TIDMCRH
RNS Number : 1196X
CRH PLC
25 August 2022
2022 Interim Results
Key Highlights
-- Positive first-half performance; further growth in sales & EBITDA
-- Margin ahead despite significant inflationary headwinds
-- Reflecting the resilience of our business & our integrated solutions strategy
-- Year-to-date acquisition spend $2.8bn including Barrette Outdoor Living
-- Efficient & disciplined reallocation of $3.8bn Building Envelope divestment
-- Strong & flexible balance sheet; significant optionality for future value creation
-- Increasing cash returns; interim dividend +4% & ongoing share buybacks
-- Full-year EBITDA to be c. $5.5bn (2021: $5.0bn) in a challenging cost environment
Summary Financials(1) H1 2022 Change
Sales $15.0bn +14%
EBITDA $2.2bn +21%
EBITDA Margin 14.7% +90bps
EPS ($) $1.21 +36%
Albert Manifold, Chief Executive, said today:
"CRH has delivered another strong performance with further
growth in sales, EBITDA and margin despite a challenging and
volatile cost environment. This performance reflects the continued
execution of our integrated and sustainable solutions strategy.
Looking ahead, despite some continued cost headwinds, the strength
of our balance sheet and resilience of our business leaves us well
positioned to deliver superior value for all our stakeholders."
Announced Thursday, 25 August 2022
(1) Current and prior year trading information is presented on a
continuing operations basis, excluding the results of the Building
Envelope business which was divested in April 2022 and has been
classified as a discontinued operation.
2022 Interim Results
Trading Overview
First-half trading was underpinned by our integrated solutions
strategy and reflected positive underlying demand and commercial
progress in both North America and Europe, where strong pricing was
achieved to address the inflationary cost environment. Group sales
of $15.0 billion (H1 2021: $13.2 billion) were 14% ahead of the
same period last year and 12% ahead on a like-for-like(2) basis.
EBITDA of $2.2 billion was 21% ahead of 2021 (H1 2021: $1.8
billion) reflecting a strong focus on commercial and operational
initiatives which more than offset the impact of cost inflation. On
a like-for-like basis EBITDA was 13% ahead and margins were
maintained or expanded across all Divisions.
-- Despite adverse weather conditions impacting activity levels
in some regions, strong pricing across all product categories
resulted in like-for-like sales in Americas Materials 12% ahead of
2021. Disciplined cost control, operational efficiencies and good
commercial management delivered like-for-like EBITDA 12% ahead of
2021 with margins slightly ahead.
-- Building Products benefited from good residential repair,
maintenance and improvement (RMI) and utility infrastructure
activity in North America and Europe as well as contributions from
prior year acquisitions. Together with positive pricing progress
across all platforms, the Division delivered like-for-like sales
11% ahead of 2021. Good commercial management and strong cost
discipline resulted in like-for-like EBITDA 14% ahead of 2021 and
further margin improvement.
-- In Europe Materials, strong pricing momentum across all
products and good demand in key markets resulted in like-for-like
sales 14% ahead of 2021. Like-for-like EBITDA was 14% ahead of
2021, as commercial excellence initiatives as well as cost saving
actions offset the impact of inflationary pressures and the ongoing
conflict in Ukraine. As a result, like-for-like margins were in
line with H1 2021.
First-half profit after tax of $0.9 billion was 29% ahead of
2021 (H1 2021: $0.7 billion), primarily reflecting a strong trading
performance. Earnings per share from continuing and discontinued
operations for the period was $2.74 (H1 2021: $1.00). Earnings per
share from continuing operations was $1.21 (H1 2021: $0.89), 36%
higher than 2021. Note 2 on page 16 analyses the key components of
the first-half 2022 performance.
Capital Allocation
Consistent with our progressive dividend policy and our strong
financial position, the Board has decided to increase the interim
dividend(3) to 24.0c per share, an increase of 4% on prior year.
Reflecting our commitment to returning cash to shareholders, the
Group also completed the most recent tranche of its share buyback
programme in June, repurchasing a further $0.6 billion of shares in
the first half of the year. On 16 June 2022 the Group announced a
further $0.3 billion tranche to be completed no later than 30
September 2022.
Following the divestment of the Building Envelope business in
April 2022 and demonstrating the continued execution of the Group's
strategy to create value through the efficient allocation and
reallocation of capital, the Group has invested $2.8 billion in
acquisitions year-to-date including the acquisition of Barrette
Outdoor Living, Inc. ("Barrette") in July for an enterprise value
of $1.9 billion. Our acquisition pipeline remains strong and our
significant balance sheet capacity provides flexibility to
capitalise on these opportunities to deliver further value for our
shareholders.
Sustainability
Sustainability is deeply embedded in all aspects of our
business. In early 2022 the Group raised its decarbonisation
ambition, announcing an industry leading 25% reduction target in
absolute CO(2) emissions by 2030. Our target is certified by the
SBTi(4) and is aligned with our ambition to be a net-zero business
by 2050. We continue to expand our offering of integrated
sustainable solutions for our customers, advancing circularity in
construction and innovating to create products and solutions with
enhanced sustainability attributes.
Trading Outlook
Against a challenging inflationary cost backdrop, our Americas
Materials Division is expected to be supported by resilient
underlying demand as well as commercial and operational excellence
initiatives. Our Building Products Division is expected to benefit
from positive underlying residential RMI and utility infrastructure
demand as well as contributions from recent acquisitions. In Europe
Materials, we expect the trading environment to remain challenged
by inflationary cost pressures, macroeconomic uncertainty and
geopolitical tensions. Assuming normal weather patterns for the
remainder of the year and absent any major dislocations in the
macroeconomic environment, we expect full-year EBITDA to be in the
region of $5.5 billion (2021: $5.0 billion) against a continually
challenging cost environment.
2 See pages 34 to 36 for glossary of alternative performance
measures (including EBITDA and like-for-like (LFL)/organic), used
throughout this report.
3 Further details on the dividend process, including the
relevant dates, payment currency and currency election options, are
set out in note 7 on page 21.
4 Scope 1 & 2 emissions reduction target approved by the
Science Based Targets initiative (SBTi).
Americas Materials
$ million 2021 Exchange Acquisitions Divestments Organic 2022 % change
======================== ====== ========= ============= ============ ======== ====== =========
Sales revenue 4,750 -6 +290 -52 +564 5,546 +17%
EBITDA 730 -1 +13 -12 +90 820 +12%
Operating profit 348 - -30 -10 +97 405 +16%
EBITDA/sales 15.4% 14.8%
Operating profit/sales 7.3% 7.3%
======================== ====== ========= ============= ============ ======== ====== =========
Despite unfavourable weather conditions impacting activity
levels in certain regions, Americas Materials generated sales of
$5.5 billion and EBITDA of $0.8 billion in the first half of the
year, 17% and 12% ahead of prior year respectively. The increase in
sales was primarily driven by strong commercial management across
all lines of business, underpinned by our integrated solutions
strategy. Operating profit was 16% ahead of 2021. Higher pricing
coupled with operating efficiencies offset an inflationary input
cost environment and resulted in slight margin expansion on a
like-for-like basis. Like-for-like sales and EBITDA were both 12%
ahead of the first half of 2021 while like-for-like operating
profit was also ahead.
Aggregates
First-half volumes were 1% behind 2021 with decreases across our
Northeast, Great Lakes and West divisions primarily due to adverse
weather conditions partly offset by solid demand in South. Pricing
improved across all regions driven by good commercial
management.
Asphalt
Asphalt volumes were 10% ahead of 2021 with robust demand and
good backlog execution in Great Lakes and South along with the
positive impact from acquisitions, partly offset by mixed weather
conditions and timing of projects in the Northeast and West. Strong
price progress was achieved across all regions.
Readymixed Concrete
Strong demand in South was more than offset by weather related
challenges in West and Northeast with volumes 6% behind prior year.
Price increases were achieved across all regions as commercial
efforts and value-added services offset the impact of rising input
costs.
Paving and Construction Services
Paving and construction revenues were 29% ahead of 2021 with
increases across all regions supported by good commercial
discipline, strong backlogs and large projects.
Cement
The Cement business delivered a strong performance with sales
15% ahead of prior year. Good market demand and strong backlog
execution in the United States (US) was partly offset by lower
activity levels in Canada. Increases in input costs were offset by
strong commercial management and cost saving measures.
Building Products (Continuing Operations)
$ million 2021 Exchange Acquisitions Divestments Organic 2022 % change
======================== ====== ========= ============= ============ ======== ====== =========
Sales revenue 3,259 -67 +476 -4 +358 4,022 +23%
EBITDA 506 -1 +203 - +73 781 +54%
Operating profit 382 - +184 - +70 636 +66%
EBITDA/sales 15.5% 19.4%
Operating profit/sales 11.7% 15.8%
======================== ====== ========= ============= ============ ======== ====== =========
The table above excludes the trading performance of Building
Envelope which, following its divestment, has been classified as a
discontinued operation.
Building Products delivered sales growth of 23% in the first
half of the year resulting from solid activity levels, commercial
progress and the strong performance of recent acquisitions;
like-for-like sales growth was 11%. Underpinned by our integrated
solutions strategy, EBITDA increased by 54%, also benefiting from
strong contributions from recent acquisitions, notably National
Pipe & Plastics, a water and energy infrastructure solutions
business in the eastern US which was acquired in September 2021. On
a like-for-like basis EBITDA increased by 14% and operating profit
by 18%. Against an inflationary cost backdrop, Building Products
delivered further margin expansion through production efficiencies,
commercial excellence initiatives, procurement savings and overhead
cost control.
Architectural Products
Sales in Architectural Products were ahead of the first half of
2021 reflecting price increases, good residential RMI demand as
homeowners continued to invest in their outdoor living spaces and
positive contributions from recent acquisitions. Against a strong
prior year comparative and despite some unfavourable weather
conditions, sales increased in both our retail and professional
channels. Sales and operating profit were ahead in our European
businesses mainly due to improved demand in Poland and Germany.
Overall operating profit was ahead of 2021 despite significant cost
inflation, particularly in materials and haulage costs.
Infrastructure Products
Strong demand for utility infrastructure solutions, proactive
commercial actions and strong contributions from acquisitions
resulted in sales ahead of prior year in both North America and
Europe. The business recorded strong operating profit growth,
particularly in North America, due to continued performance
improvement measures, commercial discipline and focused cost
control.
Construction Accessories
Sales were ahead in all regions as strong momentum from 2021
continued into the first half of 2022. Despite inflationary
pressures, particularly in Europe, operating profit was ahead of
2021 due to increased sales, commercial progress and continued cost
saving initiatives.
Building Products (Discontinued Operations)
The commentary below refers to the trading results of Building
Envelope for the first four months of 2022, prior to its divestment
in April 2022, compared to the same period in 2021.
Building Envelope delivered sales growth driven by C.R. Laurence
and the aluminium glazing business. EBITDA was ahead of 2021 as a
result of increased sales and margin expansion achieved through
operating efficiencies.
Europe Materials
$ million 2021 Exchange Acquisitions Divestments Organic 2022 % change
======================== ====== ========= ============= ============ ======== ====== =========
Sales revenue 5,158 -417 +42 -15 +662 5,430 +5%
EBITDA 585 -49 +1 -1 +73 609 +4%
Operating profit 295 -25 -1 - +75 344 +17%
EBITDA/sales 11.3% 11.2%
Operating profit/sales 5.7% 6.3%
======================== ====== ========= ============= ============ ======== ====== =========
Europe Materials results were impacted by currency exchange
headwinds in the first half of the year. Sales were 5% ahead of
prior year, 14% ahead on a like-for-like basis, reflecting the
resilience of our business, the benefits of our integrated
solutions strategy, strong commercial progress and a good demand
environment across our key markets. EBITDA was 4% ahead of prior
year, and 14% on a like-for-like basis, as price increases across
all products, strong fixed cost control and cost saving actions
offset significant cost inflation. Operating profit was 17% ahead
of prior year.
