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Annual Report
and Accounts 2021
Creating better
futures for
everyone.
Socially,
environmentally
and economically.
Annual Report and Accounts 2021
We create better spaces by
putting people, communities

Our Group operates quarries and manufac-
turing sites throughout the UK and a manu-

We are committed to quality in everything
we do, including environmental and ethical
best practice.
Strategic Report
1 Highlights
2 Our Purpose Roadmap
4 Our Investment Case
8 Marshalls at a Glance
10 Chair’s Statement
12 Chief Executive’s
Statement
14 Q&A with the

16 Growth Markets
18 Business Model
20 Our Section 172(1)
Statement
22 Stakeholder Engagement
30 Strategy
32 Key Performance
Indicators
34 Risk Management
and Principal Risks
44 Financial Review
50 What ESG Means

Governance
70 Board of Directors
72 Corporate Governance
Statement
84 Nomination
Committee Report
88 Audit Committee Report
92 Remuneration
Committee Report
96 At a glance
101 Annual Remuneration
Report
105 Fairness, diversity
and wider workforce
considerations
113 Directors’ Report – Other

115 Statement of Directors’
Responsibilities
117 Independent
Auditor’s Report
Financial Statements
125 Consolidated Income
Statement
126 Consolidated Statement
of Comprehensive
Income
127 Consolidated
Balance Sheet
128 Consolidated Cash
Flow Statement
129 Consolidated Statement

131 Notes to the Consolidated
Financial Statements
166 Company Statement of

167 Company Balance Sheet
168 Notes to the Company

174 Financial History –
Consolidated Group
175 Glossary
177 Shareholder Information
Stay up to date with the
latest investor news at
www.marshalls.co.uk
Highlights
Operational highlights
• 
• 

• 

• 

• 

• 

• 
Financial highlights
• 
• 

• 

• 

• 

• 

• 

• 
• 

Notes







Revenue (£’m) 
£589.3m

£76.2m

Adjusted EBITDA (£’m)
£107.1m




MarshallsGroup


MarshallsTV


Marshalls


@MarshallsGroup
positive trading outlook
2017 430.2
2017 53.4
2018 491.0
2018 64.8
2019 541.8
2019 73.7
2020 469.5
2020
2021 589.3
2021 76.2
2017 67.9
2018 80.8
2019 103.9
2020 57.6
2021 107.1
£72.1m


£69.3m

Basic EPS (p)
28.6p

27.5p

Return on capital employed (%),

20.6%

Full year dividend
recommended (p)
14.3p

27.2
1
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Our Purpose Roadmap
right things
right reasons,
right way
The Marshalls Way
Do the right things
• We have high standards
• We deliver market leading quality

• We strive to meet the needs and

• We are continually developing the

For the right reasons
• We consider the long-term impact of

• We are guided by strong principles
• We operate in the most ethical and
sustainable way
• We take responsibility for every action
In the right way
• We set clear expectations
• We anticipate and embrace change
• We put people, communities and the

• We work as a team to proactively

Read more about The Marshalls Way on page 22
Our purpose 




Read more about our purpose on page 3
Our mission 





Read more about our mission on pages 4 to 6
Our strategic goal 



Read more about our strategic goal on pages 30
and 31
Marshalls plc | Strategic Report
2
Strategic goal underpinned

Our purpose in action
St Ives dual block plant investment
Read more on page 28
Investment in new vehicles
Read more on page 29
Sustainable new product development –

Read more on page 15
1. Brand preference for

2. Customer centricity
3. Growth in the
emerging businesses
4. Logistics excellence
5. Operational excellence
6. Sustainable supply
7. New product development

8. Digital transformation

Read more about our strategic priorities on pages 30
and 31
3
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Our Investment Case
Proven
1 2 3
Strong
track record
• 


• 


Revenue
8.2%



9.4%


Adjusted EPS
8.6%


Pre-supplementary dividends
10.4%


Supportive UK construction
market fundamentals
• 



• 



• 




• 

Total construction
4.3%

Private housing
3.0%


9.7%


market position
• 


• 

• 

• 


• 







Read more about our key performance
indicators on pages 32 and 33
Read more about our strong market
position on pages 16 and 17
2021 revenue %
Read more on our strong market
position on page 9
 
 
 

66%
6%
28%
Marshalls plc | Strategic Report
4
4 5 6

manufacturing network
• 


• 


• 

• 
• 

• 


• 

• 

c.95%



• 


• 

16.9%


Logistics excellence and
sustainable supply strategy

• 

• 


• 

• 

230+




• 

• 

• 


• 

60%


ESG
market leadership




100%



30%+


Focus on reducing waste
and recycling
100%



30%




5,000+

Read more about where we operate on
page 8
Read more about our investment in new
vehicles on page 29
Read more about our ESG strategy
page 50 to 67

Marshalls is a complete external landscaping product business from design, planning
and engineering to guidance and delivery. We supply to the domestic and commercial
hard landscaping markets and our products include paving, block paving, kerbs and
edgings, drainage and water management solutions, protective street furniture,
lighting, concrete bricks, masonry, walling and mortar.
5
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Our Investment Case
7 8 9
Clear and consistent
capital allocation policy


• 




• 


c.£24 m


New product development strategy
• 

• 



142


Mergers and acquisitions strategy
• 


• 

Focused
growth strategy
Strategic goal
• 



• 
• 
• 
• 
• 
• 

Strategic goal underpinned

• 

• 
• 
• 
• 
• 
• 

• 


Policy that dividends will grow in


on pages 44 to 49
Read more about our capital allocation
policy on page 7
Read more about our strategy on

Strong balance sheet
and cash generation
Strong cash generation
80%

Gearing
11.9%

0%


£41.1 m

Net positive cash
£0.1 m


£165 m


organic investment and
selective acquisitions
Marshalls plc | Strategic Report
6
Priorities for capital
• Capital investment remains core
to strategic growth
• Plan c.£35 million in 2022
• Supplementary dividends when
appropriate. Discretionary and
non-recurring

good organic and
acquisition investment opportunities
• Continued focus on R&D and NPD
• New product ranges
• Digital strategy progressing well;
e-trading platform now established
• 
• 

• Good pipeline of potential acquisitions • Target selective bolt-on acquisition
opportunities in New Build Housing

2017 2018
2019
2020 2021
Selective acquisitions
2017 2018
2019
2020 2021
Ordinary dividends
2017 2018
2019
2020 2021
Supplementary dividends
Organic growth
R&D and NPD
2017 2018
2019
2020 2021
2017 2018
2019
2020 2021
7
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Marshalls at a Glance




Where we operate




St Ives
dual block plant
Businesses

Landscape Products


Protection
Civils and Drainage


Natural Stone



QR code or visit the following:
www.marshalls.co.uk/about-us
Marshalls plc | Strategic Report
8
Our markets
Domestic

customers range from
DIY enthusiasts to
professional landscapers,
driveway installers and
garden designers.

in helping homeowners
to create beautiful, yet
practical, outdoor spaces
which families can enjoy
for years to come.
Domestic revenue
Public Sector
and Commercial
In the Public Sector
and Commercial end


a diverse commercial
customer base which
spans local authorities,
commercial architects,

and housebuilders.
We have unrivalled
technical expertise
and manufacturing
capability and an enviable
product range.
International

operations comprise a
manufacturing site in
Belgium and sales and

the USA and China.
International revenue,
which also includes
exports from the UK,

Group sales.
Public Sector and
Commercial revenue
International revenue
66% 6%
  
28%
9
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Chair’s Statement



get there
Summary
• 
• Continued focus on health, safety
and employee wellbeing
• Strong trading recovery despite
supply chain challenges
• Revenue up 9% compared with 2019
• Final dividend proposed of

• Clear strategy with
sustainability embedded
• Trading continues to improve and
order books remain strong
Overview























Results



















Dividends










Marshalls plc | Strategic Report
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






Marshalls’ strategy




























Environmental




















Social








Governance







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





Vanda Murray OBE
Chair
11
Marshalls plc | Annual Report and Accounts 2021
Strategic Report





Summary
• Strong trading performance with
adjusted and statutory operating


• Adjusted EBITDA of £107.1 million, 3%
ahead of 2019
• 

• Dual block plant investment at St Ives
progressing well in line with plan
• ESG strategy generating good
sustainable commercial opportunities
• Trading in 2022 has continued
strongly with healthy order books
Introduction


























2021 trading summary







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
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

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
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













Marshalls plc | Strategic Report
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









2021 results


































Operational initiative















































Marshalls’ 5 year Strategy and ESG agenda










• 
• 
• 
• 



Chief Executive
13
Marshalls plc | Annual Report and Accounts 2021
Strategic Report







1. What are the key challenges that Marshalls has

reduction targets?







 








3. Can you highlight any new successes in how








4. What is Marshalls doing to respond to the growing







 











 
Marshalls’ approach to diversity and inclusion within

















7. Does Marshalls see any opportunity in adopting







Marshalls plc | Strategic Report
14
Case study



designed to act as a demarcation tool to safely segregate


provides a soft transition between the carriageway and the
cycle lane. This means that cyclists of all abilities can use
the cycleway without the fear of colliding with a steep kerb


vehicles mounting the unit and potentially endangering
the cyclist.
Designed to be installed in new or existing schemes where
the highway requires a redesign, the Cycle Segregation Unit
ensures that cyclists feel safe and at ease when commuting,
and consequently encouraging an increase in this mode

8. How is Marshalls working together with its

in its supply chains?








9. What impact has COVID-19 had on your human
rights due diligence activities in higher-risk
overseas supply chains?













10. What initiatives does Marshalls have in place to

standards in the workplace?









15
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Construction market overview














   
   
   
   
Total construction output 13.3 4.3 2.5




















Growth Markets


strongest
CPA total construction output
CPA 2021 
CPA 2022

% growth on previous year
 
200,000
180,000


120,000
100,000
80,000
Volume (£’m at 2018 prices)
2015  2017 2018 2019 2020 2021 2022 2023
Years
15.0
10.0
5.0
0.0
-5.0
-10.0
-15.0

Strong outlook for commercial contract work










     
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0

(£’m at 2018 prices)











25.0
20.0
15.0
10.0
5.0
0.0
-5.0
-10.0
-15.0
-20.0
 
60.0
50.0
40.0
30.0
20.0
10.0
0.0
-10.0
-20.0
-30.0
-40.0
% growth v. same month
previous year














ABI lead indicator




MAT % growth

   
   
34%
16%
40%
35%
30%
25%
20%
15%
10%
5%
0%










31%
18%
Marshalls plc | Strategic Report
16
Key sector for Marshalls Opportunities and challenges Our strategic priorities
Private Housing
• 
• 
• 

• 

• 

• 

• 

• 

• 

• 

• 


• 
Private Housing RM&I
• 
• 

• 

• 



• 

• 

• 

• 


• 

• 

Infrastructure
• 

• 


• 




• 

• 

UK Domestic




– household income £50k+

Recalculated order books with increased spread data

   
35
30
25
20
15
10
5
0











19.6%

10.2%
 
24
22
20
18
16
14
12
10
8
6
4











17.4
17
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Business Model

Financial




Business






Intellectual




Natural resources




Human



Technology




Social and relationships






Our capital Our business
Read more on page 22





Related risks
• 
• 
• 
• 
Innovation




Related risks
• 
• 
• 
• 
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Marshalls plc | Strategic Report
18
Our business Outcomes
Read more on page 22
Shareholders




Dividend per share
14.3 p
Suppliers






Suppliers trained

modern slavery
70%
Customers




Customer

98%
Communities






50%
Government and




8 years






Employees



Active apprenticeships
in 2021
102




Related risks
• 
• 
• 
• 
• 
• 
Sourcing






Related risks
• 
• 

• 
• 







Related risks
• 
• 
• 
• 
• 
Customers





Related risks
• 
• 
• 
• 






Related risks
• 
• 
• 
• 
• 
• 

Strategic corporate

• 
• 
• 
• 
• 
• 

Stakeholder outcomes
Read more about our strategy
on pages 30 and 31
Read more about our stakeholder
engagement on pages 22 to 29
19
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
S172 Relevant disclosure Reference
The likely long-term
impact of any decisions
The Board sets the Group’s purpose, mission and strategy and ensures they are
aligned with our culture and look to the future: “to create better spaces and futures for
everyone: socially, environmentally and economically”.
The annual strategic reviews conducted by the Board (the most recent being in
November 2021), and the consideration of at least one of our strategic growth pillars
at each Board meeting, focus on the long-term sustainable success of the Group and
our impact on key stakeholders.
The Board’s risk management procedures identify the potential consequences of
decisions in the short, medium and long term so that mitigation plans can be put in
place to prevent, reduce or eliminate risks to our business and wider stakeholders.
Consideration of risk is integral to, and not separate from, all business decisions.
The Board has adopted a clear and consistent capital allocation policy, with good
organic and acquisition investment opportunities. This demonstrates its commitment
to the development of the business over the medium to longer term.
Page 2
Pages 30 and 31
Pages 34 to 43
Page 7
The interests of the
Company’s employees
Our business is underpinned by people and talent development and is committed to
diversity, equity, respect and inclusion. These are central to The Marshalls Way but we
acknowledge this as a key area of development for our business.
Health, safety and wellbeing within our operations is our top priority, with this being
a standing and separate item on the agenda at every scheduled Board meeting. Our
goal is continuous improvement with the achievement of annual health and safety
targets being linked to the remuneration of our Executive Directors and our senior
management team.
The Board monitors culture through our engagement mechanisms, namely our
Employee Voice Group which, in addition to being attended by our designated Director

senior management team members.
Our Group Human Resources Director presents the results of our annual employee
engagement survey to the Board, together with details of the actions being taken to
address the feedback received.
Pages 64 to 67
Pages 68 to 69
Page 67
Page 67
Our Section 172(1) Statement
Our Section 172(1) Statement
The Board of Directors of the Company consider that they, both individually and collectively, have acted in a way that would be most likely to

31 December 2021.
Pages 24 and 29 provide details of who our stakeholders are, and how the Board and the business engage with them, and examples of the

The Board directly engages with our employees and shareholders throughout the year. This is through well-established mechanisms for
engagement, details of which are set out on pages 24 and 25. The Board occasionally engages directly with customers on site visits but, in
general, its engagement with our other stakeholders is mainly indirect. The Executive Directors ensure the Board is kept fully informed of any
material issues with other stakeholders and the Board receives presentations and reports from senior management as part of updates on
how the business is progressing with its strategic priorities. Further details of how we engage with our stakeholders are set out on page 22.

making is driven by a balanced consideration of what makes us successful in the short term and sustainable in the long term. Although
there are established parameters for decisions that are reserved for the Board, the business engages openly and transparently with the




Marshalls plc | Strategic Report
20
S172 Relevant disclosure Reference
The need to foster the
Company’s business
relationships with
suppliers, customers
and others
Customer centricity and sustainable materials supply are both strategic growth pillars
of the business.
Our record performance during 2021 was underpinned by regular engagement with
our customers and suppliers as we navigated the ongoing supply chain challenges

We are committed to operating sustainably and ethically and, within our sector, seek
to show leadership in these areas.
Pages 30 and 31
Pages 24 and 25
Pages 50 to 67
The impact of the
Company’s operations
on the communities in
which it operates and
the environment
Our sustainability journey began more than 20 years ago and is at the heart of how



programme of meetings with shareholder governance teams.
We have an established materiality matrix based on stakeholder engagement, the





Pages 52 and 53
Pages 56 and 57
Pages 56 and 57
The regulatory
implications of
any decisions

established, specialist functional teams and with the guidance of the Group’s General

Where more specialist advice is required, the Board seeks guidance from its
professional advisers.
Page 82
The importance of the
Company maintaining
a reputation for
high standards of
business conduct

achieving this standard.
Our prioritisation of the health, safety and wellbeing of our colleagues and our clear


Our strategic growth pillars underpin our purpose, mission and strategy.
Page 22
Pages 68 and 69
Pages 30 and 31
The need to act fairly


