Agenda - Home | CRH · CRH plc, AGM 2018 27 U.S. • Public Infra +3% p.a… Residential markets +4% p.a… Non-Residential markets +2% p.a • Funded infra programmes to drive investment

CRH plc, AGM 2018 1

Agenda

Our Business … Rock Solid

Performance in last 5 Years

Delivering Returns in CRH

CRH plc, AGM 2018 3

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…

Why invest in Building Materials?

… Long-term drivers of construction growth

CRH plc, AGM 2018 4

100%

120%

140%

160%

1970 1980 1990 2000 2010

Why invest in Building Materials?

US

EUR

Population Growth

100

125

150

175

200

225

250

275

300

1990 1995 2000 2005 2010 2015

US CAGR

+4%

EUR CAGR

+3%

Construction Growth

100

150

200

250

300

350

1990 1995 2000 2005 2010 2015

US CAGR

+4%

EUR CAGR

+3%

GDP Growth

… Growth underpinned by strong fundamentals

CRH plc, AGM 2018 5

1970s

1980s

1930s

‘07

‘08

‘09 ‘10

‘11 ‘12

‘13 ‘14 ‘15

‘16

‘17 ‘18F

-75%

-50%

-25%

0%

0 1 2 3 4 5 6 7 8 9 10 11 12

% D

eclin

e f

rom

peak

Year

1973-1978 1979-1985 1929-1941 2006-2018F

Still some way to run in the cycle…

1970s 1980s 1990s

‘08

‘09

‘10 ‘11

‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18F

-60%

-40%

-20%

0%

0 1 2 3 4 5 6 7 8 9 10 11

% D

eclin

e f

rom

peak

Year

1973-1980 1980-1989 1991-1998 2007-2018F

Source: Global Cement Report, US Geological Survey, PCA, UN, Morgan Stanley

Recovery in early stages…

Where are we in the recovery cycle... Our main markets

U.S. Europe

U.S. Cement Demand Europe Cement Demand

CRH plc, AGM 2018 6

€25bn Market Cap

€28bn

Revenue

€3.3bn EBITDA

85,000 Employees

2017

+124%

+87%

+53%

€13bn Market Cap

€18bn

Revenue

€1.5bn EBITDA

76,000 Employees

2013

Our Business Our Business… Our Business… Today

CRH plc, AGM 2018 7

... Strong markets … Significant room to grow ...

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

CRH plc, AGM 2018 8

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 9

Heavyside (€2.2bn) EBITDA (€3.3bn) Lightside (€1.1bn)

Cement Aggregates Asphalt RMC Paving Glass Construction

Accessories

Servicing the Breadth of Construction

CRH plc, AGM 2018 10

Servicing the Breadth of Demand

2017 EBIT

Geography Sector End-Use

40% Residential

30% Infrastructure

30% Non-Residential

50% RMI

50% New Build

37% Europe

62% Americas

2017 Sales 2017 Sales

... Balance brings Industry-leading Returns and Cash generation


1.5 1.6

2.2

3.1 3.3

1.2

1.7

2.2

2.7

3.2

3.7

2013 2014 2015 2016 2017

18.0

18.9

23.6

27.1 27.6

15

20

25

30

2013 2014 2015 2016 2017

Sales (€bn)

EBITDA (€bn)

CAGR

+11% CAGR

+22%

We have seen… strong growth in Sales and EBITDA …


6%

7%

9%

10%

11%

5%

7%

9%

11%

2013 2014 2015 2016 2017

8%

9% 9%

12% 12%

7%

9%

11%

13%

2013 2014 2015 2016 2017

EBITDA % Returns %

+400 Bps +500 Bps

Returns = EBIT / Net Assets

… and improved Margins and Returns …

CRH plc, AGM 2018 14 FCF = EBITDA +/- WC movements – Interest - Tax

• Converting ~80% of profits into cash

• Generating €2bn+ cash p.a.

• ... before disposals 1.2 1.3

2.3 2.4 2.3

0.5

1.0

1.5

2.0

2.5

2013 2014 2015 2016 2017

€2bn

Free Cash Flow (€Bn)

… and have generated strong Cash Flows …


~€4bn proceeds

from disposal…

Divestment targets exceeded …

… along with significant Cash from Disposals


Significant cash generated in past 5 years…

… large acquisition spend…

… how have these acquisitions performed ?


Heavyside

‘Bolt-ons’

~€6.5bn ~€0.5bn ~€1.2bn

We target returns of 10% by Year 3...

… New platforms established… enhanced delivery through ‘Bolt-ons’

Returns 10% +15% 13%

Acquisition spend ~€8bn in 2014-16


The key drivers of Shareholder Value …

• Returns

• Cash Generated

How did CRH perform vs Industry ?


4%

6%

8%

10%

2013 2014 2015 2016 2017

Source: Bloomberg

… Generating Industry-leading Returns …

Returns = EBIT / Net Assets

CRH

US Peers Global Peers

… Returns


30%

50%

70%

90%

110%

2013 2014 2015 2016 2017

… Generating more Cash from Profits than Global and US Peers …

Source: Bloomberg

CRH US Peers

Global Peers

FCF = EBITDA +/- WC – Interest - Tax

… Cash Generated

FCF / EBITDA


0

50

100

150

200

250

300

2013 2014 2015 2016 2017

CRH

FTSE100

How does this translate into Shareholder Value ?

CAGR

17.6%

9.5%

… Total Shareholder Returns well above FTSE 100 …


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

Delivering Sustainable, Superior Returns


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 – 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 – A Unique Business Model… Driving Returns from the Centre


Where to from here ?

CRH … 2018-2020


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

How do we see our markets evolving (2018-20)


• Relentless focus on Performance

• Disciplined Growth

• Continue to manage our Portfolio

• Value-focussed Capital Allocation policy

Commitment to continued improvement in shareholder returns

Our priorities going forward …

What to expect from CRH

• 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

In the coming months …

Documents

Agenda - Home | CRH · CRH plc, AGM 2018 27 U.S. • Public Infra +3% p.a… Residential markets +4% p.a… Non-Residential markets +2% p.a • Funded infra programmes to drive investment