Acquisition Presentation PDF
Acquisition Presentation PDF
Acquisition Presentation PDF
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
recipient, to any other person (whether within or outside such person's organisation or firm) or published in whole or in part, for any purpose or under any circumstances, without the written consent
of the Company. (For the purposes of this notice, presentation means this document, any oral presentation, any question and answer session and any written or oral material discussed or distributed
during the presentation meeting.)
This presentation is not for publication, distribution or release, directly or indirectly, in or into the United States (including its territories and dependencies, any State of the United States and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 in which the same would be unlawful restricted, unlawful or unauthorised (each a Restricted Territory).
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
defined below) or any of their respective parent or subsidiary undertakings, or the subsidiary undertakings of any such parent undertakings, or any of such person's respective directors, officers,
employees, agents, affiliates or advisers, as to, and no reliance should be placed on, the accuracy, completeness or fairness of the information or opinions contained in this presentation and no
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
subsidiary undertakings, or the subsidiary undertakings of any such parent undertakings, or any of such person's respective directors, officers, employees, agents, affiliates or advisers, undertakes any
obligation to amend, correct or update this presentation or to provide the recipient with access to any additional information that may arise in connection with it. No reliance may be placed for any
purposes whatsoever on the information contained in this presentation or on its completeness, accuracy or fairness.
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,
nor do they authorise, the contents of this presentation or its publication or any other statement made or purported to be made by the Company, or on its behalf, in connection with the arrangements
described in this presentation, and accordingly disclaim all and any liability whatsoever whether arising out of tort, contract or otherwise which they might otherwise have to any person in respect of
this presentation (other than in the case of the Joint Bookrunners, to the Company) or any other written or oral information made available to or publicly available to any recipient or its advisers.
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
INFORMATION PURPOSES ONLY AND IS DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ("EEA") WHO ARE QUALIFIED INVESTORS (AS DEFINED IN ARTICLE
2(1)(E) OF THE PROSPECTUS DIRECTIVE (DIRECTIVE 2003/71/EC AS AMENDED, INCLUDING BY DIRECTIVE 2010/73/EC) (QUALIFIED INVESTORS)); (B) PERSONS IN THE UNITED KINGDOM WHO ARE
QUALIFIED INVESTORS WHO (I) ARE PERSONS WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND
MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE FINANCIAL PROMOTION ORDER); (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) (HIGH NET WORTH
COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC) OF THE FINANCIAL PROMOTION ORDER; OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS
IN (A) AND (B) TOGETHER BEING REFERRED TO AS RELEVANT PERSONS). THIS PRESENTATION (INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED
ON OR RELIED ON (I) IN THE UNITED KINGDOM, BY PERSONS WHO ARE NOT RELEVANT PERSONS, AND (II) IN ANY MEMBER STATE OF THE EEA OTHER THAN THE UNITED KINGDOM, BY PERSONS WHO
ARE NOT QUALIFIED INVESTORS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS PRESENTATION (INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE
IS AVAILABLE ONLY TO RELEVANT PERSONS IN THE UNITED KINGDOM AND QUALIFIED INVESTORS IN ANY MEMBER STATE OF THE EEA OTHER THAN THE UNITED KINGDOM, AND WILL BE ENGAGED IN
ONLY BY SUCH PERSONS. THIS PRESENTATION (INCLUDING THE APPENDICES) DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.
The distribution of this presentation and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or the Placing Agents that would
permit an offering of such Placing Shares or possession or distribution of this presentation or any other offering or publicity material relating to such Placing Shares in any jurisdiction where action for
that purpose is required. Persons into whose possession this presentation comes are required by the Company and the Placing Agents to inform themselves about, and to observe, such restrictions.
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.
Neither the content of the Companys website nor any website accessible by hyperlinks on the Companys website is incorporated in, or forms part of, this presentation.
Where information contained in this presentation has been sourced from a third party (including the Sellers), the Company confirms that such information has been accurately reproduced and, so far as
the Company is aware and has been able to ascertain from that information, no facts have been omitted which would render the reproduced information, or information derived from it, inaccurate or
misleading.
This presentation contains (or may contain) certain forwardlooking statements with respect to certain of the Companys current expectations and projections about future events and the Companys
future financial condition and performance. These statements, which sometimes use words such as aim, anticipate, believe, may, will, should, intend, plan", assume, estimate,
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
statements contained in this presentation speak only as of the date of this presentation and the Company assumes no obligation to, and does not intend to, update or revise publicly any of them
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
Bank of Ireland or by applicable law. No statement in this presentation is or is intended to be a profit forecast or profit estimate or to imply that the earnings of the Company for the current or future
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.
2
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
Cement plants # 3 9 5 7 24
Aggs volumes mt 16 59 4 79
Asphalt volumes mt 1 7 8
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
50 Aggregates
170 mt
CRH **
40
Aggregates
Enterprise Value, bn
249 mt
CRH + NewCo
30
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
7
Strategic Rationale
8
1 Quality assets - balancing CRHs global footprint
US Canada W. Europe CEE Emerging
5% 10%
6% 19% 23%
8%
38%
36%
45% 8%
2%
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
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
Brazil
Top 5 position in the southeast
Major supplier to Rio de Janeiro
market
Ongoing infrastructure needs
Cement volumes 2.8mt
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
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
3.5
275m @ 1.375%
0
2012 2013 2014 2015 2016 2017 2018 2019
Structural
Restructuring support services
Integrating back-office functions
Administration rationalisation
12%
8%
4%
0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
23
2014E Revenue and EBITDA bridges
Revenue bn EBITDA bn
5 1.0
CRH North W. CEE Emerging CRH+ CRH North W. CEE Emerging CRH+
America Europe NewCo America Europe NewCo
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
28
Expected transaction timetable
Equity placing
Mid-2015 Completion
29
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:
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.
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
CRH plc
Investor Relations
Belgard Castle
Clondalkin
Dublin 22
Ireland
32