CRH PLC · NYSE:CRH
CRH — Davy Irish Equities Conference 2005
32 slides from CRH's conference presentation, May 18, 2005
Slide 1: Davy Irish Equities Conference London
Davy Irish Equities Conference London 18 May 2005 Liam O’Mahony, Chief Executive Davy Irish Equities Conference, London, 18 May 2005 31
Slide 2: Contents
Contents CRH Overview 3 Three Core Businesses 4 CRH Balance 5 Success through breadth and balance …. 6 …. Organisation is key 7 CRH People 8 Federal Group Organised for Growth 9 Europe Materials 10 Europe Products & Distribution 11 Americas Materials 12 Americas Products & Distribution 13 CRH Perfor
Slide 3: Overview
OVERVIEW OVERVIEW Davy Irish Equities Conference, London, 18 May 2005 2
Slide 4: CRH - Overview
CRH - Overview z 1970: Irish Cement & Roadstone: Sales €26m, Ireland 95% z Embarked on a clear, consistent development strategy z Now 24 countries; 3 continents; 2,100+ locations; 60,000+ people z Annualised Sales circa €13bn across three core businesses z Listed Dublin (CRH.I), London (CRH.L), NASD
Slide 5: Three Core Businesses
Three Core Businesses Primary Materials Building Products Distribution Precast concrete products; concrete blocks, pavers and rooftiles; clay bricks, pavers and tiles; insulation products; fencing & security; glass fabrication, rooflights & ventilation Cement, aggregates, asphalt DIY stores, builder
Slide 6: CRH Balance
CRH Balance Geographic and Product End-use* Product* Residential Non-residential 45% 30% Europe Americas Materials Materials 18% 22% Infrastructure 25% Europe Americas Products & Products & Distribution Distribution 33% 27% New RMI 55% 45% * based on 2004 sales Davy Irish Equities Conference, London
Slide 7: Success through breadth and balance ....
Success through breadth and balance …. z CRH exclusively building materials z But broad product range within this: Î primary materials Î added value building products Î specialist distribution z With appropriate regional leading positions z Some key benefits Î regions at different phases of economic
Slide 8: .... Organisation is key
…. Organisation is key z Each business type is different Î capital intensity Î achievable margins Î approach to markets / suppliers Î strategic positioning z Crucial to identify and manage relevant issues z Decentralised structure facilitates this z Specialised experienced local management z With co
Slide 9: CRH People
CRH People z An experienced management team Î Managed through previous economic cycles z Managers from 3 very different streams Î Internally developed managers, with ambition and room to grow Î Highly qualified professionals, business builders with vision Î Owner-entrepreneurs, who question the stat
Slide 10: Federal Group Organised For Growth
Federal Group Organised For Growth CRH plc CEO Liam O’Mahony Finance Development Myles Lee Albert Manifold Europe Americas Europe Materials Americas Materials Products & Distribution Products & Distribution Declan Doyle Tom Hill John Wittstock Joe McCullough Davy Irish Equities Conference, London, 1
Slide 11: Europe Materials
Europe Materials Financials Financials€m €m 2004 2004 2003 2003 Sales Sales 2,354 2,354 1,984 1,984 Operating OperatingProfit Profit 339 339 273 273 Avg AvgNet NetAssets Assets 1,785 1,785 1,548 1,548 Operating OperatingMargin Margin 14.4% 14.4% 13.8% 13.8% Leadership LeadershipPositions Positions A
Slide 12: Europe Products & Distribution
Europe Products & Distribution Financials Financials€m €m 2004 2004 2003 2003 Sales Sales 4,149 4,149 3,083 3,083 Operating OperatingProfit Profit 317 317 213 213 Avg AvgNet NetAssets Assets 2,590 2,590 2,055 2,055 Operating OperatingMargin Margin 7.6% 7.6% 6.9% 6.9% Leadership LeadershipPositions P
Slide 13: Americas Materials
Americas Materials Financials Financials$m $m 2004 2004 2003 2003 Sales Sales 3,535 3,535 3,202 3,202 Operating OperatingProfit Profit 338 338 329 329 Avg AvgNet NetAssets Assets 3,104 3,104 3,036 3,036 Operating OperatingMargin Margin 9.6% 9.6% 10.3% 10.3% Leadership LeadershipPositions Positions A
Slide 14: Americas Products & Distribution
Americas Products & Distribution Financials Financials$m $m 2004 2004 2003 2003 Sales Sales 4,323 4,323 3,600 3,600 Operating OperatingProfit Profit 397 397 303 303 Avg AvgNet NetAssets Assets 1,938 1,938 1,803 1,803 Operating OperatingMargin Margin 9.2% 9.2% 8.4% 8.4% Leadership LeadershipPositions
Slide 15: CRH Performance 1989 - 2004
CRH Performance 1989 - 2004 1000 PBT +16% 800 EPS +13% 600 DPS +12% 400 200 0 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 Index: 1989 = 100 Davy Irish Equities Conference, London, 18 May 2005 14
Slide 16: Development Strategy
DEVELOPMENT DEVELOPMENT STRATEGY STRATEGY Davy Irish Equities Conference, London, 18 May 2005 15
Slide 17: Clear Development Strategy