The Executive Directors engage with shareholders following the publication of our

detailed, real-time, investor and market feedback from the Executive Directors, our
brokers and PR advisers.
The Chair and the Remuneration Committee Chair meet annually with the governance

decisions, operate our business and evolve our strategy.
Although conducted as a hybrid meeting, our AGM provided members the opportunity
to ask questions and vote in real time to ensure maximum engagement opportunity.
Equality of rights attaching to members’ ensures we meet the obligation to act fairly
between them.
Pages 26 to 29
Pages 92 to 95
Pages 113 and 114
Pages 113 and 114
21
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Our stakeholders:
Who they are, what we do and how

Stakeholder Engagement
Generate value
by sustainable
growth
Investment,
strategic guidance
and stewardship
We deliver market
leading product
innovation
Customer
loyalty, brand
preference and

A stretching,
exciting,
supportive and
inclusive working
environment
Diverse, talented,
engaged and
productive
colleagues
We treat suppliers
fairly, building
long-term
relationships
High-quality
goods and
services resulting
in products our
customers love
and specify
We act in
support of the
commitments
we make to
doing business
responsibly
We see the
business through
the lenses
of others
We share
knowledge and

expertise
Government
policy, regulatory
frameworks and
recognition
Shareholders
Communication and dialogue build

strategy from investors
Customers
Engaging with our customers drives

solutions for the built environment
Employees
Our two-way dialogue helps Marshalls attract,
develop and retain talented people who will
help us achieve our purpose and mission
Suppliers
Dynamic dialogue has built a strong
supportive supplier base which supports
our purpose and which shares in
our success
Communities and

We have open and honest dialogue,
sharing our goals and progress in creating
better futures for everyone





The Marshalls Way
We do the right things, for the right reasons, in the right way
Key
What we do

Our purpose

Marshalls plc | Strategic Report
22
2021 in focus

governance structure at Board level and throughout the Group,
supporting the delivery of our longer-term strategy.
During 2021, the business operated against the backdrop of the

that were made during 2020 to manage its initial impact and the
medium-term threat it presented. The processes and procedures
put in place at that time have continued to support the Board and
senior management team’s decision making throughout 2021.

each Board agenda and is considered in taking key decisions, the
Board, and the business as a whole, have, during 2021, prioritised
the health and wellbeing of our colleagues and the safety of our


increasingly important in attracting and retaining talented people,
have been an area of real focus for the Board during 2021.


in 2020 has enabled the completion of a more comprehensive
strategic review in 2021. This has given us a clear vision for the
future and of how we will get there. The record performance of the

decisions that were made during 2020.

alongside its consideration of the Group’s capital structure and
capital allocation policy and its resilience to existing and emerging
risks (pages 34 to 43), which have all been reviewed in light of
the Group’s performance during the year and its future growth
aspirations.
The Board has continued to engage collaboratively with the senior
management team, providing the challenge and support that
only comes where there is transparency of information and open


relations and from its increased diversity, with the Non-Executive
Directors sharing their experiences with some of our more focused

Janet Ashdown (following her retirement from the Board) as the
designated Non-Executive Director for workforce engagement

evolved further during 2021. Recognising the criticality of logistics
excellence, as one of our strategic growth pillars, a Drivers’ Working
Party was also established during 2021 to enable our drivers to have
their say in the decisions we take that impact them in their roles.
23
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Our stakeholders:
How and why we engaged
Stakeholder Engagement continued
Marshalls’ purpose, to create better
spaces and futures for everyone: socially,
environmentally and economically, can
only be achieved if we consider and
engage with our stakeholders.
Marshalls’ stakeholder relationships
The way we do business and make decisions in support of

inside and outside the business. They can affect the communities,
companies and other organisations we deal with or which
are otherwise interested in what we do and how we do it. It is

stakeholders are.
The way in which we engage with and consider the interests


relationships with them involve open and transparent two-way
communication over a long period of time. This builds trust and

loyalty and generate value for all stakeholders, whether it be by
operating in a more sustainable way, reducing our impact on the
environment or supporting the business with long-term capital
investment that drives our growth and shareholder value.
Marshalls engages with stakeholders in many different ways and




Details of who our stakeholders are, how and why we engage

in taking two key strategic decisions during 2021 are set out on

Business engagement
• AGM, Annual Report, trading updates and presentations
• Regular phone and video calls, face to face meetings, site visits and
investor roadshows
• Investor relations website – refreshed during 2021
• 
Board engagement
• The Chair and Remuneration Committee Chair held meetings with
shareholders in November 2021
• Through regular feedback to the Board by the CEO, CFO, brokers and
PR advisers
• Investor site visits and written consultations (e.g. in relation to policy)
• At the Company’s AGM
Links to strategic corporate objectives
Shareholders
Business engagement
• Centralised procurement for the entire Group enabling optimal buying
power and attention from suppliers
• Effective, regular and honest communication with suppliers – underpinned
by Code of Conduct and other core Marshalls policies
• Payment of invoices made consistently in accordance with agreed
payment terms
• Transparent formal tenders and negotiations
• 
• Focus on total end-to-end supply chain including inbound and outbound

design, packaging, indirect costs, etc.
• 
supply risks based on the ETI Base Code
• 
regulators and charities
Board engagement
• Board presentations on growth pillars dependent on our engagement and
relationships with key suppliers
• Board participation in our strategic review
• Feedback reports on supply chain compliance
• Regular supply chain and business continuity internal audit reviews
• 
• Reports on ethical sourcing and ETI Base Code
Links to strategic corporate objectives
Suppliers
Links to strategic corporate objectives
 
 
Relationship building
Organic expansion
Brand development
Effective capital structure and control framework
How we engaged
Marshalls plc | Strategic Report
24
Business engagement
• Dedicated customer experience team and improvement plan supported

• 
• Further development of our websites and digital solutions focused on the
customer to aid ease of purchase
• 
• Customer surveys, customer visits and a commitment to deliver
on feedback
• 
commitments and products
• Awards ceremonies for professional installers and design competitions

• Design and engineering support for Domestic and Commercial customers
• 
• Training sessions for professional installers and resellers
• Research sessions and focus groups to help with product development
• On-site discovery to watch how our products are used to help us develop
new solutions
• 
Board engagement
• Board presentations on customer centricity and brand preference
• Participation in our strategic review
• Customer visits and meetings with sales teams
• Receiving updates on and engaging with our customer experience programme
• Installer and site visits seeing practical application of our products
Links to strategic corporate objectives
Customers
Business engagement
• Employee Voice Group represents all business areas and levels
• Creation of Drivers’ Working Party to engage on decisions and actions
impacting these colleagues
• Regular communication across channels – supporting those employees
working remotely and those without access to Company email
• 
through our Leadership Connected Group
• Development training and succession planning
• People and culture strategy to unlock potential
Board engagement
• 

and senior management team members attending regularly
• Board site visits
• Board attended strategy review
• Annual reviews of HR and Group reward strategy
• Review of senior management team succession planning and wider talent
development initiatives
• Monthly health and safety Board reviews
• Active engagement in workforce diversity, reward and recruitment
Links to strategic corporate objectives
Employees
Business engagement
• Regular dialogue with Government, regulators and industry groups
• Active membership of the CPA and Mineral Products Association
• Effective and clear policies against bribery and the elimination of

Board engagement
• 
principles, and policies relating to modern slavery and anti-bribery
• Board has been heavily engaged in the Group’s business continuity

Links to strategic corporate objectives
Government and regulatory bodies
Business engagement
• 

• Work with the Carbon Trust to analyse our product footprint
• Regular dialogue with local community groups
• £103,500 raised for charitable and community causes in 2021
Board engagement
• 
including the setting of science-based targets
• 

• 
with shareholders in November 2021
• 
Links to strategic corporate objectives
Communities and the environment
25
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Our stakeholders:
How and why we engaged
Stakeholder Engagement continued

Effect
• Engagement with our stakeholders ensures that our strategy

over time.
• It ensures our customers understand that a relentless pursuit
of achieving the highest possible customer satisfaction is at
the core of our “customer centricity” programme, which is one
of our eight strategic pillars.
• 
provide the foundation for long-term sustainable growth and
are central to our purpose.
Outcome
• 
not only on the impact of the pandemic but on whether our
business is positioned to meet the big societal challenges

• We have achieved record performance during 2021 in spite
of the supply chain and people challenges we have faced.

their disappointment at times regarding availability and
price rises.
• 

objectives. We have provided details of how we measure
progress but acknowledge that we need to re-evaluate
this annually to ensure the measures we choose provide
meaningful indications of our commitments and progress.
Strategy
Effect
• The Board made a number of key decisions during 2021 that
required a balanced consideration of our strategic growth
pillars, the long-term sustainable growth of our business and
the interests of stakeholders.
• Whilst a number of these decisions have been driven by
those matters which are formally reserved for the Board, the
Executive Directors, exercising their judgement, and in the
spirit of transparency, engage the Board on other business
critical decisions. This is consistent with The Marshalls Way
and we feel this ensures we are operating with the highest
standards of governance at all times.
Outcome
• The Board approved the recommencement of dividends to


ended 31 December 2021. This decision was taken only after
the repayment in full by the Company of the money claimed

and with the Board having assessed the capital requirements
of the Group at the time the dividends were declared.
• The Board approved the Group’s multi-million-pound

manufacturing site that underpins a number of our strategic
growth pillars including our commitment to new product
development. The investment secures the long-term future
of the site and will predominantly serve our customers in the

which will provide the machinery and raw materials for

• The Board approved the Group’s multi-million-pound

where the key considerations were whether to buy or lease the
vehicles and the opportunities to maximise new technology
and reduce carbon emissions, where viable. Further details
are set out on page 29.
Board decision making
Marshalls plc | Strategic Report
26
Effect
• During 2021, regular engagement with our customers has
managed their expectations in the face of strong demand

• The Board and senior management team have listened to
colleagues throughout 2021, recognising the challenges they
have faced whether as a result of working conditions during
the pandemic or market pressures or as a result of the impact
on them of the way in which we have managed the business.
• Ensuring all colleagues have a voice is critical to the
achievement of our purpose and to the preservation of our
culture and values.
• We reinstated our dividends to shareholders following a
period of careful capital management by the Board, ensuring

height of the pandemic, our focus being not only short-term

future growth and development of the business.
• Throughout 2021, we have worked hard to ensure we have
the best quality and value raw materials and resources we
can source. In addressing security of supply, we maintained
high supplier standards to ensure that our materials are
sustainable and ethically sourced. We continued to undertake
robust and effective human rights due diligence and
monitoring in the high-risk areas of our supply chain.
Outcome
• We achieved record performance during the year despite
the challenging environment. We have sought additional
feedback from customers through targeted pulse surveys

term, we have provided explanations to customers regarding

these challenges impact our long-term objectives under our
customer centricity growth pillar.
• 

• Our Employee Voice Group has contributed to decisions


create fairness and consistency in the terms and conditions
of employment. Implementing this programme attracted
a great deal of, sometimes negative, attention from both
colleagues and trade unions. At each stage, we listened and
engaged further, ultimately helping us to navigate this major
change programme.
• We created a Drivers’ Working Party, responding to the

conditions. We introduced enhanced training, joining and



• We have retained a stable and supportive shareholder base
and, unlike many in the sector, we have done so without

• The Board has supported the Group entering into longer-
term supply contracts during the year for key materials
that support sustainable production in the medium to long
term. The availability of materials underpins our ability to
meet customer demand and, as a general rule, contracts are
with trusted, long-term, suppliers which have a track record


us greater assurance around the viability of the sites and

Dynamic business management
27
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Board decision:
Dual block plant investment
Stakeholder Engagement continued
Background
Production expertise, capacity, innovation and sustainability

Throughout our history, we have looked for opportunities to

by our in-house technical expertise. We have evolved our offer

need for innovative solutions.


capital investments in Marshalls’ history. This investment
delivers a unit capable of manufacturing twice the volume

Board role
The Board considered the proposed investment in April 2021.
The Board challenged every key aspect of the project including
our approach to health and safety, the environmental impact
(including the extent to which allowance had been made
for new “green” technology), the supplier risks (given the

being supplied from a number of international suppliers),
and our consideration of other key stakeholders, including

the project.
Stakeholder considerations and impacts
Employees – We consulted with key employees




Communities and the environment 
sustainability commitments, the design enables the Company
to take advantage of new technologies, including carbon
capture, meaning we can offer alternative, lower-carbon, more
environmentally responsible and differentiated products.
The Company worked with energy specialists in incorporating



renewable power on all major production facilities by 2030.
Customers – This investment enables us to improve our

sales and marketing teams ensured the investment addresses
current and future customer product requirements. We also
worked with product development specialists and customer

allowing us to replicate the aesthetics of a number of globally
sourced products, bringing with it the opportunity for us


Suppliers – We engaged at length with each of the suppliers
whose machines are integral to the processes incorporated
within the dual block plant design (e.g. batching, curing


product innovation that drives our competitive advantage and

Shareholders – With the Board, we considered the scale

returns in order to assess whether it was an effective use of
our capital and supported our strategic objectives. In seeking
approval from the Board, measurable performance targets and

assessment of whether this investment is good value for our
shareholders and supports long-term sustainable growth.
Outcomes and decisions
The Board unanimously approved the proposed investment in
April 2021 with a request that it receives regular updates on
progress with the project including on the realisation of the

Links to strategic
corporate objectives


Organic expansion

Find our strategy
on page 30 and 31
Impact on
business model
Customers
 
Manufacturing

Find our business model
on pages 18 and 19
Marshalls plc | Strategic Report
28
Board decision:
Investment in new vehicles
Background
Our ability to deliver our own products to our customers is a
key part of our service proposition and sits within our logistics

supplemented by third-party logistics contractors as needed.


requires renewal, but also opportunities to increase our owned

requirement was for thirteen replacement and two additional
vehicles for delivery in 2022. Within Marshalls’ Landscape
Products business, we were seeking an additional ten vehicles.
In addition, we wanted to replace four short-term hire vehicles
with Marshalls owned equipment. The choice between
buying or leasing the vehicles was a key consideration, as
were opportunities to maximise new technology and reduce

Board role
The Board considered the proposed investment in May
2021, challenging our stakeholder considerations and how

challenged whether these vehicles represented the latest
technology, in terms of reduced carbon emissions, and whether
our capital allocation policy needed to be reviewed in light of

Stakeholders’ considerations and impacts
Employees – We actively engaged with our employees

alternative fuels as well as overall driver comfort, which resulted
in the loan of a demonstrator vehicle for a four-week period.
Communities and the environment – This investment supports
our policy to reduce vehicle carbon emissions within our


the towns and cities in which we operate.
Shareholders – We received proposals with a range of

vehicles and repairs and maintenance. Careful consideration
was given to whether we should include these within contracts
or pay for servicing and maintenance when required. We


against our internal measures and assessing the impact on

ultimately affect shareholder value.
Customers – The vehicles we use to make deliveries to our
customers, particularly those deployed within our Mortars

available to hire. With new vehicle lead-times being more than
twelve months, we had to make decisions during 2021, based
on projected customer sales, to ensure that we could meet
future customer demand.
Outcomes and decisions
The Board approved the proposed investment in May 2021
but supported our decision to defer an element of what we
proposed, providing us the opportunity to take advantage of
any subsequent developments in vehicle technology without
compromising our customer offer.
Links to strategic
corporate objectives

Organic expansion

 
Find our strategy
on pages 30 and 31
Impact on
business model
Customers

Find our business model
on pages 18 and 19
29
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Strategy
Focused strategy to deliver
sustainable growth
Growth pillars Our objectives What we have achieved Future priorities


brand, communicating well with our customer segments and
early involvement in any project
• To build relationships and increase engagement with consumers,
developers, builders and architects.
• 
pipeline and project conversion.
• To build brand preference through NPD, marketing and innovation.
• Improved process mapping and measurement.
• Improved capability to leverage NPD with additional capability

• Reintroduction of a strong marketing campaign.
• To target greater penetration of all market sectors.
• To increase our range of innovative and sustainable products.
Logistics excellence

and professional deliveries
• 

• 
every delivery requirement.
• Highly trained drivers.
• Acted swiftly in response to market challenges in driver availability

• Customer order tracking service via online portal.
• Flexibility to meet delivery lead-time needs of customers.
• To attract and retain talent.
• To create a Driver Academy to attract and retain HGV drivers.
• To optimise our delivery systems and processes.
Sustainable materials supply
We source and supply sustainable materials, products
and solutions
• To create a sustainable and ethical supply chain that enables
headroom for changes in demand and operates within our
carbon targets.
• Continued to source materials, despite the many supply chain

• 
• Centralised procurement team to optimise buying power and relationships.
• Our ethics, human rights and environmental commitments are

• To prioritise carbon reduction programmes.
• To reduce reliance on cement.
• To ensure long-term material supply availability.
• 

Customer centricity
We want to have the best customer experience in the buildings
material industry
• To grow the business by providing an outstanding customer

• To improve customer ease and embed an improvement culture.
• Extensive communication to manage the challenges of COVID-19

• Effective project management to measure improvement and
deliver results.
• Reduction in quality complaints.
• To improve our customer service scores across all
business areas (target is to achieve a 90 per cent customer
recommendation metric).
• To embed our “customer centric” culture.
Operational excellence
We invest in our manufacturing facilities and industrial network
and use the best tools, processes and systems
• To deliver operational excellence by improving how we work

• To effectively manage our cost base and add value.
• To improve competitive advantage whilst providing market leading
products and service.
• Increased output in response to high demand despite the challenges

• Ongoing network development programme to improve

• 
• Quality programme and ongoing reduction in waste.
• To continue to standardise our operations and processes
across the Group and to improve asset utilisation.
• To improve workforce skills and attract and retain the
best people.
• 
• Further wet press development in other sites.


