CRH PLC · NYSE:CRH
CRH — Citigroup Industrial Manufacturing Conference 2004
33 slides from CRH's conference presentation, Mar 10, 2004
Slide 1: Citigroup Industrial Manufacturing Conference, March 10, 2004
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Slide 2: Agenda
Citigroup Industrial Manufacturing Conference, March 10, 2004 AGENDA z CRH Overview z Development Strategy z 2003 Year End Results z Outlook 2
Slide 3: CRH Overview
Citigroup Industrial Manufacturing Conference, March 10, 2004 CRH OVERVIEW 3
Slide 4: CRH - Overview
Citigroup Industrial Manufacturing Conference, March 10, 2004 CRH - OVERVIEW z 1970: Irish Cement & Roadstone: Sales €26m, Ireland 95% z Embarked on a clear, consistent development strategy z Now 23 countries; 3 continents; 1,900+ locations; 55,000+ people z Sales €11bn across three core businesses
Slide 5: Three Core Businesses: Primary Materials
Citigroup Industrial Manufacturing Conference, March 10, 2004 THREE CORE BUSINESSES Cement Plant, Poland Primary Materials Asphalt paving, USA Cement, aggregates, asphalt and surfacing, readymixed concrete 5
Slide 6: Three Core Businesses: Building Products
Citigroup Industrial Manufacturing Conference, March 10, 2004 THREE CORE BUSINESSES Roofing Insulation, Denmark Building Products Paving, Canada Precast concrete products; concrete blocks, pavers and rooftiles; clay bricks, pavers and tiles; insulation products; fencing & security; glass fabrication
Slide 7: Three Core Businesses: Distribution
Citigroup Industrial Manufacturing Conference, March 10, 2004 THREE CORE BUSINESSES DIY, Netherlands Distribution Specialist distribution, USA DIY stores, builders merchanting, specialist distribution 7
Slide 8: Regional, Product & Sectoral Balance
Citigroup Industrial Manufacturing Conference, March 10, 2004 REGIONAL, PRODUCT & SECTORAL BALANCE z Helps smooth the impact of industry and economic cycles z Enhances growth potential Regional Product Materials Europe Products 40% Americas 50% & Dist 50% 60% End-use Infra- Non-res structure 30% RMI
Slide 9: CRH Performance 1987 - 2003
Citigroup Industrial Manufacturing Conference, March 10, 2004 CRH PERFORMANCE 1987 - 2003 1600 1400 PBT +18% pa 1200 1000 800 EPS +14% pa 600 DPS +12% pa 400 200 0 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 1987 = 100 9
Slide 10: CRH People
Citigroup Industrial Manufacturing Conference, March 10, 2004 CRH PEOPLE z An experienced management team Î Managed through previous economic cycles z Managers from 3 very different streams Î Grass-roots managers, now with room to grow Î Highly qualified professionals, business builders with vision
Slide 11: Federal Group Organised for Growth
Citigroup Industrial Manufacturing Conference, March 10, 2004 FEDERAL GROUP ORGANISED FOR GROWTH CRH plc CEO Liam O’Mahony Finance Development Myles Lee Joe McCullough Europe Americas Europe Materials Americas Materials Products & Distribution Products & Distribution Declan Doyle Tom Hill Brian Hill
Slide 12: Europe Materials
Citigroup Industrial Manufacturing Conference, March 10, 2004 EUROPE MATERIALS €m 2003 2002 Sales 1,984 1,927 Op profit 273 267 Op margin 13.9% 13.8% z 350+ locations z 9,900+ employees z New build / RMI 80/20 z Residential 35% z Non-Res 30% z Infrastructure 35% Irl UK Spain Swiss Pol Fin Est Lat Ru
Slide 13: Europe Products & Distribution
Citigroup Industrial Manufacturing Conference, March 10, 2004 EUROPE PRODUCTS & DISTRIBUTION €m 2003 2002 Sales 3,083 2,506 Op profit 213 153 Op margin 6.8% 6.1% z 600+ locations z 18,000+ employees z New build / RMI 55/45 z Residential 65% z Non-Res 30% z Infrastructure 10% Irl UK Por Sp Fr B NL Ge
Slide 14: Americas Materials
Citigroup Industrial Manufacturing Conference, March 10, 2004 AMERICAS MATERIALS $m 2003 2002 Sales 3,203 2,905 Op profit 329 317 Op margin 10.3% 10.9% z 600+ locations z 15,000+ employees z New build / RMI 30/70 z Residential 15% z Non-Res 20% z Infrastructure 65% New York / New England New Jersey
Slide 15: Americas Products & Distribution
Citigroup Industrial Manufacturing Conference, March 10, 2004 AMERICAS PRODUCTS & DISTRIBUTION $m 2003 2002 Sales 3,600 3,110 Op profit 303 277 Op margin 8.4% 8.9% z 380+ locations z 16,000+ employees z New build / RMI 55/45 z Residential 50% z Non-Res 40% z Infrastructure 10% USA Canada Argentina C
Slide 16: Sustainable Performance & Growth
Citigroup Industrial Manufacturing Conference, March 10, 2004 SUSTAINABLE PERFORMANCE & GROWTH z CRH seeks to excel in the “triple bottom line” in: Î Financial performance Î Environmental performance Î Social performance z Responsibility with line management continuing up to Board level z Over 200 p
Slide 17: Development Strategy
Citigroup Industrial Manufacturing Conference, March 10, 2004 DEVELOPMENT STRATEGY 17
