CRH plc 2014 Results TAGLINE TO GO HERE CRH plc, Preliminary - - PowerPoint PPT Presentation

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CRH plc, Preliminary Results 2014 1

Agenda

CRH plc 2014 Results

CRH plc, Preliminary Results 2014 1

CRH - Key Points

A year of earnings growth Delivery on strategy Improving returns and margins Capital reallocatjon Strong cash generatjon Financial discipline

GLOBAL DIVERSIFIED BUILDING MATERIALS GROUP

CRH plc, Preliminary Results 2014 2

2014 Highlights

A year of profjt growth 150bps improvement in RONA Margins up in all 6 divisions 22% operatjng leverage €0.9bn cash generated from operatjons Effjcient allocatjon of capital

2014 - A YEAR OF GROWTH

CRH plc, Preliminary Results 2014 3

2014 Headline Numbers

Sales €18.91bn EBITDA €1.64bn EPS 78.9c Dividend 62.5c Net debt €2.5bn

DELIVERY AHEAD OF GUIDANCE 5% 11% 33%* 16%

*Based on 2013 EPS of 59.5c (pre-impairment)

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Market Backdrop

CRH plc, Preliminary Results 2014 5

Market Backdrop - Europe

Well positjoned across Europe

W . Europe normalising

• C. & N. Europe stable with steady advancement
• E. Europe encouraging growth - Ukraine uncertain

Strong H1, pull-back over summer, pick-up Y/E Good operatjng leverage across all divisions

STARTED ON A RECOVERY PATH

CRH plc, Preliminary Results 2014 6

Trading Overview - Europe Heavyside

€m

2014 2013 Change

Sales 3,929 3,786 +4% EBITDA 380 326 +17% EBITDA % 9.7% 8.6% +110bps

Like-for-Like sales up 3% Pricing remains subdued Stable input cost environment Good profjt and margin improvement

CRH plc, Preliminary Results 2014 7

Trading Overview - Europe Lightside

Strong profjt and margin performance Benefjt of reorganisatjon and cost cuttjng coming through Double-digit returns; 13% RONA

€m

2014 2013 Change

Sales 913 856 +7% EBITDA 94 71 +32% EBITDA % 10.3% 8.3% +200bps

CRH plc, Preliminary Results 2014 8

Trading Overview - Europe Distributjon

Strong positjons in key RMI markets 9% profjt growth absent 2013 pension gain Resilient performance in challenging environments 40bps increase in organic margin

€m

2014 2013 Change

Sales 3,999 3,936 +2% EBITDA 190 186* +2% EBITDA % 4.8% 4.7%* +10bps

*Includes pension gain of €11m

CRH plc, Preliminary Results 2014 9

Market Backdrop - Americas

Aturactjve macro fundamentals Economy advancing steadily Demand led by Res and Non-Res Infrastructure spending stable Profjt and margin growth in all Divisions

POSITIVE MOMENTUM CONTINUES

CRH plc, Preliminary Results 2014 10

Trading Overview - Americas Materials

Good volume and pricing environment Res/Non-Res contributjng positjvely Industry highway constructjon up Strong season fjnish - good momentum

€m

2014 2013 Change

Sales 5,070 4,721 +7% EBITDA 609 557 +9% EBITDA % 12.0% 11.8% +20bps

CRH plc, Preliminary Results 2014 11

Trading Overview - Americas Products

Strong margin recovery in H2 afuer diffjcult H1 Good Q3 growth contjnued into Q4 Res growth at steady pace Non-Res recovery acceleratjng Strongest markets in South and West

€m

2014 2013 Change

Sales 3,225 3,068 +5% EBITDA 263 246 +7% EBITDA % 8.2% 8.0% +20bps

CRH plc, Preliminary Results 2014 12

Trading Overview - Americas Distributjon

Increased roofjng volumes in tough markets Positjve wallboard performance; volumes and prices ahead Benefjts of branch network optjmisatjon Strong sales and profjt growth

