CRH PLC · NYSE:CRH
CRH — Merrill Lynch Building Conference, London 2005
29 slides from CRH's conference presentation, Oct 31, 2005
Slide 1: Sector M&A Activity: Adding Shareholder Value or Over-Hyped Hot Air?
Merrill Lynch Building Conference, London "Sector M&A Activity: Adding Shareholder Value or Over-Hyped Hot Air?" Monday 31st October, 2005 Myles Lee, Finance Director, CRH plc "Adding growth in different products" Merrill Lynch Building Conference, London, 31 October 2005 1
Slide 2: Contents
Contents CRH Overview 3 Three Core Businesses 4 CRH Balance 5 Federal Group Organised for Growth 6 Clear Strategy 7 Acquisition Approach 8 The 1970s – Foundations of the Group 10 The 1980s – Pursuing a clear Strategy 11 The 1990s – Expansion on all Fronts 12 The 2000s – Continuing Growth …. 13 Expan
Slide 3: Overview
Overview Overview Merrill Lynch Building Conference, London, 31 October 2005 2
Slide 4: CRH - Overview
CRH - Overview z 1970: Irish Cement & Roadstone: Sales €26m, Ireland 95% z Embarked on a clear, consistent development strategy z Now 25 countries; 3 continents; 2,100+ locations; 60,000+ people z 2004 Sales €12.8bn, EBITA €1.25bn, EBT €1.1bn z Listed Dublin (CRH.I), London (CRH.L), NASDAQ (CRHCY);
Slide 5: Three Core Businesses
Three Core Businesses Primary Materials Building Products Distribution Precast concrete products; concrete blocks, pavers, rooftiles; clay bricks, pavers, tiles; insulation products; fencing & security; glass fabrication, rooflights & ventilation, construction accessories Cement, aggregates, asphalt
Slide 6: CRH Balance
CRH Balance Geographic and Product* Product End-use* Residential Non-residential 45% 30% Europe Americas Materials Materials 18% 22% Infrastructure 25% Europe Americas Products & Products & Distribution Distribution 33% 27% New RMI 55% 45% * based on 2004 sales Merrill Lynch Building Conference, Lon
Slide 7: Federal Group Organised For Growth
Federal Group Organised For Growth CRH CRHplc plc CEO Liam O'Mahony CEO Liam O'Mahony Finance Finance Development Development Myles MylesLee Lee Albert AlbertManifold Manifold Europe Europe Americas Americas Europe EuropeMaterials Materials Americas AmericasMaterials Materials Products Products&&Dis
Slide 8: Clear Strategy
Clear Strategy z Stick to core businesses in building materials - but broad z Invest at “home”; be the low cost market leader z Develop “overseas”; create platforms for future growth z Generally mid-sized deals with some larger transactions z Negotiate deals that meet sellers needs ... and our needs
Slide 9: Acquisition Approach
Acquisition Approach Identifying Identifyingdeals deals Courtship/negotiation Courtship/negotiation • •Ongoing Ongoingcontact contactwith withextensive extensive25 25 • •Patient Patientapproach approachrecognising recognising year+ target database year+ target database evolving owner circumstances e
Slide 10: CRH Development 1970 - 2005
CRH CRH Development Development 1970 1970 -- 2005 2005 Merrill Lynch Building Conference, London, 31 October 2005 9
Slide 11: The 1970s – Foundations of the Group
The 1970s – Foundations of the Group E Merger 1st move to Mainland Europe Distribution Materials U Irish Cement Concrete & Distribution UK NI R + Netherlands O Roadstone P E 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 A M 1st step in US E Precast & APG R UT, ID, CO I C A S €26m €26m ~€43m ~€43
Slide 12: The 1980s – Pursuing a clear Strategy
The 1980s – Pursuing a clear Strategy E Materials Materials U NI Spain R O P Fencing Concrete Clay E Neths Neths Neths 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 A M 1st step Materials E Materials NY New England R I C Precast Precast APG 4th US Product A CO, WY WA, OR, CA, AZ Southeast US Gro
Slide 13: The 1990s – Expansion on all Fronts
The 1990s – Expansion on all Fronts E Materials €0.4bn Materials U Poland Finland R O P Clay Concrete Insulation Distribution Clay E Germany Belgium Netherlands France UK €0.5bn 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 A M Materials Materials Materials €0.4bn Materials E Pennsylvania Utah N
Slide 14: The 2000s – Continuing Growth
The 2000s – Continuing Growth …. €0.3bn E Materials Materials Materials Materials U Switz Israel Switz Portugal R €0.3bn O P Insul D&V Insul Conc Dist Cementbouw E UK/DK Neths Nordics DE Switz Neths €0.7bn 2000 2001 2002 2003 2004 2005 A M Materials Mats Materials E Ohio NJ OH, MI R €0.3bn €0.2bn I
Slide 15: Expanding CRH Product Platforms
