CRH PLC · NYSE:CRH
CRH — Sanford C. Bernstein Strategic Decisions Conference 2012
28 slides from CRH's conference presentation, Sep 19, 2012
Slide 1: Sanford C. Bernstein Strategic Decisions Conference
Sanford C. Bernstein Strategic Decisions Conference M YLES L EE – C HIEF E XECUTIVE S EPTEMBER 2012
Slide 2: Agenda
1 Agenda CRH Overview Development Strategy Cost Reduction Action CRH Full Year Outlook CRH Strengths Sanford C. Bernstein Strategic Decisions Conference 19 Sept. 2012
Slide 3: CRH Overview
2 CRH Overview CRH ………….….. a diversified, international building materials Group Scale …….…..……. 36 countries; 3,600 locations; 76k people; Sales €18+Bn (2011) Market Cap .....…c£9Bn (c€11Bn); a sector leader worldwide Listed ……………….London (LSE), Dublin (ISE), and New York (NYSE) Indices ………...…. F
Slide 4: CRH Balance – exposure to multiple demand drivers
3 CRH Balance – exposure to multiple demand drivers Materials Products Distribution Cement & Aggregates Products for General Merchants Asphalt & Paving Construction Solutions Specialised Distribution Readymixed Concrete Do-It-Yourself Early Cycle Servicing the breadth of construction Late Cycle New
Slide 5: CRH Balance – Expanding Geographic Footprint
4 CRH Balance – Expanding Geographic Footprint 1980 1990 2000 2011 Ireland W.Europe USA Emerging Present in 36 countries ... Strong positions in developed markets (85% EBITDA) Growing presence in emerging economies (15% EBITDA) Sanford C. Bernstein Strategic Decisions Conference 19 Sept. 2012 Basis:
Slide 6: CRH – Regional and National Leadership Positions
5 CRH – Regional and National Leadership Positions Developing Europe United States Economies Top 10 Cement No. 1 Asphalt No. 1 Building Materials Region Aggregates & No. 3 Aggregates in Poland Leader RMC No.1 Concrete Top 3 RMC No. 1 Cement – N. East China Products No. 1 Concrete (26% Associate) No.
Slide 7: Europe by Segment
6 Europe by Segment Materials Eurozone 40% of revenues; Strong CEE positions; Growth platforms in China/India Residential 35%; Non-Residential 25%; Infrastructure 40% Products Eurozone 70% of revenues; Large Benelux presence c. 1/3rd of segment Residential 45%; Non-Residential 35%; Infrastructure 20
Slide 8: Europe Divisions – €10bn Revenues
7 Europe Divisions – €10bn Revenues Eurozone (€bn) Materials Products Distribution Total Benelux 0.2 0.9 1.5 2.6 Germany/Austria - 0.4 1.2 1.6 France - 0.3 0.3 0.6 Nordic 0.4 0.2 - 0.6 Republic of Ireland 0.3 - - 0.3 Other 0.2 - - 0.2 Discontinued 0.1 0.1 - 0.2 1.2 1.9 3.0 6.1 Non-Eurozone (€bn) Swi
Slide 9: % of Europe Division Sales and 2012 GDP Growth
8 % of Europe Division Sales and 2012 GDP Growth % of Europe Eurozone Non-Eurozone GDP Growth % Division Sales 3.0% 2.0% 1.0% 0.0% -1.0% Sanford C. Bernstein Strategic Decisions Conference 19 Sept. 2012 *Source: GDP growth % as per EIU data July 2012
Slide 10: Americas by Segment
9 Americas by Segment Materials Construction (c. 1/3rd of sales) creates pull through for aggregates / asphalt / RMC Significant aggregates backing; 12.5bn tons (100+ years) reserves Residential 10%; Non-Residential 25%; Infrastructure 65% Products Broad product offering, serving Residential (50%) a
Slide 11: CRH Americas – $11.5bn Revenues
10 CRH Americas – $11.5bn Revenues Region US Census Division ($bn) Materials Products Distribution Total West Pacific 0.3 0.3 0.5 1.1 Mountain 0.9 0.2 0.2 1.3 Mid - West West North Central 0.6 0.1 0.1 0.8 East North Central 0.9 0.4 0.2 1.5 South West South Central 0.5 0.4 0.1 1.0 East South Central
Slide 12: % of Americas Division Sales and US Population
11 % of Americas Division Sales and US Population Pacific: no Materials positions in California Mountain : strong Materials positions across these states New England / Mid Atlantic : good market positions Other regions : sales proportions closely match population Well placed for US economic recovery
Slide 13: CRH – The International Building Materials Group
12 CRH – The International Building Materials Group 2011: Sales €18.1 Bn … EBITDA €1.66 Bn Geography Nth America 45% Europe 40% Emerging 15% Product Materials 58% Products 22% Distribution 20% Sector Infra 35% Non-Res 30% Res 35% End-Use New 55% RMI 45% A Balanced Business by Geography, Product, Sec
