Slide 1: Interim Report 2008
Slide 2: Contents
Contents H1 2008 Highlights 2 Segmental Review 5 Development 14 Finance 15 Strategy & Outlook 24 Supplementary Information 30 Contact Us 36 CRH plc, 2008 Interim Results, 26th August 2008 1
Slide 3: H1 2008 Highlights
H1 2008 Highlights Strategic Balance underpins Performance Sales unchanged, EBITDA down -3%, EBIT down -8%, Disposals up +9% PBT €606 million; down -10% after adverse translation of €21 million Tax rate 23% (2007: 24.5%) based on full year estimate Earnings 85.5c, down -8%; Dividend 20.5c, u
Slide 4: H1 2008 in Context: EBITDA and Operating Profit
H1 2008 in Context EBITDA and Operating Profit 2008 EBITDA: €1.1Bn; down 3% 2007 H1 EBITDA 2006 Margin: 11.4% vs 11.8% (€ Bn) 2005 2004 ‘92 – ‘07: +22% cagr 0.0 0.2 0.4 0.6 0.8 1.0 1.2 2008 Op. Profit: €0.71Bn; down 8% 2007 H1 Op.Profit 2006 Margin: 7.3% vs 8.0% (€ Bn) 2005 2004 ‘92 – ‘0
Slide 5: H1 2008 in Context: EPS and Dividend
H1 2008 in Context EPS and Dividend 2008 H1 EPS: 85.5c; down -8% 2007 H1 EPS 2006 Down -5% in constant currency (cent) 2005 2004 ‘92 – ‘07: +20% cagr 0 20 40 60 80 100 2008 H1 DPS: 20.5c; up 2.5% 2007 H1 Dividend 2006 Continuing payout increase (cent) 2005 2004 ‘83 – ‘07: +14% cagr 0 5 1
Slide 6: Europe – Overall
Europe – Overall Op.Profit up 4%, with contributions from 2007/08 acqs H1 Acquisitions €m 2008 2007 Change Organic 2007 2008 FX Sales +9% 5,523 5,071 +452 -85 +487 +82 -32 Op. profit +4% 515 495 +20 -14 +27 +6 +1 Op. margin 9.3% 9.8% Operating profit excludes profit on disposal Materials ¾ Positiv
Slide 7: Europe Materials
Europe Materials Strong organic growth in higher margin CEE cement ops H1 Acquisitions €m 2008 2007 Change Organic 2007 2008 FX Sales +7% 1,810 1,686 +124 -30 +153 +6 -5 Op. profit +20% 267 222 +45 +25 +16 - +4 Op. margin 14.8% 13.2% Operating profit excludes profit on disposal € Op. Profit +20% H1
Slide 8: Europe Products
Europe Products Sharp decline in UK Clay the main impact H1 Acquisitions €m 2008 2007 Change Organic 2007 2008 FX Sales +4% 1,908 1,826 +82 -17 +73 +58 -32 Op. profit -12% 158 180 -22 -27 +4 +4 -3 Op. margin 8.3% 9.9% Operating profit excludes profit on disposal € Op. Profit -12% H1 2008 Concrete Cl
Slide 9: Europe Products
Europe Products Sharp decline in UK Clay the main impact H1 Acquisitions €m 2008 2007 Change Organic 2007 2008 FX Sales +4% 1,908 1,826 +82 -17 +73 +58 -32 Op. profit -12% 158 180 -22 -27 +4 +4 -3 Op. margin 8.3% 9.9% Operating profit excludes profit on disposal € Op. Profit -12% H1 2008 Benelux W.
