2018 Results
Agenda Market Backdrop & Trading Performance Financial Performance & Track Record Value Creation & Strategic Positioning Outlook & Key Takeaways CRH plc, Preliminary Results 2018 1
Key Messages • Record profit delivery ... € 3.4bn EBITDA (+7% YoY); margin ahead • Strong financial discipline maintained … € 2.4bn cash generation; 70% cash conversion … <2.1x net debt/EBITDA • Continued focus on efficient capital management ... share buyback programme continuing … € 800m in 2018 ... 6% increase in FY dividend • Profit improvement programme progressing well CRH plc, Preliminary Results 2018 2
2018 Financial Highlights Sales EPS LFL LFL € 26.8bn +6% € 3.02 +33% +3% +11% EBITDA DPS € 3.4bn € 0.72 +7% +6% +3% EBITDA Margin Cash Flow € 2.4bn 12.6% +10bps +8% in line CRH plc, Preliminary Results 2018 3
Americas Market Backdrop • Favourable economic environment in 2018 • Continuing momentum in Infrastructure ... positive trends in Res & Non-Res markets • Significant weather disruption & input cost pressures ... energy, labour & logistics • Positive demand outlook for 2019 CRH plc, Preliminary Results 2018 5
Americas Materials – Trading Performance • Sales & EBITDA ahead … margins impacted by weather disruption & input cost pressures Change vs. 2017 € m 2018 LFL • Positive pricing momentum Sales 8,951 +12% +4% • North America cement integration progressing well EBITDA 1,493 +18% +2% • 55% infrastructure ... favourable funding environment Margin 16.7% +80bps -30bps • Strong backlogs … volumes & margins ahead CRH plc, Preliminary Results 2018 6
Americas Products – Trading Performance • Strong growth in key regions & end-use markets Change vs. 2017 € m 2018 LFL • Good progress in sales, EBITDA & margin Sales 4,433 +2% +2% • Benefiting from cost reduction & performance initiatives EBITDA 603 +5% +6% • Positive Q4 momentum ... continuing in 2019 Margin 13.6% +40bps +40bps CRH plc, Preliminary Results 2018 7
Europe Market Backdrop • Continued economic growth in 2018 • Solid underlying construction demand in Continental Europe • UK impacted by political uncertainty • C ost inflation headwinds … energy & labour • Expect further market growth in 2019 CRH plc, Preliminary Results 2018 9
Europe Heavyside – Trading Performance • Good growth in sales & EBITDA … … LFL margin maintained Change vs. 2017 • Major markets performing well … € m 2018 LFL UK impacted by Brexit-related uncertainty Sales 7,611 +10% +4% • Cement volumes ahead … positive pricing momentum EBITDA 911 +9% +4% • Fels performing in line with expectations Margin 12.0% -20bps - • Encouraging start to 2019 CRH plc, Preliminary Results 2018 10
Europe Lightside – Trading Performance • Growth in all product areas Change vs. 2017 € m 2018 LFL • Strong performance across Continental Europe … UK stable Sales 1,508 +5% +5% • EBITDA 152 +6% +5% Recovery of high input cost inflation Margin 10.1% +20bps - • Expanding global reach ... now ~15% ex-Europe CRH plc, Preliminary Results 2018 11
Europe Distribution – Trading Performance • Major markets performing well … improving trends in Switzerland in H2 Change vs. 2017 € m 2018 LFL • Divestment of DIY Benelux completed Sales 3,856 -7% -3% • Margin impacted by divestments & EBITDA 181 -33% -1% non-recurrence of one-off gain in 2017 Margin 4.7% -180bps +10bps • Wider strategic review ongoing ... considering all options to maximise shareholder value CRH plc, Preliminary Results 2018 12
Asia – Philippines Market Backdrop & Trading Performance • Growing construction markets … Change vs. 2017 positive demand environment € m 2018 LFL • Volumes & prices ahead … margins eroded by Sales 431 -1% +8% strong energy cost headwinds EBITDA 25 -52% -44% • Operational improvements & cost reductions Margin 5.8% -610bps -550bps implemented … profitability to increase in 2019 CRH plc, Preliminary Results 2018 13
Components of Financial Performance (81) (100) 321 (20) 99 € 3,365m € 3,146m FY17 Organic Organic Acquisitions/ One-off FX FY18 EBITDA Ex-Asia Asia Disposals Items Translation EBITDA (cont. ops) CRH plc, Preliminary Results 2018 15