United Kingdom (UK) & Ireland
UK & Ireland first-half sales were well ahead of prior year.
In the UK, price increases were implemented across all products,
with increased activity levels also benefiting sales. Our
businesses in Ireland had a positive start to the year with strong
demand in all key products against a prior year comparative
impacted by COVID-19 restrictions. Operating profit was ahead of
prior year.
Europe North
Europe North (Finland, Germany and Switzerland) had a positive
first half of the year as increased activity levels and commercial
improvements resulted in higher sales. Europe North experienced
significant energy cost inflation but pricing actions and a
continued focus on cost saving initiatives resulted in operating
profit ahead of 2021.
Europe West
Europe West (France, Benelux, Denmark and Spain) sales were
ahead of prior year primarily driven by France and Benelux which
benefited from resilient activity levels and strong price increases
in all products. Our precast concrete operations also delivered
sales ahead of 2021, however operating profit was negatively
impacted by raw materials and energy cost inflation. Overall,
operating profit was below prior year.
Europe East
Europe East (Poland, Ukraine, Romania, Hungary, Slovakia, Serbia
and Croatia) benefited from milder winter weather compared to the
prior year which, combined with a robust demand environment,
resulted in strong activity levels in most markets, particularly
Poland and Romania. Following a strong start to the year, activity
levels in Ukraine were negatively impacted by the ongoing conflict
in the country. Overall, operating profit in Europe East was ahead
of 2021 as strong pricing across all markets more than offset
inflationary pressures. We continue to assist our employees in
Ukraine at this very challenging time.
Asia
Sales in the Philippines were behind 2021, impacted by a
pre-election ban on construction and a post-election transition of
Government . While the impact of lower activity and cost inflation
was partially mitigated by price increases and cost containment
initiatives , operating profit decreased compared to prior
year.
CRH's operations include a 26% stake in Yatai Building Materials
in China, reported within the Group's share of equity accounted
investments, where both sales and EBITDA were behind 2021 as a
result of lower demand due to COVID-19 restrictions and higher
energy costs.
Other Financial Items
Depreciation and amortisation charges of $0.8 billion were in
line with prior year (H1 2021: $0.8 billion).
Divestments and asset disposals from continuing operations
during the period generated total profit on disposals of $7 million
(H1 2021: $100 million). The profit on the divestment of the
Building Envelope business amounted to $1.5 billion and is included
in profit after tax from discontinued operations.
Net finance costs from continuing operations of $197 million
were lower than 2021 (H1 2021: $206 million) primarily due to lower
debt levels.
The Group's $8 million share of profit from equity accounted
investments from continuing operations was slightly behind 2021 (H1
2021: $10 million).
The Group reported profit before tax from continuing operations
of $1.2 billion (H1 2021: $0.9 billion). The interim tax charge
which represents an effective tax rate of 22.0%, has been
estimated, as in prior years, based on current expectations of the
full year tax charge.
Earnings per share from continuing and discontinued operations
for the period was $2.74 (H1 2021: $1.00). Earnings per share from
continuing operations for the period was 36% higher than last year
at $1.21 (H1 2021: $0.89).
Balance Sheet and Liquidity
Net debt of $4.3 billion at 30 June 2022 was $1.7 billion lower
than at 30 June 2021 (H1 2021: $6.0 billion) primarily due to the
proceeds from the divestment of Building Envelope exceeding the H1
acquisition spend; the $1.9 billion acquisition of Barrette was
completed in July 2022. A first-half cash inflow from operating
activities of $0.6 billion was below prior year (H1 2021: $1.6
billion) primarily due to an increased investment in working
capital reflecting the impact of cost inflation and prudent supply
chain management.
As at 30 June 2022, the Group had $6.8 billion of cash with
sufficient liquidity to meet all maturing debt obligations for the
next 5.4 years. The Group continues to maintain its robust balance
sheet and a strong investment grade credit rating with a BBB+ or
equivalent rating with each of the three main rating agencies.
Investments and Divestments
In H1 2022, the Group invested $0.9 billion on 14 acquisitions
(including deferred and contingent consideration in respect of
prior year acquisitions) and a further $0.2 billion on expansionary
capital expenditure projects. On the divestment front, the Group
completed six transactions and realised total business and asset
disposal proceeds of $3.6 billion, primarily relating to the
proceeds from the Building Envelope divestment.
2022 Acquisitions
The Building Products Division completed two bolt-on
acquisitions in the US in H1 2022 amounting to a total spend of
$0.5 billion. The largest acquisition was in our Infrastructure
Products business where certain assets of Rinker Materials were
acquired, expanding our water infrastructure solutions offering in
Texas. The Americas Materials Division also completed five bolt-on
acquisitions in the US for a total spend of $0.3 billion, while the
Europe Materials Division completed seven bolt-on acquisitions for
$0.1 billion.
On 8 July 2022, the Group completed its acquisition of Barrette,
North America's leading provider of residential fencing and railing
solutions for an enterprise value of $1.9 billion. This acquisition
represents an excellent strategic fit for our existing business,
complementing and enhancing our offering of sustainable outdoor
living solutions in North America.
2022 Divestments and Disposals
The divestment of the Building Envelope business for cash
proceeds of $3.5 billion (enterprise value of $3.8 billion
including lease liabilities transferred) represented the largest
divestment in H1 2022, with a further five divestments completed
across the Group realising total proceeds of $31 million. In
addition to these business divestments, the Group realised proceeds
of $47 million from the disposal of surplus property, plant and
equipment and other non-current assets.
Condensed Interim
Financial Statements
and Summarised Notes
Six months ended 30 June 2022
Condensed Consolidated Income Statement
Unaudited Year ended
Six months ended 31 December
30 June
Restated Restated
(i) (i)
2022 2021 2021
$m $m $m
---------- ---------- ------------
Revenue 14,998 13,167 29,206
Cost of sales (10,243) (8,867) (19,350)
---------- ---------- ------------
Gross profit 4,755 4,300 9,856
Operating costs (3,370) (3,275) (6,525)
---------- ---------- ------------
Group operating profit 1,385 1,025 3,331
Profit on disposals 7 100 116
---------- ---------- ------------
Profit before finance costs 1,392 1,125 3,447
Finance costs (184) (185) (357)
Finance income 7 - -
Other financial expense (20) (21) (42)
Share of equity accounted investments'
profit 8 10 55
---------- ---------- ------------
Profit before tax from continuing
operations 1,203 929 3,103
Income tax expense - estimated at
interim (265) (201) (661)
---------- ---------- ------------
Group profit for the financial period
from continuing operations 938 728 2,442
Profit after tax for the financial
period from discontinued operations 1,168 87 179
---------- ---------- ------------
Group profit for the financial period 2,106 815 2,621
Profit attributable to:
Equity holders of the Company
From continuing operations 926 698 2,386
From discontinued operations 1,168 87 179
Non-controlling interests
From continuing operations 12 30 56
------------
Group profit for the financial period 2,106 815 2,621
========== ========== ============
Basic earnings per Ordinary Share $2.74 $1.00 $3.29
Diluted earnings per Ordinary Share $2.72 $0.99 $3.26
========== ========== ============
Basic earnings per Ordinary Share
from continuing operations $1.21 $0.89 $3.06
Diluted earnings per Ordinary Share
from continuing operations $1.20 $0.88 $3.03
========== ========== ============
(i) Restated to show the results of our former Building Envelope
business in discontinued operations. See note 8 for further
details.
Condensed Consolidated Statement of Comprehensive Income
Unaudited Year ended
Six months ended 31 December
30 June
Restated Restated
2022 2021 2021
$m $m $m
----------------- --------- ----------------
Group profit for the financial period 2,106 815 2,621
----------------- --------- ----------------
Other comprehensive income
Items that may be reclassified to profit or loss in subsequent
periods:
Currency translation effects (562) (63) (338)
Gains relating to cash flow hedges 71 31 34
Tax relating to cash flow hedges (12) (5) (8)
----------------- --------- ----------------
(503) (37) (312)
----------------- --------- ----------------
Items that will not be reclassified to profit or loss in subsequent
periods:
Remeasurement of retirement benefit
obligations 297 252 264
Tax relating to retirement benefit
obligations (64) (31) (36)
----------------- --------- ----------------
233 221 228
----------------- --------- ----------------
Total other comprehensive income for
the financial period (270) 184 (84)
----------------- --------- ----------------
Total comprehensive income for the
financial period 1,836 999 2,537
================= ========= ================
Attributable to:
Equity holders of the Company 1,866 979 2,516
Non-controlling interests (30) 20 21
----------------- --------- ----------------
Total comprehensive income for the
financial period 1,836 999 2,537
================= ========= ================
Condensed Consolidated Balance Sheet
Unaudited Unaudited As at
As at As at 31 December
30 June 30 June
2022 2021 2021
$m $m $m
ASSETS
Non-current assets
Property, plant and equipment 18,298 19,100 19,502
Intangible assets 8,726 9,468 9,848
Investments accounted for using the
equity method 655 627 653
Other financial assets 12 13 12
Other receivables 212 235 239
Retirement benefit assets 284 - 166
Derivative financial instruments 5 131 97
Deferred income tax assets 56 100 109
---------- ---------- ------------
Total non-current assets 28,248 29,674 30,626
---------- ---------- ------------
Current assets
Inventories 3,792 3,193 3,611
Trade and other receivables 5,818 5,306 4,569
Current income tax recoverable 40 29 42
Derivative financial instruments 112 35 39
Cash and cash equivalents 6,826 6,292 5,783
------------
Total current assets 16,588 14,855 14,044
---------- ---------- ------------
Total assets 44,836 44,529 44,670
========== ========== ============
EQUITY
Capital and reserves attributable
to the Company ' s equity holders
Equity share capital 309 317 309
Preference share capital 1 1 1
Treasury Shares and own shares (644) (557) (195)
Other reserves 322 384 445
Foreign currency translation reserve (617) 153 (97)
Retained income 21,424 19,079 19,770
---------- ---------- ------------
Capital and reserves attributable
to the Company's equity holders 20,795 19,377 20,233
Non-controlling interests 640 695 681
---------- ---------- ------------
Total equity 21,435 20,072 20,914
---------- ---------- ------------
LIABILITIES
Non-current liabilities
Lease liabilities 1,014 1,336 1,374
Interest-bearing loans and borrowings 8,584 10,659 9,938
Derivative financial instruments 26 - -
Deferred income tax liabilities 2,623 2,609 2,734
Other payables 700 706 717
Retirement benefit obligations 296 314 475
Provisions for liabilities 879 921 937
---------- ---------- ------------
Total non-current liabilities 14,122 16,545 16,175
---------- ---------- ------------
Current liabilities
Lease liabilities 246 297 297
Trade and other payables 6,172 6,198 5,692
Current income tax liabilities 982 680 550
Interest-bearing loans and borrowings 1,364 155 549
Derivative financial instruments 8 25 14
Provisions for liabilities 507 557 479
------------
Total current liabilities 9,279 7,912 7,581
---------- ---------- ------------
Total liabilities 23,401 24,457 23,756
---------- ---------- ------------
Total equity and liabilities 44,836 44,529 44,670
========== ========== ============
Condensed Consolidated Statement of Changes in Equity
Attributable to the equity holders of
the Company
-----------------------------------------------------------------
Treasury Foreign
