Slide 1: ly) fr ji fl i} ii
ly) fr ji fl i} ii
Slide 2: Agenda
Agenda Markets & Trading H1 2018 Strategy Update Outlook & Key Takeaways CRH plc, Interim Results 2018 1
Slide 3: Key Messages
Key Messages • H1 performance in line with guidance • Volume recovery following Q1 weather disruption … positive momentum in Q2 • Active portfolio management YTD … €2.9bn divestments … €3.4bn acquisitions (incl. 28 bolt-ons) • €1bn share buyback underway … €350m completed to-date CRH plc, Interim Re
Slide 4: H1 Financial Highlights
H1 Financial Highlights Sales EBITDA Margin €11.9bn €1.13bn 9.5% +2% LFL +1% LFL in line LFL EPS DPS 45.0c 19.6c +11% +2% CRH plc, Interim Results 2018 3
Slide 5: Americas – Market Backdrop
Americas – Market Backdrop • Positive economic backdrop … US & Canada • Infrastructure funding underpinned … State & Federal • Residential construction continues to advance … underlying demand remains robust • Non-Residential sector supported by economic growth & strong labour market CRH plc, Interi
Slide 6: Americas – Trading Performance
Americas – Trading Performance • Significant weather disruption in Q1 … recovered in Q2 Sales EBITDA Margin • Volumes ahead … positive pricing environment LFL % Chg Q1 Q2 H1 H1 H1 • Materials margin impacted by weather Materials -2% +7% +4% +1% -20bps & cost inflation … Q2 margin ahead Products -3%
Slide 7: Europe – Market Backdrop
Europe – Market Backdrop • Macro-economic conditions remain positive despite political uncertainty • Construction market continues to recover • Positive outlook for W. Europe construction (new & RMI) … strong new-build growth in E. Europe CRH plc, Interim Results 2018 6
Slide 8: Europe – Trading Performance
Europe – Trading Performance • Broad-based weather disruption in Q1 … improvement in Q2 Sales EBITDA Margin • Volumes ahead … pricing momentum building LFL % Chg Q1 Q2 H1 H1 H1 Heavyside -3% +7% +2% +2% - • Margin maintained despite inflationary input cost environment Lightside +3% +6% +5% +7% +20bp
Slide 9: Asia Division – Market Backdrop & Trading Performance
Asia Division – Market Backdrop & Trading Performance • Philippines: Challenging trading environment … prices ahead amid input cost pressures ... Sales EBITDA Margin • Long term market fundamentals remain attractive LFL % Chg Q1 Q2 H1 H1 H1 Asia -5% +1% -2% -59% -760bps • India: Strong volume growth
Slide 10: Financial Performance
WM Weg Wek! thy = ub Financial Performance
Slide 11: Components of Performance
Components of Performance €m Sales EBITDA H1 2017 – Continuing Ops. 11,850 1,120 • Organic improvement despite inflationary input cost environment Organic (excl. Asia) 214 24 Organic Asia (4) (16) • Acquisitions performing in line with expectations Acquisitions/(Disposals) 575 84 • Currency headwind
Slide 12: Cash Flow Movements
Cash Flow Movements €m H1 2017 H1 2018 EBITDA 1,175 1,130 • Working capital increase … higher inventory levels due to improved backlogs Working Capital (1,021) (1,108) Interest (145) (158) • Higher tax charge due to significant gain on divestment Tax (102) (215) Other 44 40 • Seasonal cash outflow i
Slide 13: Net Debt Movements
Net Debt Movements €m H1 2017 H1 2018 Opening Net Debt 5,297 5,796 Operating Cash Outflow 49 311 • Active portfolio activity … reallocating capital for higher growth & returns Capital Expenditure 513 509 • Significant increase in cash returns to Divestments (145) (2,386) shareholders Acquisitions 63
Slide 14: Group Strategy Update
Group Strategy Update ite
Slide 15: Our Strategic Objectives …
