Slide 1: Trading Update November 2018
Slide 2: Agenda
Agenda Key Messages & Market Backdrop Trading Performance Value Creation CRH plc, Trading Update 1
Slide 3: Key Messages & Financial Highlights
Key Messages & Financial Highlights • 9M trading … continuation of H1 trends despite significant Q3 weather disruption 9M Sales +6% • Ash Grove integration ... in line with expectations €19.9bn +3% LFL • €1bn share buyback programme … €700m returned to-date 9M EBITDA +8% €2.5bn • FY EBITDA expected
Slide 4: Americas Market Backdrop
Americas Market Backdrop • Economic activity remains robust • Solid underlying demand ... Res, Non-Res & Infra • Significant Q3 weather disruption • Cost inflation & labour constraints CRH plc, Trading Update 3
Slide 5: Europe Market Backdrop
Europe Market Backdrop • Positive economic momentum continuing • Western & Eastern European construction markets performing well • Political uncertainty in UK CRH plc, Trading Update 4
Slide 6: Trading Performance
CRH plc, Trading Update 5
Slide 7: Trading Overview
Trading Overview • Americas – continuation of H1 trends ... adverse weather in key markets LFL Sales EBITDA YoY change H1 9M H1 9M • Europe – positive momentum despite political uncertainty Americas +3% +4% +3% +3% Europe +1% +1% +1% +2% • Asia – challenging energy cost environment Asia -2% +3% -59%
Slide 8: Americas Trading
Americas Trading • Materials – adverse weather in Q3 ... LFL Sales EBITDA positive pricing in inflationary environment YoY change H1 9M H1 9M • Products – Sales & EBITDA ahead ... strong Materials +4% +5% +1% +2% performance in engineered building products Products +1% +2% +6% +6% • Ash Grove integr
Slide 9: Europe Trading
Europe Trading LFL Sales EBITDA • Positive momentum despite inflationary input cost pressures YoY change H1 9M H1 9M Heavyside +2% +4% +2% +2% • Volumes & prices ahead Lightside +5% +5% +7% +5% • Good growth in major markets ... Distribution -3% -4% -4% -4% some uncertainty in the UK Europe +1% +1%
Slide 10: Asia Trading
Asia Trading • Philippines – Q3 volumes and prices ahead … input cost & competitive pressures persist LFL Sales EBITDA • India – Q3 volumes strong ... YoY change H1 9M H1 9M pricing behind amid competitive pressure Philippines -2% +3% -59% -44% • China – Q3 volumes behind ... pricing ahead amid infl
Slide 11: FY 2018 EBITDA Expectations
FY 2018 EBITDA Expectations LFL % Americas Europe Asia Group Chg H1 +3% +1% -59% +1% 9M +3% +2% -44% +2% FY 2018E +3% +2% -50% ~€3.35bn CRH plc, Trading Update 10
Slide 12: FY 2018 Balance Sheet Expectations
FY 2018 Balance Sheet Expectations €bn 0.3 1.3 1.3 3.5 2.5 €6.8bn ~€7bn €5.8bn FY17 Net Net Debt Net Cash Dividends/ FY18E Acquisitions Currency/Other Net Debt Divestments Post M&A Inflow Buybacks Net Debt €3.15bn ~€3.35bn EBITDA EBITDA 1.8x ~2.1x Net Debt/EBITDA CRH plc, Trading Update 11
Slide 13: Value Creation
Slide 14: Continued Focus on Long-Term Value Creation
Continued Focus on Long-Term Value Creation • Long-term value has always been a core focus • Returns & cash ... 2 key metrics for delivering shareholder value • Near-term and long-term value creation • Delivering superior returns and cash for shareholders through the cycle CRH plc, Trading Update 13
Slide 15: Repositioning CRH
Repositioning CRH • 2014 portfolio review ... facilitated the repositioning of our business • €4bn+ divestments in last 4 years • Core capabilities in vertically integrated materials • Focusing on attractive long-term market dynamics ... Europe & North America • Changing face of construction ... opp
Slide 16: Investing for Growth
Investing for Growth • €13bn acquisitions in last 4 years … integrated platforms for growth and value creation • Aligning core competencies with attractive market dynamics • Focusing on higher growth opportunities to deliver superior returns & cash CRH plc, Trading Update 15
