The new 5 year Strategy, launched in June 2019, maintains the objective of delivering sustainable growth. The main elements are:
- Continued focus on organic growth and investment - capital expenditure of £20 million planned for 2020 to drive growth
- Increasing momentum in the delivery of the digital strategy through continued investment and continuous improvement
- Increase in research and development and new product development to drive sales growth
- Renewed focus on increasing the profitability of the Emerging UK Businesses
- Continuing to target selective bolt-on acquisition opportunities in New Build Housing, Water Management and Minerals
- Continued focus on customer service, brand, operational and manufacturing excellence and procurement efficiency
- Maintaining a strong balance sheet, a flexible capital structure and a clear capital allocation policy
- Maintaining a 2 times earnings cover dividend policy, enhanced by supplementary dividends
Our vision is to create better spaces and futures for everyone; socially, environmentally and economically.
Our continuing mission is to deliver sustainable growth through a brand that drives customer specification of innovative product solutions for the built environment.
- Brand preference for product specification
- Digital transformation
- New product development
- Logistics excellence
- Sustainable materials supply
- Customer centricity
- Operational excellence
- Growth in the emerging businesses
Our 2020 strategy has been consistently followed during the last 3 years and has delivered strong growth. The Group is now well advanced in mapping out its ambitions for the next 5 years, setting strategic objectives that continue to support long-term sustainable growth. The Group’s strategic planning process incorporates engagement with stakeholders and a Board priority for 2019 includes the launch of the Group’s strategy for the next 5 years.
- To make strategic investments for organic growth and acquisitions.
- To strengthen the Marshalls brand by developing systems-based solutions.
- To have a progressive dividend policy supported by supplementary dividends, as appropriate.
- Growth in EBITDA of 12 per cent to £90.1 million on a pre-IFRS 16 basis (£103.9 million on a reported basis).
- Market share gains.
- Dividend growth: 13 per cent.
- Supplementary dividend.
- To grow ROCE and EBITDA.
- To deliver long-term sustainable shareholder value.
- Digital transformation.
- To promote strong ethical, environmental and corporate social responsibility principles.
- To grow ROCE and EBITDA and continue to deliver long-term sustainable shareholder value
- Digital transformation
- To outperform the market.
- To deliver new and innovative product solutions.
- To improve operational efficiency of our manufacturing and logistics network.
- To drive through sustainable cost reductions.
- 12 per cent growth in operating profit (pre-IFRS 16 basis) driven by sustainable efficiency improvements.
- Increase in operating profit percentage to 13.4 per cent (2018: 13.2 per cent).
- Sales of new products in the core business now represent 13 per cent of total revenue.
- Continuing to exceed CPA growth forecasts.
- To focus on new product development to drive growth.
- Improve operational efficiency across the manufacturing network.
- Logistics excellence.
- To deliver sustainable EPS growth
- New product development to drive growth
- Logistics excellence
- Sustainable and ethical materials supply – to enable manufacturing flexibility.
- To focus on customer satisfaction.
- To promote integrated product solutions.
- To focus on installer training, marketing and sales support.
- Dedicated “customer experience” team with strengthened relationships.
- 98 per cent customer service KPI.
- New Commercial and Domestic websites.
- 1,900 registered installer teams.
- To improve communication and stakeholder engagement.
- To focus on the customer.
- To invest in digital technology.
- Sustainable materials supply.
- To continue to invest in digital and systems improvements to improve communication efficiency and stakeholder engagement
- To target growth areas such as New Build Housing, Road, Rail and Water Management.
- To invest in capital expenditure for organic growth.
- To increase sustainable profitability in the emerging businesses.
- To increase new product development.
- Revenue growth of 10 per cent to £541.8 million.
- Significant growth in key focus areas whilst maintaining operational flexibility.
- Strong growth in New Build Housing revenue.
- Self help capital investment of £39.6 million over the last 4 years.
- To optimise our national network of manufacturing sites.
- To grow our emerging businesses and increase their market share.
- To develop our global supply chain.
- To optimise our national network of manufacturing and distribution sites
- To further develop our global supply chains and infrastructure
- To focus on The Marshalls Way.
- Customer satisfaction – to be the supplier of choice.
- To focus on innovation, customer service and product quality.
- To maintain the highest health and safety standards.
- “Superbrand“ status.
- Continued development of Marshalls brand.
- Developed product range.
- Introduced 87 new product ranges to market in the current innovation cycle.
- Award accreditation, e.g. Health and Safety Award from the Mineral Products Association.
- To maintain the Group’s market leading position.
- Responsible business and The Marshalls Way.
- ESG principles and responsible business.
- To increase brand preference to drive product specification.
- To maintain the Group’s market leading position and increase brand preference for product specification
- Brand preference that drives product specification
Effective capital structure and control framework
- To maintain a flexible capital structure that recognises cyclical risk, focusing on security, efficiency and liquidity.
- To deliver a capital allocation strategy that is fully aligned with this capital structure.
- Strong balance sheet with low gearing (20.3 per cent (6.3 per cent pre-IFRS 16)).
- Efficient portfolio of bank facilities with extended maturities and realigned headroom.
- Continued focus on working capital management and efficient inventory control.
- To maintain a flexible capital structure that recognises cyclical risk, focusing on security, efficiency and liquidity
- To deliver a capital allocation strategy that is fully aligned with this capital structure
- To operate tight control over business operational and financial procedures
- To target a net debt to EBITDA ratio of between 0 and 1 times over the business cycle