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Strictly confidential

Acquisition of assets being disposed of by Lafarge and Holcim


2 February 2015
0
Disclaimer (1/2)

THIS PRESENTATION IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES (INCLUDING ITS TERRITORIES AND
DEPENDENCIES, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA, JERSEY OR ANY OTHER STATE OR JURISDICTION WHERE
SUCH DISTRIBUTION IS UNLAWFUL.
This presentation has been prepared and issued by and is the sole responsibility of CRH plc (the Company) and comprises the written materials/slides for a presentation concerning the Company and
its proposed acquisition of certain assets being disposed of by Holcim Limited and Lafarge S.A. (together, the Sellers) and associated Placing (as defined below). This presentation has been prepared
and is being provided to you solely for your information and this presentation may not be copied, distributed, reproduced or passed on, directly or indirectly, in whole or in part, or disclosed by any
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This presentation is for information purposes only and shall not constitute an offer to buy, sell, issue, or acquire, or the solicitation of an offer to buy, sell, issue, or acquire any securities, nor shall there
be any sale of securities in any Restricted Territory. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. The Placing Shares have not been
and will not be registered under the United States Securities Act of 1933, as amended (the Securities Act), and may not be offered or sold in the United States or to, or for the account or benefit of, US
Persons (as defined in Rule 902 of Regulation S under the Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
Any sale in the United States of the Placing Shares will be made solely to qualified institutional buyers (within the meaning of Rule 144A under the Securities Act) who are also accredited investors
(as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) in transactions not involving a public offering and in accordance with an exemption from registration under the
Securities Act. Neither this presentation nor the information contained herein constitutes or forms part of an offer to sell or the solicitation of an offer to buy securities in the United States. There will
be no public offer of any securities in the United States or in any other jurisdiction.
This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities and it is not a prospectus or a
prospectus equivalent document. Neither this presentation, nor any part of it nor the fact of its distribution , is intended to form the basis of any investment decision or any decision to participate in
the Placing (as defined below) nor is it to be relied upon in connection with any agreement to participate in the Placing and should not be considered as a recommendation by the Company, the Joint
Bookrunners (as defined below) or any other person in relation to participation in the allotment of up to 9.99% of the current issued share capital of the Company through the placing of new ordinary
shares of 0.32 each in the share capital of the Company (each a Placing Share and together, the Placing). Neither the Company nor the Joint Bookrunners make any representation to any recipient
regarding an investment in the securities referred to in this presentation under the laws applicable to such recipient.
The presentation has not been independently verified and no representation or warranty, express or implied, is made or given by or on behalf of the Company or any of the Joint Bookrunners (as
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responsibility or liability is assumed by any such persons for any such information or opinions or for any errors or omissions. All information presented or contained in this presentation is subject to
verification, correction, completion and change without notice. In giving this presentation, none of the Company or any of the Joint Bookrunners (as defined below) or any of their respective parent or
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J&E Davy, which is regulated in Ireland by the Irish Financial Services Regulatory Authority, and each of J.P. Morgan Limited, Merrill Lynch International and UBS Limited, which are authorised by the
Prudential Regulation Authority (PRA) and regulated in the United Kingdom by the PRA and the Financial Conduct Authority (FCA) (together, the Joint Bookrunners) are acting as Joint
Bookrunners exclusively for the Company and noone else in connection with the Placing and are not, and will not be, responsible to anyone other than the Company for providing the protections
afforded to their respective clients nor for providing advice in relation to the Placing and/or any other matter referred to in this presentation. Apart from the responsibilities and liabilities, if any, which
may be imposed by the Central Bank of Ireland, the Financial Conduct Authority, Financial Services and Markets Act 2000 (as amended) (FSMA), or any applicable Irish law, the Company and the Joint
Bookrunners make no representation, express or implied, with respect to the accuracy, verification or completeness of any information contained in this presentation and accept no responsibility for,
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1
Disclaimer (2/2)