€m

2014 2013 Change

Sales 1,776 1,664 +7% EBITDA 105 89 +18% EBITDA % 5.9% 5.3% +60bps

CRH plc, Preliminary Results 2014 13

Components of 2014 Performance

Overall results ahead of guidance Realising the benefjts of prior year cost initjatjves €164m increase in organic EBITDA 22% operatjng leverage

€m

Sales EBITDA

2013 18,031 1,475 Translation (62) (11) Acquisition/Disposals 212 16 Net Other

• (3)

Organic 731 164 2014 18,912 1,641

STRONG ORGANIC EBITDA GROWTH ON MODEST SALES GROWTH

CRH plc, Preliminary Results 2014 14

Cash Generatjon in 2014

Tight capex management Working capital infmow despite 5% sales growth EBITDA increase converted directly to cash

€m

2014 2013 Change

EBITDA 1,641 1,475 +166 Capital Expenditure (435) (497) Working Capital 69 118 Other (mainly interest & tax) (373) (360) Cash from Operations 902 736 +166

STRONG OPERATING CASH FLOW OF €0.9BN

CRH plc, Preliminary Results 2014 15

Liquidity & Term Debt Profjle

Y/E cash balance of €3.3bn Undrawn facilitjes of €2.6bn €0.9bn bond issuances at record low coupons Investment grade credit ratjngs Net debt €2.5bn (2013: €3.0bn)

Term Debt Maturity Profjle (€bn)

2014 Y/E Cash 2015 2014 2016

• Avg. cost of debt

0.5 1.0 1.5 2.0 2.5 3.0 3.5

2017 2018 2020+ 2019

4% 2% 3%

3.0% 4.1%

BALANCE SHEET SUPPORTS FINANCIAL STRENGTH AND AGILITY

CRH plc, Preliminary Results 2014 16

€6.5bn commitued to L/H acquisitjon €1.6bn from equity placement €2.9bn senior unsecured debt facility Net Debt/EBITDA pro forma ratjo of 3.1x Commitued to restoring debt metrics to normalised levels in 2016

Balance Sheet Impact – Lafarge-Holcim Transactjon

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2014 Progress on Key Agenda Items

CRH plc, Preliminary Results 2014 18

DELIVERING ON MARGINS AND RETURNS

Restoring Margins and Returns to Peak Over Cycle

2014 a year of progress on all fronts Operatjng leverage coming through Margin progression and RONA improvement in all divisions

2014

EBITDA Margin RONA

Europe Heavyside Europe Lightside Europe Distribution Americas Materials Americas Products Americas Distribution Group

CRH plc, Preliminary Results 2014 19

Capital Effjciency

RECYCLING CAPITAL AT HIGHER RETURNS

Divestment programme progressing well €0.93bn divestments commitued since mid-2014 €0.35bn signed and completed in 2014 €0.58bn signed in 2014...to complete in Q1 2015 €0.19bn bolt-on acquisitjons in 2014 Reallocatjon of capital at aturactjve multjples

*EV/EBITDA multiples

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CRH plc, Preliminary Results 2014 20

CRH - Positjoned for Growth

CRH plc, Preliminary Results 2014 21

Organic markets improving US recovery gaining momentum Res/Non-Res advancing; Infrastructure stable EU normalising Benefjtjng from strong regional footprint

Industry in the Early Stage of Growth Cycle

2013 2014e 2015f 2016f 2017f

100 110 120 130

Constructjon Output Index (2013 = 100)

• W. Europe
• E. Europe

US

Source: Euroconstruct and PCA

CRH plc, Preliminary Results 2014 22

CRH Opportunitjes for Growth

MARKETS

CRH #1 building materials producer in N. America ~50% pro forma EBITDA (post L/H) Constructjon to grow at 4% CAGR* US market recovery to drive organic growth New Canada platgorm

STRATEGY

US Regional in-fjll and network optjmisatjon Further vertjcal integratjon; pull-through demand Canada Vertjcal integratjon Adjacent products Balanced across all sectors

