Crh Plc · NYSE:CRH
Crh — Investor Day (November 2010)
25 slides from Crh's investor day presentation, November 2010
Slide 1: CRH Investor Day 2010: Europe Products & Distribution
CRH Investor Day 2010 EUROPE PRODUCTS & DISTRIBUTION ERIK BAX
Slide 2: Europe Products & Distribution (EPD)
2 Europe Products & Distribution (EPD) y BUSINESS MODEL y COMPETITIVE ADVANTAGES y OPERATIONAL EXCELLENCE y DEVELOPMENT OPPORTUNITY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 3: Europe P&D – Today
3 Europe P&D – Today Leading Regional Industry Positions y Concrete Products: Benelux, DK y Concrete Landscaping: DE y Clay Products: UK y Construction Accessories: Europe y Outdoor Security: Benelux, UK, DE y Building Materials Distributor: NL,CH,AT,DE y DIY: Benelux €1.7bn to €6.6bn in 10yrs CRH I
Slide 4: Europe P&D – Changing Face of European Construction
4 Europe P&D – Changing Face of European Construction Non‐residential Spend – W. Europe Residential Spend – W. Europe 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% New 50% 50% 40% 40% RMI 30% 30% 20% 20% 10% 10% 0% 0% 2006 2007 2008 2009 2010 2011 2012 2006 2007 2008 2009 2010 2011 2012 Source: Eurocons
Slide 5: Europe P&D – What We Do
5 Europe P&D – What We Do Products Distribution Products for Land‐ Outdoor Builders SHAP DIY Sanitary Heating construction scaping Security Merchants & Plumbing Leadership positions with a balance in New/RMI CRH Investor Day, November 2010
Slide 6: Europe P&D – Total 2009 Sales €6.1bn
6 Europe P&D – Total 2009 Sales €6.1bn* Products Distribution Products for Land‐ Outdoor Builders SHAP DIY Sanitary Heating construction scaping Security Merchants & Plumbing Sales*: €1.7Bn €0.4Bn €0.3Bn €2.5Bn €0.3Bn €0.9Bn * Sales exclude Insulation and Climate Control Products Distribution Res No
Slide 7: Europe P&D – Sales Split per Country
7 Europe P&D – Sales Split per Country Products Distribution OTH OTH NL FR 10% 20% 24% 8% DE NL UK 13% 40% 12% DE BE 16% FR CH 14% 14% 29% Focussed on mature economies with growing RMI CRH Investor Day, November 2010
Slide 8: Europe P&D – Business Model
8 Europe P&D – Business Model y Grow the business in large European construction markets y Increase exposure to RMI in mature economies y Build scalable businesses y Drive Commercial and Operational Excellence y Replicate business models in new and adjacent markets y Innovate and develop new product
Slide 9: Europe Products & Distribution (EPD)
9 Europe Products & Distribution (EPD) y BUSINESS MODEL y COMPETITIVE ADVANTAGES y OPERATIONAL EXCELLENCE y DEVELOPMENT OPPORTUNITY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 10: Europe Products – Competitive Advantages
10 Europe Products – Competitive Advantages y Full range of value‐added, engineered products y Broad product range offering construction solutions that: o Increase efficiencies on site o Create more design freedom for architects o Enhance the built environment y Innovative Pan European product devel
Slide 11: Europe Distribution – Competitive Advantages
11 Europe Distribution – Competitive Advantages y Extensive regional leadership network y Strong brands and local franchises y Knowledge transfer from DIY to B.Merchants y Proven operational team y Rollout of model to: o Increase network density o Capture network synergies o Centralise procurement s
Slide 12: Europe P&D Competitive Advantages – Our Returns
12 Europe P&D Competitive Advantages – Our Returns ROIC Return on Invested Capital 12% 10% 8% 6% 4% 2% Industry Peers CRH Europe P&D 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Bloomberg Delivering returns that will improve as European markets recover CRH Investor Day, November 2010
Slide 13: Europe Products & Distribution (EPD)
