Crh Plc · NYSE:CRH
Crh — Q3 2023 Earnings Presentation
38 slides from Crh's earnings presentation, Nov 21, 2023
Slide 1: 2023 Results
2023 Results
Slide 2: Disclaimer
Disclaimer Unless the context otherwise provides, “we,” “us,” “our,” “CRH”, the “Company” and like terms refer to CRH plc and its consolidated subsidiaries. Forward-Looking Statements In order to utilize the “Safe Harbor” provisions of the United States Private Securities Litigation Reform Act of 19
Slide 3: Agenda
Agenda Operating Performance Financial Performance Capital Allocation 2024 Outlook Full Year Results 2023 2
Slide 4: Key Messages
Key Messages Financial Delivery Strategy & Capital Allocation • Strong growth across all key metrics • Significant acquisition activity; increasing exposure to high-growth markets • FY23 delivery ahead of previous guidance • European lime divestiture; phase 1 complete • 10th consecutive year of marg
Slide 5: 2023 Financial Highlights
2023 Financial Highlights Return on Revenues Adj. EBITDA1 Margin1 EPS1 Cash Flow Net Assets1 $34.9bn $6.2bn 17.7% $4.65 $5.0bn 15.3% US GAAP +7% +15% +120bps +30% +32% +200bps IFRS2 $34.9bn $6.5bn 18.6% $4.62 $5.0bn 15.1% Previous IFRS guidance for FY23 (published November 21, 2023): EBITDA ~$6.3bn;
Slide 6: Operating Performance
Operating Performance
Slide 7: Americas Materials Solutions – Operating Performance
Americas Materials Solutions – Operating Performance • Strong performance & continued margin expansion … integrated solutions strategy delivering % change $m Total Organic • Robust Infrastructure activity underpinned by historic increase in government funding; state budgets strong Revenues 15,435 +8
Slide 8: Americas Building Solutions – Operating Performance
Americas Building Solutions – Operating Performance • Strong operating leverage & further margin expansion … good contribution from recent acquisitions % change • Positive growth trends continue in Utility Infrastructure $m Total Organic & Outdoor Living Revenues 7,017 +13% +1% • Good momentum in ke
Slide 9: Europe Materials Solutions – Operating Performance
Europe Materials Solutions – Operating Performance • Strong performance & margin well ahead of PY % change • Infrastructure demand underpinned by government $m Total Organic & EU funding Revenues 9,690 +4% +3% • Positive pricing momentum; 6th consecutive year of Adj. EBITDA 1,395 +17% +14% improveme
Slide 10: Europe Building Solutions – Operating Performance
Europe Building Solutions – Operating Performance • Performance impacted by subdued Residential activity % change $m Total Organic • Infrastructure & Non-Residential demand resilient Revenues 2,807 -2% -7% • Ongoing focus on commercial management Adj. EBITDA 280 -17% -20% & price progression Margin
Slide 11: Financial Performance
Financial Performance
Slide 12: Transition to US GAAP
Transition to US GAAP • FY23 results filed on Form 10-K under US GAAP • Financial restatements available on crh.com (incl. IFRS to US GAAP reconciliations) • No material net impact on EPS • Quarterly US GAAP reporting on Form 10-Q from Q1 2024 Full Year Results 2023 11
Slide 13: Strong Organic Delivery
Strong Organic Delivery 25 287 324 573 $6,500m +10% $6,176m $5,615m LFL EBITDA FY22 Organic Acquisitions / Currency FY23 Adj. IFRS to FY23 Adj. EBITDA (Divestitures)* Translation EBITDA US GAAP EBITDA 1 1 1 (IFRS) (IFRS) Transition (US GAAP) *Includes 2022 gains on disposal of long-lived assets and
Slide 14: Strong & Flexible Balance Sheet
Strong & Flexible Balance Sheet $4.0bn $5.0bn 0.9x Net Debt / $1.8bn Adj. EBITDA $1.2bn $0.7bn $5.1bn $5.4bn FY22 IFRS to FY23 Net M&A / Dividends / Cash Net Debt Capex US GAAP Net Debt 1 Other Buybacks Inflow 1 (IFRS) Transition (US GAAP) 1Represents a non-GAAP measure. See the discussion within 'N