• N. America (4% CAGR*)

* Constructjon output 2015 - 2025 Source: Global Constructjon 2025

CRH plc, Preliminary Results 2014 23

CRH Opportunitjes for Growth

• W. Europe (1% CAGR*)

* Constructjon output 2015 - 2025 Source: Global Constructjon 2025

MARKETS

Pro forma EBITDA ~€0.9 bn (post L/H) across 14 countries 6 key countries account for >80% of EBITDA Stable developed markets

STRATEGY

Enhanced network benefjts Increased pull-through demand Build on Distributjon platgorm - currently #2 in Contjnental Europe Scalable Lightside platgorms

CRH plc, Preliminary Results 2014 24

CEE (4% CAGR*)

CRH Opportunitjes for Growth

* Constructjon output 2015 - 2025 Source: Global Constructjon 2025

MARKETS

#1 building materials producer in CEE Long-term constructjon growth drivers New-build driving demand ~65% Regional constructjon growth of 4% CAGR*

STRATEGY

Leverage existjng materials network Roll-out vertjcal integratjon model Regional productjon fmexibility Enhanced procurement benefjts - self-supply optjons

CRH plc, Preliminary Results 2014 25

Asia (7% CAGR*)

CRH Opportunitjes for Growth

* Constructjon output 2015 - 2025 Source: Global Constructjon 2025

MARKETS

Asia ~60% global populatjon Urbanisatjon driving demand Constructjon growth of 7% CAGR*

• S. AMERICA

Top 5 positjon in SE Brazil On-going infrastructure needs

STRATEGY

Further develop existjng China/India platgorms Heavyside entry into new regions - Philippines Lightside product opportunitjes

• S. Am. (3% CAGR*)

CRH plc, Preliminary Results 2014 26

FINANCIAL AGILITY – A KEY STRATEGIC ASSET

Cash and Effjcient Capital Allocatjon

Financial discipline underpins investment grade ratjngs Balance Sheet strength gives competjtjve advantage Positjoned to reinvest capital at higher returns Strong cash generatjon funds growth Capital effjciency “chasing out stranded capital”

CRH plc, Preliminary Results 2014 27

Outlook 2015

Tough comparatjves vs H1 2014 General market environment contjnues to improve US - Contjnued positjve momentum Europe - normalisatjon across main markets Benefjts from Easing of commodity prices Favourable FX translatjon efgect Pricing environment in US positjve - Europe more mixed Further improvement in earnings and returns 2015 - a year of growth

CRH plc, Preliminary Results 2014 28

Key Messages

CRH POSITIONED FOR GROWTH

Growth Margins Returns Cash Capital Effjciency EBITDA +11% EBITDA margin +50bps RONA +150bps

• Op. Cash Flow

€0.9bn Recycling capital at higher returns

Appendix

CRH plc, Preliminary Results 2014 30

Group Key Components of Performance

€m

Sales EBITDA Operating profjt Profjt on disposals Finance costs (net) Equity Accounted PBT

2013 18,031 1,475 100 26 (297) (44) (215) Exchange effects (62) (11) (4)

• (1)

5

• Acquisitions

237 16 4

• (2)

2 Divestments (25)

• 1

43

• (1)

43 Restructuring and impairment costs

• 20

621

• 105

726 Pension restructuring and CO2 gains

• (23)

(23)

• (23)

Organic 731 164 218 8 10 (8) 228 2014 18,912 1,641 917 77 (288) 55 761

Restructuring costs amounted to €51 million (2013: €71 million) and impairment charges amounted to €49 million (2013: €755 million)

CRH plc, Preliminary Results 2014 31

Europe Heavyside

*EBITDA and operating profjt exclude profjt on disposals No pension restructuring gains were recorded (2013: €12 million) Gains from CO2 trading amounted to €9 million (2013: €8 million) Restructuring costs amounted to €15 million (2013: €37 million) Impairment charges of €35 million were incurred (2013: €502 million)

