Crh Plc · NYSE:CRH
Crh — H1 2019 Earnings Presentation
33 slides from Crh's earnings presentation, 2019
Slide 1: Interim Results
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Slide 2: Agenda
Agenda Market Backdrop Trading Performance Financial Performance H1 Key Developments Outlook & Key Takeaways CRH plc, Interim Results 2019 1
Slide 3: Key Messages
Key Messages • Record H1 profit performance ... margin ahead • Positive underlying demand backdrop ... Europe & North America • Active portfolio management ... ~€2bn divestments; ~€470m bolt-on acquisitions • Continued focus on disciplined & efficient capital allocation ... €550m share buyback YTD;
Slide 4: H1 Financial Highlights
H1 Financial Highlights Sales EBITDA Margin €13.2bn €1.54bn 11.7% +11% +36% +220bps +3% LFL +5% LFL +10bps LFL EPS DPS 67.8c 20.0c +51% +2% CRH plc, Interim Results 2019 3
Slide 5: Agenda
Agenda Market Backdrop Trading Performance Financial Performance H1 Key Developments Outlook & Key Takeaways CRH plc, Interim Results 2019 4
Slide 6: Market Backdrop – Europe & North America
Market Backdrop – Europe & North America • Positive construction activity across main markets ... UK impacted by ongoing political uncertainty • Solid underlying demand in Res & Non-Res markets • Good momentum in Infrastructure activity • Supportive pricing environment CRH plc, Interim Results 2019
Slide 7: Agenda
Agenda Market Backdrop Trading Performance Financial Performance H1 Key Developments Outlook & Key Takeaways CRH plc, Interim Results 2019 6
Slide 8: Americas Materials – Trading Performance
Americas Materials – Trading Performance • Sales, EBITDA & margin ahead Change vs. H1 2018 • Volumes impacted by weather disruption in Q2 H1 2019 €m LFL • Positive pricing offsetting higher input costs Sales 4,012 +26% +2% EBITDA 502 +69% +3% • North America Cement integration progressing well Margi
Slide 9: Europe Materials – Trading Performance
Europe Materials – Trading Performance • Cement volumes ahead Change vs. H1 2018 • Good pricing momentum across all markets H1 2019 €m LFL Sales 4,085 +7% +6% • Margins impacted by challenging UK trading environment EBITDA 461 +17% +2% • Strong focus on cost recovery & margin improvement in H2 Margi
Slide 10: Building Products – Trading Performance
Building Products – Trading Performance • Good progress in sales, EBITDA & margin Change vs. H1 2018 • Strong operating leverage H1 2019 €m LFL ... cost control & product mix optimisation Sales 5,120 +4% +3% • Integration of global products platform progressing well EBITDA 577 +32% +8% • Continued r
Slide 11: Agenda
Agenda Market Backdrop Trading Performance Financial Performance H1 Key Developments Outlook & Key Takeaways CRH plc, Interim Results 2019 10
Slide 12: Components of Financial Performance
Components of Financial Performance 193 111 50 56 €1,540m +5% LFL €1,130m H1 2018 Acquisitions/ FX IFRS 16 H1 2019 Organic EBITDA Divestments Translation Transition EBITDA CRH plc, Interim Results 2019 11
Slide 13: H1 2019 Cash Flow Movements
H1 2019 Cash Flow Movements ... €m H1 2018 H1 2019 EBITDA 1,130 1,540 • Strong focus on efficient cash management Working Capital (1,108) (1,002) • Good working capital control Interest (158) (202) • Lower combined interest & tax charges Tax (215) (111) Other 40 45 • Expect strong seasonal inflow in
Slide 14: Consistently Strong Cash Delivery
Consistently Strong Cash Delivery • Substantial profit growth; organic & acquisition 15 €10.6bn FCF generated last 5 years … … relentless focus on cash generation 10 • ~80% conversion of EBITDA to FCF … industry-leading through the cycle 5 • Significant optionality for further value creation 0 2014
Slide 15: FY 2019 Balance Sheet ... Key Components
FY 2019 Balance Sheet ... Key Components 1.5 1.6 1.6 1.5 €7bn ~€7bn €5.4bn Net FY18 Net Cash Dividends/ Net Debt IFRS 16 FY19E Divestments/ Net Debt Inflow Buybacks pre-IFRS 16 Transition Net Debt Acquisitions <2.1x <2x Net Debt / EBITDA CRH plc, Interim Results 2019 14
Slide 16: Financial Discipline … Net Debt / EBITDA
Financial Discipline … • Committed to maintaining strong investment grade rating 3.0 ~2x 10yr avg. … ~2x Net Debt / EBITDA maintained through the cycle Net Debt / EBITDA (x) 2.5 Net Debt / EBITDA … • Significant value created last 5 years 2.0 … ~€7bn divestments at 11x EBITDA … re-invested into valu
Slide 17: Agenda
Agenda Market Backdrop Trading Performance Financial Performance H1 Key Developments Outlook & Key Takeaways CRH plc, Interim Results 2019 16
Slide 18: Building a Better Business …
