Crh Plc · NYSE:CRH
Crh — Investor Day (November 2010)
25 slides from Crh's investor day presentation, November 2010
Slide 1: CRH Investor Day 2010: Europe Materials
CRH Investor Day 2010 EUROPE MATERIALS H E N RY M O R R I S
Slide 2: Europe Materials (EMAT)
2 Europe Materials (EMAT) y BUSINESS MODEL y COMPETITIVE ADVANTAGES y OPERATIONAL EXCELLENCE y DEVELOPMENT OPPORTUNITY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 3: Europe Materials – What We Do
3 Europe Materials – What We Do 20 countries Concrete 5mt Infrastructure Cement 13mt 520 locations RMC 10m m3 Non‐residential €2.7Bn Sales Aggregates 51mt Asphalt 4mt Residential Basis: 2009 Results Integrated materials business with a balanced end‐use CRH Investor Day, November 2010
Slide 4: Europe Materials – Where We Began
4 Europe Materials – Where We Began Ireland 1995 #1 Cement #1 Aggs #1 RMC #1 Asphalt #1 Lime #1 Concrete Products Spain Leading RMC/Aggs in Catalonia Market leader with vertically integrated model CRH Investor Day, November 2010
Slide 5: Europe Materials – The Business Model
5 Europe Materials – The Business Model y Market leading regional positions y Built around a core of resource‐backed assets (Cement and Aggregates) y Grow through Development (acquisitions and capex) y Vertical integration – most extensive in industry y Operational Excellence – ability to improve pe
Slide 6: Europe Materials – Expanding The Footprint: 2000
6 Europe Materials – Expanding The Footprint: 2000 Poland #3 Cement (#1 in SE) 2000 Aggregates Concrete, Asphalt Ukraine #3 Cement (#1 in W) Aggregates Finland #1 Cement #1 Aggregates #1 RMC Switzerland #2 Cement Aggregates RMC Developing new platforms with emphasis on CEE CRH Investor Day, November
Slide 7: Europe Materials – Expanding The Footprint: 2005
7 Europe Materials – Expanding The Footprint: 2005 Portugal 2005 #2 Cement #2 RMC Aggregates Tunisia, Lebanon, Angola #1 cement positions in regional markets Israel #1 Cement Extending our position in Southern Europe CRH Investor Day, November 2010
Slide 8: Europe Materials – Today
8 Europe Materials – Today EBITDA ’09* China (Northeast) #1 Cement 15% India (Andhra Pradesh) #2 Cement 31% 17% Turkey (Aegean Region) #1 Cement 16% * Other countries not individually disclosed account for 21% Improving our positions in EU + Asia entry Grown EBITDA from €0.1Bn to €0.43Bn in 15 years
Slide 9: Europe Materials – Geographical Balance
9 Europe Materials – Geographical Balance 2009 EBITDA €0.43Bn * Stable economies Switzerland Finland Netherlands 37% Developing economies 42% Poland, Ukraine Turkey, Lebanon China, India ‘Austerity’ economies 21% Ireland Portugal * Note: Excludes Associates Spain c80% businesses with stable to high
Slide 10: Europe Materials (EMAT)
10 Europe Materials (EMAT) y BUSINESS MODEL y COMPETITIVE ADVANTAGES y OPERATIONAL EXCELLENCE y DEVELOPMENT OPPORTUNITY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 11: Europe Materials – Competitive Advantages
11 Europe Materials – Competitive Advantages y Strong regional positions in consolidated markets y Resource‐backed assets { 29m tonnes of cement capacity (pro‐rata for ownership %) { 2.6Bn tonnes of well located reserves y Development approach….build vertically integrated positions { Most extensive
Slide 12: Why Integration Provides Strength
12 Europe Materials – Why Integration Provides Strength Cement Aggregates Concrete/Asphalt y Upstream…..resource; Downstream……demand; Target c30% captive y Pull‐through volumes……..Multiplier on sales, Profit at each level y Interact with market at many levels….Improved commercial offering y Presence
Slide 13: Vertical Integration & Federal Structure