Issued Share Shares/ currency Non-
share premium own Other translation Retained controlling Total
capital account shares reserves reserve income interests equity
$m $m $m $m $m $m $m $m
-------- -------- --------- --------- ------------ --------- ------------ -------
For the financial period ended 30
June 2022 (unaudited)
At 1 January 2022 310 - (195) 445 (97) 19,770 681 20,914
Group profit for
the financial period - - - - - 2,094 12 2,106
Other comprehensive
income - - - - (520) 292 (42) (270)
-------- -------- --------- --------- ------------ --------- ------------ -------
Total comprehensive
income - - - - (520) 2,386 (30) 1,836
Share-based payment
expense - - - 50 - - - 50
Shares acquired
by CRH plc (Treasury
Shares) - - (626) - - 39 - (587)
Treasury Shares/own
shares reissued - - 12 - - (12) - -
Shares acquired
by Employee Benefit
Trust (own shares) - - (8) - - - - (8)
Shares distributed
under the Performance
Share Plan Awards - - 173 (173) - - - -
Tax relating to
share-based payment
expense - - - - - (15) - (15)
Share option exercises - - - - - 6 - 6
Dividends - - - - - (750) (8) (758)
Transactions involving
non-controlling
interests - - - - - - (3) (3)
At 30 June 2022 310 - (644) 322 (617) 21,424 640 21,435
======== ======== ========= ========= ============ ========= ============ =======
For the financial period ended 30 June 2021 (unaudited)
At 1 January 2021 334 7,493 (386) 444 206 11,565 692 20,348
Group profit for
the financial period - - - - - 785 30 815
Other comprehensive
income - - - - (53) 247 (10) 184
----- -------- ------ ------ ----- ------- ----- -------
Total comprehensive
income - - - - (53) 1,032 20 999
Share-based payment
expense - - - 57 - - - 57
Shares acquired
by CRH plc (Treasury
Shares) - - (285) - - (295) - (580)
Treasury Shares/own
shares reissued - - 13 - - (13) - -
Shares acquired
by Employee Benefit
Trust (own shares) - - (16) - - - - (16)
Shares distributed
under the Performance
Share Plan Awards - - 117 (117) - - - -
Reduction of Share
Premium - (7,493) - - - 7,493 - -
Cancellation of
Income Shares (16) - - - - 16 - -
Tax relating to
share-based payment
expense - - - - - 1 - 1
Share option exercises - - - - - 9 - 9
Dividends - - - - - (729) (17) (746)
At 30 June 2021 318 - (557) 384 153 19,079 695 20,072
===== ======== ====== ====== ===== ======= ===== =======
Condensed Consolidated Statement of Changes in Equity -
continued
Attributable to the equity holders of
the Company
-----------------------------------------------------------------
Treasury Foreign
Issued Share Shares/ currency Non-
share premium own Other translation Retained controlling Total
capital account shares reserves reserve income interests Equity
$m $m $m $m $m $m $m $m
-------- -------- --------- --------- ------------ --------- ------------ --------
For the financial year ended 31 December
2021
At 1 January 2021 334 7,493 (386) 444 206 11,565 692 20,348
Group profit for
the financial year - - - - - 2,565 56 2,621
Other comprehensive
income - - - - (303) 254 (35) (84)
-------- -------- --------- --------- ------------ --------- ------------ --------
Total comprehensive
income - - - - (303) 2,819 21 2,537
Share-based payment
expense - - - 110 - - - 110
Shares acquired
by CRH plc (Treasury
Shares) - - (880) - - (281) - (1,161)
Treasury Shares/own
shares reissued - - 19 - - (19) - -
Shares acquired
by Employee Benefit
Trust (own shares) - - (16) - - - - (16)
Shares distributed
under the Performance
Share Plan Awards - - 117 (117) - - - -
Reduction in Share
Premium - (7,493) - - - 7,493 - -
Cancellation of
Income Shares (16) - - - - 16 - -
Cancellation of
Treasury Shares (8) - 951 8 - (951) - -
Tax relating to
share-based payment
expense - - - - - 24 - 24
Share option exercises - - - - - 13 - 13
Dividends - - - - - (909) (32) (941)
At 31 December 2021 310 - (195) 445 (97) 19,770 681 20,914
======== ======== ========= ========= ============ ========= ============ ========
Condensed Consolidated Statement of Cash Flows
Unaudited Year ended
Six months ended 30 31 December
June
Restated Restated
(i) (i)
2022 2021 2021
$m $m $m
------------- -------------- ------------
Cash flows from operating activities
Group profit for the financial period 2,106 815 2,621
Finance costs (net) 203 215 417
Share of equity accounted investments'
profit (8) (10) (55)
Profit on disposals (1,464) (104) (119)
Depreciation charge 821 813 1,691
Amortisation of intangible assets 40 35 74
Share-based payment expense 50 57 110
Income tax expense 643 231 721
Other 7 7 21
Net movement on working capital and
provisions (1,365) (123) (228)
Cash generated from operations 1,033 1,936 5,253
Interest paid (including leases) (179) (218) (401)
Corporation tax paid (233) (153) (642)
Net cash inflow from operating activities 621 1,565 4,210
------------- -------------- ------------
Cash flows from investing activities
Proceeds from disposals (net of cash
disposed and deferred proceeds) 3,579 288 387
Interest received 7 - -
Dividends received from equity accounted
investments 16 13 32
Purchase of property, plant and equipment (596) (587) (1,554)
Acquisition of subsidiaries (net of
cash acquired) (886) (335) (1,494)
Other investments and advances (14) (1) (4)
Net cash flow arising from derivative (15) - -
financial instruments
Deferred and contingent acquisition
consideration paid (19) (15) (33)
Deferred divestment consideration
received 53 118 120
------------- -------------- ------------
Net cash inflow/(outflow) from investing
activities 2,125 (519) (2,546)
------------- -------------- ------------
Cash flows from financing activities
Proceeds from exercise of share options 6 9 13
Transactions involving non-controlling (3) - -
interests
Increase in interest-bearing loans
and borrowings 49 70 -
Net cash flow arising from derivative
financial instruments (16) (28) (37)
Repayment of interest-bearing loans
and borrowings - (1,241) (1,183)
Repayment of lease liabilities (ii) (132) (131) (264)
Treasury Shares/own shares purchased (634) (301) (896)
Dividends paid to equity holders of
the Company (732) (729) (906)
Dividends paid to non-controlling
interests (8) (17) (32)
------------- -------------- ------------
Net cash outflow from financing activities (1,470) (2,368) (3,305)
------------- -------------- ------------
Increase/(decrease) in cash and cash
equivalents 1,276 (1,322) (1,641)
============= ============== ============
Reconciliation of opening to closing
cash and cash equivalents
Cash and cash equivalents at 1 January 5,783 7,721 7,721
Translation adjustment (233) (107) (297)
Increase/(decrease) in cash and cash
equivalents 1,276 (1,322) (1,641)
------------- -------------- ------------
Cash and cash equivalents at 30 June 6,826 6,292 5,783
============= ============== ============
(i) See note 1 on page 14 for further details.
(ii) Repayment of lease liabilities in the period to 30 June
2022 amounted to $159 million (30 June 2021: $163 million; 31
December 2021: $328 million), of which $27 million (30 June 2021:
$32 million; 31 December 2021: $64 million) related to interest
paid which is presented in cash flows from operating
activities.
Supplementary Information
Selected Explanatory Notes to the Condensed Consolidated Interim
Financial Statements
1. Basis of Preparation and Accounting Policies
Basis of Preparation
The financial information presented in this report has been
prepared in accordance with the Group's accounting policies under
International Financial Reporting Standards (IFRS) as adopted by
the European Union, as issued by the International Accounting
Standards Board (IASB) and in accordance with IAS 34 Interim
Financial Reporting.
These Condensed Consolidated Interim Financial Statements do not
include all the information and disclosures required in the Annual
Consolidated Financial Statements and should be read in conjunction
with the Group's 2021 Annual Report and Form 20-F.
The accounting policies and methods of computation employed in
the preparation of the Condensed Consolidated Interim Financial
Statements are the same as those employed in the preparation of the
Annual Consolidated Financial Statements in respect of the year
ended 31 December 2021, unless stated otherwise below.
Certain prior year disclosures have been amended to conform to
current year presentation. An amount of $21 million relating to the
unwinding of the discount element of lease liabilities has been
reclassified from other financial expense to finance costs in the
period ended 30 June 2022 (30 June 2021: $23 million; 31 December
2021: $46 million) to align with current year presentation. This
has no impact on total net finance costs or any other financial
statement line items for the period ended 30 June 2022 or any
comparative periods presented.
Adoption of IFRS and International Financial Reporting
Interpretations Committee (IFRIC) interpretations
The following standard amendments became effective for the Group
as of 1 January 2022:
-- Amendments to IFRS 16 - COVID-19-Related Rent Concessions beyond 30 June 2021
-- Amendments to IFRS 3 Business Combinations - Reference to the Conceptual Framework
-- Amendments to IAS 16 Property, Plant and Equipment - Proceeds before Intended Use
-- Amendments to IAS 37 Provisions, Contingent Liabilities and
Contingent Assets - Onerous Contracts - Costs of Fulfilling a
Contract
-- Annual Improvements 2018 - 2020 Cycle
The standard amendments did not result in a material impact on
the Group's results.
IFRS and IFRIC interpretations being adopted in subsequent
years
-- IFRS 17 Insurance Contracts will be effective for reporting
periods beginning on or after 1 January 2023, with presentation of
comparative figures required. The Group is currently evaluating the
impact of this standard on future periods which is not expected to
be material.
There are no other IFRS or IFRIC interpretations that are
effective subsequent to the CRH 2022 financial year end that would
have a material impact on the results or financial position of the
Group.
Voluntary Change in Accounting Policy
For the period ended 30 June 2022, the Group retrospectively
adopted a voluntary change in accounting policy in accordance with
IAS 8 Accounting Policies, Changes in Accounting Estimates and
Errors with respect to the presentation of operating cash flows
under IAS 7 Statement of Cash Flows. The impact of this change is
to replace "Profit before tax" with "Group profit for the financial
period" as the starting point for the reconciliation to net cash
flows from operating activities in the Condensed Consolidated
Statement of Cash Flows. The new presentation reconciles net cash
flows from operating activities on a total Group basis, including
both continuing and discontinued operations. This has no impact on
net cash inflow from operating activities or any other financial
statement line items for the period ended 30 June 2022 or any
comparative periods presented.
1. Basis of Preparation and Accounting Policies - continued
Significant Estimates, Assumptions and Judgements
The preparation of the Condensed Consolidated Interim Financial
Statements in accordance with IFRS requires management to make
certain estimates, assumptions and judgements that affect the
application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Management believes that
the estimates, assumptions and judgements upon which it relies are
reasonable based on the information available to it at the time
that those estimates, assumptions and judgements are made.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Changes in accounting estimates may be necessary if there
are changes in the circumstances or experiences on which the
estimate was based or as a result of new information.
The significant judgements, the key sources of estimation
uncertainty and underlying assumptions applied in the preparation
of the Condensed Consolidated Interim Financial Statements were the
same as those applied in preparing the Consolidated Financial
Statements for the year ended 31 December 2021.
Impairment
As at 30 June 2022, the Group performed a review for potential
indicators of impairment relating to goodwill of $8.5 billion (30
June 2021: $9.1 billion) allocated to cash-generating units
("CGUs"). When reviewing for indicators of impairment in interim
periods, the Group considers, amongst others, the results of the
last annual impairment test, the level of headroom and financial
performance in the first half of the year. The carrying values of
items of property, plant and equipment were also reviewed for
indicators of impairment.
