Agenda Key Messages & Market Backdrop Trading Performance - PowerPoint PPT Presentation

Agenda Key Messages & Market Backdrop Trading Performance Value Creation CRH plc, Trading Update 1

Key Messages & Financial Highlights • 9M trading … continuation of H1 trends despite significant Q3 weather disruption 9M Sales +6% € 19.9bn • Ash Grove integration ... in line with expectations +3% LFL • € 1bn share buyback programme … € 700m returned to-date 9M EBITDA +8% € 2.5bn • FY EBITDA expected to be ~ €3.35bn … +2% LFL expect YE net debt of ~ € 7bn ... ~2.1x EBITDA CRH plc, Trading Update 2

Americas Market Backdrop • Economic activity remains robust • Solid underlying demand ... Res, Non-Res & Infra • Significant Q3 weather disruption • Cost inflation & labour constraints CRH plc, Trading Update 3

Europe Market Backdrop • Positive economic momentum continuing • Western & Eastern European construction markets performing well • Political uncertainty in UK CRH plc, Trading Update 4

CRH plc, Trading Update 5

Trading Overview • Americas – continuation of H1 trends ... LFL Sales EBITDA adverse weather in key markets YoY change H1 9M H1 9M • Europe – positive momentum despite political uncertainty Americas +3% +4% +3% +3% Europe +1% +1% +1% +2% • Asia – challenging energy cost environment Asia -2% +3% -59% -44% • Group – satisfactory performance amid Group +2% +3% +1% +2% market challenges CRH plc, Trading Update 6

Americas Trading • Materials – adverse weather in Q3 ... LFL Sales EBITDA positive pricing in inflationary environment YoY change H1 9M H1 9M • Products – Sales & EBITDA ahead ... strong Materials +4% +5% +1% +2% performance in engineered building products Products +1% +2% +6% +6% • Ash Grove integration progressing as planned Americas +3% +4% +3% +3% … performing in line with expectations CRH plc, Trading Update 7

Europe Trading LFL Sales EBITDA • Positive momentum despite inflationary input cost pressures YoY change H1 9M H1 9M Heavyside +2% +4% +2% +2% • Volumes & prices ahead Lightside +5% +5% +7% +5% • Good growth in major markets ... Distribution -3% -4% -4% -4% some uncertainty in the UK Europe +1% +1% +1% +2% CRH plc, Trading Update 8

Asia Trading • Philippines – Q3 volumes and prices ahead … input cost & competitive pressures persist LFL Sales EBITDA • India – Q3 volumes strong ... YoY change H1 9M H1 9M pricing behind amid competitive pressure Philippines -2% +3% -59% -44% • China – Q3 volumes behind ... pricing ahead amid inflationary environment CRH plc, Trading Update 9

FY 2018 EBITDA Expectations LFL % Americas Europe Asia Group Chg H1 +3% +1% -59% +1% 9M +3% +2% -44% +2% ~ € 3.35bn FY 2018E +3% +2% -50% CRH plc, Trading Update 10

FY 2018 Balance Sheet Expectations € bn 0.3 1.3 1.3 3.5 2.5 ~ € 7bn € 6.8bn € 5.8bn Net Net Debt Net Cash Dividends/ FY17 FY18E Acquisitions Currency/Other Divestments Post M&A Inflow Buybacks Net Debt Net Debt € 3.15bn ~ € 3.35bn EBITDA EBITDA 1.8x ~2.1x Net Debt/EBITDA CRH plc, Trading Update 11

Continued Focus on Long-Term Value Creation • Long-term value has always been a core focus • Returns & cash ... 2 key metrics for delivering shareholder value • Near-term and long-term value creation • Delivering superior returns and cash for shareholders through the cycle CRH plc, Trading Update 13

Repositioning CRH • 2014 portfolio review ... facilitated the repositioning of our business • € 4bn+ divestments in last 4 years • Core capabilities in vertically integrated materials • Focusing on attractive long-term market dynamics ... Europe & North America • Changing face of construction ... opportunities to build out Products platform CRH plc, Trading Update 14

