TIDMCRH
RNS Number : 5818R
CRH PLC
02 March 2023
2022 Full Year Results
This document contains inside information
Key Highlights
-- Strong performance underpinned by our integrated solutions strategy
-- Further growth in sales, EBITDA, margin & EPS despite significant cost inflation
-- Efficient & disciplined approach to capital allocation
-- FY dividend +5%, significantly increasing share buyback to $3bn over next 12 months
-- $3.3bn invested in solutions-focused acquisitions; strong pipeline of opportunities
-- Strong & flexible balance sheet; significant optionality for future value creation
-- Raising sustainability ambitions; updated 1.5degC decarbonisation targets
-- New organisational structure; aligning with integrated solutions strategy
-- Recommending transition to US primary listing in 2023
Summary Financials(1) 2022 Change
Sales $32.7bn +12%
EBITDA $5.6bn +13%
EBITDA Margin 17.2% +10bps
EPS $3.50 +14%
Albert Manifold, Chief Executive, said today:
"Our 2022 performance reflects the outstanding commitment of our
people, the underlying strength and resilience of our business and
the continued delivery of our integrated, solutions-focused
strategy. Despite significant cost pressures throughout the year,
we delivered further improvements in profits, margins and returns.
Our strong cash generation together with our relentless focus on
disciplined capital allocation has also delivered the strongest
balance sheet in our history, providing us with significant
opportunities for further growth and value creation going
forward."
Announced Thursday, 2 March 2023
(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 within discontinued operations.
2022 Full Year Results
Trading Overview
CRH delivered a strong performance in 2022 underpinned by our
integrated solutions strategy along with resilient demand and
commercial progress in North America and Europe. Group sales of
$32.7 billion (2021: $29.2 billion) were 12% ahead of 2021 on both
a total and like-for-like basis(2) . Group EBITDA of $5.6 billion
(2021: $5.0 billion) was 13% ahead as good commercial management
and further operational efficiencies offset significant cost
inflation, overall Group margin was also ahead of prior year.
Like-for-like EBITDA was 8% ahead of 2021.
-- Americas Materials delivered a strong performance with total
sales 15% above 2021 levels and like-for-like sales 12% ahead
driven primarily by solid price progression across all lines of
business. EBITDA was 6% ahead, or 5% ahead on a like-for-like
basis, as good commercial management partially offset the impact of
higher input costs and lower volumes resulting from unfavourable
weather.
-- Building Products maintained good activity levels as demand
for critical utility infrastructure and outdoor living solutions
remained resilient. This, together with strong performances from
recent acquisitions, delivered total sales 26% ahead of 2021, or
11% ahead on a like-for-like basis. Total EBITDA was 52% ahead, 18%
ahead on a like-for-like basis, as a result of continued progress
on pricing, cost control and production efficiencies.
-- Europe Materials like-for-like sales were 11% ahead
reflecting continued strong pricing progress which offset the
impact of lower activity levels. Like-for-like EBITDA was 8% ahead,
driven by commercial excellence measures across all countries along
with a continued focus on cost savings, partly offset by
significant cost inflation and the impact of the conflict in
Ukraine. Total sales were in line with 2021 and EBITDA was 4%
behind due to the impact of adverse currency translation
effects.
Profit after tax from continuing operations was 10% ahead of
2021 at $2.7 billion (2021: $2.4 billion) driven primarily by the
strong trading performance.
Earnings per share (EPS) from continuing operations was 14%
higher than 2021 at $3.50 (2021: $3.06). Including the trading
contribution and profit on disposal of our discontinued operations,
total EPS was $5.07 (2021: $3.29).
Note 2 on page 15 analyses the key components of the 2022
performance.
Accelerating Integrated Solutions
Our 2022 performance reflects the continued delivery of our
integrated solutions strategy. By uniquely integrating value-added
materials, products and services across the construction project
lifecycle, our strategy enables us to provide bespoke solutions for
our customers that solve their increasingly complex construction
needs, while also creating superior value for our business. To
further accelerate the development of our integrated solutions
strategy and align our business with the changing needs and future
growth opportunities of our industry, the Group has decided to
transition to a new organisational structure, effective from 1
January 2023(3) . See Appendix 1 for further information and
associated 2022 pro forma disclosures. Further financial
information will be provided in advance of our April trading
update.
Sustainability
We remain committed to continuously improving our sustainability
performance and decarbonising our businesses. In 2022, we announced
an industry leading absolute carbon emissions reduction target by
2030. In early 2023, the Science Based Targets initiative (SBTi)
validated our revised targets in line with the updated 1.5degC
science-based framework, which now equate to a 30% reduction in
absolute carbon emissions by 2030 (from a 2021 base year). This is
aligned with our ambition to be a net-zero business by 2050. In
addition, we continue to expand our offering of integrated
sustainable solutions to address the needs of our customers,
advancing circularity and innovating to create a more sustainable
built environment.
The Group has also recently announced the establishment of CRH
Ventures, its venture capital unit, which will support the
development of new technologies and innovative solutions to meet
the increasingly complex needs of customers and evolving trends in
construction. With access to a $250 million venturing and
innovation fund to invest, CRH Ventures will partner with
construction and climate technology companies, operating across the
construction value chain.