13 Europe Materials – Vertical Integration & Federal Structure y Unique model built‐up over many years Cement H L Capital Intensity y Lean centre co‐ordinates local management # Locations y Capture benefits of large and small company { Central: co‐ordination and synergistic Aggregates benefits (Oper
Slide 14: Vertical Integration – Underpins Development Model
14 Vertical Integration – Underpins Development Model y Development a core‐competence, embedded at all levels y Allows us acquire multiple on small / medium sized businesses { Typically significant OpEx improvement potential { Network synergies { Low risk y Multiple platforms for growth……more opport
Slide 15: Our model in practice - Poland
15 Our model in practice ‐ Poland Entry Product Line 1995 Cement 9 9 9 9 9 1998 Aggregates 9 9 9 9 1997 RMC 9 9 9 9 9 1997 Pavers 9 1999 Asphalt 9 2000 Aerated Concrete 9 2003 Lime 9 2006 Sand Lime Bricks 9 CRH: #3 Cement…..but #1 Building Materials Biggest and most profitable Building Materials Com
Slide 16: Europe Materials (EMAT)
16 Europe Materials (EMAT) y BUSINESS MODEL y COMPETITIVE ADVANTAGES y OPERATIONAL EXCELLENCE y DEVELOPMENT OPPORTUNITY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 17: Europe Materials – Operational Excellence
17 Europe Materials – Operational Excellence 6 key areas: Clinker Factor y Cement production Some Cement KPI’s 85% y RMC & Aggs production 9 Clinker content 80% y Fixed Costs 9 Alternative fuels y Purchasing 9 Energy efficiency 2005 2009 Alternative Fuels y Logistics 9 Power consumption y Working Ca
Slide 18: Operational Excellence in Practice
18 Operational Excellence in Practice Jura: acquired in 2000 Kiln stops Alternative fuels Post‐acquisition: 76% Usage 131 decline doubled 62% y Stable market 31% y Management retained 31 2000 2009 2000 2009 But approach changed…. Headcount In-house Cement y Operational Excellence 30% Doubled 223 fal
Slide 19: Europe Materials – Our Returns
19 Europe Materials – Our Returns ROIC Return on Invested Capital 20% Industry Peers 16% CRH Europe Materials 12% 8% 4% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Bloomberg Focus on performance delivers industry leading returns CRH Investor Day, November 2010
Slide 20: Europe Materials – Our Margins
20 Europe Materials – Our Margins EBITDA % EBIT % Upside leverage to margins as markets normalise CRH Investor Day, November 2010
Slide 21: Europe Materials (EMAT)
21 Europe Materials (EMAT) y BUSINESS MODEL y COMPETITIVE ADVANTAGES y OPERATIONAL EXCELLENCE y DEVELOPMENT OPPORTUNITY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 22: Europe Materials Development – The Last 10 Years
22 Europe Materials Development – The Last 10 Years y Platform and Bolt‐on model Spend €m 500 y 80 deals y 16 countries 400 y Total spend of €2.3 billion 300 y Comprising deals valued... 200 { 58 < €10M { 14 €10 – 100M 100 { 8 > €100M - 00 01 02 03 04 05 06 07 08 20 9 e 0 10 20 20 20 20 20 20 20 20
Slide 23: Europe Materials – Development Opportunities
23 Europe Materials – Development Opportunities y Existing markets { Bolt‐ons for synergies and reserves { Deepen vertical Integration y Contiguous Regions { New Platforms to extend and strengthen regional positions { Leverage network capability, regional reach and Op Excellence transfer y New Regio
Slide 24: Europe Materials (EMAT)
24 Europe Materials (EMAT) y BUSINESS MODEL y COMPETITIVE ADVANTAGES y OPERATIONAL EXCELLENCE y DEVELOPMENT OPPORTUNITY y KEY TAKE‐AWAYS CRH Investor Day, November 2010
Slide 25: Europe Materials – Key Take-Aways
25 Europe Materials – Key Take‐Aways Our Markets y Geographical diversity provides earnings balance y Significant exposure to higher growth CEE markets y Opportunities for continued rollout of vertical integration model CRH Europe Materials Market Positions Vertically Federal Growth of Scale Integra