Crh Plc · NYSE:CRH
Crh — Investor Day (November 2010)
17 slides from Crh's investor day presentation, November 2010
Slide 1: CRH Investor Day 2010 – Introduction
CRH Investor Day 2010 INTRODUCTION M Y L ES L E E C H I E F E X EC U T I V E
Slide 2: CRH Management
2 CRH Management CRH Investor Day, November 2010
Slide 3: Introduction
3 Introduction y October 2010 ‐ the 40th anniversary of CRH’s foundation y Outstanding long‐term record of performance & growth y Based on: { Balanced portfolio { Creating leadership positions { Rigorous approach to capital allocation { Strong cash generation focus { Distinct organisation / manageme
Slide 4: Operating Backdrop – Recent Years
4 Operating Backdrop – Recent Years y CRH well used to managing ups/downs in a cyclical sector y Scale / synchronised nature of current downturn unprecedented y Significant like‐for‐like sector sales declines; for CRH YTD Cumulative 2008 2009 Q3 2010 2008‐2010 Like‐for‐like Sales ‐6% ‐19% ‐c8% ‐c30%
Slide 5: Recent Years – Short-term Tactical Response
5 Recent Years – Short‐term Tactical Response y Significant variable cost reductions as volumes declined y Fixed cost savings from administrative restructuring y Active approach to cash generation y Working capital reduction and sharp Capex cut‐backs y More measured acquisition approach (especially
Slide 6: Recent Years – Some Structural Changes
6 Recent Years – Some Structural Changes y Continuing strong belief in the benefits of federal structure y Increased co‐ordination to maximise benefits of scale y Driven by group‐wide CRH HQ/Divisional initiatives focussed on: { Operational excellence { Purchasing { Top line Growth { People developm
Slide 7: Core Elements of Long-Term CRH Strategy Unchanged
7 Core Elements of Long‐Term CRH Strategy Unchanged y Balance remains the key – by geography, sector end‐use, new vs RMI y Build & Grow approach – creating clustered groups of businesses y Rigorous value‐based approach to development y Open to larger transactions – but no “bet the ranch” moves y The
Slide 8: CRH – Industry-leading returns on invested capital
8 CRH – Industry‐leading returns on invested capital ROIC Return on Invested Capital 16% Industry Peers CRH 12% 8% 4% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Bloomberg Delivering long‐term out‐performance ... through the cycle CRH Investor Day, November 2010
Slide 9: CRH Balance
9 CRH Balance y Superior RoIC – underpinned by balanced approach y Smoothing the effects of varying economic cycles y Providing multiple platforms for growth y Recent synchronised global downturn has masked the benefits y Both balanced and single‐product companies have been similarly affected Value
Slide 10: CRH Balance – expanding geographic footprint
10 CRH Balance – expanding geographic footprint CRH EBITDA (€ Bn) 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Ireland W.Europe USA Emerging ‐0.5 1980 1990 2000 2010e Strong positions in developed markets Growing presence in emerging economies CRH Investor Day, November 2010
Slide 11: CRH Diversity – exposure to multiple demand drivers
11 CRH Diversity – exposure to multiple demand drivers Materials Products Distribution Aggregates Products for DIY Cement Construction Solutions General Merchants Asphalt Specialised Distribution Readymix Early Cycle Late Cycle New Servicing the breadth of construction RMI CRH Investor Day, November
Slide 12: CRH Balance – The Benefits
12 CRH Balance – The Benefits As markets normalise, CRH’s balance will restore profitability and performance CRH Investor Day, November 2010
Slide 13: CRH Portfolio Review
13 CRH Portfolio Review y Portfolio review an ongoing process across all Divisions y Focussed on underperforming units with limited growth opportunities y €0.1Bn of fringe disposals since 2008 mainly in European operations y More significant disposals currently underway in Europe and US Products y E
Slide 14: CRH Development Backdrop 2008 - 2010
14 CRH Development Backdrop 2008 ‐ 2010 y March 2009 Rights Issue anticipated € Bn CRH Acquisition Spend near‐term leverage‐driven disposals 0.8 Associates 0.7 y Mid‐09 Bond market recovery eased Subs/JVs leverage pressures 0.6 0.5 y With 2009 outlook deteriorating, CRH 0.4 maintained acquisition di
Slide 15: Communications
15 Communications y Positive reputation for frank and open dialogue with stakeholders y Poor visibility on trading conditions through 2009/10 y With CRH trading guidance uncharacteristically off‐target y As seen in August with revision to US Materials 2010 outlook y Recent Q3 industry newsflow has c
Slide 16: Dividend
16 Dividend y Outstanding dividend record; key element of CRH’s offering y Growing investor focus on dividend y Ability to accommodate dividends and development y EPS cover currently less relevant; more about cash flow / balance sheet y August Interims indicated timing of / backdrop to final dividen
Slide 17: Agenda for the Day
17 Agenda for the Day y A mix of Divisional and Group presentations y With plenty of time for Q&A y And an opportunity to meet our extended Management Team Divisional Presentations Group Presentations Our Business Models Our Emerging Market strategy Our Competitive Advantages Our Op.Excellence initi