Slide 1: Investor Update April 2022
Investor Update April 2022 Investor Update 0
Slide 2: Agenda
Agenda Integrated Solutions Sustainability Portfolio Capital Allocation Investor Update 1
Slide 3: CRH − A global leader in building materials solutions
CRH − A global leader in building materials solutions • Leading provider of value-added materials, products & solutions • Attractive sector exposures … ~40% Infrastructure; ~35% Residential; ~25% Non-Residential • Consistent growth in recent years … 5-year CAGR: Revenue +6%; EBITDA +11%; Cash +10% •
Slide 4: CRH – an integrated provider of building solutions
CRH – an integrated provider of building solutions Reshaped & repositioned … from base materials to integrated solutions Products & Services Products & Services… Our approach to integrated solutions … • End-to-end solutions: Uniquely integrating materials, products & services • Business model: Evolv
Slide 5: A reshaped & repositioned business
A reshaped & repositioned business … Active portfolio management (to-date) (2014-2022) • Active portfolio management … a continuous process • Building a structurally better business … $12bn divested … simpler, leaner & more focused … 11x EBITDA … less cyclical & less capital intensive … higher margi
Slide 6: Continuous business improvement
Continuous business improvement … … at the heart of all we do … +580bps EBITDA margin expansion (2017-2021 cumulative) +580bps • Growth underpinned by mindset of continuous +530bps business improvement • Leveraging scale & expertise from across the Group +330bps … co-ordinated centrally, but … execu
Slide 7: Drivers of Performance
Drivers of Performance Growth through Disciplined Strong global the cycle value creation leadership team • High quality building solutions • Owner-mindset approach to • Best-in-class operators … businesses ... #1 in attractive, capital allocation relentless focus on continuous developed construction
Slide 8: Experienced & talented leadership team
Experienced & talented leadership team Albert Manifold Jim Mintern Randy Lake Dan Stover Gina Jardine Chief Executive Group Finance Director Chief Operating Officer President, Chief HR Officer Joined 1998 Joined 2002 Joined 1996 Americas Materials Joined 2019 Joined 1999 Onne van der Weijde David Di
Slide 9: Performance through the cycle
Performance through the cycle … 2013 2021 $23.9bn Revenue $31.0bn Revenue +29% +3% CAGR $2.0bn EBITDA $5.35bn EBITDA +173% +13% CAGR $1.5bn Cash Flow $4.2bn Cash Flow +190% +14% CAGR 8.2% 17.3% Margin Margin +910bps 5.8% Returns 12.3% Returns +650bps … industry leading performance Investor Update 8
Slide 10: And performance within the cycle
… And performance within the cycle … 2019 2021 $28.1bn Revenue $31.0bn Revenue +10% $4.5bn $5.35bn EBITDA EBITDA +19% $3.9bn $4.2bn Cash Flow Cash Flow +8% 15.9% 17.3% Margin Margin +140bps 9.9% Returns 12.3% Returns +240bps … industry leading performance Investor Update 9
Slide 11: We cannot stand still
We cannot stand still … • We have delivered superior performance to-date … but we are focused on the future • Factors driving construction demand in recent years … … significant Infrastructure needs … Residential underbuild … Non-Residential recovery • But climate change is reshaping the world of co
Slide 12: How are we positioning for the changing needs of construction?
