Slide 1: CRH plc 2013 Results
CRH plc 2013 Results Albert Manifold Maeve Carton Chief Executive Finance Director
Slide 2: CRH plc, Preliminary Results 2013 Page
CRH plc, Preliminary Results 2013 Page 1
Slide 3: Key Points – 2013
Key Points – 2013 Challenging weather in H1, significantly better trading in H2 Marked regional & market differences US – Moderate recovery… stronger res markets… improved profits & margins Europe – Slowing declines… markets difficult, but stabilising 2013 trough earnings… recovery underway CRH plc,
Slide 4: CRH 2013 Results – Highlights
CRH 2013 Results – Highlights Sales EBITDA PBT / EPS €18 Bn €1.48 Bn €540m / 59.5c (pre-impairment) Net debt Development Dividend ˂€3.0 Bn €0.7 Bn maintained at 62.5c EBITDA ahead of guidance... strong cash delivery CRH plc, Preliminary Results 2013 Page 3
Slide 5: Trading Overview – CRH Group
Trading Overview – CRH Group €m % chg 2013 2012 Sales 0% 18,031 18,084 EBITDA ahead of guidance EBITDA -6% 1,475 1,563 Continuing challenges in Europe EBITDA % 8.2% 8.6% Progress in the US CRH plc, Preliminary Results 2013 Page 4
Slide 6: Trading Overview – CRH Group
Trading Overview – CRH Group 2013 v 2012 €m % chg 2013 2012 ∆ H1 ∆ H2 Sales 0% 18,031 18,084 -3% +2% EBITDA -6% 1,475 1,563 -24% +4% EBITDA % 8.2% 8.6% Significant H1 weather impact… good H2 progress CRH plc, Preliminary Results 2013 Page 5
Slide 7: Trading Overview – Europe Overall
Trading Overview – Europe Overall €m % chg 2013 2012 Materials… weather & markets Sales -3% 8,578 8,816 headwinds Products… continued focus on EBITDA -19% 583 721 restructuring & rationalisation EBITDA % 6.8% 8.2% Distribution… challenges remain in the Netherlands CRH plc, Preliminary Results 2013
Slide 8: Trading Overview – Europe Overall
Trading Overview – Europe Overall 2013 v 2012 €m % chg 2013 2012 ∆ H1 ∆ H2 Sales -3% 8,578 8,816 -7% +1% EBITDA -19% 583 721 -43% -1% EBITDA % 6.8% 8.2% Much improved H2 trends CRH plc, Preliminary Results 2013 Page 7
Slide 9: Trading Overview – Europe Materials
Trading Overview – Europe Materials €m % chg 2013 2012 Sales -5% 2,266 2,383 90% of EBITDA from 4 countries CH / FI / PL / UA EBITDA -21% 278 352 Competitive pricing environment EBITDA % 12.3% 14.8% Lower Pension & CO2 gains (∆€43m) CRH plc, Preliminary Results 2013 Page 8
Slide 10: Trading Overview – Europe Materials
Trading Overview – Europe Materials 2013 v 2012 €m % chg 2013 2012 ∆ H1 ∆ H2 Sales -5% 2,266 2,383 -13% +3% EBITDA -21% 278 352 -54% -2% EBITDA % 12.3% 14.8% H1 cement volumes down 14%... H2 up 5% CRH plc, Preliminary Results 2013 Page 9
Slide 11: Trading Overview – Europe Products
Trading Overview – Europe Products €m % chg 2013 2012 Sales -4% 2,376 2,477 BE / NL / FR at all-time lows… historically 50% of EBITDA EBITDA -22% 119 152 Pressure on pricing & margins EBITDA % 5.0% 6.1% On-going restructuring actions CRH plc, Preliminary Results 2013 Page 10
Slide 12: Trading Overview – Europe Products
Trading Overview – Europe Products 2013 v 2012 €m % chg 2013 2012 ∆ H1 ∆ H2 Sales -4% 2,376 2,477 -8% 0% EBITDA -22% 119 152 -40% +5% EBITDA % 5.0% 6.1% 2013 H2 margins ahead of 2012 CRH plc, Preliminary Results 2013 Page 11
Slide 13: Trading Overview – Europe Distribution
