Delivering our strategic growth objectives
Our 5 year Strategy maintains the objective of delivering sustainable growth. The main elements are:
- Continued focus on organic growth and investment - capital expenditure of £30 million planned for 2021 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
Our vision is to create better spaces and futures for everyone; socially, environmentally and economically.
Our mission
Our continuing mission is to deliver sustainable growth through a brand that drives customer specification of innovative product solutions for the built environment.
Strategic Priorities
- Brand preference for product specification
- Digital transformation
- New product development
- Logistics excellence
- Sustainable materials supply
- Customer centricity
- Operational excellence
- Growth in the emerging businesses
Developing strategy
The impact of COVID-19 has presented many challenges, but we remain confident that our strategy is the right one, with built-in flexibility such that the pace of delivery can be adjusted for external uncertainties. We remain committed to the 2025 Strategy as our driver for growth.
Shareholder value
To deliver sustainable shareholder value by improving the long-term operating performance of the business.
Our objectives
• To make strategic investments for organic growth and acquisitions.
• To strengthen the Marshalls brand by developing systems-based solutions and by promoting ESG values.
• To maintain a progressive dividend policy and a dividend cover of 2 times over the business cycle.
• To strengthen the Marshalls brand by developing systems-based solutions and by promoting ESG values.
• To maintain a progressive dividend policy and a dividend cover of 2 times over the business cycle.
What we have achieved
• Market share gains during 2020.
• Improvements in operational efficiency across the manufacturing network.
• Full integration of CPM and Edenhall acquisitions.
• Strong growth in HY2 has supported the Group’s market capitalisation (£1,495 million at 31 December 2020).
• Continued to exceed CPA growth forecasts.
• Improvements in operational efficiency across the manufacturing network.
• Full integration of CPM and Edenhall acquisitions.
• Strong growth in HY2 has supported the Group’s market capitalisation (£1,495 million at 31 December 2020).
• Continued to exceed CPA growth forecasts.
Key 5-year strategic priorities
• 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 deliver long-term sustainable shareholder value.
• Digital transformation.
• To promote strong ethical, environmental and corporate social responsibility principles.
Sustainable profitability
To maintain a strong market position and grow the business profitability in all the Group’s end markets.
Our objectives
• To outperform the market.
• To deliver new and innovative product solutions.
• To invest in IT and lead the digital transformation.
• To drive through sustainable cost reductions.
• To deliver new and innovative product solutions.
• To invest in IT and lead the digital transformation.
• To drive through sustainable cost reductions.
What we have achieved
• Sustainable efficiency improvements arising from the operational restructuring programme in 2020.
• Continued to invest in R&D during 2020. Sales of new products in the core business were 8 per cent of total revenue in 2020.
• Increased the pace of the digital strategy in 2020.
• Increase in International sales of 16 per cent in 2020.
• Continued to invest in R&D during 2020. Sales of new products in the core business were 8 per cent of total revenue in 2020.
• Increased the pace of the digital strategy in 2020.
• Increase in International sales of 16 per cent in 2020.
Key 5-year strategic priorities
• To focus on new product development to drive growth.
• Improve operational efficiency across the manufacturing network.
• Logistics excellence.
• Improve operational efficiency across the manufacturing network.
• Logistics excellence.
Relationship building
To develop relationships with key stakeholders, customers and installers.
Our objectives
- To focus on stakeholder engagement at all levels.
- 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.
What we have achieved
- Dedicated “customer experience” team with strengthened relationships.
- 94 per cent customer service KPI.
- New Commercial and Domestic websites.
- New investor relations and sustainability websites.
- 1,900 registered installer teams.
Key 5-year strategic priorities
• To improve communication and stakeholder engagement.
• To focus on the customer.
• To invest in digital technology to improve customer experience.
• Sustainable materials supply.
• To focus on the customer.
• To invest in digital technology to improve customer experience.
• Sustainable materials supply.
Organic expansion
To invest in organic expansion in existing and related markets and product categories to expand the business.
Our objectives
• 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.
• To invest in capital expenditure for organic growth.
• To increase sustainable profitability in the emerging businesses.
• To increase new product development.
What we have achieved
• Strong growth in Domestic sales in 2020.
• Significant growth in key focus areas whilst maintaining operational flexibility.
• Strong growth in New Build Housing revenue.
• Self-help capital investment of £42 million over the last 5 years.
• Re opening of the Maltby site to provide additional capacity.
• Significant growth in key focus areas whilst maintaining operational flexibility.
• Strong growth in New Build Housing revenue.
• Self-help capital investment of £42 million over the last 5 years.
• Re opening of the Maltby site to provide additional capacity.
Key 5-year strategic priorities
• 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 grow our emerging businesses and increase their market share.
• To develop our global supply chain.
Brand development
To strengthen and extend the Marshalls brand by focusing on innovation, service and new product development.
Our objectives
• To focus on The Marshalls Way and our ESG priorities.
• Customer satisfaction – to be thesupplier of choice.
• To lead the market on customer service and product quality.
• To maintain the highest health and safety standards.
• To pioneer the digital standard for our industry.
• Customer satisfaction – to be thesupplier of choice.
• To lead the market on customer service and product quality.
• To maintain the highest health and safety standards.
• To pioneer the digital standard for our industry.
What we have achieved
• “Superbrand“ status.
• Continued development of the Marshalls brand and product range.
• Introduced 132 new product ranges launched in the last 2 years.
• First company in the sector to have emission targets approved by the science-based targets initiative.
• Continued development of the Marshalls brand and product range.
• Introduced 132 new product ranges launched in the last 2 years.
• First company in the sector to have emission targets approved by the science-based targets initiative.
Key 5-year strategic priorities
• To maintain the Group’s market leading position.
• Responsible business and The Marshalls Way.
• ESG principles and responsible business.
• To support the UN sustainable development goals.
• To increase brand preference to drive product specification.
• Responsible business and The Marshalls Way.
• ESG principles and responsible business.
• To support the UN sustainable development goals.
• To increase brand preference to drive product specification.
Effective capital structure and control framework
To maintain efficient and effective business controls and to ensure that the capital structure remains aligned with the Group’s corporate growth objectives.
Our objectives
• To maintain a strong balance sheet, a flexible capital structure and a clear and fully aligned capital allocation policy.
• To maintain a flexible capital structure that recognises cyclical risk, focusing on security, efficiency and liquidity.
• To maintain a flexible capital structure that recognises cyclical risk, focusing on security, efficiency and liquidity.
What we have achieved
• A conservative capital structure that maintains significant headroom against downside scenarios.
• Strong balance sheet with low gearing (26.3 per cent (9.3 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.
• Strong balance sheet with low gearing (26.3 per cent (9.3 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.
Key 5-year strategic priorities
• To operate tight control over business, operational and financial procedures.
• To maintain the target net debt:EBITDA ratio (on a reported, post-IFRS 16 basis) of between 0.5 and 1.5 times over the cycle. On a pre-IFRS 16 basis, this translates into a target of between 0 and 1 times.
• To maintain the target net debt:EBITDA ratio (on a reported, post-IFRS 16 basis) of between 0.5 and 1.5 times over the cycle. On a pre-IFRS 16 basis, this translates into a target of between 0 and 1 times.
