CRH PLC · NYSE:CRH
CRH — FY2006 Earnings Presentation
27 slides from CRH's earnings presentation, Mar 6, 2007
Slide 1: 2006 Preliminary Results
Liam O’Mahony Myles Lee Chief Executive Finance Director CRH plc, 2006 Preliminary Results, 1 6th March 2007
Slide 2: 2006 Highlights
2006 Highlights A record year of performance and growth Revenue up 30%, Operating Profit 27% higher Operating Profit advance 50/50 organic and acquisitions 25% increase in PBT, Earnings +20%, Dividend +33% Strong €0.7 billion operating cash inflow €3 billion investment (acqs & capex) which
Slide 3: 2006 Highlights: Long-term performance and growth
2006 Highlights Continuing long-term performance and growth 2006 EBITDA: €2.46 bn; up 25% EBITDA (€ bn) 2005 10-yr cagr: +20% p.a. 2004 0.0 0.5 1.0 1.5 2.0 2.5 Op.Profit: €1.77 bn; up 27% 2006 Op.Profit 10-yr cagr: +20% p.a. (€ bn) 2005 2004 0.0 0.5 1.0 1.5 2.0 2.5 CRH plc, 2006 Preliminary Resu
Slide 4: 2006 Highlights: Long-term shareholder return
2006 Highlights Continuing long-term shareholder return 2006 EPS +20%; 14th year of growth EPS (cent) 2005 10-yr cagr: +17% p.a. 2004 0 50 100 150 200 250 DPS +33%; 23rd year of growth 2006 10-yr cagr: +16% p.a. DPS 2005 (cent) 2004 0 10 20 30 40 50 60 CRH plc, 2006 Preliminary Results, 4 6th Ma
Slide 5: Europe Materials
Europe Materials Satisfactory advance; stronger second half momentum Acquisitions €m 2005 FX 2005 2006 Organic 2006 Change Sales * 2,646 +5 +21 +33 +262 2,967 +12% Op. profit * 377 +1 +2 +5 +36 421 +12% Op. margin 14.2% 14.2% * Excludes associate Uniland share of PAT included in PBT Organic EBIT g
Slide 6: Europe Products
Europe Products Stronger trading; welcome step-up in underlying margin Acquisitions Non €m 2005 FX 2005 2006 Rec Organic 2006 Change Sales 2,533 +4 +245 +276 - +128 3,186 +26% Op. profit 176 - +25 +20 (31) +31 221 +26% Op. margin 6.9% 6.9% excl. Non-Rec 7.9% Improving markets, with increased momen
Slide 7: Europe Distribution
Europe Distribution Satisfactory acquisition impact & good organic growth Acquisitions Non €m 2005 FX 2005 2006 Rec Organic 2006 Change Sales 2,193 (6) +418 +65 - +116 2,786 +27% Op. profit 123 - +12 +4 +19 +14 172 +39% Op. margin 5.6% 6.2% excl. Non-Rec 5.5% Strong organic BM improvements in NL,
Slide 8: Americas Materials
Americas Materials Significant success in recovery of higher input costs Acquisitions €m 2005 FX 2005 2006 Organic 2006 Change Sales 3,165 (30) +186 +904 +553 4,778 +51% Op. profit 328 (3) +27 +45 +78 475 +45% Op. margin 10.4% 9.9% excl. APAC 11.2% Excellent organic advance; price improvements & c
Slide 9: Americas Products
Americas Products Good profit advance; improved underlying margin excl. MMI Acquisitions €m 2005 FX 2005 2006 Organic 2006 Change Sales 2,756 (16) +113 +492 +227 3,572 +30% Op. profit 308 (1) +3 +22 +43 375 +22% Op. margin 11.2% 10.5% excl. MMI 11.3% Strong full year organic growth from Precast, A
Slide 10: Americas Distribution
Americas Distribution Margin similar to excellent 2005 level Acquisitions €m 2005 FX 2005 2006 Organic 2006 Change Sales 1,156 (11) +125 +137 +41 1,448 +25% Op. profit 80 (1) +13 +12 (1) 103 +28% Op. margin 7.0% 7.1% As expected Florida declined in H2, post hurricane-induced activity ‘05/’06 Int
Slide 11: 2006 Acquisitions
2006 Acquisitions Continuing delivery with record net spend of €2.1 bn €2.1 billion net spend split approx. 20% Europe, 80% Americas Including 3 significant deals at a combined net cost of €1.3 billion ¾Halfen (Europe Products) – a leader in Const. Access. ¾MMI (Americas Products) – a new produc
Slide 12: APAC
APAC Major expansion into Midwestern / Southern US states Expands aggs/asphalt position and infrastructure exposure 32 million tpa of aggregates, 2 billion tons of reserves Substantial synergies Existing CRH Margins/capital intensity APAC reflect construction focus Net of Disposals Selecti
Slide 13: Development 2007
