CRH PLC · NYSE:CRH
CRH — NCB Irish Equities Conference 2004
34 slides from CRH's conference presentation, Mar 25, 2004
Slide 1: Contents
CONTENTS Agenda 2 CRH - Overview 4 Three Core Businesses 5 Regional, Product & Sectoral Balance 8 CRH Performance 9 CRH People 10 Federal Group Organised for Growth 11 NCB Irish Equities Conference, 25th March 2004 Europe Materials 12 Europe Products & Distribution 13 Americas Materials 14 Americas
Slide 2: Agenda
AGENDA z CRH Overview NCB Irish Equities Conference, 25th March 2004 z Development Strategy z 2003 Year End Results z Outlook 2
Slide 3: CRH Overview
NCB Irish Equities Conference, 25th March 2004 CRH OVERVIEW 3
Slide 4: CRH - Overview
CRH - OVERVIEW z 1970: Irish Cement & Roadstone: Sales €26m, Ireland 95% z Embarked on a clear, consistent development strategy NCB Irish Equities Conference, 25th March 2004 z Now 23 countries; 3 continents; 1,950+ locations; 54,000+ people z Sales €11bn across three core businesses z Listed Dublin
Slide 5: Three Core Businesses: Primary Materials
THREE CORE BUSINESSES Cement Plant, Poland Primary Materials Asphalt paving, USA NCB Irish Equities Conference, 25th March 2004 Cement, aggregates, asphalt and surfacing, readymixed concrete 5
Slide 6: Three Core Businesses: Building Products
THREE CORE BUSINESSES Roofing Insulation, Denmark Building Products Paving, Canada NCB Irish Equities Conference, 25th March 2004 Precast concrete products; concrete blocks, pavers and rooftiles; clay bricks, pavers and tiles; insulation products; fencing & security; glass fabrication, rooflights &
Slide 7: Three Core Businesses: Distribution
THREE CORE BUSINESSES DIY, Netherlands Distribution Specialist distribution, USA NCB Irish Equities Conference, 25th March 2004 DIY stores, builders merchanting, specialist distribution 7
Slide 8: Regional, Product & Sectoral Balance
REGIONAL, PRODUCT & SECTORAL BALANCE z Helps smooth the impact of industry and economic cycles z Enhances growth potential Regional Product NCB Irish Equities Conference, 25th March 2004 Materials Europe Products 40% Americas 50% & Dist 50% 60% End-use Infra- Non-res structure 30% RMI 30% New 45% 55
Slide 9: CRH Performance 1987 - 2003
CRH PERFORMANCE 1987 - 2003 1600 1400 PBT +18% pa NCB Irish Equities Conference, 25th March 2004 1200 1000 800 EPS +14% pa 600 DPS +12% pa 400 200 0 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 1987 = 100 9
Slide 10: CRH People
CRH PEOPLE z An experienced management team Î Managed through previous economic cycles NCB Irish Equities Conference, 25th March 2004 z Managers from 3 very different streams Î Grass-roots managers, now with room to grow Î Highly qualified professionals, business builders with vision Î Owner-entrepr
Slide 11: Federal Group Organised for Growth
FEDERAL GROUP ORGANISED FOR GROWTH CRH plc CEO Liam O’Mahony NCB Irish Equities Conference, 25th March 2004 Finance Development Myles Lee Joe McCullough Europe Americas Europe Materials Americas Materials Products & Distribution Products & Distribution Declan Doyle Tom Hill Brian Hill John Wittstock
Slide 12: Europe Materials
EUROPE MATERIALS €m 2003 2002 Sales 1,984 1,927 Op profit 273 267 Op margin 13.9% 13.8% NCB Irish Equities Conference, 25th March 2004 z 350+ locations z 9,900+ employees z New build / RMI 80/20 z Residential 35% z Non-Res 30% z Infrastructure 35% Irl UK Spain Swiss Pol Fin Est Lat Rus Ukr Isr Cemen