Slide 15: Capital Allocation
Capital Allocation
Slide 16: Capital Allocation Priorities
Capital Allocation Priorities Acquisitions Dividends • Strong pipeline of opportunities • Consistent long-term dividend growth • Disciplined & value-focused • Current annual run-rate ~$1bn p.a. Up to $5bn+ Significant ~$16bn M&A Run-rate Dividends ~$35bn optionality for ~70% next 5 years ~30% shareh
Slide 17: Value Creation Through Active Portfolio Management
Value Creation Through Active Portfolio Management • Continuous process of portfolio optimization ... $13bn divested & $24bn acquired over last decade • Building a structurally better business … … simpler, leaner & more focused … less cyclical & less capital intensive … higher margins, cash & return
Slide 18: Increasing Exposure to Attractive, High-Growth Markets
Increasing Exposure to Attractive, High-Growth Markets $2.1bn Acquisition of Materials Assets in Texas $0.7bn Proposal to Acquire Majority Stake in Adbri • Further strengthening our #1 market • Quality assets with leading positions position in Texas – the fastest in attractive, high-growth markets g
Slide 19: Entering a Golden Age for Construction
Entering a Golden Age for Construction • Unprecedented investment in critical infrastructure & re-industrialization • #1 beneficiary of significant growth phase for our industry • Opportunities to accelerate growth & value creation … Expanding capacity to meet growing demand … Building on leading po
Slide 20: Proven Delivery from Growth Capex
Proven Delivery from Growth Capex Accelerating growth in existing businesses Strong track record of Low risk, high-returning successful execution investments ~$2bn invested over last 3 years 20%+ return on net assets Accretive to growth, margins & returns Full Year Results 2023 19
Slide 21: Significantly Increasing Allocation to High-Returning Growth Capex
Significantly Increasing Allocation to High-Returning Growth Capex Expanding capacity in existing high-growth markets • Strong pipeline of projects … capitalizing on significant growth opportunities Driving innovation & product development • Investing in our largest, most profitable Enhancing
Slide 22: 2024 Outlook
2024 Outlook
Slide 23: End-Market Outlook for 2024
End-Market Outlook for 2024 Favorable underlying demand with positive pricing momentum North America Europe ~75% Adj. EBITDA 1 ~25% Adj. EBITDA1 Infrastructure Continued rollout of once-in-a- Infrastructure Robust demand underpinned by ~40% Sales generation federal & state investment ~35% Sales gove
Slide 24: 2024 Guidance (US GAAP)
2024 Guidance (US GAAP) Adj. EBITDA 1 Net Income EPS $6.55bn – $6.85bn $3.55bn – $3.80bn $5.15 – $5.45 2023: $6.2bn 2023: $3.4bn 2023: $4.65 1 1 EPS guidance based on approximately 690 million of common shares currently outstanding. Full Year Results 2023 23 1Represents a non-GAAP measure. See the d
Slide 25: Appendix
Appendix
Slide 26: Americas Materials Solutions
Americas Materials Solutions Analysis of change $ million 2022 Currency Acquisitions Divestitures Organic 2023 % Change Total revenues 14,324 (44) +242 - +913 15,435 +8% Adjusted EBITDA 2,638 (6) +42 - +385 3,059 +16% Adjusted EBITDA margin 18.4% 19.8% Full Year Results 2023 25
Slide 27: Americas Building Solutions
Americas Building Solutions Analysis of change $ million 2022 Currency Acquisitions Divestitures Organic 2023 % Change Total revenues 6,188 (14) +751 - +92 7,017 +13% Adjusted EBITDA 1,219 (4) +153 - +74 1,442 +18% Adjusted EBITDA margin 19.7% 20.6% Full Year Results 2023 26