Trading Outlook
Overall, we expect resilient demand and increased pricing in
2023 despite macroeconomic uncertainties and ongoing cost
inflation. Our operations in North America will benefit from strong
pricing and robust infrastructure demand being underpinned by
significant increases in funding at both federal and state level.
The non-residential sector is supported by government funding
initiatives in clean energy and the onshoring of critical
manufacturing, while the residential new-build sector will
experience short-term weakness as a result of rising interest
rates. In Europe we expect positive pricing momentum to offset
lower volumes. Construction activity in Central and Eastern Europe
will continue to be supported by EU infrastructure funds, while our
businesses in Western Europe remain underpinned by resilient
repair, maintenance and improvement (RMI) activity and stable
infrastructure demand. Notwithstanding a number of macroeconomic
risks and uncertainties, CRH remains well positioned for another
year of progress in 2023 due to our uniquely integrated,
value-added solutions strategy together with a strong and flexible
balance sheet.
2 See pages 34 to 37 for glossary of alternative performance
measures (including EBITDA, like-for-like/organic, Net Debt/EBITDA)
used throughout this report.
3 Segmental information presented in the 2022 Financial
Statements is based on the segment structure as at 31 December 2022
being Americas Materials, Building Products and Europe
Materials.
Americas Materials
Analysis of change
=======================================================================================================
$ million 2021 Exchange Acquisitions Divestments Organic 2022 % change
======================== ======= ========= ============= ============ ======== ======= =========
Sales revenue 12,407 -41 +511 -60 +1,507 14,324 +15%
EBITDA 2,588 -4 +44 -13 +133 2,748 +6%
Operating profit 1,788 -2 -11 -11 +145 1,909 +7%
EBITDA/sales 20.9% 19.2%
Operating profit/sales 14.4% 13.3%
======================== ======= ========= ============= ============ ======== ======= =========
Americas Materials sales were 15% ahead driven primarily by
solid price progression across all lines of business which was
partly offset by lower volumes impacted by unfavourable weather.
EBITDA of $2.7 billion and operating profit of $1.9 billion were 6%
and 7% ahead of 2021 respectively, as positive pricing was impacted
by higher input costs. Like-for-like sales and EBITDA were 12% and
5% ahead of 2021 respectively.
Construction market growth remained positive in 2022, primarily
driven by strong infrastructure activity, supported by increases in
federal, state and local transportation funding. The
non-residential market remained resilient, while parts of the
new-build residential market faced challenges from rising interest
rates and affordability constraints. Canada experienced solid
growth in most provinces; however, rising interest rates and
inflationary pressures negatively impacted the residential
market.
During 2022, Americas Materials completed ten solutions-focused
acquisitions across the US with a total spend of $0.5 billion. The
largest of these was the acquisition of Hinkle Contracting Company,
a vertically integrated materials and road solutions business in
Kentucky.
Materials
Aggregates volumes declined by 1% compared to 2021 as strong
volumes in the South and Great Lakes divisions were offset by
unfavourable weather which impacted activity in the Northeast and
West divisions. Aggregates prices increased by 10%, driven by
strong commercial management.
Asphalt volumes were 3% ahead, driven by increases in the Great
Lakes and South divisions, while volumes were lower in the
Northeast and West divisions. Asphalt prices increased by 20%
compared to prior year.
Readymixed concrete volumes were 6% behind 2021 levels, impacted
by less favourable weather conditions in the West and the
Northeast. Strong commercial discipline delivered higher prices
across all divisions, 14% ahead of 2021, which offset raw materials
and energy cost inflation.
Paving and construction revenues were 25% ahead of 2021 due to a
strong order book and good project execution.
Regional Performance
Sales in the Northeast division were 10% ahead of 2021 as prices
improved across all lines of business offsetting lower volumes due
to less favourable weather. Operating profit increased, driven by
improved pricing which offset lower volumes and higher input
costs.
Great Lakes sales were 20% ahead of 2021, led by improved
pricing across all lines of business and solid construction demand.
Growth in operating profit was achieved through strong commercial
management and ongoing cost control, offsetting input cost
inflation.
South division sales were 26% ahead of 2021 with volumes ahead
of prior year. Pricing was strong across all lines of business.
Operating profit marginally declined as strong pricing was offset
by increases in energy and bitumen costs.
The West division delivered 10% sales growth, driven primarily
by disciplined commercial management across all lines of business
and strong construction revenues. Unfavourable weather and a late
start to the season impacted volumes. Operating profit was slightly
ahead of 2021 as lower volumes were offset by improved pricing.
Cement
Our cement division delivered sales growth of 8% driven
primarily by price realisation of 12% which offset slightly lower
volumes compared with 2021. Operating profit was ahead driven by
strong price progression amid an inflationary cost environment.
Building Products (Continuing Operations)
Analysis of change
=====================================================================================================
$ million 2021 Exchange Acquisitions Divestments Organic 2022 % change
======================== ====== ========= ============= ============ ======== ====== =========
Sales revenue 6,218 -167 +1,121 -4 +655 7,823 +26 %
EBITDA 992 -7 +350 - +175 1,510 +52 %
Operating profit 729 -1 +285 - +148 1,161 +59 %
EBITDA/sales 16.0% 19.3%
Operating profit/sales 11.7% 14.8%
======================== ====== ========= ============= ============ ======== ====== =========
The table above excludes the trading performance of Building
Envelope which, following its divestment, has been classified
within discontinued operations.