For the current interim period this review also considered the
ongoing conflict in Ukraine which represented an impairment
indicator for the Group's Ukrainian goodwill and property, plant
and equipment CGUs. The recoverable amount of the applicable CGUs
was determined based on value-in-use computations, using Level 3
inputs in accordance with the fair value hierarchy. This impairment
testing did not give rise to any impairment charges in the first
half of 2022 (H1 2021: $nil million).
No other impairment indicators were identified across the
Group's CGUs. We will continue to monitor our assessment of the
ongoing conflict in Ukraine and as part of our annual process, we
will update our impairment reviews prior to the finalisation of the
full year Consolidated Financial Statements for 2022.
Going Concern
The time period that the Directors have considered in evaluating
the appropriateness of the going concern basis in preparing the
2022 Condensed Consolidated Interim Financial Statements is a
period of at least twelve months from the date of approval of these
financial statements (the "period of assessment").
The Group has considerable financial resources and a large
number of customers and suppliers across different geographic areas
and industries, and the local nature of building materials means
that the Group's products are not usually shipped cross-border. The
level of cash and liquidity available to the Group including our
ongoing ability to access the debt markets, the quantum of our
liquidity facilities, the absence of financial covenants associated
with our debt obligations and the continuing maintenance of strong
investment grade credit ratings demonstrate the significant
financial strength and resilience of the Group. No concerns or
material uncertainties have been identified as part of our
assessment.
Having assessed the relevant business risks, including the
climate change risk, identified and discussed in our Principal
Risks and Uncertainties on pages 37 and 38, the Directors believe
that the Group is well placed to manage these risks successfully
and they have a reasonable expectation that CRH plc, and the Group
as a whole, has adequate financial and other resources to continue
in operational existence for the period of assessment with no
material uncertainties. For this reason, the Directors continue to
adopt the going concern basis in preparing the Condensed
Consolidated Interim Financial Statements.
1. Basis of Preparation and Accounting Policies - continued
Translation of Foreign Currencies
The financial information is presented in US Dollar. Results and
cash flows of operations based in non-US Dollar countries have been
translated into US Dollar at average exchange rates for the period,
and the related balance sheets have been translated at the rates of
exchange in effect at the balance sheet date. The principal rates
used for translation of results, cash flows and balance sheets into
US Dollar were:
Average Period end
Six months ended Year ended Six months ended Year ended
30 June 31 December 30 June 31 December
USD 1 = 2022 2021 2021 2022 2021 2021
Brazilian Real 5.0742 5.3898 5.3968 5.1802 4.9546 5.5716
Canadian Dollar 1.2715 1.2472 1.2538 1.2920 1.2384 1.2716
Chinese Renminbi 6.4808 6.4687 6.4493 6.7029 6.4577 6.3513
Danish Krone 6.8120 6.1719 6.2919 7.1585 6.2522 6.5652
Euro 0.9156 0.8299 0.8460 0.9623 0.8408 0.8829
Hungarian Forint 343.8223 297.0413 303.3739 382.0900 295.5700 325.9300
Indian Rupee 76.2320 73.3296 73.9391 79.0116 74.3360 74.3009
Philippine Peso 52.1510 48.2492 49.2983 54.985 48.8040 50.9800
Polish Zloty 4.2453 3.7664 3.8633 4.5101 3.7988 4.0579
Pound Sterling 0.7713 0.7202 0.7270 0.8257 0.7212 0.7417
Romanian Leu 4.5283 4.0680 4.1641 4.7601 4.1436 4.3692
Serbian Dinar 107.6546 97.5819 99.4732 112.9686 98.8448 103.7590
Swiss Franc 0.9446 0.9085 0.9145 0.9576 0.9229 0.9119
Ukrainian Hryvnia 29.1905 27.7461 27.2588 29.6067 27.2312 27.2850
2. Key Components of Performance for the First Half of 2022
Continuing operations
Operating Profit on Finance costs Assoc. and Pre-tax
$ million Sales revenue EBITDA profit disposals (net) JV PAT (i) profit
First half
2021 13,167 1,821 1,025 100 (206) 10 929
Exchange
effects (490) (51) (25) (1) 8 (1) (19)
-------------- ------- -------------- ------------- -------------- ------------- --------------
2021 at 2022
rates 12,677 1,770 1,000 99 (198) 9 910
Incremental
impact in 2022
of:
2021/2022
acquisitions 808 217 148 - (4) - 144
2021/2022
divestments (71) (13) (10) (94) 7 1 (96)
Organic 1,584 236 247 2 (2) (2) 245
First half
2022 14,998 2,210 1,385 7 (197) 8 1,203
============== ======= ============== ============= ============== ============= ==============
% Total change 14% 21% 35% 29%
% Organic
change 12% 13% 25% 27%
(i) CRH's share of after-tax profit of joint ventures and associated undertakings.
3. Seasonality
Activity in the construction industry is characterised by
cyclicality and is dependent to a considerable extent on the
seasonal impact of weather in the Group ' s operating locations,
with activity in some markets reduced significantly in winter due
to inclement weather. As shown in the table above, the Group ' s
operations exhibit a high degree of seasonality and can be
significantly impacted by the timing of acquisitions and
divestments.
4. Revenue
A. Disaggregated revenue
In the following tables, revenue is disaggregated by primary
geographic market and by principal activities and products. Due to
the diversified nature of the Group, the basis on which management
reviews its businesses varies across the Group. Geography is the
primary basis for the Americas Materials and Europe Materials
businesses; while activities and products are used for the Building
Products businesses.
Revenue from external customers (as defined in IFRS 8 Operating
Segments) attributable to the country of domicile and all foreign
countries of operation greater than 10% are included below. Further
operating segment disclosures are set out in note 5.
Six months ended 30 June 2022 - Unaudited Six months ended 30 June 2021 -
Unaudited
------------------------------------------ -------------------------------------
Americas Building Europe Total Americas Building Europe Total
Materials Products Materials Materials Products Materials
$m $m $m $m $m $m $m $m
Primary geographic
markets
Continuing operations
Republic of Ireland
(Country of domicile) - - 395 395 - - 311 311
United Kingdom - 129 2,088 2,217 - 111 1,963 2,074
Rest of Europe (i) - 588 2,655 3,243 - 545 2,533 3,078
United States 5,071 3,043 - 8,114 4,237 2,331 - 6,568
Rest of World (ii) 475 262 292 1,029 513 272 351 1,136
------- -------
Total Group from
continuing operations 5,546 4,022 5,430 14,998 4,750 3,259 5,158 13,167
========== ========= ========== ======= ========== ========= ========== =======
Discontinued
operations
United Kingdom -
Building Envelope - 8 - 8 - 12 - 12
Rest of Europe (i) -
Building Envelope - 4 - 4 - 6 - 6
United States -
Building Envelope - 576 - 576 - 779 - 779
Rest of World (ii) -
Building Envelope - 59 - 59 - 80 - 80
---------- --------- ---------- ------- ---------- --------- ---------- -------
Total Group from
discontinued
operations - 647 - 647 - 877 - 877
========== ========= ========== ======= ========== ========= ========== =======
Footnotes (i) and (ii) appear on page 18.
4. Revenue - continued
Six months ended 30 June 2022 - Unaudited Six months ended 30 June 2021 - Unaudited
----------------------------------------------- ------------------------------------------------
Americas Building Europe Total Americas Building Europe Total
Materials Products Materials Materials Products Materials
(iii) (iii) (iii) (iii)
$m $m $m $m $m $m $m $m
----------- ----------- ------------ ------- ----------- ------------ ------------ -------
Principal
activities and
products
Continuing
operations
Cement, lime
and cement
products 720 - 1,753 2,473 658 - 1,698 2,356
Aggregates,
asphalt and
readymixed
products 2,865 - 1,798 4,663 2,569 - 1,749 4,318
Construction
contract
activities* 1,961 47 1,072 3,080 1,523 51 964 2,538
Architectural
products - 2,319 713 3,032 - 2,146 647 2,793
Infrastructure
products - 1,231 94 1,325 - 700 100 800
Construction
accessories - 425 - 425 - 362 - 362
------- -------
Total Group
from
continuing
operations 5,546 4,022 5,430 14,998 4,750 3,259 5,158 13,167
=========== =========== ============ ======= =========== ============ ============ =======
Discontinued
operations
Construction
contract
activities* -
Building
Envelope - 16 - 16 - 39 - 39
Architectural
glass and
glazing
systems and
related
hardware -
Building
Envelope - 631 - 631 - 838 - 838
----------- ----------- ------------ ------- ----------- ------------ ------------ -------
Total Group
from
discontinued
operations - 647 - 647 - 877 - 877
=========== =========== ============ ======= =========== ============ ============ =======
* Revenue principally recognised over time. Construction
contracts are generally completed within one year.
Footnotes to revenue disaggregation on pages 17 & 18
(i) The Rest of Europe principally includes Austria, Belgium,
Czech Republic, Denmark, Estonia, Finland, France, Germany,
Hungary, Luxembourg, the Netherlands, Poland, Romania, Serbia,
Slovakia, Spain, Sweden, Switzerland and Ukraine.
(ii) The Rest of World principally includes Australia, Brazil, Canada and the Philippines.
(iii) Americas Materials and Europe Materials both operate
vertically integrated businesses, which are founded in
resource-backed cement and aggregates assets and which support the
manufacture and supply of aggregates, asphalt, cement, readymixed
and precast concrete and landscaping products. Accordingly, for the
purpose of disaggregation of revenue we have included certain
products together, as this is how management reviews and evaluates
this business line.