Our Strategic Objectives … Portfolio Management … Re-shaping our business for higher growth & more sustainable returns Capital Allocation … Maximising shareholder value through the efficient use of capital Continuous Business Improvement … Making businesses better through internal self-help initiati
Slide 16: Portfolio Management … creating value through refined organisation
Portfolio Management • Simplified business structure … more focused … narrower & deeper • Re-balancing towards higher growth regions & products … adapting to the changing needs of construction • Focusing on existing markets & product adjacencies • Leveraging our integrated business model … enhanced
Slide 17: Capital Allocation … relentless focus on shareholder value
Capital Allocation • Patient & disciplined approach to capital deployment … track record of balance sheet strength & flexibility • Value-accretive capex … supporting our business through low risk investments • Value-driven M&A … strong pipeline of opportunities • Returning excess cash to shareholder
Slide 18: Continuous Business Improvement
Continuous Business Improvement 20% Targeting 300bps EBITDA Margin Improvement • Incremental business improvement initiatives ... +300bps 50% internal self-help measures 30% • Improving organic operating leverage • Announced synergies … Ash Grove, Florida Assets, Fels Growth & Operating Leverage Syn
Slide 19: Incremental Business Improvement Initiatives
Incremental Business Improvement Initiatives 20% Procurement Process Structural 20% 10% • Global purchasing & • Commercial & operational • Business support supply agreements excellence initiatives rationalisation • Transport, logistics, • Vertical integration benefits • Cost base mobile equipment op
Slide 20: Growth & Operating Leverage + Announced Synergies
Growth & Operating Leverage + Announced Synergies 20% Growth & Operating Synergies Leverage 30% • Higher growth markets … • Significant integration more integrated business … benefits better business mix • Ash Grove, Florida Assets • Structurally higher margins ... & Fels improving operating leverag
Slide 21: Significant Progress …
Significant Progress … Portfolio Capital Continuous Business Management Allocation Improvement • Continuous portfolio review • Progressive dividend policy … • Relentless focus on making • ~30% of assets divested in ~€1.6bn in last 4 years businesses better last 3 years; ~50% acquired • €1bn share bu
Slide 22: Industry-leading Cash Generation …
Industry-leading Cash Generation … • Generated €2bn+ FCF p.a. in last 4 years … expect continued strong cash conversion (70%+) • Unutilised financial capacity of €7bn by 2021 (before divestments) Value-driven M&A … €7bn financial capacity Cash Returns to Shareholders … providing further optionality
Slide 23: Reiteration of Medium-Term Financial Targets …
Reiteration of Medium-Term Financial Targets … • Operating leverage … guiding 20%+ organic operating leverage • EBITDA margin … targeting 300bps margin improvement by 2021 • Efficient capital management … further €1.5-2bn of divestments over the medium-term • Cash generation … capacity of €7bn after
Slide 24: CRH plc, Interim Results 2018
CRH plc, Interim Results 2018 23
Slide 25: EBITDA Outlook
EBITDA Outlook • Americas: Supportive trading environment … further progress expected in H2 • Europe: Continued positive momentum … expect increased rate of growth in H2 • Asia: Challenging conditions in the Philippines … expect H2 EBITDA similar to H1 • Group: Higher pace of growth in H2 … another