How are we positioning for the changing needs of construction? Four key drivers of growth… World population projected to grow by ~2bn by 2050 1 … ~70% in urban environments, an increase of ~50% Economic development will continue to drive investment 2 in infrastructure, residential & commercial proje
Slide 13: Value Drivers – North America
Value Drivers – North America • Strong population growth ... +30m people every decade • Good demand momentum ... … Infrastructure funding underpinned ... Federal & State Steady RMI … significant Residential needs ... New & RMI Demand Higher Growth Markets … Non-Residential activity recovering … grow
Slide 14: Value Drivers – Europe
Value Drivers – Europe • Western Europe … stable & developed … resilient RMI demand … advancements in sustainable construction • Eastern Europe … higher growth … significant new-build Infrastructure & Residential needs Stability Growth … supportive regulatory environment for sustainable solutions …
Slide 15: Integrated Solutions
Integrated Solutions Investor Update 14
Slide 16: Construction is changing
Integrated Solutions Construction is changing … Becoming less impactful on our world … • Less intrusive on communities • More efficient & flexible • Faster construction times • Increasing offsite manufacturing • Safer, cleaner … and better • More resilient & longer lasting • Reducing harmful emissio
Slide 17: Customers’ needs are changing
Integrated Solutions Customers’ needs are changing … Addressing complex challenges through … • Simplified supply chains & logistics • Improved quality, reliability & security of supply • Collaborative partnerships to create innovative, value-added products & services • End-to-end integrated building
Slide 18: And we too are changing
Integrated Solutions And we too are changing … Developing products & solutions that build … • Quicker … … reducing construction times • Cleaner … … more circular & less intrusive on communities • Better … … improving the efficiency & safety of buildings • More reliably … … longer lasting & more resi
Slide 19: Investing in innovative, sustainable solutions
Integrated Solutions Investing in innovative, sustainable solutions … at the forefront of demand for sustainable products & solutions • Uniquely positioned for long-term growth ~$1bn invested on innovation … the leading producer of sustainable building materials within CRH every 10 years • Working c
Slide 20: Customer insights on integrated solutions
Integrated Solutions Customer insights on integrated solutions … Grant Kai Paul Ajegba Ryszard Dąbek Civil Engineer Associate Director, Michigan DOT President, MONTING L.A. International Airport Project I-69 Freeway Reconstruction Warsaw Tower Projects Investor Update 19
Slide 21: Water Infrastructure Solutions
Integrated Solutions Water Infrastructure Solutions • Water ... a vital utility for life ... urgent need to manage water scarcity & excess • Essential to upgrade & build new water infrastructure ... 2.2m miles of underground water pipes in the US ... aging & underfunded network ... average water pip
Slide 22: Solutions in Action – Los Angeles
• Custom-built stormwater management system for LAX airport Solutions • Bespoke solution to capture, clean & infiltrate 45,000ft3 of water Los Angeles, in Action • Highly specified project with numerous stakeholders United States • Provided products, design & engineering services − one-stop-shop Pla
Slide 23: Road Infrastructure Solutions
Integrated Solutions Road Infrastructure Solutions • CRH ... #1 roadbuilder in the US • Full-service, end-to-end offering across entire project lifecycle … design, manufacture, install, maintain & recycle • Uniquely combining ... ... breadth of materials, products & services ... design, innovation &
Slide 24: Road Solutions
Integrated Solutions Road Solutions … 2020 2010 2000 • Aggregates • Cement • Asphalt • Concrete products • Aggregates • Aggregates • Mix-design • Bridge construction • Asphalt • Contracting services • Water transportation • Engineering skills • Culverts From base materials Products … …… to integrate
Slide 25: Solutions in Action – Michigan
Play Customer Video • Combined 4 projects into 1 … a single end-to-end solution Solutions • Shortened the construction time from 8 years to 3 years Michigan, United States in Action • Applied custom asphalt mixes for the challenging Michigan climate • Simplified, efficient & cost effective … using r
Slide 26: Urban construction solutions
Integrated Solutions Urban construction solutions … • Rebuilding the world’s cities … from the centre out • Modern architectural structures within confined footprints • Densely populated & congested urban centres • Strict regulatory & environmental specifications … solving complex challenges for our
Slide 27: Solutions in Action – Warsaw
Play Customer Video • Poured concrete in -30 degrees Celsius to heights of 200 metres Solutions • Leveraged expertise & materials technology within the Group Warsaw, in Action • Used innovative products & off-site manufacturing Poland • Simplified logistics, improved project scheduling & lowered cos
Slide 28: Integrated solutions strategy
Integrated Solutions Integrated solutions strategy … Unique capabilities, decades of experience … • #1 in North America … #1 in Europe • Leveraging scale & best practise from across the Group • Providing integrated, value-added materials, products & services • End-to-end solutions … solving complex