Cash Generation (0.4) (0.3) (0.3) € 3.4bn >70% Cash Conversion € 2.4bn FY18 Cash Working Capital Interest Tax EBITDA Generation CRH plc, Preliminary Results 2018 16
2018 Net Debt Performance 0.2 1.3 2.4 3.6 1.1 < € 7bn 2.6 € 6.8bn € 5.8bn FY17 Net Net Debt Net Cash Dividends/ FY18 Acquisitions Capex FX/Other Net Debt Divestments Post M&A Inflow Buybacks Net Debt € 3.15bn € 3.37bn EBITDA EBITDA >1.8x <2.1x Net Debt/EBITDA CRH plc, Preliminary Results 2018 17
CRH … Performance & Growth 2013-2018 2018 2013 +49% € 18bn € 27bn Revenue Revenue +8% CAGR € 1.5bn € 3.4bn +128% EBITDA EBITDA +18% CAGR 8.2% 12.6% +440bps Margin Margin € 1.2bn € 2.4bn +102% Free Cash Free Cash +15% CAGR 5.9% 9.6% +370bps RONA RONA CRH plc, Preliminary Results 2018 19 Free Cash = EBITDA +/- WC movements - Interest - Tax
CRH … Organic Growth 2013-2018 Group Europe Americas Sales Sales Sales CAGR CAGR CAGR + € 3.3bn +18% +3% +12% +2% +24% +4% EBITDA EBITDA EBITDA + € 815m +55% +9% +35% +6% +77% +12% 25% 19% 30% Operating Leverage Operating Leverage Operating Leverage CRH plc, Preliminary Results 2018 20
CRH … Acquisition Growth 2013-2018 Group Europe Americas Sales Sales Sales CAGR CAGR CAGR + € 9.1bn +50% +8% +55% +9% +41% +7% EBITDA EBITDA EBITDA + € 1.4bn +94% +14% +105% +15% +73% +12% 15% 13% 17% EBITDA Margin EBITDA Margin EBITDA Margin CRH plc, Preliminary Results 2018 21
Strong Financial Discipline … ~2x Net Debt / EBITDA maintained through the cycle 3.0 2.5 Net Debt / EBITDA (x) ~2x 2.0 10yr avg. 1.5 1.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 CRH plc, Preliminary Results 2018 22 In 2015, CRH acquired LH Assets for € 6.5bn and CRL for $1.3bn
Free Cash Flow Generation ~ € 2.1bn of FCF per annum … ~80 % EBITDA conversion … ~10% FCF Yield 2.5 ~ € 2.1bn Free Cash Flow ( € bn) 2.0 5yr avg. 1.5 1.0 2014 2015 2016 2017 2018 9.1% 11.1% 10.5% 8.8% 10.1% ~10% FCF Yield CRH plc, Preliminary Results 2018 23 Free Cash = EBITDA +/- WC movements - Interest - Tax
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 initiatives … delivering structurally higher margins, cash & returns CRH plc, Preliminary Results 2018 25
Significant Progress … Portfolio Capital Continuous Business Management Allocation Improvement • Continuous portfolio review • ~ € 3bn returned to • Targeting further 300bps shareholders past 5 years EBITDA margin improvement • Narrower & deeper across 3 • Strong balance sheet … • Initiatives underway … ~70% divisions consistent discipline … internal self-help • ~35% of assets divested in ~2.1x Net Debt/EBITDA • Improved operating leverage last 5 years; ~50% acquired • Disciplined & patient … & synergy delivery • Further € 1.5-2bn divestment acquisitions & divestments programme underway Last 5 years … EBITDA margin +440bps … RONA +370bps CRH plc, Preliminary Results 2018 26
Profit Improvement Programme • Group- wide initiative … managed centrally, delivered locally • Business improvement & growth … higher margins, returns & cash • 70% to be internally delivered … procurement, process & structural • Progressing well ... regular updates to market as delivery unfolds CRH plc, Preliminary Results 2018 27
Profit Improvement Programme – Procurement • Driving centralised procurement across the Group • Broadening scope & depth … 2% to 4% savings • Key categories ... raw materials; energy; logistics; production services; consumables; mobile plant • € 100m+ savings already identified CRH plc, Preliminary Results 2018 28
Profit Improvement Programme – Process • Leveraging Group expertise to drive local improvements • Increasing vertical integration & self-supply • Reducing fuel & energy usage ... transport & logistics efficiencies • Optimising production footprint ... improved scheduling, throughput & maintenance CRH plc, Preliminary Results 2018 29
Profit Improvement Programme – Structural • A more focused & leaner business … … 7 divisions to 3 • Integrated platforms of scale • Reorganising management structures, support functions & regional office footprint • ~ €100m of cost savings identified … implementation in process CRH plc, Preliminary Results 2018 30
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