H1 2016 Key messages • Strong profit delivery • Good operating leverage • Margins & returns ahead in all divisions • Good cash management • De-leveraging ahead of plan 1 2016 Interim Results
H1 2016 Financial highlights Sales Reported Proforma € 12.7bn +35% +8% EBITDA € 1.12bn +102% +20% EBITDA margin 8.8% +290bps +90bps Dividend 18.8c +1.6% * Proforma comparisons are at constant currency; include the H1 2015 trading results of the LH and CRL acquisitions; and exclude all divested entities and certain one-off items. 2 2016 Interim Results
Trading Performance
Europe – Market Backdrop 2016 GDP trends YoY change 0-1% 1-2% >2% • Very early stages of recovery • Impact of Brexit … as yet unclear • Construction markets well below long-term trends • Construction spend due to increase … over time CRH Presence 4 2016 Interim Results
Europe – Trading Performance Proforma Sales EBITDA Margin • H1 carry-forward of Q4 2015 trends YoY change Q1 Q2 H1 H1 H1 • Volumes ahead in key markets - +6% +4% +4% +10bps Heavyside • Pricing ahead … in some markets +6% +11% +8% +14% +50bps Lightside • Distribution - +2% +1% +5% +10bps Modest growth expected in H2 Total +1% +5% +3% +5% +10bps 5 2016 Interim Results
Europe – Profit & Growth Potential • #1 Heavyside business • New platforms for growth • Integration complete; synergy delivery on track • Significant pent-up demand 6 2016 Interim Results
Americas – Market Backdrop Every decade adds … +30 m • Positive economic environment; construction People … markets outpacing overall economy • Res & Non-Res markets continue to advance +15 m • Infrastructure funding underpinned; real benefit Homes … still to come • $ 10 tn+ Demand environment supporting pricing momentum Construction spend 7 2016 Interim Results
Americas – Trading Performance Proforma Sales EBITDA Margin • Strong Q1 in benign weather YoY change Q1 Q2 H1 H1 H1 conditions +27% +7% +12% +69% +300bps Materials • Normalising growth rates in Q2 +22% +12% +16% +21% +50bps Products • Margins ahead in all divisions Distribution +17% +7% +11% +26% +50bps • Canada performing well Total +22% +8% +13% +39% +170bps 8 2016 Interim Results
Americas – Profit & Growth Potential • #1 building materials company … & growing • Margins & returns ahead of expectations for current activity levels • Benefiting from restructuring & investment during downturn • CRL integration complete; performing ahead of expectations 9 2016 Interim Results
Asia – Market Backdrop & Trading Performance Proforma H1 YoY change Sales EBITDA Margin Philippines +4% +7% +70bps • Philippines – solid fundamentals; positive demand environment; volumes & prices ahead • India * – volumes ahead on increased demand • China * – trading environment remains challenging * Equity accounted entities 10 2016 Interim Results
H1 2016 EBITDA Performance Bridge +20% € bn (25) 21 190 379 1,120 934 555 H1 2015 H1 2015 H1 2016 H1 2015 H1 2016 FX H1 2016 (CRH) (LH Assets/CRL) (CRH) (including LH (LH Assets/CRL) Assets/CRL) Heritage businesses … delivering in H1 2016 11 2016 Interim Results
Financial Performance
Components of performance € m Sales EBITDA H1 2015 9,370 555 Excellent market positions … Organic 795 154 • Strong organic growth LH Assets / CRL 2,862 384 • Good operating leverage Other Acquisitions / (Disposals) (222) 4 • Acquisitions performing as expected Net Other - 32 Currency Translation (112) (9) H1 2016 12,693 1,120 13 2016 Interim Results
Operating cash movements € m H1 2015 H1 2016 Strong earnings delivery … … focus on cash performance … EBITDA 555 1,120 Capital expenditure (338) (408) • Improved working capital management Working capital (597) (774) Other (mainly interest & tax) (233) (263) • Good capex control Cash flow from operations (613) (325) 14 2016 Interim Results
Outlook for year-end net debt position € bn ~1.0 6.6 ~0.0 ~0.4 ~6.0 Cash flow from Acquisitions / FY 2015 Net Dividends FY 2016E operations Divestments Net debt / 3x ~2x EBITDA … De -leveraging ahead of plan 15 2016 Interim Results
CRH … continuing to build on solid foundations
