CRH PLC · NYSE:CRH
CRH — Davy European Building Materials Conference 2008
43 slides from CRH's conference presentation, Sep 4, 2008
Slide 1: Davy European Building Materials Conference
Slide 2: Contents
Contents H1 2008 Highlights 2 2008 Interim Results 12 Outlook 23 Appendices 28 Contact Us 42 CRH plc, Davy European Building Materials Conference, New York, September 2008 1
Slide 3: CRH Overview
CRH Overview CRH plc, Davy European Building Materials Conference, New York, September 2008 2
Slide 4: CRH Overview: The International Building Materials Group
CRH Overview The International Building Materials Group 1970 merger of Irish Cement and Roadstone; Sales €26M, 95% Ireland Now in 34 countries; 3,500+ locations; 92,000+ people Annualised Sales over €20Bn focused on three core businesses Evenly balanced across geographies, products and secto
Slide 5: CRH… An International Group: Developed Markets
CRH… An International Group Strong Leadership positions in the Developed World … Developed Markets Leading regional & national positions in Materials, Products & Distribution Opportunities: Ops synergies, Geographic infill, Product extension 84% Group EBITDA from 17 stable developed world countr
Slide 6: CRH… An International Group: Emerging Regions
CRH… An International Group Growing presence in Emerging Regions … Emerging Regions Heavyside Entry Cement Emphasis Meaningful Scale Potential to create integrated Materials businesses as markets mature 16% Group EBITDA from 17 emerging region countries; high growth potential for the future
Slide 7: Focused and Diversified: Materials
CRH... Focused and Diversified Servicing the breadth of Building Materials demand from … Materials (55% EBITDA) The Fundamentals Europe ¾Top 10 Cement ¾Leader Aggregates, R/mix US ¾No.3 Aggregates ¾No.1 Asphalt, Top 5 R/mix Vertically integrated primary materials businesses with c13Bn tonnes strateg
Slide 8: Focused and Diversified: Concrete Products
CRH... Focused and Diversified Servicing the breadth of Building Materials demand through … Concrete Prods (20% EBITDA) Constructing the Frame Europe ¾No.1 Arch/Structural Concrete ¾No.1 Construction Accessories Americas ¾No.1 Arch/Precast Concrete ¾No.2 Construction Accessories Building systems and
Slide 9: Focused and Diversified: Other Products
CRH... Focused and Diversified Servicing the breadth of Building Materials demand through … Other Products (12% EBITDA) Completing the Envelope Europe ¾No.1 Facing Brick [UK/NL] ¾No.1 EPS Insulation [EI/NL/PL/Nordics] ¾No.1 Fencing & Security Americas ¾No.1 Architectural Glass ¾No.1 Clay Brick [NE/M
Slide 10: Focused and Diversified: Distribution
CRH... Focused and Diversified Servicing the breadth of Building Materials demand to … Distribution (13% EBITDA) Fit-out and Renewal Cementbouw Store Europe ¾Top 3 BM Distributor Mainland Europe ¾No.1 NL, No.2 BE - DIY Americas ¾Top 3 Roofing / Siding ¾Top 3 Interior Products Distribution channels t
Slide 11: Providing Building Materials for Our World
CRH... Focused and Diversified Providing Building Materials for Our World Materials Products Products Distribution The Fundamentals Constructing Completing Fit-Out the Frame the Envelope and Renewal ¾Aggregates ¾Precast Concrete ¾Clay ¾Builders ¾Cement ¾Architectural ¾Glass Merchants ¾Roofing & Conc