Expanding CRH Product Platforms 2005 – 25 Countries Cement Aggregates Asphalt & Surfacing Readymixed concrete 1970 – 2 Countries Architectural concrete Cement Precast concrete Cement Aggregates Aggregates Clay Concrete Concrete Products Products Glass Insulation Fencing & Security systems Daylight &
Slide 16: Delivering Superior Performance
Delivering Superior Performance …. 1000 PBT +16% 800 EPS +13% 600 DPS +12% 400 200 0 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 Growth Index: 1989 = 100 .… Creating Significant Shareholder Value Merrill Lynch Building Conference, London, 31 October 2005 15
Slide 17: Development Strategy Going Forward
Development Development Strategy Strategy Going Going Forward Forward Merrill Lynch Building Conference, London, 31 October 2005 16
Slide 18: Acquisitions Market Today
Acquisitions Market Today z Current trends and challenges Î Larger Industry transactions Î Private Equity interest in the sector …. Î …. driving higher multiples z The CRH Development Model Î Divisional development teams targeting multiple parallel growth platforms Î Many regional and product-based
Slide 19: Europe Materials
Europe Materials Financials Financials€m €m 2004 2004 2003 2003 Sales Sales 2,354 2,354 1,984 1,984 Operating OperatingProfit Profit 339 339 273 273 Avg AvgNet NetAssets Assets 1,785 1,785 1,548 1,548 Operating OperatingMargin Margin 14.4% 14.4% 13.8% 13.8% Leadership LeadershipPositions Positions A
Slide 20: Europe Materials - Strategy
Europe Materials - Strategy zzMaintain Maintainand andbuild buildexisting existingoperations operationsinin mature matureEuropean Europeanmarkets markets ÎSelective expansion in related products ÎSelective expansion in related products ÎGeographic infill ÎGeographic infill zzSelectively Selectivelya
Slide 21: Europe Products & Distribution
Europe Products & Distribution Financials Financials€m €m 2004 2004 2003 2003 Sales Sales 4,149 4,149 3,083 3,083 Operating OperatingProfit Profit 317 317 213 213 Avg AvgNet NetAssets Assets 2,590 2,590 2,055 2,055 Operating OperatingMargin Margin 7.6% 7.6% 6.9% 6.9% Leadership LeadershipPositions P
Slide 22: Europe Products & Distribution - Strategy
Europe Products & Distribution - Strategy zzConcrete: Concrete: Î strengthen existing architectural and utility ops Î strengthen existing architectural and utility ops Î acquire in neighbouring regions Î acquire in neighbouring regions zzClay: Clay: Î consolidate in UK, grow in Netherlands/Poland Î
Slide 23: Americas Materials
Americas Materials Financials Financials$m $m 2004 2004 2003 2003 Sales Sales 3,535 3,535 3,202 3,202 Operating OperatingProfit Profit 338 338 329 329 Avg AvgNet NetAssets Assets 3,104 3,104 3,036 3,036 Operating OperatingMargin Margin 9.6% 9.6% 10.3% 10.3% Leadership LeadershipPositions Positions A
Slide 24: Americas Materials - Strategy
Americas Materials - Strategy zzNew NewEngland England Î Further vertical integration in NH, ME, VT Î Further vertical integration in NH, ME, VT Î Expand readymixed concrete operations Î Expand readymixed concrete operations zzNew NewYork York/ /New NewJersey Jersey Î Seek further bolt-ons in NJ Î S
Slide 25: Americas Products & Distribution
Americas Products & Distribution Financials Financials$m $m 2004 2004 2003 2003 Sales Sales 4,323 4,323 3,600 3,600 Operating OperatingProfit Profit 397 397 303 303 Avg AvgNet NetAssets Assets 1,938 1,938 1,803 1,803 Operating OperatingMargin Margin 9.2% 9.2% 8.4% 8.4% Leadership LeadershipPositions
Slide 26: Americas Products & Distribution - Strategy
Americas Products & Distribution - Strategy zzPrecast Precast Î Geographic infill through acqs/greenfield dev Î Geographic infill through acqs/greenfield dev Î Pursue new product/region opportunities Î Pursue new product/region opportunities zzAPG APG Î Exploit retail platform through national Î Exp
Slide 27: Overall
Overall z Sustained focus on operational performance is the foundation for growth z Divisional development teams active across many fronts z Central Group Development team with complementary focus on Î Expanding geographic horizons, eg. Asia Pacific Î Evaluating new product platforms Î Working to ex
Slide 28: Strategic Vision
Strategic Vision Our strategic vision is consistent and clear …. “to be a leading international building materials group delivering superior performance and growth” Merrill Lynch Building Conference, London, 31 October 2005 27
Slide 29: 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