Crh Plc · NYSE:CRH
Crh — Davy Institutional Investors Conference, New York, January 2003
35 slides from Crh's conference presentation, Jan 10, 2003
Slide 1: Davy Institutional Investors Conference
Davy Institutional Conference, New York, Jan 10, 2003 Davy Institutional Investors Conference January 10th, 2003 Harry Sheridan, Finance Director 1
Slide 2: CRH plc - Overview
CRH plc - OVERVIEW z 1970: Irish Cement & Roadstone: Sales €26m, Ireland 95% Davy Institutional Conference, New York, Jan 10, 2003 z Embarked on a consistent development strategy z Now 22 countries; 3 continents; 1,500 locations; 50,000 people z Sales €10.4 bn, Americas 60%±, Europe 40%± z Listed Du
Slide 3: CRH Performance 1987 - 2001
CRH PERFORMANCE 1987 - 2001 1400 PBT Davy Institutional Conference, New York, Jan 10, 2003 1200 +20% pa 1000 800 EPS +15% pa 600 DPS 400 +12% pa 200 0 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1600 1400 CRH Share price 1200 +15.5% pa 1000 800 600 400 FTSE100 200
Slide 4: CRH's Unique Record
CRH’s UNIQUE RECORD Many factors, including; Davy Institutional Conference, New York, Jan 10, 2003 z Î a clear, consistent development strategy Î a focus on performance and growth cash flow and rigorous approach to investment Î the development and maintenance of a balanced portfolio Î investment
Slide 5: Three Core Businesses: Primary Materials
THREE CORE BUSINESSES Davy Institutional Conference, New York, Jan 10, 2003 Asphalt paving, Wyoming, USA Primary Materials Cement plant, Switzerland Cement, aggregates, asphalt and surfacing, readymixed concrete 5
Slide 6: Three Core Businesses: Building Products
THREE CORE BUSINESSES Security fencing, Netherlands Davy Institutional Conference, New York, Jan 10, 2003 Building Products Paving, Québec, Canada Precast concrete products; concrete blocks, pavers and rooftiles; clay bricks, pavers and tiles; insulation products; fencing & security; glass fabricati
Slide 7: Three Core Businesses: Distribution
THREE CORE BUSINESSES Davy Institutional Conference, New York, Jan 10, 2003 DIY, Netherlands Distribution Builders Merchanting, USA DIY stores, builders merchanting, specialist distribution 7
Slide 8: Clear Development Strategy
CLEAR DEVELOPMENT STRATEGY z Stick to core businesses in building materials Davy Institutional Conference, New York, Jan 10, 2003 z Invest “at home” Î reinvest in existing businesses; assets and people Î be low cost market leader; leverage best practices z Develop “overseas” Î build regional market
Slide 9: Clear Development Strategy
CLEAR DEVELOPMENT STRATEGY z Rigorous approach to: Davy Institutional Conference, New York, Jan 10, 2003 Î evaluation Î project approval Î subsequent performance review z Accelerated pace since mid-90’s Î 280+ acquisitions 1996 to date, totalling €6.5 bn Î traditional focus small to mid-size compani
Slide 10: Significant Development Capacity
SIGNIFICANT DEVELOPMENT CAPACITY Continued development capacity supported by: Davy Institutional Conference, New York, Jan 10, 2003 z Î Ongoing strong cash flow Î Rolling 12 month EBITDA interest cover June 2002 - 10.1 times Î Supportive shareholder and lender base z March 2001: 1 for 4 Rights Issue
Slide 11: 2002 Acquisition Spend
2002 ACQUISITION SPEND Davy Institutional Conference, New York, Jan 10, 2003 €m Acquisitions individually announced: US Aggregates 81 EHL 155 H1 Development update (acquisition spend) 385 H2 Development update (acquisition spend) 348 Total spend 969 11