Slide 29: Outperforming industry peers
Integrated Solutions Outperforming industry peers … EBITDA Growth Margin Expansion Operating Cash (% Change 2018 - 2021) (2018 - 2021) (% Change 2018 - 2021) +480 +51% +33% +35% bps +39% +41% +40% +320 +24% +240 +18% bps +130 bps bps Global US Peers Peer Avg. CRH Global US Peers Peer Avg. CRH Global
Slide 30: Integrated solutions strategy
Integrated Solutions Integrated solutions strategy … +360bps organic RONA* improvement (2019-2021 cumulative) • More deeply embedded with customers +360bps … significant commercial & operational benefits • Leveraging production & logistics efficiencies to drive increased profitability & asset utilis
Slide 31: Sustainability
Sustainability Investor Update 30
Slide 32: Our approach to Sustainability
Sustainability Our approach to Sustainability … CO2 Decarbonise Preserve & Conserve Sustainable Solutions People & Community Our commitment to Protecting scarce Products & solutions that Empowering our decarbonise our resources & enabling a contribute to a more employees & engaging business & societ
Slide 33: Addressing the challenges facing our world
Sustainability Addressing the challenges facing our world … • Global population to increase by ~2bn people by 2050 ... significant construction needs • Construction industry emits ~4bn tonnes CO2 p.a. • Using scarce natural resources at an unsustainable rate … sustainability must be at the core of c
Slide 34: Taking the lead on decarbonisation
Sustainability Taking the lead on decarbonisation … Group Carbon Emissions (2020: Scope 1, 2 & 3) • Long track record of industry-leading emissions reduction 24% • Raising our ambition & accelerating our efforts with best-in-class new target • 25% reduction in absolute Group-wide emissions 6% 46mt …
Slide 35: Targeting Group-wide emissions reductions
Sustainability Targeting Group-wide emissions reductions … 60mt 48 48 Industry-leading reductions -25% 50mt 46 46 45 44 43 41 40 40mt 38 34 30mt 20mt 10mt 0mt 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 … roadmap to 2050 … net zero carbon Investor Update 34
Slide 36: Detailed, bottom-up roadmap
Sustainability Detailed, bottom-up roadmap … Key areas of focus Clinker substitution Network optimisation • Significant experience in decarbonisation pozzolans, calcined clay, etc optimising plant footprint • At the leading edge for many years Fuel economy Fleet upgrades recycled waste & biomass veh
Slide 37: Investing in decarbonisation
Sustainability Investing in decarbonisation … • Expect ~$150m increase in annual capex • A net business benefit … Higher sales Higher profitability Offsetting future CO2 costs Creating superior value • Disciplined approach with strict investment criteria … attractive returns profile … reduci
Slide 38: Circularity in construction
Sustainability Circularity in construction … • Significant environmental, financial & societal benefits • Preserving scarce natural resources & prolonging the life of reserves • Reducing the costs of construction … for us & our customers • Providing equivalent or superior product quality Investor Up
Slide 39: Building a more resilient, circular & sustainable world
Sustainability Building a more resilient, circular & sustainable world … • Advancing circularity to enable a more sustainable future • Increasing customer demand for greater … … Resilience − protecting against climate change … Circularity − preserving scarce natural resources … Sustainability − redu
Slide 40: Developing sustainable solutions
Sustainability Developing sustainable solutions … • Leveraging capabilities across the construction value chain • Delivering a more sustainable & better quality built environment … more resilient, lower carbon, higher performing • Collaborating & innovating to develop value-added products & solution
Slide 41: Sustainable solutions
Sustainability Sustainable solutions … … that contribute to a more sustainable society Investor Update 40
Slide 42: Sustainable solutions
Sustainability Sustainable solutions … … that improve the quality of construction and our lives Investor Update 41
Slide 43: Empowering employees and communities
Sustainability Empowering employees and communities … Zero harm Equality Working to ensure safety & Where everyone has equal wellness of colleagues & partners opportunities to develop & progress People Community Attracting, developing & retaining Recognising the important role of the top talent in o
Slide 44: Portfolio
Portfolio Investor Update 43
Slide 45: Value creation through M&A – patient, disciplined, sustainable
Portfolio Value creation through M&A – patient, disciplined, sustainable Robust framework & focus areas Market & product selection Performance / financials Expand & prioritise geographic footprints Value-focused ... avg. 8x EBITDA since 2014 Attractive markets – strong population growth, Acc
Slide 46: Continuous Business Improvement
Portfolio Continuous Business Improvement … • Building better businesses … operational, commercial & financial initiatives to maximise performance • Continually improving & evaluating every business • Dedicated teams implementing culture of operational excellence & continuous improvement • Ambitious
Slide 47: Driving organic growth through M&A – Ash Grove