Trading Overview – Europe Distribution €m % chg 2013 2012 GBM / SHAP / DIY (EBITDA) Sales -1% 3,936 3,956 45% : 25% : 30% Weak consumer confidence in NL EBITDA -14% 186 217 30% of EBITDA EBITDA % 4.7% 5.5% Good performance in DE, FR & SHAP segments CRH plc, Preliminary Results 2013 Page 12
Slide 14: Trading Overview – Europe Distribution
Trading Overview – Europe Distribution 2013 v 2012 €m % chg 2013 2012 ∆ H1 ∆ H2 Sales -1% 3,936 3,956 -3% +2% EBITDA -14% 186 217 -31% -2% EBITDA % 4.7% 5.5% Improved H2 trends CRH plc, Preliminary Results 2013 Page 13
Slide 15: Trading Overview – Americas Overall
Trading Overview – Americas Overall €m % chg 2013 2012 Sales +2% 9,453 9,268 10% EBITDA growth in USD terms EBITDA +6% 892 842 Res up; Non-Res & Infra flat EBITDA % 9.4% 9.1% Products the main growth driver CRH plc, Preliminary Results 2013 Page 14
Slide 16: Trading Overview – Americas Overall
Trading Overview – Americas Overall 2013 v 2012 €m % chg 2013 2012 ∆ H1 ∆ H2 Sales +2% 9,453 9,268 +1% +3% EBITDA +6% 892 842 +4% +7% EBITDA % 9.4% 9.1% Stronger H2 trends with better weather CRH plc, Preliminary Results 2013 Page 15
Slide 17: Trading Overview – Americas Materials
Trading Overview – Americas Materials €m % chg 2013 2012 Aggregates… modest price Sales -3% 4,721 4,886 & volume increases EBITDA 0% 557 555 Asphalt… lower volumes, margins maintained EBITDA % 11.8% 11.4% Good acquisition contributions CRH plc, Preliminary Results 2013 Page 16
Slide 18: Trading Overview – Americas Materials
Trading Overview – Americas Materials 2013 v 2012 €m % chg 2013 2012 ∆ H1 ∆ H2 Sales -3% 4,721 4,886 -7% -1% EBITDA 0% 557 555 -27% +4% EBITDA % 11.8% 11.4% H2 EBITDA margin 16.8% (vs. 15.9% H2 2012) CRH plc, Preliminary Results 2013 Page 17
Slide 19: Trading Overview – Americas Products
Trading Overview – Americas Products €m % chg 2013 2012 Sales +9% 3,068 2,806 Advances in all segments Volumes up; Modest pricing EBITDA +21% 246 204 benefit EBITDA % 8.0% 7.3% Leverage on the way back up CRH plc, Preliminary Results 2013 Page 18
Slide 20: Trading Overview – Americas Products
Trading Overview – Americas Products 2013 v 2012 €m % chg 2013 2012 ∆ H1 ∆ H2 Sales +9% 3,068 2,806 +9% +10% EBITDA +21% 246 204 +19% +23% EBITDA % 8.0% 7.3% Good H1 & H2 margin progression CRH plc, Preliminary Results 2013 Page 19
Slide 21: Trading Overview – Americas Distribution
Trading Overview – Americas Distribution €m % chg 2013 2012 EBITDA split... Ext 70% : Int 30% Sales +6% 1,664 1,576 Exterior Products: Hurricane Sandy activity in H1 EBITDA +7% 89 83 Some margin pressures in H2 EBITDA % - 5.3% 5.3% Interior Products: Benefiting from multi-family Res growth CRH plc,
Slide 22: Trading Overview – Americas Distribution
Trading Overview – Americas Distribution 2013 v 2012 €m % chg 2013 2012 ∆ H1 ∆ H2 Sales +6% 1,664 1,576 +6% +5% EBITDA +7% 89 83 +20% +3% EBITDA % - 5.3% 5.3% Hurricane Sandy repair activity in H1 CRH plc, Preliminary Results 2013 Page 21
Slide 23: CRH plc, Preliminary Results 2013 Page
CRH plc, Preliminary Results 2013 Page 22
Slide 24: Financial Results – Components of 2013 Performance
Financial Results – Components of 2013 Performance €m Sales EBITDA 2012 18,084 1,563 Good performance from 2012 Translation (404) (36) acquisitions Acquisitions / Divestments 630 73 Restructuring - (11) Lower Pension / CO2 gains in 2013 Pension / CO2 gains - (29) H1 organic EBITDA down €105m Organic
