CRH PLC · NYSE:CRH
CRH — NCB Conference, Dublin 2003
37 slides from CRH's conference presentation, Mar 27, 2003
Slide 1: Performance and Growth
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Slide 2: Contents
CONTENTS CRH plc - Overview 2 CRH Performance 1982 – 2002 3 CRH’s Unique Record 5 Three Core Businesses 6 Regional, Product & Sectoral Balance 9 Clear Development Strategy 10 NCB Conference, Dublin, March 27-28 2003 Significant Development Capacity 12 Federal Group Organised for Growth 13 Europe Mat
Slide 3: CRH plc - Overview
CRH plc - OVERVIEW z 1970: Irish Cement & Roadstone: Sales €26m, Ireland 95% z Embarked on a consistent development strategy NCB Conference, Dublin, March 27-28 2003 z Now 22 countries; 3 continents; +1,600 locations, 50,000 people z Sales €10.8 bn, Americas 60%±, Europe 40%± z Listed Dublin, London
Slide 4: CRH Performance 1982 - 2002
CRH PERFORMANCE 1982 - 2002 3200 2800 NCB Conference, Dublin, March 27-28 2003 2400 CRH Share price 2000 +15% pa 1600 1200 800 FTSE100 400 +5% pa 0 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 1982 = 100, FTSE 100 first floated on 31/12/83 4
Slide 5: CRH Performance 1982 - 2002
CRH PERFORMANCE 1982 - 2002 1400 EPS 1200 +13% pa NCB Conference, Dublin, March 27-28 2003 1000 800 600 DPS 400 +7% pa 200 0 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 1982 = 100 5
Slide 6: CRH's Unique Record
CRH’s UNIQUE RECORD z Many factors, including; Î a clear, consistent development strategy NCB Conference, Dublin, March 27-28 2003 Î a focus on performance and growth cash flow and rigorous approach to investment Î the development and maintenance of a balanced portfolio Î investment in people of
Slide 7: Three Core Businesses: Primary Materials
THREE CORE BUSINESSES Asphalt paving, Wyoming, USA Primary Materials Cement plant, Switzerland NCB Conference, Dublin, March 27-28 2003 Cement, aggregates, asphalt and surfacing, readymixed concrete 7
Slide 8: Three Core Businesses: Building Products
THREE CORE BUSINESSES Security fencing, Netherlands Building Products Paving, Québec, Canada NCB Conference, Dublin, March 27-28 2003 Precast concrete products; concrete blocks, pavers and rooftiles; clay bricks, pavers and tiles; insulation products; fencing & security; glass fabrication, rooflight
Slide 9: Three Core Businesses: Distribution
THREE CORE BUSINESSES DIY, Netherlands Distribution Builders Merchanting, USA NCB Conference, Dublin, March 27-28 2003 DIY stores, builders merchanting, specialist distribution 9
Slide 10: Regional, Product & Sectoral Balance
REGIONAL, PRODUCT & SECTORAL BALANCE z Helps smooth the impact of industry and economic cycles z ….and enhances growth potential NCB Conference, Dublin, March 27-28 2003 Regional Product Europe Materials Europe Materials Americas 40% Products & 40% Americas 40% Distribution 45% 60% Products & 60% 60
Slide 11: Clear Development Strategy
CLEAR DEVELOPMENT STRATEGY z Stick to core businesses in building materials z Invest “at home” Î reinvest in existing businesses; assets and people NCB Conference, Dublin, March 27-28 2003 Î be low cost market leader; leverage best practices z Develop “overseas” Î build regional market leadership po
Slide 12: Clear Development Strategy
CLEAR DEVELOPMENT STRATEGY z Rigorous approach to: Î evaluation Î project approval NCB Conference, Dublin, March 27-28 2003 Î subsequent performance review z Accelerated pace since mid-90’s Î 290+ acquisitions 1996 to date, totaling €6.6 bn Î traditional focus small to mid-size companies Î some bigg
Slide 13: Significant Development Capacity
SIGNIFICANT DEVELOPMENT CAPACITY z Continued development capacity supported by: Î Ongoing strong cash flow NCB Conference, Dublin, March 27-28 2003 Î Rolling 12 month EBITDA interest cover 11.3 times Î Supportive shareholder and lender base z March 2001: 1 for 4 Rights Issue Î Raised €1.1 bn from in