• To create new, innovative products that will drive the
market forward.
• To develop best-in-class facilities, processes and products.
• 

• 

• To deliver dual block plant project completion by end of 2022.
Growth in the emerging businesses
We make selective acquisitions to complement our business
and help us advance into new and untapped areas
• To grow our emerging businesses to help us expand into key
growth areas.
• To develop clear plans for each business and deliver margin growth.
• 

• Renewed focus on marketing, and rebranding the businesses and
focusing on the solutions they deliver.
• 
• Development of service offer to improve ease of doing business.
Digital transformation
We are continuing to invest in digital and forward-thinking
technology
• To provide an end-to-end digital offering and to pioneer the digital
standard for the industry.
• To move to B2B digital trading where this is possible with

• To ensure the planned upgrade and move of our ERP system to
the cloud. This will bring with it a platform to digitise our processes
optimising and transforming our ways of working.
• 
improvement and optimisation.
• E-commerce platform now established – creating a cohesive,
frictionless user experience and a new complementary sales channel.
• Product augmented reality experience now live on the website.
• Developed digital solutions to allow for improved self-service.
• To migrate all business units from our on-premise ERP system
to the cloud.
• To develop automation and AI processes.
• To further improve our B2B web offering.
• To develop visualisation and QR technologies to enhance
customer experience.
• 
Strategic corporate objectives
Strategic goal to become the UK’s leading manufacturer of products for the built environment
Strategic corporate objectives
Shareholder value



Relationship building
To develop relationships with key
stakeholders, installers and suppliers.

To maintain a strong market position and

Group’s end markets.
Marshalls plc | Strategic Report
30
Growth pillars Our objectives What we have achieved Future priorities


brand, communicating well with our customer segments and
early involvement in any project
• To build relationships and increase engagement with consumers,
developers, builders and architects.
• 
pipeline and project conversion.
• To build brand preference through NPD, marketing and innovation.
• Improved process mapping and measurement.
• Improved capability to leverage NPD with additional capability

• Reintroduction of a strong marketing campaign.
• To target greater penetration of all market sectors.
• To increase our range of innovative and sustainable products.
Logistics excellence

and professional deliveries
• 

• 
every delivery requirement.
• Highly trained drivers.
• Acted swiftly in response to market challenges in driver availability

• Customer order tracking service via online portal.
• Flexibility to meet delivery lead-time needs of customers.
• To attract and retain talent.
• To create a Driver Academy to attract and retain HGV drivers.
• To optimise our delivery systems and processes.
Sustainable materials supply
We source and supply sustainable materials, products
and solutions
• To create a sustainable and ethical supply chain that enables
headroom for changes in demand and operates within our
carbon targets.
• Continued to source materials, despite the many supply chain

• 
• Centralised procurement team to optimise buying power and relationships.
• Our ethics, human rights and environmental commitments are

• To prioritise carbon reduction programmes.
• To reduce reliance on cement.
• To ensure long-term material supply availability.
• 

Customer centricity
We want to have the best customer experience in the buildings
material industry
• To grow the business by providing an outstanding customer

• To improve customer ease and embed an improvement culture.
• Extensive communication to manage the challenges of COVID-19

• Effective project management to measure improvement and
deliver results.
• Reduction in quality complaints.
• To improve our customer service scores across all
business areas (target is to achieve a 90 per cent customer
recommendation metric).
• To embed our “customer centric” culture.
Operational excellence
We invest in our manufacturing facilities and industrial network
and use the best tools, processes and systems
• To deliver operational excellence by improving how we work

• To effectively manage our cost base and add value.
• To improve competitive advantage whilst providing market leading
products and service.
• Increased output in response to high demand despite the challenges

• Ongoing network development programme to improve

• 
• Quality programme and ongoing reduction in waste.
• To continue to standardise our operations and processes
across the Group and to improve asset utilisation.
• To improve workforce skills and attract and retain the
best people.
• 
• Further wet press development in other sites.


• To create new, innovative products that will drive the
market forward.
• To develop best-in-class facilities, processes and products.
• 

• 

• To deliver dual block plant project completion by end of 2022.
Growth in the emerging businesses
We make selective acquisitions to complement our business
and help us advance into new and untapped areas
• To grow our emerging businesses to help us expand into key
growth areas.
• To develop clear plans for each business and deliver margin growth.
• 

• Renewed focus on marketing, and rebranding the businesses and
focusing on the solutions they deliver.
• 
• Development of service offer to improve ease of doing business.
Digital transformation
We are continuing to invest in digital and forward-thinking
technology
• To provide an end-to-end digital offering and to pioneer the digital
standard for the industry.
• To move to B2B digital trading where this is possible with

• To ensure the planned upgrade and move of our ERP system to
the cloud. This will bring with it a platform to digitise our processes
optimising and transforming our ways of working.
• 
improvement and optimisation.
• E-commerce platform now established – creating a cohesive,
frictionless user experience and a new complementary sales channel.
• Product augmented reality experience now live on the website.
• Developed digital solutions to allow for improved self-service.
• To migrate all business units from our on-premise ERP system
to the cloud.
• To develop automation and AI processes.
• To further improve our B2B web offering.
• To develop visualisation and QR technologies to enhance
customer experience.
• 
Enabled by people and talent management
Strategic corporate objectives
Organic expansion
To invest in organic expansion in existing


Effective capital structure
and control framework
To ensure that the capital structure


Brand development
To strengthen and extend the Marshalls
brand by focusing on innovation, service and
new product development.
31
Marshalls plc | Annual Report and Accounts 2021
Strategic Report


Key Performance Indicators
Measuring our performance
£589.3m
(up 9% against 2019)
2017 430.2
2018 491.0
2019 541.8
2020 469.5
2021 589.3
Stakeholder linkage
• Customers
• 
• Employees
• Communities
Revenue (£’m)


£72.1m
2017 52.1
2018 62.9
2019 69.9
2020
2021 72.1

Why is this KPI important?
Delivering sustainable growth is
key to the Group’s strategy. The
aim is to outperform the market
and grow market share.
Performance

market conditions have remained
supportive. We continue to focus
on those market areas where
demand is expected to be greatest.
Links to strategic
corporate objectives
Principal risks
• 
impacts demand
• Macro-economic and political
• Raw material and
labour shortages
• Increased rate of digital change
Risk mitigation
• Close monitoring of trends
and lead indicators
• Diversity of business
• Customer centricity
• Digital strategy
Links to remuneration
AI AI
LTIP LTIP
Why is this KPI important?


Performance

increasingly challenging supply
chain pressures. Cost increases
have been recovered through sales
price increases. Trading in 2022
has started strongly.
Links to strategic
corporate objectives
Principal risks
• Cyber security risks
• 
• 
• Climate change
Risk mitigation
• Innovation and new
product development
• Focus on cyber
security controls
• Proactive supply
chain management
Stakeholder linkage
• 
• Employees
Links to remuneration
AI AI
LTIP LTIP
ROCE (before adjusting items)
20.6%
2017 20.8
2018 20.9
2019 21.4
2020 8.2
2021 20.6
ROCE (%)
Why is this KPI important?
ROCE is an important indicator of
sustainable shareholder value.
Performance

cent (2019: 21.4 per cent). ROCE

funds plus net debt.
Links to strategic
corporate objectives
Principal risks
• Threat from new technologies
and business models
• Increased pace of
digital change
• Capital structure
Risk mitigation
• Digital transformation
• Operational excellence
• Flexible capital structure
• Capital allocation policy
Links to remuneration
AI AI
LTIP LTIP
Stakeholder linkage
• 
• Employees

£0.1m
(net positive
cash)
Reported basis
£41.1m
(37.4) 2018
(60.0) 2019
(75.6) 2020
(41.1) 2021
Stakeholder linkage
• 
• Employees
• Customers
• 
Net debt (£’m)
Why is this KPI important?
Marshalls continues to support

Performance
Net debt was £41.1 million at




Links to strategic
corporate objectives
Principal risks
• Funding strategy
• Overpaying for acquisitions
• 
Risk mitigation
• Close monitoring of trends
and lead indicators
• Diversity of business
• Customer centricity
• Digital strategy
Links to remuneration
AI AI
LTIP LTIP
2017
22.5
(24.3)
Marshalls plc | Strategic Report
32
2017 103
2018 94
2019 96
2020 49
2021 80
Operating cash

Stakeholder linkage
• 
• Customers
• 
Why is this KPI important?

is key to our growth strategy
and for delivering increased
shareholder value.
Performance

cent of EBITDA. This was lower
than usual due to increased
investment in imported inventory

shipping costs. This action was
taken to ensure ongoing availability.
Links to strategic

Principal risks
• 
increased investment in
working capital
• 
Risk mitigation
• Excellent customer service
and quality
• Customer relationships and
brand value
Links to remuneration
AIAI
LTIP LTIP
98%
customer
service index
2017 98
2018 98
2019 98
2020 94
2021 98
Customer service
Stakeholder linkage
• Customers
• Communities
• Environment
Why is this KPI important?
Customer centricity is a key
strategic priority. Customer
service lies at the heart of the
Marshalls brand.
Performance
The Group’s manufacturing
operations are responding to
market demand and changing
trading patterns. The focus
remains on quality, on-time delivery
and order accuracy.
Links to strategic

Principal risks
• Quality, service and reliability
• Brand reputation
• Further COVID-19 disruption
Risk mitigation
• Customer centricity strategy
• Digital strategy
16%
carbon reduction per tonne

2017 10.24
2018 9.92
2019 9.21
2020 7.70
2021 6.46
Climate change
Stakeholder linkage
• 
• Employees
• Customers
• 
• Environment
• Regulators
Why is this KPI important?
The Group’s continued
commitment to our sustainability
strategy is that our annual carbon
reduction targets must be achieved

Performance
Although our absolute emissions
increased in 2021, due to increased
production, our relative (intensity)
performance has decreased.
Links to strategic

Principal risks
• Physical risks from climate
change, such as wind and water
• Rising energy prices and
carbon taxes
• Changing product requirements
in the built environment
Risk mitigation
• Climate site risk analysis
• Market price increases
• Mitigation and
adaptation strategy
Links to remuneration
AIAI
LTIP LTIP
16.9%
reduction in working days lost (%)
compared with the target benchmark
2017 46
2018 17
2019 14
2020
2021 17
Health and safety

Why is this KPI important?
Marshalls is committed to


Performance

cent reduction in days lost from
workplace incidents compared
with the target benchmark.
Links to strategic

Principal risks
• Consistency of standards
• Regulatory controls
• Investment in operation network
• Extended COVID-19 restrictions
• Mental health and
employee wellbeing
Risk mitigation
• Embedded culture –
The Marshalls Way
• Compliance procedures
and policies
• Employee training
Links to remuneration
AI AI
LTIPLTIP
Stakeholder linkage
• Employees
• Customers
• Communities
• Environment
Links to remuneration
AIAI
LTIP LTIP
Find our strategy on pages 30 and 31
Links to strategic corporate objectives
 
 
Relationship building
Organic expansion
Brand development
Effective capital structure
and control framework
Links to remuneration
Long-term Incentive Plan
Annual incentive award
AI LTIP
LTIP AI
80%
OCF:EBITDA
(rolling annual basis)
12
33
Marshalls plc | Annual Report and Accounts 2021
Strategic Report


Managing risk is a key factor
delivery of the Group’s

Risk Management and Principal Risks

The impact of COVID-19 continues to have implications for the
business and its underlying risks. This is particularly true in the
areas of health and safety, cyber security and the security of
raw materials supply. All these areas are considered in more

continue to be reviewed and certain new operating procedures
have been developed. Mitigating controls continue to be reviewed
as appropriate. The Group’s risk function has placed particular
emphasis on the following areas during the year:
• Health and safety – the Group has used frequent and consistent
messaging with mental and physical health prioritised for
all employees and stakeholders. We have maintained our
established COVID-19 workplace protocols throughout the
last year.
• IT and cyber risk – the Group has continued to ensure
business continuity during the COVID-19 restrictions. Practical


this has remained a priority as the focus has shifted to a more

• Security of raw materials supply – the Group has continued to
ensure that product and distribution can continue to meet the
increased levels of demand.

during 2021 covering the following areas:
• 
• 
• 
• 
• 
• 
• Cyber risk – ransomware.

result of assessing the Group’s key risks. They also include audits

subject to routine cyclical coverage.
Priorities for 2022
The priorities for the Group’s risk function in 2022 include the
following areas:
• Health and safety remains a major focus area and 2022

• The completion of a number of targeted projects will again be a

general IT controls, project delivery and inventory are planned.
• During 2022 the Group will commence a project to review the
adequacy, completeness and effectiveness of the underlying
control environment to ensure that it continues to be robust and
suitably documented.
• 
and governance and the generation of detailed climate risk
assessments and scenario planning continues to be a priority.
• We also intend to review our approach to identifying the risk

a structural approach to aligning internal controls and risk
mitigation initiatives with our risk appetite.
Approach to risk management
Risk management is the responsibility of the Board and is a key
factor in the delivery of the Group’s strategic objectives. The
Board establishes the culture of effective risk management and

The Board sets the risk appetite and determines the policies and
procedures that are put in place to mitigate exposure to risks. The
Board plays a central role in the Group’s risk review process, which
covers emerging risks and incorporates scenario planning and
detailed stress testing.
Marshalls plc | Strategic Report
34
Risk management framework
The Board:
• determines the Group’s approach to risk, its policies

exposure to risk.
The Audit Committee:
• 
risk management and internal controls;
• 
management and internal control procedures; and
• 

Operational managers:
• 
strategic risks;
• 

• 
implementation of appropriate action plans; and
• 
Executive Directors:
• 

of the Group’s

• 
management of risk;
• monitor risk mitigation
and controls; and
• 
implementation of
action plans.
Internal audit:
• 

of internal control
procedures;
• 
of management
actions; and
• 
the Audit Committee.
Process
There is a formal ongoing process to identify, assess and analyse