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS PRESENTATION (INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT HEREIN IS FOR
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The price of the Placing Shares and any income from them may go down as well as up and investors may not get back the full amount invested on disposal of such Placing Shares.
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expect (or the negative thereof) and words of similar meaning, reflect the directors beliefs and expectations and involve a number of risks, uncertainties and assumptions that could cause actual
results and performance to differ materially from any expected future results or performance expressed or implied by the forwardlooking statement, including those accompanying such
forwardlooking statements and under Risk Factors in our Annual Report on Form 20F, filed with the U.S. Securities and Exchange Commission (the S.E.C.) on March 13, 2014 and Principal Risks
and Uncertainties in our 2014 Interim Results contained in our Form 6K filed with the S.E.C. on August 20, 2014.
Statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The forwardlooking
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whether as a result of new information, future events or otherwise, except to the extent required by the Financial Conduct Authority, the London Stock Exchange, the Irish Stock Exchange, the Central
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financial years will necessarily match or exceed the historical or published earnings of the Company.
By attending the meeting where this presentation is made or by accepting a copy of this presentation you agree to be bound by the foregoing limitations.

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1 global deal 4 regional platforms
Acquiring high quality assets Financed by mix of existing cash, debt
across 4 regional platforms and 9.99% equity placing
Regions
CRH 2014E net debt / EBITDA 3.2x
Western Europe North America
post-transaction
Central & Eastern Emerging
Europe Markets Committed to investment grade rating

2014E* Financials
2014E Revenue 5.1bn Value creating
2014E EBITDA 752m
90m(net) synergies run-rate by year 3

Enterprise Value: 6.5bn Earnings and returns accretive


in 2016; first full year post completion

Delivering CRHs strategy


* 2014E is used throughout this presentation to indicate numbers which are approximate pending audit finalisation 3
Deal Dimensions - Assets being acquired

N. America W. Europe CEE Emerging Total

Locations # ~85 ~490 ~100 ~10 ~685

Employees # ~3,000 ~8,000 ~2,500 ~1,500 ~15,000

Cement plants # 3 9 5 7 24

Cement capacity mt 3.7 12.3 9.8 10.1 36

Cement volumes mt 2.9 7.4 4.3 8.0 23

Aggs volumes mt 16 59 4 79

RMC volumes m m3 3 6 1 n/m 10

Asphalt volumes mt 1 7 8

Right Assets Right Time


2013 figures as reported by Lafarge and Holcim 4
Leading Market Positions in 4 Regional Platforms
Cement Aggregates RMC Asphalt Market position
North
America Canada Regional #1

Great Britain #1
Western
France #3
Europe
Germany Regional leader

Romania #3
Central and Slovakia #1
Eastern
Europe Hungary #2

Serbia #2

Emerging Philippines #2
Markets
Brazil Regional leader

Strengthening existing positions, developing new platforms


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Industry Position Post-Acquisition

Global #3 building materials player Global #2 in aggregates

50 Aggregates
170 mt
CRH **
40
Aggregates
Enterprise Value, bn

249 mt
CRH + NewCo
30

20 Doubling cement volume

10
Cement
19 mt
CRH **
0
Cement
42 mt
CRH + NewCo

Source: FactSet (Enterprise Value = Market Cap + Net Debt); 30 Jan 2015
Global #3 in building materials
* Pro-forma Lafarge-Holcim post closure **CRH 2013 volumes including share of Equity Accounted investments 6
Strategic Rationale

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Strategic Rationale

1 Quality portfolio of assets


4 strong growth platforms leading market positions
Geographically diverse portfolio

2 Strong strategic fit


3 platforms integrate well with existing CRH networks
Emerging market platform entry points of scale

3 Right time for CRH


Trough earnings, trough margins, low-cost financing
Growth phase of global construction cycle

4 Value creation potential


Synergies estimated at 1.8% NewCo sales
Significant bolt-on and vertical integration opportunities

