Crh Plc · NYSE:CRH
Crh — FY2015 Earnings Presentation
51 slides from Crh's earnings presentation, February 2016
Slide 1: 2015 Results
2015 Results
Slide 2: 2015 Highlights
2015 Highlights » Good profit growth » Enhanced portfolio through M&A » Strong cash generation; de-leveraging accelerated » Delivering value through capital allocation » Margins & returns ahead 2 | CRH plc, Preliminary Results 2015
Slide 3: 2015 Financial Performance
2015 Financial Performance Sales EPS €23.6bn +25% 89.1c +13% EBITDA Operating cash flow €2.2bn +35% €1.3bn +47% EBITDA margin Dividend 9.4% +70bps 62.5c 3 | CRH plc, Preliminary Results 2015
Slide 4: Group – Components of Financial Performance
Group – Components of Financial Performance Europe Americas LH Assets Group Sales €8.7bn €12.5bn €2.4bn €23.6bn EBITDA €0.6bn €1.4bn €0.2bn €2.2bn 4 | CRH plc, Preliminary Results 2015
Slide 5: Trading Performance
Trading Performance Continuing Operations* 5 | CRH plc, Preliminary Results 2015 *Continuing operations exclude the impact of divested entities, one-off items and any contribution from the LH Assets
Slide 6: Europe Heavyside – Market Backdrop
Europe Heavyside – Market Backdrop » Mixed economic environment » Competitive trading conditions » Improved markets in NL / PL / IE / DK » Challenges remained in Switzerland 6 | CRH plc, Preliminary Results 2015
Slide 7: Europe Heavyside – Trading Performance
Europe Heavyside – Trading Performance Continuing Operations » Overall cement volumes ahead 2015 €m % change » Pricing environment subdued Sales 3,520 +1% » On-going cost savings & efficiency measures EBITDA 323 +2% » Steady margin improvement Margin 9.2% +10bps 7 | CRH plc, Preliminary Results 2015
Slide 8: Europe Lightside – Market Backdrop
Europe Lightside – Market Backdrop » Good performance in key markets » Favourable H2 weather conditions » Pick-up in export demand 8 | CRH plc, Preliminary Results 2015
Slide 9: Europe Lightside – Trading Performance
Europe Lightside – Trading Performance Continuing Operations » Positive trends in Engineered Accessories 2015 €m % change » Healthy project activity supported demand Sales 961 +5% » Benefits from process improvements EBITDA 105 +6% Margin 10.9% +10bps 9 | CRH plc, Preliminary Results 2015
Slide 10: Europe Distribution – Market Backdrop
Europe Distribution – Market Backdrop » Market backdrop remained mixed » NL recovery evident – good growth in Res new-build » Stable environment in Germany & Belgium » Market challenges in Switzerland & France 10 | CRH plc, Preliminary Results 2015
Slide 11: Europe Distribution – Trading Performance
Europe Distribution – Trading Performance Continuing Operations » Sales – GBM stable; DIY / SHAP ahead 2015 €m % change » Tight cost control & commercial initiatives Sales 4,158 +4% supporting profit delivery EBITDA 207 +7% » Continued margin improvement Margin 5.0% +10bps 11 | CRH plc, Preliminary
Slide 12: Europe – Continuing Operations
Europe – Continuing Operations Heavyside Lightside Distribution » Continued top line improvement Sales +1% +5% +4% +3% » Good profit delivery EBITDA +2% +6% +7% +4% » Tight cost control a key focus Margin » Margins ahead in all divisions 12 | CRH plc, Preliminary Results 2015
Slide 13: Americas Materials – Market Backdrop
Americas Materials – Market Backdrop » Continued momentum » Positive volume and pricing environment » Favourable energy cost environment » Infrastructure stable with improving outlook 13 | CRH plc, Preliminary Results 2015
Slide 14: Americas Materials – Trading Performance