Building a Better Business … Portfolio Management … Re-shaping our business for superior growth, returns & cash generation Synergy Delivery … Creating shareholder value through greater integration Continuous Business Improvement … Making businesses better through internal self-help initiatives … del
Slide 19: Portfolio Management
Portfolio Management • Re-shaping our business for superior growth, returns & cash generation • Agreement reached on ~€2bn divestments YTD • Crystallising value for shareholders … attractive double-digit exit multiples • Clear execution of our strategy … value creation through active portfolio manag
Slide 20: Synergy Delivery
Synergy Delivery Ash Grove & Suwannee acquisition synergies 3 year run-rate ($m) • Creating shareholder value through greater integration • Ash Grove / Suwannee integration progressing well … synergies ahead of expectations 145 • Leveraging global scale & best practice … commercial & operational exc
Slide 21: Continuous Business Improvement …
Continuous Business Improvement … • Making businesses better through internal self-help initiatives • Proven best-in-class operators • Detailed plans in place for further profit improvement … progressing as planned • Improving efficiency & effectiveness through greater integration across our busines
Slide 22: Agenda
Agenda Market Backdrop Trading Performance Financial Performance H1 Key Developments Outlook & Key Takeaways CRH plc, Interim Results 2019 21
Slide 23: EBITDA Outlook
EBITDA Outlook • Americas Materials: Positive underlying momentum; increased rate of growth in H2 • Europe Materials: UK to remain challenging; similar pace of growth in H2 • Building Products: Positive momentum to continue in H2 • Group: Further growth in H2 … another year of progress CRH plc, Inte
Slide 24: Key Takeaways
Key Takeaways Record H1 EBITDA ... Profit improvement programme further progress in H2 progressing well Allocating & reallocating capital Continue to maintain strong, for superior shareholder value flexible balance sheet CRH plc, Interim Results 2019 23
Slide 25: Appendices
Appendices
Slide 26: Group Components of Performance
Group Components of Performance Sales Operating Profit on Finance Assoc. and Pre-tax € million EBITDA revenue profit disposals costs (net) JV PAT1 profit H1 2018 11,944 1,130 592 46 -160 19 497 Exchange effects 394 50 31 4 -6 - 29 H1 2018 at 2019 rates 12,338 1,180 623 50 -166 19 526 Incremental imp
Slide 27: Americas Materials
Americas Materials Analysis of change € million H1 2018 Exchange Acquisitions Divestments IFRS 16 Organic H1 2019 % Change Sales revenue 3,178 +205 +597 -19 - +51 4,012 +26% EBITDA 297 +24 +126 -4 +49 +10 502 +69% Operating profit 94 +12 +56 -3 +4 +4 167 +78% EBITDA/sales 9.3% 12.5% Op. profit/sales
Slide 28: Europe Materials
Europe Materials Analysis of change € million H1 2018 Exchange Acquisitions Divestments IFRS 16 Organic H1 2019 % Change Sales revenue 3,827 +26 +25 -23 - +230 4,085 +7% EBITDA 395 +4 +1 - +54 +7 461 +17% Operating profit 194 +2 - +2 +4 +7 209 +8% EBITDA/sales 10.3% 11.3% Op. profit/sales 5.1% 5.1%
Slide 29: Building Products
Building Products Analysis of change € million H1 2018 Exchange Acquisitions Divestments IFRS 16 Organic H1 2019 % Change Sales revenue 4,939 +163 +197 -326 - +147 5,120 +4% EBITDA 438 +22 +17 -29 +90 +39 577 +32% Operating profit 304 +17 +8 -2 +9 +39 375 +23% EBITDA/sales 8.9% 11.3% Op. profit/sale
Slide 30: Cement Volumes & Pricing
Cement Volumes & Pricing YoY % Change Volumes Price (LC) YoY % Change Volumes Price (LC) Finland - = Slovakia ++ + France ++ + Spain + ++ Germany -- + Switzerland - + Legend >5% ++ Hungary -- ++ Ukraine = ++ 2% to 5% + Ireland ++ ++ United Kingdom = + -1% to +1% = -5% to -2% - Poland ++ ++ North Ame
Slide 31: Americas Materials Volumes & Prices
Americas Materials Volumes & Prices Total Heritage YoY % Change Volumes Price Volumes Price Aggregates +6% +6% -1% +6% Asphalt -3% +7% -4% +7% RMC +22% +4% +1% +5% CRH plc, Interim Results 2019 30
Slide 32: Disclaimer
Disclaimer In order to utilise the “Safe Harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, CRH public limited company (the “Company”), and its subsidiaries (collectively, “CRH” or the “Group”) is providing the following cautionary statement. This document cont
Slide 33: CRH plc Investor Relations
CRH plc Investor Relations Stonemason’s Way Rathfarnham Dublin 16 D16 KH51 Ireland Telephone: +353 1 404 1000 Email: ir@crh.com Website: www.crh.com CRH plc, Interim Results 2019 32