Slide 13: Europe Products & Distribution
EUROPE PRODUCTS & DISTRIBUTION €m 2003 2002 Sales 3,083 2,506 Op profit 213 153 Op margin 6.8% 6.1% NCB Irish Equities Conference, 25th March 2004 z 600+ locations z 14,700+ employees z New build / RMI 55/45 z Residential 65% z Non-Res 30% z Infrastructure 10% Irl UK Por Sp Fr B NL Ger Swiss Den Sw
Slide 14: Americas Materials
AMERICAS MATERIALS $m 2003 2002 Sales 3,203 2,905 Op profit 329 317 Op margin 10.3% 10.9% NCB Irish Equities Conference, 25th March 2004 z 600+ locations z 13,100+ employees z New build / RMI 30/70 z Residential 15% z Non-Res 20% z Infrastructure 65% New York / New England New Jersey Central West Ag
Slide 15: Americas Products & Distribution
AMERICAS PRODUCTS & DISTRIBUTION $m 2003 2002 Sales 3,600 3,110 Op profit 303 277 Op margin 8.4% 8.9% NCB Irish Equities Conference, 25th March 2004 z 400+ locations z 16,500+ employees z New build / RMI 55/45 z Residential 50% z Non-Res 40% z Infrastructure 10% USA Canada Argentina Chile Precast co
Slide 16: Development Strategy
NCB Irish Equities Conference, 25th March 2004 DEVELOPMENT STRATEGY 16
Slide 17: Clear Development Strategy
CLEAR DEVELOPMENT STRATEGY z Stick to core businesses in building materials z Invest at “home”; be the low cost market leader NCB Irish Equities Conference, 25th March 2004 z Develop “overseas”; create platforms for future growth z Pay fair prices that meet sellers needs z 14 devolved regional devel
Slide 18: Acquisition Approach
ACQUISITION APPROACH z Identifying deals Î Ongoing contact with extensive 25 year+ target database Î Each deal done opens doors to further opportunities Î CRH scale ensures access to all larger industry transactions NCB Irish Equities Conference, 25th March 2004 z Courtship/negotiation Î Patient app
Slide 19: CRH Acquisition Spend 1987-2003
CRH ACQUISITION SPEND 1987-2003 Cementbouw €m Jura Group €330m 100% Ops & JV €0.7bn 1600 Shelly Co. €347m 1400 Ibstock 49% €230m NCB Irish Equities Conference, 25th March 2004 Finnsementti/Rudus €420m 1200 T. McCully €425m 1000 Ibstock 51% €320m 800 600 Tilcon US €253m 400 Beton Catalan €77m 200 0 '
Slide 20: Development Spend 1999-2003
DEVELOPMENT SPEND 1999-2003 €bn Europe Americas Total NCB Irish Equities Conference, 25th March 2004 Materials 1.1 2.4 3.5 53% Products 1.3 1.0 2.3 34% Distribution 0.7 0.2 0.9 13% Total 3.1 3.6 6.7 100% 46% 54% 100% 20
Slide 21: 2003 Europe Acquisitions
2003 EUROPE ACQUISITIONS z Europe Materials €58m Î Finland: modest expansion of aggregates and readymixed concrete operations NCB Irish Equities Conference, 25th March 2004 Î Poland: development of a substantial lime business (Trzuskawica, Kujawy) z Europe P&D €1bn Î Cementbouw: 100% of Distribution
Slide 22: 2003 Americas Acquisitions
2003 AMERICAS ACQUISITIONS z Americas Materials €320m Î Central Group: significant strengthening of Mid-West market positions May acquisition S.E. Johnson (SEJ), an excellent fit with existing OH/MI ops NCB Irish Equities Conference, 25th March 2004 Subsequent swap of non-core SEJ Indiana assets for
Slide 23: 2004 Secil Acquisition
