Crh Plc · NYSE:CRH
Crh — Corporate Update (July 2009)
27 slides from Crh's corporate update, Jul 7, 2009
Slide 1: Interim Trading & Development Update
Interim Trading & Development Update Myles Lee Chief Executive Albert Manifold Chief Operating Officer Glenn Culpepper Finance Director 7 July 2009 CRH Interim Trading Statement & Development Update, 7th July 2009 1
Slide 2: CRH Interim Updating Statement: H1 2009 Key Points
CRH Interim Updating Statement H1 2009 – Key Points With global recessionary environment – May/Jun weaker than anticipated Expect seasonally less profitable H1 to show a c.40% EBITDA decline H1 EBIT circa two-thirds lower; DA more evenly spread between H1 and H2 H1 PBT of the order of €0.1 B
Slide 3: Segmental Trading Performance
Segmental Trading Performance CRH Interim Trading Statement & Development Update, 7th July 2009 3
Slide 4: Europe Materials
Europe Materials H1 2009 Operating Profit Indications Operating Profit Materials Products Distribution Total H1 2009 Indications -c. 70% -c. 50% -c. 30% -c. 60% H1 2008 Actual €267m €158m €90m €515m H1 ‘09 reflects restructuring costs (-c €25m) and FX (-c €30m) Poland: May/June cement volumes br
Slide 5: Europe Products
Europe Products H1 2009 Operating Profit Indications Operating Profit Materials Products Distribution Total H1 2009 Indications -c. 70% -c. 50% -c. 30% -c. 60% H1 2008 Actual €267m €158m €90m €515m H1 ’09 reflects restructuring costs of c. €15m Cumulative ytd like-for-like sales are approx 20% b
Slide 6: Europe Distribution
Europe Distribution H1 2009 Operating Profit Indications Operating Profit Materials Products Distribution Total H1 2009 Indications -c. 70% -c. 50% -c. 30% -c. 60% H1 2008 Actual €267m €158m €90m €515m More robust performance than Products due to higher RMI exposure Cumulative ytd like-for-like
Slide 7: Americas Materials
Americas Materials H1 2009 Operating Profit Indications Operating Profit Materials Products Distribution Total H1 2009 Indications -c. 100% -c. 85% -c. 100% -c. 90% H1 2008 Actual $47m $210m $44m $301m CRH market seasonality typically delivers a modest H1 outcome H1 ’09 hit by poor early weather
Slide 8: Americas Products
Americas Products H1 2009 Operating Profit Indications Operating Profit Materials Products Distribution Total H1 2009 Indications -c. 100% -c. 85% -c. 100% -c. 90% H1 2008 Actual $47m $210m $44m $301m H1 reflects restructuring costs of c.$30m With falling Non-Res like-for-like sales in US$ are d
Slide 9: Americas Distribution
Americas Distribution H1 2009 Operating Profit Indications Operating Profit Materials Products Distribution Total H1 2009 Indications -c. 100% -c. 85% -c. 100% -c. 90% H1 2008 Actual $47m $210m $44m $301m Exterior Products adversely affected by poor early weather … … but has stabilised over rece
Slide 10: CRH Interim Updating Statement
CRH Interim Updating Statement Extremely challenging H1 trading across all operating segments Impacted by harsh early weather and tough 2008 comparatives Rate of profit decline eased substantially in Q2 compared with Q1 … … though May/June pick-up not as strong as anticipated Further signi
Slide 11: Cost Reduction Update
Cost Reduction Update CRH Interim Trading Statement & Development Update, 7th July 2009 11
Slide 12: Increased Cost Savings
Increased Cost Savings Cumulative annualised 2007 - 2010 Announced Jan-09 Gross savings of €895m … revised to … July-09 Gross savings of €1,450m Total Total savings savings €555m €555m ahead ahead of of €895m €895m savings savings announced announced Jan-09 Jan-09 CRH Interim Trading Statement &
Slide 13: Revised Cost Savings Plan Overview
Revised Cost Savings Plan Overview Impact Gross Annualised Initiatives (€m) ‘07 ‘08 ‘09 ‘10 Savings 2007 50 - - - 50 2008 - 447 398 - 845 2009 - - 450 105 555 Gross savings 50 447 848 105 1,450 Cost to implement - 62 158 30 Net savings 50 385 690 75 CRH Interim Trading Statement & Development Update
Slide 14: Cost Savings by Division
