Slide 1: AGM 2018
AGM 2018
Slide 2: Agenda
Agenda Our Business … Rock Solid Performance in last 5 Years Delivering Returns in CRH CRH plc, AGM 2018 1
Slide 3: Our Business ... Rock Solid
by 7 faa Our Business ... Rock Solid
Slide 4: Why invest in Building Materials? Long-term drivers of construction growth
Why invest in Building Materials? Natural demand for construction products driven by: • Population Growth • Economic Development • New-Build and Repair, Maintenance and Improvement The Industry is fragmented: • Opportunities for acquisitions… room to grow • Significant benefits of scale… … Long-term
Slide 5: Why invest in Building Materials? Growth underpinned by strong fundamentals
Why invest in Building Materials? Population Growth GDP Growth Construction Growth 160% 350 US CAGR 300 US US CAGR +4% +4% 275 300 250 140% EUR CAGR 225 EUR CAGR 250 +3% +3% 200 200 175 120% EUR 150 150 125 100% 100 100 1970 1980 1990 2000 2010 1990 1995 2000 2005 2010 2015 1990 1995 2000 2005 2010
Slide 6: Where are we in the recovery cycle... Our main markets
Where are we in the recovery cycle... Our main markets U.S. Europe Year Year 0 1 2 3 4 5 6 7 8 9 10 11 12 0 1 2 3 4 5 6 7 8 9 10 11 0% 0% 1930s 1990s 1980s 1970s 1970s ‘07 % Decline from peak 1980s % Decline from peak ‘16 ‘08 ‘14 ‘15 -25% ‘13 -20% ‘08 ‘18F ‘12 ‘17 ‘11 ‘10 ‘09 ‘09 ‘10 ‘11 -50% -40% ‘
Slide 7: Our Business… Business Today
Our Business… Business Today 2013 2017 €18bn €28bn Revenue Revenue +53% €1.5bn €3.3bn EBITDA EBITDA +124% €13bn €25bn Market Cap Market Cap +87% 76,000 85,000 Employees Employees CRH plc, AGM 2018 6
Slide 8: North America … #1 Building Materials Company
North America … #1 Building Materials Company • Positive fundamentals • Population growth and good demographics • Funded infra programmes to drive investment • Res / Non-res exposure in high-growth states ... Strong markets … Significant room to grow ... CRH plc, AGM 2018 7
Slide 9: Europe … #1 Heavyside Materials Company
Europe … #1 Heavyside Materials Company • Largest economic bloc • Growing population • Solid developed markets in West • Growth potential in East … Recovery underway… Leverage to deliver… CRH plc, AGM 2018 8
Slide 10: Servicing the Breadth of Construction
Servicing the Breadth of Construction Cement Aggregates Asphalt RMC Paving Glass Construction Accessories Heavyside (€2.2bn) EBITDA (€3.3bn) Lightside (€1.1bn) CRH plc, AGM 2018 9
Slide 11: Servicing the Breadth of Demand
Servicing the Breadth of Demand End-Use Sector Geography 30% 40% 37% Infrastructure Residential 50% 50% Europe 62% RMI New Build Americas 30% Non-Residential 2017 Sales 2017 Sales 2017 EBIT ... Balance brings Industry-leading Returns and Cash generation CRH plc, AGM 2018 10
Slide 12: Performance in last 5 Years
Slide 13: We have seen strong growth in Sales and EBITDA
We have seen… strong growth in Sales and EBITDA … 30 3.7 Sales 27.6 EBITDA 3.3 (€bn) 27.1 3.1 3.2 (€bn) 25 23.6 2.7 CAGR CAGR +11% 2.2 2.2 +22% 18.9 20 18.0 1.6 1.7 1.5 15 1.2 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 CRH plc, AGM 2018 12
Slide 14: … and improved Margins and Returns
… and improved Margins and Returns … 13% EBITDA % 12% Returns % 11% 11% 12% 10% 11% 9% 9% 9% +400 Bps +500 Bps 7% 9% 9% 8% 7% 6% 7% 5% 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 CRH plc, AGM 2018 13 Returns = EBIT / Net Assets
Slide 15: … and have generated strong Cash Flows
… and have generated strong Cash Flows … Free Cash Flow (€Bn) 2.5 2.4 2.3 2.3 €2bn • Converting ~80% of profits into cash 2.0 • Generating €2bn+ cash p.a. 1.5 1.3 1.2 • ... before disposals 1.0 0.5 2013 2014 2015 2016 2017 CRH plc, AGM 2018 14 FCF = EBITDA +/- WC movements – Interest - Tax
Slide 16: … along with significant Cash from Disposals
… along with significant Cash from Disposals ~€4bn proceeds from disposal… Divestment targets exceeded … CRH plc, AGM 2018 15
Slide 17: Significant cash generated in past 5 years… large acquisition spend
Significant cash generated in past 5 years… … large acquisition spend… … how have these acquisitions performed ? CRH plc, AGM 2018 16
Slide 18: Acquisition spend ~€8bn in 2014-16
Acquisition spend ~€8bn in 2014-16 Heavyside ‘Bolt-ons’ Returns 10% +15% 13% ~€6.5bn ~€0.5bn ~€1.2bn We target returns of 10% by Year 3... … New platforms established… enhanced delivery through ‘Bolt-ons’ CRH plc, AGM 2018 17
Slide 19: How did CRH perform vs Industry?
