CRH PLC · NYSE:CRH
CRH — Merrill Lynch Building Materials Conference 2007
31 slides from CRH's conference presentation, Oct 18, 2007
Slide 1: Merrill Lynch Building Materials Conference CRH
Merrill Lynch Building Materials Conference CRH Continuing Growth Myles Lee Finance Director CRH plc October 2007 30
Slide 2: Contents
Contents Overview 3 2006 / 2007 Development Highlights 14 APAC – Delivering the Promise 21 Summary 29 Contact Us 30 Merrill Lynch Building Materials Conference, 18th October 2007 1
Slide 3: CRH Overview
CRH Overview 2 ‘en
Slide 4: CRH Overview: The International Building Materials Group
CRH Overview The International Building Materials Group 1970 merger of Irish Cement and Roadstone; Sales €26M, 95% Ireland Now in 30 countries; 3,300+ locations; 80,000+ people Annualised Sales over €20Bn focused on three core businesses Evenly balanced across geographies, products and secto
Slide 5: Three Core Businesses
Three Core Businesses Focused product diversity Primary Materials Building Products Distribution 2006 Sales €7.7Bn 2006 Sales €6.8Bn 2006 Sales €4.2Bn Cement/RMC/ Concrete Products 60% B Merchants - Europe 47% Concrete Products 31% Clay Products 9% DIY - Europe 19% Glass Fabrication 9% Aggregates/As
Slide 6: Three Core Businesses: Leading European & US Positions
Three Core Businesses Leading European & US Positions Primary Materials Building Products Distribution Europe Europe Europe Top 10 Cement producer No 1 Concrete Products Top 3 Building Materials Leading national Aggs/RMC No 1 Const Accessories Distributor positions USA USA USA No 3 in Aggregates No
Slide 7: CRH Balance
CRH Balance Balanced exposure to industry demand drivers Product End Use* Geographic End-Use* Materials Products Americas 41% 36% 52% Distribution Europe 23% 48% Sectoral End Use* Residential Non Residential New 40% 30% 55% Infrastructure RMI 30% 45% * based on 2006 sales th 6 Merrill Lynch Building
Slide 8: Delivering Performance & Growth
Delivering Performance & Growth 20% CAGR in Total Shareholder Return since 1970 75,000 PBT +20%pa 60,000 45,000 Growth Index: 1970 = 100 30,000 EPS +17%pa 15,000 DPS +12%pa 0 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 Merrill Lynch Building Materials Conference, 18th October 2007 7
Slide 9: 2000 – 2006 Performance
2000 – 2006 Performance Good growth despite weakening US dollar 300 0.80 DPS $/€ +17%pa 250 0.90 200 1.00 PBT +13%pa Growth Annual Index: 150 1.10 Average EPS 2000 = 100 +10%pa $/€ rate 100 1.20 50 1.30 0 1.40 2000 2001 2002 2003 2004 2005 2006 Merrill Lynch Building Materials Conference, 18th Octob
Slide 10: '00 – '07 H1 Organic EBIT Growth
’00 – ’07 H1 Organic EBIT Growth Strong delivery through the economic cycle €m 500 5% Organic EBIT Growth W Europe GDP US GDP 400 4% 300 3% EBIT GDP Change 200 2% Growth 100 1% 0 0% 2000 2001 2002 2003 2004 2005 2006 H1 '07 -100 -1% 2001 – 2003 … modest organic profit decline post 9/11 GDP setback
Slide 11: Significant Development Focus
Significant Development Focus Average €2Bn p.a. development spend 2001 – 2007 €m 3,000 2,500 2,000 1,500 1,000 500 0 2001 2002 2003 2004 2005 2006 H1 '07 Capital Acquisition Expenditure Expenditure Ongoing capital investment to maintain low-cost positions Value-creating acqs sourced, evaluated &
Slide 12: '01 – '07 Organic & Acquisitive Growth
’01 – ‘07 Organic & Acquisitive Growth Delivering Superior Performance through the Cycle €m 500 Organic EBIT Growth Acquisitive EBIT Growth 400 300 EBIT 200 Change 100 0 2001 2002 2003 2004 2005 2006 H1 2007 -100 Ongoing focus on price/cost effectiveness across the operations Healthy blend of or
Slide 13: Strong Cash Flow / Interest Cover
Strong Cash Flow / Interest Cover EBITDA/Net Interest; the best financial prudence measure €m 3,000 15 2,500 12 2,000 9 EBITDA/ 1,500 Net Interest 6 (times) 1,000 500 3 0 0 2001 2002 2003 2004 2005 2006 H1 '07 Op. Cash Flow Capital Acquisition EBITDA/Net Interest (post divs & tax Expenditure Expendi
Slide 14: 2006/2007 Development Highlights
2006/2007 Development Highlights 13
Slide 15: Europe Materials
Europe Materials Initial steps into China & Turkey, new regional platforms Harbin Sanling Cement Denizli Cement Acquired 100% Feb 2007 Acquired 50% April 2007 0.65m tpa cement capacity 1.8m tpa cement + rmc Expanding Expanding the the Cement Cement Platform Platform through through Acqs
Slide 16: Americas Materials
Americas Materials New platform in mid-western and southern US APAC, Aug ‘06, significantly increases US aggregates & asphalt positions Sales post-disposals $2.4Bn : 5.8x EBITDA multiple Substantial scope for administrative, operational and purchasing synergies Existing CRH APAC Expanding Expa