Slide 25: Financial Results – Excluding Impairment
Financial Results – Excluding Impairment €m 2013 2012 PBT before impairments €m Operating profit 750 833 2012 820 Profit on disposals 26 230 Secil / Magnetic disposal (187) Net finance costs (297) (305) Organic (79) Equity-accounted entities 61 62 Other (14) Profit before tax 540 820 2013 540 CRH pl
Slide 26: Cost Actions – 2013 Targets Exceeded
Cost Actions – 2013 Targets Exceeded 200 +€70m 150 Increased Saving €m 100 Procurement Process 50 Structural 0 2013 CMD Target* 2013F 2013 Achieved €195m cost savings in 2013 CRH plc, Preliminary Results 2013 *Capital Markets Day Nov. 2012 Page 25
Slide 27: Cost Actions – Increasing Targets 2012-2015
Cost Actions – Increasing Targets 2012-2015 600 +€85m Increased Saving 400 €m Procurement 200 Process Structural 0 Target* Target Forecast Forecast €450m €535m ~50% of savings to date are permanent in nature CRH plc, Preliminary Results 2013 *Capital Markets Day Nov. 2012 Page 26
Slide 28: Impairment – 2013
Impairment – 2013 Impairment of €755m 100% Americas Businesses impaired & identified Europe 80% for disposal 60% ~3% of EBITDA 40% ~10% of Assets 20% Disposal processes underway 0% Products Materials Distribution Impairment exercise complete CRH plc, Preliminary Results 2013 Page 27
Slide 29: Cash Generation
Cash Generation €m 2013 2012 EBITDA 1,475 1,563 Capital expenditure (497) (544) Working capital 118 5 Other, mainly interest & tax (360) (384) Cash from operations 736 640 Continuing tight Capex & Working capital management CRH plc, Preliminary Results 2013 Page 28
Slide 30: Debt – Liquidity & Debt Profile
Debt – Liquidity & Debt Profile Debt Maturity Profile Liquidity 2.5 Y/E undrawn facilities €1.95Bn €Bn 2.0 €1.5Bn bond issues, record low coupons 1.5 Y/E 2013 cash of €2.5Bn 1.0 Net Debt €2.97Bn 0.5 Net Debt / EBITDA 2.0x 0.0 Cash 2014 2015 2016 2017 2018 2019+ Well positioned to fund future growth
Slide 31: Financial Overview – Key Points in 2013
Financial Overview – Key Points in 2013 Tight capex & Good cash Strong working capital generation liquidity control Impairment Increased Dividend exercise cost savings maintained complete CRH plc, Preliminary Results 2013 Page 30
Slide 32: CRH plc, Preliminary Results 2013 Page
CRH plc, Preliminary Results 2013 Page 31
Slide 33: Portfolio Review – Context
Portfolio Review – Context 25% Return on Invested Capital 20% CRH Group Peers 15% 10% 5% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Industry-leading returns… through the cycle CRH plc, Preliminary Results 2013 Source: Bloomberg Page 32
Slide 34: Portfolio Review – Context
Portfolio Review – Context CRH strong long-term track record of performance & growth Sustainable model for operational improvement Relentless focus on returns Bolt-on acquisition strategy Resulting legacy… a strong portfolio of businesses However, the crisis has highlighted some concerns CRH plc, Pr
Slide 35: Portfolio Review – Context
Portfolio Review – Context 25% Return on Invested Capital CRH Group Distribution 20% Materials Products 15% Peers 10% 5% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Variable delivery across divisions CRH plc, Preliminary Results 2013 Source: Bloomberg Page 34
Slide 36: Portfolio Review – Why?