Slide 12: CRH… International and Balanced
CRH… International and Balanced Broad exposure to industry demand drivers Heavyside 75% Lightside 25% Product Materials Concrete Other Distrib Products Products 55% 20% 12% 13% Geography North Western Emerging America Europe Regions 42% 42% 16% End-use Residential Non-Residential Infrastructure 40%
Slide 13: 2008 Interim Results
2008 Interim Results CRH plc, Davy European Building Materials Conference, New York, September 2008 12
Slide 14: H1 2008 Highlights
H1 2008 Highlights Strategic Balance underpins Performance Sales unchanged, EBITDA down -3%, EBIT down -8%, Disposals up +9% PBT €606 million; down -10% after adverse translation of €21 million Tax rate 23% (2007: 24.5%) based on full year estimate Earnings 85.5c, down -8%; Dividend 20.5c, u
Slide 15: H1 2008 in Context: EBITDA and Operating Profit
H1 2008 in Context EBITDA and Operating Profit 2008 EBITDA: €1.1Bn; down 3% 2007 H1 EBITDA 2006 Margin: 11.4% vs 11.8% (€ Bn) 2005 2004 ‘92 – ‘07: +22% cagr 0.0 0.2 0.4 0.6 0.8 1.0 1.2 2008 Op. Profit: €0.71Bn; down 8% 2007 H1 Op.Profit 2006 Margin: 7.3% vs 8.0% (€ Bn) 2005 2004 ‘92 – ‘0
Slide 16: H1 2008 in Context: EPS and Dividend
H1 2008 in Context EPS and Dividend 2008 H1 EPS: 85.5c; down -8% 2007 H1 EPS 2006 Down -5% in constant currency (cent) 2005 2004 ‘92 – ‘07: +20% cagr 0 20 40 60 80 100 2008 H1 DPS: 20.5c; up 2.5% 2007 H1 Dividend 2006 Continuing payout increase (cent) 2005 2004 ‘83 – ‘07: +14% cagr 0 5 1
Slide 17: Europe – Overall
Europe – Overall Op.Profit up +4%, with contributions from 2007/08 acqs H1 Acquisitions €m 2008 2007 Change Organic 2007 2008 FX Sales +9% 5,523 5,071 +452 -85 +487 +82 -32 Op. profit +4% 515 495 +20 -14 +27 +6 +1 Op. margin 9.3% 9.8% Operating profit excludes profit on disposal Materials ¾ Positi
Slide 18: Americas – Overall
Americas – Overall Operating Profit down -18% in constant currency H1 Acquisitions €m 2008 2007 Change Organic 2007 2008 FX Sales -10% 4,181 4,627 -446 -404 +513 +39 -594 Op. profit -29% 197 276 -79 -70 +23 +3 -35 Op. margin 4.7% 6.0% Operating profit excludes profit on disposal Materials ¾ Trend
Slide 19: H1 2008 Development Activity
H1 2008 Development Activity €0.7Bn spend maintaining strong development record H1 2008 Acquisitions: 40% Europe; 15% Americas; 45% Emerging Regions ¾ Materials – first cement investment in India (45% My Home Industries) ¾ Products – extension of Construction Accessories platform (Ancon) ¾ 35 Bolt
Slide 20: Responsive to Changing Markets
Responsive to Changing Markets A Focus on Cost … Targeted cost reduction programmes an ongoing feature of CRH Tailored to ongoing business performance / market developments Significant specific measures implemented since early 2007 ¾ Labour savings appropriate to balance capacity / market dema
Slide 21: Annualised Savings
Annualised Savings Achieved to date €m Europe Americas Total Labour Savings 95 125 220 Energy Related 45 20 65 Purchasing Initiatives etc. 45 40 85 Bought-in Services 105 75 180 Total gross savings 290 260 550 Cost to Implement c €50m 2007 2008 2009 Analysis of net incremental savings: €50m €350
