Crh Plc · NYSE:CRH
Crh — Investor Day (November 2010)
23 slides from Crh's investor day presentation, November 2010
Slide 1: CRH Investor Day 2010 Operational Review
CRH Investor Day 2010 OPERATIONAL REVIEW A L B E RT M A N I FO L D C H I E F O P E R AT I N G O F F I C E R
Slide 2: Operational Review
2 Operational Review y INTRODUCTION y SAFETY PERFORMANCE y COST REDUCTIONS y OPERATIONAL EXCELLENCE y PORTFOLIO STRATEGY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 3: Introduction
3 Introduction y Crisis provided an opportunity to improve efficiency and effectiveness of our businesses { Not content to just “hunker down” y Focus on key priorities { Safety { Reducing our cost base { Operational Excellence { Financial strength and flexibility Focussed on the near term challenges
Slide 4: Operational Review
4 Operational Review y INTRODUCTION y SAFETY PERFORMANCE y COST REDUCTIONS y OPERATIONAL EXCELLENCE y PORTFOLIO STRATEGY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 5: Safety Performance – Accidents
5 Safety Performance – Accidents 6.0 Declining trend in accidents 1.4 Accident Frequency Accident Frequency Ratio Ratio vs 1.2 5.0 Peers y Result of focussed management 1 action 4.0 0.8 y Frequency ratio: c20% ↓ p.a. 3.0 0.6 2.0 0.4 1.0 0.2 Benchmark well versus industry 0.00 y Lower end of CSI peer
Slide 6: Safety Performance – Fatalities
6 Safety Performance – Fatalities 40 16 Fatalities continue to occur 40 Fatalities Fatalities vs Peers 35 35 14 y Target is zero fatalities 30 12 30 11 y Fatality Elimination – specific 25 25 10 9 20 8 8 8 focussed programs 20 6 15 15 6 5 11 9 10 4 10 6 8 8 Benchmark against industry 5 525 y Lower e
Slide 7: Operational Review
7 Operational Review y INTRODUCTION y SAFETY PERFORMANCE y COST REDUCTIONS y OPERATIONAL EXCELLENCE y PORTFOLIO STRATEGY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 8: Cost Reductions – Introduction
8 Cost Reductions – Introduction y Responded rapidly to crisis of unprecedented scale { Reset our business – acted early & aggressively from mid 2007 y Took actions to reduce our cost base { Very significant multi‐year program – bottom up { Simplifying our businesses – lowering overheads y Focussed
Slide 9: Cost Reductions – €1.8bn Savings since 2007
9 Cost Reductions – €1.8bn Savings since 2007 2010 initiatives 1,800 1,725 2009 initiatives 235 310 2008 initiatives 1,345 2007 initiatives 595 595 450 497 845 845 845 447 50 50 50 50 50 2007 2008 2009 2010 2011 Progressive activity across all Group divisions … … with c40% of total gross savings bei
Slide 10: Cost Reductions – c40% Permanent
10 Cost Reductions – c40% Permanent Permanent Savings Delivered across c40% 5 Key Areas Energy Optimisation c11% Permanent Administration Savings c34% 40% Procurement & Other c22% Volume-related Savings 60% Production Operational Sales Efficiencies Distribution c22% c11% Permanent savings … achieved
Slide 11: Cost Reductions – Savings Announced vs Peers
11 Cost Reductions – Savings Announced vs Peers 2.5 12% 2.1 10% 2.0 1.8 Savings % 2009 Sales Savings (€Bn) 8% 1.5 6% 1.0 0.9 0.9 0.6 0.6 4% 0.5 2% 0.0 0% Lightside CRH Peer Heavyside Peers CRH’s cumulative gross savings at top end of peer group CRH Investor Day, November 2010
Slide 12: Cost Reductions – Benefits Going Forward
12 Cost Reductions – Benefits Going Forward y Pre‐crisis world will not return { Scaled operations to new environment y Ensuring a strong core from which to grow: { With efficient operations { A low cost base { Delivering benefits from operational leverage y An ongoing process Positioning CRH to cap
Slide 13: Operational Review
13 Operational Review y INTRODUCTION y SAFETY PERFORMANCE y COST REDUCTIONS y OPERATIONAL EXCELLENCE y PORTFOLIO STRATEGY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 14: Operational Excellence – Delivery
14 Operational Excellence – Delivery y Multiple programs within the Divisions and across the Group { Driven by local operational teams { Coordinated at Divisional / Group level y Focussed on increasing our effectiveness and efficiency { Commercial Excellence programs across the Divisions { Optimisin
Slide 15: Operational Excellence – Delivery in Materials Divisions
15 Operational Excellence – Delivery in Materials Divisions US Materials Energy and new technology RAP % y Continued increase in recycled materials y Focus on energy and fuel efficiency y Development of warm mix asphalt EU Materials Key areas of improvement Clinker Factor % y Cement 85% 85% 84% y RM
Slide 16: Operational Excellence – Delivery in Products Divisions
16 Operational Excellence – Delivery in Products Divisions US Products Adapting to changing market channels APG % Sales to “Big Box” 40% APG growing sales to superstores y Growing market segment 30% 39% y Developing tailored product offering 20% 29% 26% y National footprint and relationships 10% 200
Slide 17: Operational Excellence – Delivery in Distribution Divisions
17 Operational Excellence – Delivery in Distribution Divisions US Distribution Working Capital % Sales 16% Working capital improvement at Allied 14% y Result of focussed management effort 12% y Strong cashflow delivery 10% 8% 2006 2007 2008 2009 EU Distribution Builders Merchants margin trend Good m
Slide 18: Operational Excellence – Benefits Going Forward
18 Operational Excellence – Benefits Going Forward y We are building a stronger business { Simpler, leaner operations { Increased effectiveness and efficiencies { Improved cash generation and balance sheet flexibility y A clearer understanding of how we create value today…. { Performance setting KPI
Slide 19: Operational Review
19 Operational Review y INTRODUCTION y SAFETY PERFORMANCE y COST REDUCTIONS y OPERATIONAL EXCELLENCE y PORTFOLIO STRATEGY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 20: Our Portfolio
20 Our Portfolio y Built our portfolio over the past 40 years { Growth on the back of Global trends and based on our core competencies y Decade to 2007 – very significant Global growth { Building businesses ….extending our geographies ….broadening our product offering …serving an increasing number o
Slide 21: Portfolio Review
21 Portfolio Review y To continue to generate superior returns…. { Look to optimise our portfolio ….move to redeploy capital y Initial focus on our Products Divisions { Full portfolio review underway ….internal measures to assess performance y Identified Insulation and Climate Control for disposal {
Slide 22: Operational Review
22 Operational Review y INTRODUCTION y SAFETY PERFORMANCE y COST REDUCTIONS y OPERATIONAL EXCELLENCE y PORTFOLIO STRATEGY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 23: Key Take‐Aways
23 Key Take‐Aways y Using the crisis as an opportunity to improve our businesses y Focusing on doing the right thing – taking the tough decisions y Improving our operating flexibility and innovation y Capturing synergies across Divisions y A clearer understanding of how we create value Responding to