CRH PLC · NYSE:CRH
CRH — Citigroup Building Materials Conference November 2008
30 slides from CRH's conference presentation, November 2008
Slide 1: Citigroup Building Materials Conference November 2008
Citigroup Building Materials Conference November 2008 Myles Lee Finance Director Chief Executive Designate
Slide 2: Contents
Contents CRH Overview 2 Current Climate - Intensified Focus on Business Fundamentals 12 November IMS Statement 20 Conclusion 27 Contact Us 29 Citigroup Building Materials Conference, Nov 2008 1
Slide 3: CRH Overview
CRH Overview
Slide 4: CRH Overview: The International Building Materials Group
CRH Overview The International Building Materials Group 1970 merger of Irish Cement and Roadstone; Sales €26M, 95% Ireland Now in 34 countries; 3,500+ locations; 92,000+ people Annualised Sales over €20Bn focused on three core businesses Evenly balanced across geographies, products and secto
Slide 5: CRH – Focused and Diversified: Materials
CRH – Focused and Diversified Servicing the breadth of Building Materials demand Materials (55% EBITDA) The Fundamentals Europe ¾Top 10 Cement ¾Leader Aggregates, R/mix US ¾No.3 Aggregates ¾No.1 Asphalt, Top 5 R/mix Vertically integrated primary materials businesses with strategically located long-t
Slide 6: CRH – Focused and Diversified: Concrete Products
CRH – Focused and Diversified Servicing the breadth of Building Materials demand Concrete Prods (20% EBITDA) Constructing the Frame Europe ¾No.1 Arch/Structural Concrete ¾No.1 Construction Accessories Americas ¾No.1 Arch/Precast Concrete ¾No.2 Construction Accessories Building systems and engineered
Slide 7: CRH – Focused and Diversified: Other Products
CRH – Focused and Diversified Servicing the breadth of Building Materials demand Other Products (12% EBITDA) Completing the Envelope Europe ¾No.1 Facing Brick [UK/NL] ¾No.1 EPS Insulation [EI/NL/PL/Nordics] ¾No.1 Fencing & Security Americas ¾No.1 Architectural Glass ¾No.1 Clay Brick [NE/MidW US] Com
Slide 8: CRH – Focused and Diversified: Distribution
CRH – Focused and Diversified Servicing the breadth of Building Materials demand Distribution (13% EBITDA) Fit-out and Renewal Cementbouw Store Europe ¾Top 3 BM Distributor Mainland Europe ¾No.1 NL, No.2 BE - DIY Americas ¾Top 3 Roofing / Siding ¾Top 3 Interior Products Distribution channels to serv
Slide 9: CRH – Focused and Diversified: Providing Building Materials for Our World
CRH – Focused and Diversified Providing Building Materials for Our World Materials Products Products Distribution The Fundamentals Constructing Completing Fit-Out the Frame the Envelope and Renewal ¾Aggregates ¾Precast Concrete ¾Clay ¾Builders ¾Cement ¾Architectural ¾Glass Merchants ¾Roofing & Concr
Slide 10: CRH … International and Balanced
CRH … International and Balanced By Geography North Western Emerging America Europe Regions 45% 40% 15% By Product Heavyside 75% Lightside 25% Materials Concrete Other Distrib Products Products 55% 20% 12% 13% By Sector Residential Non-Residential Infrastructure 40% 35% 25% By End-use New Repair Mai
Slide 11: CRH … RONA, rather than Margin, the key Measure
CRH … RONA, rather than Margin, the key Measure EBITDA / EBIT / Asset RONA* 2007 Sales % Sales % Turn % Materials 17% 13% 1.3x 17% High margin High Capital Intensity Products 13% 9% 1.7x 15% Medium margin Medium Capital Intensity Distribution 7% 6% 2.7x 16% Low margin Low Capital Intensity Group 14%
Slide 12: CRH … Balanced Portfolio contributes to Margin Stability
CRH … Balanced Portfolio contributes to Margin Stability GDP EBITDA Growth Margin 5% W Europe GDP US GDP EBITDA Margin 15% 4% 12% 3% 9% 2% 6% 1% 3% 0% 0% -1% -3% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Operational excellence plus balanced business …
Slide 13: Current Climate: Intensified Focus on Business Fundamentals
Current Climate Intensified Focus on Business Fundamentals
Slide 14: CRH Approach … Intensified Focus on the Business Fundamentals
CRH Approach … Intensified Focus on the Business Fundamentals Commercial Focus – price management to recoup input costs Cost Reduction – significant measures implemented; more planned Working Capital – close attention to seasonal working capital flows Capex – c€1 Bn (2008); c€0.75Bn (2009) b
Slide 15: Focus on Fundamentals: Price Management to recoup Input Costs
Focus on Fundamentals Price Management to recoup Input Costs Asphalt Cost Margin An Americas Materials example Liquid Asphalt Input Cost 2000=100 % 400 AMAT Margin ex. APAC 14% 2000-2004 2001 low, Liq. Asphalt cost rose 55% 350 12% Inevitable lag in pricing reaction 300 10% Contributed to -1.2
Slide 16: Focus on Fundamentals … Significant cost reduction measures implemented