Slide 17: Building a Simpler & More Focused Business
Building a Simpler & More Focused Business • Moving from 7 divisions to 3 ... Europe Materials, Americas Materials & Building Products • A more focused, leaner business ... narrower & deeper • Driving value from the centre ... business improvement initiatives ... customer & market management ... str
Slide 18: Now Positioned for the Next Phase
Now Positioned for the Next Phase 300bps EBITDA margin improvement target • Aggressive growth plan in place • Enabled by leaner organisational structure • Focusing on improving efficiency & productivity +300bps • Targeting 300bps EBITDA margin improvement ... €7bn financial capacity Business Improve
Slide 19: Business Improvement Initiatives – Structural
Business Improvement Initiatives – Structural 300bps EBITDA margin improvement target • De-layering management structures • Consolidating sub-regional support functions into centralised hubs • Rationalising regional office footprint • ~€100m of cost savings identified Structural CRH plc, Trading Upd
Slide 20: Business Improvement Initiatives – Procurement
Business Improvement Initiatives – Procurement 300bps EBITDA margin improvement target • ~€18bn of products & services procured annually … ~€9bn currently managed centrally • Largest purchaser of cement in the world … ~€3bn purchaser of fuels & logistics • Now extending our procurement programmes th
Slide 21: Business Improvement Initiatives – Process
Business Improvement Initiatives – Process 300bps EBITDA margin improvement target • Leveraging Group expertise and best practice • Accelerating commercial & operational initiatives ... vertical integration benefits ... fuel & power optimisation ... increasing use of alternative fuels ... centralise
Slide 22: Synergies
Synergies 300bps EBITDA margin improvement target • Significant integration benefits from recent acquisitions ... Ash Grove, Florida Assets & Fels • Leveraging Group-level cement expertise for synergy delivery • Year 3 run-rate synergies ~€130m Synergies CRH plc, Trading Update 21
Slide 23: Cash Generation & Financial Discipline
Cash Generation & Financial Discipline • • Continued strong cash generation ... & conversion Committed to maintaining normalised debt metrics 2 € bn+ Free Cash Flow p.a. over last 4 years • Aggressive growth plan in place ... significant optionality for further value creation • Uniquely positioned t
Slide 24: Key Takeaways
Key Takeaways Aggressive growth plan ... 2018 EBITDA ~€3.35bn ... 300bps margin improvement & net debt / EBITDA ~2.1x €7bn financial capacity 2019 outlook ... Delivering near-term and positive underlying long-term shareholder value market dynamics CRH plc, Trading Update 23
Slide 25: Appendices
Slide 26: Cement Volumes & Pricing
Cement Volumes & Pricing 9M YoY % Change Volumes Price (LC) 9M YoY % Change Volumes Price (LC) Finland = = Slovakia = = France = + Spain -- + Germany1 + = Switzerland ++ -- Legend >5% ++ Hungary ++ + Ukraine -- + 2% to 5% + Ireland = + United Kingdom1 - = -1% to +1% = -5% to -2% - Poland + + Canada
Slide 27: Americas Materials Volumes & Prices
Americas Materials Volumes & Prices Total Heritage 9M YoY % Change Volumes Price Volumes Price Aggregates +8% +2% +1% +3% Asphalt 0% +9% -2% +9% RMC +28% +3% 0% +4% CRH plc, Trading Update 26
Slide 28: Disclaimer
Disclaimer In order to utilise the “Safe Harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, CRH public limited company (the “Company”), and its subsidiaries (collectively, “CRH” or the “Group”) is providing the following cautionary statement. This document cont
Slide 29: Stonemason's Way
CRH plc Investor Relations Stonemason’s Way Rathfarnham Dublin 16 D16 KH51 Ireland Telephone: +353 1 404 1000 Email: ir@crh.com Website: www.crh.com CRH plc, Trading Update 28