Clear Development Strategy z Stick to core businesses in building materials z Invest at “home”; be the low cost market leader z Develop “overseas”; create platforms for future growth z Negotiate deals that meet the sellers and our needs z Devolved regional development teams z Rigorous approach to ev
Slide 18: Acquisition Approach
Acquisition Approach Identifying Identifyingdeals deals Courtship/negotiation Courtship/negotiation • •Ongoing Ongoingcontact contactwith withextensive extensive25 25 • •Patient Patientapproach approachrecognising recognising year+ target database year+ target database evolving owner circumstances e
Slide 19: CRH Development Spend 1994 - 2004
CRH Development Spend 1994 - 2004 Jura Group €330m €m Shelly Co. €347m Cementbouw 1800 100% Ops & JV €0.7bn 1600 Ibstock 49% €230m Finnsementti/Rudus €420m T. McCully €425m 1400 Secil €333m. 1200 Ibstock 51% €320m 1000 800 Tilcon US €253m 600 400 200 0 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 Dea
Slide 20: Development Spend 1999 - 2004
Development Spend 1999 - 2004 €bn Europe Americas Total Materials 1.7 2.6 4.3 54% Products 1.3 1.3 2.6 33% Distribution 0.8 0.2 1.0 13% Total 3.8 4.1 7.9 100% 49% 51% 100% Davy Irish Equities Conference, London, 18 May 2005 19
Slide 21: 2004 Development Spend - €1bn
2004 Development Spend - €1bn z Europe Materials €0.48bn Î Secil 49% with joint control gives new geographic platforms in Iberia/Mediterranean Î Significant bolt-ons in Finland and Switzerland plus Swiss cement plant expansion z Europe Products & Distribution €0.18bn Î Major additions to Concrete an
Slide 22: Debt Ratios & Interest Cover
Debt Ratios & Interest Cover Y/E Y/E 2004 2003 Debt (€bn) 2.4 2.3 Shareholders’ funds (€bn) 5.2 4.7 Debt/shareholders’ funds 46% 48% Debt/year-end market capitalisation 23% 27% Interest cover* EBITDA/Net Interest 13.2 13.1 EBIT/Net Interest 8.5 8.4 * excluding JVs Davy Irish Equities Conference, Lon
Slide 23: 2004 Highlights & Outlook
2004 2004 HIGHLIGHTS HIGHLIGHTS && OUTLOOK OUTLOOK Davy Irish Equities Conference, London, 18 May 2005 22
Slide 24: 2004 Highlights
2004 Highlights % change in 2004 2004 2003 Constant Reported €m €m Reported Currency Sales 12,820 11,080 +16% +22% Operating profit before goodwill 1,247 1,045 +19% +25% Profit before tax 1,017 864 +18% +23% € cent € cent EPS before goodwill 163.1 136.2 +20% +26% EPS after goodwill 143.9 121.9 +18%
Slide 25: 2004 Components of Growth
2004 Components of Growth €m Sales EBITA Goodwill Disposals Interest EBT 2003 reported 11,080 1,045 (76) 13 (118) 864 Exchange effects (545) (50) 3 - 7 (40) 2003 at 2004 FX rates 10,535 995 (73) 13 (111) 824 Incremental impact 2003 acquisitions 1,036 91 (23) - (39) 29 2004 acquisition 587 72 (5) - (
Slide 26: 2005 Outlook - Europe Materials
2005 Outlook - Europe Materials z Ireland: Housing continuing strong, non-res improving, infrastructure timing factors z Finland: Residential and non-residential demand to offset infrastructure declines z Poland: Despite adverse impact of late winter weather, outlook is positive z Switzerland: Gener
Slide 27: 2005 Outlook - Europe Products & Distribution
2005 Outlook - Europe Products & Distribution z Holland: Modest growth driven by new housing and broadly based RMI z Belgium: Stronger housing and continued strength in commercial activity z France: Continued growth, but at a lower rate than 2004 z Germany: Construction activity is forecast to show
Slide 28: 2005 Outlook - Americas Materials
2005 Outlook - Americas Materials z Activity levels to date have exceed expectations; backlogs are solid z Good early progress in our efforts to improve prices and recover higher input costs z TEA-21 extended to end-May with annualised funding of US$34.4bn z New 6-year programme negotiations progres
Slide 29: 2005 Outlook - Americas Products & Distribution
2005 Outlook - Americas Products & Distribution z Approximately 90% residential/non-residential building end-use z US residential activity remains strong z Ongoing improvement in non-residential demand continues z Important repair and maintenance activity to remain at good levels z Positive start to
Slide 30: 2005 Outlook - Overall
2005 Outlook - Overall z Good start overall; US strong; adverse weather affected northern Europe z While higher energy and other input costs a feature generally …. z .… We are encouraged by cost recovery results to date, and expect further gains z As always uncertainties and challenges, but outlook
Slide 31: Strategic Vision
Strategic Vision Our strategic vision is consistent and clear …. “to be a leading international building materials group delivering superior performance and growth” Davy Irish Equities Conference, London, 18 May 2005 30
Slide 32: 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