Crh Plc · NYSE:CRH
Crh — FY2020 Earnings Presentation
48 slides from Crh's earnings presentation, Mar 4, 2021
Slide 1: Full Year Results 2020
Full Year Results 2020 0
Slide 2: Agenda
Agenda Market Backdrop & Trading Performance Financial Performance Strategy Update Outlook ESG Update Full Year Results 2020 1
Slide 3: Key Messages
Key Messages • Continued growth in profit, margin & cash despite lower activity levels • Robust & flexible balance sheet; Net Debt/EBITDA 1.3x ... significant pipeline of opportunities • Increasing cash returns to shareholders … 25% increase in FY dividend … recommencing share buyback; ~$0.3bn to en
Slide 4: 2020 Financial Highlights
2020 Financial Highlights Sales EPS $27.6bn -2% LFL $2.43 +19% EBITDA Cash Flow $4.6bn +5% LFL $3.9bn +1% EBITDA Margin Net Debt/EBITDA 16.8% +120bps LFL 1.3x -0.4x Full Year Results 2020 3
Slide 5: Market Backdrop & Trading Performance
Market Backdrop & Trading Performance
Slide 6: North America – Market Backdrop
North America – Market Backdrop • Resilient demand backdrop ... construction deemed essential in most markets • Good momentum in US Infrastructure … state & federal funding underpinned • Robust Residential demand … New-Build & RMI … Non-Residential impacted by COVID-19 restrictions • Positive pricin
Slide 7: Americas Materials – Trading Performance
Americas Materials – Trading Performance • Robust performance despite lower volumes • Disciplined commercial management 2020 $m LFL Chg • Margin improvement across all product lines … Cement, Aggregates, RMC & Asphalt Sales 11,273 -3% EBITDA 2,405 +10% • Performance driven by … … solutions driven bu
Slide 8: Building Products – Trading Performance
Building Products – Trading Performance • Varied delivery across key businesses ... ... Building Envelope impacted by lower Non-Res activity ... Infrastructure Products resilient ... record performance in Architectural Products 2020 $m LFL Chg Sales 7,173 +4% • Continued strong operating leverage EB
Slide 9: Europe – Market Backdrop
Europe – Market Backdrop • Europe significantly impacted by the pandemic • However … resilient construction demand in CEE • Western Europe impacted by COVID-19 restrictions in H1 ... recovery gathered pace in H2 • Continuing YoY price improvement across key markets Full Year Results 2020 8
Slide 10: Europe Materials – Trading Performance
Europe Materials – Trading Performance • Solid performance in a challenging environment ... profits & margins ahead in H2 2020 $m LFL Chg • 3rd consecutive year of price recovery in Europe Sales 9,141 -5% EBITDA 1,055 -7% • Good commercial management & cost control ... LFL margin 100bps ahead ex-UK
Slide 11: Financial Performance
Financial Performance
Slide 12: 2020 components of performance
2020 components of performance … 32 12 (122) +$230m +5% LFL EBITDA $4,630m $4,478m FY19 Organic Acquisitions / Currency One-off FY20 EBITDA (Divestments) Translation Costs EBITDA Full Year Results 2020 11
Slide 13: Continuing strong cash conversion
Continuing strong cash conversion … $m 2020 EBITDA 4,630 Working Capital 196 • Continuing to bolster balance sheet strength Interest (432) • Optionality for future value delivery Tax (558) … disciplined M&A strategy Other 102 … focused, value-enhancing capex … and continuing cash returns to sharehol
Slide 14: Strong cash generation & financial discipline
Strong cash generation & financial discipline … 1.3x Net Debt / EBITDA 3.9 0.9 0.4 1.0 $7.5bn $5.9bn FY19 Net Debt Net Cash Inflow Net M&A / Other Capex Dividends / Buyback FY20 Net Debt Full Year Results 2020 13
Slide 15: Performance through the cycle
Performance through the cycle … 2013 2020 $23.9bn Revenue $27.6bn Revenue +15% +2% CAGR $2.0bn EBITDA $4.6bn EBITDA +136% +13% CAGR $1.5bn Cash Flow $3.9bn Cash Flow +172% +15% CAGR 8.2% 16.8% Margin Margin +860bps 5.8% 10.1% Returns Returns +430bps Full Year Results 2020 14
Slide 16: And now … performance within the cycle
… And now … performance within the cycle … 2019 2020 $28.1bn Revenue $27.6bn Revenue -2% -2% LFL $4.5bn EBITDA $4.6bn EBITDA +3% +5% LFL $3.88bn $3.94bn Cash Flow Cash Flow +1% 15.9% Margin 16.8% Margin +90bps +120bps LFL 9.9% 10.1% Returns Returns +20bps Full Year Results 2020 15
Slide 17: Group Strategy Update
i Group Strategy Update
Slide 18: Performance within the cycle