Slide 22: Balance Sheet Management
Balance Sheet Management Cash Generation and Funding Cash Generation ¾ H2 operating cash inflow pre-acquisitions / buyback to exceed €1Bn ¾ Adjusting maintenance capex levels due to reduced demand ¾ Focus on development opportunities offering compelling value & strategic fit Funding ¾ €0.65Bn of
Slide 23: Delivering Value for Shareholders
Delivering value for Shareholders Dividend Policy and Share Buyback Dividend Policy ¾ 2007 total dividend (up 31%), cover 3.9 times ¾ Target cover c 3.5 times for 2008 financial year ¾ H1 2008 dividend of 20.5c per share up 2.5% Share Buyback ¾ Share repurchase programme of up to 5%, initiated J
Slide 24: Outlook
Outlook CRH plc, Davy European Building Materials Conference, New York, September 2008 23
Slide 25: 2008 Full Year Europe Outlook
2008 Full Year Europe Outlook Low single digit % increase on 2007 Op. Profit Indications Materials Products Distribution Total 2008 Change mid-teen % mid-teen % similar low single increase decrease outcome digit % inc 2007 Actual €586m €308m €212m €1,106m Materials ¾ Positive H1 with continuing ad
Slide 26: 2008 Full Year Americas Outlook
2008 Full Year Americas Outlook US$ Op. Profit to show low-teen % decline on 2007 Indications Materials Products Distribution Total 2008 Change low-teen % high-teen % mid-teen % low-teen % decrease decrease increase decrease 2007 Actual $781m $466m $96m $1,343m Materials ¾ Pricing to recover input
Slide 27: Overall 2008 Outlook
Overall 2008 Outlook Twin goals – Performance and Growth Some recent easing of commodity prices & strengthening US$ However, negative economic / financial market newsflow has continued With recent international developments adding to risk and uncertainties As previously indicated 2008 outcom
Slide 28: Going Forward
Going Forward Continuation of our clear consistent strategic vision … Strong market positions; strategic reserves; experienced management team Balance sheet capacity to avail of appropriate development opportunities Difficult market outlook for immediate future Proactively managing cost base
Slide 29: Appendices
Appendices CRH plc, Davy European Building Materials Conference, New York, September 2008 28
Slide 30: Europe Materials
Europe Materials Strong organic growth in higher margin CEE cement ops H1 Acquisitions €m 2008 2007 Change Organic 2007 2008 FX Sales +7% 1,810 1,686 +124 -30 +153 +6 -5 Op. profit +20% 267 222 +45 +25 +16 - +4 Op. margin 14.8% 13.2% Operating profit excludes profit on disposal € Op. Profit +20% H1
Slide 31: Europe Products
Europe Products Sharp decline in UK Clay the main impact H1 Acquisitions €m 2008 2007 Change Organic 2007 2008 FX Sales +4% 1,908 1,826 +82 -17 +73 +58 -32 Op. profit -12% 158 180 -22 -27 +4 +4 -3 Op. margin 8.3% 9.9% Operating profit excludes profit on disposal € Op. Profit -12% H1 2008 Concrete Cl
Slide 32: Europe Products
Europe Products Sharp decline in UK Clay the main impact H1 Acquisitions €m 2008 2007 Change Organic 2007 2008 FX Sales +4% 1,908 1,826 +82 -17 +73 +58 -32 Op. profit -12% 158 180 -22 -27 +4 +4 -3 Op. margin 8.3% 9.9% Operating profit excludes profit on disposal € Op. Profit -12% H1 2008 Benelux W.