Building Products delivered sales growth of 26%, 11% ahead on a
like-for-like basis, due to strong demand for critical utility
infrastructure and outdoor living solutions. This, combined with
continued strong cost control and production efficiencies resulted
in EBITDA 52% ahead of prior year and operating profit 59% ahead,
18% ahead and 20% ahead respectively on a like-for-like basis. This
demonstrates the strong contribution from both the underlying
businesses and recent acquisitions underpinned by our integrated
solutions strategy.
Building Products completed ten acquisitions during 2022, mainly
in the US, for a total spend of c. $2.7 billion. The largest
acquisition was the purchase in July 2022 of Barrette Outdoor
Living, North America's leading provider of fencing and railing
solutions for the outdoor living space.
Architectural Products
Architectural Products in North America delivered strong sales
growth in 2022, as sustained RMI activity offset the impact of
rising interest rates on certain parts of new-build residential
construction activity. Underlying demand in our European businesses
was solid, particularly in Poland; however total sales were
slightly behind 2021 due to currency headwinds. Pricing progress,
improved operational performance and contributions from
acquisitions resulted in operating profit ahead of prior year in
both North America and Europe despite cost inflation and raw
materials shortages. The integration of Barrette Outdoor Living is
progressing well with trading in line with expectations and good
synergy delivery.
Infrastructure Products
Infrastructure Products experienced strong sales growth in 2022,
particularly in North America, with robust demand in the
communications, energy, water and transportation sectors as well as
strong contributions from recent acquisitions. This resulted in
operating profit well ahead of prior year as higher activity levels
combined with pricing progress and disciplined cost control offset
higher energy and materials costs, as well as labour market
constraints.
Construction Accessories
Proactive pricing actions by our Construction Accessories
business resulted in sales ahead of prior year across all regions,
with growth primarily driven by the UK, Germany and North America.
Operating profit finished well ahead of prior year as commercial
excellence measures successfully mitigated the impact of cost
inflation.
Building Envelope (Discontinued Operations)
The commentary below refers to the trading results of Building
Envelope, 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
Analysis of change
=======================================================================================================
$ million 2021 Exchange Acquisitions Divestments Organic 2022 % change
======================== ======= ========= ============= ============ ======== ======= =========
Sales revenue 10,581 -1,151 +107 -44 +1,083 10,576 -
EBITDA 1,410 -157 +8 -4 +100 1,357 -4 %
Operating profit 814 -79 +1 -2 +90 824 +1 %
EBITDA/sales 13.3% 12.8%
Operating profit/sales 7.7% 7.8%
======================== ======= ========= ============= ============ ======== ======= =========
Europe Materials benefited from commercial management
initiatives across all countries, which, along with a continued
focus on cost savings, helped to mitigate significant energy and
other input cost inflation, as well as the impact of the conflict
in Ukraine. Like-for-like sales were 11% ahead reflecting continued
strong pricing progress which offset the impact of lower activity
levels. In 2022, EBITDA was $1.4 billion, 8% ahead on a
like-for-like basis and operating profit was $0.8 billion, 12%
ahead like-for-like. Unfavourable currency translation effects
resulted in total sales in line with 2021, EBITDA -4% behind, and
operating profit 1% ahead.
UK & Ireland
UK & Ireland sales and operating profit were well ahead of
2021 driven by strong pricing and ongoing performance optimisation
initiatives. In the UK, aggregates and asphalt volumes were behind
prior year due to lower paving activity, while readymixed concrete
volumes benefited from an increase in project activity. Ireland
primarily benefited from improved construction activity and pricing
progress.
Europe North
Sales in Europe North (Finland, Germany and Switzerland) were in
line with 2021 driven mainly by price increases which offset lower
volumes, and a strong performance in our lime business.
Like-for-like operating profit ended ahead of 2021 as improved
pricing and cost savings actions compensated for an inflationary
and volatile energy cost environment.
Europe West
Europe West (France, Benelux, Denmark and Spain) delivered sales
slightly below 2021 due to softening volumes. Higher raw materials,
energy and freight costs in all countries were offset by higher
pricing, which, along with continued cost saving actions and
commercial initiatives, saw like-for-like operating profit ahead of
2021.
Europe East
Sales in Europe East (Poland, Ukraine, Romania, Hungary,
Slovakia, Serbia, and Croatia) were ahead of prior year due to a
strong focus on commercial actions to offset significant cost
inflation. Poland, in particular, delivered sales and operating
profit strongly ahead of 2021. Activity levels in Ukraine were
impacted by the ongoing conflict and we continue to prioritise the
support of our employees during this challenging time. Total
operating profit in Europe East was behind prior year.
Asia
Sales in the Philippines ended the year behind 2021.
Construction activity was impacted by a pre-election ban on
construction and high cost inflation which slowed large
infrastructure project activity. Price increases largely offset
weaker volumes; however, operating profit was impacted by high
energy and transportation costs which resulted in operating profit
significantly below 2021.