Americas Materials – Trading Performance Continuing Operations » Good growth across all regions 2015 €m % change » Margin expansion in all product lines Sales 6,389 +29% » Strong operating leverage EBITDA 923 +50% Margin 14.4% +200bps 14 | CRH plc, Preliminary Results 2015
Slide 15: Americas Products – Market Backdrop
Americas Products – Market Backdrop » Res markets advanced steadily – new & RMI » Improving growth in single-family home construction » Non-Res sector performed well » Southern & Western markets particularly strong 15 | CRH plc, Preliminary Results 2015
Slide 16: Americas Products – Trading Performance
Americas Products – Trading Performance Continuing Operations » Sales ahead in all product groups 2015 €m % change » Commercial initiatives & portfolio management Sales 3,643 +35% supported margin improvement EBITDA 392 +58% » C.R. Laurence – performed to plan Margin 10.8% +160bps 16 | CRH plc, Prel
Slide 17: Americas Distribution – Market Backdrop
Americas Distribution – Market Backdrop » Good growth in commercial activity » Res roofing market ahead » Strongest in California & Eastern metro markets 17 | CRH plc, Preliminary Results 2015
Slide 18: Americas Distribution – Trading Performance
Americas Distribution – Trading Performance Continuing Operations » Pricing discipline in competitive markets 2015 €m % change » Good profit delivery on increased top line Sales 2,229 +26% » Further margin improvement EBITDA 141 +34% Margin 6.3% +40bps 18 | CRH plc, Preliminary Results 2015
Slide 19: Americas – Continuing Operations
Americas – Continuing Operations Materials Products Distribution » Strong top line growth Sales +29% +35% +26% +30% » Disciplined pricing & cost control EBITDA +50% +58% +34% +51% » Continued margin improvement Margin » Favourable currency effect 19 | CRH plc, Preliminary Results 2015
Slide 20: Development Update
Development Update 20 | CRH plc, Preliminary Results 2015
Slide 21: Divestment Programme
Divestment Programme » €1bn proceeds in 2015; cumulative now €1.4bn Divestments 10x EBITDA » Recycling capital for higher returns » Continuing portfolio refinement – supporting profitable growth Acquisitions 8x EBITDA 21 | CRH plc, Preliminary Results 2015
Slide 22: LH Assets Update
LH Assets Update 2015 partial year contribution €m Sales EBITDA* » Integration now largely complete W. Europe 1,464 183 » Sales & EBITDA ahead of expectations CEE 186 51 » 70% of EBITDA from three countries (UK / PH / CA) Americas 617 100 » Annual run-rate EBITDA ~€820m Asia 151 34 Total 2,418 368 *
Slide 23: Synergies Update
Synergies Update LH Assets Synergies Target LH Assets €120m » Additional operating efficiencies identified €90m Process » Synergies target increased to €120m by 2018 Process Structural Structural C.R. Laurence Procurement Procurement » Synergies on track ($40m by 2017) Original Target Revised Target
Slide 24: Financial Performance
Financial Performance 24 | CRH plc, Preliminary Results 2015
Slide 25: Components of 2015 Performance
Components of 2015 Performance €m Sales EBITDA 2014 18,912 1,641 Currency Translation 2,198 218 » Favourable currency translation effect Acquisitions / (Disposals) 1,883 115 » Good delivery from heritage platforms Net Other - (13) » Strong operating leverage Organic 642 258 2015 23,635 2,219 25 | CR
Slide 26: 2015 EBITDA Performance Bridge
2015 EBITDA Performance Bridge 0.2 +35% 0.4 +25% €bn 0.3 0.2 2.2 0.1 2.0 1.6 2014 Divested FX EBITDA CRH 2015 Contribution Transaction / 2015 entities growth (excl. LH Assets) from LH Assets one-off costs 26 | CRH plc, Preliminary Results 2015
Slide 27: Operating Cash Movements