Slide 33: Europe Distribution
Europe Distribution Organic decline largely offset by acquisitions H1 Acquisitions €m 2008 2007 Change Organic 2007 2008 FX Sales +16% 1,805 1,559 +246 -38 +261 +18 +5 Op. profit -3% 90 93 -3 -12 +7 +2 - Op. margin 5.0% 6.0% Operating profit excludes profit on disposal € Op. Profit -3% H1 2008 Benel
Slide 34: Americas Materials
Americas Materials Adverse weather in seasonally less significant H1 H1 Acquisitions €m 2008 2007 Change Organic 2007 2008 FX Sales -14% 1,874 2,181 -307 -222 +182 +20 -287 Op. profit -53% 31 66 -35 -27 - +1 -9 Op. margin 1.7% 3.0% Operating profit excludes profit on disposal US$ Op. Profit -47% US$
Slide 35: Americas Products
Americas Products Balanced operations limit US$ decline to 12% H1 Acquisitions €m 2008 2007 Change Organic 2007 2008 FX Sales -8% 1,660 1,796 -136 -118 +190 +13 -221 Op. profit -24% 137 180 -43 -36 +13 +2 -22 Op. margin 8.3% 10.0% Operating profit excludes profit on disposal US$ Op. Profit -12% H1 2
Slide 36: Americas Distribution
Americas Distribution Successful margin management H1 Acquisitions €m 2008 2007 Change Organic 2007 2008 FX Sales 647 650 -3 -64 +141 +6 -86 Op. profit -3% 29 30 -1 -7 +10 - -4 Op. margin 4.5% 4.6% Operating profit excludes profit on disposal US$ Op. Profit +10% H1 2008 Roofing / Siding Interior Pro
Slide 37: Key Components of H1 Performance
Key Components of H1 Performance PBT down 7% in constant currency terms H1 Acquisitions €m 2008 2007 Change Organic 2007 2008 FX Sales 9,704 9,698 +6 -489 +1,000 +121 -626 Operating Profit 712 771 -59 -84 +50 +9 -34 Profit on disposals 24 22 +2 +3 - - -1 Trading Profit 736 793 -57 -81 +50 +9 -35 Fin
Slide 38: Analysis by Segment
Analysis by Segment H1 % €m 2008 2007 change Sales Europe Materials 1,810 1,686 +7% Europe Products 1,908 1,826 +4% Europe Distribution 1,805 1,559 +16% Americas Materials 1,874 2,181 -14% Americas Products 1,660 1,796 -8% Americas Distribution 647 650 -% Total 9,704 9,698 -% Operating Profit Europe
Slide 39: Analysis by Region
Analysis by Region H1 % €m 2008 2007 change Sales Ireland 576 695 -17% Benelux 1,543 1,444 +7% Rest of Europe 3,399 2,933 +16% Americas 4,186 4,626 -10% Total 9,704 9,698 -% Operating Profit Ireland 56 73 -23% Benelux 138 136 +1% Rest of Europe 321 286 +12% Americas 197 276 -29% Total 712 771 -8% CR
Slide 40: Profit on Disposal
Profit on Disposal H1 €m 2008 2007 Analysis by Segment Europe Materials 3 12 Europe Products 10 2 Europe Distribution 1 - Americas Materials 9 7 Americas Products 1 - Americas Distribution - 1 Total 24 22 Analysis by Region Ireland 1 11 Benelux 8 3 Rest of Europe 5 - Americas 10 8 Total 24 22 CRH pl
Slide 41: Foreign Currency Rates
Foreign Currency Rates Average Year-end Six months ended Year ended Six months ended Year ended euro 1= 2008 2007 2007 2008 2007 2007 US Dollar 1.5304 1.3291 1.3705 1.5764 1.3505 1.4721 Pound Sterling 0.7752 0.6746 0.6843 0.7923 0.6740 0.7334 Polish Zloty 3.4901 3.8441 3.7837 3.3513 3.7677 3.5935 Uk
Slide 42: Euroconstruct Forecasts
Euroconstruct Forecasts Construction output 2008 (Euroconstruct June 2008) % Belgium Ï +2.7 Denmark Ð -0.7 Finland Ï +3.0 France Ï +1.5 Germany Ï +1.2 Ireland Ð -17.7 Netherlands Ï +3.1 Poland Ï +14.6 Portugal Ï +2.2 Spain Ð -5.9 Sweden Ï +3.4 Switzerland Ï +1.9 United Kingdom Ð -0.5 CRH plc, Davy E
Slide 43: 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 CRH plc, Davy European Building Materials Conference, New York, September 2008 42
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