5 Efficient use of capital


Disciplined investment approach maintained
Dynamic re-allocation of divestment proceeds

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1 Quality assets - balancing CRHs global footprint
US Canada W. Europe CEE Emerging

CRH NewCo CRH + NewCo


Illustrative EBITDA Split*

5% 10%
6% 19% 23%
8%
38%

31% 56% 13%

36%
45% 8%
2%

Platforms of scale in developed and developing markets


* Illustrative EBITDA split: CRH split includes share of Asian JVs and Associates 9
2 Strategic fit - North America
Northeast US is CRHs most profitable market
40% of US Revenue

#1 in Asphalt, #1 in Aggs, #1 in Building Products


CRH core market
CRH asset

Great fit with CRHs NE Materials operations NewCo market


NewCo asset

Well-located resource-backed Aggs assets

Cement assets in Ontario / Quebec


and supply terminals in northern US
enhance purchasing / self-supply alternatives
Cement / Aggregates pull-through into
CRH downstream operations
Production volumes (NewCo)
Expanded platform roll-out CRH vertical
integration model Cement 2.9mt
#2 largest acquisition by CRH US Materials
Aggregates 16mt
RMC 3m m
Asphalt 1mt

Strengthens position in key North American region


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2 Strategic fit - Western Europe CRH markets
Great Britain Both

Market leading positions in cement, aggs, asphalt, RMC


Resource-backed integrated businesses
Enhanced network benefits W Europe cement

France
Strengthens integrated business in Northeast FR / BE / NL
Increased pull-through demand from existing operations
Production volumes (NewCo)
Purchasing leverage with own supply alternative Cement 7.4mt
Aggregates 59mt
RMC 6m m
Germany Asphalt 7mt
Entry to strategically important Southern German market
Adds regional production flexibility
Enhanced purchasing / self-supply alternatives

Positions of scale in leading European economies


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2 Strategic fit - Central and Eastern Europe CRH markets

Romania NewCo markets

Top 3 integrated player in consolidated market Both

Well-located resource-backed assets


EU funding to drive construction growth

Slovakia - Hungary
Market leader Cement: #1 SK; #2 HU; RMC: top 3
Cement usage at low level modern efficient cement assets
Production volumes (NewCo)
Significant growth potential
Cement 4.3mt
Aggregates 4mt
Serbia RMC 1m m
#2 cement company in consolidated market
Well-located resource-backed assets
Roll-out CRH vertical integration model

Geographic infill creates strong regional cluster


become #1 heavyside building materials company in CEE
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2 Strategic fit - Emerging Markets
Philippines
New platform for CRH in Asia,
expanding beyond India & China
#2 position in Philippines market
Construction growth forecast*
11% CAGR 2015-2020
Cement volumes 5.2mt

Brazil
Top 5 position in the southeast
Major supplier to Rio de Janeiro
market
Ongoing infrastructure needs
Cement volumes 2.8mt

Balancing returns and long term growth


* Source: Construction and Infrastructure Capital Investment; Bank of America Merrill Lynch 13
3 Right time in cycle to acquire assets
Global economies emerging from crisis

North America
Good momentum in US; Canada stable

Europe
Markets normalising early stages of recovery
Self-help / synergies key in early part of cycle
CEE significant construction needs

Emerging markets
Infrastructure and urbanisation continue to drive demand across markets
Strong economic fundamentals in core Philippines market

Right point in the cycle


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3 Right time in cycle to acquire assets
Heavyside sector earnings at cyclical low and industry margins at trough
billions Heavyside Sector EBITDA*
%
Global Peers EBITDA margin %

25 22

20
20
-44%
-27%
15

18

10

16
5

0 14
1998 2000 2002 2004 2006 2008 2010 2012 1998 2000 2002 2004 2006 2008 2010 2012

