Agenda Our Business Rock Solid Performance in last 5 Years Delivering Returns in CRH CRH plc, AGM 2018 1
Why invest in Building Materials? Natural demand for construction products driven by: Population Growth Economic Development New-Build and Repair, Maintenance and Improvement The Industry is fragmented: Opportunities for acquisitions room to grow Significant benefits of scale Long-term drivers of construction growth CRH plc, AGM 2018 3
Why invest in Building Materials? 160% 140% Population Growth US 350 300 250 GDP Growth US CAGR +4% EUR CAGR +3% 300 275 250 225 200 Construction Growth US CAGR +4% EUR CAGR +3% 120% EUR 200 150 175 150 125 100% 1970 1980 1990 2000 2010 100 1990 1995 2000 2005 2010 2015 100 1990 1995 2000 2005 2010 2015 Growth underpinned by strong fundamentals CRH plc, AGM 2018 4
% Decline from peak % Decline from peak Where are we in the recovery cycle... Our main markets U.S. Europe 0% -25% -50% Year 0 1 2 3 4 5 6 7 8 9 10 11 12 1970s 1930s 07 1980s 14 15 16 13 08 11 12 17 18F 10 09 0% -20% -40% Year 0 1 2 3 4 5 6 7 8 9 10 11 1990s 1980s 1970s 08 09 10 11 12 13 14 15 16 17 18F -75% 1973-1978 1979-1985 1929-1941 2006-2018F U.S. Cement Demand -60% 1973-1980 1980-1989 1991-1998 2007-2018F Europe Cement Demand Still some way to run in the cycle Recovery in early stages CRH plc, AGM 2018 5 Source: Global Cement Report, US Geological Survey, PCA, UN, Morgan Stanley
Our Business Today 2013 18bn Revenue 2017 28bn Revenue +53% 1.5bn EBITDA 3.3bn EBITDA +124% 13bn Market Cap 25bn Market Cap +87% 76,000 Employees 85,000 Employees CRH plc, AGM 2018 6
North America #1 Building Materials Company Positive fundamentals Population growth and good demographics Funded infra programmes to drive investment Res / Non-res exposure in high-growth states... Strong markets Significant room to grow... CRH plc, AGM 2018 7
Europe #1 Heavyside Materials Company Largest economic bloc Growing population Solid developed markets in West Growth potential in East Recovery underway Leverage to deliver CRH plc, AGM 2018 8
Servicing the Breadth of Construction Cement Aggregates Asphalt RMC Paving Glass Construction Accessories Heavyside ( 2.2bn) EBITDA ( 3.3bn) Lightside ( 1.1bn) CRH plc, AGM 2018 9
Servicing the Breadth of Demand End-Use Sector Geography 30% Infrastructure 30% Non-Residential 40% Residential 50% RMI 50% New Build 37% Europe 62% Americas 2017 Sales 2017 Sales 2017 EBIT... Balance brings Industry-leading Returns and Cash generation CRH plc, AGM 2018 10
We have seen strong growth in Sales and EBITDA 30 Sales ( bn) 27.1 27.6 3.7 3.2 EBITDA ( bn) 3.1 3.3 25 20 18.0 18.9 23.6 CAGR +11% 2.7 2.2 1.7 1.5 1.6 2.2 CAGR +22% 15 2013 2014 2015 2016 2017 1.2 2013 2014 2015 2016 2017 CRH plc, AGM 2018 12
and improved Margins and Returns 13% 11% 9% EBITDA % Returns % 12% 9% 9% 8% 12% 11% 9% 7% 6% 7% 10% 9% 11% +400 Bps +500 Bps 7% 2013 2014 2015 2016 2017 5% 2013 2014 2015 2016 2017 CRH plc, AGM 2018 13 Returns = EBIT / Net Assets
and have generated strong Cash Flows 2.5 2.0 Free Cash Flow ( Bn) 2.3 2.4 2.3 2bn Converting ~80% of profits into cash Generating 2bn+ cash p.a. 1.5 1.2 1.3... before disposals 1.0 0.5 2013 2014 2015 2016 2017 CRH plc, AGM 2018 14 FCF = EBITDA +/- WC movements Interest - Tax
along with significant Cash from Disposals ~ 4bn proceeds from disposal Divestment targets exceeded CRH plc, AGM 2018 15
