Crh Plc · NYSE:CRH
Crh — H1 2010 Earnings Presentation
32 slides from Crh's earnings presentation, Aug 24, 2010
Slide 1: CRH 2010 Interim Results presenters
Albert Manifold Myles Lee Maeve Carton Chief Operating Officer Chief Executive Finance Director
Slide 2: Trading Performance
Trading Performance Myles Lee CEO
Slide 3: H1 2010 trading highlights
` Cumulative like‐for‐like Sales declines eased progressively through H1 … ` … from ‐23% end‐Feb, ‐17% end‐Mar, ‐14% end‐Apr to ‐10% at end‐Jun ` Reported Sales (incl. acqs + FX) down 8% at €7.7bn (2009: €8.3bn) ` EBITDA €520m (2009: €651m) down 20% with bulk of decline in Q1 ` Op. Profit €118m (200
Slide 4: H1 spend on transactions and equity investment in China
H1 Spend ‐ €159m on 13 Transactions + Equity Investment in China ` 9 bolt‐ons to Americas Materials adding 243m tonnes aggregates reserves ` 4 bolt‐ons to Europe Materials incl. a downstream acquisition in India ` Funding for 2 projects expanding Yatai Cement’s capacity in China July/August Activity
Slide 5: Group H1 results
% H1 €m chg 2010 2009 Change Organic Acqs Restruc FX Sales (8%) 4,267 4,614 (347) (439) +13 ‐ +79 EBITDA (17%) 342 410 (68) (94) ‐ +16 +10 Op. profit (28%) 160 221 (61) (83) (1) +16 +7 EBITDA margin 8.0% 8.9% Op. margin 3.7% 4.8% ` H1 like‐for‐like Sales down 9% but moderating trend with Q2 down 5%
Slide 6: Europe Materials
% H1 €m chg 2010 2009 Change Organic Acqs Restruc FX Sales (6%) 1,223 1,303 (80) (132) +13 ‐ +39 EBITDA (7%) 152 163 (11) (36) ‐ +19 +6 Op. profit (15%) 68 80 (12) (35) (1) +19 +5 EBITDA margin 12.4% 12.5% Op. margin 5.6% 6.1% ` Following tough Q1 weather, Q2 saw more positive volume trends ` H1 cem
Slide 7: Europe Products
% H1 €m chg 2010 2009 Change Organic Acqs Restruc FX Sales (10%) 1,398 1,546 (148) (164) ‐ ‐ +16 EBITDA (28%) 107 149 (42) (50) ‐ +6 +2 Op. profit (47%) 40 75 (35) (42) ‐ +6 +1 EBITDA margin 7.7% 9.6% Op. margin 2.9% 4.9% ` H1 like‐for‐like Sales down 10% but moderating trend with Q2 down ‐3% ` Conc
Slide 8: Europe Distribution
% H1 €m chg 2010 2009 Change Organic Acqs Restruc FX Sales (7%) 1,646 1,765 (119) (143) ‐ ‐ +24 EBITDA (15%) 83 98 (15) (8) ‐ (9) +2 Op. profit (21%) 52 66 (14) (6) ‐ (9) +1 EBITDA margin 5.0% 5.6% Op. margin 3.2% 3.7% ` H1 like‐for‐like Sales down 8% but moderating trend with Q2 down 6% ` 2009/2010
Slide 9: Americas results
% H1 €m chg 2010 2009 Change Organic Acqs Restruc FX Sales (8%) 3,391 3,678 (287) (394) +70 ‐ +37 EBITDA (26%) 178 241 (63) (102) +7 +27 +5 Op. profit n/m (42) 20 (62) (93) +2 +27 +2 EBITDA margin 5.2% 6.6% Op. margin (1.2%) 0.5% ` H1 like‐for‐like US$ Sales down c10% with Q2 down 5% ` EBITDA down 2
Slide 10: Americas Materials
% H1 €m chg 2010 2009 Change Organic Acqs Restruc FX Sales (6%) 1,545 1,648 (103) (180) +70 ‐ +7 EBITDA (44%) 75 135 (60) (74) +7 +6 +1 Op. profit n/m (63) (2) (61) (69) +2 +6 ‐ EBITDA margin 4.9% 8.2% Op. margin (4.1%) (0.1%) ` H1 like‐for‐like US$ Sales c.‐11%; lower vols impacted operational effi
Slide 11: Americas Products
% H1 €m chg 2010 2009 Change Organic Acqs Restruc FX Sales (10%) 1,300 1,442 (142) (169) ‐ ‐ +27 EBITDA (6%) 89 95 (6) (29) ‐ +19 +4 Op. profit (21%) 19 24 (5) (26) ‐ +19 +2 EBITDA margin 6.8% 6.6% Op. margin 1.5% 1.7% ` H1 like‐for‐like US$ sales down 12%, but moderating trend with Q2 down ‐4% ` AP