Slide 12: Regional, Product & Sectoral Balance
REGIONAL, PRODUCT & SECTORAL BALANCE Davy Institutional Conference, New York, Jan 10, 2003 z Helps smooth the impact of industry and economic cycles z ….and enhances growth potential Regional Product Europe Products & Materials Americas 39% Distribution 48% 61% 52% Sectoral Infra- structure RMI Resi
Slide 13: Corporate Governance
CORPORATE GOVERNANCE Non-executive Chairman + Senior Independent Director Davy Institutional Conference, New York, Jan 10, 2003 z z Majority of Board (9 out of 15) are non-executive z Audit & Remuneration committees solely non-executive z Share options: Î issued at market value on date of grant to f
Slide 14: Federal Group Organised for Growth
FEDERAL GROUP ORGANISED FOR GROWTH Davy Institutional Conference, New York, Jan 10, 2003 CRH plc CEO Liam O’Mahony Finance Development Harry Sheridan Joe McCullough Europe Americas Europe Materials Americas Materials Products & Distribution Products & Distribution Brian Griffin Tom Hill Brian Hill J
Slide 15: Europe Materials
Davy Institutional Conference, New York, Jan 10, 2003 EUROPE MATERIALS 15
Slide 16: Europe Materials
EUROPE MATERIALS Davy Institutional Conference, New York, Jan 10, 2003 z Sales 2001: € 1,861m; 5yr CAGR +20 % z Operating profit 2001 : € 271m z 340+ locations; 11 countries z 9,800 employees z New build / RMI 80/20 z Residential 33% z Non-Res 36% z Infrastructure 31% Irl UK Spain Swiss Pol Fin Est
Slide 17: Europe Materials
EUROPE MATERIALS Davy Institutional Conference, New York, Jan 10, 2003 2001 Operating Sales Profit Margin Ireland €975m c 15% Spain €170m c 11% Poland and Ukraine €230m c 13% Finland and Switzerland €450m c 15% Israel* €36m c 18% Total €1,861m c 15% *CRH share, 5 month 2001 17
Slide 18: Europe Products & Distribution
Davy Institutional Conference, New York, Jan 10, 2003 EUROPE PRODUCTS & DISTRIBUTION 18
Slide 19: Europe P&D
EUROPE P&D Davy Institutional Conference, New York, Jan 10, 2003 z Sales 2001: € 2,175M; 5yr CAGR +13 % z Operating profit 2001 : € 117m z 370+ locations; 12 countries z 12,500 employees z New build / RMI 60/40 z Residential 55% z Non-Res 20% z Infrastructure 10% z DIY 15% Irl UK Por Sp Fr B NL Ger
Slide 20: Europe P&D
EUROPE P&D Davy Institutional Conference, New York, Jan 10, 2003 2001 Operating Sales Profit Margin Concrete €410m c 6% Clay €365m c 7% Building Products €406m c 6% Distribution €994m c 4% Total €2,175m c 5% 20
Slide 21: Americas Materials
Davy Institutional Conference, New York, Jan 10, 2003 AMERICAS MATERIALS 21
Slide 22: Americas Materials
AMERICAS MATERIALS z Sales 2001: $ 2,840m; 5yr CAGR +31 % Davy Institutional Conference, New York, Jan 10, 2003 z Op profit 2001 : $ 310m z 530+ locations z 25 US states z 15,000 employees z New build / RMI 30/70 z Residential 15% z Non-Res 20% z Infrastructure 65% New New York / England New Jersey
Slide 23: Americas Materials
AMERICAS MATERIALS Davy Institutional Conference, New York, Jan 10, 2003 2001 Operating Sales Profit Margin New England $500m c 11% New York / New Jersey $600m c 13% Central $880m c 12% West $860m c 8% Total $2,840m c 11% 23
Slide 24: Americas Products & Distribution
Davy Institutional Conference, New York, Jan 10, 2003 AMERICAS PRODUCTS & DISTRIBUTION 24
Slide 25: Americas P&D