Right point in the cycle


* Estimated Global Heavyside Sector EBITDA, adjusted for inflation and expressed in 2014 15
3 Right time in cycle to acquire assets
CRH cost of debt All-time-low cost of funds
% CRH weighted average cost of gross debt
In 2012 CRH average cost of debt >5%
6.0 500m @ 5%
CRH Bond issuance
c3bn Public Debt issuances 2012-2014
5.5 Declining Average cost of CRH debt
750m @ 3.125%
5.0
750m @ 2. 75%
600m @ 1. 75%

4.5 CRH current weighted average cost of


debt c4% reducing to c3% by 2020
4.0

3.5
275m @ 1.375%

0
2012 2013 2014 2015 2016 2017 2018 2019

Funding acquisitions at historically low levels


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4 Creating value - 90m synergies identified
Synergies 90m
30m in year 1 10 Structural
Rising to 90m(net) run-rate
20 Process
in year 3 60m
Synergies estimated at 5
1.8% NewCo sales 15
Procurement, process and
structural benefits 30m
5 60 Procurement
Operational
40
Commercial 25
Network

Year 1 Year 2 Year 3

Consistent delivery of synergies


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4 Synergy opportunity across multiple categories
Year 3 synergies
Procurement Internal sourcing / procurement leverage benefits c30m
Cement: 3mt savings of 5 to 10 /t = ~25m
Aggregates: 8mt savings 0.50 - 1 /t = ~5m

Integrated procurement programmes CRH+NewCo c30m


60m
Transport Savings through procurement, logistics
management and integrating logistics services
Heavy mobile equipment Mobile plant savings from
aggregated procurement scale of CRH+NewCo
Additives Rollout of CRH tendering practices
across all additive categories in NewCo
Non-product related spend e.g. contracted services,
admin, IT, equipment, etc.
Global direct sourcing for consumables from low cost countries
(e.g. spare parts, wear parts for crushers etc.)

Sustainable model of continuous business improvement


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4 Synergy opportunity across multiple categories
Year 3 synergies
Process Ops improvement/reduced costs through combined technical services
NewCo Synergies
Global spares policy
Better run-times and efficiencies
Process improvements/management in NewCo downstream
20m
Reverse Synergies (CRH cement)
Lower maintenance costs
Increasing use of alternative fuels
Reducing clinker factor (-1.5%pt)

Structural
Restructuring support services
Integrating back-office functions
Administration rationalisation

10m Regional centres of administration

Sustainable model of continuous business improvement


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4 Creating value - CRH experience and track record
APAC Switzerland and Finland

Major expansion of US asphalt and US Initial investment 0.7bn at ~7x EBITDA


aggregates business $1.3bn EV
Step-out into 2 new regional cement platforms
1 deal 6 regional platforms over 18 month period

Synergies estimated at 2.0% of sales 25 deals over 5 years; multiple bolt-on


investments, vertical integration
Synergies achieved at 3.2% of sales
Significant investment in platform assets
Operational excellence programmes 0.2bn in first 5 years
delivered significant margin improvement Operational improvements, alternative fuels
Selective disposals and subsequent bolt-ons expertise, delivered benefits
enhanced returns Doubled earnings in 5 years
Double digit returns in early years Double digit returns by year 5

Building better businesses


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5 Maximising returns through capital efficiency
Capital Efficiency

Reallocation of capital at attractive multiples

930m* of divestments at 11.0x EBITDA since mid-2014

Recycling capital at higher returns

On-going portfolio management

Continuing to deliver on current divestment programme

Portfolio discipline will now be applied to combined CRH+NewCo asset base

Recycling capital at higher returns


* Estimated divestment EV including deals agreed but not yet closed 21
5 CRH Heavyside Materials Returns
ROIC*
16%
Return on Invested Capital
Peers CRH CRH Heavyside Materials

