Crh Plc · NYSE:CRH
Crh — Investor Day (November 2010)
24 slides from Crh's investor day presentation, November 2010
Slide 1: CRH Investor Day 2010 – Americas Materials
CRH Investor Day 2010 AMERICAS MATERIALS D O U G B L AC K
Slide 2: Americas Materials (AMAT)
2 Americas Materials (AMAT) y BUSINESS MODEL y COMPETITIVE ADVANTAGES y OPERATIONAL EXCELLENCE y DEVELOPMENT OPPORTUNITY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 3: Americas Materials – What We Do
3 Americas Materials – What We Do Infrastructure Asphalt Paving Aggregates Non Residential Aggregates Readymix Concrete Residential Value‐Added Integrated The Foundation Products Services CRH Investor Day, November 2010
Slide 4: Americas Materials – Scale in 2009
4 Americas Materials – Scale in 2009 65% Aggregates Sales 70m tons pa 65 % Infrastructure 65% RMI Aggregates 25% Asphalt 35% Production Product $6 billion 110m tons pa 40m tons pa 65% Asphalt Paving Services 25% Non Res 10% Readymixed 35% New Build Concrete 6m yd3 Value‐Added Integrated Res The Foun
Slide 5: Americas Materials – Why Integration Provides Strength
5 Americas Materials – Why Integration Provides Strength Aggregates Asphalt/RMC Paving y Scarce reserves – defensibility y Aggregates/Asphalt pull through – security of demand y Economies of scale – integrated network y Quality, logistics and efficiency – supports margin y Decentralised model – diff
Slide 6: Americas Materials – Building an Integrated Business
6 Americas Materials – Building an Integrated Business Americas Materials 1985 ‐ 2010 Liquid Asphalt Terminal CRH Investor Day, November 2010
Slide 7: Americas Materials – Today
7 Americas Materials – Today Today { Vertically integrated business { Focused on infrastructure RMI { Clustered for regional leadership Leading Industry Position { No. 1 Asphalt { No. 3 Aggregates { No. 3 RMC { National footprint: 44 states Liquid Asphalt { Experienced management Terminal From a sta
Slide 8: Americas Materials (AMAT)
8 Americas Materials (AMAT) y BUSINESS MODEL y COMPETITIVE ADVANTAGES y OPERATIONAL EXCELLENCE y DEVELOPMENT OPPORTUNITY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 9: Americas Materials Competitive Advantages
9 Americas Materials Competitive Advantages y Our Locations { 11.8 billion tons of aggregates reserves in 575 quarries; 50 stone terminals { 490 asphalt facilities and 20 liquid AC terminals (830k tons) { 300 RMC plants; one cement plant y Our Operating Capability { Important economies of scale { Si
Slide 10: AMAT Competitive Advantages – Our Locations / Footprint
10 AMAT Competitive Advantages – Our Locations / Footprint o In 25 of the top 50 MSAs o Market leader in 14 o Positioned for growth Liquid Asphalt Terminal Strong, asset‐backed business servicing key market areas CRH Investor Day, November 2010
Slide 11: AMAT Competitive Advantage – Our Operational Capability
11 AMAT Competitive Advantage – Our Operational Capability National Regional Local Success Footprint Franchise Presence y Operating y Regional y Deep market y Superior excellence economies knowledge returns y Group‐wide y Network y Fast & flexible y Excellent sourcing synergies delivery reputation y
Slide 12: AMAT Competitive Advantage – Our Economies of Scale
12 AMAT Competitive Advantage – Our Economies of Scale Regional economies provide: y Cost management across plant networks y Scale in raw material purchases y Leveraged fixed overhead Enhanced by national scale – we are a leading purchaser of: y Materials: liquid asphalt, cement, admixtures y Energy
Slide 13: AMAT Competitive Advantage – Our Acquisition Capability