CRH's operations include a 26% stake in Yatai Building Materials
(reported within the Group's share of equity accounted investments)
in China where the government's COVID-19 restrictions impacted many
areas of the economy, including the construction sector. This
resulted in sales and operating profit below 2021.
Other Financial Items
Depreciation and amortisation charges amounted to $1.7 billion,
in line with prior year (2021: $1.7 billion).
Divestments and asset disposals from continuing operations
generated a total loss on disposals of $49 million (2021: $116
million profit). Profit after tax on the divestment of the Building
Envelope business amounted to $1.1 billion and is included in
profit after tax from discontinued operations.
Net finance costs of $376 million were lower than 2021 (2021:
$399 million) primarily as a result of higher interest income and
lower debt levels offsetting increased interest expense driven by
higher rates.
The Group's share of profit from equity accounted investments
was $nil (2021: $55 million), primarily driven by the performance
of the Group's associate in China where activity levels were
impacted by COVID-19 restrictions.
Profit before tax was $3.5 billion (2021: $3.1 billion), and the
associated tax charge of $785 million (2021: $661 million)
represented an effective tax rate of 22.6% (2021: 21.3%) on profit
before tax, which was higher than prior year due to the tax impact
of divestments.
Dividend
In addition to the interim dividend of $0.24 (2021: $0.23) per
share which was paid in October 2022, the Board is recommending a
final dividend of $1.03 per share. This would result in a total
dividend of $1.27 for the year (2021: $1.21), an increase of 5.0%
over 2021, in line with the Group's progressive dividend policy.
Based on the EPS from continuing operations for the year this
represents a dividend cover of 2.8x. It is proposed to pay the
final dividend on 4 May 2023 to shareholders registered at close of
business on 17 March 2023. The ex-dividend date will be 16 March
2023. The final dividend will be paid wholly in cash.
Share Buyback Programme
Reflecting our strong financial position and commitment to
returning cash to shareholders, the Group continued its ongoing
share buyback programme in 2022 repurchasing 29.8 million (2021:
17.8 million) ordinary shares for a total consideration of $1.2
billion (2021: $0.9 billion).
Our strong financial position and cash generation capabilities
provides us with the opportunity to increase our cash returns to
shareholders, while at the same time continuing to invest in our
business and execute our strategic growth initiatives. Having
carefully considered our near-term capital allocation
opportunities, we intend to substantially increase our share
buyback programme through the repurchase of up to $3 billion of CRH
shares over the next 12 months(4) .
Consistent with the Group's disciplined approach to capital
allocation, the increase in our share buyback programme
demonstrates our confidence in the outlook for our business and our
continued strong cash generation, while retaining the financial
flexibility to invest in further growth and value creation
opportunities for our shareholders. We remain committed to our
progressive dividend policy and our strong investment grade credit
rating.
Balance Sheet and Liquidity
2022 marked another year of strong cash generation for the Group
with net cash inflow from operating activities of $4.0 billion
(2021: $4.2 billion). Excluding higher tax outflows related to the
Building Envelope divestment ($0.4 billion) net cash inflow from
operating activities was higher than 2021 despite the impact of
significant cost inflation on working capital. Year-end net debt of
$5.1 billion (2021: $6.3 billion) reflects healthy inflows from
operations, proceeds from the Building Envelope divestment,
disciplined capital expenditure and value focused investments. Net
debt to EBITDA was 0.9x (2021: 1.3x).
The Group ended 2022 with $5.9 billion of cash and cash
equivalents on hand and $3.7 billion of undrawn committed
facilities which are available until 2026. At year end, the Group
had sufficient cash balances to meet all maturing debt obligations
(including leases) for the next five years and the weighted average
maturity of the remaining term debt was 12.2 years. The Group also
has a $2.0 billion US Dollar Commercial Paper Programme and a
EUR1.5 billion Euro Commercial Paper Programme of which there were
no outstanding issued notes at year end. 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 2022 the Group invested $3.3 billion on 29 acquisitions
(including deferred and contingent consideration in respect of
prior year acquisitions). On the divestment front, the Group
completed nine transactions and realised total business and asset
disposal proceeds(5) of $3.9 billion, primarily relating to the
proceeds from the Building Envelope divestment.
Investments and Acquisitions
The largest acquisition in 2022 was in our Building Products
Division where the Group completed its $1.9 billion acquisition of
Barrette Outdoor Living, North America's leading provider of
fencing and railing solutions. This acquisition complements and
enhances our offering of sustainable outdoor living solutions in
North America. In addition, Building Products completed a further
seven acquisitions in the US and two in Europe, amounting to a
total spend of c. $2.7 billion. The Americas Materials Division
completed ten solutions-focused acquisitions in the US for a total
spend of $0.5 billion, and the Europe Materials Division completed
nine bolt-on acquisitions for $0.1 billion, the largest of which
was the acquisition of a precast business in Denmark.
Divestments and Disposals
The largest divestment in 2022 was the Building Envelope
business for cash proceeds of $3.5 billion (enterprise value of
$3.8 billion including lease liabilities transferred of $0.3
billion). A further eight divestments were completed across the
Group, realising total proceeds of $0.2 billion. In addition to
these business divestments, the Group realised proceeds of $0.1
billion from the disposal of surplus property, plant and equipment
and other non-current assets.