Slide 12: Americas Distribution
% H1 €m chg 2010 2009 Change Organic Acqs Restruc FX Sales (7%) 546 588 (42) (45) ‐ ‐ +3 EBITDA +27% 14 11 +3 +1 ‐ +2 ‐ Op. profit n/m 2 (2) +4 +2 ‐ +2 ‐ EBITDA margin 2.6% 1.9% Op. margin 0.4% (0.3%) Exterior Products (Roofing/Siding): 2/3rds of FY 2009 Turnover ` H1 US$ Sales +3%; good activity pi
Slide 13: EBITDA margin by segment
H1 H1 EBITDA % 2010 2009 Americas DIST 2.6 1.9 ` Good improvement in US Distribution Americas PRODS 6.8 6.6 ` Americas Prods/Europe Mats stable Europe MATS 12.4 12.5 ` Europe Distribution slightly lower Europe DIST 5.0 5.6 ` Europe Prods impacted by Concrete Europe PRODS 7.7 9.6 Americas MATS 4.9 8.
Slide 14: Americas Materials
Americas Materials Albert Manifold COO
Slide 15: Heritage volume change and market trends
Heritage Vol Change % 2009 Aggs Asph RMC ` ARRA an offset to underlying volume declines Q1 2009 ‐32% ‐26% ‐35% ` Particularly positive for Asphalt (ready‐to‐go projects) Q2 2009 ‐29% ‐25% ‐34% H1 2010 Q3 2009 ‐20% ‐12% ‐34% ` Season start adversely impacted by cold winter Q4 2009 ‐17% ‐6% ‐11% ` Dis
Slide 16: Regional volume and exposure review
NW & StakerParson N.East ` Exposure: c50% Infra ` Exposure: c70% Infra ` H1 Aggs: 6m tons; flat, ` H1 Aggs: 10m tons; ‐12% ` H1 Asph: 0.8m tons; ‐21% ` H1 Asph: 3m tons; +1% ` Large projects ` Weak metro NY activity underpinning Aggs impacting Aggs volumes ` State budget constraints ` Asphalt resili
Slide 17: EBITDA change by product line
$m Aggs Asphalt RMC Const/Other Total EBITDA Change ‐c5 ‐c35 ‐c10 ‐c30 ‐c80 Aggregates ` Volumes down ‐4% (heritage ‐8%); avg price up +1%; unit variable costs flat ` Strong price & cost mgmt in the context of lower vols & higher diesel costs (up c13%) Asphalt ` Volumes down ‐3% (heritage ‐9%); avg
Slide 18: Funding and market trends for H2
` Volume backlogs for ARRA/SAFETEA‐LU funded projects are good ` Increasing evidence of pull‐back in state & municipal work programmes ` Potential for some 2010 projects to be delayed into 2011 ` Expected Jul/Aug seasonal pick‐up in private work has not materialised ` Intensified competition for all
Slide 19: H2 outlook by product line
Aggregates ` Volumes broadly flat (heritage ‐4 to ‐5%); avg prices 0 to +1%; unit costs ‐2 to ‐3% ` Expect good performance with strong operational / commercial management Asphalt ` Volumes ‐2 to ‐3% (heritage ‐7 to ‐8%); avg prices +1 to +2%; unit costs +6 to +7% ` Higher YoY liquid asphalt costs a
Slide 20: Positioning Americas Materials for market recovery
` Continue to control the controllables ◦ Focusing on operational excellence ◦ Reducing Capex / Working Capital to improve our cash flow ◦ Reducing costs and balancing capacity to market demand ◦ Seeking value‐enhancing acquisitions ` Anticipate, Adapt and Act – proactive in changing market conditio
Slide 21: CRH and CRH Americas Materials
CRH is ... ` The #1 integrated building materials company in the US ` With operations in all 50 US States and 4 Canadian provinces ` 30+ years of industry‐leading performance & growth in N.America markets CRH Americas Materials is ... ` Largest integrated Aggs, Asphalt, Rmc & highway paving company