Slide 28: Europe Materials Solutions
Europe Materials Solutions Analysis of change $ million 2022 Currency Acquisitions Divestitures Organic 2023 % Change Total revenues 9,349 +186 +61 (157) +251 9,690 +4% Adjusted EBITDA 1,195 +30 +10 (12) +172 1,395 +17% Adjusted EBITDA margin 12.8% 14.4% Full Year Results 2023 27
Slide 29: Europe Building Solutions
Europe Building Solutions Analysis of change $ million 2022 Currency Acquisitions Divestitures Organic 2023 % Change Total revenues 2,862 +69 +95 - (219) 2,807 -2% Adjusted EBITDA 336 +4 +8 - (68) 280 -17% Adjusted EBITDA margin 11.7% 10.0% Full Year Results 2023 28
Slide 30: Materials Volumes & Prices
Materials Volumes & Prices Americas Materials Europe Materials YoY % Change Volumes Price Volumes Price Aggregates -1% +14% -7% +9% Asphalt - +7% -6% +10% Cement -3% +15% -10% +18% RMC -2% +12% -14% +17% Full Year Results 2023 29
Slide 31: 2024 Financial Guidance (US GAAP)
2024 Financial Guidance (US GAAP) Low High 2023 1 Net income (i) $3.55bn $3.80bn $3.4bn 1 Adj. EBITDA $6.55bn $6.85bn $6.2bn 1 EPS (i) $5.15 $5.45 $4.65 Capital expenditure $2.2bn $2.4bn $1.8bn (i) 2024 Net income and EPS are based on approximately $0.4 billion interest expense, net, effective tax r
Slide 32: Sustainability – Another Year of Progress
Sustainability – Another Year of Progress Revenue from products with enhanced sustainability attributes1 ($bn) #1 43.9 0.9 13.9 12.6 11.4 9.4 m tonnes kg/$ Revenue The largest recycler wastes and by-products from other CO2e emissions per dollar of in North America industries recycled in 2023 revenue
Slide 33: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted EBITDA: Adjusted EBITDA is defined as earnings from continuing operations before interest, taxes, depreciation, depletion, amortization, loss on impairments, gain/loss on divestitures, income/loss from equity method investments, substantial acquisition-related costs
Slide 34: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted EBITDA (continued): Adjusted EBITDA is not defined by GAAP and should not be considered as an alternative to earnings measures defined by GAAP. Reconciliation to its nearest GAAP measure for the mid-point of the 2024 Adjusted EBITDA guidance is presented below: in $
Slide 35: Non-GAAP Reconciliations
Non-GAAP Reconciliations Return on Net Assets (RONA): Return on Net Assets is a key internal pre-tax and pre-impairment (which is non-cash) measure of operating performance throughout the Company and can be used by management and investors to measure the relative use of assets between CRH’s segments
Slide 36: Non-GAAP Reconciliations
Non-GAAP Reconciliations Net Debt: Net Debt is used by management as it gives additional insight into the Company’s current debt position less available cash. Net Debt is provided to enable investors to see the economic effect of gross debt, related hedges and cash and cash equivalents in total. Net
Slide 37: Non-GAAP Reconciliations
Non-GAAP Reconciliations EPS pre-impairment: EPS pre-impairment is a measure of the Company's profitability per share from continuing operations excluding any loss on impairments (which is non-cash) and the related tax impact of such impairments. It is used by management to evaluate the Company's un
Slide 38: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted EBITDA (IFRS) to Adjusted EBITDA (U.S. GAAP) Reconciliation: in $ millions 2023 2022 Adjusted EBITDA (IFRS) (i) 6,500 5,692 U.S. GAAP Adjustments: Leases (293) (255) Provisions (36) (22) Pensions 6 (2) Other (1) (25) Adjusted EBITDA (U.S. GAAP) 6,176 5,388 Total rev