Slide 26: Key Takeaways
Key Takeaways €1bn share buyback underway H1 in line with guidance … €350m returned to shareholders Continued portfolio Internal initiatives management … underway to improve significant progress to-date margins, returns & cash CRH plc, Interim Results 2018 25
Slide 27: CRH plc, Interim Results 2018
CRH plc, Interim Results 2018 26
Slide 28: Group Components of Performance
Group Components of Performance Sales Operating Profit on Finance Assoc. and Pre-tax € million EBITDA revenue profit disposals costs (net) JV PAT1 profit H1 2017 11,850 1,120 607 43 -189 14 475 Exchange Effects -691 -82 -49 -2 12 -1 -40 H1 2017 at 2018 rates 11,159 1,038 558 41 -177 13 435 Increment
Slide 29: Americas Materials
Americas Materials Analysis of change € million H1 2017 Exchange Acquisitions Organic H1 2018 % Change Sales revenue 3,166 -320 +211 +121 3,178 - EBITDA 288 -33 +39 +3 297 +3% Operating profit 87 -13 +21 -1 94 +8% EBITDA/sales 9.1% 9.3% Op. profit/sales 2.7% 3.0% CRH plc, Interim Results 2018 28
Slide 30: Americas Products
Americas Products Analysis of change € million H1 2017 Exchange Acquisitions Divestments Organic H1 2018 % Change Sales revenue 2,355 -238 +72 -2 +29 2,216 -6% EBITDA 295 -33 +8 +1 +15 286 -3% Operating profit 225 -27 +4 +1 +15 218 -3% EBITDA/sales 12.5% 12.9% Op. profit/sales 9.6% 9.8% CRH plc, Int
Slide 31: Europe Heavyside
Europe Heavyside Analysis of change € million H1 2017 Exchange Acquisitions Divestments Organic H1 2018 % Change Sales revenue 3,353 -51 +263 -25 +81 3,621 +8% EBITDA 351 -7 +34 - +6 384 +9% Operating profit 178 -4 +18 - +8 200 +12% EBITDA/sales 10.5% 10.6% Op. profit/sales 5.3% 5.5% CRH plc, Interi
Slide 32: Europe Lightside
Europe Lightside Analysis of change € million H1 2017 Exchange Acquisitions Organic H1 2018 % Change Sales revenue 721 -9 +5 +35 752 +4% EBITDA 59 -1 +1 +4 63 +7% Operating profit 39 -1 - +5 43 +10% EBITDA/sales 8.2% 8.4% Op. profit/sales 5.4% 5.7% CRH plc, Interim Results 2018 31
Slide 33: Europe Distribution
Europe Distribution Analysis of change € million H1 2017 Exchange Acquisitions Organic H1 2018 % Change Sales revenue1 2,011 -39 +51 -52 1,971 -2% EBITDA 93 -1 +1 -4 89 -4% Operating profit 62 - - -19 43 -31% EBITDA/sales 4.6% 4.5% Op. profit/sales 3.1% 2.2% 1 Reported H1 2018 sales were impacted by
Slide 34: Asia
Asia Analysis of change € million H1 2017 Exchange Organic H1 2018 % Change Sales revenue 244 -34 -4 206 -16% EBITDA 34 -7 -16 11 -68% Operating 16 -4 -18 -6 -138% profit/(loss) EBITDA/sales 13.9% 5.3% Op. profit/sales 6.6% -2.9% CRH plc, Interim Results 2018 33
Slide 35: Europe Cement Volumes & Pricing
Europe Cement Volumes & Pricing YoY % Change Volumes Price (LC) YoY % Change Volumes Price (LC) Finland = = Slovakia - = France - + Spain -- + Germany1 + + Switzerland ++ -- Legend >5% ++ Hungary ++ = Ukraine -- ++ 2% to 5% + Ireland - + United Kingdom1 - = -1% to +1% = -5% to -2% - Poland = + Canad
Slide 36: Americas Materials Volumes & Prices
Americas Materials Volumes & Prices Total Heritage YoY % Change Volumes Price Volumes Price Aggregates +9% +1% +4% +2% Asphalt +2% +6% - +7% RMC +21% +3% +4% +3% CRH plc, Interim Results 2018 35
Slide 37: Disclaimer
Disclaimer 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 cautionary statement. This document cont
Slide 38: Contact Information
Contact Information 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 The inclusion of CRH public limited company in any MSCI Index, and the use of MSCI logos, trademarks, service marks or index names