5. Segment Information
Unaudited Year ended
Six months ended 30 June 31 December
2022 2021 2021
$m % $m % $m %
--------- ------- -------- ------- --------- -------
Revenue
Continuing operations
Americas Materials 5,546 37.0 4,750 36.1 12,407 42.5
Building Products 4,022 26.8 3,259 24.7 6,218 21.3
Europe Materials 5,430 36.2 5,158 39.2 10,581 36.2
-------
Total Group from continuing
operations 14,998 100.0 13,167 100.0 29,206 100.0
========= ======= ======== ======= ========= =======
Discontinued operations
Building Products - Building
Envelope 647 877 1,775
--------- -------- ---------
Total Group from discontinued
operations 647 877 1,775
========= ======== =========
EBITDA
Continuing operations
Americas Materials 820 37.1 730 40.1 2,588 51.8
Building Products 781 35.3 506 27.8 992 19.9
Europe Materials 609 27.6 585 32.1 1,410 28.3
Total Group from continuing
operations 2,210 100.0 1,821 100.0 4,990 100.0
========= ======= ======== ======= ========= =======
Discontinued operations
Building Products - Building
Envelope 131 174 360
--------- -------- ---------
Total Group from discontinued
operations 131 174 360
========= ======== =========
Depreciation, amortisation
and impairment
Continuing operations
Americas Materials 415 50.3 382 48.0 800 48.2
Building Products 145 17.6 124 15.6 263 15.9
Europe Materials 265 32.1 290 36.4 596 35.9
Total Group from continuing
operations 825 100.0 796 100.0 1,659 100.0
========= ======= ======== ======= ========= =======
Group operating profit
Continuing operations
Americas Materials 405 29.2 348 33.9 1,788 53.7
Building Products 636 45.9 382 37.3 729 21.9
Europe Materials 344 24.9 295 28.8 814 24.4
Total Group from continuing
operations 1,385 100.0 1,025 100.0 3,331 100.0
========= ======= ======== ======= ========= =======
5. Segment Information - continued
Unaudited Year ended
Six months ended 30 31 December
June
2022 2021 2021
$m $m $m
------------------- ------------------- ------------
Reconciliation of Group operating
profit to profit before tax:
Continuing operations
Group operating profit (analysed
on page 19) 1,385 1,025 3,331
Profit on disposals (i) 7 100 116
------------------- ------------------- ------------
Profit before finance costs 1,392 1,125 3,447
Finance costs less income (177) (185) (357)
Other financial expense (20) (21) (42)
Share of equity accounted investments'
profit 8 10 55
------------------- ------------------- ------------
Profit before tax from continuing
operations 1,203 929 3,103
=================== =================== ============
(i) Profit on disposals
Americas Materials 17 112 126
Building Products 1 (21) (27)
Europe Materials (11) 9 17
------------------- ------------------- ------------
Total Group from continuing
operations 7 100 116
=================== =================== ============
Unaudited Unaudited As at
As at 30 As at 30 31 December
June June
2022 2021 2021
$m % $m % $m %
--------------- ------ --------------- ------ -------------- ------
Total assets
Americas Materials 18,027 48.5 16,635 44.6 17,064 45.0
Building Products 7,000 18.9 7,892 21.2 8,504 22.4
Europe Materials 12,103 32.6 12,775 34.2 12,367 32.6
------
Total Group 37,130 100.0 37,302 100.0 37,935 100.0
====== ====== ======
Reconciliation to total
assets
as reported in the
Condensed
Consolidated Balance
Sheet:
Investments accounted for
using
the equity method 655 627 653
Other financial assets 12 13 12
Derivative financial
instruments
(current and non-current) 117 166 136
Income tax assets (current
and
deferred) 96 129 151
Cash and cash equivalents 6,826 6,292 5,783
Total assets 44,836 44,529 44,670
=============== =============== ==============
6. Earnings per Ordinary Share
The computation of basic and diluted earnings per Ordinary Share
is set out below:
Unaudited Year ended
Six months ended 31 December
30 June
2022 2021 2021
$m $m $m
----------------- ------- ------------
Numerator computations
Group profit for the financial period 2,106 815 2,621
Profit attributable to non-controlling
interests (12) (30) (56)
----------------- ------- ------------
Profit attributable to ordinary equity
holders of the Company - numerator
for basic/diluted earnings per Ordinary
Share 2,094 785 2,565
Profit after tax for the financial
period from discontinued operations
-
attributable to equity holders of
the Company 1,168 87 179
----------------- ------- ------------
Profit attributable to ordinary equity
holders of the Company -
numerator for basic/diluted earnings
per Ordinary Share from
continuing operations 926 698 2,386
----------------- ------- ------------
Number Number Number
of of of
shares shares Shares
----------------- ------- ------------
Denominator computations
Weighted average number of Ordinary
Shares (millions) outstanding for
the financial period 765.2 784.3 780.2
Effect of dilutive potential Ordinary
Shares (employee share options) (millions) 4.9 4.9 6.6
----------------- ------- ------------
Denominator for diluted earnings
per Ordinary Share 770.1 789.2 786.8
----------------- ------- ------------
Earnings per Ordinary Share
- basic $2.74 $1.00 $3.29
- diluted $2.72 $0.99 $3.26
================= ======= ============
Earnings per Ordinary Share from
continuing operations
- basic $1.21 $0.89 $3.06
- diluted $1.20 $0.88 $3.03
====== ====== ======
7. Dividends
Unaudited Year ended
Six months ended 31 December
30 June
2022 2021 2021
Net dividend paid per share 98.0c 93.0c 116.0c
Net dividend declared for the period 24.0c 23.0c 121.0c
Dividend cover (Earnings per share/Dividend
declared per share) - continuing
and discontinued operations 11.4x 4.3x 2.7x
Dividend cover - continuing operations 5.0x 3.9x 2.5x
The Board has decided to pay an interim dividend of 24.0c per
share, which represents an increase of 4% on prior year. It is
proposed to pay the interim dividend on 7 October 2022 to
shareholders registered at the close of business on 9 September
2022. The ex-dividend date will be 8 September 2022. The interim
dividend will be paid wholly in cash.
The interim dividend will be paid in euro, Pounds Sterling and
US Dollar to shareholders in accordance with their payment
instructions. For certificated shareholder, if no such instructions
are in place, the currency for dividend payments will be based on
shareholders' addresses on CRH's Share Register. In the case of
shares held in the Euroclear Bank system, dividends will be paid
automatically in euro, unless a currency election is put in place.
Investors holding CREST Depositary Interests (CDIs) should refer to
the CREST International Service Description. In respect of the
interim dividend, the latest date for receipt of currency elections
(and DWT exemption forms) is 16 September 2022. Earlier closing
dates may apply to holders in Euroclear Bank and in CREST.
If shareholders receive dividend payments in euro or Pounds
Sterling, the exchange rate is expected to be set on 23 September
2022.
8. Assets Held for Sale and Discontinued Operations
A. Profit on disposal of discontinued operations
In April 2022, the Group completed the divestment of its
Building Envelope business, formerly part of our Building Products
segment. With the exception of our Building Envelope business, no
other businesses divested during the first half of 2022 are
considered to be either separate major lines of business or
geographical areas of operation and therefore do not constitute
discontinued operations as defined in IFRS 5 Non-Current Assets
Held for Sale and Discontinued Operations.
No businesses met the IFRS 5 held for sale criteria at 30 June
2022.
The table below sets out the proceeds and related profit
recognised on the divestment which is included in profit after tax
for the financial period from discontinued operations:
Unaudited
Six months ended 30 June
2022
$m
------
Net assets disposed 2,066
Reclassification of currency translation effects on
disposal 5
------
Total 2,071
Proceeds from disposal (net of disposal costs) 3,528
------
Profit on disposal of discontinued operations 1,457
======
Net cash inflow arising on disposal
Proceeds from disposal from discontinued operations 3,528
Less: cash and cash equivalents disposed (27)
------
Total 3,501
======
8. Assets Held for Sale and Discontinued Operations - continued
B. Results of discontinued operations
The results of the discontinued operations included in the Group
profit for the financial period are set out as follows:
Unaudited Year ended
Six months ended 31 December
30 June
2022 2021 2021
$m $m $m
----------------- ------ ------------
Revenue 647 877 1,775
Cost of sales (i) (413) (568) (1,143)
----------------- ------ ------------
Gross profit 234 309 632
Operating costs (i) (139) (187) (378)
----------------- ------ ------------
Group operating profit 95 122 254
Profit on disposals 1,457 4 3
----------------- ------ ------------
Profit before finance costs 1,552 126 257
Finance costs (6) (9) (18)
----------------- ------ ------------
Profit before tax 1,546 117 239
Attributable income tax expense (ii) (378) (30) (60)
----------------- ------ ------------
Profit after tax for the financial
period from discontinued operations 1,168 87 179
================= ====== ============
Profit attributable to:
Equity holders of the Company 1,168 87 179
----------------- ------ ------------
Profit for the financial period from
discontinued operations 1,168 87 179
================= ====== ============
Basic earnings per Ordinary Share
from discontinued operations $1.53 $0.11 $0.23
Diluted earnings per Ordinary Share
from discontinued operations $1.52 $0.11 $0.23
================= ====== ============
Cash flows from discontinued operations
Net cash (outflow)/inflow from operating
activities (iii) (18) 138 234
Net cash inflow/(outflow) from investing
activities (iv) 3,449 (67) (102)
Net cash outflow from financing activities (6) (13) (28)
================= ====== ============
(i) The depreciation and amortisation charge for discontinued
operations amounted to $26 million and $10 million respectively (30
June 2021: $39 million and $13 million respectively; 31 December
2021: $78 million and $28 million respectively).
(ii) 2022 attributable income tax expense includes $357 million
relating to the profit on disposal of discontinued operations.
(iii) Includes the corporation tax paid to date on the sale of discontinued operations.
(iv) Includes the proceeds from the disposal of discontinued operations.
9. Net Finance Costs
Continuing operations
Unaudited Year ended
Six months ended 31 December
30 June
2022 2021 2021
$m $m $m
----------------- ----- -------------
Finance costs 184 185 357
Finance income (7) - -
Other financial expense 20 21 42
----------------- ----- -------------
Total net finance costs 197 206 399
================= ===== =============
The overall total is analysed as
follows:
Net finance costs on interest-bearing
loans and borrowings and cash and
cash equivalents 180 187 361
Net credit re change in fair value
of derivatives and fixed rate debt (3) (2) (4)
----------------- ----- -------------
Finance costs less income 177 185 357
Unwinding of discount element of
provisions for liabilities 8 9 18
Unwinding of discount applicable
to deferred and contingent acquisition
consideration 10 10 20
Unwinding of discount applicable
to deferred divestment proceeds (5) (6) (12)
Unwinding of discount applicable
to leased mineral reserves 3 3 6
Pension-related finance costs (net)
(note 15) 4 5 10
-------------
Total net finance costs (i) 197 206 399
================= ===== =============
(i) Net finance costs excludes $6 million (30 June 2021: $9
million; 31 December 2021: $18 million) relating to discontinued
operations.
10. Net Debt
Unaudited Unaudited As at
As at 30 June As at 30 31 December
June
2022 2021 2021
Book Fair Book Fair Book Fair
value Value value value value value
(i) (i) (i)
Net debt $m $m $m $m $m $m
-------- -------- --------- --------- -------- ---------
Non-current assets
Derivative financial instruments 5 5 131 131 97 97
Current assets
Cash and cash equivalents 6,826 6,826 6,292 6,292 5,783 5,783
Derivative financial instruments 112 112 35 35 39 39
Non-current liabilities
Interest-bearing loans
and borrowings (8,584) (8,253) (10,659) (11,636) (9,938) (10,786)
Lease liabilities (1,014) (1,014) (1,336) (1,336) (1,374) (1,374)
Derivative financial instruments (26) (26) - - - -
Current liabilities
Interest-bearing loans
and borrowings (1,364) (1,370) (155) (155) (549) (554)
Lease liabilities (246) (246) (297) (297) (297) (297)
Derivative financial instruments (8) (8) (25) (25) (14) (14)
-------- ---------
Group net debt (4,299) (3,974) (6,014) (6,991) (6,253) (7,106)
======== ======== ========= ========= ======== =========
(i) Interest-bearing loans and borrowings are Level 2
instruments whose fair value is derived from quoted market
prices.
Unaudited Unaudited As at
As at As at 31 December
30 June 30 June
2022 2021 2021
Gross debt, net of derivatives, matures $m $m $m
as follows:
---------- ---------- ------------
Within one year 1,506 442 821
Between one and two years 1,323 1,553 1,642
Between two and three years 1,391 1,491 866
Between three and four years 116 1,394 1,399
Between four and five years 1,755 125 971
After five years 5,034 7,301 6,337
---------- ---------- ------------
Total 11,125 12,306 12,036
========== ========== ============
10. Net Debt - continued
Components of net debt
Net debt is a non GAAP measure which we provide to investors as
we believe they find it useful. Net debt comprises cash and cash
equivalents, interest-bearing loans and borrowings, lease
liabilities and derivative financial instrument assets and
liabilities; it enables investors to see the economic effects of
these in total. Net debt is commonly used in computations such as
net debt as a % of total equity and net debt as a % of market
capitalisation.