AMERICAS P&D Davy Institutional Conference, New York, Jan 10, 2003 z Sales 2001: $ 2,900M; 5yr CAGR +22 % z Op profit 2001 : $ 256M z 370+ locations z 45 US states z 4 provinces z S America z 15,000 employees z New build / RMI 60/40 z Residential 45% z Non-Res 40% z Infrastructure 15% USA Canada Arg
Slide 26: America P&D
AMERICA P&D Davy Institutional Conference, New York, Jan 10, 2003 2001 Operating Sales Profit Margin APG $950m c 11% Precast $650m c 9% Glass $450m c 15% Distribution $800m c 3% South America $50m c 5% Total $2,900m c 9% 26
Slide 27: Distribution USA: Asbestos Litigation
DISTRIBUTION USA Davy Institutional Conference, New York, Jan 10, 2003 Asbestos litigation (announcement Sept 29, 2002) z Companies in distribution group named in asbestos litigation z 244 pending cases, 251 claimants z 95% one law firm z 52% pipe fitters z Pace decreasing z Claims are a nuisance is
Slide 28: Strategic Issues: Europe
STRATEGIC ISSUES Europe Materials Davy Institutional Conference, New York, Jan 10, 2003 z Strong stable economies z Good cash flow z Well positioned for EU enlargement, eastern Mediterranean options z Successful track record Europe P&D z New house (and office) building weak in all our core markets N
Slide 29: Strategic Issues: Americas Materials
STRATEGIC ISSUES Americas Materials Davy Institutional Conference, New York, Jan 10, 2003 z TEA-21 Î Funding level Î Reauthorization Î Long term outlook is positive; Highways are a popular bi–partisan issue z Bitumen Î Utilize almost 2.0mt of bitumen Î Increased cost volatility 2000 - 2002 Î Delay i
Slide 30: Strategic Issues: Americas P&D
STRATEGIC ISSUES Americas P&D Davy Institutional Conference, New York, Jan 10, 2003 z Medium Term US Housing outlook: Î Harvard housing group estimates need for 1.7M new homes in coming decade Î Driven by demographics including immigration Î Supported by solid, innovative financing sector i.e. Fanni
Slide 31: Strategic Issues - Longer Term
STRATEGIC ISSUES - LONGER TERM Demographics America v Europe (The Economist, Aug 24, 2002) Davy Institutional Conference, New York, Jan 10, 2003 z US Census 2002 shock - population rising faster than predicted z 1950’s - Western Europe population twice USA; 304m v 152m z Now - gap 100m; fertility, i
Slide 32: Financial Capacity to Expand
FINANCIAL CAPACITY TO EXPAND Davy Institutional Conference, New York, Jan 10, 2003 Y/E 2001 Debt (€m) 1,894 Shareholders' funds (€m) 4,775 Debt/shareholders' funds 39.7% Debt/market capitalisation 18.3% Interest cover EBITDA/Interest 8.5 EBIT/Interest 5.6 32
Slide 33: Strong Cash Flow
STRONG CASH FLOW Y/end Yr to June Davy Institutional Conference, New York, Jan 10, 2003 2001 2002 €m €m PBT 803 813 Depreciation/goodwill 495 518 1,298 1,331 Capital expenditure (452) (416) Working capital (61) 87 Dividends (103) (125) Tax (79) (118) Other (29) (23) Operating Cash Flow 574 736 Acqui
Slide 34: Summary
SUMMARY z Robust H1 performance in context of: Davy Institutional Conference, New York, Jan 10, 2003 Î difficult trading conditions in many markets Î unseasonable May / June weather for US Materials Î €9m rationalisation costs taken above the line z 2001 and 2002 have been challenging years z 2003 W
Slide 35: Davy Institutional Investors Conference
Davy Institutional Conference, New York, Jan 10, 2003 Davy Institutional Investors Conference January 10th, 2003 Harry Sheridan, Finance Director 35
CRH — Davy Institutional Investors Conference, New York, January 2003 on 6ix