Portfolio Review – Why? Early 2000s… strong construction growth Easy credit… all acquisitions delivered returns Investment in some unsustainable trends Fundamental review… lessons learned Disposal candidates identified… impairments taken CRH plc, Preliminary Results 2013 Page 35
Slide 37: Portfolio Review – Why Now?
Portfolio Review – Why Now? Significant cyclical swings since 1995… Construction Growth (CAGR) Cycle 1995-06 2006-13 2013-16 Europe +2.0% -3.5% 1% - 2% US +2.5% -5.0% 7% - 9% New cycle… New trends CRH plc, Preliminary Results 2013 Source: Euroconstruct-19 and PCA Page 36
Slide 38: Portfolio Review – Objective
Portfolio Review – Objective Re-setting CRH for growth in the coming cycle… Leverage CRH strengths … where we add value Capture growth trends … with focus & capital discipline Maximise cash generation … for re-investment & growth Optimise portfolio … narrower & deeper Return ROIC and Margins to peak
Slide 39: Portfolio Review – Programme Overview
Portfolio Review – Programme Overview Initial Portfolio Assessment Disposal targets identified On-going Review Impairments taken Identify core businesses Focus on optimisation A More Focussed CRH COMPLETE Better capital allocation Initial Review Narrower & deeper Q3 2014 Identify Core Businesses THE
Slide 40: Portfolio Review – Initial Findings
Portfolio Review – Initial Findings 10% ~10% Sell 20% Will not meet return & growth requirements… to be disposed ~20% Still under review Fix / Invest / Grow / Exit 70% ~70% “Core” Fundamental to CRH future… key to restoring returns Building strong positions across the Group Focus where we have prove
Slide 41: Portfolio Review – Other considerations
Portfolio Review – Other considerations Returning ROIC & Margins to peak Portfolio Review… only part of the solution Market growth & price recovery will be key Sustainable model of business improvement - Commercial synergies - Operational improvements - Leverage network benefits Building better busi
Slide 42: Portfolio Review – Market Review
Portfolio Review – Market Review Portfolio Review looks beyond our own businesses… … includes analysing the potential of CRH’s key regions, markets & market structures CRH plc, Preliminary Results 2013 Page 41
Slide 43: US – Fundamentals
US – Fundamentals Positive fundamentals Changing face of energy Pop. growth & good demographics Funded infrastructure programmes Significant potential in all end-use markets CRH #1 in Building Materials… largely unconsolidated market CRH plc, Preliminary Results 2013 Page 42
Slide 44: US – North East
US – North East Market Characteristics Densely populated / Wealthy economy 35% US roads… 95% Asphalt Short road-repair cycle… ~90% RMI CRH Positions ~40% of US Sales #1 Aggregates; #1 Asphalt #1 Building Products; #1 Distribution CRH strong established positions CRH plc, Preliminary Results 2013 Pag
Slide 45: US – South East
US – South East Market Characteristics Fastest growing region in USA (pop.) 25% total US Res construction Fastest growing Res/Non-Res 2013-18 CRH Broad Business Base #1 Building Products; 90% Res/Non-Res #1 Asphalt #1 Aggregates Distribution CRH #1 position in largest & fastest growth Res/Non-Res ma
Slide 46: US – West
US – West Market Characteristics 6 Key States*… ~65% Construction Spend Sunbelt… 30% of all US Immigration N. West N. West… Pop. growth rate 1.6x US avg. Sunbelt CRH Present in All States, All Businesses 6 Key States*… 60% of sales Sunbelt… 65% of Products sales N. West… 40% of Materials sales Stron
Slide 47: Europe – Fundamentals
Europe – Fundamentals Largest economic bloc Solid developed markets in West Growth potential in East Solid governance structure Growing population Europe West / Europe East… different dynamics CRH plc, Preliminary Results 2013 Page 46