Unaudited Unaudited As at
As at As at 30 31 December
30 June June
2022 2021 2021
$m $m $m
---------- ---------- ------------
Cash and cash equivalents 6,826 6,292 5,783
Interest-bearing loans and borrowings (9,948) (10,814) (10,487)
Lease liabilities (1,260) (1,633) (1,671)
Derivative financial instruments (net) 83 141 122
---------- ---------- ------------
Group net debt (4,299) (6,014) (6,253)
========== ========== ============
Reconciliation of opening to closing
net debt:
At 1 January (6,253) (5,941) (5,941)
Movement in period
Increase in interest-bearing loans
and borrowings (49) (70) -
Repayment of interest-bearing loans
and borrowings - 1,241 1,183
Debt, including lease liabilities,
in acquired companies (34) (14) (91)
Debt, including lease liabilities,
in disposed companies 347 1 3
Net increase in lease liabilities (90) (122) (249)
Repayment of lease liabilities 132 131 264
Net cash flow arising from derivative
financial instruments 16 28 37
Mark-to-market adjustment and other
non-cash adjustments 75 33 38
Translation adjustment on financing
activities 503 128 441
-------- -------- --------
Decrease in liabilities from financing
activities 900 1,356 1,626
Net cash flow arising from derivative 15 - -
financial instruments - investing
activities
Mark-to-market adjustment and other (1) - -
non-cash adjustments - investing activities
Translation adjustment on derivative (3) - -
financial instruments - investing
activities
Translation adjustment on cash and
cash equivalents (233) (107) (297)
Increase/(decrease) in cash and cash
equivalents 1,276 (1,322) (1,641)
At 30 June (4,299) (6,014) (6,253)
======== ======== ========
Market capitalisation
Market capitalisation, calculated as the period-end share price
multiplied by the number of Ordinary Shares in issue, is as
follows:
Unaudited Unaudited As at
As at As at 31 December
30 June 30 June
2022 2021 2021
$m $m $m
---------- ---------- ------------
Market capitalisation - Euronext Dublin
(i) 26,037 39,540 40,593
========== ========== ============
(i) The market capitalisation figure of EUR25.1 billion (30 June
2021: EUR33.2 billion; 31 December 2021: EUR35.9 billion), based on
the euro denominated share price per CRH's listing on Euronext
Dublin, was translated to US Dollar using the relevant closing
rates as noted in the principal foreign exchange rates table in
note 1.
10. Net Debt - continued
Liquidity information - borrowing facilities
The Group manages its borrowing ability by entering into
committed borrowing agreements. Revolving committed bank facilities
are generally available to the Group for periods of up to five
years from the date of inception. The undrawn committed facilities
figures shown in the table below represent the facilities available
to be drawn by the Group at 30 June 2022.
Unaudited Unaudited As at
As at As at 31 December
30 June 30 June
2022 2021 2021
$m $m $m
---------- ---------- ------------
Within one year - - 19
Between one and two years - 20 -
Between two and three years 36 59 -
Between three and four years 3,637 - -
Between four and five years - 4,163 3,964
Total 3,673 4,242 3,983
========== ========== ============
Guarantees
The Company has given letters of guarantee to secure obligations
of subsidiary undertakings as follows: $9.5 billion in respect of
loans and borrowings, bank advances and derivative obligations (30
June 2021: $10.3 billion; 31 December 2021: $10.0 billion) and $0.4
billion in respect of letters of credit (30 June 2021: $0.4
billion; 31 December 2021: $0.4 billion).
Net debt metrics
The net debt metrics based on net debt as shown on page 25,
EBITDA as defined on page 34 and net debt-related interest as shown
in note 9 are as follows:
Continuing operations
---------------------------------------
Unaudited Year ended
Six months ended 31 December
30 June
2022 2021 2021
EBITDA net interest cover - six months
(times) to 30 June 12.5 9.8 -
- rolling 12
months 15.4 11.9 14.0
EBIT net interest cover - six months
(times) to 30 June 7.8 5.5 -
- rolling 12
months 10.6 6.1 9.3
Net debt as a percentage
of market capitalisation 17% 15% 15%
Net debt as a percentage
of total equity 20% 30% 30%
11. Fair Value of Financial Instruments
The table below sets out the valuation basis of financial
instruments held at fair value by the Group:
Level 2 (i) Level 3 (i)
-------------------------- ----------------------------
Unaudited As at Unaudited As at
As at 30 As at 30
June 31 December June 31 December
2022 2021 2021 2022 2021 2021
$m $m $m $m $m $m
----- ----- ------------ ------ ------ ------------
Assets measured at fair
value
Fair value hedges - interest
rate swaps 5 126 96 - - -
Cash flow hedges - currency
forwards, currency swaps
and commodity swaps 107 38 37 - - -
Net investment hedges -
currency forwards and currency
swaps 3 - 1 - - -
Not designated as hedges
(classified as held for
trading) - currency forwards
and currency swaps 2 2 2 - - -
----- ----- ------------ ------ ------ ------------
Total 117 166 136 - - -
Liabilities measured at
fair value
Fair value hedges - interest (26) - - - - -
rate swaps
Cash flow hedges - currency
forwards, currency swaps
and commodity swaps (1) (7) (2) - - -
Net investment hedges -
currency forwards and currency
swaps (1) (7) (10) - - -
Not designated as hedges
(classified as held for
trading) - currency forwards
and currency swaps (6) (11) (2) - - -
Contingent consideration - - - (306) (314) (317)
----- ----- ------------ ------ ------ ------------
Total (34) (25) (14) (306) (314) (317)
===== ===== ============ ====== ====== ============
The carrying amount of trade and other payables approximate
their fair value largely due to the short-term maturities and
nature of these instruments. There were no transfers between Levels
2 and 3 during the periods.
There were no significant changes in contingent consideration
recognised in profit or loss or other comprehensive income in the
current period. Further details in relation to the inputs into
valuation models for contingent consideration are available in the
Group's 2021 Annual Report and Form 20-F.
(i) For financial reporting purposes, fair value measurements
are categorised into Level 1, 2 or 3 based on the degree to which
inputs to the fair value measurements are observable and the
significance of the inputs to the fair value measurement in its
entirety.
12. Future Purchase Commitments for Property, Plant and
Equipment
Unaudited Year ended
Six months ended 31 December
30 June
2022 2021 (i) 2021 (i)
$m $m $m
----------------- --------- ------------
Contracted for but not provided in
the Condensed Consolidated Interim
Financial Statements 660 692 628
================= ========= ============
(i) Contracted for but not provided in the Condensed
Consolidated Interim Financial Statements includes $20 million and
$11 million at 30 June 2021 and 31 December 2021 respectively
relating to discontinued operations.
13. Business Combinations
The acquisitions completed during the period ended 30 June 2022
by reportable segment, together with the completion dates, are
detailed below; these transactions entailed the acquisition of an
effective 100% stake except where indicated to the contrary:
Americas Materials:
Alabama: North Alabama Paving, Inc. (30 June);
Arkansas: Marion County Paving (18 March);
Colorado: Granby Sand & Gravel (31 March);
Florida: certain assets of Kudzue 3 Trucking, Inc. (11 March);
and
Kentucky: Hinkle Contracting, LLC (13 May).
Building Products:
California: Calstone Company (29 March); and
Texas: certain assets of Rinker Materials (18 April).
Europe Materials:
Croatia: Thermostone (1 April);
Denmark: Confac Holdings A/S (1 April);
Finland: Terrawise Oy Stone Aggregates (31 May);
Poland: Mabau Group (75%, 21 March);
Romania: certain assets of SUT-ICIM (23 February); and
Slovakia: certain assets of U.S. Steel Košice (1 January) and
certain assets of Colas Slovakia a.s. (10 January).
CRH performs a detailed quantitative and qualitative assessment
of each acquisition in order to determine whether it is material
for the purposes of separate disclosure under IFRS 3. None of the
acquisitions completed during the financial period were considered
sufficiently material to warrant separate disclosure of the
attributable fair values. The initial assignment of the fair values
to identifiable assets acquired and liabilities assumed as
disclosed are provisional (principally in respect of property,
plant and equipment and intangible assets) in respect of certain
acquisitions due to timing of close. The fair value assigned to
identifiable assets and liabilities acquired is based on estimates
and assumptions made by management at the time of acquisition. CRH
may revise its purchase price allocation during the subsequent
reporting window as permitted under IFRS 3.
The acquisition balance sheet presented on the following page
reflects the identifiable net assets acquired in respect of
acquisitions completed during 2022, together with adjustments to
provisional fair values (to the extent identified as of 30 June
2022) in respect of acquisitions completed during 2021. The
measurement period for a number of acquisitions completed in 2021,
closed in 2022 with no material adjustments identified.
13. Business Combinations - continued
The identifiable net assets acquired, including adjustments to
provisional fair values, were as follows:
Unaudited Year ended
Six months ended 30 31 December
June
2022 2021 2021
ASSETS $m $m $m
-------------------- ----- ------------
Non-current assets
Property, plant and equipment 312 111 609
Intangible assets 65 50 131
Equity accounted investments 28 - -
Total non-current assets 405 161 740
Current assets
Inventories 67 39 157
Trade and other receivables (i) 45 48 191
Cash and cash equivalents 10 - 7
Total current assets 122 87 355
LIABILITIES
Trade and other payables (35) (29) (143)
Provisions for liabilities - (1) (1)
Lease liabilities (30) (14) (88)
Interest-bearing loans and borrowings (4) - (3)
Deferred income tax liabilities (8) - (37)
Total liabilities (77) (44) (272)
Total identifiable net assets at
fair value 450 204 823
Goodwill arising on acquisition
(ii) 453 131 679
Total consideration 903 335 1,502
Consideration satisfied by:
Cash payments 896 335 1,501
Deferred consideration (stated 1 - -
at net present cost)
Contingent consideration 6 - 1
Total consideration 903 335 1,502
Net cash outflow arising on acquisition
Cash consideration 896 335 1,501
Less: cash and cash equivalents
acquired (10) - (7)
Total outflow in the Condensed
Consolidated Statement of Cash
Flows 886 335 1,494
(i) The gross contractual value of trade and other receivables
as at the respective dates of acquisition amounted to $45 million
(30 June 2021: $48 million; 31 December 2021: $192 million). The
fair value of these receivables is $45 million (all of which is
expected to be recoverable) (30 June 2021: $48 million; 31 December
2021: $191 million).
(ii) The principal factor contributing to the recognition of
goodwill on acquisitions entered into by the Group is the
realisation of cost savings and other synergies with existing
entities in the Group which do not qualify for separate recognition
as intangible assets. Due to the asset-intensive nature of
operations in the Americas Materials and Europe Materials business
segments, no significant separately identifiable intangible assets
were recognised on business combinations in these segments. $418
million of the goodwill recognised in respect of acquisitions
completed in 2022 is expected to be deductible for tax purposes (30
June 2021: $94 million; 31 December 2021: $284 million).
13. Business Combinations - continued
Acquisition-related costs
Acquisition-related costs, which exclude post-acquisition
integration costs, amounting to $4 million (H1 2021: $1 million)
have been included in operating costs in the Condensed Consolidated
Income Statement.
The following table analyses the 14 acquisitions completed in
2022 (H1 2021: 7 acquisitions) by reportable segment and provides
details of the goodwill and consideration figures arising in each
of those segments:
Six months ended 30 June - Unaudited
Number of acquisitions Goodwill Consideration
2022 2021 2022 2021 2022 2021
Reportable segments $m $m $m $m
Continuing operations
Americas Materials 5 3 120 26 318 77
Building Products 2 2 337 85 485 197
Europe Materials 7 1 37 - 99 5
Total Group from continuing operations 14 6 494 111 902 279
Discontinued operations
Building Products - Building Envelope - 1 - 17 - 56
494 128 902 335
Adjustments to provisional fair values of prior period acquisitions (41) 3 1 -
Total 453 131 903 335
Post-acquisition impact
The post-acquisition impact of acquisitions completed during the
period on the Group's profit for the financial period was as
follows:
Unaudited
Six months ended
30 June
2022 2021
Continuing operations $m $m
-------- --------
Revenue 107 39
Profit before tax for the financial period 3 2
The revenue and profit of the Group for the financial period
determined in accordance with IFRS as though the acquisitions
effected during the period had been at the beginning of the period
would have been as follows:
Unaudited
CRH Group Consolidated
2022 excluding Group including
2022
acquisitions acquisitions acquisitions
$m $m $m
Revenue 225 14,891 15,116
Profit before tax for the
financial period 23 1,200 1,223
On 3 June 2022, the Group announced that it reached agreement to
acquire Barrette Outdoor Living, Inc. ("Barrette"), North America's
leading provider of residential fencing and railing solutions for
an enterprise value of $1.9 billion (the "Transaction"). On 8 July
2022, the Transaction was completed. The assets acquired are
located in the US and are expected to enhance our existing offering
of sustainable outdoor living solutions in North America. Given the
size and completion date of the Transaction, the Group has not yet
completed a preliminary purchase price allocation in respect of
this transaction.