The Group Risk Register is updated by the full Executive
Management team at least every six months and the overall
process is the subject of regular review by the Board. Risks are
recorded with a full analysis, and risk owners are nominated who
have authority and responsibility for assessing and managing the


continues to be a robust mechanism for monitoring and controlling
the Group’s principal risks, and for challenging the potential impact
of new emerging risks. All risks are aligned with the Group’s
strategic objectives, each risk is analysed in terms of likelihood and
impact to the business and the determination of a “gross risk score”
enables risk exposure to be prioritised.
The Group seeks to mitigate exposure to all forms of strategic,

effectiveness of key mitigating controls is continually monitored,
and such controls are subject to internal audit and periodic testing

appropriate. The effectiveness and impact of key controls are
evaluated and this is used to determine a “net risk score“ for each
risk. The process is used to develop detailed action plans that are
used to manage, or respond to, the risks, and these are monitored
and reviewed on a regular basis by the Group’s Audit Committee.
1 Macro-economic and political
2 Cyber risks
3 
4 Long-term impacts of climate change
5 Human rights consideration
6 
7 
increased pace of digital change
8 Corporate, legal and regulatory
9 Competitor activity
10 Project delivery of major strategic business projects and
change management
11 Health and safety
12 People risk
Risk heatmap (net risk scores)
Impact
Likelihood
Low HighMedium
<£2m £2m–£5m >£5m
2
1
3
7
5
4
8
9
10
11
12
3
6
The Group has a formal framework for the ongoing assessment

objective is to gain assurance that the control framework is
complete and that the individual controls are operating effectively.


includes key controls over access to, and changing permissions on,
base data and metadata.
Risk appetite
The Group is prepared to accept a certain level of risk to remain
competitive, but continues to adopt a conservative approach
to risk management. In assessing risk appetite, the aim is to
ensure that internal controls and risk mitigation measures are
designed to reduce the net risk score to a point that aligns with

to channel resources to those mitigation measures and controls

that lies outside our acceptable risk appetite. The risk framework is
robust and provides clarity in determining the risks faced and the
level of risk that we are prepared to accept. Marshalls’ strategies
are designed to either treat, transfer or terminate the source of

35
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Risk Management and Principal Risks continued
Viability Statement

have assessed the prospects of the Group over a longer period than
the period of at least twelve months required by the “going concern“
basis of accounting. The Directors consider that the Group’s risk


The Board considers annually, and on a rolling basis, a strategic
plan, which is assessed with reference to the Group’s current
position and prospects, the strategic objectives and the operation of
the procedures and policies to manage the principal risks that might
threaten the business model, future performance and target capital
structure. In making this assessment the Board considers emerging
risks and longer-term risks and opportunities.
The aim is to ensure that the business model is continually


underpin the Group’s capital structure objectives. The Group’s
funding strategy is to ensure that headroom remains at comfortable
levels under all planning scenarios. The objective continues to be
to have a range of competitively-priced funding lines in place, at all
times, with different maturity dates.

believe that three years is an appropriate period of assessment as


that there is less visibility beyond three years. The Construction
Products Association’s forecasts currently go out to 2023. This






threaten the Group’s ability to continue operating as a going
concern, and focuses on scenarios that might give rise to sales
volume reductions, deteriorating operating margins and increases
in interest rates. Alongside the current supply chain challenges that
are causing shortages of both materials and labour, the current

medium-term risk. None of the individual sensitivities applied
impact the Directors’ assessment of viability.

2021 against the base medium-term forecast. Material and labour

consequently, it is possible that if this continues and leads to
increases in interest rates this could lead to a softening in market
demand. The impact on demand of external market factors
continues to be a key medium-term risk. The stress test assumes
a sales revenue sensitivity of 20 per cent over each of the next

current growth rates assumed to apply on the revised base position
from 2024.
In the wake of COVID-19, the stress testing has used sales volume
and margin sensitivities that aim to replicate the impact of the last
sustained recession, and are similar to the reductions that took

in revenue of around £350 million over 2022 and 2023 and, over the
same two-year period, leads to a reduction in operating margin to

experienced in 2020 as a consequence of COVID-19.
Even under the deep stress test, all bank covenants are met and


downturn, and this would create additional contingency.
The risk of cyber-attack continues to be one of the Group’s highest
rated risks. The Group maintains a comprehensive response and
recovery plan to ensure critical business systems can be restored
within a designated period in the event of an attack. In respect to
cyber protection, we employ a multi-layered approach to ensure
we have more than one level of defence. We also employ an
independent IT security company to perform regular penetration
tests and vulnerability scans on our internal and external facing IT
environment. From a detection perspective we employ a tier one IT

response to ensure we react quickly and effectively to any security
incidents. A detailed Risk Register is maintained to assess both the
likelihood of an incident occurring and its impact on the business.
This register is reviewed on a six-monthly basis to ensure it is kept
current and we undertake independent annual cyber security audits
to ensure we keep abreast of the ever increasing and changing
threat landscape.
In undertaking its review, the Board has considered the
appropriateness of any key assumptions, taking into account the
external environments and the Group’s strategy and risks. Based on
this assessment, and taking account of the Group’s principal risks

expectation that the Group will be able to continue in operation and
meet its liabilities as they fall due for the next three years.
Marshalls continues to have strong market positions and a strategy
of targeting those market areas where growth prospects are
greatest. The potential impact of wider economic and political
uncertainties has been considered in the assessment of risk 1


supply chain. The Group has developed a detailed plan to mitigate
the risk of raw material shortages.
Marshalls plc | Strategic Report
36
Find our strategy on pages 30 and 31
Links to strategic corporate objectives
 
 
Relationship building
Organic expansion
Brand development
Effective capital structure
and control framework
1. Macro-economic and political
Nature of risk and potential impact Key risk indicators Mitigating factors Change
The Group is dependent on the level of
activity in its end markets. Accordingly,
it is susceptible to economic downturn,
the impact of Government policy,
interest rates, volatility in world markets
and any continuing issues associated
with COVID-19. Material shortages
and labour availability are causing

include the increasing impact of wider
geo-political factors (including the

levels of Government borrowings.
Potential impact
The potential longer-term impact of
macro-economic uncertainty and


lead to lower activity levels. This could
have an adverse effect on the Group’s

volatility in world markets and global
economic uncertainty continues to
be a risk. geo-political issues give rise

disrupted markets. Ongoing risk of
interest rate increases.
• Further COVID-19
uncertainty and
the emergence of
new virus variants.
• Government policy
failing to contain

• Reductions
in consumer

order pipeline.
• The Group closely monitors trends
and lead indicators, invests in market
research and is an active member
of the CPA.
• 
of its business and end markets. The
proactive development of the product
range continues to offer protection.
• The Group has developed detailed plans
to support its supply chain, maintain
inventory levels and mitigate the risk of
raw material shortages.
• The Group undertakes scenario planning
to support improved business resilience.
• The Group continues to target those
market areas where growth prospects
are greatest, e.g. New Build Housing,
Road, Rail and Water Management.
• The Group focuses on its supplier


initiatives.
No change in risk

objective is to support

investment support for
infrastructure and housing
has been planned. Economic
slowdown would result
in a loss of business and

to delays in investment
decisions. However, demand
in construction continues to
be very strong and the outlook
is positive.
Priorities
• Regular scenario planning
to assess various market
risks and disruptive events.
• 
on business resilience.
Links to strategic corporate objectives Impact on business model
Impact on business model
 
Manufacturing
Distribution
Customers
Find our business model on pages 18 and 19
Scenario Nature of scenario planning process Outcome of scenario stress testing
1. Macro-
economic factors
A prolonged downturn in
economic conditions leading
to reduced consumer and

a consequent reduction
in demand.
Stress test modelling uses severe downside
assumptions. These include:
• 20 per cent reduction in sales revenue over
two years.
• This amounts to around £350 million in lost


than that experienced during the COVID-19
pandemic in 2020.
• Interest rates increase to 5 per cent.
Outcomes
• PBT reduces to around £20 million in year two.
• 
• Net debt increases to around £100 million
– which is well within current facility limits –

• Bank covenants continue to be met.
2. Cyber
security breach

leading to an immediate
and unexpected disruption
to essential IT systems and
infrastructure.
The main elements of our stress testing are
as follows:
• Penetration tests and vulnerability scans
are performed by independent IT security
companies. These are changed on an
annual basis.
• We run cyber-attack “play-book” exercises
against different cyber-attack scenarios.
Outcomes
• The “play-book” scenarios that we run


security incidents.
• All systems are categorised to ensure that the

in the event of an incident occurring.
Principal risks and uncertainties
The Directors have undertaken a robust, systematic assessment of the Group’s emerging and principal risks. These have been considered

greater focus on emerging risks and risk outlook. The reporting includes more detailed assessments of proximity (how far away in time

37
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Risk Management and Principal Risks continued
3. Security of raw material supply/raw material and labour shortages
Links to strategic corporate objectives Impact on business model
Nature of risk and potential impact Key risk indicators Mitigating factors Change
The post-COVID-19 recovery in market

pressure on raw material and labour
availability. There are increasing risks
in relation to economic volatility, the
security of raw material supply and



stresses for sand, cement and other
raw materials and energy supplies.
In addition, there continues to be
a shortage of HGV drivers causing
distribution and logistics challenges.
Longer term there is a risk of

Potential impact

create imbalances in the mix of regional
activity. The risk of market demand
exceeding raw material supply could

could reduce margins.
• Temporary
shortages and

impacting
materials
and labour.
• Decreases in
vehicle availability

shortages.
• 

• Maintaining adequate, but not
excessive, stocks.
• Continued development of our own



• 
and tier two suppliers to ensure any supply
risks are minimised.
• The digitisation of the supply chain through
the implementation of a best-in-class

• The Group focuses on its supplier

long-term supply agreements, the use of

freight forwarding options.
• The Group utilises sales pricing and
purchasing policies designed to mitigate
the risks.
• Consideration of alternative technologies,
including the reduction of cement content.
Increased risk
The impact of raw material

has increased during the
last year.
The risk of temporary
shortages is mitigated
by proactive supply chain
management and the use

Priorities
• Increasing productivity and

• Continue to develop
supply chain strategies

2. Cyber security risks
Links to strategic corporate objectives Impact on business model
Nature of risk and potential impact Key risk indicators Mitigating factors Change
Fast growing and indiscriminate risk
of cyber risk. Inadequate controls
and procedures over the protection
of intellectual property, sensitive
employee information and market

controls against cyber security risk
quickly enough, given the rapid pace
of change and the continuing threat of
ransomware attacks and new cyber
threats. Increasingly, all business is
becoming more IT.
Potential impact
Operational disruption and


reputational risk.
• Emergence
of new cyber
security risks.
• Increased
examples of data
loss and security
breaches in the
wider market.
• 
• Regular cyber security risk audits
undertaken by specialists and the
use of mitigation controls and other
recommended procedure updates.
Annual penetration tests are undertaken,
and during 2021 an internal audit was

the Group’s controls in relation to a
ransomware attack. The Group’s “cyber
maturity assessment” score has continued
to increase, and Marshalls is accredited
with “Cyber Essentials” approval.
• Restriction of sensitive data to selected
senior and experienced employees who
are used to handling such data.
• Appropriate tools and training procedures
are in place to protect sensitive data
when stored and transmitted between
parties (e.g. encryption of hard drives,

transmission mechanisms and third-party
security audits).
• A continuous programme of awareness
campaigns and training for staff.
No change in risk
Cyber risk has increased
during the COVID-19
pandemic and remains a

focus continues to be given
to promoting awareness of
IT security policies, and we
continue to extend mitigation
controls. The risk is fast
growing and indiscriminate
and the perception is that the
risk of data loss through new
(or as yet unseen) security
threats continues to increase.
Priorities
• Constant review and
ongoing challenge to
procedures – use of
external experts.
• Continue to develop cyber
risk strategy.
Principal risks and uncertainties continued
Marshalls plc | Strategic Report
38
4. Long-term impacts of climate change
Links to strategic corporate objectives Impact on business model
Nature of risk and potential impact Key risk indicators Mitigating factors Change

heightened awareness of the
environmental challenge, with
increased operational and reporting
requirements, hardening targets and
greater consideration by investor and
stakeholder groups.


Based Targets initiative and other
Environmental Protocols.

environmental risks is included in the

Potential impact
Risk that investors and customers
could reduce support if the Group
failed to improve performance against
targets or did not report appropriately.
Risk of customers switching products
away from those with a higher

Cost impact of the “Environmental
Protocols” and mitigation programmes
could lead to increasingly

• Negative feedback
from stakeholders
– loss of business
and investment
due to lack of
preparedness.
• Failure to meet
internal targets.
• The Group utilises experienced, specialist
staff to support the Group’s focus in
this area.
• 
Carbon Trust and Verisk Maplecroft.
• Climate risk analysis.
• Agreed carbon reduction plan and a set

• 
Based Targets initiative.
• Working groups established in all focus
areas and controls being progressively
embedded across the business.
Increased risk

focus from stakeholders,
Government, customers

Increased expectation


and transition risk. TCFD
disclosure requirements.
Priorities
• Ongoing assessment of
climate change and risks
for production, facilities,
products and distribution.
• Develop comprehensive
strategic covering

business processes.
5. Human rights
Links to strategic corporate objectives Impact on business model
Nature of risk and potential impact Key risk indicators Mitigating factors Change
Mandatory human rights disclosure
from 2022 and increased focus on
modern slavery and diversity reporting.
The continuing requirement to identify
risk across the whole supply chain
and the need to maintain reliable and
consistent internal systems, processes
and procedures.



Potential impact
Risk that stakeholders could reduce
support if the Group failed to address
issues around modern slavery and
diversity appropriately.
• Negative feedback
from stakeholders
– loss of business
and investment.
• Increase in general
level of disclosure
required and
administrative
compliance.
• The Group utilises experienced, specialist
staff to support the Group’s focus in
this area and the development of a
comprehensive strategy.
• Regular internal cross-functional
meetings to discuss progress, issues

• Annual analysis of sourcing country risk.
• 

• Focus on ethical sourcing processes

• Working groups established in all
focus areas.
Increased risk

focus from stakeholders,
Government, customers
and investors and
increased operational and

Priorities
• Develop strategic
partnerships.
• Increase focus on the
development of the Group’s
comprehensive strategy.
Find our strategy on pages 30 and 31
Links to strategic corporate objectives
 
 
Relationship building
Organic expansion
Brand development
Effective capital structure
and control framework
Impact on business model
 
Manufacturing
Distribution
Customers
Find our business model on pages 18 and 19
39
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Risk Management and Principal Risks continued
7. Threat from new technologies and business models, and the increased pace of digital change in the market
Links to strategic corporate objectives Impact on business model
Nature of risk and potential impact Key risk indicators Mitigating factors Change
Reduction in demand for traditional
products. Risk of new competitors,

new substitute products appearing.
Failure to react to market
developments, including digital and
technological advances.
Potential impact
The increased competition could
reduce volumes and margins on
traditional products.
Increased costs and
production capacity tied up


made by the Group in this area in recent
years, there remains a risk that a new
third party could use emerging digital
technology to enter the market and
transition more quickly and effectively.
• Less demand
for traditional
products and
routes to market.
• Emergence of
new competitors
and new digital
business models.
• More widespread
availability

intelligence
technology.
• Good market intelligence and ongoing
monitoring of competitive threats.
• Flexible business strategy able to embrace
new technologies.
• 
development and new products.
• Development of the Group’s e-commerce
platform and developing digital strategy.
No change in risk

the business, the continued
development of the Marshalls
brand and the focus on
new products and greater

continue to mitigate the risk.
The pace of digital change
in the market continues
to increase and the risk

Priorities
• Collaboration with
universities to develop new
products and processes.
• Increase pace of digital
change and technological
solutions.
6. Impact of weather events
Links to strategic corporate objectives Impact on business model
Nature of risk and
potential impact Key risk indicators Mitigating factors Change
Increasingly unpredictable
weather conditions and extreme
weather events.
The longer-term implications of
climate change give rise to the
transition risk to address the
challenges quickly enough.
Potential impact
Disruption to supply chain and
operations that might reduce short-
term activity levels.
Financial risk caused by adverse
impact on margins and cash

production volumes.
• Prolonged periods
of bad weather (e.g.

