Crh Plc · NYSE:CRH
Crh — FY2019 Earnings Presentation
39 slides from Crh's earnings presentation, February 2020
Slide 1: 2) am =) 7) O ae OD ce NX
2) am =) 7) O ae OD ce NX
Slide 2: Agenda
Agenda Market Backdrop & Trading Performance Financial Performance Strategy & Sustainability Update Outlook & Key Takeaways CRH plc, Full Year Results 2019 1
Slide 3: Key Messages
Key Messages Financial Delivery Business Developments • Good profit performance & cash generation … • Active portfolio management … significant balance sheet strength & capacity ... €0.7bn bolt-ons; €2.1bn divestments ... €0.3bn divestment of Indian cement JV • Continuing business improvement … ...
Slide 4: 2019 Financial Highlights
2019 Financial Highlights Sales EPS +6% +25% €28.3bn +3% LFL €2.41 (Continuing Ops) EBITDA Cash Flow +25% €4.2bn +25% +7% LFL €3.5bn +83% EBITDA Margin Net Debt/EBITDA1 +230bps 1.7x 14.8% +50bps LFL 1 Continuing Operations CRH plc, Full Year Results 2019 3
Slide 5: Market Backdrop & Trading Performance
Market Backdrop & Trading Performance
Slide 6: Americas Materials – Market Backdrop
Americas Materials – Market Backdrop • Favourable economic backdrop … … fundamentals remain supportive • Solid underlying demand environment • Positive momentum in Infrastructure activity … … state & federal funding underpinned • Good visibility into 2020 … outlook positive CRH plc, Full Year Result
Slide 7: Americas Materials – Trading Performance
Americas Materials – Trading Performance • Strong financial & operational delivery Change vs. 2018 • Good demand … disciplined pricing 2019 €m LFL • Performance improvement & cost focus Sales 10,385 +16% +4% driving margin expansion EBITDA 1,960 +31% +10% • Ash Grove performing well … good synergy d
Slide 8: Europe Materials – Market Backdrop
Europe Materials – Market Backdrop • Positive construction demand in key markets • Challenging UK construction market … … expect stabilisation in 2020 • Progress in Western Europe … … good growth in Eastern Europe • Continued growth expected in 2020 CRH plc, Full Year Results 2019 7
Slide 9: Europe Materials – Trading Performance
Europe Materials – Trading Performance • Good performance in 2019 Change vs. 2018 • Margin progress offset by challenging UK market 2019 €m LFL • European cement volumes ahead ... Sales 8,494 +6% +5% … strongest growth in the East EBITDA 1,079 +15% +2% • Pricing ahead in all markets … Margin 12.7% +
Slide 10: Building Products – Market Backdrop
Building Products – Market Backdrop • Favourable demand environment in North America & Europe • Core European markets performing well • Improving US Residential outlook … ... further growth in key Non-Residential markets • Continued positive momentum expected in 2020 CRH plc, Full Year Results 2019
Slide 11: Building Products – Trading Performance
Building Products – Trading Performance • Strong underlying performance Change vs. 2018 • Margin expansion reflects continuing focus on 2019 €m LFL operating efficiencies & commercial management Sales 6,250 - +2% • Significant portfolio activity … simpler & more focused EBITDA 961 +22% +8% • Realloc
Slide 12: Building Products – Positioned for Further Growth
Building Products – Positioned for Further Growth • High-growth markets … … addressing the changing needs of construction Organic Performance (2014-2019) • Delivering complete customer solutions … Sales CAGR EBITDA CAGR … integrating materials, products & services +€1.0bn +4% +€0.3bn +13% • Value-ad
Slide 13: Financial Performance
Financial Performance
Slide 14: Components of Financial Performance
Components of Financial Performance 378 170 (73) 128 237 €4,200m +7% LFL €3,360m 2018 Currency IFRS 16 2019 Organic Acquisitions Divestments EBITDA Translation Transition EBITDA CRH plc, Full Year Results 2019 13
Slide 15: 2019 Net Debt Performance
2019 Net Debt Performance 1.4 1.6 1.9 1.4 €7.0bn €6.7bn €5.1bn Net FY18 Net Cash Dividends/ Net Debt IFRS 16 FY19 Divestments/ Net Debt Inflow Buybacks pre-IFRS 16 Transition Net Debt Acquisitions 2.1x 1.7x Net Debt / EBITDA (Continuing Operations) CRH plc, Full Year Results 2019 14
Slide 16: Increasing Cash Returns to Shareholders
Increasing Cash Returns to Shareholders • Significant balance sheet strength & flexibility • Consistent focus on shareholder value & efficient capital allocation • Share buyback programme ongoing … … €0.8bn in 2019; further €0.2bn underway • Resetting dividend to higher level (+15% in 2019) … ... re
Slide 17: Changing Reporting Currency to US Dollar
Changing Reporting Currency to US Dollar EBITDA by currency • Significant shift in portfolio & business mix … … structurally higher USD exposure ~50% ~65% • Benefits of change to USD reporting … Reduced volatility of reported earnings ~25% ~10% More accurate reflection of underlying performance
Slide 18: Group Strategy Update
Group Strategy Update
Slide 19: A Simpler & More Focused Business
A Simpler & More Focused Business • Continuing to re-shape & refine our portfolio to maximise shareholder value … … 40%+ of assets divested in last 5 years • Completed €0.3bn divestment of Indian cement JV • Active portfolio management in 2019 ... divesting at 11x EBITDA ... acquiring at 8x EBITDA C