Slide 14: Federal Group Organised for Growth
FEDERAL GROUP ORGANISED FOR GROWTH CRH plc CEO Liam O’Mahony NCB Conference, Dublin, March 27-28 2003 Finance Development Harry Sheridan Joe McCullough Europe Americas Europe Materials Americas Materials Products & Distribution Products & Distribution Declan Doyle Tom Hill Brian Hill John Wittstock
Slide 15: Europe Materials
EUROPE MATERIALS z Sales 2002: €1,927m z Operating profit 2002: €267m z 350 locations; 11 countries NCB Conference, Dublin, March 27-28 2003 z 9,500 employees z New build / RMI 80/20 z Residential 35% z Non-Res 30% z Infrastructure 35% Irl UK Spain Swiss Pol Fin Est Lat Rus Ukr Isr Cement 9 9 9 9 9
Slide 16: Europe Materials
EUROPE MATERIALS 2002 Operating Sales Profit Margin NCB Conference, Dublin, March 27-28 2003 Ireland €975m c 14% Spain €189m c 10% Poland and Ukraine €228m c 10% Finland and Switzerland €458m c 16% Israel €77m c 18% Total €1,927m c 14% 16
Slide 17: Europe P&D
EUROPE P&D z Sales 2002: €2,506m z Operating profit 2002: €153m z 400+ locations; 13 countries NCB Conference, Dublin, March 27-28 2003 z 13,000 employees z New build / RMI 60/40 z Residential 60% z Non-Res 30% z Infrastructure 10% Irl UK Por Fr B NL Ger Swiss Den Sw Pol Fin Est Concrete 9 9 9 9 9 C
Slide 18: Europe P&D
EUROPE P&D 2002 Operating Sales Profit Margin NCB Conference, Dublin, March 27-28 2003 Concrete €570m c 8% Clay €362m c 7% Insulation €202m c 8% Building Products €283m c 7% Distribution €1,089m c 4% Total €2,506m c 6% 18
Slide 19: Americas Materials
AMERICAS MATERIALS z Sales 2002: $2,905m z Op profit 2002: $317m z 540+ locations NCB Conference, Dublin, March 27-28 2003 z 26 US states z 12,500 employees z New build / RMI 30/70 z Residential 15% z Non-Res 20% z Infrastructure 65% New New York / England New Jersey Central West Aggregates 9 9 9 9
Slide 20: Americas Materials
AMERICAS MATERIALS 2002 Operating Sales Profit Margin NCB Conference, Dublin, March 27-28 2003 New England $460m c 12% New York / New Jersey $585m c 13% Central $880m c 12% West $980m c 8% Total $2,905m c 11% 20
Slide 21: Americas P&D
AMERICAS P&D z Sales 2002: $3,110m z Op profit 2002: $277m z 380+ locations NCB Conference, Dublin, March 27-28 2003 z 43 US states z 4 provinces z S America z 15,000 employees z New build / RMI 55/45 z Residential 45% z Non-Res 40% z Infrastructure 15% USA Canada Argentina Chile Precast concrete pr
Slide 22: America P&D
AMERICA P&D 2002 Operating Sales Profit Margin NCB Conference, Dublin, March 27-28 2003 APG $1,110m c 11% Precast $600m c 8% Glass $430m c 15% Distribution $940m c 4% South America $30m c 13% Total $3,110m c 9% 22
Slide 23: US Distribution Asbestos Claims
US DISTRIBUTION ASBESTOS CLAIMS z 251 claimants announced 30th September 2002 z Only 8 new claimants notified in last five months to end Feb ‘03 NCB Conference, Dublin, March 27-28 2003 z 8 claims disposed of since September for $5,800 gross z 251 claimants outstanding at end February 2003 z All cla
Slide 24: Pension Costs
PENSION COSTS z Total SSAP 24 pension cost charged to P&L €108m (2001: €96m) z FRS 17 charge would be lower at €85m (2001: €81m) NCB Conference, Dublin, March 27-28 2003 z Defined benefit scheme members c.23% of total employees z 2002 FRS 17 net pension liability €130m (2001: €119m asset) z €130m ju
Slide 25: Corporate Governance
CORPORATE GOVERNANCE z Non-executive Chairman + Senior Independent Director z Majority of Board (9 out of 15) are non-executive z Audit & Remuneration committees solely non-executive NCB Conference, Dublin, March 27-28 2003 z Share options: Î issued at market value on date of grant to full time empl
Slide 26: Strategic Issues: Europe
