CRH Delivering through the Cycle

Transcription

1 Citigroup Building Materials Conference CRH Delivering through the Cycle Liam O Mahony Chief Executive CRH plc November

2 CRH Overview 2

3 CRH Overview The International Building Materials Group 1970 merger of Irish Cement and Roadstone; Sales 26M, 95% Ireland Now in 30 countries; 3,300+ locations; 80,000+ people Annualised Sales over 20Bn focused on three core businesses Evenly balanced across geographies, products and sector end-use Market Cap c. 13Bn, top 6 in sector worldwide Listed: Dublin (CRH.I), London (CRH.L) and NYSE (CRH) Citigroup Building Materials Conference, 29 th November

4 CRH - The International Group In 30 countries and in all 50 US States Developed world focus; increasing presence in emerging regions Citigroup Building Materials Conference, 29 th November

5 CRH - The Building Materials Group Leading positions in local / regional markets Materials Products Concrete Other Distribution Europe Europe Top Top Cement Cement Leader Leader Aggs/RMC Aggs/RMC USA USA No No 3 Aggregates Aggregates No No 1 Asphalt Asphalt Europe Europe No No 1 Architectural Architectural No No 1 Structural Structural USA USA No No 1 Architectural Architectural No No 1 Precast Precast Europe Europe No No 1 Accessories Accessories No No 1 Facing Facing Brick Brick [UK/NL] [UK/NL] USA USA No No 1 Glass Glass No No 1 NE NE Brick Brick Europe Europe Top Top 3 Distributor Distributor USA USA Top Top 3 Roof/Siding Roof/Siding Top Top 3 Int.Products Int.Products 55% EBITDA 20% 13% EBITDA 12% 75% 25% Citigroup Building Materials Conference, 29 th November

6 CRH - Servicing the Breadth of Demand Balanced exposure to industry demand drivers Product End Use* Geographic End-Use* Materials 55% Products 33% Americas 50% Residential 40% Distribution 12% Sectoral End Use* Non Residential 30% New 55% Europe 50% Infrastructure 30% RMI 45% Balance yields performance stability + growth opportunity * Basis estimated annualised EBITDA Citigroup Building Materials Conference, 29 th November

7 CRH - Track Record A strong culture of delivering superior Performance & Growth 75,000 PBT +20%pa Growth Index [1970 = 100] 60,000 45,000 30,000 15,000 EPS +17%pa DPS +12%pa % CAGR in Total Shareholder Return Citigroup Building Materials Conference, 29 th November

8 Delivering Through the Cycle 8

9 Recent Economic Cycles Western Europe & US GDP growth GDP Growth 5% W Europe GDP US GDP 4% 3% 2% 1% 0% Source: IMF (1%) Citigroup Building Materials Conference, 29 th November

10 Recent Economic Cycles Building materials demand linked to economic cycles GDP Growth 5% W Europe GDP US GDP CRH EPS EPS (c) (pre GW) 250 4% 200 3% 150 2% 100 1% 50 0% Source: IMF 0 (1%) (50) CRH - delivering superior performance through the cycle Citigroup Building Materials Conference, 29 th November

11 Period I: Economic Backdrop Worldwide Recession Gulf War 5% 4% W Europe GDP US GDP High energy prices Sharp US decline & recovery Europe lagged with slower decline GDP growth stalled US & Europe 3% 2% 1% 0% (1%) Citigroup Building Materials Conference, 29 th November

12 Period I: CRH Performance Strong Cashflow through downturn 14% EBITDA Margin EPS (c) (pre GW) CRH EPS 50 Rapid EBITDA margin recovery 12% 10% 40 Benefits of operational leverage 8% 6% % Pursuit of new opportunities 2% 10 Sales from 1.7Bn to 2.5Bn 0% EPS cagr 9% ( ) 0 Citigroup Building Materials Conference, 29 th November

13 Period I: Acquisition Spend c 0.6Bn c Expansion of P&D Group EBITDA growth c60% EBITDA 0.3Bn Ireland 43% 32% Europe 36% 35% Americas 21% 33% Americas Benelux Rest of Europe Ireland 0.2Bn Materials 64% 49% Products 23% 37% Distribution 13% 14% Distribution Products Materials Citigroup Building Materials Conference, 29 th November

14 Period II: Period of strong economic growth in US and Europe GDP Growth 5% W Europe GDP US GDP CRH EPS EPS (c) (pre GW) 250 4% 200 3% 150 2% 100 1% 50 0% Source: IMF 0 (1%) (50) CRH accelerated pace of acquisitive growth Citigroup Building Materials Conference, 29 th November

15 Period II: Economic Backdrop Favourable Economies Lower energy prices Stronger USD [1 = 1.26 to 0.92] 5% 4% 3% W Europe GDP US GDP Strong US growth c4% p.a. Lower Europe growth c3% p.a. 2% 1% 0% Citigroup Building Materials Conference, 29 th November