Analysis of change

€m

% Change 2014 2013 Total Change Organic Acquisitions Divestments Restructuring/ Impairment Pension/CO2 gains Exchange

Sales 4% 3,929 3,786 143 105 51 (4)

• (9)

EBITDA* 17% 380 326 54 47 2 1 22 (11) (7) Operating profjt* 138% 151 (395) 546 73 (2) 1 489 (11) (4) EBITDA/Sales 9.7% 8.6%

• Op. profjt/Sales

3.8% (10.4%)

CRH plc, Preliminary Results 2014 32

Europe Lightside

*EBITDA and operating profjt exclude profjt on disposals No pension restructuring gains were recorded (2013: €1 million)

Analysis of change

€m

% Change 2014 2013 Total Change Organic Acquisitions Divestments Restructuring/ Impairment Pension gains Exchange

Sales 7% 913 856 57 53

• 4

EBITDA* 32% 94 71 23 22

• 1

(1) 1 Operating profjt* 154% 71 28 43 31

• 14

(1) (1) EBITDA/Sales 10.3% 8.3%

• Op. profjt/Sales

7.8% 3.3%

Restructuring costs amounted to €5 million (2013: €6 million) No impairment charges were recorded (2013: €13 million)

CRH plc, Preliminary Results 2014 33

Europe Distributjon

*EBITDA and operating profjt exclude profjt on disposals No pension restructuring gains were recorded (2013: €11 million)

Analysis of change

€m

% Change 2014 2013 Total Change Organic Acquisitions Divestments Restructuring/ Impairment Pension gains Exchange

Sales 2% 3,999 3,936 63 7 41

• 15

EBITDA* 2% 190 186 4 15

• (11)
• Operating profjt*

6% 112 106 6 14 (1)

• 4

(11)

• EBITDA/Sales

4.8% 4.7%

• Op. profjt/Sales

2.8% 2.7%

Restructuring costs amounted to €4 million (2013: €4 million) No impairment charges were recorded (2013: €4 million)

CRH plc, Preliminary Results 2014 34

Americas Materials

Analysis of change

€m

% Change 2014 2013 Total Change Organic Acquisitions Divestments Restructuring/ Impairment Exchange

Sales 7% 5,070 4,721 349 317 37 (2)

• (3)

EBITDA* 9% 609 557 52 42 7

• 3
• Operating profjt*

57% 355 226 129 61 5

• 63
• EBITDA/Sales

12.0% 11.8%

• Op. profjt/Sales

7.0% 4.8%

*EBITDA and operating profjt exclude profjt on disposals Restructuring costs amounted to €9 million (2013: €12 million) No impairment charges were recorded (2013: €60 million)

CRH plc, Preliminary Results 2014 35

Americas Products

*EBITDA and operating profjt exclude profjt on disposals

Analysis of change

€m

% Change 2014 2013 Total Change Organic Acquisitions Divestments Restructuring/ Impairment Exchange

Sales 5% 3,225 3,068 157 169 75 (19)

• (68)

EBITDA* 7% 263 246 17 24 6 (1) (7) (5) Operating profjt* 113% 145 68 77 24 2

• 50

1 EBITDA/Sales 8.2% 8.0%

• Op. profjt/Sales

4.5% 2.2%

Restructuring costs amounted to €18 million (2013: €11 million) Impairment charges of €14 million were incurred (2013: €71 million)

CRH plc, Preliminary Results 2014 36

Americas Distributjon

*EBITDA and operating profjt exclude profjt on disposals

Analysis of change

€m

% Change 2014 2013 Total Change Organic Acquisitions Divestments Restructuring/ Impairment Exchange

Sales 7% 1,776 1,664 112 80 33

• (1)

EBITDA* 18% 105 89 16 14 1

• 1
• Operating profjt*

24% 83 67 16 15

• 1
• EBITDA/Sales

5.9% 5.3%

• Op. profjt/Sales

4.7% 4.0%

No restructuring costs were recorded (2013: €1 million)