13 Europe Products & Distribution (EPD) y BUSINESS MODEL y COMPETITIVE ADVANTAGES y OPERATIONAL EXCELLENCE y DEVELOPMENT OPPORTUNITY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 14: Europe Products – Operational Excellence
14 Europe Products – Operational Excellence Procurement & Broad Footprint to Regional Commercial Supply National Production Strategy Synergies Accounts Example: Concrete ‐ Landscaping y Multiple facilities operating as a regional production platform y Cross divisional synergies (APG, US) on commerci
Slide 15: Europe Products – Gross Margin Improvement
15 Europe Products – Gross Margin Improvement y Severe sales declines 2008 – 2010 120 Sales Index (2008 = 100) { Very tough markets 100 100 { Margin pressures 80 82 60 y Benefits of operational excellence '08 '10F Gross Margin % { Lower cost production 120 Index (2008 = 100) { Optimising facilities
Slide 16: Europe Distribution – Operational Excellence
16 Europe Distribution – Operational Excellence Tailored Integrated Multi‐ Synergies between Distribution Brand Outlets DIY/GBM/SHAP Formats Example: Distribution y Integration of back offices y National purchasing programmes in GBM; Europe‐wide programmes in SHAP y Best practice roll out DIY to GBM
Slide 17: Europe Distribution – Strong Sales Growth
17 Europe Distribution – Strong Sales Growth y Successful acquisition strategy ‐ developed an integrated distribution group y Tailored distribution formats for growing market segments y Different channel sales through different single locations y Successful multi‐brand strategy in major metro areas
Slide 18: Europe Operational Excellence – Our Products Margins
18 Europe Operational Excellence – Our Products Margins EBITDA % EBIT % Upside leverage to margins as markets normalise CRH Investor Day, November 2010
Slide 19: Europe Operational Excellence – Our Distribution Margins
19 Europe Operational Excellence – Our Distribution Margins EBITDA % EBIT % Upside leverage to margins as markets normalise CRH Investor Day, November 2010
Slide 20: Europe Products & Distribution (EPD)
20 Europe Products & Distribution (EPD) y BUSINESS MODEL y COMPETITIVE ADVANTAGES y OPERATIONAL EXCELLENCE y DEVELOPMENT OPPORTUNITY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 21: Europe P&D Development Spend – The Last 10 Years
21 Europe P&D Development Spend – The Last 10 years CRH Development Activity 2000 ‐ 2009 Spend (€m) y 134 deals 1000 y In 20 countries 900 800 y With a total value of €3.9 billion 700 600 y Comprising deals valued: 500 o 127 < c€10‐100 million 400 300 o 6 < c€100‐500 million 200 o 1 < c€700 million
Slide 22: Europe P&D Development Opportunities – Products
22 Europe P&D Development Opportunities – Products Relevant market size €20-25B Products 100% 80% 60% 40% Products for Land‐ Outdoor construction scaping Security 20% c10% E. Prod. 0% y Precast concrete – Value added concrete products for new build y Engineered Construction Accessories – global grow
Slide 23: Europe P&D Development Opportunities – Distribution
23 Europe P&D Development Opportunities – Distribution Relevant market size €40-50B 100% Distribution 80% 60% 40% SHAP Builders DIY Sanitary Heating 20% Merchants & Plumbing c10% E. Dist. 0% y Unconsolidated markets – substantial opportunities remain y Builders Merchant: increase existing network; e
Slide 24: Europe Products & Distribution (EPD)
24 Europe Products & Distribution (EPD) y BUSINESS MODEL y COMPETITIVE ADVANTAGES y OPERATIONAL EXCELLENCE y DEVELOPMENT OPPORTUNITY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 25: EPD – Key Take-Aways
25 EPD – Key Take‐Aways Europe Market y Mature Western European economies with growing RMI emphasis y Fragmented light‐side markets with significant scope for consolidation y Emerging Europe: broadening product range as markets sophisticate CRH Europe Products and Distribution Leadership RMI Enginee