16 Period II: CRH Performance EPS (c) (pre GW) Rapid expansion on all fronts 16% EBITDA Margin CRH EPS 140 Strong & rising EBITDA margins Underpinned by growing Cashflow Sales from 2.5Bn to 8.9Bn 14% 12% 10% 8% 6% 4% 2% 0% EPS cagr 25% ( ) Citigroup Building Materials Conference, 29 th November

17 Period II: Acquisition Spend c 3Bn c 55:45 Americas:Europe EBITDA growth over 300% Rapid US expansion + stronger $ EBITDA 1.3Bn Ireland 32% 14% Europe 35% 26% Americas 33% 60% Materials 49% 57% Products 37% 37% Distribution 14% 6% Americas Benelux Rest of Europe Ireland Distribution Products Materials 0.3Bn Citigroup Building Materials Conference, 29 th November

18 Period III: Worldwide slowdown post Dot.Com crash and 9/11 GDP Growth 5% W Europe GDP US GDP CRH EPS EPS (c) (pre GW) 250 4% 200 3% 150 2% 100 1% 50 0% Source: IMF 0 (1%) (50) CRH maintained EPS growth through slowdown Citigroup Building Materials Conference, 29 th November

19 Period III: Economic Backdrop Worldwide Slowdown Dot.Com bust and 9/11 tragedy Weaker USD [1 = ] 4% 3% W Europe GDP US GDP Again sharp US decline/recovery Europe followed slower pick-up However; neither economy stalled 2% 1% 0% Citigroup Building Materials Conference, 29 th November

20 Period III: CRH Performance EPS (c) (pre GW) US Non Res particularly affected 16% EBITDA Margin CRH EPS 250 Rapid recovery; strong Res/Infra 12% 200 EBITDA margins 12-14% range 8% Significant development activity 4% 50 Sales from 8.9Bn to 18.7Bn 0% EPS progression each year with 11% EPS cagr ( ) Citigroup Building Materials Conference, 29 th November

21 Period III: Acquisition Spend c 9.6Bn c 57:43 Americas:Europe EBITDA growth c100% Eastern Europe expansion EBITDA 2.5Bn Ireland 14% 8% Europe 26% 38% Americas 60% 54% Materials 57% 51% Products 37% 35% Distribution 6% 14% Americas Benelux Rest of Europe Ireland Distribution Products Materials 1.3Bn Citigroup Building Materials Conference, 29 th November

22 Looking Ahead Economic outlook uncertainty range of views Current GDP Forecasts Some see risk of US recession 4% W Europe GDP US GDP Mean forecasts Not as bleak as early 90s / 00s Not negative growth Fed/ECB important roles to play Challenges ahead, as always Key is to be responsive Citigroup Building Materials Conference, 29 th November % 2% 1% 0% CRH has track record of continued delivery e 2008e 2009e 2010e Fed High Euroconstruct Fed Low

23 CRH Strong delivery of Performance and Growth EBITDA Margin 16% EBITDA Margin CRH EPS EPS (c) (pre GW) % % 10% 150 8% 100 6% 50 4% 2% 0 0% consecutive years of EPS growth Citigroup Building Materials Conference, 29 th November

24 CRH Today 24

25 CRH in 2007 A Leading International Building Materials Group Aggregates... Top 5 worldwide with c13bn tonnes reserves Cement... Top 10 in Europe Readymix... Top 5 worldwide Concrete Products No. 1 in US and Europe Construction Accessories... No. 1 in Europe, No. 2 in US Clay Facing Brick... No. 1 in UK, M.Europe and NE US Building Materials Distribution... Top 3 in Americas and Europe Citigroup Building Materials Conference, 29 th November

26 CRH in 2007 Group operating characteristics Developed world focus 85-90% of annualised EBITDA (c20 countries) Increasing presence in emerging regions % EBITDA (c10 countries) Vertically integrated materials business Complemented by value-added products & distribution Robust cashflow, strong balance sheet and interest cover Citigroup Building Materials Conference, 29 th November

27 CRH Strengths In our 15th consecutive year of earnings growth Diverse yet balanced geographic, sectoral and product end-use Experience of managing through economic cycles Devolved structure supports ability to respond promptly Focus on cost control, operational efficiency, margins and cashflow Challenges also bring opportunities Sound basis to continue strategy of Performance & Growth Citigroup Building Materials Conference, 29 th November

28 Conclusion A culture and track record of delivery Relentless focus on operational performance Disciplined approach to acquisition evaluation Focussed integration with emphasis on value-creation Dedicated people with ambition to achieve enables CRH to deliver Superior Performance and Growth through the Cycle! Citigroup Building Materials Conference, 29 th November

29 Citigroup Building Materials Conference CRH Delivering through the Cycle Liam O Mahony Chief Executive CRH plc November