which make ground

impossible.
• Changing public
perceptions of
the longer-term
implications of
climate change.
• Diversity of the business.
• The Group utilises centralised specialist
functions to support mitigation plans
and the management of relationships

• Climate change risk analysis in place.
• Commitment to water harvesting and
recycling schemes.
• The development of resilience strategies
for climate change is a key element of the
Group’s Climate Change Policy.
• The development of the Group’s Water
Management business and the continuing
focus on new product development.
No change in risk
Weather conditions continue
to be closely monitored
but are beyond the
Group’s control.

awareness of climate change.
Priorities
• Continue to develop
resilience strategies.
• Development of Civils

Principal risks and uncertainties continued
Marshalls plc | Strategic Report
40
8. Corporate, legal and regulatory
Links to strategic corporate objectives Impact on business model
Nature of risk and potential impact Key risk indicators Mitigating factors Change
Inadvertent failure to comply with

governance, legislative and regulatory
business environment. The Group
may be adversely affected by an
unexpected reputational event, e.g. an
issue in its ethical supply chain or due
to a health and safety incident.
Potential impact

regime across all areas of business
(e.g. health and safety, competition
law, the Bribery Act and GDPR) could

a breach.
A health and safety or environmental
incident could lead to a disruption to
production and the supply of products

lead to prosecutions and increased
costs and have a negative impact on
the Group’s reputation.
• Increased
regulatory and
compliance
requirements.
• Integration
requirements for
new acquisitions.
• 
increases in the
penalty regime for
health and safety
and environmental
incidents.
• Centralised legal and other specialist
functions, the use of specialist advisers
and ongoing monitoring and mandatory
compliance training programmes.
• The Group has a formal Group
sustainability strategy focusing

• The Group employs compliance

independent audit processes which
seek to ensure that local, national and
international regulatory and compliance
procedures are fully complied with.
• The Group uses professional specialists
covering carbon reduction, water
management and biodiversity.
No change in risk

governance and regulation
continues to require additional
management focus and
robust compliance procedures
within all areas of the business.
Priorities
• Continue to renew all
compliance processes and
controls effectiveness.
• Develop stress tests and
crisis planning procedures.
9. Competitor activity
Links to strategic corporate objectives Impact on business model
Nature of risk and potential impact Key risk indicators Mitigating factors Change
The Group has a number of existing
competitors which compete on range,
price, quality and service. Potential
new low-cost competitors may be
attracted into the market through
increased demand for imported natural
stone products.
Competitive risk increases if we
fail to maintain high levels of
customer service.
Potential impact
Increased competition could reduce
volumes and margins on manufactured
and traded products.
Reputational damage if the Group loses
competitive advantage.
• Threat from new
competitors and
new technologies.
• Less demand
for traditional
products and
the increased
emergence of new
digital business
models and
product solutions.
• The Group has unique selling points that
differentiate the Marshalls branded offer.
• The Group focuses on quality, service,
reliability and ethical standards
that differentiate Marshalls from
competitor products.
• The Group has a continuing focus on new
product development.
• The continued development of the Group’s
digital strategy and its focus for customers
and all stakeholders.
No change in risk
The more uncertain market
environment has not led to

competitive pressure.
Priorities
• New product development.
• Research into green
technologies.
• Review marketing and
communications.
• Continue to review
all elements of
customer service.
Find our strategy on pages 30 and 31
Links to strategic corporate objectives
 
 
Relationship building
Organic expansion
Brand development
Effective capital structure
and control framework
Impact on business model
 
Manufacturing
Distribution
Customers
Find our business model on pages 18 and 19
41
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Risk Management and Principal Risks continued
11. Health and safety
Links to strategic corporate objectives Impact on business model
Nature of risk and potential impact Key risk indicators Mitigating factors Change

possibly caused by human error or the
actions of a subcontractor.
Ongoing risks in relation to COVID-19
and the need to maintain safe

Ongoing welfare and mental health

Potential impact
Risk of harm to all stakeholders,
including on-site employees

Negative impact of working from home
for certain employees.


and prosecution.
A major incident could lead to a
disruption to production and a negative
impact on the Group’s reputation.
• Integration
requirements for
new acquisitions.
• 
increases in the
penalty regime.
• Centralised specialist functions and clear
policies in place.
• Regular communication and support for
employees, including those working from

• 
safety strategy.
• Ongoing monitoring, training and health
and safety audits.
• Introduction of a digital management
system for enhanced data collection
and analysis.
• All senior managers receive the Marshalls

stage 3 training.
No change in risk
Health and safety continues to

Continuing risks arising from
COVID-19, including mental
health and employee welfare.

procedures leading to
improved root cause analysis.
Priorities
• Ensure health and safety
embedded in the “day-to-
day” culture.
• Improve reporting
structures.
10. Project delivery
Links to strategic corporate objectives Impact on business model
Nature of risk and potential impact Key risk indicators Mitigating factors Change
Growth outstrips our ability to manage
and stress test all aspects of our
business model.
Ineffective management of major
development projects, from initial

management, due to constraints that
might impact the Group’s ability to
absorb change.
Potential impact
The extent and complexity of projects

Potential failure to realise

business projects.
Reputational damage, service under-
delivery and staff retention risks.
• Delays to
project delivery.
• 
in resource
utilisation.
• Robust and standardised project
appraisal process.
• Change management framework

• Programmes are continually


No change in risk
Although the underlying risk
continues, effective control
and the ongoing development
of an appropriate
management framework
continue to mitigate the risk.
Priorities
• Develop strategies

• Ongoing reviews of
acquisition strategy and

Principal risks and uncertainties continued
Marshalls plc | Strategic Report
42
12. People risks
Links to strategic corporate objectives Impact on business model
Nature of risk and potential impact Key risk indicators Mitigating factors Change
Availability of labour diversity
– with risks around core skills,
demographics, capability and changing
working patterns.
Ongoing risks and requirements
concerned with training, development
and succession planning. Implications
of technological change and automation.
Welfare and mental health
related risks associated with the
COVID-19 pandemic.
Potential impact
Inability to recruit and retain people with
required skills, calibre and potential.
Risk of reduced skills and inadequate
training potentially leading to reduced

Companies are changing their
“employment position” and creating

Implications for employee health and
wellbeing and overall workforce morale.
Potential risk to the Marshalls brand.
• 
and lack of
diversity within

• Increased stress
levels within
workforce leading
to employee
absenteeism.
• Increased levels

• Focused Human Resources department
with experienced staff and specialist skills.
• Group People and Organisational Plan.
• 
relationships.
• 
employee feedback through the Employee
Voice Group and the newly-established
Drivers’ Working Party.
• Regular feedback questionnaires
supported by a third-party provider.
• 
• Focus on training, apprenticeships and
ongoing staff development and leadership
potential – “Early Talent Programme”.
Increased risk
Increasingly competitive
labour market.
The emergence of challenges
for employees with changed
working requirements, health
and safety regulations and
operational working practices.
These include issues that
could give rise to heightened
employee wellbeing issues
and risks to mental health.
Priorities
• Develop retention and
recruitment strategies.
• Effective marketing and
communications.
• Focus on succession
planning, internal
development and

leadership teams.
Find our strategy on pages 30 and 31
Links to strategic corporate objectives
 
 
Relationship building
Organic expansion
Brand development
Effective capital structure
and control framework
Impact on business model
 
Manufacturing
Distribution
Customers
Find our business model on pages 18 and 19
43
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Trading summary
Revenue
Group revenue for the year ended 31 December 2021 was


increase of 9 per cent compared with the same period in 2019, being
the last comparative period which was unaffected by COVID-19.
Revenue growth in the second half of the year was increasingly strong,

Revenue analysis


an increase of 30 per cent compared with the prior year, and is up

domestic installers at the end of February 2022 revealed a healthy


The Group has a strong
balance sheet and a
robust capital structure,

headroom.”
Financial Review
Trading continues to
improve and order books
remain strong
Summary
• 

• 
• 

• 
• 

• 

• 

• 

Revenue
310.0
290.0
270.0
250.0
230.0
210.0
190.0
170.0
150.0
2018 2019 2020 2021
£’m
First half     
Marshalls plc | Strategic Report
44
Domestic
Our Domestic customers comprise DIY enthusiasts, professional landscapers and driveway installers. Our aim is to generate sales through

installer teams and the Group continues to receive good feedback for its consistently high standard of quality, excellent customer service
and marketing support.
Private Housing “repair, maintenance and improvement” remains strong with consumers continuing to spend more time at home and



Public Sector and Commercial




contractors and housebuilders. The Group continues to focus on those market areas where future demand is expected to be greatest
including New Build Housing, Road, Rail and Water Management. Infrastructure is expected to be a key element of construction growth

remains strong with Private Housing starts forecast to increase by 5 per cent in 2022 and 3 per cent in 2023. Our aim is to generate demand


Change
2021 2020 2019  
Analysis of sales by end market £’m £’m £’m % %
 167.0  141.2 30% 
 389.1 309.5   4%
International
33.2 31.3   23%
589.3  541.9  9%
% % %
 28%  
 66%  
International 6%  5%

by digitalisation, including the use of visualisation tools, and to promote and invest in innovation. Building on 15 years of experience in
digital visualisation, our new augmented reality app gives architects, garden designers, installers and consumers state-of-the-art solutions.

ranges. Digital tools are a key feature of our new housebuilders website.
International


develop its global supply chains to ensure that international operations are sustainable and aligned with market risks and opportunities.

end markets. Those businesses that are not large enough to comprise separate operating segments include Marshalls Landscape Protection
and Mineral Products and they continue to be a key strategic focus and a positive driver for growth.
Revenue variance analysis
2019–2021
600
550
500
450
400
350
300
2019
revenue
Public Sector
and Commercial
UK Domestic International 2020
revenue
Public Sector
and Commercial
UK Domestic International 2021
revenue
4.4
1.9
64.3
541.8
£’m
469.5
79.6
38.3
589.3
12.4
Revenue analysis: business area (%)

 
 
 
Revenue by area (%)

 
 
 
45
Marshalls plc | Annual Report and Accounts 2021
Strategic Report



Change
2021 2020 2019  
Trading results £'m £'m £'m % %
EBITDA* 107.1   103.9  3%
 (30.9) (30.4) (30.2)
Operating profit* 76.2    3%
Adjusting items —  —
Operating profit (reported) 76.2 9.4 
* Before adjusting items.




summarises the impact of the separately disclosed adjusting item costs, which are disclosed in Note 4 on pages 142 and 143.
Disclosed adjusting costs £’m
 

decided to exit this market.
1.2
The additional consideration payable to the CPM vendors represents a charge relating to the acquisition of CPM following the
agreement reached with the vendors to release funds initially set aside in escrow, following the identification of an under-funded




Payment of a special bonus to employees as a thank you for their support during the pandemic. 2.2
Net total of disclosed adjusting costs 



commissioned at the end of 2022.








in 2019. This result was adversely impacted by the temporary effect of supply chain issues and by additional manning and increased levels
of overtime required as a consequence of labour shortages and absenteeism during the COVID-19 pandemic. Proactive management
continues to mitigate the impact of material shortages.
Revenue
Operating
profit
Margin
impact
Margin analysis £’m £’m %
2020   
Landscape Products 111.2 45.4 
Other   0.4%
2021 589.3 76.2 12.9%
2019   
Financial Review continued
Marshalls plc | Strategic Report
46






this item. The additional pension liability is a non-cash adjustment but,


On a rolling annual basis interest, before the adjusting items,



interest charge of £0.4 million (2020: £0.2 million) in relation to


Marshalls plc pension scheme, net of the expected return on
scheme assets.
Taxation


would increase to 25 per cent from 2023, and this rate change was
substantively enacted on 10 June 2021. Consequently, the deferred
tax liability at 31 December 2021 has been calculated at the rate
at which the deferred tax is expected to unwind in the future, using
rates enacted at the balance sheet date. This rate change has given
rise to an increase in the deferred tax charge of £4.9 million. The
impact of this on the tax charge has been partially mitigated by the
temporary increases in capital allowances in the year arising from

and machinery and the reversal of certain tax provisions made in
prior years which are no longer required.




Comprehensive Income.
For the eighth year running, Marshalls has been awarded the Fair
Tax Mark, which recognises social responsibility and transparency
in a company’s tax affairs. The Group’s tax approach has long been
closely aligned with the Fair Tax Mark’s objectives and this is supported
by the Group’s tax strategy and fully transparent tax disclosures. Taking
into account not only corporation tax but also PAYE and NI paid on our
employee wages, aggregate levy, VAT, fuel duty and business rates

Dividends
The Group’s stated objective is that “the Group has a progressive
dividend policy with the objective of achieving up to 2 times
dividend cover over the business cycle. As earnings increase
we plan to share the increase between strengthening cover and
progressively raising the rate of dividend.” A progressive dividend
policy remains a key objective.

paid for 2021. This will be payable on 1 July 2022. When combined

dividend of 14.3 pence per share. Dividend payments will continue

our stated strategy and capital allocation policy.
Net debt
Reported net debt was £41.1 million at 31 December 2021






to the operating decision to increase investment in imported inventory

availability and maintain the desired high levels of customer service.

The continuing strategy is to ensure that facility and covenant
headroom remains at comfortable levels and that we have a range
of competitively-priced funding lines in place, with different banks,
at all times and with different maturity dates. The Group has total



Adjusted Reported Change
2021 2021 2020 2019 
Profit before taxation £'m £'m £'m £'m %
Operational profit before adjusting items 76.2 76.2   3%
Adjusting items — —   —
Operating profit (reported) 76.2 76.2 9.4  3%
Net finance costs (4.1) (6.9)  
Profit before taxation 72.1 69.3   3%
Taxation (15.1) (14.4) (2.1) (11.9)
Profit after taxation 57.0 54.9   —
Earnings per share – pence 28.6 27.5 1.2 29.4 —




million), which represents an increase of 3 per cent against the 2019 comparative.