4 In accordance with the applicable authority considered
annually by shareholders to repurchase CRH ordinary shares.
5 Net of cash disposed and including deferred consideration
proceeds in respect of prior year divestments.
Listing Considerations
Through the active reshaping and repositioning of CRH's business
over the last decade, North America now represents approximately
75% of Group EBITDA. The US is expected to be a key driver of
future growth for CRH and our exposure to this market is likely to
increase further driven by substantial increases in infrastructure
funding, a renewed drive for the onshoring of manufacturing
activity and significant levels of under-build in the residential
construction market.
We communicate frequently with our stakeholders regarding our
future strategy, our portfolio of businesses and how we keep our
listing arrangements regularly under review.
We have now come to the conclusion that a US primary listing
would bring increased commercial, operational and acquisition
opportunities for CRH, further accelerating our successful
integrated solutions strategy and delivering even higher levels of
profitability, returns and cash for our shareholders.
In the coming weeks we will outline to our shareholders why we
are recommending that it is in the best interests of our business
and our shareholders to pursue a primary listing of CRH, together
with US equity index inclusion as soon as possible.
This change in listing structure will have no impact on CRH plc,
which will remain headquartered, incorporated and tax-resident in
Ireland.
We will provide a further update as part of our trading
statement on Wednesday 26 April 2023.
Primary Financial Statements
and
Summarised N otes
Year ended 31 December 2022
Consolidated Income Statement
for the financial year ended 31 December 2022
Restated
(i)
2022 2021
$m $m
--------- ---------
Revenue 32,723 29,206
Cost of sales (21,844) (19,350)
--------- ---------
Gross profit 10,879 9,856
Operating costs (6,985) (6,525)
--------- ---------
Group operating profit 3,894 3,331
(Loss)/profit on disposals (49) 116
--------- ---------
Profit before finance costs 3,845 3,447
Finance costs (401) (357)
Finance income 65 -
Other financial expense (40) (42)
Share of equity accounted investments' profit - 55
--------- ---------
Profit before tax from continuing operations 3,469 3,103
Income tax expense (785) (661)
--------- ---------
Group profit for the financial year from
continuing operations 2,684 2,442
Profit after tax for the financial year from
discontinued operations 1,190 179
--------- ---------
Group profit for the financial year 3,874 2,621
========= =========
Profit attributable to:
Equity holders of the Company
From continuing operations 2,657 2,386
From discontinued operations 1,190 179
Non-controlling interests
From continuing operations 27 56
--------- ---------
Group profit for the financial year 3,874 2,621
========= =========
Basic earnings per Ordinary Share $5.07 $3.29
Diluted earnings per Ordinary Share $5.03 $3.26
Basic earnings per Ordinary Share from continuing
operations $3.50 $3.06
Diluted earnings per Ordinary Share from
continuing operations $3.48 $3.03
========= =========
(i) Restated to show the results of our former Building Envelope
business in discontinued operations. See note 8 for further
details.
Consolidated Statement of Comprehensive Income
for the financial year ended 31 December 2022
2022 2021
$m $m
------ ------
Group profit for the financial year 3,874 2,621
------ ------
Other comprehensive income
Items that may be reclassified to profit
or loss in subsequent years:
Currency translation effects (641) (338)
Gains relating to cash flow hedges 66 34
Tax relating to cash flow hedges (14) (8)
------ ------
(589) (312)
------ ------
Items that will not be reclassified to profit
or loss in subsequent years:
Remeasurement of retirement benefit obligations 279 264
Tax relating to retirement benefit obligations (63) (36)
------ ------
216 228
------ ------
Total other comprehensive income for the
financial year (373) (84)
------ ------
Total comprehensive income for the financial
year 3,501 2,537
====== ======
Attributable to:
Equity holders of the Company 3,520 2,516
Non-controlling interests (19) 21
------ ------
Total comprehensive income for the financial
year 3,501 2,537
====== ======
Consolidated Balance Sheet
as at 31 December 2022
2022 2021
$m $m
------- -------
ASSETS
Non-current assets
Property, plant and equipment 18,921 19,502
Intangible assets 10,287 9,848
Investments accounted for using the equity
method 649 653
Other financial assets 14 12
Other receivables 164 239
Retirement benefit assets 261 166
Derivative financial instruments 3 97
Deferred income tax assets 88 109
-------
Total non-current assets 30,387 30,626
-------
Current assets
Inventories 4,194 3,611
Trade and other receivables 4,569 4,569
Current income tax recoverable 63 42
Derivative financial instruments 39 39
Cash and cash equivalents 5,936 5,783
Total current assets 14,801 14,044
------- -------
Total assets 45,188 44,670
======= =======
EQUITY
Capital and reserves attributable to the
Company's equity holders
Equity share capital 302 309
Preference share capital 1 1
Treasury Shares and own shares (297) (195)
Other reserves 380 445
Cash flow hedging reserve 5 -
Foreign currency translation reserve (692) (97)
Retained income 21,992 19,770
Capital and reserves attributable to the