Portfolio Driving organic growth through M&A Ash Grove (2018) • Successful integration with existing CRH network Sales EBITDA Margin • Significant synergy delivery 2021 $1,914m $586m 30.6% … process, procurement, structural … materials self-supply & demand pull-through • Leveraging expertise from Eu
Slide 48: Driving organic growth through M&A – South Eastern Europe
Portfolio Driving organic growth through M&A South Eastern Europe (2015) • Vertically integrated cement, aggregates and RMC Sales EBITDA Margin businesses … #1 in South Eastern Europe 2021 €617m €183m 29.6% • Strengthening existing positions … integrating with legacy precast & concrete product busin
Slide 49: Continuous business improvement underpins M&A growth
Portfolio Continuous business improvement underpins M&A growth Value creation in M&A Commercial Alternative Circular excellence fuels economy • Evaluating acquisition opportunities … … Financial criteria & leadership team Margin Process Synergy … Market expansion & full potential expansion improveme
Slide 50: Benefits of continuous business improvement
Portfolio Benefits of continuous business improvement ... Shareholders ... Industry ... Higher growth, margin expansion, increasing Embracing industry-leading safety (zero cash & returns, value-accretive M&A harm), equality, innovation, R&D Customers ... Communities ... Proactively addressing their
Slide 51: Capital Allocation
Capital Allocation
Slide 52: Relentless focus on shareholder value creation
Capital Allocation Relentless focus on shareholder value creation … Markets & solutions-driven growth Disciplined & value-focused acquisition strategy Mindset of continuous business improvement High-returning expansionary capex investments Continued strong cash generation … disciplined approach to c
Slide 53: Capital allocation last years
Capital Allocation Capital allocation last 5 years … ~35% cash returns Key drivers 2017-2021 • $3.6bn dividends • $2.9bn share buybacks $17bn 2.5% organic sales growth 3.2% acquisition growth Operating cash 21% operating leverage last 5 years 77% cash conversion ~65% growth investments • $9.
Slide 54: Significantly improved profitability & cash over time
Capital Allocation Significantly improved profitability & cash over time … EBITDA & Margin Operating Cash $6bn (2016 - 2021) 17.3% 18% (2016 - 2021) $4.2bn +9% $5.3bn +10% CAGR 16% $4bn CAGR $5bn 14% $4bn 11.5% $3.5bn 12% $3bn $2.6bn $3bn 10% $2bn 8% $2bn 2016 2017 2018 2019 2020 2021 2016 2017 2018
Slide 55: Continuous business improvement
Capital Allocation Continuous business improvement … … at the heart of all we do … +580bps EBITDA margin expansion (2017-2021 cumulative) +580bps • Growth underpinned by mindset of continuous +530bps business improvement • Leveraging scale & expertise from across the Group +330bps … co-ordinated cen
Slide 56: Investment growth
Capital Allocation Investment growth … Growth investments (2017-2021) • Patient & disciplined approach ... strict performance ~20% & returns criteria applied • Value-accretive M&A … building out our integrated solutions strategy $11bn • Low risk expansionary capex … increasing capacity ~80% in high
Slide 57: Strong & active pipeline of opportunities
Capital Allocation Strong & active pipeline of opportunities … • Fragmented industry Acquisition priority areas … significant consolidation opportunities Existing core geographies & product areas • Unique bolt-on acquisition model High growth markets with attractive fundamentals … developing str
Slide 58: Organic revenue growth
Capital Allocation Organic revenue growth … North America Europe • Western Europe • Infrastructure growth underpinned … resilient RMI demand • Steady Residential demand … evolution of sustainable construction • Non-Residential in line with economic growth • Eastern Europe … construction activity und
Slide 59: Significant optionality for long-term value creation
Capital Allocation Significant optionality for long-term value creation … Cash returns to shareholders Underlying assumptions • Dividends – single-digit % increases • Share buybacks – $1.2bn current Mid-single digit % organic sales growth ~$30bn annual run-rate Continued margin expansion Financi
Slide 60: A framework for robust long-term value creation
Capital Allocation CRH – A framework for robust long-term value creation … Attractive industry Additional growth Ongoing margin Continued strong Additional returns - + + + + growth from bolt-on M&A expansion cash conversion capital allocation • Expect to grow greater • Additional organic • Continuou
Slide 61: Key Takeaways
Key Takeaways
Slide 62: Key takeaways
Key takeaways… Strong growth outlook driven by infrastructure investment & long-term residential needs Leading market positions in developed markets with attractive fundamentals Rebalanced & repositioned into resilient geographic, sector & end-use markets Uniquely integrated sustainable buil
Slide 63: Disclaimer / Forward-Looking Statements (1/2)
Disclaimer / Forward-Looking Statements (1/2) 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 cauti
Slide 64: Disclaimer / Forward-Looking Statements (2/2)
Disclaimer / Forward-Looking Statements (2/2) By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future and reflect the Company's current expectations and assumptions as to such future ev
Slide 65: 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 Investor Update 64