Focus on Fundamentals … Significant cost reduction measures implemented Targeted cost reduction programmes an ongoing feature of CRH Tailored to ongoing business performance / market developments Significant specific measures implemented since early 2007 ¾ Labour savings appropriate to balance
Slide 17: Focus on Fundamentals … Annualised Savings Achieved to Aug 2008
Focus on Fundamentals … Annualised Savings Achieved to Aug 2008 €m Europe Americas Total Labour Savings 95 125 220 Energy Related 45 20 65 Purchasing Initiatives etc. 45 40 85 Bought-in Services 105 75 180 Total gross savings 290 260 550 Cost to Implement c €50m 2007 2008 2009 Analysis of net in
Slide 18: Focus on Fundamentals … Close Attention to Seasonal Working Capital Flows
Focus on Fundamentals … Close Attention to Seasonal Working Capital Flows FY H2 H1 Net Change Cash Inflow Cash Outflow 2008e ≈ (56) to (106) ≈ +500 to +550 (606) 2007 +227 +556 (329) 2006 (76) +398 (474) 2005 (119) +231 (350) 2004 (78) +230 (308) Traditional H1 cash outflow ¾ H1’07 and FY’07 flatt
Slide 19: Focus on Fundamentals … Capex Management
Focus on Fundamentals … Capex Management Capex to Depreciation % 200% 180% 160% 140% 120% 100% 80% 60% 40% Worldwide Favourable Economic Setback Financial 20% Recession Economies & Recovery Crisis 0% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008f 2010e Capital expenditure adapted to the cycle …
Slide 20: Focus on Fundamentals … Absolute Focus on Valuation Discipline
Focus on Fundamentals … Absolute Focus on Valuation Discipline €Bn Acquisition Spend & EBITDA Multiples 2,500 6.2x 7.0x 2,000 1,500 * Pavestone Group 6.7x 7.0x Yatai c7.0x * Cement 1,000 Completed YTD 500 - 2004 2005 2006 2007 2008e 2008 / 2009 ??? *Announced deals – subject to regulatory approvals
Slide 21: November IMS Statement
November IMS Statement
Slide 22: CRH Interim Management Statement November 2008
CRH Interim Management Statement November 2008 August Interims indicated FY 2008 PBT decline similar to -10% for H1 Since then … unprecedented events in financial markets With increasingly cautious business climate across the world Change in sentiment has been most marked in Europe US trad
Slide 23: 2008 Full Year Europe Outlook
2008 Full Year Europe Outlook Low single digit % decline on 2007 Op. Profit Indications Materials Products Distribution Total high mid-high low c25% 2008 Change single digit % single digit % single digit % decrease increase decrease decrease 2007 Actual €586m €308m €212m €1,106m Materials ¾ Slower
Slide 24: 2008 Full Year Americas Outlook
2008 Full Year Americas Outlook Mid-teen US$ Op. Profit decline; -c20% in euro Indications Materials Products Distribution Total mid-teen % c20% c30% mid-teen% 2008 Change decrease decrease increase decrease 2007 Actual $781m $466m $96m $1,343m Materials ¾ Strong pricing to recover input costs but
Slide 25: Development: Focus on Compelling Value / Strategic Fit / Needs
Development Focus on Compelling Value / Strategic Fit / Needs Acquisitions c€1 billion acquisitions and investments completed year-to-date Completion of Yatai/Pavestone remains dependent on regulatory approvals Current emphasis firmly concentrated on operational delivery Activity limited to
Slide 26: Finance: Strengthening Existing Financial Flexibility
Finance Strengthening Existing Financial Flexibility 2008 EBITDA / Net interest cover expected to remain strong at c7.5x To-date in 2008, CRH has raised a total of €1.5 billion of funding ¾ €0.8 billion long-term funding (Stg£ 250m and US$ 650m Bonds) ¾ €0.7 billion of bank funding, primarily ne
Slide 27: IMS Summary
IMS Summary Intense emphasis on operational efficiency / commercial delivery €500m cost reductions since early 2007 / further measures in progress While 2009 outlook is challenging, there are some positives ¾ declining energy costs and world wide interest rate reductions ¾ potential US infrast
Slide 28: Conclusion
Conclusion
Slide 29: CRH Investment Highlights …
CRH Investment Highlights … Consistent strategy and growth record over 38 years Disciplined approach to acquisition through the cycle Geographic, sectoral and product balance a key strength Strong market positions and well located strategic reserves Experienced senior management team devel
Slide 30: Contact Us
Contact Us CRH plc Investor Relations Belgard Castle Clondalkin Dublin 22 Ireland Phone:+ 353 1 404 1000 Fax: + 353 1 404 1007 Email: ir@crh.com or look up our Website - www.crh.com This presentation contains certain forward-looking statements as defined under US legislation. By their nature, such s
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