Company's equity holders 21,691 20,233
Non-controlling interests 646 681
-------
Total equity 22,337 20,914
------- =======
LIABILITIES
Non-current liabilities
Lease liabilities 1,059 1,374
Interest-bearing loans and borrowings 8,145 9,938
Derivative financial instruments 77 -
Deferred income tax liabilities 2,868 2,734
Other payables 691 717
Retirement benefit obligations 277 475
Provisions for liabilities 845 937
Total non-current liabilities 13,962 16,175
------- -------
Current liabilities
Lease liabilities 260 297
Trade and other payables 5,872 5,692
Current income tax liabilities 702 550
Interest-bearing loans and borrowings 1,491 549
Derivative financial instruments 51 14
Provisions for liabilities 513 479
Total current liabilities 8,889 7,581
------- -------
Total liabilities 22,851 23,756
------- -------
Total equity and liabilities 45,188 44,670
======= =======
Consolidated Statement of Changes in Equity
for the financial year ended 31 December 2022
Attributable to the equity holders of
the Company
---------------------------------------------------------------------------
Treasury Cash Foreign
Issued Share Shares/ flow currency Non-
share premium own Other hedging translation Retained controlling Total
capital account shares reserves reserve reserve income interests equity
$m $m $m $m $m $m $m $m $m
-------- -------- --------- --------- -------- ------------ --------- ------------ --------
At 1 January 2022 310 - (195) 445 - (97) 19,770 681 20,914
Group profit for
the financial
year - - - - - - 3,847 27 3,874
Other
comprehensive
income - - - - 66 (595) 202 (46) (373)
-------- -------- --------- --------- -------- ------------ --------- ------------ --------
Total
comprehensive
income - - - - 66 (595) 4,049 (19) 3,501
Reclassifications - - - - 35 - (35) - -
Share-based
payment
expense - - - 101 - - - - 101
Shares acquired
by CRH plc
(Treasury
Shares) - - (1,170) - - - 17 - (1,153)
Treasury
Shares/own
shares reissued - - 24 - - - (24) - -
Shares acquired
by Employee
Benefit
Trust (own
shares) - - (8) - - - - - (8)
Shares distributed
under the
Performance
Share Plan Awards - - 173 (173) - - - - -
Cancellation of
Treasury Shares (7) - 879 7 - - (879) - -
Hedging gains
transferred to
inventory - - - - (96) - - - (96)
Tax relating to
cash flow hedges - - - - - - 17 - 17
Tax relating to
share-based
payment
expense - - - - - - (3) - (3)
Share option
exercises - - - - - - 11 - 11
Dividends - - - - - - (931) (13) (944)
Transactions
involving
non-controlling
interests - - - - - - - (3) (3)
-------- -------- --------- --------- -------- ------------ --------- ------------ --------
At 31 December
2022 303 - (297) 380 5 (692) 21,992 646 22,337
======== ======== ========= ========= ======== ============ ========= ============ ========
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
======== ======== ========= ========= ======== ============ ========= ============ ========
Consolidated Statement of Cash Flows
for the financial year ended 31 December 2022
Restated
(i)
2022 2021
$m $m
-------- ---------
Cash flows from operating activities
Group profit for the financial year 3,874 2,621
Finance costs (net) 382 417
Share of equity accounted investments' profit - (55)
Profit on disposals (1,422) (119)
Depreciation charge 1,644 1,691
Amortisation of intangible assets 113 74
Share-based payment expense 101 110
Income tax expense 1,155 721
Other 42 21
Net movement in inventories, receivables,
payables and provisions (518) (228)
-------- ---------
Cash generated from operations 5,371 5,253
Interest paid (including leases) (374) (401)
Corporation tax paid (1,043) (642)
-------- ---------
Net cash inflow from operating activities 3,954 4,210
-------- ---------
Cash flows from investing activities
Proceeds from disposals (net of cash disposed
and deferred proceeds) 3,827 387
Interest received 65 -
Dividends received from equity accounted
investments 36 32
Purchase of property, plant and equipment (1,523) (1,554)
Acquisition of subsidiaries (net of cash
acquired) (3,253) (1,494)
Other investments and advances (45) (4)
Net cash flow arising from derivative financial (11) -
instruments
Deferred and contingent acquisition consideration
paid (32) (33)
Deferred divestment consideration received 52 120
-------- ---------
Net cash outflow from investing activities (884) (2,546)
-------- ---------
Cash flows from financing activities
Proceeds from exercise of share options 11 13
Transactions involving non-controlling interests (3) -
Increase in interest-bearing loans and borrowings 38 -
Net cash flow arising from derivative financial
instruments (11) (37)
Repayment of interest-bearing loans and borrowings (364) (1,183)
Repayment of lease liabilities (ii) (249) (264)
Treasury Shares/own shares purchased (1,178) (896)
Dividends paid to equity holders of the Company (917) (906)
Dividends paid to non-controlling interests (13) (32)
-------- ---------
Net cash outflow from financing activities (2,686) (3,305)
-------- ---------
Increase/(decrease) in cash and cash equivalents 384 (1,641)
======== =========
Reconciliation of opening to closing cash
and cash equivalents
Cash and cash equivalents at 1 January 5,783 7,721
Translation adjustment (231) (297)
Increase/(decrease) in cash and cash equivalents 384 (1,641)
-------- ---------
Cash and cash equivalents at 31 December 5,936 5,783
======== =========
(i) See the Basis of Preparation and Accounting Policies on page 14 for further details.