How did CRH perform vs Industry ? The key drivers of Shareholder Value … • Returns • Cash Generated CRH plc, AGM 2018 18
Slide 20: … Returns
… Returns 10% CRH 8% US Peers Global Peers 6% 4% 2013 2014 2015 2016 2017 Source: Bloomberg … Generating Industry-leading Returns … CRH plc, AGM 2018 19 Returns = EBIT / Net Assets
Slide 21: … Cash Generated
… Cash Generated 110% FCF / EBITDA 90% CRH US Peers 70% 50% Global Peers 30% 2013 2014 2015 2016 2017 Source: Bloomberg … Generating more Cash from Profits than Global and US Peers … CRH plc, AGM 2018 20 FCF = EBITDA +/- WC – Interest - Tax
Slide 22: How does this translate into Shareholder Value?
How does this translate into Shareholder Value ? 300 250 CRH CAGR FTSE100 17.6% 200 150 9.5% 100 50 0 2013 2014 2015 2016 2017 … Total Shareholder Returns well above FTSE 100 … CRH plc, AGM 2018 21
Slide 23: Delivering Returns in CRH
Slide 24: Delivering Sustainable, Superior Returns
Delivering Sustainable, Superior Returns Founded on 3 Core Principles 1. Relentless focus on Performance • Co-ordinated & driven from the centre ... delivered locally 2. Growth • Rigorous approach to M&A ... large & small deals • Focussed on building integrated clusters of businesses • Scalable acqu
Slide 25: CRH – A Unique Business Model… Driving Returns from the Centre
CRH – A Unique Business Model… Driving Returns from the Centre 1. Rigorous approach to Capital Allocation 2. Active Portfolio Management 3. Co-ordinating Divisional Strategies • Shaping the Group for future growth • Transfer of best practices across Divisions 4. Setting Strategic Targets for Operati
Slide 26: CRH – A Unique Business Model… Driving Returns from the Centre
CRH – A Unique Business Model… Driving Returns from the Centre 1. Embedding CRH Continuous Business Improvement Processes 2. Co-ordinating Development and Strategy 3. Delivering Synergies on Integration 4. Mandating Process and Commercial Excellence across Divisions 5. Implementing Group-wide Procur
Slide 27: CRH … 2018-2020: Where to from here?
Where to from here ? CRH … 2018-2020 CRH plc, AGM 2018 26
Slide 28: How do we see our markets evolving (2018-20)
How do we see our markets evolving (2018-20) U.S. Europe • Public Infra +3% p.a… Residential markets +4% • Recovery underway across European markets p.a… Non-Residential markets +2% p.a • Expect demand to continue to build in the coming • Funded infra programmes to drive investment years • Res / Non
Slide 29: What to expect from CRH
What to expect from CRH Our priorities going forward … In the coming months … • We will set out the scale of the ambition we • Relentless focus on Performance have for the Group in the years ahead, with a focus on … • Disciplined Growth • Shareholder Value • Continue to manage our Portfolio • Cash G
Slide 30: The Road Ahead…