47
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Net debt continued
The committed bank facilities have a spread of medium-term
maturities that now extends to 2025.
The ratio of net debt to EBITDA was 0.4 times at 31 December 2021


and well below covenant levels.
Cash generation



annual basis.
The Group continues to prioritise the close control of inventory and
the effective management of working capital. Debtor days remain
industry leading due to continued close control of credit management
procedures. The Group maintains credit insurance which provides
excellent intelligence to minimise the number and value of bad debts
and ultimately provides compensation if bad debts are incurred. We
do not engage in debt factoring, but do have access to a supplier

of our partner banks. This provides an additional short-term facility
that can be utilised to facilitate the management of mid-month
cycles. The Group complies with prompt payment guidelines and

has been agreed with all major suppliers.
2021 2020
Group cash flow £’m £’m
Net cash from operating activities 68.3 19.3
Net cash from investing activities (7.1) (3.3)
Net cash from financing activities (32.2) 
Movement in net debt in the year 29.0 (0.5)
Adjusting items (2.8) 
Foreign exchange 0.6 (1.2)
 7.7 
Net debt at beginning of year (75.6) 
Net debt at end of year (41.1) 


capital expenditure for 2021, due to delays to certain capital projects
during the year caused by ongoing supply chain issues and material
availability. We are now targeting £35 million of capital investment


Last
5 years
2021 2020

basis)
Analysis of cash utilisation £’m £’m £’m
Net cash from operating activities 68.3 19.3 259.0
Capital expenditure (21.9)  (109.4)
Proceeds from the sale of surplus
property assets 14.9 11.4 32.3
Lease payments (10.8)  —
Acquisition of subsidiary undertakings — — 

share issues (3.6)  
Dividends (17.9) — (104.4)
Movement in net debt in the year 29.0 (0.5) 

generation capacity of the Group and how cash has been invested to
grow the business and also to show the cash returned to shareholders.
Cash generated from operating activities was £259.0 million. The Group
has invested £109.4 million back into the business to generate growth,
improve productivity and provide industry leading manufacturing

acquisitions of CPM and Edenhall. Dividends to shareholders over




a reported basis, at 31 December 2021. The consistently high ROCE

monetary working capital.
Balance sheet
Net assets at 31 December 2021 were £344.3 million



2021 2020
Group balance sheet £’m £’m
Non-current assets 332.7 324.4
Current assets 263.2 290.0
Current liabilities (150.6)  
Non-current liabilities (101.0) 
Net assets 344.3 
 0.1 
Net debt (reported) (41.1) 
 — 
Net debt: EBITDA (reported) 0.4 1.3
 — 9.3%
Gearing (reported) 11.9% 
Pension







determined by the scheme actuary using appropriate assumptions
which are in line with current market expectations. The surplus

referred to previously. During the last year the AA corporate bond
rate has increased from 1.40 per cent to 1.90 per cent and this is
the primary driver of the increased surplus. The expected rate of

scheme’s LDI asset portfolio continues to hedge protection against

These changes have resulted in an actuarial gain, net of deferred




surplus of approximately £20 million which was a funding level of

progress, and the expectation is that this will continue to be in surplus
and that the scheme continues to require no Company contributions.
Financial Review continued
Marshalls plc | Strategic Report
48
Capital allocation
Marshalls continues to recognise the three guiding principles of

structure. The Group’s optimal capital structure supports the

background and the cyclical nature of the construction sector.
The Group’s capital allocation strategy is to maintain a strong


• to prioritise organic capital investment (£35 million investment
planned for 2022), supported by an increase in new product

• to continue to target selective strategic acquisition opportunities
in New Build Housing, Water Management and Minerals. Bolt-on
acquisitions of up to £50 million are considered to be the current
strategy, but larger acquisitions would be considered if there was

• to continue the payment of dividends on the basis of a dividend
cover of two times earnings in 2022 and beyond. This will see

• to maintain a capital structure that recognises cyclical risk and
volatility by continuing to maintain an appropriate level of bank

• to maintain a target net debt:EBITDA ratio of up to 1.5


Clear and consistent capital allocation policy
Continued development of the Group’s growth strategy
Organic investment remains the priority for capital allocation and

with good paybacks. Capital expenditure of £35 million is planned


the planned investment over the next three years will be around


launch of added-value new products.
We are committed to providing sustainable, high-performance
product solutions. These include investment in technologies to
enhance the development of cement-free product solutions. We



materials. We are committed to reducing the environmental impact
of our products, reducing packaging and the recycling of water at
our sites. Our plastic consumption has reduced by over 30 per cent
since 2013 and 100 per cent of concrete and natural stone products



Investment in research and development covers a number of
areas including the development of the Group’s project engineering
and manufacturing capabilities, concrete and other materials
technology innovations and extending the new product pipeline.
New products are driven by sustainability, performance, aesthetics,

three years the Group has developed 142 new product ranges.
Further investment continues to be made to develop our wide-
ranging digital strategy, encompassing digital trading, digital

Borrowing facilities
The total bank borrowing facilities at 31 December 2021 amounted
to £155 million, of which £114 million remained unutilised. The bank
facilities are unsecured save for inter-company guarantees between
the Group and its subsidiary undertakings in favour of the facility
banks. The continuing strategy is to ensure that headroom remains
at comfortable levels, and that we have a range of competitively-
priced funding lines in place (with different banks) at all times and
with different maturity dates. The Group’s committed bank facilities
have a spread of medium-term maturities that now extend to 2025.

relevant ratios were achieved comfortably and were as follows:
• EBITA: interest charge – 54.0 times (covenant test requirement –

• net debt: EBITDA – 0 times (covenant test requirement – to be
less than 3.0 times).
Facility
Cumulative
facility
Banking facilities £’m £’m
Committed facilities
Q3 2025 20 20
Q3 2024 35 55
Q1 2024 25 
Q3 2023 20 100
Q2 2023 20 120
Q4 2022 20 140
On-demand facilities
Available all year 15 155
 10 
Conclusion
Trading continues to improve, and order books remain strong.
The Group has a strong balance sheet and a conservative capital

continue to monitor any risk to demand due to the continuing

material and labour shortages. We are well placed to introduce any
necessary measures to mitigate any adverse impact.
Justin Lockwood

1
Organic growth
2
R&D new product development
3
Ordinary dividends
4
Selective acquisitions
5
Supplementary dividends
49
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
What ESG Means to Marshalls
Creating better net
positive futures
Dear stakeholder
When we say sustainability is at the heart of what we do, we mean
it. We have been on our sustainability journey for over 20 years,
and we are committed to the principles of running a responsible
business. That’s why we joined the Ethical Trading Initiative in
2006 and became a signatory of the UN Global Compact in 2009.
We knew that the rights of all workers should be respected and
that having a values-based approach was key to our future. When
carbon wasn’t part of the conversation more than 15 years ago, we
started reporting our carbon emissions and labelling our products
with carbon footprint information. Four years ago, we listened to the
leading climate scientists and started working on setting science-
based carbon reduction targets, which were approved by the Science
Based Targets initiative. Sustainability is simply part of The Marshalls
Way of doing the right things, for the right reasons, in the right way.
Here we are in 2022, after a challenging couple of years and with
much global focus on how we shape our world and the places
around us. The evolution of our purpose is to create better net

society, the environment and the global economy than it takes out.
For Marshalls, it’s about better understanding the net impact of our
actions and having a net positive mindset in the decisions we take.
Environment
Last year’s COP26 served as a timely reminder that we need to take
climate change seriously and that we need to act now. Business
has its part to play and I’m proud to say that Marshalls is well
placed to take on the challenge. Last year, we committed to being
a net zero business by 2030 as part of our plan and we are well on
our way to achieving this. We’re already making changes, with focus
on reducing plastic packaging, using lower emission fuels in our
manufacturing sites and installing more solar panels.
Social
The global pandemic reminded us of the value of our public
services – and why it’s so important to pay our fair share of tax.
It also shone a light on the need to work together in respecting
all people and we continue to take the lead in supporting and
upholding human rights at home and overseas in our supply chains.
In 2021, we were proud to play an active part in the International
Year for the Elimination of Child Labour. Our CEO, Martyn Coffey,
spoke out against child labour at two global United Nations
leadership events. He also engaged with a former child labourer,
and now youth advocate, in an open discussion about the role
of business in tackling child labour. This is true leadership which

Governance
As focus on ESG rightly continues to gain momentum, we ensure
we have structures in place so that our environmental, social and
governance processes are at the core of our decision making
and reporting. In 2021, an ESG internal audit was undertaken by
a third party to look at our processes and controls. It also looked
at our preparedness for the future and our alignment to reporting
frameworks. The feedback was positive and we are in a strong
position to embrace the changes in this space.
Vanda Murray OBE
Chair
Our science-based targets
“We commit to reduce Scope 1 and 2
greenhouse gas emissions 40 per cent
per tonne of production by 2030 from
a 2018 base year. We also commit that
73 per cent of suppliers by emissions,
covering purchased goods and
services and upstream transport and
distribution, will have science-based
targets by 2024.”
Marshalls plc | Strategic Report
50
Sustainability at Marshalls is at the heart of what
we do – you can see it in our products, in our
commitments and in our actions.
The UN Global Compact’s principles continue to
guide us and provide our framework for reporting
on our activities in the key areas of human rights,
labour, the environment and anti-corruption.
The Marshalls Way of doing the right things, for
the right reasons, in the right way underpins our
sustainability model along with the UN Sustainable
Development Goals.
Our three pillars of Respecting People, Climate
Action and Made to Last demonstrate our areas
of focus through becoming a Better Workplace,
contributing to a Better World and giving our
customers a Better Product.


found within this document (or required by Sections 414CA and 414CB of the Companies Act 2006).
Reporting requirements Relevant policies Section within Annual Report
Environmental matters
Environmental Policy Statement*
Energy and Climate Change Policy*
Timber and Paper Policy
Transport Policy
Sustainability strategy (pages 56 and 57)
Sustainability commitments relating to the
environment (page 54)
Social
Code of Conduct*
Social Community Investment Policy
Corporate Responsibility Policy*
Tax Policy*
Human Rights Policy*
Modern Slavery and Anti-Human

Children’s Rights Policy
Responsible business (page 50)
Charitable donations (page 64)
Health and safety (pages 68 and 69)
Stakeholder engagement (pages 22 to 29)
Governance
Anti-Bribery Code*
Tax Policy*
Trading Policy*
Schedule of matters reserved for the Board*
Board Committee Terms of Reference*
Governance and compliance (pages 72 to 83)
Corporate Governance Statement (pages 72 to 83)
Corporate Governance Statement (pages 72 to 83)
Corporate Governance Statement (pages 72 to 83)
Employees
Health and Safety Policy
Serious Concerns Policy
Diversity and Inclusion Policy
Drug and Alcohol Policy
Mental Health and Wellbeing Policy
Headcount (pages 68 and 69)
People engagement (pages 64 to 67)
Board diversity (pages 70 and 71)
Gender diversity (pages 110 and 111)
Stakeholder engagement (pages 22 to 29)
Principal risks
Description of risk process (page 35)
Risk framework (page 35)
Principal risks and uncertainties (pages 37 to 43)
Business model
Our business model (pages 18 and 19)

Key performance indicators (pages 32 and 33)
Strategy (pages 30 and 31)
Full versions of the policies referred to above form part of the Group’s Policy Framework that supports Marshalls’ Code of Conduct. These can be
found on the Group’s investor relations website at marshalls.co.uk/about-us/policies
* Key policies referred to in this Annual Report.
UN Global Compact
Purpose:
Creating BETTER Net Positive Futures
The Marshalls Way:
Doing the right things, for the
right reasons, in the right way
Respecting
People
Climate
Action
Made
to Last
Values:
Courageous, Inspiring, Purposeful
BETTER
Workplace
BETTER
World
BETTER
Product
51
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
What ESG Means to Marshalls continued
Our sustainability journey
How our journey began...
First time achievement of BES 6001
for sustainable procurement
2000
Began trading
in imported stone
Carbon reporting started
2004
2005
Marshalls joined the FTSE4Good
index of sustainable shares
Joined the Ethical

2006
Product carbon
footprint started
2008
Marshalls became UN
Global Compact signatory
2009
2010
First disclosure to Carbon
Disclosure Project (“CDP”)
2014
First time
Living Wage employer
2011
Marshalls plc | Strategic Report
52
Carbon Reduction Plan approved
by Science Based Targets initiative
Moving into the
future, Marshalls
aims to create
better net positive
futures.
2022...

www.marshalls.co.uk/sustainability
Superbrand status
for ten years running
2019
2017
First to achieve Ethical
Labour Standard BES 6002
2015
First Fair Tax
Mark accreditation
2016

Slavery Working Group
Signatory to Women’s
Empowerment Principles (“WEPs”)
2021
2020
53
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
What ESG Means to Marshalls continued
Sustainability – materiality matrix
Materiality matrix
We base our materiality matrix on stakeholder engagement,
the SASB Standards for Construction and the UN Sustainable
Development Goals. The ESG materiality matrix complements
our risk heatmap (on page 35) and whereas the heatmap looks
at impact and likelihood, the materiality matrix focuses more

impact on the business.
Review process
Building on the process we put in place in 2020, we started with
a review of materiality topics through desk research, analysis
of industry issues, and feedback from stakeholders including
customers and colleagues. A quantitative process was then taken
to our ESG Committee, a group of 19 senior colleagues from
different areas of the business, in order to review the positions


Outcome of review
Further to the review, our key material issues still broadly fall into
the categories of environment, people and responsible business.
However, there have been additions and changes. We have added
talent and development, as well as natural capital in order to
differentiate from biodiversity. Circular economy now encompasses
waste management, and responsible sourcing has become
sustainable procurement. With the impact of climate change
becoming more prevalent, human rights due diligence has evolved
into human rights and environmental due diligence.
In 2022, we will revisit and update the ESG materiality assessment

Marshalls and developing a process where each material issue is
assessed on a risk basis and appropriately linked and recorded
within the risk registers (where appropriate).
Impact on business
Stakeholder interest
Moderate Major
Low High
Energy management
Water management
Circular economy
Biodiversity impacts
Natural capital
Health and safety
Product innovation
Impact of climate change
Carbon reduction
Employee wellbeing
Supply chain resilience
Sustainable procurement
Community relations
Human rights and
environmental
due diligence
Anti-corruption
Diversity and equity
Talent and development
Regulatory environment
1
11
2
12
3
13
4
14
5
15
6
16
7
17
8
18
9
10
Materiality review process
Stage 1 Stage 2 Stage 3
Desk research
SASB Standards for Construction
Analysis of industry issues
Feedback from customers
Quantitative and qualitative review
process with ESG Committee
Final review
Review process with customer-facing
colleagues
Presentation to Executive team
and Board
Publication in Annual ReportConsultation with Employee

ESG audit
In 2021, the Audit Committee commissioned KPMG to undertake an audit in order to assess the controls in place in relation to
ESG at Marshalls. This also included consideration of our preparedness for the future, particularly in relation to aligning reporting
frameworks and meeting the challenges associated with future changes. Following this audit, areas of focus for 2022 include
formalising processes, completing skill assessments and aligning ESG metrics and reporting.
“Overall, the control environment in relation to ESG processes was found
to be working well. With a dedicated sponsor appointed and a steering
group in place, the governance, oversight and reporting of ESG matters

4
2
1
8
7
5
9
12
13
16
6
15
11
10
18
17
14
3
Marshalls plc | Strategic Report
54
Sustainable Development Goals (“SDGs”)
Materiality
Last year, we outlined our engagement with each of the four UN

our strategic objectives – SDG 8 for Decent Work and Economic
Growth, SDG 11 for Sustainable Cities and Communities, SDG 12 for
Responsible Consumption and Production and SDG 13 for Climate
Action. While we understand the SDGs are very much aimed at
countries and nations globally, we also know that business has a
role to play in contributing to the future of the planet and its people.
Contribution to the SDGs
In 2021, we undertook a review to further delve into the goals at
target level as each of the 17 goals have associated targets and
indicators. This process enabled us to see where we contribute,
focusing on tangible actions. In our commitment to being

of each SDG we do and don’t contribute to.
Reporting
Our review also encouraged us to put a process in place for SDG
reporting. By the end of 2021, we have further understood the
SDGs and their targets, prioritised the SDGs that are material

We look forward to taking our process further in 2022, where we

and starting the process of collecting and analysing relevant
data. We will also be joining the UNGC Network UK Global Goals
Working Group.
Case study
Goal 8.4: Improve progressively, through 2030, global resource


Though this is a global goal, our contribution is based
on our ongoing move towards circularity. We have waste
management strategies and metrics to measure our waste to

removing plastic packaging from some of our kerb and edging
products. We continue to monitor our water use by measuring
water harvesting and recycling at our manufacturing sites, and
we have processes in place for quarry restoration.
Link to strategic objective: Sustainable materials supply
SDG Targets How we contribute positively Related strategic priorities
8.2, 8.4,
8.5, 8.6,
8.7, 8.8
• Business and human rights roadmap
• Code of Conduct and ETI Base Code
• Living Wage and Fair Tax employer
• UN Target for Gender Equality and signatory to Women’s
Empowerment Principles (“WEPs”)
• Apprenticeship programme
• Safecall independent whistleblowing service
• Digital transformation
• Logistics excellence
• Customer centricity
• Operational excellence
• Growth in the emerging businesses
11.2, 11.3,
11.4, 11.5,
11.6, 11.7,
11.7a 11.7b
• Net zero commitment and climate change mitigation
and adaptation strategy
• Tactile paving, natural stone and permeable
paving products
• Product information including carbon footprints and
Environmental Product Declarations (“EPDs”)
• Focus on placemaking and social value
• Landscape protection products and anti-terrorism kerbs
• Brand preference for product

• New product development

• Sustainable supply
12.1, 12.2,
12.5, 12.6,
12.7, 12.8
• Renewable energy at sites
• Water monitoring programme, including water
harvesting and recycling at sites
• Focus on biodiversity and natural capital
• Waste management and move towards circularity
• Active participant of UN Global Compact
• Ethical Risk Index for natural stone products
• Digital transformation
• Logistics excellence
• Sustainable supply
• Operational excellence
13.1, 13.3
• Net zero commitment and climate change mitigation
and adaptation strategy
• Science-based targets for carbon reduction
• Product carbon footprints for over 5,000 products
• Permeable paving products
• Brand preference for product