(ii) Repayment of lease liabilities amounted to $297 million
(2021: $328 million), of which $48 million (2021: $64 million)
related to interest paid which is presented in cash flows from
operating activities.
Supplementary Information
Selected Explanatory Notes to the Consolidated 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 and as issued by the International Accounting
Standards Board (IASB).
Certain prior year disclosures have been amended to conform to
current year presentation. An amount of $46 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 31 December 2021 to align with current year
presentation. This has no impact on total net finance costs or any
other financial statement line items for any of the 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 3 Business Combinations - Reference to the Conceptual Framework
-- Amendments to IAS16 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.
Voluntary Change in Accounting Policy
For the period ended 31 December 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
year" as the starting point for the reconciliation to net cash
flows from operating activities in the 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 any of the periods presented.
Translation of Foreign Currencies
The financial information is presented in US Dollar millions.
Results and cash flows of operations with non-US Dollar functional
currencies have been translated into US Dollar at average exchange
rates for the year, 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 the translation of results, cash
flows and balance sheets into US Dollar were:
Average Year end
US Dollar 1 = 2022 2021 2022 2021
------------- ------------- ------------- -------------
Brazilian Real 5.1648 5.3968 5.2794 5.5716
Canadian Dollar 1.3017 1.2538 1.3535 1.2716
Chinese Renminbi 6.7334 6.4493 6.8987 6.3513
Danish Krone 7.0805 6.2919 6.9662 6.5652
Euro 0.9518 0.8460 0.9368 0.8829
Hungarian Forint 373.1682 303.3739 375.1400 325.9300
Indian Rupee 78.6295 73.9391 82.7211 74.3009
Philippine Peso 54.5318 49.2983 55.7290 50.9800
Polish Zloty 4.4631 3.8633 4.3881 4.0579
Pound Sterling 0.8120 0.7270 0.8310 0.7417
Romanian Leu 4.6930 4.1641 4.6357 4.3692
Serbian Dinar 111.7836 99.4732 109.8553 103.7590
Swiss Franc 0.9551 0.9145 0.9230 0.9119
Ukrainian Hryvnia 32.6730 27.2588 36.9172 27.2850
2. Key Components of 2022 Performance
Continuing operations
Operating Profit/(loss) Finance costs Assoc. and Pre-tax
$ million Sales revenue EBITDA profit on disposals (net) JV PAT (i) profit
-------------- ------- -------------- -------------- -------------- ------------- --------------
2021 29,206 4,990 3,331 116 (399) 55 3,103
Exchange
effects (1,359) (168) (82) (2) 19 (3) (68)
-------------- ------- -------------- -------------- -------------- ------------- --------------
2021 at 2022
rates 27,847 4,822 3,249 114 (380) 52 3,035
Incremental
impact in
2022 of:
2021/2022
acquisitions 1,739 402 275 - (55) - 220
2021/2022
divestments (108) (17) (13) (177) 47 - (143)
Organic 3,245 408 383 14 12 (52) 357
2022 32,723 5,615 3,894 (49) (376) - 3,469
-------------- ------- -------------- -------------- -------------- ------------- --------------
% Total
change 12% 13% 17% 12%
% Organic
change 12% 8% 12% 12%
-------------- ------- -------------- -------------- -------------- ------------- --------------
(i) CRH's share of after-tax results 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. First--half sales accounted for 46% of full-year
2022 (2021: 45%), while EBITDA for the first six months of 2022
represented 39% of the full-year out-turn (2021: 36%).
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.
Year ended 31 December
---------------------------------------------------------------------------------------
Americas Building Europe Americas Building Europe
Materials Products Materials Total Materials Products Materials Total
2022 2022 2022 2022 2021 2021 2021 2021
$m $m $m $m $m $m $m $m
---------- --------- ---------- ------- ---------- ---------- ---------- -------
Primary geographic
markets
Continuing operations
Republic of Ireland
(country of domicile) - - 801 801 - - 706 706
United Kingdom - 238 4,003 4,241 - 220 3,979 4,199
Rest of Europe (i) - 1,074 5,219 6,293 - 1,073 5,243 6,316
United States 13,050 6,038 - 19,088 11,172 4,446 - 15,618
Rest of World (ii) 1,274 473 553 2,300 1,235 479 653 2,367
---------- --------- ---------- ------- ---------- ---------- ---------- -------
Total Group from
continuing
operations 14,324 7,823 10,576 32,723 12,407 6,218 10,581 29,206
========== ========= ========== ======= ========== ========== ========== =======
Discontinued
operations
United Kingdom -
Building
Envelope - 7 - 7 - 24 - 24
Rest of Europe (i)
- Building Envelope - 4 - 4 - 12 - 12
United States -
Building
Envelope - 576 - 576 - 1,575 - 1,575
Rest of World (ii)
- Building Envelope - 58 - 58 - 164 - 164
---------- --------- ---------- ------- ---------- ---------- ---------- -------
Total Group from
discontinued
operations - 645 - 645 - 1,775 - 1,775
========== ========= ========== ======= ========== ========== ========== =======
Footnotes (i) and (ii) appear on page 17.