Operating Cash Movements €m 2015 2014 EBITDA 2,219 1,641 » Continued strong cash generation Capital expenditure (882) (435) » Focused investment in growth markets Working capital 642 69 » Record working capital performance Other (mainly Tax & Interest) (650) (373) Cash flow from operations 1,329 902
Slide 28: 2015 Net Debt Movements
2015 Net Debt Movements 1.2 1.0 1.0 €bn 4.9 6.6 2.5 Net debt LH acquisition CRL Divestment Net cash Net debt 2014 (net of placing acquisition proceeds flows 2015 proceeds) Net debt / EBITDA 1.5x 3.0x 28 | CRH plc, Preliminary Results 2015
Slide 29: 2015 – Continued Progress
2015 – Continued Progress EBITDA … ahead strongly Margin … continued expansion Returns … 2nd consecutive year of improvement De-leveraging target … ahead of plan 29 | CRH plc, Preliminary Results 2015
Slide 30: Expectations for 2016
Expectations for 2016 30 | CRH plc, Preliminary Results 2015
Slide 31: Expectations for 2016 …
Expectations for 2016 … Operations … » Relentless focus on performance » Restoring debt metrics Markets … » Europe – stable » Americas – momentum continues » Asia – further growth in the Philippines 31 | CRH plc, Preliminary Results 2015 … another year of growth
Slide 32: Appendices
Appendices 32 | CRH plc, Preliminary Results 2015
Slide 33: Group Components of Performance
Group Components of Performance Operating Profit Finance Assoc. Pre-tax € million Sales EBITDA profit on disposals costs (net) & JV PAT profit 2014 18,912 1,641 917 77 (288) 55 761 Exchange effects 2,198 218 137 6 (27) 4 120 2014/2015 acquisitions 2,738 215 28 - (50) 1 (21) 2014/2015 divestments (85
Slide 34: Europe Heavyside
Europe Heavyside Analysis of change Total Restructuring/ Pensions/ € million % Change 2015 2014 Change Organic Acquisitions Divestments Impairment CO2 Exchange Sales revenue -8% 3,607 3,929 (322) (30) 5 (386) - - 89 EBITDA* -12% 334 380 (46) 1 - (62) 9 (3) 9 Operating profit* -11% 135 151 (16) 7 - (
Slide 35: Europe Lightside
Europe Lightside Analysis of change Total € million % Change 2015 2014 Change Organic Acquisitions Restructuring Exchange Sales revenue +5% 961 913 48 3 12 - 33 EBITDA* +6% 100 94 6 2 - - 4 Operating profit* +6% 75 71 4 - - - 4 EBITDA/sales 10.4% 10.3% Op. profit/sales 7.8% 7.8% *EBITDA and operatin
Slide 36: Europe Distribution
Europe Distribution Analysis of change Total Restructuring Swiss € million % Change 2015 2014 Change Organic Acquisitions /Impairment Fine Exchange Sales revenue +4% 4,158 3,999 159 (21) 27 - - 153 EBITDA* -10% 171 190 (19) 4 1 - (32) 8 Operating profit* -16% 94 112 (18) 10 - (1) (32) 5 EBITDA/sales
Slide 37: Americas Materials
Americas Materials Analysis of change Total € million % Change 2015 2014 Change Organic Acquisitions Divestments Restructuring Exchange Sales revenue +26% 6,400 5,070 1,330 342 80 (95) - 1,003 EBITDA* +50% 912 609 303 170 14 (7) 1 125 Operating profit* +72% 611 355 256 176 11 (3) 1 71 EBITDA/sales 1
Slide 38: Americas Products
Americas Products Analysis of change Total Restructuring/ € million % Change 2015 2014 Change Organic Acquisitions Divestments Impairment Exchange Sales revenue +20% 3,862 3,225 637 246 196 (374) - 569 EBITDA* +49% 391 263 128 67 29 (31) 13 50 Operating profit* +72% 249 145 104 68 15 (21) 10 32 EBIT
Slide 39: Americas Distribution
Americas Distribution Analysis of change Total € million % Change 2015 2014 Change Organic Restructuring Exchange Sales revenue +26% 2,229 1,776 453 102 - 351 EBITDA* +33% 140 105 35 14 (1) 22 Operating profit* +34% 111 83 28 11 (1) 18 EBITDA/sales 6.3% 5.9% Op. profit/sales 5.0% 4.7% *EBITDA and op
Slide 40: LH Assets