13 AMAT Competitive Advantage – Our Acquisition Capability y Excellent reputation – purchaser of choice y Extensive contacts – local and regional management y Long‐term relationships – lead to negotiated deals y Capacity – to pursue, close and integrate multiple deals y Devolved process – but rigoro
Slide 14: AMAT Competitive Advantage – Our Returns
14 AMAT Competitive Advantage – Our Returns ROIC Return on Invested Capital 20% Industry Peers CRH Americas Materials 16% 12% 8% 4% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Bloomberg Industry‐leading returns that will improve with market recovery CRH Investor Day, November 2010
Slide 15: Americas Materials (AMAT)
15 Americas Materials (AMAT) y BUSINESS MODEL y COMPETITIVE ADVANTAGES y OPERATIONAL EXCELLENCE y DEVELOPMENT OPPORTUNITY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 16: AMAT Operational Excellence – Commercial & Cost
16 AMAT Operational Excellence – Commercial & Cost Aggs ASP $/Ton Aggs Heritage Vol chg% 10 0% 8 Commercial: 6 ‐10% y Strong local price discipline 4 ‐20% y Common analytical tools & metrics 2 y Structured sales management 0 ‐30% 2005 2006 2007 2008 2009 2010e Aggs VC $/Ton Aggs Heritage Vol chg% 8
Slide 17: AMAT Operational Excellence – Energy & Innovation
17 AMAT Operational Excellence – Energy & Innovation Reclaimed Asphalt Pavement (RAP) % 20% Energy: 15% y Continued increase in RAP 10% y Energy and fuel efficiency 5% y Reduced environmental impacts 0% 2005 2006 2007 2008 2009 2010e Warm Mix Asphalt (WMA) Tons (m) 6.0 Innovation: Technology introdu
Slide 18: AMAT Operational Excellence – Margin Potential
18 AMAT Operational Excellence – Margin Potential Indexed Volume Growth (1987 = 1) 1.8 1.6 1.4 1.2 1.0 0.8 0.6 1987 1990 1993 1996 1999 2002 2005 2008 2011e 2014e Aggregates Asphalt RMC Cement Population (1%) Source: NAPA, NRMCA, USGS, PCA Operational Excellence + Market Recovery = Strong Margin Opp
Slide 19: AMAT Operational Excellence – Our Margins
19 AMAT Operational Excellence – Our Margins EBITDA % EBIT % Upside leverage to margins as markets normalise CRH Investor Day, November 2010
Slide 20: Americas Materials (AMAT)
20 Americas Materials (AMAT) y BUSINESS MODEL y COMPETITIVE ADVANTAGES y OPERATIONAL EXCELLENCE y DEVELOPMENT OPPORTUNITY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 21: AMAT Development – The Last 10 Years
21 AMAT Development – The Last 10 years Development Activity 2000 ‐ 2009 Spend ($ Bn) y 152 deals 1.8 1.6 y In 32 states 1.4 y c$5 billion total spend 1.2 y Comprising deals valued ... 1.0 0.8 { 112 <$20m 0.6 { 34 $20 – 100m 0.4 { 5 $100 – 500m 0.2 0.0 { 1 $1.1Bn (2006: APAC) 2000 2002 2004 2006 200
Slide 22: AMAT Development Opportunity – The Industry
22 AMAT Development Opportunity – The Industry Estimated OMG Top 10 Estimated OMG Key Players U.S. Market % U.S. % U.S. Private % Vulcan, Martin, AMAT, Aggregates (m tons) 110 2,100 5% 30% 60% Heidelberg, Cemex AMAT, Colas, Vulcan, Asphalt (m tons) 40 362 11% 25% 70% MDU, Holcim Cemex, Heidelberg, R
Slide 23: Americas Materials (AMAT)
23 Americas Materials (AMAT) y BUSINESS MODEL y COMPETITIVE ADVANTAGES y OPERATIONAL EXCELLENCE y DEVELOPMENT OPPORTUNITY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 24: Americas Materials – Key Takeaways
24 Americas Materials – Key Takeaways The U.S. Materials Market y Aggregates, asphalt and readymix are core building construction materials y Ongoing population growth and ageing infrastructure to drive robust recovery y Largely unconsolidated sector with very fragmented regional markets CRH America