Marshalls (MSLH) CMD 2024 summary

Strategic direction and business transformation

• Evolved from a landscaping heritage to a diversified group with strong brands in roofing, solar, water management, and bricks, focused on the UK market after strategic acquisitions and divestments since 2014.

• Undertook a full strategic review, identifying underperformance in landscaping and implementing improvement actions, including leadership changes, sales team reorganization, SKU reduction, and manufacturing optimization.

• Portfolio now balanced across new housing, housing RMI, and commercial/infrastructure, with 2023 exposure at 30%, 27%, and 43% respectively.

• Emphasizing a business unit operating model with clear accountability, supported by group centers of excellence in HR, IT, ESG, and technical functions.

• Investing in people, leadership development, and culture to drive transformation and growth, with a focus on diversity, inclusion, and performance management.

Market opportunities and growth drivers

• Addressable market estimated at £7 billion, with significant headroom for growth across landscaping, roofing, energy transition, water management, and bricks; total UK building products market at £60-70bn.

• Exposed to long-term growth drivers: climate change mitigation/adaptation, net zero transition, green urbanization, and regulatory tailwinds in housing, water, and energy.

• Government targets for 1.5 million new homes and £90 billion water infrastructure investment (AMP8) provide strong sector tailwinds.

• Leading market positions (number one or two) in all core segments, with opportunities for share gains in profitable segments and cyclical recovery.

• Regulatory and structural trends, such as Future Homes Standard and decarbonization funds, are expected to drive demand across business units.

Business unit strategies and imperatives

• Landscaping: Reinvigorating customer relationships, simplifying product range (25% SKU reduction), leveraging a national manufacturing model, and focusing on commercial and residential segments.

• Roofing: Defending specification in social RMI, driving share in private RMI and new housing, leveraging full roof system and solar integration.

• Solar: Market leader in in-roof solar for new build, leveraging regulatory tailwinds, technical innovation (ArcBox), and expanding internationally.

• Water Management: Pivoting from new housing to infrastructure, investing in technical support, offering end-to-end solutions, and targeting infrastructure market penetration.

• Bricks & Masonry: Accelerating adoption of lower-carbon concrete bricks, expanding with national housebuilders, and targeting new regions with innovative products.