Slide 17: Europe Products
Europe Products Doubling of position in Construction Accessories Halfen, leading European metal construction accessories producer Acquired May 2006 – Sales c. €0.2Bn : 7.7x EBITDA CRH now No.1 in Construction Accessories in Europe – Sales €0.4Bn Anchoring AnchoringTechnology Technology Façade
Slide 18: Americas Products
Americas Products New platform business & major expansion in Glass MMI, April 2006, new US platform Vistawall, June 2007 In sectors familiar in Europe Architectural glazing systems CA (20%), WWR (35%), Fencing (45%) Provides scale and critical mass Sales $0.7Bn, 7.0x EBITDA multiple
Slide 19: Europe Distribution
Europe Distribution Establishment of leading Builders Merchanting position in Switz Gétaz Romang, leading BM distributor in French-speaking Switzerland Acquired May 2007 – Sales €0.5Bn; 8.2x EBITDA, 7.0x post synergies Excellent fit with CRH ops in German-speaking Switzerland Developing Develo
Slide 20: Americas Distribution
Americas Distribution Strong development momentum 8 acquisitions (2006: 6; 2007: 2) added $0.4Bn Sales Adding locations in Florida, Texas, California, Carolina, Hawaii & Virginia Mainly focused on Interior Products segments Leveraging Leveraging Interior Interior Products Products business bus
Slide 21: APAC – Delivering the Promise
APAC – Delivering the Promise 20
Slide 22: Americas Materials Development Strategy
Americas Materials Development Strategy Leverage strong regional market positions / long-term aggregates reserves Ongoing investment in long-term reserves/modern production capacity Bolt-on acquisitions to expand existing regional businesses Seek new growth platforms Merrill Lynch Building M
Slide 23: Americas Materials Development Strategy (APAC)
Americas Materials Development Strategy Leverage strong regional market positions / long-term aggregates reserves Ongoing investment in long-term reserves/modern production capacity Bolt-on acquisitions to expand existing regional businesses Seek new growth platforms APAC Merrill Lynch Build
Slide 24: APAC
APAC Enterprise Value $1.3Bn Subsidiary of Ashland; HQ Atlanta; ops in 14 midwest & southern states LTM June 2006; Sales $2.9bn, EBITDA $220m, multiple 5.9x Aggregates: 29.5 m tpa; 1.8 Bn+ tonnes permitted reserves Asphalt: 28.1 m tpa R/mixed concrete: c0.8 m cmtrs Construction: c$1.7 Bn
Slide 25: APAC: The Opportunities
APAC The Opportunities Transition emphasis from APAC’ s former “Construction First” focus to … CRH’s “Materials First” approach Through selective disposals of contracting / non-integrated units …. followed over time by aggregates / other downstream bolt-ons Implement CRH’s aggregates/asphalt p
Slide 26: APAC: Integration Progress to Date
APAC Integration Progress to Date Disposal of non-core contracting and asphalt activities Conversion to Americas Materials IT system completed by May, 2007 Substantial reduction in fixed overhead costs Significant pricing benefits being realised Active participation in Americas Materials B
Slide 27: APAC: Delivering the Promise
APAC Delivering the Promise Rolling 12 mths Adjusted 12 mths Forecast to June 2006 to June 2006 2007 (EV $1.1Bn (EV $1.1Bn $m (EV $1.3Bn) post disposals) post disposals) Sales 2,879 2,359 ~2,100 EBITDA 220 190 ~230 EBIT 114 102 ~130 EBITDA Margin 7.6% 8.1% ~11% EBIT Margin 4.0% 4.3% ~6% Significan
Slide 28: Americas Materials: Largest integrated materials & highway construction company in US
Americas Materials Largest integrated materials & highway construction company in US Post #3 in US Aggregates #1 in US Asphalt Top 10 in Readymix (2006: 181 m tonnes) (2006: 61 m tonnes) (2006: 8.4 m cmtrs) APAC Pre #4 in US Aggregates #1 in US Asphalt Top 10 in Readymix APAC (2005: 147 m tonnes) (2
Slide 29: Summary
Summary 28
Slide 30: Summary: CRH strategy continues to deliver
Summary CRH strategy continues to deliver Ongoing focus on price / cost effectiveness driving organic performance Strong development spend to date in 2007 Active pipeline of opportunities across all business segments Due diligence in progress regarding selective Cemex assets Geographic, se
Slide 31: Contact Us
Contact Us CRH plc Investor Relations Belgard Castle Clondalkin Dublin 22 Ireland Phone: + 353 1 404 1000 Fax: + 353 1 404 1007 Email: ir@crh.com or look up our Website - www.crh.com This presentation contains certain forward-looking statements as defined under US legislation. By their nature, such
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