There have been no other acquisitions completed subsequent to
the balance sheet date which would be individually material to the
Group, thereby requiring disclosure under either IFRS 3 or IAS 10
Events after the Balance Sheet Date. Development updates, giving
details of acquisitions which do not require separate disclosure on
the grounds of materiality, are published periodically.
14. Related Party Transactions
There have been no related party transactions or changes in the
nature and scale of the related party transactions described in the
2021 Annual Report and Form 20-F that could have had a material
impact on the financial position or performance of the Group in the
first six months of 2022.
15. Retirement Benefit Obligations
The Group operates either defined benefit or defined
contribution pension schemes in all of its principal operating
areas.
In consultation with the actuaries to the various defined
benefit pension schemes (including jubilee schemes, long-term
service commitments and post-retirement healthcare obligations,
where relevant), the valuations of the applicable assets and
liabilities have been marked-to-market as at the end of the
financial period, taking account of prevailing bid values, actual
investment returns, corporate bond yields and other matters such as
updated actuarial valuations conducted during the period.
Financial assumptions - scheme liabilities
The discount rates used by the Group's actuaries in the
computation of the pension scheme liabilities and post-retirement
healthcare obligations are as follows:
Unaudited Year ended
Six months ended 31 December
30 June
2022 2021 2021
% % %
Eurozone 3.32 1.52 1.43
United States and Canada 4.81 2.76 2.82
Switzerland 2.14 0.35 0.30
The following table provides a reconciliation of scheme assets
(at bid value) and the actuarial value of scheme liabilities (using
the aforementioned assumptions):
Six months ended 30 June 2022 - Unaudited
Impact Net
of
asset Pension
Assets Liabilities Total ceiling Asset
$m $m $m $m $m
----------------
At 1 January 3,174 (3,483) (309) - (309)
Administration expenses (1) - (1) - (1)
Current service cost - (24) (24) - (24)
Interest income on scheme
assets 26 - 26 - 26
Interest cost on scheme liabilities - (30) (30) - (30)
Disposals - 14 14 - 14
Remeasurement adjustments:
-return on scheme assets
excluding interest income (450) - (450) - (450)
-actuarial gain from changes
in financial assumptions - 832 832 - 832
-change in asset ceiling,
excluding amounts included
in interest expense - - - (85) (85)
Employer contributions paid 18 - 18 - 18
Contributions paid by plan 4 (4) - - -
participants
Benefit and settlement payments (74) 74 - - -
Translation adjustment (168) 165 (3) - (3)
At 30 June (i) 2,529 (2,456) 73 (85) (12)
================
Related deferred income tax
asset 24
Net pension asset 12
(i) Reconciliation to Consolidated
Balance Sheet
Retirement benefit assets 284
Retirement benefit obligations (296)
Net pension deficit (12)
15. Retirement Benefit Obligations - continued
Six months ended 30 June
2021 - Unaudited
Net
Pension
Assets Liabilities Liability
$m $m $m
--------------- ----------
At 1 January 3,321 (3,877) (556)
Administration expenses (2) - (2)
Current service cost - (28) (28)
Past service credit - 2 2
Interest income on scheme assets 23 - 23
Interest cost on scheme liabilities - (28) (28)
Disposals - 1 1
Remeasurement adjustments:
-return on scheme assets excluding interest
income 33 - 33
-actuarial gain from changes in financial
assumptions - 219 219
Employer contributions paid 22 - 22
Contributions paid by plan participants 4 (4) -
Benefit and settlement payments (67) 67 -
Translation adjustment (58) 58 -
At 30 June (i) 3,276 (3,590) (314)
Related deferred income tax asset 99
Net pension liability (215)
(i) Reconciliation to Consolidated Balance
Sheet
Retirement benefit assets -
Retirement benefit obligations (314)
Net pension deficit (314)
16. Share Buyback Programme
During 2022, the Group completed the latest phases of its share
buyback programme (the "Programme"), returning a further $0.6
billion of cash to shareholders. This brings total cash returned to
shareholders under the Programme to $3.5 billion since its
commencement in May 2018. On 16 June 2022 the Group announced the
continuation of the Programme which was extended to include a
further repurchase of Ordinary Shares of up to $0.3 billion in the
period up to 30 September 2022. At 30 June 2022 a financial
liability of $252 million was included in other payables in respect
of the latest phase of the Programme which was entered into with
UBS A.G. This phase will end no later than 30 September 2022 (30
June 2021: $295 million; 31 December 2021: $281 million).
17. Taxation
The taxation expense for the interim period is an estimate based
on the expected full year effective tax rate on full year
profits.
18. Statutory Accounts and Audit Opinion
The financial information presented in this interim report does
not represent full statutory accounts as defined by the Companies
Act 2014 and has not been reviewed or audited by the Company's
auditors. A copy of the full statutory accounts for the year ended
31 December 2021 prepared in accordance with IFRS, upon which the
auditors have given an unqualified audit report, has been filed
with the Registrar of Companies.
19. Board Approval
This announcement was approved by the Board of Directors of CRH
plc on 24 August 2022.
20. Distribution of Interim Report
This interim report is available on the Group's website
(www.crh.com). A printed copy is available to the public at the
Company's registered office.
Glossary of Alternative Performance Measures
CRH uses a number of alternative performance measures (APMs) to
monitor financial performance. These measures are referred to
throughout the discussion of our reported financial position and
operating performance and are measures which are regularly reviewed
by CRH management.
The APMs as summarised below should not be viewed in isolation
or as an alternative to the equivalent GAAP measure.
The APMs may not be uniformly defined by all companies and
accordingly they may not be directly comparable with similarly
titled measures and disclosures by other companies. Certain
information presented is derived from amounts calculated in
accordance with IFRS but is not itself an expressly permitted GAAP
measure.
EBITDA
EBITDA is defined as earnings before interest, taxes,
depreciation, amortisation, asset impairment charges, profit on
disposals and the Group's share of equity accounted investments'
profit after tax. It is quoted by management, in conjunction with
other GAAP and non-GAAP financial measures, to aid investors in
their analysis of the performance of the Group and to assist
investors in the comparison of the Group's performance with that of
other companies.
EBITDA and operating profit by segment are monitored by
management in order to allocate resources between segments and to
assess performance. Given that net finance costs and income tax are
managed on a centralised basis, these items are not allocated
between operating segments for the purpose of the information
presented to the Chief Operating Decision Maker5 (Group Chief
Executive, Finance Director and Chief Operating Officer). EBITDA
margin is calculated by expressing EBITDA as a percentage of
revenue.
Operating profit (EBIT) is defined as earnings before interest,
taxes, profit on disposals and the Group's share of equity
accounted investments' profit after tax.
A reconciliation of Group profit to EBITDA is presented
below.
Continuing Operations
Unaudited Year ended
Six months ended 30 June 31 December
2022 2021 2021
$m $m $m
Group profit for the financial period 938 728 2,442
Income tax expense - estimated at interim 265 201 661
Profit before tax 1,203 929 3,103
Share of equity accounted investments' profit (8) (10) (55)
Other financial expense 20 21 42
Finance costs less income 177 185 357
Profit before finance costs 1,392 1,125 3,447
Profit on disposals (7) (100) (116)
Group operating profit 1,385 1,025 3,331
Depreciation charge 795 774 1,613
Amortisation of intangibles 30 22 46
EBITDA 2,210 1,821 4,990
(5) Effective 1 January 2022, following the appointment of the Chief Operating Officer and a resultant change in the reporting line of the "segment managers" as outlined in IFRS 8, the Group has determined that Group Chief Executive, Finance Director and Chief Operating Officer (formerly the Group Chief Executive and Finance Director) together fulfil the role of Chief Operating Decision Maker (as defined in IFRS 8). This did not result in any change to the Group's operating segments.
Glossary of Alternative Performance Measures - continued
EBITDA Net Interest Cover
EBITDA net interest cover is used by management as a measure
which matches the earnings and cash generated by the business to
the underlying funding costs. EBITDA net interest cover is
presented to provide investors with a greater understanding of the
impact of CRH's debt and financing arrangements.
It is calculated below:
Continuing Operations
Unaudited Year ended
Six months ended 31 December
30 June
2022 2021 2021
$m $m $m
-------------
Interest
Finance costs (i) (ii) 184 185 357
Finance income (i) (7) - -
Net interest 177 185 357
EBITDA 2,210 1,821 4,990
EBITDA net interest cover (EBITDA divided
by net interest) 12.5x 9.8x 14.0x
Unaudited
Rolling 12 months
ended 30 June
2022 2021
$m $m
Interest - continuing operations
Net interest - full year prior year (2021
and 2020) 357 438
Net interest - H1 prior year (2021 and
2020) (185) (229)
Net interest - H2 prior year (2021 and
2020) 172 209
Net interest - H1 current year (2022
and 2021) 177 185
Net interest - rolling 12 months to
30 June 349 394
EBITDA - continuing operations
EBITDA - full year prior year (2021 and
2020) 4,990 4,293
EBITDA - H1 prior year (2021 and 2020) (1,821) (1,424)
EBITDA - H2 prior year (2021 and 2020) 3,169 2,869
EBITDA - H1 current year (2022 and 2021) 2,210 1,821
EBITDA - rolling 12 months to 30 June 5,379 4,690
EBITDA net interest cover (EBITDA divided
by net interest) 15.4x 11.9x
(i) These items appear on the Condensed Consolidated Income Statement on page 8.
(ii) Finance costs include lease interest in the period ended 30
June 2022. 2021 comparatives have been presented accordingly.
EBIT net interest cover is the ratio of EBIT to net debt-related
interest costs.
Glossary of Alternative Performance Measures - continued
Organic Revenue, Organic Operating Profit and Organic EBITDA
The terms "like-for-like" (LFL) and "organic" are used
interchangeably throughout this report.
Because of the impact of acquisitions, divestments, exchange
translation and other non-recurring items on reported results each
period, the Group uses organic revenue, organic operating profit
and organic EBITDA as additional performance indicators to assess
performance of pre-existing operations each period.
Organic revenue, organic operating profit and organic EBITDA are
arrived at by excluding the incremental revenue, operating profit
and EBITDA contributions from current and prior year acquisitions
and divestments, the impact of exchange translation and the impact
of any non-recurring items. Organic EBITDA margin is calculated by
expressing organic EBITDA as a percentage of organic revenue.
In the Business Performance review on pages 1 to 6, changes in
organic revenue, organic operating profit and organic EBITDA are
presented as additional measures of revenue, operating profit and
EBITDA to provide a greater understanding of the performance of the
Group. A reconciliation of the changes in organic revenue, organic
operating profit and organic EBITDA to the changes in total
revenue, operating profit and EBITDA for the Group and by segment
is presented with the discussion of each segment's performance in
tables contained in the segment discussion commencing on page
3.
Principal Risks and Uncertainties
Under Section 327(1)(b) of the Companies Act 2014 and Regulation
5(4)(c)(ii) of the Transparency (Directive 2004/109/EC) Regulations
2007, the Group is required to give a description of the principal
risks and uncertainties which it faces. These risks and
uncertainties reflect the international scope of the Group's
operations and the Group's decentralised structure. During the
course of 2022, new risks and uncertainties may materialise
attributable to changes in markets, regulatory environments and
other factors and existing risks and uncertainties may become less
relevant.