2004 SECIL ACQUISITION z CRH has reached agreement to acquire a 49% stake in Secil z Based on €900m Enterprise value for 100% of Secil, including debt €140m NCB Irish Equities Conference, 25th March 2004 z 49% for €372m cash consideration with goodwill €45m z Multiples - 2003: Sales 2.1x, EBITDA 7.0
Slide 24: Secil - The Company
SECIL - THE COMPANY z 2003 Sales €418m, EBITDA €123m, EBITA €69m, employees 2,000 z In Portugal: NCB Irish Equities Conference, 25th March 2004 Î Three integrated cement plants, total capacity 4.2m tonnes Î 41 readymixed concrete plants Î 6 hard rock quarries, total permitted stone reserves approxim
Slide 25: 2003 Results
NCB Irish Equities Conference, 25th March 2004 2003 RESULTS 25
Slide 26: 2003 Results Highlights
2003 RESULTS HIGHLIGHTS 2003 2002 % change as at 2003 €m €m reported FX rates NCB Irish Equities Conference, 25th March 2004 Sales 11,080 10,794 +3% +15% Operating profit before goodwill 1,045 1,048 - +12% Profit before tax 864 856 +1% +12% € cent € cent EPS before goodwill 136.2 132.5 +3% +13% EPS
Slide 27: 2003 Results Overview
2003 RESULTS OVERVIEW z Record results despite significant translation hit z Ireland: Similar profits; strong residential demand; but infrastructure slower in H2 NCB Irish Equities Conference, 25th March 2004 z UK: Strong 13% advance in Sterling profits; ahead 3% in euro terms z Mainland Europe oper
Slide 28: Funds Flow
FUNDS FLOW 2003 2002 Inflows €m €m Profit before tax 864 856 Depreciation 458 456 Goodwill amortisation 76 70 NCB Irish Equities Conference, 25th March 2004 1,398 1,382 Outflows Working capital (58) 90 Tax paid (103) (162) Dividends (150) (135) Capital expenditure (402) (367) Other (30) (21) (743) (
Slide 29: Debt Ratios & Interest Cover
DEBT RATIOS & INTEREST COVER Y/E Y/E 2003 2002 Debt (€bn) 2.3 1.7 NCB Irish Equities Conference, 25th March 2004 Shareholders’ funds (€bn) 4.8 4.8 Debt/shareholders’ funds 48% 36% Debt/year-end market capitalisation 27% 28% Interest cover EBITDA/Interest 13.1 11.3 EBIT/Interest 8.4 7.3 29
Slide 30: 2004 Outlook
NCB Irish Equities Conference, 25th March 2004 2004 OUTLOOK 30
Slide 31: 2004 Outlook - Europe
2004 OUTLOOK - EUROPE z Materials Î Ireland: record housing expected to moderate in H2, infrastructure picking up Î Finland/Switzerland: housing/infrastructure to offset softness in other sectors NCB Irish Equities Conference, 25th March 2004 Î Poland: EU entry likely to sustain improvement evident
Slide 32: 2004 Outlook - Americas
2004 OUTLOOK - AMERICAS z Materials Î 2004 Federal highway budget US$33.6bn (+7%) Î Senate/House converging on a 6-year ‘04-’09 highway proposal NCB Irish Equities Conference, 25th March 2004 Î Negotiations with the Administration continuing Î Despite continuing state budget deficits expect similar
Slide 33: 2004 Outlook - Overall
2004 OUTLOOK - OVERALL z Economic growth in Europe generally subdued; US economy recovering z Continued focus on cost effectiveness and operational performance 2004 profits likely to be impacted by weakness of US$ …. NCB Irish Equities Conference, 25th March 2004 z z …. however 2003 acquisitions sho
Slide 34: Contact Us
CONTACT US CRH plc Investor Relations Belgard Castle NCB Irish Equities Conference, 25th March 2004 Clondalkin Dublin 22 Ireland Phone: + 353 1 404 1000 Fax: + 353 1 404 1007 E-mail: ir@crh.com or look up our Website - www.crh.com This presentation contains certain forward-looking statements as defi