 36: Lunar launch video
AA C1 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Lunar launch video 36
Slide 37: Marshalls Building Products
Marshalls Building Products Ian Dean, MD Marshalls Landscape & Building Products 37
Slide 38: Performance evolution – Marshalls Building Products
AA C2 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Performance evolution – Marshalls Building Products Revenue, adjusted operating profit and margin 200 14% £181m 13.0% LTM revenue 23% of Group 180 12.1% 181.0 12% 160 11.9% 164.5 157.3 10% 13.0% 140 Operating margin - progressive 120 128.9 improvement 8%
Slide 39: Building Products – coverage of construction end markets
AA C2 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Marshalls Building Products – coverage of construction end markets Significant strength in new housebuilding and growing position in infrastructure 7% 34% 59% New build housing Commercial, infrastructure, industrial Private housing RMI 39
Slide 40: Our products: Civils & Drainage
AA C2 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Our products Civils & Drainage Working with architects, engineers, house builders, major contractors and ground-workers we have developed a leading civils range which includes: ▪ Combined kerb and drainage systems ▪ Below ground water management and SuDS
Slide 41: Our products: Bricks & Masonry
AA C2 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Our products Bricks & Masonry Our concrete brick range gives house builders a complete brick offer… but with half the carbon of the traditional clay product. Bricks are manufactured across the UK in multiple finishes and colours to suit all building and
Slide 42: Our products: Aggregates
AA C2 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Our products Aggregates From our network of UK quarries, we offer a range of aggregate and mineral products from general purpose building sand to block stone for secondary processing/transformation. Our ranges are all certified to British Standard requir
Slide 43: Our products: Mortars & Screeds
AA C2 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Our products Mortars & Screeds Our Mortars & Screeds business is the leading supplier of ready-to-use mortar, and screed in the UK. We operate from six plants, close to customers, using our own fleet to ensure service leadership in this market. 43
Slide 44: Commercial Excellence framework sets the improvement priorities
AA C2 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Commercial Excellence framework sets the improvement priorities Marshalls Building Products Solution/Specification Sales continues to drive mix margins in Civils & Drainage and Bricks & Masonry Increased capacity delivers Brick range extended to include
Slide 45: Operational excellence
Marshalls Operational excellence – Simon Bourne, Chief Operating Officer 45
Slide 46: Dual block plant
AA C3 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Dual block plant A simple, effective, inline design incorporating MaxiMix Technology™ Objectives & priorities Semi dry technology Product features ▪ Increase customer choice with VA product offer ▪ Flexible and adaptable – can add secondary ▪ Value Add p
Slide 47: Marshalls' asset base is well invested and flexible
AA C3 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Marshalls' asset base is well invested and flexible Marshalls’ manufacturing assets have flexibility to support changes in demand in different end markets Conversion flexibility Conversion efficiencies New technology resilience ▪ We can convert our Concr
Slide 48: Dual Block Plant Video
AA C3 C3 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Dual Block Plant Video 48
Slide 49: Digital transformation
C4 Marshalls Digital transformation – Adil Jan, Chief information Officer 49
Slide 50: Monetising digital
AA C4 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Monetising digital New revenue streams and models Dropship Marketplace Content Technology Fusion Leverage our investment in digital and Explore the use of technology in our Extend range for customers Use Marshalls online brand to extend extend use of vis
Slide 51: Marley integration
AA C4 CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Marley integration A considered IT integration approach ERP Digital Procurement Integration Established cloud SAP Solution on a Same or similar customer base. Utilise economies of scale to improve In a world where tech talent is scarce, secure and certif
Slide 52: Structural growth drivers and sustainability
Structural growth drivers and sustainability Professor Chris Harrop OBE, ESG Strategy Director 52
Slide 53: Balancing the short, the medium & the long term
D CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Balancing the short, the medium & the long term Identifying the contextual, societal, and macro-economic trends that may be risks or opportunities for the Group Analysis of trends and implications for Marshalls for the short-term and formulation of future bu
Slide 54: Construction Products Association forecasts
D CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Construction Products Association forecasts ▪ Construction output is forecast to rise by 2.5% in 2022 and 1.6% in 2023 as strong growth in industrial and major infrastructure projects offsets a slowdown in private housing RMI ▪ Output is set to increase to 2
Slide 55: Our end markets: New Build Housing
D Key product opportunities CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Our end markets: New Build Housing ▪ Prospects in the largest construction sector remain cautiously optimistic in the near-term ▪ Concerns largely focus on the extent to which demand will continue to be enabled by mortgage availabil
Slide 56: Our end markets: Infrastructure, Commercial & Industrial
Key D product opportunities CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Our end markets: Infrastructure, Commercial & Industrial ▪ Infrastructure, the 2nd largest construction sector continues to be a key driver of growth ▪ Output in the commercial sector remained 27.7% lower than its pre-pandemic level
Slide 57: Our end markets: Private Housing RMI
D Key product CAPITAL MARKETS DAY – 22 SEPTEMBER 202 opportunities Our end markets: Private Housing RMI ▪ The 3rd largest construction sector, has been a key driver of activity over the last two years. ▪ Activity on the ground continues to remain at historically high levels although discretionary im
Slide 58: Wider market impacts
CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Wider market impacts ▪ The ripple effect of the pandemic continues ▪ Some neighbourhoods have suffered irreparably, the so called ‘Death of the High Street’ is morphing into ‘High Street Transformations’ ▪ The big issues are the climate emergency, the cost of
Slide 59: Sustainability: Key to unlocking opportunities
Key D product opportunities CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Sustainability: Key to unlocking opportunities ▪ We were the first in our sector embrace all aspects of sustainable business ▪ We anticipate new product requirements, matching the growing demand for net positive products ▪ We are a
Slide 60: Sustainability ESG Model
D CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Sustainability ESG Model Purpose: Creating better net positive futures for everyone 60
Slide 61: Climate change strategy
CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Climate change strategy ▪ Approved SBTi 1.5C target ▪ 2030 Net Zero Plan ▪ Product Carbon Footprints for All products ▪ NPD aligned to climate impact and low carbon ▪ Carbon Sequestration R&D project now in production trials 61
Slide 62: Structural growth drivers & sustainability
D CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Structural growth drivers & sustainability ▪ Strong focus core end markets and those significant sectors with stronger current growth ▪ Deep understanding of the macro and ▪ Climate Change Strategy in place since 2008 than the overall market societal changes
Slide 63: Summary
Summary Martyn Coffey, CEO 63
Slide 64: Group focus and key near term objectives
ADA E CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Group focus and key near term objectives ▪ Continue to differentiate Marshalls from the competition ▪ Fully integrate Marley into the Group, extract synergies and operational improvements and capitalise on the solar PV opportunity ▪ Balance manufacturing
Slide 65: Key takeaways
ADA E CAPITAL MARKETS DAY – 22 SEPTEMBER 2022 Key takeaways ▪ The Group has transformed into a significantly more robust and resilient business since 2013 ▪ Demonstrable track record of consistent outperformance against UK construction output growth ▪ Medium term prospects across all target end mark
Slide 66: Questions and Answers
Questions and Answers Q. A. 66