Principal Strategic Risks and Uncertainties
Industry cyclicality and economic conditions: Construction
activity, and therefore demand for the Group's products, is
inherently cyclical as it is influenced by global and national
economic circumstances, monetary policies, consumer sentiment and
weather conditions. The Group may also be negatively impacted by
unfavourable swings in fuel and other input costs. Failure to
predict and plan for cyclical events or adverse economic conditions
could negatively impact financial performance.
People management: Existing processes around people management,
such as attracting, retaining and developing people, leadership
succession planning, developing a diverse and inclusive workforce
as well as dealing with collective representation groups, may fail
to achieve their goals, inhibiting the Group achieving its
strategy. Failure to effectively manage talent and plan for
leadership succession could impede the realisation of strategic
objectives.
Commodity products and substitution: Many of the Group's
products are commodities, which face strong volume and price
competition, and may be replaced by substitute products which the
Group does not produce. Further, the Group must maintain strong
customer relationships to ensure changing consumer preferences and
approaches to construction are addressed. Failure to differentiate
and innovate could lead to market share decline, thus adversely
impacting financial performance.
Supply chain continuity: The Group is dependent on its ability
to reliably and economically source various raw materials,
equipment and other inputs to satisfy customer demands and meet
contractual requirements. Any disruption reducing our ability to do
so or materially extending lead times could result in a failure to
deliver on time and in full to customers. Failure to manage supply
chain disruption could result in increased costs, loss of
customers, financial penalties, and/or reputational damage.
Portfolio management: The Group may engage in acquisition and
divestment activity during the year as part of active portfolio
management which presents risks around due diligence, execution and
integration of assets. Additionally, the Group may be liable for
liabilities of companies it has acquired or divested. Failure to
identify and execute deals in an efficient manner may limit the
Group's growth potential and impact financial performance.
Public policies and geopolitics: Adverse public policy,
economic, social and political situations in any country in which
the Group operates could lead to a fall in demand for the Group's
products, business interruption, restrictions on repatriation of
earnings or a loss of plant access. The ongoing geopolitical
conflict in Ukraine has contributed to heightened uncertainty.
Changes in these conditions may adversely affect the Group's
people, business, results of operations, financial condition or
prospects.
Strategic mineral reserves: Appropriate reserves are an
increasingly scarce commodity and licences and/or permits required
to enable operation are becoming harder to secure and renew. There
are numerous uncertainties inherent in reserves estimation and in
projecting future rates of production. Failure by the Group to plan
for reserve depletion, or to secure permits, may result in
operation stoppages, adversely impacting financial performance.
Principal Operational Risks and Uncertainties
Climate change and policy: The impact of climate change may over
time affect the operations and cost base of the Group and the
markets in which the Group operates. Climate change could include
physical risks, such as acute and chronic changes in weather and/or
transitional risks such as technological development, policy and
regulation change and market and economic responses. Should the
Group not reduce its greenhouse gases (GHGs) emissions by its
identified targets, the Group may be subject to increased costs,
adverse financial performance, increasing litigation and/or
reputational damage.
Sustainability and corporate social responsibility: The nature
of the Group's activities poses inherent environmental, social and
governance (ESG) risks, which are subject to changing societal
expectations, increased demand for sustainable building solutions
and an evolving regulatory framework. Failure to embed
sustainability principles within the Group's businesses and core
strategy may result in the Group failing to deliver the talent,
innovation and performance improvements required to achieve our
stated sustainability targets and ambitions. Such failures could
lead to adverse stakeholder sentiment, reduced product demand,
regulatory non-compliance, and adversely impact the Group's
financial position.
Information technology and/or cyber security: The Group is
dependent on information and operational technology systems to
support its business activities. Any significant operational event,
whether caused by external attack, insider threat or error, could
lead to loss of access to systems or data, adversely impacting
business operations. Security breaches, IT interruptions or data
loss could result in significant business disruption, loss of
production, reputational damage and/or regulatory penalties.
Significant financial costs for remediation are also likely in a
major cyber security incident.
Health and safety performance: The Group's businesses operate in
an industry where health and safety risks are inherently prominent.
Further, the Group is subject to stringent regulations from a
health and safety perspective in the various jurisdictions in which
it operates. A serious health and safety incident could have a
significant impact on the Group's operational and financial
performance, as well as the Group's reputation.
Principal Risks and Uncertainties - continued
Principal Operational Risks and Uncertainties - continued
COVID-19 pandemic: Public health emergencies, epidemics or
pandemics, such as the emergence and spread of the COVID-19
pandemic, have the potential to significantly impact the Group's
operations through a fall in demand for the Group's products, a
reduction in staff availability and business interruption. The
emergence and spread of the COVID-19 pandemic has had a material
impact across the construction markets in which the Group operates.
The continued uncertainty around the global pandemic could have an
adverse effect on the Group's operating results, cash flows,
financial condition and/or prospects.
Principal Compliance Risks and Uncertainties
Laws, regulations and business conduct: The Group is subject to
a wide variety of local and international laws and regulations
(including those applicable to it as a listed company) across the
many jurisdictions in which it operates, which vary in complexity,
application and frequency of change. Potential breaches of local
and international laws and regulations could result in litigation
or investigations, the imposition of significant fines, sanctions,
adverse operational impact and reputational damage.
Principal Financial and Reporting Risks and Uncertainties
Taxation charge and balance sheet provisioning: The Group is
exposed to uncertainties stemming from governmental actions in
respect of taxes paid or payable in the future in all jurisdictions
of operation. In addition, various assumptions are made in the
computation of the overall tax charge and in balance sheet
provisions which may need to be adjusted over time. Changes in tax
regimes or assessment of additional tax liabilities in future tax
audits could result in incremental tax liabilities which could have
a material adverse effect on cash flows and the financial results
of operations.
Financial instruments: The Group uses financial instruments
throughout its businesses giving rise to interest rate and
leverage, foreign currency, counterparty, credit rating and
liquidity risks. A downgrade of the Group's credit ratings may give
rise to increases in future funding costs and may impair the
Group's ability to raise funds on acceptable terms. In addition,
insolvency of the financial institutions with which the Group
conducts business may adversely impact the Group's financial
position.
Goodwill impairment: Significant under-performance in any of the
Group's major cash-generating units or the divestment of businesses
in the future may give rise to a material write-down of goodwill.
While a non-cash item, a material write-down of goodwill could have
a substantial impact on the Group's income and equity.
Foreign currency translation: The principal foreign exchange
risks to which the Condensed Consolidated Financial Statements are
exposed pertain to (i) adverse movements in reported results when
translated into the reporting currency; and (ii) declines in the
reporting currency value of net investments which are denominated
in a wide basket of currencies other than the reporting currency.
Adverse changes in the exchange rates will continue to negatively
affect retained earnings. The annual impact is reported in the
Condensed Consolidated Statement of Comprehensive Income.
Responsibility Statement
The Directors of CRH plc are responsible for preparing the
interim management report in accordance with the Transparency
(Directive 2004/109/EC) Regulations 2007 as amended, the Central
Bank (Investment Market Conduct) Rules 2019, the Disclosure
Guidance and Transparency Rules of the UK's Financial Conduct
Authority and with IAS 34, as adopted by the European Union.
The Directors of CRH plc, being the persons responsible within
CRH plc, confirm that to the best of their knowledge:
1) the Condensed Consolidated Unaudited Financial Statements for
the six months ended 30 June 2022 have been prepared in accordance
with International Accounting Standard 34 Interim Financial
Reporting, the accounting standard applicable to interim financial
reporting adopted pursuant to the procedure provided for under
Article 6 of Regulation (EC) no. 1606/2002 of the European
Parliament and of the Council of 19 July 2002, and give a true and
fair view of the assets, liabilities, financial position and profit
or loss of the Group for the six months ended 30 June 2022;
2) the interim management report includes a fair review of:
I. the important events that have occurred during the first six
months of the financial year, and their impact on the condensed
consolidated set of financial statements;
II. the principal risks and uncertainties for the remaining six months of the financial year;
III. any related parties ' transactions that have taken place in
the first six months of the current financial year that have
materially affected the financial position or the performance of
the enterprise during that period; and
IV. any changes in the related parties ' transactions described
in the 2021 Annual Report and Form 20-F that could have had a
material effect on the financial position or performance of the
enterprise in the first six months of the current financial
year.
For and on behalf of the Board
Albert Manifold Chief Executive
Jim Mintern Finance Director
Disclaimer / Forward-Looking Statements
In order to utilise the "Safe Harbor" provisions of the United
States Private Securities Litigation Reform Act of 1995, CRH public
limited company (the "Company") and its subsidiaries (collectively,
"CRH" or the "Group") are providing the following cautionary
statement.
This document contains statements that are, or may be deemed to
be, forward-looking statements with respect to the financial
condition, results of operations, business, viability and future
performance of CRH and certain of the plans and objectives of CRH.
These forward-looking statements may generally, but not always, be
identified by the use of words such as "will", "anticipates",
"should", "could", "would", "targets", "aims", "may", "continues",
"expects", "is expected to", "estimates", "believes", "intends" or
similar expressions. These forward-looking statements include all
matters that are not historical facts or matters of fact at the
date of this document.
In particular, the following, among other statements, are all
forward looking in nature: plans and expectations regarding demand
outlook, economic growth in CRH's markets and construction activity
levels; plans and expectations regarding cash returns for
shareholders, including expectations regarding dividends and share
buybacks; plans and expectations regarding CRH's financial
capacity, balance sheet, sales growth, EBITDA, margin, leverage,
capital expenditure, debt, costs, allocation and reallocation of
capital, acquisition pipeline, acquisition strategy and effect of
operational excellence initiatives; expectations regarding
inflation, macroeconomic uncertainty, geopolitical tensions and
weather patterns; plans and expectations regarding climate change,
CRH's decarbonisation target and delivery of sustainable solutions
and products; and plans and expectations regarding the strategic
risks and uncertainties facing CRH.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that may or may not occur in the future and reflect
the Company's current expectations and assumptions as to such
future events and circumstances that may not prove accurate.
A number of material factors could cause actual results and
developments to differ materially from those expressed or implied
by these forward-looking statements, certain of which are beyond
our control, and which include, among other factors: economic and
financial conditions generally in various countries and regions
where we operate; the pace of growth in the overall construction
and building materials sector; demand for infrastructure,
residential and non-residential construction in our geographic
markets; increased competition and its impact on prices; increases
in energy and/or raw materials costs; adverse changes to laws and
regulations; approval or allocation of funding for infrastructure
programmes; adverse political developments in various countries and
regions, including the ongoing geopolitical conflict in Ukraine;
failure to complete or successfully integrate acquisitions; the
duration of the COVID-19 pandemic; weather conditions; and other
factors discussed elsewhere in this report, including the factors
discussed under "Principal Risks and Uncertainties" herein, as well
those factors discussed under "Risk factors" in the Company's 2021
Annual Report on Form 20-F as filed with the US Securities and
Exchange Commission.
You are cautioned not to place undue reliance on any
forward-looking statements. These forward-looking statements are
made as of the date of this document. The Company expressly
disclaims any obligation or undertaking to publicly update or
revise these forward-looking statements other than as required by
applicable law.
The forward-looking statements in this document do not
constitute reports or statements published in compliance with any
of Regulations 6 to 8 of the Transparency (Directive 2004/109/EC)
Regulations 2007 (as amended).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
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For further information about how RNS and the London Stock Exchange
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END
IR MZGZRDDLGZZM
(END) Dow Jones Newswires
August 25, 2022 02:00 ET (06:00 GMT)
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