12%

8%

4%

0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

History of superior performance in heavy building materials


Well-located resource-backed assets Operational excellence

Leading market positions Platform assets facilitated roll-out

Vertically integrated businesses of bolt-on acquisition strategy

Industry leading returns through the cycle


* Source: CRH estimates and Bloomberg 22
Financial rationale

23
2014E Revenue and EBITDA bridges

Revenue bn EBITDA bn

25 2.4 0.2 2.4


0.6 24.0
24 0.4 0.1
3.1 2.2 0.3
22
2.0

1.0 1.8 0.2


20
18.9
1.6
1.6
18

5 1.0
CRH North W. CEE Emerging CRH+ CRH North W. CEE Emerging CRH+
America Europe NewCo America Europe NewCo

Revenue up by 27% and EBITDA by 46%


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CRH discipline maintained

ROIC in line with CRH WACC in 2016

High-teen return on equity in 2016

RONA in line with previous returns generated by CRH

c25% EPS accretion in 2016

Bringing returns back to peak


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Financing structure
bn
Key terms
Class 1 transaction
Completion expected in mid-2015 subject to
1.5 equity CRH shareholder approval
Completion of the Lafarge-Holcim merger
Completion of Lafarge-Holcim local reorganisations

3.0 debt Financing


Equity placing of c1.5bn (9.99%)
Senior unsecured bridge facility of 3.0bn
Cash: 2.0bn

Credit Rating
2.0 cash Remain committed to investment grade

26
Debt metric impact (basis 2014E)
bn Impact of Anticipated impact from
NewCo transaction CRH divestment programme

~1.4
2.0

3.0 7.5
6.1

2.5

Net debt* Acquisition Cash from Net debt Anticipated Net debt
pre- debt balance post- divestment post-
transaction sheet transaction programme divestment
proceeds programme

Net debt /
1.5x 3.2x ~2.8x
EBITDA 2014E
Intend to return to debt levels consistent with current credit metrics
* CRH net debt pre-transaction is approximate 27
Proposed placing

Fully underwritten

Unconditional upon acquisition completing

New shares will rank pari passu with existing shares

New shares will be issued cum-dividend

28
Expected transaction timetable

2 Feb 2015 Acquisition announcement

Equity placing

February Class 1 circular published

March EGM to approve the acquisition

June Lafarge/Holcim merger closes

Mid-2015 Completion

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Trading update
On 11 November 2014, CRH announced its interim management statement outlining its
trading performance in the first nine months of the year, in which it stated that:

Assuming normal weather patterns for the remainder of the year


and a US dollar/euro exchange rate of 1.33 (2013: 1.3281), we expect
EBITDA for the fourth quarter to be broadly similar to the strong
performance in the final quarter of 2013. Against this backdrop, we
reiterate our expectation for second-half EBITDA to be somewhat ahead
of last year (H2 2013: 1.08 billion), resulting in expected full year EBITDA
growth of c.10% in 2014 (2013: 1.475 billion)

Since that date, the Group's trading performance continues to be in line with the Board's
expectations and we expect EBITDA for the full year to be not less than 1.625 billion
with full year revenues of 18.9 billion. We expect year-end net debt to be approximately
2.5 billion (2013: 3.0 billion), with a net debt/EBITDA ratio of approximately 1.5x times.

CRH 2014 Results will be announced on Thursday, 26th Feb 2015


30
Summary
The transaction
1 global transaction 4 regional platforms quality portfolio of assets
Strong strategic fit become global #3 in building materials
Attractive valuation right point in the cycle
Options to involve partners in certain regions being explored

Value-creating acquisition
Earnings and returns accretive in first full year post completion
Significant synergy potential for NewCo and CRH
Continuous portfolio management efficient use of capital

Bringing returns back to peak


31
Contact us

CRH plc
Investor Relations
Belgard Castle
Clondalkin
Dublin 22
Ireland

Phone: + 353 1 404 1000


Fax: + 353 1 404 1007
Email: [email protected]
Website: www.crh.com

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