Development 2007 Opportunities for growth across multiple platforms Capital Expenditure ¾ Expanding capacity to meet demand growth ¾ Reinvesting for energy efficiency and world-class HSE Acquisitions - Existing regions ¾ Developed world focus remains the main priority ¾ Good pipeline of opportun
Slide 14: China
China Action research for future growth Harbin Sanling (Heilongjiang) RUSSIA ¾ 1 cement plant: 0.65 mtpa KAZAKHSTAN ¾ Acquisition of 100% assets MONGOLIA Harbin ¾ Completed Feb 2007 N.KOREA Beijing CHINA S.KOREA JAPAN Yatai (Jilin/Heilongjiang) INDIA ¾ 4 cement plants Pacific Ocean ¾ Capacity: c
Slide 15: Finance
Finance CRH plc, 2006 Preliminary Results, 15 6th March 2007
Slide 16: 2006 Components of Growth
2006 Components of Growth 50% of operating profit growth generated by ongoing ops €M Sales EBIT Disposals Finance Assocs EBT 2005 reported 14,449 1,392 20 (159) 26 1,279 Exchange effects (54) (4) - - - (4) 2005 at 2006 FX rates 14,395 1,388 20 (159) 26 1,275 Incremental impact 2005 acquisitions 1,10
Slide 17: Margins
Margins Adjusted to exclude APAC/MMI & non-recurring items 2006 2006 2005 Reported Adjusted Reported Europe Materials 14.2% 14.2% 14.2% Europe Products 6.9% 7.9% 6.9% Europe Distribution 6.2% 5.5% 5.6% Americas Materials 9.9% 11.2% 10.4% Americas Products 10.5% 11.3% 11.2% Americas Distribution 7.1%
Slide 18: Funds Flow
Funds Flow Continuing strong operating cash inflow … 2006 2005 Inflows €M €M Profit before tax 1,602 1,279 Depreciation 664 556 Amortisation of intangibles 25 9 2,291 1,844 Outflows Working capital (75) (119) Tax paid (378) (260) Dividends (222) (185) Capital expenditure (832) (652) Other (69) (19)
Slide 19: Funds Flow
Funds Flow ... limits net Debt increase after record investment spend 2006 2005 €M €M Operating cash inflow 715 609 Acquisitions and investments (2,311) (1,298) Disposals (incl. APAC disposals) 252 103 Share issues 112 61 Translation 188 (165) Debt increase (1,044) (690) Acqs, Capex less Disposals (
Slide 20: Key Financial Data
Key Financial Data Substantial capacity to pursue further opportunities Financial Strength ¾ Successful $1.75 billion global bond issue ¾ 2006 EBITDA Interest Cover 9.7x … (bank covenants 4.5x) ¾ Strong €0.7 billion operating cashflow (post divs, tax, total CX) Focus is value-creation ¾ Return o
Slide 21: Dividend Strategy
Dividend Strategy Phased reductions in cover levels from 2006 to 2008 2005 cover 4.8 times; aiming at c.3.5 times for 2008 First step 2006, dividend +33%, cover 4.3 times Expect further reductions in cover for 2007 and 2008 Subject as always to no major changes in market conditions No impa
Slide 22: Outlook
Outlook CRH plc, 2006 Preliminary Results, 22 6th March 2007
Slide 23: 2007 Europe Outlook
2007 Europe Outlook Overall European construction demand outlook is positive Materials ¾ Broadly positive market outlooks & benefits from Capex projects ¾ Expect further organic growth & another year of progress in ‘07 Products ¾ Firmer outlook in core European markets ¾ Further improvement in p
Slide 24: 2007 Americas Outlook
2007 Americas Outlook Infra and Non-Res demand a counterbalance to softer Res Materials ¾ Infra well underpinned by SAFETEA & better State finances ¾ Pricing strategy, efficiency benefits, 2006 acqs contributions ¾ We look forward to another year of significant progress Products ¾ Likely further
Slide 25: Overall Outlook
Overall Outlook Looking to another year of progress … 2006 ¾ Continuing delivery with record acquisition spend ¾ Strong improvement in all key financial measures ¾ Continuing robust cash generation & comfortable interest cover 2007 ¾ Can sustain higher dividend payout and continuing development
Slide 26: Going Forward
Going Forward Continuation of our clear consistent strategic vision… be a responsible international leader in building materials delivering superior performance and growth CRH plc, 2006 Preliminary Results, 26 6th March 2007
Slide 27: Liam O’Mahony Chief Executive Myles Lee
Liam O’Mahony Myles Lee Chief Executive Finance Director CRH plc, 2006 Preliminary Results, 27 6th March 2007