STRATEGIC ISSUES Europe Materials z Strong stable economies z Good cash flow NCB Conference, Dublin, March 27-28 2003 z Well positioned for EU enlargement, eastern Mediterranean options z Successful track record Europe P&D z New house (and office) building weak in all our core markets New House star
Slide 27: Strategic Issues: Americas Materials
STRATEGIC ISSUES Americas Materials z TEA-21 Î Funding level; 2003 $31.6bn NCB Conference, Dublin, March 27-28 2003 Î Reauthorization; TEA-3 Î Long term outlook is positive; Highways are a popular bi–partisan issue z Bitumen Î Utilize almost 2.0mt of bitumen Î Increased cost volatility 2000 - 2002 Î
Slide 28: Strategic Issues: Americas P&D
STRATEGIC ISSUES Americas P&D z Medium Term US Housing outlook: Î Harvard housing group estimates need for 1.7M new homes in coming decade Î Driven by demographics including immigration NCB Conference, Dublin, March 27-28 2003 Î Supported by solid, innovative financing sector i.e. Fannie Mae and Fre
Slide 29: Strategic Issues - Longer Term
STRATEGIC ISSUES - LONGER TERM Demographics America v Europe (The Economist, Aug 24, 2002) z US Census 2002 shock - population rising faster than predicted NCB Conference, Dublin, March 27-28 2003 z 1950’s - Western Europe population twice USA; 304m v 152m z Now - gap 100m; fertility, immigration z
Slide 30: Financial Capacity to Expand
FINANCIAL CAPACITY TO EXPAND Y/E Y/E 2002 2001 NCB Conference, Dublin, March 27-28 2003 Debt (€bn) 1.7 1.9 Shareholders' funds (€bn) 4.8 4.8 Debt/shareholders' funds 36% 40% Debt/market capitalisation 28% 18% Interest cover EBITDA/Interest 11.3 8.5 EBIT/Interest 7.3 5.6 30
Slide 31: 2002 Funds Flow
2002 FUNDS FLOW 2002 2001 Inflows €m €m Profit before tax 856 803 Depreciation 456 436 Goodwill amortisation 70 61 NCB Conference, Dublin, March 27-28 2003 Working capital 90 (61) 1,472 1,239 Outflows Tax paid (162) (79) Dividends (135) (103) Capital expenditure (367) (452) Other (21) (31) (685) (66
Slide 32: Operating Cash Flow +37%
OPERATING CASH FLOW 800 +37% 700 NCB Conference, Dublin, March 27-28 2003 600 +67% 500 400 +77% 300 200 100 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 32
Slide 33: Europe - 2003 Outlook
EUROPE - 2003 OUTLOOK z Euroconstruct forecasts for major CRH markets: Î Belgium 0.0% Ï Finland +0.5% Î France 0.0% Ð Germany -1.1% Ð Ireland -7.2% Ð Netherlands -1.9% NCB Conference, Dublin, March 27-28 2003 Ï Poland +3.4% Ï Spain +3.2% Î Switzerland +0.1% Ï UK +3.8% z Ireland: strong H1, H2 likely
Slide 34: Americas - 2003 Outlook
AMERICAS - 2003 OUTLOOK z Construction forecast c.-2% z Materials Î 2003 Federal Highway funding finally agreed at $31.6 billion NCB Conference, Dublin, March 27-28 2003 Î High oil prices have curtailed bitumen winter fill programme Î State funding constraints also a concern Î Recovery of energy cos
Slide 35: Overall - 2003 Outlook
OVERALL - 2003 OUTLOOK z World political / economic / energy backdrop uncertain z Markets likely to remain difficult for immediate future NCB Conference, Dublin, March 27-28 2003 z However, CRH well positioned in majority of markets z Continuing emphasis on cost control, cash flow optimisation z Uni
Slide 36: Summary
SUMMARY z CRH overview Î 1970 sales €26m; now sales €10.8bn, top 5 in sector worldwide Î consistently strong performance Î unique record NCB Conference, Dublin, March 27-28 2003 Î three core businesses Î balanced portfolio Î clear development strategy Î decentralised structure z Operational review z
Slide 37: Contact Us
CONTACT US CRH plc Investor Relations Belgard Castle NCB Conference, Dublin, March 27-28 2003 Clondalkin Dublin 22 Ireland Phone: + 353 1 404 1000 Fax: + 353 1 404 1007 E-mail: ir@crh.com or look up our Website - www.crh.com CRH® is a registered Trade Mark of CRH plc 37