Slide 22: Finance Details
Finance Details Maeve Carton FD
Slide 23: Actual outturn in line with July IMS guidance
H1 H1 €m 2010 2009 % change Sales 7,658 8,292 (8%) EBITDA 520 651 (20%) Operating profit 118 241 (51%) Profit before tax 25 108 (77%) € cent EPS 2.6 12.2 (79%) Cash EPS 59.9 75.7 (21%) Dividend per share 18.5 18.5 maintained Actual outturn in line with July IMS guidance CRH 2010 Interim Results, 24t
Slide 24: H1 operating cash flow
H1 H1 H1 €m 2010 2009 2008 Profit before tax 25 108 606 Depreciation / Amortisation 402 410 392 Working capital (503) (96) (606) Tax paid (43) (41) (149) Dividends (307) (258) (259) Capital expenditure (219) (316) (560) Other (8) (7) (1) Operating cash outflow (653) (200) (577) Increased H1 seasonal
Slide 25: Net debt movement and net debt/equity
H1 H1 H1 €m 2010 2009 2008 Operating cash outflow (653) (200) (577) Acquisitions / Investments (159) (280) (744) Disposals 55 48 61 Share issues / (buyback) 170 1,346 (295) FX translation (452) 55 155 Debt (increase) / decrease (1,039) 969 (1,400) Opening net debt (3,723) (6,091) (5,163) Closing net
Slide 26: Committed to investment grade credit rating
H1 H1 Year-end 2010 2009 2009 Total net debt (incl. share of JVs) €m 4,762 5,122 3,723 Total equity €m 10,299 9,222 9,710 Net debt / Total equity 46% 56% 38% Net debt / Market capitalisation 39% 45% 28% Net Debt / EBITDA (times) * 2.8x 2.3x 2.1x EBITDA / Net interest cover (times) * 6.5x 6.3x 6.1x *
Slide 27: Debt maturity profile
June 2010 – including JVs Gross debt by maturity Undrawn € Bn (incl. derivatives) committed facilities Overdrafts 0.1 ‐ 2010 (H2) 0.2 0.2 2011 0.8 0.3 2012 0.9 0.8 2013 0.6 0.2 2014 0.9 0.0 2015 0.4 0.0 2016+ 2.0 0.0 Total 5.9 1.5 Cash/Liquid invs 1.1 Strong capacity to pursue appropriate developmen
Slide 28: Interim dividend and H2 cash flow
` Expect strong operating cash inflow in seasonally more profitable H2 ` 18.5c Interim dividend; in line with 2009 interim dividend of 18.5c ` Board will decide and announce final dividend decision in March ’11 ` Taking account of profit/development outturn & economic/trading outlook CRH 2010 Interi
Slide 29: Outlook
Outlook Myles Lee CEO
Slide 30: July interim trading update statement
July H1 Interim Trading Update Statement pointed to ... ` c20% decline in H1 2010 Group EBITDA ` Uncertainty relating to the pace of European economic progress ` Softening of the rate of US economic recovery ` 2010 like‐for‐like sales decline greater than previously expected ` Expectation that H2 Gr
Slide 31: Developments since early July and full-year outlook
Since early July ... ` European economic indicators have been more encouraging ` Concerns relating to US recovery have increased ` Continuing flow of disappointing US economic data ` With expected lower US Materials US$ profits in H2 ` Overall H2 Group EBITDA unlikely to exceed H2 2009 ` Now expect
Slide 32: CRH plc Investor Relations
CRH plc Investor Relations Belgard Castle Clondalkin Dublin 22 Ireland Phone: + 353 1 404 1000 Fax: + 353 1 404 1007 Email: ir@crh.com Website: www.crh.com This presentation contains certain forward‐looking statements as defined under US legislation. By their nature, such statements involve uncertai