Slide 48: Europe – West
Europe – West Market Characteristics Debt levels remain high…in some countries Same GDP as the United States Shifting to RMI… ~55% of total construction CRH Established Player 3 countries*… ~65% of EBITDA Heavyside… benefits of Materials network Distribution… #2 in Continental Europe Leverage heavys
Slide 49: Europe – East
Europe – East Market Characteristics Key market growth (+5% p.a.) New Build market (~65%) Acquisition opportunities CRH Positions for Growth 3 countries…~90% EBITDA Poland... #1 integrated Materials Finland... #1 integrated Materials Ukraine... #1 Cement Clear drivers for long-term construction grow
Slide 50: Market Review – Emerging Markets
Market Review – Emerging Markets Leading regional positions 2008 India 2007 Regional #1 Resource-backed assets China Regional #1 1999 ASIA Ukraine Measured, disciplined approach Now #1 1995 Poland Now #1 Returns & profitable growth CEE Investing through the cycle… Balancing returns & long-term growt
Slide 51: Portfolio – Current Thinking
Portfolio – Current Thinking US Broadly positive on our businesses, market positions and outlook; potential for some regional or product trimming Europe Some strong businesses, but changing trends; review on-going Emerging Retain measured, progressive approach Markets Further update with AGM in May
Slide 52: CRH – Value-Adding Acquisitions (2010-2012)
CRH – Value-Adding Acquisitions (2010-2012) Return on Net Assets (RONA*) Strict capital discipline 10% Europe : US 50:50 Materials 60% 5% Distribution 20% Products 20% 0% 2011 2012 2013 Cumul. 2011-13 95 deals, ~ €1.6bn spend, returns ~11% CRH plc, Preliminary Results 2013 * RONA = EBIT / Average Ne
Slide 53: CRH – Portfolio Review
CRH – Portfolio Review A unique process in the history of CRH… Approach Status Target • Detailed analysis • Impairment exercise • Leverage regional concluded operations • External consultants • Complete portfolio • Focus where we add review Q3 2014 value • Orderly disposal of • Return ROIC & margins
Slide 54: CRH – At the Core of Our Success
CRH – At the Core of Our Success A well-developed & proven strategy that continues to evolve… A business model of continuous improvement A strong centre with a relentless focus on returns Strict capital discipline Dynamic allocation & re-allocation of resources Drive growth & bring ROIC back to peak
Slide 55: CRH plc, Preliminary Results 2013 Page
CRH plc, Preliminary Results 2013 Page 54
Slide 56: CRH – 2014 Outlook
CRH – 2014 Outlook US Continuing positive momentum Res and Non-Res improving; Infra stable Europe Signs of stabilisation – challenges remain Positive H2 - 2013 trends continuing Portfolio Review Disposal process underway 2013 trough in profits… 2014 a year of profit growth CRH plc, Preliminary Resul
Slide 57: Wrap Up
Wrap Up US recovery Europe Operational underway stabilising leverage Financial Portfolio Growth and Strength Review Returns CRH plc, Preliminary Results 2013 Page 56
Slide 58: Appendices
2015 IR@SUIisS Supplementany Imionmneion
Slide 59: Group Performance Components
Group Performance Components Appendices Profit on Finance Equity €m Sales EBITDA EBIT PBT Disposals costs Accounted 2012 as restated 18,084 1,563 805 230 (305) (84) 646 Exchange effects (404) (36) (19) (1) 5 (2) (17) Acquisitions 672 73 43 - (3) 3 43 Divestments (42) - 2 (191) (2) 4 (187) Restructur
Slide 60: Europe Materials
Europe Materials Appendices Analysis of change % Restructuring Pensions € million 2013 2012 Change Organic Acquisitions Divestments Exchange change / Impairment / CO2 Sales -5% 2,266 2,383 (117) (188) +111 (8) - - (32) EBITDA -21% 278 352 (74) (40) +7 +1 +6 (43) (5) EBITDA/Sales 12.3% 14.8% Operat