Slide 14: Agenda
13 Agenda CRH Overview Development Strategy Cost Reduction Action CRH Full Year Outlook CRH Strengths Sanford C. Bernstein Strategic Decisions Conference 19 Sept. 2012
Slide 15: Core Elements of CRH Development Strategy
14 Core Elements of CRH Development Strategy Balance remains the key – by geography, sector end-use, new vs RMI Rigorous value-based approach to development Build & Grow approach – creating clustered groups of businesses Open to larger transactions – but no “bet the ranch” moves The priority – to de
Slide 16: Acquisition Spend 2002 to date
15 Acquisition Spend 2002 to date Sanford C. Bernstein Strategic Decisions Conference 19 Sept. 2012
Slide 17: 2012 Acquisition Activity
16 2012 Acquisition Activity H1 spend of approx. €0.25bn (on 18 transactions) Further expenditure of c. €0.1bn to date in H2 (on 5 transactions) Cumulative year to date 2012 spend c €0.35bn Further €0.1bn (2 transactions) awaiting regulatory clearance Active pipeline of opportunities; maintaining a
Slide 18: Agenda
17 Agenda CRH Overview Development Strategy Cost Reduction Action CRH Full Year Outlook CRH Strengths Sanford C. Bernstein Strategic Decisions Conference 19 Sept. 2012
Slide 19: Significant Multi-Year Cost Reduction Programme
18 Significant Multi-Year Cost Reduction Programme P&L Impact Initiatives (€m) 2007 2008 2009 2010 2011 Annualised 2007 50 50 2008 447 398 845 2009 450 145 595 2010 374 37 411 2011 €1.8 billion 117 117 Gross savings 50 447 848 519 154 2,018 Cost to implement - (62) (205) (100) (61) (428) Net Savings
Slide 20: Management Response to Market Challenges
19 Management Response to Market Challenges FOCUSSED ON EXCELLENCE OPERATIONAL COMMERCIAL Cost Savings outweighed by volume declines / cost inflation Sanford C. Bernstein Strategic Decisions Conference 19 Sept. 2012
Slide 21: 2012 – Further Cost Reduction Initiatives
20 2012 – Further Cost Reduction Initiatives Responding particularly to more difficult European conditions Sharpening our commercial focus Aggressively pursuing further operational efficiencies Identifying additional measures as market outlook evolves Maintaining proactive approach evident since 200
Slide 22: Agenda
21 Agenda CRH Overview Development Strategy Cost Reduction Action CRH Full Year Outlook CRH Strengths Sanford C. Bernstein Strategic Decisions Conference 19 Sept. 2012
Slide 23: 2012 Outlook
22 2012 Outlook Europe Eurozone problems intensified from March through mid-August Continuing to erode consumer and business confidence Expect H2 l-f-l sales to show a higher decline than H1’s -5% Americas Current trends suggest Q1 weather pulled forward demand After good early momentum US economic
Slide 24: CRH Focus
23 CRH Focus Cost base Commercial Further adjusting cost base in Sharpening commercial focus in response to evolving demand face of ongoing margin pressures Cash Generation Development Optimising cash generation capacity Maintaining strong balance sheet - working capital & capex control for acquisit
Slide 25: Agenda
24 Agenda CRH Overview Development Strategy Cost Reduction Action CRH Full Year Outlook CRH Strengths Sanford C. Bernstein Strategic Decisions Conference 19 Sept. 2012
Slide 26: CRH Strengths
25 CRH Strengths Proven Business Model Balance Sheet Disciplined approach One of to long-term value creation the sector’s strongest Dividend Delivery Acquisition Capability Unique Substantial capacity sector record for appropriate opportunities Sanford C. Bernstein Strategic Decisions Conference 19
Slide 27: Forthcoming Events
26 Forthcoming Events Tuesday, 13th November – Interim Management Statement Friday, 16th November – Capital Markets Day, London Monday, 19th November – Capital Markets Day, New York Updates on recent trading, full year outlook and further cost reduction measures Sanford C. Bernstein Strategic Decisi
Slide 28: Contact Us
27 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 This presentation contains certain forward-looking statements as defined under US legislation. By their Website: www.crh.com nature, such statements in
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