Slide 18: Clear Development Strategy
Citigroup Industrial Manufacturing Conference, March 10, 2004 CLEAR DEVELOPMENT STRATEGY z Stick to core businesses in building materials z Invest at “home”; be the low cost market leader z Develop “overseas”; create platforms for future growth z Pay fair prices that meet sellers needs z 14 devolved
Slide 19: Acquisition Approach
ACQUISITION APPROACH Identifying deals Citigroup Industrial Manufacturing Conference, March 10, 2004 z Î Ongoing contact with extensive 25 year+ target database Î Each deal done opens doors to further opportunities Î CRH scale ensures access to all larger industry transactions z Courtship/negotiatio
Slide 20: CRH Acquisition Spend 1987-2003
Citigroup Industrial Manufacturing Conference, March 10, 2004 CRH ACQUISITION SPEND 1987-2003 Cementbouw €m Jura Group €330m 100% Ops & JV €0.7bn 1600 Shelly Co. €347m 1400 Ibstock 49% €230m Finnsementti/Rudus €420m 1200 T. McCully €425m 1000 Ibstock 51% €320m 800 600 Tilcon US €253m 400 Beton Catal
Slide 21: Development Spend 1999-2003
Citigroup Industrial Manufacturing Conference, March 10, 2004 DEVELOPMENT SPEND 1999-2003 €bn Europe Americas Total Materials 1.1 2.4 3.5 53% Products 1.3 1.0 2.3 34% Distribution 0.7 0.2 0.9 13% Total 3.1 3.6 6.7 100% 46% 54% 100% 21
Slide 22: 2003 Europe Acquisitions
Citigroup Industrial Manufacturing Conference, March 10, 2004 2003 EUROPE ACQUISITIONS z Europe Materials €58m Î Finland: modest expansion of aggregates and readymixed concrete operations Î Poland: development of a substantial lime business (Trzuskawica, Kujawy) z Europe P&D €1bn Î Cementbouw: 100%
Slide 23: 2003 Americas Acquisitions
Citigroup Industrial Manufacturing Conference, March 10, 2004 2003 AMERICAS ACQUISITIONS z Americas Materials €320m Î Central Group: significant strengthening of Mid-West market positions May acquisition S.E. Johnson (SEJ), an excellent fit with existing OH/MI ops Subsequent swap of non-core SEJ Ind
Slide 24: 2003 Results
Citigroup Industrial Manufacturing Conference, March 10, 2004 2003 RESULTS 24
Slide 25: 2003 Results Highlights
Citigroup Industrial Manufacturing Conference, March 10, 2004 2003 RESULTS HIGHLIGHTS 2003 2002 % change as at 2003 €m €m reported FX rates Sales 11,080 10,794 +3% +15% Operating profit before goodwill 1,045 1,048 - +12% Profit before tax 864 856 +1% +12% € cent € cent EPS before goodwill 136.2 132.
Slide 26: 2003 Results Overview
Citigroup Industrial Manufacturing Conference, March 10, 2004 2003 RESULTS OVERVIEW z Record results despite significant translation hit z Ireland: Similar profits; strong residential demand; but infrastructure slower in H2 z UK: Strong 13% advance in Sterling profits; ahead 3% in euro terms z Mainl
Slide 27: Funds Flow
Citigroup Industrial Manufacturing Conference, March 10, 2004 FUNDS FLOW 2003 2002 Inflows €m €m Profit before tax 864 856 Depreciation 458 456 Goodwill amortisation 76 70 1,398 1,382 Outflows Working capital (58) 90 Tax paid (103) (162) Dividends (150) (135) Capital expenditure (402) (367) Other (3
Slide 28: Debt Ratios & Interest Cover
Citigroup Industrial Manufacturing Conference, March 10, 2004 DEBT RATIOS & INTEREST COVER Y/E Y/E 2003 2002 Debt (€bn) 2.3 1.7 Shareholders’ funds (€bn) 4.8 4.8 Debt/shareholders’ funds 48% 36% Debt/year-end market capitalisation 27% 28% Interest cover EBITDA/Interest 13.1 11.3 EBIT/Interest 8.4 7.
Slide 29: 2004 Outlook
Citigroup Industrial Manufacturing Conference, March 10, 2004 2004 OUTLOOK 29
Slide 30: 2004 Outlook - Europe
Citigroup Industrial Manufacturing Conference, March 10, 2004 2004 OUTLOOK - EUROPE z Materials Î Ireland: record housing expected to moderate in H2, infrastructure picking up Î Finland/Switzerland: housing/infrastructure to offset softness in other sectors Î Poland: EU entry likely to sustain impro
Slide 31: 2004 Outlook - Americas
Citigroup Industrial Manufacturing Conference, March 10, 2004 2004 OUTLOOK - AMERICAS z Materials Î 2004 Federal highway budget US$33.6bn (+7%) Î Senate/House converging on a US$240bn 6-year ‘04-’09 highway proposal Î Negotiations with the Administration continuing Î Despite continuing state budget
Slide 32: 2004 Outlook - Overall
Citigroup Industrial Manufacturing Conference, March 10, 2004 2004 OUTLOOK - OVERALL z Economic growth in Europe generally subdued; US economy is recovering z Continued focus on cost effectiveness and operational performance z 2004 profits likely to be impacted by weakness of US$ …. z …. however 200
Slide 33: Citigroup Industrial Manufacturing Conference, March 10, 2004
`áíáÖêçìé=fåÇìëíêá~ä j~åìÑ~ÅíìêáåÖ Citigroup Industrial Manufacturing Conference, March 10, 2004 `çåÑÉêÉåÅÉ iá~ã=lÛj~Üçåó `ÜáÉÑ=bñÉÅìíáîÉ 33
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