Significant cash generated in past 5 years large acquisition spend how have these acquisitions performed? CRH plc, AGM 2018 16
Acquisition spend ~ 8bn in 2014-16 Heavyside Bolt-ons Returns 10% +15% 13% ~ 6.5bn ~ 0.5bn ~ 1.2bn We target returns of 10% by Year 3... New platforms established enhanced delivery through Bolt-ons CRH plc, AGM 2018 17
How did CRH perform vs Industry? The key drivers of Shareholder Value Returns Cash Generated CRH plc, AGM 2018 18
Returns 10% 8% 6% CRH US Peers Global Peers 4% 2013 2014 2015 2016 2017 Source: Bloomberg Generating Industry-leading Returns CRH plc, AGM 2018 19 Returns = EBIT / Net Assets
Cash Generated 110% FCF / EBITDA 90% 70% 50% CRH US Peers Global Peers 30% 2013 2014 2015 2016 2017 Source: Bloomberg Generating more Cash from Profits than Global and US Peers CRH plc, AGM 2018 20 FCF = EBITDA +/- WC Interest - Tax
How does this translate into Shareholder Value? 300 250 200 150 CRH FTSE100 CAGR 17.6% 9.5% 100 50 0 2013 2014 2015 2016 2017 Total Shareholder Returns well above FTSE 100 CRH plc, AGM 2018 21
Delivering Sustainable, Superior Returns Founded on 3 Core Principles 1. Relentless focus on Performance Co-ordinated & driven from the centre... delivered locally 2. Growth Rigorous approach to M&A... large & small deals Focussed on building integrated clusters of businesses Scalable acquisition model... difficult to replicate 3. CRH A Unique Business Model Extracts more value from businesses than if stand-alone CRH plc, AGM 2018 23
CRH A Unique Business Model Driving Returns from the Centre 1. Rigorous approach to Capital Allocation 2. Active Portfolio Management 3. Co-ordinating Divisional Strategies Shaping the Group for future growth Transfer of best practices across Divisions 4. Setting Strategic Targets for Operations Demanding Margins, Returns and Cash Improvements year over year CRH plc, AGM 2018 24
CRH A Unique Business Model Driving Returns from the Centre 1. Embedding CRH Continuous Business Improvement Processes 2. Co-ordinating Development and Strategy 3. Delivering Synergies on Integration 4. Mandating Process and Commercial Excellence across Divisions 5. Implementing Group-wide Procurement Programmes 6. Co-ordinating Customer and Market management 7. Driving value from Tax, Treasury, Insurance and other corporate processes Delivering the Scale Benefits of an Integrated Group CRH plc, AGM 2018 25
Where to from here? CRH 2018-2020 CRH plc, AGM 2018 26
How do we see our markets evolving (2018-20) U.S. Public Infra +3% p.a Residential markets +4% p.a Non-Residential markets +2% p.a Funded infra programmes to drive investment Res / Non-res exposure in high-growth states Delivery on integration of ~$4bn acquisitions... ~$135m synergies Positive price dynamics in the marketplace Europe Recovery underway across European markets Expect demand to continue to build in the coming years Pricing continuing to show signs of recovery Asia Expect market stabilisation in 2018 CRH plc, AGM 2018 27
What to expect from CRH Our priorities going forward In the coming months Relentless focus on Performance Disciplined Growth Continue to manage our Portfolio Value-focussed Capital Allocation policy We will set out the scale of the ambition we have for the Group in the years ahead, with a focus on Shareholder Value Cash Generation Capital Allocation Policy Commitment to continued improvement in shareholder returns CRH plc, AGM 2018 28