• Sustainable supply
• New product development

• Operational excellence
55
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
What ESG Means to Marshalls continued
Sustainability progress
The Group’s sustainability pillars are aligned with the UN Global Compact principles. They sit alongside the Group’s strategic
objectives set out on pages 30 and 31, and ensure that the Group’s priorities and actions take full account of the longer-term
sustainability priorities.
EnvironmentSocial
Theme Achievements in 2021 Stakeholder engagement Targets Progress 
membership
Climate change
and carbon reduction
• Mitigation and adaptation strategy
• Reporting progress on TCFD reporting
recommendations
• Recognised as European Climate Leader by Financial
Times and Statista
• CDP B score
• Re-accreditation to Carbon Trust Standard
• Working with the Carbon Trust to update product
carbon footprints
• Climate change awareness education and training
with colleagues and customers
• Engagement with UNGC Network UK TCFD
Working Group
• Executive remuneration for carbon reduction targets
• Reduce absolute emissions by 15 per cent by 2025 (from a
2018 base year)
• Commitment to net zero by 2030
• 
Zero Standard
• Updated product carbon footprints
• Science Based Targets initiative
• Carbon Trust Standard
• Carbon Trust Route to Net Zero Standard
• ISO 50001:2018
Pollution
and resources
• Solar panels at second manufacturing site
• Removal of non-essential packaging on standard

• Launch of virtual sample service
• Active membership of Mineral Products
Association (“MPA”) and MPA Precast
• Collaboration with Cambridgeshire County Council
on renewable energy project
• 2.7 per cent reduction year on year of kWh/tonne of product
• Solar panels at every major manufacturing site
• 
• Implementation of ISO 9001 Circular Economy
• Re-accreditation to ISO 50001
• FORS (Fleet Operators Recognition Scheme)
membership
• ISO 14001:2015
• ISO 50001:2018
• ISO 8001
Biodiversity
• Working towards providing biodiversity net gain
• Quarry restoration
• Move to FSC
®


• Working with the Royal Society for the Protection
of Birds (“RSPB”) on twite project
• Community engagement for geodiversity projects
• Biodiversity roadmap
• Tree planting project
• 
Protection products
• Mineral planning legislation
Water use
• Focus on water monitoring (including harvesting

• Permeable paving and Sustainable Drainage Systems

• Collaborative working as members of
Construction Industry Research & Information
Association (“CIRIA”) and susdrain
• Water product footprints
• Rollout of automatic meter reading for water usage
• Re-accreditation to ISO 14001
• Environment Agency
• ISO 14001:2015
Supply chain and
responsible sourcing
• Re-accreditation of BRE BES 6001 and BRE ELS 6002
• Sustainable procurement human rights due diligence
system and processes
• Gold membership of Supply Chain
Sustainability School
• Active membership of Supply Chain
Sustainability School
• Collaboration with UK and overseas suppliers
• Engagement forum with solar panel suppliers
• ETI Base Code video for overseas suppliers in
four languages
• Implementation of ISO 20400 Sustainable Procurement
• Re-accreditation of BRE ELS 6002 for ethical
labour sourcing
• BRE BES 6001
• BRE ELS 6002
• ISO 20400
Human rights
and modern slavery
• Active engagement with the International Year for

• Independent Modern Slavery Threat
Assessment programme
• 
Hub big data
• Active engagement with the UN and ILO Child
Labour Platform
• Engagement with UK Government on aligning
overseas aid with private sector modern
slavery efforts
• Engagement with UNGC Network UK Modern
Slavery and Child Labour Working Groups
• Continue to deliver pledge in support of the International
Year for the Elimination of Child Labour
• Launch Everyone’s Business app
• Launch Safecall whistleblowing hotline to overseas

• Modern Slavery Act 2015
• Modern Slavery Statement
Anti-corruption
and anti-bribery
• Code of Conduct cumulative training for

• Core programme of compliance training on

• Corporate Criminal Offence (“CCO”)

• Collaboration with internal teams

• Code of Conduct training for 100 per cent of staff
• Set up of Compliance Steering Group
• Compliance training refresher
• Development of CCO training programme
• UK Bribery Act 2010
Responsible business
• Sustainability materiality review
• Review of internal ESG processes
• £103,500 donated to Macmillan and Mind
• Fair Tax Mark
• Disclosure to Workforce Disclosure Initiative
• Drug and Alcohol Policy training programme
• Charity partnership with Macmillan
• Member of Made in Britain
• Engagement with UNGC Network UK Global Goals
Working Group
• Fair Tax Mark re-accreditation
• Social value measurement and reporting
• Reporting alignment to Global Reporting Initiative (“GRI”)
• Reporting to Ethical Trading Initiative (“ETI”) and UNGC
Communication on Progress revised frameworks
• Re-accreditation to ISO 9001
• Corporate Governance Code
• Fair Tax Mark
• UN Sustainable Development Goals
• UNGC Communication on Progress
• Sustainability reporting frameworks
• ISO 9001:2015
People
• Women’s Empowerment Principles (“WEPs”) signatory
• 102 apprenticeships
• Over 8,200 training courses completed
• Over 72 per cent of colleagues using Marshalls NOW

• Living Wage employer
• Engagement with UNGC UK Network on Diversity
and Inclusion
• 
employee survey
• Accredited new driver apprenticeship programme
• 
• Drivers’ Working Party
• Living Wage re-accreditation
• Strengthen and evolve the Driver Academy
• Increase number of apprentices
• Rollout of inclusive leadership and diversity awareness
programme for Marshalls leaders
• Employment and equality legislation
• Living Wage
• Gender pay gap reporting
Health and safety
• Over 18,000 hours spent on health, safety and
environmental training
• 53 new Mental Health First Aiders
• 7.8 score for health and wellbeing in employee survey
• Highly Commended for the Safer Through
Improvements in Health and Wellbeing Award at the
MPA and British Precast Health and Safety Awards
• Working with Mental Health First Aiders to support
our people
• Cross-team development of mental health
support process
• Implementation of SLAM (“Stop, Look, Assess,
Manage”) with colleagues
• Set up of Steering Committee for Mental Health
and Wellbeing
• Rollout of Fair & Just Approach framework
• Recruit and train more Mental Health First Aiders
• Re-accreditation to ISO 45001
• Health and safety legislation
• ISO 45001:2018
• RIDDOR
• SafeContractor
• 
Marshalls plc | Strategic Report
56
Governance
Theme Achievements in 2021 Stakeholder engagement Targets Progress 
membership
Climate change
and carbon reduction
• Mitigation and adaptation strategy
• Reporting progress on TCFD reporting
recommendations
• Recognised as European Climate Leader by Financial
Times and Statista
• CDP B score
• Re-accreditation to Carbon Trust Standard
• Working with the Carbon Trust to update product
carbon footprints
• Climate change awareness education and training
with colleagues and customers
• Engagement with UNGC Network UK TCFD
Working Group
• Executive remuneration for carbon reduction targets
• Reduce absolute emissions by 15 per cent by 2025 (from a
2018 base year)
• Commitment to net zero by 2030
• 
Zero Standard
• Updated product carbon footprints
• Science Based Targets initiative
• Carbon Trust Standard
• Carbon Trust Route to Net Zero Standard
• ISO 50001:2018
Pollution
and resources
• Solar panels at second manufacturing site
• Removal of non-essential packaging on standard

• Launch of virtual sample service
• Active membership of Mineral Products
Association (“MPA”) and MPA Precast
• Collaboration with Cambridgeshire County Council
on renewable energy project
• 2.7 per cent reduction year on year of kWh/tonne of product
• Solar panels at every major manufacturing site
• 
• Implementation of ISO 9001 Circular Economy
• Re-accreditation to ISO 50001
• FORS (Fleet Operators Recognition Scheme)
membership
• ISO 14001:2015
• ISO 50001:2018
• ISO 8001
Biodiversity
• Working towards providing biodiversity net gain
• Quarry restoration
• Move to FSC
®


• Working with the Royal Society for the Protection
of Birds (“RSPB”) on twite project
• Community engagement for geodiversity projects
• Biodiversity roadmap
• Tree planting project
• 
Protection products
• Mineral planning legislation
Water use
• Focus on water monitoring (including harvesting

• Permeable paving and Sustainable Drainage Systems

• Collaborative working as members of
Construction Industry Research & Information
Association (“CIRIA”) and susdrain
• Water product footprints
• Rollout of automatic meter reading for water usage
• Re-accreditation to ISO 14001
• Environment Agency
• ISO 14001:2015
Supply chain and
responsible sourcing
• Re-accreditation of BRE BES 6001 and BRE ELS 6002
• Sustainable procurement human rights due diligence
system and processes
• Gold membership of Supply Chain
Sustainability School
• Active membership of Supply Chain
Sustainability School
• Collaboration with UK and overseas suppliers
• Engagement forum with solar panel suppliers
• ETI Base Code video for overseas suppliers in
four languages
• Implementation of ISO 20400 Sustainable Procurement
• Re-accreditation of BRE ELS 6002 for ethical
labour sourcing
• BRE BES 6001
• BRE ELS 6002
• ISO 20400
Human rights
and modern slavery
• Active engagement with the International Year for

• Independent Modern Slavery Threat
Assessment programme
• 
Hub big data
• Active engagement with the UN and ILO Child
Labour Platform
• Engagement with UK Government on aligning
overseas aid with private sector modern
slavery efforts
• Engagement with UNGC Network UK Modern
Slavery and Child Labour Working Groups
• Continue to deliver pledge in support of the International
Year for the Elimination of Child Labour
• Launch Everyone’s Business app
• Launch Safecall whistleblowing hotline to overseas

• Modern Slavery Act 2015
• Modern Slavery Statement
Anti-corruption
and anti-bribery
• Code of Conduct cumulative training for

• Core programme of compliance training on

• Corporate Criminal Offence (“CCO”)

• Collaboration with internal teams

• Code of Conduct training for 100 per cent of staff
• Set up of Compliance Steering Group
• Compliance training refresher
• Development of CCO training programme
• UK Bribery Act 2010
Responsible business
• Sustainability materiality review
• Review of internal ESG processes
• £103,500 donated to Macmillan and Mind
• Fair Tax Mark
• Disclosure to Workforce Disclosure Initiative
• Drug and Alcohol Policy training programme
• Charity partnership with Macmillan
• Member of Made in Britain
• Engagement with UNGC Network UK Global Goals
Working Group
• Fair Tax Mark re-accreditation
• Social value measurement and reporting
• Reporting alignment to Global Reporting Initiative (“GRI”)
• Reporting to Ethical Trading Initiative (“ETI”) and UNGC
Communication on Progress revised frameworks
• Re-accreditation to ISO 9001
• Corporate Governance Code
• Fair Tax Mark
• UN Sustainable Development Goals
• UNGC Communication on Progress
• Sustainability reporting frameworks
• ISO 9001:2015
People
• Women’s Empowerment Principles (“WEPs”) signatory
• 102 apprenticeships
• Over 8,200 training courses completed
• Over 72 per cent of colleagues using Marshalls NOW

• Living Wage employer
• Engagement with UNGC UK Network on Diversity
and Inclusion
• 
employee survey
• Accredited new driver apprenticeship programme
• 
• Drivers’ Working Party
• Living Wage re-accreditation
• Strengthen and evolve the Driver Academy
• Increase number of apprentices
• Rollout of inclusive leadership and diversity awareness
programme for Marshalls leaders
• Employment and equality legislation
• Living Wage
• Gender pay gap reporting
Health and safety
• Over 18,000 hours spent on health, safety and
environmental training
• 53 new Mental Health First Aiders
• 7.8 score for health and wellbeing in employee survey
• Highly Commended for the Safer Through
Improvements in Health and Wellbeing Award at the
MPA and British Precast Health and Safety Awards
• Working with Mental Health First Aiders to support
our people
• Cross-team development of mental health
support process
• Implementation of SLAM (“Stop, Look, Assess,
Manage”) with colleagues
• Set up of Steering Committee for Mental Health
and Wellbeing
• Rollout of Fair & Just Approach framework
• Recruit and train more Mental Health First Aiders
• Re-accreditation to ISO 45001
• Health and safety legislation
• ISO 45001:2018
• RIDDOR
• SafeContractor
• 
On track = meeting regulation and mandatory requirements
Exceeding = engaging in activity that goes beyond regulation and mandatory requirements
57
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
What ESG Means to Marshalls continued
Recommendation Recommended disclosures
Additional
information
Governance




The Board has ultimate responsibility for climate-related risks and
opportunities. The CEO has overall responsibility for climate-related issues
and has responsibility to the Board for reporting on climate-related issues.
The Sustainability and Energy teams, led by the Group Sustainability Director
and the Group Operations Director, work collaboratively with other teams
and sites to identify risks and opportunities, monitor performance, report

2021 progress: Appointment of Sustainability Improvement Director to
drive implementation of our sustainability strategy, and plans for executive
remuneration for carbon reduction.
Climate Action Report
(pages 4–5)
Strategy








Our mitigation and adaptation strategy focuses on the actions we need to
take to both reduce our emissions and adapt to climate change. We continue
to focus on reducing our carbon emissions and driving manufacturing

aligned to our purpose of creating better net positive futures for everyone.
We recognise that customers are interested in low-carbon products and more
sustainable solutions, and there are opportunities for our industry to work
together to achieve carbon reduction targets.
2021 progress: Mitigation and adaptation strategy and appointment of
Head of Product Sustainability to identify opportunities in product portfolio.
Climate Action Report
(pages 6–9, 10)
Risk




Climate change is a principal risk and we have a formal ongoing process to
identify, assess and analyse risks. These form part of the Group Risk Register,
which is compiled by the Executive team.

risks which could affect our sites. We have also looked at risk in terms
of our products and availability of materials, along with risks relating to
reputation and the market. There are, however, also opportunities around

management business and our drive to give our customers the information
they need to make informed buying decisions.