Financial delivery • On track to deliver > € 3bn EBITDA in 2016 Strong Heritage Delivery … restructuring & investment during • Recycling divestment proceeds for higher downturn … realised through improved returns operating leverage • Good operating leverage; restoring Disciplined Capital Management margins & returns … active portfolio management … value - • Strong cash generation capability enhancing acquisitions … divesting at 10x; acquiring at 8x 17 2016 Interim Results
Market positions # 1 building materials company in North • 90%+ of EBITDA in North America & Europe America • Significant unutilised capacity across our businesses; well invested for growth • Americas not yet mid- cycle … Europe still # 1 heavyside building materials company very early cycle in Europe 18 2016 Interim Results
US – Point in the cycle Housing starts (m) 4 m 40 year average 1.5 1.1 Construction 1.0 Homes underbuilt 0.9 since 2010 markets … Aggregates production (m tonnes) 1 6 2,462 in 20 year average … well below 2,193 every 2,154 Miles of US roads in 2,030 need of repair long-term Construction spend (as % of GDP) 8.6% 50 year average $ 225 bn trends 6.3% 6.0% Of FAST Act highway 5.8% funding 2016-20 2015 Long-term average 2014 2013 19 2016 Interim Results
Europe – Point in the cycle Housing starts (m) 400 k p.a. 1.55 20 year average 1.14 Construction 1.09 Housing starts below 1.08 long-term averages market Cement consumption (kg per capita) 2015 405 25 year average recovery … 292 298 All 19 Euroconstruct 304 economies grew at a very Construction output ( € billion) 1,583 20 year average $ 1 tn early stage 1,406 1,386 Estimated private funds 1,371 available for European 2015 Long-term average infrastructure over the 2014 2013 next decade 20 2016 Interim Results
Outlook
Expectations for H2 2016 • Europe – continued modest growth • Americas – H2 to be ahead of prior year • Asia – positive demand backdrop in the Philippines • FY 2016 – > € 3bn EBITDA; ~2x net debt / EBITDA 22 2016 Interim Results
Appendices
Group components of performance Sales Operating Profit Finance Assoc. Pre-tax € million EBITDA revenue profit on disposals costs (net) & JV PAT profit H1 2015 9,370 555 189 72 (199) 1 63 Exchange effects (112) (9) (1) - 3 - 2 2015/2016 acquisitions 2,957 401 215 - (39) 1 177 2015/2016 divestments (317) (13) (2) (53) 2 (4) (57) Swiss fine - 32 32 - - - 32 Early bond redemptions - - - - 38 - 38 Organic 795 154 155 1 (11) 7 152 H1 2016 12,693 1,120 588 20 (206) 5 407 24 2016 Interim Results
Europe Heavyside Six months ended Analysis of change 30 June Total € million % Change 2016 2015 Exchange Acquisitions Divestments Organic Change Sales revenue +107% 3,637 1,760 1,877 (42) 1,855 (93) 157 EBITDA +190% 362 125 237 (5) 249 (11) 4 +326% 38 (3) 130 (7) 4 Operating profit 162 124 7.1% EBITDA/sales 10.0% Op. profit/sales 4.5% 2.2% The acquisition impact substantially relates to the European part of the LH Assets acquired in H2 2015. 25 2016 Interim Results
Europe Lightside Six months ended Analysis of change 30 June Total € million % Change 2016 2015 Exchange Acquisitions Divestments Organic Change Sales revenue - 477 475 2 (9) 16 (26) 21 EBITDA +7% 49 46 3 (1) 1 (2) 5 +15% 33 (1) 1 (1) 6 Operating profit 38 5 9.7% EBITDA/sales 10.3% Op. profit/sales 8.0% 6.9% 26 2016 Interim Results
Europe Distribution Six months ended Analysis of change 30 June Total € million % Change 2016 2015 Exchange Divestments Swiss Fine Organic Change Sales revenue -1% 1,982 2,010 (28) (20) (26) - 18 EBITDA +63% 88 54 34 - (1) 32 3 +231% 16 - - 32 5 Operating profit 53 37 2.7% EBITDA/sales 4.4% Op. profit/sales 2.7% 0.8% 27 2016 Interim Results
Americas Materials Six months ended Analysis of change 30 June Total € million % Change 2016 2015 Exchange Acquisitions Divestments Organic Change Sales revenue +33% 2,975 2,235 740 - 529 (27) 238 EBITDA +122% 251 113 138 - 33 1 104 Operating n/m (34) - (2) 2 95 61 95 profit / (loss) 5.1% EBITDA/sales 8.4% Op. profit/sales 2.1% -1.5% The acquisition impact primarily relates to the Americas part of the LH Assets acquired in H2 2015. 28 2016 Interim Results
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