Cost Savings by Division Jan-09 Jan-09 Increased Increased to to €895m €895m €1,450m €1,450m Europe Americas Americas Materials P&D 23% Europe P&D 29% Materials 32% 38% Americas Materials Europe Europe 26% P&D P&D Americas 15% 13% Materials 24% Cost Cost savings savings across across all all divisio
Slide 15: Breakdown of Cost Savings
Breakdown of Cost Savings Cumulative Cumulative Cost Cost Savings Savings €1,450m €1,450m Overheads Direct labour 30% 35% Other direct: subcontractors, procurement, energy 35% Focus Focus on on continuous continuous and and sustainable sustainable cost cost savings savings CRH Interim Trading Statem
Slide 16: Direct Labour Savings
Direct Labour Savings 35% 35% of of Savings Savings Operations Operations rationalised rationalised €508m €508m and and capacity capacity reduced reduced Materials ¾Flexible programme of extended layoffs, closures Overheads ¾Rotating crews serving different ops Direct labour 30% 35% ¾Reduced shift
Slide 17: Subcontractor, Procurement & Energy Savings
Subcontractor, Procurement & Energy Savings 35% 35% of of Savings Savings Leveraging Leveraging our our operating operating efficiency, efficiency, €514m €514m flexibility flexibility and and scale scale Reduced subcontracting costs ¾Transport & delivery ¾Maintenance, drilling, blasting, etc. Over
Slide 18: Overhead Savings
Overhead Savings 30% 30% of of Savings Savings Resizing Resizing Business Business Overheads Overheads €428m €428m Shared services initiatives Other ¾US Distribution, Denmark, Ireland overhead 13% ¾Significant headcount reductions Overhead Direct labour labour 35% 17% Other measures Other direct
Slide 19: Headcount and Capacity Reductions
Headcount and Capacity Reductions Underlying Divisions Headcount Reduction Capacity Reductions (H1 ’09 v H1 ’07) Europe Materials -24% ~10% of locations temporarily closed Europe Products -23% ~13% production capacity idled Europe Distribution -10% 12 distribution outlets temporarily shut down Ameri
Slide 20: Cash Generation & Debt Profile
Cash Generation & Debt Profile CRH Interim Trading Statement & Development Update, 7th July 2009 20
Slide 21: Cash and Debt Management
Cash and Debt Management Liquidity Focus Reduced cash outflow from TWC and Capital Expenditure Inventory – intense focus on balancing supply with demand Receivables – focus on collections – DSO’s remain stable Capex – spending restraint – H1 levels c.50% of H1 2008 Excellent debt maturity
Slide 22: Free Cash Flow
Free Cash Flow H1 outflow estimated similar to 2008 despite lower PBT € Bn Estimated Actual H1 ’09 H1 ’08 Profit before tax 0.1 0.6 Depreciation/Amortisation 0.4 0.4 Working capital (0.3) (0.6) Tax Paid (0.1) (0.1) Dividends (0.3) (0.3) Capital expenditure (0.3) (0.6) Other - - Operating cash outflo
Slide 23: June '09 Debt Maturity Profile
June ‘09 Debt Maturity Profile June 2009 (estimated) CRH Debt € Bn Gross Debt by Maturity Undrawn (incl. Derivatives) (incl. JVs) Committed Facilities O/Ds 0.2 - Within 1 year 0.9 0.3 2 years 0.5 0.3 3 years 1.3 0.7 4 years 0.2 0.1 5 years 1.3 0.1 5 years + 2.1 - Total 6.5 1.5 Cash/Liquid Investment
Slide 24: 2009 Full Year Outlook
2009 Full Year Outlook CRH Interim Trading Statement & Development Update, 7th July 2009 24
Slide 25: Full Year Outlook
Full Year Outlook Europe Continuing tough markets; CEE outlook somewhat more robust for H2 H1 rate of profit decline expected to moderate in H2 … … with significant restructuring benefits and less demanding comparatives Americas Profit performance biased to H2 due to seasonality of Materials
Slide 26: Summary
Summary Resolutely focused on commercial delivery Implementing further cost reduction / cash generating measures Well positioned for development opportunities For transactions that offer compelling value / strategic fit CRH CRH …… responding responding vigorously vigorously to to extremely e
Slide 27: 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 This presentation contains certain forward-looking statements as defined under US legislation. By their nature, such s