Slide 10: Europe Distribution
Europe Distribution Organic decline largely offset by acquisitions H1 Acquisitions €m 2008 2007 Change Organic 2007 2008 FX Sales +16% 1,805 1,559 +246 -38 +261 +18 +5 Op. profit -3% 90 93 -3 -12 +7 +2 - Op. margin 5.0% 6.0% Operating profit excludes profit on disposal € Op. Profit -3% H1 2008 Benel
Slide 11: Americas – Overall
Americas – Overall Operating Profit down -18% in constant currency H1 Acquisitions €m 2008 2007 Change Organic 2007 2008 FX Sales -10% 4,181 4,627 -446 -404 +513 +39 -594 Op. profit -29% 197 276 -79 -70 +23 +3 -35 Op. margin 4.7% 6.0% Operating profit excludes profit on disposal Materials ¾ Trend
Slide 12: Americas Materials
Americas Materials Adverse weather in seasonally less significant H1 H1 Acquisitions €m 2008 2007 Change Organic 2007 2008 FX Sales -14% 1,874 2,181 -307 -222 +182 +20 -287 Op. profit -53% 31 66 -35 -27 - +1 -9 Op. margin 1.7% 3.0% Operating profit excludes profit on disposal US$ Op. Profit -47% US$
Slide 13: Americas Products
Americas Products Balanced operations limit US$ decline to 12% H1 Acquisitions €m 2008 2007 Change Organic 2007 2008 FX Sales -8% 1,660 1,796 -136 -118 +190 +13 -221 Op. profit -24% 137 180 -43 -36 +13 +2 -22 Op. margin 8.3% 10.0% Operating profit excludes profit on disposal US$ Op. Profit -12% H1 2
Slide 14: Americas Distribution
Americas Distribution Successful margin management H1 Acquisitions €m 2008 2007 Change Organic 2007 2008 FX Sales 647 650 -3 -64 +141 +6 -86 Op. profit -3% 29 30 -1 -7 +10 - -4 Op. margin 4.5% 4.6% Operating profit excludes profit on disposal US$ Op. Profit +10% H1 2008 Roofing / Siding Interior Pro
Slide 15: H1 2008 Development Activity
H1 2008 Development Activity €0.7Bn spend maintaining strong development record H1 2008 Acquisitions: 40% Europe; 15% Americas; 45% Emerging Regions ¾ Materials – first cement investment in India (45% My Home Industries) ¾ Products – extension of Construction Accessories platform (Ancon) ¾ 35 Bolt
Slide 16: Finance
Finance CRH plc Interim Results, 26 August 2008 15
Slide 17: Key Components of H1 Performance
Key Components of H1 Performance PBT down 7% in constant currency terms H1 Acquisitions €m 2008 2007 Change Organic 2007 2008 FX Sales 9,704 9,698 +6 -489 +1,000 +121 -626 Operating Profit 712 771 -59 -84 +50 +9 -34 Profit on disposals 24 22 +2 +3 - - -1 Trading Profit 736 793 -57 -81 +50 +9 -35 Fin
Slide 18: Responsive to Changing Markets
Responsive to Changing Markets A Focus on Cost … Targeted cost reduction programmes an ongoing feature of CRH Tailored to ongoing business performance / market developments Significant specific measures implemented since early 2007 ¾ Labour savings appropriate to balance capacity / market dema
Slide 19: Annualised Savings
Annualised Savings Achieved to date €m Europe Americas Total Labour Savings 95 125 220 Energy Related 45 20 65 Purchasing Initiatives etc. 45 40 85 Bought-in Services 105 75 180 Total gross savings 290 260 550 Cost to Implement c €50m 2007 2008 2009 Analysis of net incremental savings: €50m €350
Slide 20: H1 2008 Funds Flow
H1 2008 Funds Flow Higher seasonal working capital outflow… 2008 2007 Inflows €M €M Profit before tax 606 670 Depreciation 371 354 Amortisation of intangibles 21 16 998 1,040 Outflows Working capital (606) (329) Tax paid (149) (103) Dividends (259) (208) Capital expenditure (560) (520) Other (1) (21
Slide 21: H1 2008 Funds Flow
H1 2008 Funds Flow … with net Debt increase ahead of net Investment spend 2008 2007 €M €M Operating cash outflow (577) (141) Acquisitions and investments (744) (983) Disposals 61 62 Share issues 22 78 Purchase of Shares (317) (31) Translation 155 57 Debt increase (1,400) (958) Acqs & Capex less Disp
Slide 22: H1 Working Capital Outflow
H1 Working Capital Outflow Analysis by business segment Europe Americas €m Mats Prods Dist Mats Prods Dist Total 2008 90 115 80 125 166 30 606 2007 25 160 30 10 134 -30 329 Change 65 -45 50 115 32 60 277 E Mats: Pre-payments related to major cement kiln projects E Prods: Generally good working c
Slide 23: Balance Sheet Management