Slide 20: Reallocating Capital for Further Value Creation
Reallocating Capital for Further Value Creation • Disciplined approach to capital deployment • Focused on developed markets with attractive fundamentals & sustainable growth prospects • Leveraging our core strengths & capabilities in operating integrated & value-adding businesses • Significant oppor
Slide 21: Continuous Business Improvement
Continuous Business Improvement Implementation … Progress … Further Delivery … • Group-wide focus … • Initiatives underway across all • Detailed plans in place for … coordinated centrally businesses further improvement • Focused on improving • Good delivery in 2019 despite • Positive momentum to eff
Slide 22: Sustainability Update
Sustainability Update
Slide 23: CRH … Building our World in a More Sustainable Way
CRH … Building our World in a More Sustainable Way • Our products build our world … essential for modern living • 30+ years collaborating, innovating & engaging with our industry • Focused on … Reducing carbon emissions Increasing the use of recycled materials Reducing the impact of constructi
Slide 24: Leading the Industry in Reducing Cement Carbon Emissions
Leading the Industry in Reducing Cement Carbon Emissions • Founding member of Global Cement & Concrete Association … -33% … leading a coordinated industry response to a global issue • Significant progress to date … … 2020 targets achieved ahead of schedule 760kg CO2 p/t • Key areas of focus … 570kg
Slide 25: Sustainability is at the Core of our Thinking
Sustainability is at the Core of our Thinking • Delivering excellence in sustainable manufacturing • Recognised as an industry leader by major rating agencies • 30+ years focused on sustainable innovation in our industry … 33% of fuels in our cement plants … recycled materials 20%+ of every road
Slide 26: Innovating & Delivering Sustainable Solutions
Innovating & Delivering Sustainable Solutions • CRH, uniquely … integrating … materials, products & services • A leading manufacturer of the world’s most sustainable building material … concrete From Concrete … … … … to Sustainable Solutions 100+ year life Value-added, engineered Using less reso
Slide 27: Outlook
Outlook
Slide 28: CRH in 2020 ... Well Positioned
CRH in 2020 ... Well Positioned • Leading positions in attractive developed markets with sustainable growth prospects • Continuous business improvement ... higher margins, returns & cash generation year after year • Strong pipeline of value-accretive acquisition opportunities ... disciplined & focus
Slide 29: 2020 Expectations … another year of progress
2020 Expectations … • Americas Materials – positive demand to continue • Europe Materials – further growth in key markets • Building Products – continuing positive momentum … another year of progress CRH plc, Full Year Results 2019 28
Slide 30: Key Takeaways
Key Takeaways Strong financial delivery … Continuing improvement ... ... well positioned for 2020 … margins, returns & cash Enhancing value through Increasing cash returns ... active portfolio management … dividends & buybacks CRH plc, Full Year Results 2019 29
Slide 31: Appendices
Appendices
Slide 32: Key Components of 2019 Performance (Continuing Operations)
Key Components of 2019 Performance (Continuing Operations) Sales Operating Profit/(loss) Finance Assoc. and Pre-tax € million EBITDA revenue profit on disposals costs (net) JV PAT1 profit 2018 23,241 3,216 2,071 -27 -351 48 1,741 Exchange effects 764 127 91 1 -12 2 82 2018 at 2019 rates 24,005 3,343
Slide 33: Americas Materials
Americas Materials Analysis of change € million 2018 Exchange Acquisitions Divestments Leases Organic 2019 % Change Sales revenue 8,951 +460 +657 -26 - +343 10,385 +16% EBITDA 1,493 +84 +135 -5 +98 +155 1,960 +31% Operating profit 1,009 +60 +61 -4 +9 +136 1,271 +26% EBITDA/sales 16.7% 18.9% Operatin
Slide 34: Europe Materials
Europe Materials Analysis of change € million 2018 Exchange Acquisitions Divestments Leases Organic 2019 % Change Sales revenue 8,042 +70 +35 -27 - +374 8,494 +6% EBITDA 936 +10 +2 +1 +113 +17 1,079 +15% Operating profit 487 +6 -1 +2 +16 +45 555 +14% EBITDA/sales 11.6% 12.7% Operating profit/sales 6
Slide 35: Building Products (Continuing Operations)
Building Products (Continuing Operations) Analysis of change € million 2018 Exchange Acquisitions Divestments Leases Organic 2019 % Change Sales revenue 6,248 +234 +231 -576 - +113 6,250 +0% EBITDA 787 +33 +27 -48 +100 +62 961 +22% Operating profit 575 +25 +10 -16 +15 +59 668 +16% EBITDA/sales 12.6%
Slide 36: 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 Americ
Slide 37: Americas Materials Volumes & Prices
Americas Materials Volumes & Prices Total Heritage YoY % Change Volumes Price Volumes Price Aggregates +5% +4% +1% +5% Asphalt -1% +5% -1% +5% RMC +9% +4% +2% +4% CRH plc, Full Year Results 2019 36
Slide 38: Disclaimer
Disclaimer 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 statement. This document cont
Slide 39: 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