Investing for Growth • € 13bn acquisitions in last 4 years … integrated platforms for growth and value creation • Aligning core competencies with attractive market dynamics • Focusing on higher growth opportunities to deliver superior returns & cash CRH plc, Trading Update 15

Building a Simpler & More Focused Business • Moving from 7 divisions to 3 ... Europe Materials, Americas Materials & Building Products • A more focused, leaner business ... narrower & deeper • Driving value from the centre ... business improvement initiatives ... customer & market management ... strategy development ... synergy delivery … delivering the scale benefits of an integrated Group CRH plc, Trading Update 16

Now Positioned for the Next Phase 300bps EBITDA margin improvement target • Aggressive growth plan in place • Enabled by leaner organisational structure • +300bps Focusing on improving efficiency & productivity • Targeting 300bps EBITDA margin improvement ... € 7bn financial capacity Business Improvement Initiatives Synergies Growth & Operating Leverage CRH plc, Trading Update 17

Business Improvement Initiatives – Structural 300bps EBITDA margin improvement target • De-layering management structures • Consolidating sub-regional support functions into centralised hubs • Rationalising regional office footprint • ~ € 100m of cost savings identified Structural CRH plc, Trading Update 18

Business Improvement Initiatives – Procurement 300bps EBITDA margin improvement target • ~ €18bn of products & services procured annually … ~ € 9bn currently managed centrally • Largest purchaser of cement in the world … ~ € 3bn purchaser of fuels & logistics • Now extending our procurement programmes throughout the Group … co -ordinated from the centre • Expanding scope & increasing savings yield on existing purchases Procurement CRH plc, Trading Update 19

Business Improvement Initiatives – Process 300bps EBITDA margin improvement target • Leveraging Group expertise and best practice • Accelerating commercial & operational initiatives ... vertical integration benefits ... fuel & power optimisation ... increasing use of alternative fuels ... centralised pricing control Process CRH plc, Trading Update 20

Synergies 300bps EBITDA margin improvement target • Significant integration benefits from recent acquisitions ... Ash Grove, Florida Assets & Fels • Leveraging Group-level cement expertise for synergy delivery • Year 3 run-rate synergies ~ € 130m Synergies CRH plc, Trading Update 21

Cash Generation & Financial Discipline € 2 bn+ • Continued strong cash generation ... & conversion Free Cash Flow p.a. • Committed to maintaining normalised debt metrics over last 4 years • Aggressive growth plan in place ... significant optionality for further value creation € 7 bn • Uniquely positioned to deliver long-term value for shareholders Financial Capacity by 2021 CRH plc, Trading Update 22 Free Cash = EBITDA +/- WC movements - Interest - Tax

Key Takeaways Aggressive growth plan ... 2018 EBITDA ~ € 3.35bn ... 300bps margin improvement & net debt / EBITDA ~2.1x € 7bn financial capacity 2019 outlook ... Delivering near-term and positive underlying long-term shareholder value market dynamics CRH plc, Trading Update 23

Cement Volumes & Pricing 9M YoY % Change Volumes Price (LC) 9M YoY % Change Volumes Price (LC) Finland = = Slovakia = = France = Spain -- + + Legend Germany 1 + = Switzerland ++ -- >5% + + Hungary ++ + Ukraine -- + 2% to 5% + United Kingdom 1 -1% to +1% = Ireland = + - = -5% to -2% - Poland + + Canada - - <-5% - - Romania = + Philippines + + Serbia + Brazil - = ++ 1 Volumes in the UK and Germany have been adjusted to exclude the impact of acquisition-related supply arrangements. CRH plc, Trading Update 25

Americas Materials Volumes & Prices Total Heritage 9M YoY % Change Volumes Price Volumes Price Aggregates +8% +2% +1% +3% Asphalt 0% +9% -2% +9% RMC +28% +3% 0% +4% CRH plc, Trading Update 26