Slide 61: Europe Products
Europe Products Appendices Analysis of change % Restructuring € million 2013 2012 Change Organic Acquisitions Divestments Pensions Exchange change / Impairment Sales -4% 2,376 2,477 (101) (100) +47 (28) - - (20) EBITDA -22% 119 152 (33) (28) +4 (1) (9) +3 (2) EBITDA/Sales 5.0% 6.1% Operating profi
Slide 62: Europe Distribution
Europe Distribution Appendices Analysis of change % Restructuring € million 2013 2012 Change Organic Acquisitions Divestments Pensions Exchange change / Impairment Sales -1% 3,936 3,956 (20) (175) +180 - - - (25) EBITDA -14% 186 217 (31) (47) +7 - (1) +11 (1) EBITDA/Sales 4.7% 5.5% Operating profi
Slide 63: Americas Materials
Americas Materials Appendices Analysis of change % Restructuring € million 2013 2012 Change Organic Acquisitions Divestments Exchange change / Impairment Sales -3% 4,721 4,886 (165) (147) +141 - - (159) EBITDA 0% 557 555 +2 (15) +33 - +2 (18) EBITDA/Sales 11.8% 11.4% Operating profit -19% 226 279
Slide 64: Americas Products
Americas Products Appendices Analysis of change % Restructuring € million 2013 2012 Change Organic Acquisitions Divestments Exchange change / Impairment Sales +9% 3,068 2,806 +262 +219 +166 (6) - (117) EBITDA +21% 246 204 +42 +37 +21 - (9) (7) EBITDA/Sales 8.0% 7.3% Operating profit -21% 68 86 (18
Slide 65: Americas Distribution
Americas Distribution Appendices Analysis of change % € million 2013 2012 Change Organic Acquisitions Divestments Restructuring Exchange change Sales +6% 1,664 1,576 +88 +112 +27 - - (51) EBITDA +7% 89 83 +6 +8 +1 - - (3) EBITDA/Sales - 5.3% 5.3% Operating profit +14% 67 59 +8 +10 - - - (2) EBITDA a
Slide 66: 2013 Development Activity €0.72Bn
2013 Development Activity €0.72Bn Appendices €Bn H1 2013 H2 2013 Full Year Eur / Asia 0.24 0.15 0.39 Americas 0.23 0.10 0.33 Group 0.47 0.25 0.72 Transactions: – 11 Europe deals (7 Materials; 1 Products; 3 Distribution) – 17 Americas deals (10 Materials; 4 Products; 3 Distribution) CRH plc, Prelimin
Slide 67: Analysis by Segment
Analysis by Segment Appendices Sales (€m) % chg 2013 2012 EBITDA (€m) % chg 2013 2012 Europe Materials -5% 2,266 2,383 Europe Materials -21% 278 352 Europe Products -4% 2,376 2,477 Europe Products -22% 119 152 Europe Distribution -1% 3,936 3,956 Europe Distribution -14% 186 217 Americas Materials -3
Slide 68: Analysis by Segment
Analysis by Segment Appendices Op. profit (€m) % chg 2013 2012 Profit on disposals (€m) 2013 2012 Europe Materials -82% 39 217 Europe Materials 7 148 Europe Products n/m (406) 19 Europe Products 5 54 Europe Distribution -27% 106 145 Europe Distribution (2) 3 Americas Materials -19% 226 279 Americas
Slide 69: Euroconstruct Estimates 2013
Euroconstruct Estimates 2013 Appendices Construction Output 2013 % chg Construction Output 2013 % chg Belgium -1.3% Poland -8.9% Denmark +2.4% Portugal -16.5% Finland -2.7% Spain -23.0% France -2.8% Switzerland +2.8% Germany +0.3% United Kingdom -1.1% Ireland -3.5% Western Euro
Slide 70: PCA (US) Estimates 2013
PCA (US) Estimates 2013 Appendices Real GDP +2.3% Construction Put-in-place % chg Construction Put-in-place +1.3% Industrial +2.8% Cement consumption +4.5% Office +5.3% Hotels, Motels +20.4% Construction Put-in-place % chg New Housing +17.9% Total Non-residential -2.4% Single family
Slide 71: CRH plc – Contact Us
CRH plc – 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 Website: www.crh.com This presentation contains certain forward-looking statements as defined under US legislation. By their nature, such statem