Balance Sheet Management Cash Generation and Funding Cash Generation ¾ H2 operating cash inflow pre-acquisitions / buyback to exceed €1Bn ¾ Adjusting maintenance capex levels due to reduced demand ¾ Focus on development opportunities offering compelling value & strategic fit Funding ¾ €0.65Bn of
Slide 24: Delivering value for Shareholders
Delivering value for Shareholders Dividend Policy and Share Buyback Dividend Policy ¾ 2007 total dividend (up 31%), cover 3.9 times ¾ Target cover c 3.5 times for 2008 financial year ¾ H1 2008 dividend of 20.5c per share up 2.5% Share Buyback ¾ Share repurchase programme of up to 5%, initiated J
Slide 25: Strategy and Outlook
Strategy and Outlook CRH plc Interim Results, 26 August 2008 24
Slide 26: CRH Strategy
CRH Strategy Balanced exposure to industry demand drivers Product Balance * Heavyside 75% Lightside 25% Concrete Other Distribution Materials Products Products Geographic Balance * Europe Americas Emerging 0 25 50 75 100 * Based on annualised EBITDA Deliver performance stability and growth opportuni
Slide 27: 2008 Full Year Europe Outlook
2008 Full Year Europe Outlook Low single digit % increase on 2007 Op. Profit Indications Materials Products Distribution Total 2008 Change mid-teen % mid-teen % similar low single increase decrease outcome digit % inc 2007 Actual €586m €308m €212m €1,106m Materials ¾ Positive H1 with continuing ad
Slide 28: 2008 Full Year Americas Outlook
2008 Full Year Americas Outlook US$ Op. Profit to show low-teen % decline on 2007 Indications Materials Products Distribution Total 2008 Change low-teen % high-teen % mid-teen % low-teen % decrease decrease increase decrease 2007 Actual $781m $466m $96m $1,343m Materials ¾ Pricing to recover input
Slide 29: Overall 2008 Outlook
Overall 2008 Outlook Twin goals – Performance and Growth Some recent easing of commodity prices & strengthening US$ However, negative economic / financial market newsflow has continued With recent international developments adding to risk and uncertainties As previously indicated 2008 outcom
Slide 30: Going Forward
Going Forward Continuation of our clear consistent strategic vision … Strong market positions; strategic reserves; experienced management team Balance sheet capacity to avail of appropriate development opportunities Difficult market outlook for immediate future Proactively managing cost base
Slide 31: Supplementary Information
Supplementary Information CRH plc Interim Results, 26 August 2008 30
Slide 32: Analysis by Segment
Analysis by Segment H1 % €m 2008 2007 change Sales Europe Materials 1,810 1,686 +7% Europe Products 1,908 1,826 +4% Europe Distribution 1,805 1,559 +16% Americas Materials 1,874 2,181 -14% Americas Products 1,660 1,796 -8% Americas Distribution 647 650 -% Total 9,704 9,698 -% Operating Profit Europe
Slide 33: Analysis by Region
Analysis by Region H1 % €m 2008 2007 change Sales Ireland 576 695 -17% Benelux 1,543 1,444 +7% Rest of Europe 3,399 2,933 +16% Americas 4,186 4,626 -10% Total 9,704 9,698 -% Operating Profit Ireland 56 73 -23% Benelux 138 136 +1% Rest of Europe 321 286 +12% Americas 197 276 -29% Total 712 771 -8% CR
Slide 34: Profit on Disposal
Profit on Disposal H1 €m 2008 2007 Analysis by Segment Europe Materials 3 12 Europe Products 10 2 Europe Distribution 1 - Americas Materials 9 7 Americas Products 1 - Americas Distribution - 1 Total 24 22 Analysis by Region Ireland 1 11 Benelux 8 3 Rest of Europe 5 - Americas 10 8 Total 24 22 CRH pl
Slide 35: Foreign Currency Rates
Foreign Currency Rates Average Year-end Six months ended Year ended Six months ended Year ended euro 1= 2008 2007 2007 2008 2007 2007 US Dollar 1.5304 1.3291 1.3705 1.5764 1.3505 1.4721 Pound Sterling 0.7752 0.6746 0.6843 0.7923 0.6740 0.7334 Polish Zloty 3.4901 3.8441 3.7837 3.3513 3.7677 3.5935 Uk
Slide 36: Euroconstruct Forecasts
Euroconstruct Forecasts Construction output 2008 (Euroconstruct June 2008) % Belgium Ï +2.7 Denmark Ð -0.7 Finland Ï +3.0 France Ï +1.5 Germany Ï +1.2 Ireland Ð -17.7 Netherlands Ï +3.1 Poland Ï +14.6 Portugal Ï +2.2 Spain Ð -5.9 Sweden Ï +3.4 Switzerland Ï +1.9 United Kingdom Ð -0.5 CRH plc, 2008 I
Slide 37: 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 CRH plc, 2008 Interim Results, 26th August 2008 36