Performance within the cycle … … What was behind 2020 results? 1. Protected revenues … … resilient in down-cycle – more public work & RMI … embedded with customers – integrated building solutions (now ~65% of Sales) 2. Significant self-help … … continuous business improvement programmes … margin-foc
Slide 19: Performance through the cycle
Performance through the cycle … • Relentless focus on continuous business improvement ... … year-on-year profits, margins, returns & cash • CRH – re-shaped & repositioned … … simpler, leaner, solutions-focused … strong fundamentals underpin key markets • Cyclicality reduced … … structural shift to
Slide 20: #1 in North America
#1 in North America … … the most profitable construction market in the world • Repositioned in recent years … by region, sector, end-use • NE & Midwest – solid & steady; resilient RMI demand Steady RMI Demand Higher Growth Markets • South & West – immigration & migration … … growing population … str
Slide 21: #1 in Europe … and #1 in CEE
#1 in Europe … and #1 in CEE • Western Europe … … resilient RMI demand … retrofit in urban markets … new-build construction • Eastern Europe … … significant Infrastructure … EU funding … strong Residential demand Stability Growth • Well positioned to benefit from government stimulus Full Year Result
Slide 22: However …
However … Performing through the cycle has not just been about … • Geographic repositioning • Re-shaping the business • Shifting to more resilient markets … … public infrastructure … RMI … new-build residential • Continuous business improvement … much more has changed in CRH through the last cycle …
Slide 23: CRH is changing … because construction is changing
CRH is changing … because construction is changing … Reducing the impact of construction on our world • Improving the efficiency of buildings … • Becoming less intrusive on communities … heat, sound, light • Reducing construction times • Increasing offsite manufacturing • Building safer, cleaner … a
Slide 24: Construction is changing … because …
Construction is changing … because … 1) Increasing urbanisation … global population to increase by ~2bn by 2050 … ~70% will live in cities 2) Significant need to build new & upgrade existing infrastructure ... within & between urban areas 3) Necessity to conserve, protect & transport scarce natural
Slide 25: CRH has changed …
CRH has changed … • CRH … is the largest recycler in North America • Cement, Aggregates, Asphalt, Concrete (~70% of Sales) … … all 100% recyclable … not one life … but many lives • As the largest roadbuilder in North America … … ~25% of every mile of road we build is from recycled materials … CRH …
Slide 26: CRH’s customers are changing too
CRH’s customers are changing too … • Our customers demand more … ➢ Simplified supply chains ➢ Improved quality, reliability & security of supply ➢ Collaborative partnerships to create innovative, value-added products ➢ End-to-end integrated building solutions … no longer enough to dig materials out
Slide 27: Developing value-added products & integrated building solutions
CRH … developing value-added products & integrated building solutions Focused on developing products & solutions that build … • Quicker … … reducing construction times • Cleaner … … less intrusive on communities • Better … … improving the efficiency & safety of buildings • More reliably … … prolongi
Slide 28: Americas Materials
Americas Materials … … integrating product … solutions & services … Rock to Road • Aggregates • Cement Integrated Aggregates • RMC Solutions … • Concrete Products • Asphalt & Contracting … additional $1bn of EBITDA p.a. vs. pure-play … record margin levels Full Year Results 2020 27
Slide 29: Architectural Products
Architectural Products … … bundling branded range of products … Owning the back yard • Paving solutions • Hardscapes Integrated Grey Pavers • Masonry Solutions … • Composite Decking • Lawn & Garden … driving a 4-fold increase in EBITDA last 10 years … record margin levels Full Year Results 2020 28
Slide 30: Building Envelope
Building Envelope … … end-to-end complete solutions … Full service offering • Tempered Glass • Curtain Wall Integrated Tempered Glass • Entrance Systems Solutions … • Framing Solutions • Glazing Hardware … driving a 12-fold increase in EBITDA last 10 years … record margin levels Full Year Results 20
Slide 31: CRH … performance in last cycle