Climate Action Report.
Climate Action Report
(pages 5–9)
Metrics and
targets






Metrics used to assess climate-related risks and opportunities include climate

emissions. These are in line with our strategy and risk management process.
We continue to report our greenhouse gas (“GHG”) emissions – see page 60
for Scope 1 and Scope 2 GHG emissions and science-based targets.
See pages 56–57 and 60–61 for targets used by Marshalls to manage
climate-related risks and opportunities and performance against targets.
2021 progress: SECR reporting and ESG data sheet in Sustainability Report
covering carbon emissions data.
Climate Action Report
(pages 5 and 11)
Task Force on Climate-related Financial Disclosures (TCFD)

time. According to TCFD recommendations, we are reporting on climate-related governance, strategy, risks and opportunities, and
metrics and targets.
We believe our disclosure is consistent with the TCFD’s recommendations. Information on our disclosures can be found in this Annual
Report and in our recently published Climate Action Report. In both reports, we provide more detail on our strategy and processes,
and the risks and opportunities related to climate change for our business. Next year’s disclosure will include more detail on scenario

consistent with the four recommendations and eleven recommended disclosures.
We continue to disclose to the CDP Climate Questionnaire, which is aligned with TCFD, and we scored a B for our 2021 disclosure

Marshalls plc | Strategic Report
58
Net zero by 2030
When we started our sustainability journey over 20 years ago,
we understood that sustainability would play a big part in how
companies do business. We watched and learned – and we
believed the climate science. So in 2018, we gathered our data

These targets were approved by the Science Based Targets
initiative in 2020 and we are still the only construction materials
listed company in the UK to have approved targets.
In 2021, we were proud to announce that Marshalls has committed
to being net zero by 2030. Our original science-based target was
based on a well-below 2°C scenario. As part of our commitment to
net zero, we have updated this to a 1.5°C pathway and alignment
with the Paris Agreement. This target is due to be approved by the
Science Based Targets initiative in 2022.
Mitigation
Actions to reduce
emissions that cause
climate change
Adaptation
Actions to manage
the risks of climate
change impacts
Disaster and risk management
Flood protection
Infrastructure upgrades
Urban heat island

Mix design
Science-based targets
Water conservation
Renewable energy systems
Product choice
Placemaking
Our Journey to Net Zero
We pledge our commitment to
become a net zero business by 2030.
Set out on becoming a
1.5
o
C net zero business
2022 2024 2026 2028 2030 2040 2020 2018
Meet our pledge
to become a net
zero business
Removal of
packaging
ovens
CO
2
Bio LPG &
electric for all
fork lift trucks
CO
2
BIO
LPG
All company cars
are electric or hybrid
CO
2
All manufacturing
sites with solar
panels.
CO
2
50% reduction
in carbon
footprint
CO
2
Switch to green
electricity for
all sites
CO
2
Removal of all gas
oil fork lift trucks
CO
2
Mitigation and adaptation
As we aim for net zero by 2030, our journey focuses on the twin
goals of mitigation – actions needed to reduce emissions that
cause climate change – and adaptation – actions we need to take
to manage the risks of climate change impacts.
In order to mitigate against the effects of climate change, we are

and achieving our science-based targets. Adaptation will look
much more at the products and infrastructure required to alleviate

Our journey to net zero by 2030
• Green energy for all forklift trucks
• Removal of packaging ovens
• All company cars powered by electric or green energy
• All major manufacturing sites with solar power
• Net zero by 2030
Our journey to net zero
We pledge our commitment to become a net zero business by 2030.
59
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Marshalls has used bio LPG rather than condition LPG for heating

2021. While we can declare these using the lower emission factor
published via DEFRA, we must also declare the possible outside

2
e) from using this fuel source.
Relative Scope 1 and 2 emissions
This chart illustrates the Group’s CO
2
e intensity emissions as

 
12.00
10.00
8.00
6.00
4.00
2.00
0.00
kg CO
2
e per tonne production output
2017 2018 2019 2020 2021
9.92
10.24
9.21
8.65
7.70
7.88
6.46
Though our absolute emissions have increased in 2021, our
intensity emissions have reduced.
Scope 3 target
Our Scope 3 science-based target is that 73 per cent of suppliers by
emissions, covering purchased goods and services and upstream
transport and distribution, have science-based targets by 2024.
What ESG Means to Marshalls continued
Carbon reduction



As we reported last year, we reduced our total carbon footprint by
50 per cent between 2008 and 2020. We re-baselined our targets in
2018 and our interim science-based targets are to reduce absolute
emissions by 15 per cent by 2025 and 27 per cent by 2030. For
relative (intensity) emissions, the targets are 23 per cent by 2025
and 40 per cent by 2030. Next year, we will report on our new
targets aligned with our net zero commitment.
Marshalls has a mandatory duty to report annual greenhouse gas
(“GHG”) emissions under the Companies Act 2006 (Strategic Report
and Directors’ Report) Regulations 2013. We use The Greenhouse
Gas Protocol: A Corporate Accounting and Reporting Standard
(revised edition) and the June 2018 Department for Business,
Energy and Industrial Strategy (“BEIS”) published CO
2
e conversion
factors to measure GHG emissions.
This year, in line with mandatory requirements, we have reported
according to recommendations from the Task Force on Climate-
related Financial Disclosures (“TCFD”), which can be found on
pages 58–60 and in our Climate Action Report.

for all UK and Belgium operations. In 2022, we will work on

Our approach to the Energy Savings Opportunity Scheme (“ESOS”)

with the international standard for energy management, ISO 50001,
and we were re-accredited in 2021.
Measuring carbon emissions
We measure carbon emissions by looking at Scopes 1, 2 and 3.
Scope 1 refers to all direct emissions of carbon. For Marshalls, this

petroleum gas (“LPG”), bio LPG, kerosene and natural gas.
Scope 2 covers our indirect emissions of carbon, so this would
be electricity that we have purchased. In 2021, we reported our
Scope 2 emissions in two different ways – location based (using
Government emission factors) and market based (using supplier
emission factors) – and we continue to do so.
Scope 3 refers to supplier emissions including cement, aggregates,
shipping and transport.

Absolute Scope 1 and 2 emissions
This chart illustrates the Group’s absolute CO
2
e emissions in tonnes
(including Belgium).
50,000
40,000
30,000
20,000
10,000
0
Tonnes CO
2
e
2017 2018 2019 2020 2021
41,602
12,582
42,147
10,430
43,559
10,670
 

35,072
2,897
7,565
37,540
32
8,232
As production has increased in 2021 so have our Scope 1 and
2 absolute emissions; however, they remain within our science-
based target.
Case study
The carbon footprints we provide for all of our concrete and
natural stone products are calculated for us by the Carbon Trust
according to methodology outlined in PAS 2050. We were the

we revised the numbers in 2011 and 2016. We are in the process
of updating the footprints to include all of our new products. We

all emissions across the full lifecycle of the product. This includes
material extraction, production, packaging, transportation to site,
emissions in installation and use, and even end of life treatment.
We believe that this is the most honest and transparent approach,

the carbon impact of the products they buy from us.
Link to strategic objective: Brand preference for

Marshalls plc | Strategic Report
60
Streamlined Energy and Carbon
Reporting (“SECR”)
In accordance with the SECR framework, we are reporting
underlying energy use, which includes self-generated energy from
renewables.

The chart below shows underlying UK energy use. Belgium’s energy
use for 2021 was 1.936 mkWh (2020: 1.717 mkWh).
250
200
150
100
50
0
kWh (millions)
2017 2018 2019 2020 2021
209.167
215.836
178.682
217.868
199.016

This chart shows Marshalls’ energy use in the UK in relation to
product. Whilst our energy use has increased in 2021, our relative
performance remains strong.
50
40
30
20
10
0
kWh/tonne
2017 2018 2019 2020 2021
40.04
37.82
36.25
42.40
34.24
Note: The intensity ratio for 2021 is 34.24 kWh per tonne of product and
this is calculated by dividing our kWh (energy) usage by our production
output (tonnes).
Self-generated energy from renewables
This chart shows self-generated energy from the solar arrays at our
Sandy and Sittingbourne manufacturing sites.
500,000
400,000
300,000
200,000
100,000
0
kWh
2017 2018 2019 2020 2021
197,294
199,453
209,551
201,635
413,449
Energy reduction
Energy reduction is a big part of our plans to get to net zero. As well
as engineering high-emission fuels like gas oil out of the business,
we are focusing on operational controls and building management
systems to reduce energy.
Since 2018, we have installed eleven building management systems
saving over 4 GWh and over 1,000 tonnes of CO
2
. We have also
ensured that our 18 packaging ovens, which are fuelled by a mixture
of LPG and natural gas, switch off automatically when not in use.
We continue to work on reducing plastic packaging and in 2021,
we announced plastic reduction for our kerb and edging products,
which reduces gas consumption. We also installed solar panels


with Euro 6 standards and in 2022, we are updating our product
carbon footprints.
Case study
For some years, we have investigated different types of energy
for our business operations, including wind and solar. Our
solar energy project is now well underway and in 2021, we
installed solar panels at our Sittingbourne site in Kent. All our
major manufacturing sites have had solar energy assessments
in order to evaluate potential for solar panel installation
and we have a target of one major solar panel project every
year. Our new dual block plant project in St Ives has been
designed to be compatible with solar energy supply with the
aim of using solar power for all forklift trucks and electric car
charging points.
Link to strategic objective: Operational excellence
Sites with solar panels
Sites without solar panels


10%
90%
61
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Business and human rights
What ESG Means to Marshalls continued
We have been an active member of the International Labour
Organisation (“ILO”) Child Labour Platform since 2015. This dynamic
platform gives us the opportunity to join other global brands and
organisations committed to eliminating child labour in supply chains.
We convene to share experience, knowledge and challenges in order
to gain new perspective and recommit to doing all that we can as
businesses to accelerate progress and take action.
UN Global Compact Leaders Summit
Our CEO, Martyn Coffey, stood together
with leaders from Coca Cola, Ferrero
and Louis Dreyfus to speak out in
support of children’s rights. The session
marked the tenth anniversary of the
UN Guiding Principles on Business
and Human Rights and spoke to the
imperative of businesses to respect
human rights and the requirement for
human rights due diligence.
Children’s Rights and Business Principles Report
As part of our work on promoting children’s rights, we
commissioned an independent agency to undertake an audit of
the impact of our business operations on children in India, China,

Principles Framework. This is the third such report that we have

The World Day Against Child Labour
As members of the ILO Child Labour Platform and an Alliance
8.7 partner – the global partnership for eradicating forced labour,

world – we made a public International Year for the Elimination

As part of the World Day Against Child Labour, a series of
connections were made between high-level speakers and youth
advocates on highlighting efforts made to implement International
Year pledges. Our CEO, Martyn Coffey, addressed a question
from Amar Lal, a youth advocate and former child labourer in

The focus of the conversation was on sharing perspectives and


BRE Ethical Labour Sourcing 6002
Marshalls has achieved BRE Ethical Labour Sourcing Standard

the accreditation to drive our continual improvement and to deliver
back on our Modern Slavery Statement KPIs and commitments.
Against the trajectory of business and human rights milestones,

linked to “hot goods” with high risk of child and forced labour, the

for business and human rights. For us, independent third-party
assurances are an integral part of our journey.
Advanced supply chain mapping


partner global big data platform, initially funded by IBM but now


which can then be analysed in multiple ways.

chain tool which allows organisations to view their own supply
chain data in the global, national, regional and local contexts. This
in turn can be harnessed to help inform business and human rights
strategy, as well as human rights due diligence approaches. It also
makes plain the context in which an organisation’s supply chain,
and the wider sector, operates.
Offering job opportunities to victims of modern

Marshalls has been a member of Bright Future, now a co-operative
of which we are a founding member, since 2018. We continue to
make available work placements, with the opportunity of full time
employment. We are also looking at the possibility of ring-fencing

Marshalls plc | Strategic Report
62
Human rights due diligence
Our human rights due diligence approach is thorough and


our own country risk analysis using the best available global data.
This information is supplemented with knowledge gained from our
extensive networks and partners in the UK and overseas.
We work continuously with higher risk suppliers to embed and
implement the Ethical Trading Initiative Base Code. We recently

as English, which is currently being rolled out, together with further
supplier training on our Code of Conduct.


Risk Template (“STRT”). This has allowed us to further understand
and manage our risks. We also utilise the full STRT within our audit
process, and in tender processes.
A revised and enhanced ten-stage ethical audit process has been
put in place and our business & human rights team is being
strengthened in the UK and the EU. We have committed to further

our human rights due diligence work and support suppliers.
We continue to look at all of our activities through a child rights
lens and have made good strides in delivering against our
International Year for the Elimination of Child Labour
Action Pledge.
Live monitoring will become increasingly important alongside our
Safecall grievance mechanism for supply chain workers.
We continue to make our annual Modern Slavery Statement in
accordance with the spirit of the act, which for us is a platform to
further the human rights agenda.
H
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Verisk
Maplecroft
Analysis
Traffik Analysis
Hub Mapping
Country/Sector/
Product Risk
Profiles
ETI Base Code
Implementation
Oversight
Ethical Audit
Programme
Goods for
Resale
‘Know & Show’
HRDD Operational
Systems and
Procedures
Children’s Rights
& Business
Principles
Framework
Everyone’s
Business Live
Monitoring
Safecall Whistle
Blowing/Grievance
Mechanisms
Bespoke
Programmes
with UN
Agencies
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63
Marshalls plc | Annual Report and Accounts 2021
Strategic Report
Underpinned by people
and talent development
What ESG Means to Marshalls continued
102
8,287
7.6
colleagues in apprenticeship
programmes (2020: 99)
training courses completed

eNPS score – 0.3 above

(2020: 7.6)
2,700
employees (2020: 2,500)
7 years
of Living Wage accreditation
£103,500
raised for Macmillan and

35%

761
new people in 2021
A message from our EVG Board sponsor
I’m really pleased to have taken over as the Board sponsor of

business further its focus on employee engagement and the
Marshalls people agenda. This focus continues to be an important
topic for the Board, which is essential while businesses continue to


witnessed this elected group represent its colleagues in a meaningful
and constructive way. This team has grown to be a valuable asset
to Marshalls, providing a sounding board and feedback on the key
topics outlined in this section of the report.
In other areas, work continues to enhance our position as an
employer of choice through the development and growth of the
people strategy. We’ve made further strides in 2021, and we’re


Non-Executive Director
COVID-19
As the COVID-19 pandemic continues to pose challenges to
everyday life and to businesses, we maintained our support

Our health and safety protocols at all sites exceeded the
minimum UK Government requirements – for example,
maintaining two-metre social distancing and mask wearing

Our communications gave clear information on working
safely and staying safe outside of work, and received positive
feedback from employees. We recognised not everyone

create a more modern and hybrid-working environment, so
we also introduced an Agile Working Policy and issued hybrid
working guidance. To succeed in our new hybrid-working
world, we supported managers and leaders to empower
and enable their teams to work effectively through utilising
technology and providing relevant guidance and advice.
Marshalls plc | Strategic Report
64
Diversity, equity, respect and
inclusion (“DERI”)
We are focused on developing our DERI agenda and formulating
our ambitions in this area. While we have started measurement
activities, we have not yet set measurable targets.
In 2021, we collected diversity data from our existing employees
and new starters. Around 40 per cent of our employee base
voluntarily shared details about their gender identity, sexual
orientation, ethnicity, religious beliefs, generation, caring
responsibilities and disabilities.
In 2022, we plan to increase measurement activity with the
introduction of new HR technology.
Although the majority of our workforce is white, cis and male,

• colleagues who identify as non-binary and trans;
• 13 different beliefs;
• 24 different countries of origin/nationality;
• colleagues who identify as asexual, bisexual, gay, lesbian,

• 2 per cent of our colleagues have shared that they have a disability.
Generations at Marshalls (%)
 
18% Baby Boomer Generation (1946–1964)
8% Gen Z (1995–2012)
40% Generation X (1965–1979)
34% Millennials/Gen Y (1980–1994)
0% The Silent Generation (1925–1945)

the culture, behaviour and awareness of our employees and leaders.
This change programme started in 2020 with a tactical plan to open
the conversation, involve and educate our people and address what
we discover. The initial focus was on developing gender equality
and social mobility, and engaging people from ethnic backgrounds
without excluding the need to recognise intersectionality.
We have continued working with the United Nations Global
Compact (“UNGC”) on our Target for Gender Equality, taking action

their direct reports) and representation in our business. We put in
place an action plan to further our commitment to supporting and
promoting the rights of women and girls by becoming a Women’s
Empowerment Principles (“WEPs”) signatory. With this public
commitment, we are working towards upholding and implementing
the principles across our own business and our supply chain. Our
Talent Director also sits on the UNGC Network UK Diversity and
Inclusion Working Group. Our DERI agenda is sponsored by Shiv
Sibal, Marshalls’ General Counsel and Company Secretary.
In our most recent employee engagement survey, we included a

scored this at 8.5 out of 10, which is 0.8 above the industry benchmark.
In 2022, we plan to grow our DERI agenda through the rollout of a
comprehensive education and cultural change programme for all
Marshalls leaders focusing on inclusive leadership and diversity
awareness. We are also working to create additional Employee
Resource Groups to represent the different diverse groups within
our business and within the communities we serve.
Early careers
Attracting and developing early talent

Marshalls through our various apprenticeship and development
programmes. We know that workforce sustainability is essential to
our long-term success, and we have an ambitious plan to focus on
early talent and promote our industry as a destination of choice for
younger people.
Marshalls took part in the summer 2021 issue
of Jobs & Careers magazine to showcase the
diverse career opportunities in manufacturing.
The magazine aims to appeal to young people
and gives a great insight to those starting
out on their career path. A study of 520
young people who had read the magazine
placed Marshalls in eighth place out of

All of our job advertisements
now include our very clear equal
opportunities statement:











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Marshalls plc | Annual Report and Accounts 2021
Strategic Report