LH Assets Analysis by region Western Transaction/ € million 2015 Europe CEE Americas Asia One-off costs Sales revenue 2,418 1,464 186 617 151 EBITDA* 171 183 51 100 34 (197) Operating profit* 2 85 22 67 25 (197) EBITDA/sales 7.1% 12.5% 27.3% 16.2% 22.5% Op. profit/sales 0.1% 5.8% 11.7% 10.9% 16.6% *
Slide 41: 2015 Sales
2015 Sales Reported Sales Sales from continuing operations* €bn 2015 2014 % chg 2015 2014 % chg % chg^ Heavyside 3.6 3.9 -8% 3.5 3.5 +1% -1% Lightside 1.0 0.9 +5% 1.0 0.9 +5% +2% Distribution 4.1 4.0 +4% 4.1 4.0 +4% - Europe 8.7 8.8 -1% 8.6 8.4 +3% - Materials 6.4 5.1 +26% 6.4 4.9 +29% +7% Products
Slide 42: 2015 EBITDA
2015 EBITDA Reported EBITDA EBITDA from continuing operations* €m 2015 2014 % chg 2015 2014 % chg % chg^ Heavyside 334 380 -12% 323 316 +2% - Lightside 100 94 +6% 105 99 +6% +2% Distribution 171 190 -10% 207 194 +7% +2% Europe 605 664 -9% 635 609 +4% +1% Materials 912 609 +50% 923 613 +50% +25% Prod
Slide 43: 2015 Continuing Operations Sales
2015 Continuing Operations Sales FY 2015 (€bn) Reported Divested entities One-off items Continuing operations* Heavyside 3.6 (0.1) - 3.5 Lightside 1.0 - - 1.0 Distribution 4.1 - - 4.1 Europe 8.7 (0.1) - 8.6 Materials 6.4 - - 6.4 Products 3.9 (0.2) - 3.7 Distribution 2.2 - - 2.2 Americas 12.5 (0.2) -
Slide 44: 2015 Continuing Operations EBITDA
2015 Continuing Operations EBITDA FY 2015 (€m) Reported Divested entities One-off items Continuing operations* Heavyside 334 (11) - 323 Lightside 100 - 5 105 Distribution 171 - 36 207 Europe 605 (11) 41 635 Materials 912 3 8 923 Products 391 (4) 5 392 Distribution 140 - 1 141 Americas 1,443 (1) 14 1
Slide 45: 2015 EBITDA by Region
2015 EBITDA by Region €bn Americas Europe Asia Group CRH (excl. LH Assets) 1.44 0.61 - 2.05 LH Assets 0.10 0.23 0.04 0.37 2015 (pre-transaction costs) 1.54 0.84 0.04 2.42 Transaction costs (0.20) 2015 2.22 45 | CRH plc, Preliminary Results 2015
Slide 46: Europe Heavyside Cement Volumes & Prices
Europe Heavyside Cement Volumes & Prices YoY % chg 2015 Volume 2015 Price (LC) Ireland* +17% -1% Switzerland -6% -6% Finland -6% +1% Poland +6% -7% Ukraine +2% +21% *Domestic Volumes – excludes exports 46 | CRH plc, Preliminary Results 2015
Slide 47: Americas Materials Volumes & Prices
Americas Materials Volumes & Prices YoY % chg 2015 Volume 2015 Price Total LFL Total LFL Aggregates +4% +4% +4% +5% Asphalt +7% +6% -4% -4% RMC -1% +2% +5% +5% 47 | CRH plc, Preliminary Results 2015
Slide 48: Term debt maturity profile
Term debt maturity profile 31 December 2015 (€bn) 1.6 Bridge Facility Term Facility Other Gross Debt 1.4 1.2 1.0 » Year-end net debt of €6.6bn is net of 0.8 €2.5bn cash & cash equivalents 0.6 » In addition, the Group has €3.1bn of 0.4 undrawn committed facilities 0.2 0.0 48 | CRH plc, Preliminary Re
Slide 49: Euroconstruct Estimates 2015
Euroconstruct Estimates 2015 Construction Output 2015 % chg Construction Output 2015 % chg Austria +0.2% Netherlands +6.0% Belgium +0.3% Poland +5.6% Denmark +1.3% Slovakia +10.3% Finland -0.3% Spain +2.4% France -1.3% Switzerland -0.1% Germany +0.4% United Kingdom +3.7% Hungary +3.1% West Europe (E
Slide 50: US Estimates 2015 (PCA)
US Estimates 2015 (PCA) Construction Put-in-place % chg Construction Put-in-place % chg Total Construction Put-in-place +6.1% Office +21.5% Total Residential +7.6% Hotels, Motels +24.4% New Housing +11.7% Total Public +4.2% Single-Family +10.3% Highways & Streets +3.4% Multi-Family +18.1% Public Uti
Slide 51: Contact Us
Contact Us CRH plc Investor Relations Stonemason’s Way Rathfarnham Dublin 16 D16 KH51 Ireland Telephone: +353 1 404 1000 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 unce