CRH … performance in last cycle … Superior performance driven by … Revenue +2% CAGR • Geographic repositioning EBITDA +13% CAGR • Re-shaped & re-focused business Cash • Continuous business improvement Flow +15% CAGR • Increasing demand for value-added Margin +860bps products & integrated building so
Slide 32: Outlook
Outlook
Slide 33: Well positioned for the next growth cycle
Well positioned for the next growth cycle … Beneficiary of bounce-back growth ... • Strong market positions … well placed to benefit from government stimulus A stronger repositioned business ... • Strong & resilient geographic, sector & end-use exposures Unique portfolio of integrated building solut
Slide 34: Outlook
Outlook … • Market recovery to continue as health situation improves • Near-term uncertainties remain but long-term demand fundamentals remain attractive • Expect significant support for construction activity going forward ... public & private • Focused on continued execution of our strategy ... del
Slide 35: ESG Update
ti ESG Update
Slide 36: ESG … fundamental to CRH business
ESG … fundamental to CRH business … Focus for 30+ years … embedded in strategy & business model • Strong governance • Board oversight … Safety, Environment and Social Responsibility Committee • Long history and track record of target delivery • Stated ambition to be carbon neutral by 2050 … recognis
Slide 37: CRH … a leader in sustainable construction
CRH … a leader in sustainable construction … Uniquely integrating materials, value-added products and building solutions Business structure … diversified portfolio • Ability to design and assemble complex multi-material building structures • Global leader in the world’s most sustainable building mat
Slide 38: ESG … well on track for 2030 targets
ESG … well on track for 2030 targets … 2020 Highlights 94% 573kg* 16% 46% (in line with 2019) (-3% vs 2019) (15% in 2019) (44% in 2019) product revenue from of locations progressing in line female senior products with enhanced accident-free with leading peers leadership sustainability attributes … f
Slide 39: CRH … strongly contributing to a better built environment
CRH … strongly contributing to a better built environment … Revenue ~15% ~20% ~65% Cement Aggs & Other Valued added products and solutions Lowering our environmental footprint Delivering sustainability benefits Facilitating environmental solutions • Reducing fossil fuel usage with • Building safer,
Slide 40: Appendices
Appendices
Slide 41: Key Components of 2020 Performance
Key Components of 2020 Performance Sales Operating Profit/(loss) Finance Assoc. and Pre-tax $ million EBITDA revenue profit on disposals costs (net) JV PAT1 profit 2019 28,132 4,478 2,793 -189 -490 67 2,181 Exchange effects 82 12 5 - -3 - 2 2019 at 2020 rates 28,214 4,490 2,798 -189 -493 67 2,183 In
Slide 42: Americas Materials
Americas Materials Analysis of change Impairment/ $ million 2019 Exchange Acquisitions Divestments Organic 2020 % Change One-offs1 Sales revenue 11,626 -37 +43 -39 - -320 11,273 -3% EBITDA 2,194 -2 +8 +2 -24 +227 2,405 +10% Operating profit 1,423 +1 +5 +5 -25 +222 1,631 +15% EBITDA/sales 18.9% 21.3%
Slide 43: Europe Materials
Europe Materials Analysis of change $ million 2019 Exchange Acquisitions Divestments Impairment One-offs1 Organic 2020 % Change Sales revenue 9,509 +105 +63 -27 - - -509 9,141 -4% EBITDA 1,208 +14 +7 -3 - -83 -88 1,055 -13% Operating profit 622 +5 +1 -2 -660 -83 -73 -190 -131% EBITDA/sales 12.7% 11.
Slide 44: Building Products
Building Products Analysis of change Impairment/ $ million 2019 Exchange Acquisitions Divestments Organic 2020 % Change One-offs1 Sales revenue 6,997 +14 +262 -347 - +247 7,173 +3% EBITDA 1,076 - +50 -32 -15 +91 1,170 +9% Operating profit 748 -1 +26 -17 -19 +85 822 +10% EBITDA/sales 15.4% 16.3% Oper
Slide 45: 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 America
Slide 46: Americas Materials Volumes & Prices
Americas Materials Volumes & Prices Total Heritage YoY % Change Volumes Price Volumes Price Aggregates -1% +3% -2% +4% Asphalt -5% -2% -6% -2% RMC -4% +6% -4% +6% Full Year Results 2020 45
Slide 47: Disclaimer / Forward-Looking Statements
Disclaimer / Forward-Looking Statements 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
Slide 48: 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 Full Year Results 2020 47