CRH plc, Preliminary Results 2014 37

Analysis by Segment

Sales (€m) 2014 2013 % chg

Europe Heavyside 3,929 3,786 4% Europe Lightside 913 856 7% Europe Distribution 3,999 3,936 2% Americas Materials 5,070 4,721 7% Americas Products 3,225 3,068 5% Americas Distribution 1,776 1,664 7% Group 18,912 18,031 5%

EBITDA (€m) 2014 2013 % chg

Europe Heavyside 380 326 17% Europe Lightside 94 71 32% Europe Distribution 190 186 2% Americas Materials 609 557 9% Americas Products 263 246 7% Americas Distribution 105 89 18% Group 1,641 1,475 11%

CRH plc, Preliminary Results 2014 38

Analysis by Segment

Operating profjt (€m)

2014 2013

Europe Heavyside 151 (395) Europe Lightside 71 28 Europe Distribution 112 106 Americas Materials 355 226 Americas Products 145 68 Americas Distribution 83 67 Group 917 100

Profjt on disposals (€m)

2014 2013

Europe Heavyside 38 6 Europe Lightside 1 6 Europe Distribution 6 (2) Americas Materials 11 19 Americas Products 20 (3) Americas Distribution 1

• Group

77 26

CRH plc, Preliminary Results 2014 39

Europe Heavyside Cement

Volumes Var % chg ‘14 v ‘13 Price Var^ % chg ‘14 v ‘13

Ireland* +17%

• 4%

UK +65% +1% Switzerland +8%

• 3%

Finland

• 2%
• 1%

Poland +12%

• 3%

Ukraine** +26% +10%

* Domestic volumes - excludes exports ** LFL volumes excluding Mykolaiv -1% ^ Based on local currency

CRH plc, Preliminary Results 2014 40

Americas Materials Volume and Price Variances FY14 v FY13

FY Volumes FY Price ($) Total LFL Total LFL

Aggregates +10% +6% +1% +2% Asphalt +6% +5% +1% +1% RMC +7% +6% +4% +4%

CRH plc, Preliminary Results 2014 41

Euroconstruct Estjmates 2014

Construction Output 2014 % chg

Belgium +0.7% Denmark +2.5% Finland

• 0.2%

France

• 2.8%

Germany +2.4% Ireland +10.1% Netherlands +0.3%

Construction Output 2014 % chg

Poland +4.9% Portugal

• 1.0%

Spain

• 2.4%

Switzerland +0.8% United Kindgom +5.2% West Europe (EC-15) +0.8% Eastern Europe (EC-4) +4.8%

CRH plc, Preliminary Results 2014 42

US Estjmates 2014 (PCA)

Others % chg

Real GDP +2.2% Cement consumption +8.1%

Construction Put-in-place % chg

Offjce +13.3% Hotels, Motels +10.0% Total Public 0.0% Highways & Streets +0.3% Public Utility & Other +12.9% Farm Non-Residential

• 6.1%

Construction Put-in-place % chg

Total Construction Put-in-Place +3.6% Total Residential +3.9% New Housing +7.8% Single-Family +1.1% Multi-Family +43.0% Improvements

• 2.2%

Total Non-Residential +3.1% Industrial +9.6%

CRH plc, Preliminary Results 2014 43

Contact Us

CRH plc Investor Relatjons Belgard Castle Clondalkin Dublin 22 Ireland Phone: + 353 1 404 1000 Fax: + 353 1 404 1007 Email: ir@crh.com Website: www.crh.com

This presentation contains certain forward-looking statements as defjned under US legislation. By their nature, such statements involve uncertainty; as a consequence, actual results and developments may differ from those expressed in or implied by such statements depending on a variety of factors including the specifjc factors identifjed in this presentation and other factors discussed in our Annual Report on Form 20-F fjled with the SEC.