4. Revenue - continued
Year ended 31 December
------------------------------------------------------------------------------------- -------
Americas Europe Americas Europe
Materials Materials Materials Building Materials
(iii) BuildingProducts (iii) Total (iii) Products (iii) Total
2022 2022 2022 2022 2021 2021 2021 2021
$m $m $m $m $m $m $m $m
---------- ----------------- ---------- ------- ---------- --------- ---------- -------
Principal
activities
and products
Continuing
operations
Cement, lime
and
cement
products 1,554 - 3,481 5,035 1,483 - 3,463 4,946
Aggregates,
asphalt
and readymixed
products 6,979 - 3,515 10,494 6,262 - 3,606 9,868
Construction
contract
activities* 5,791 88 2,101 7,980 4,662 92 2,065 6,819
Architectural
products - 4,409 1,308 5,717 - 3,790 1,264 5,054
Infrastructure
products - 2,531 171 2,702 - 1,605 183 1,788
Construction
accessories - 795 - 795 - 731 - 731
---------- ----------------- ---------- ------- ---------- --------- ---------- -------
Total Group
from
continuing
operations 14,324 7,823 10,576 32,723 12,407 6,218 10,581 29,206
========== ================= ========== ======= ========== ========= ========== =======
Discontinued
operations
Construction
contract
activities* -
Building
Envelope - 16 - 16 - 83 - 83
Architectural
glass
and glazing
systems
and related
hardware
- Building
Envelope - 629 - 629 - 1,692 - 1,692
---------- ----------------- ---------- ------- ---------- --------- ---------- -------
Total Group
from
discontinued
operations - 645 - 645 - 1,775 - 1,775
========== ================= ========== ======= ========== ========= ========== =======
* Revenue principally recognised over time. Construction
contracts are generally completed within the same financial
reporting year.
Footnotes to revenue disaggregation on pages 16 & 17
(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.
B. Unsatisfied long-term construction contracts and other performance obligations
Revenue yet to be recognised from long-term construction
contracts, primarily within our Americas Materials and Europe
Materials businesses, amounted to $3,742 million at 31 December
2022 (2021: $3,177 million). The Group has applied the practical
expedient set out in IFRS 15 Revenue from Contracts with Customers
whereby revenue yet to be recognised on contracts that had an
original expected duration of less than one year is not disclosed.
The majority of open contracts at 31 December 2022 will close and
revenue will be recognised within 12 months of the balance sheet
date.
5. Segment Information
Effective 1 January 2023 the Group restructured into two
Divisions, CRH Americas and CRH Europe. During the first quarter of
2023, the Group's reportable segments increased from three to the
following four segments: Americas Materials Solutions, Americas
Building Solutions, Europe Materials Solutions and Europe Building
Solutions. This realignment reflects the way resources are
allocated and performance is assessed by the Chief Operating
Decision Maker.
In the Group's financial reporting for 2023 comparative
information for 2021 and 2022 will be restated to reflect the
changes in reportable segments. The segmental information presented
is based on the segment structure as at 31 December 2022 being
Americas Materials, Building Products and Europe Materials.
The change in segment reporting post year end does not have a
financial impact on the Group's Consolidated Financial
Statements.
2022 2021
$m % $m %
------- ------ ------- ------
Revenue
Continuing operations
Americas Materials 14,324 43.8 12,407 42.5
Building Products 7,823 23.9 6,218 21.3
Europe Materials 10,576 32.3 10,581 36.2
Total Group from continuing operations 32,723 100.0 29,206 100.0
======= ====== ======= ======
Discontinued operations
Building Products - Building Envelope 645 1,775
------- -------
Total Group from discontinued operations 645 1,775
======= =======
EBITDA
Continuing operations
Americas Materials 2,748 48.9 2,588 51.9
Building Products 1,510 26.9 992 19.9
Europe Materials 1,357 24.2 1,410 28.2
Total Group from continuing operations 5,615 100.0 4,990 100.0
======= ====== ======= ======
Discontinued operations
Building Products - Building Envelope 131 360
------- -------
Total Group from discontinued operations 131 360
======= =======
Depreciation, amortisation and impairment
Continuing operations
Americas Materials 839 48.7 800 48.2
Building Products 349 20.3 263 15.9
Europe Materials 533 31.0 596 35.9
------- ------
Total Group from continuing operations 1,721 100.0 1,659 100.0
======= ====== ======= ======
Group Operating profit
Continuing operations
Americas Materials 1,909 49.0 1,788 53.7
Building Products 1,161 29.8 729 21.9
Europe Materials 824 21.2 814 24.4
------- ------
Total Group from continuing operations 3,894 100.0 3,331 100.0
======= ====== ======= ======
5. Segment Information - continued
2022 2021
$m $m
------ ------
Reconciliation of Group operating profit to
profit before tax:
Continuing operations
Group operating profit 3,894 3,331
(Loss)/profit on disposals (i) (49) 116
------ ------
Profit before finance costs 3,845 3,447
Finance costs less income (336) (357)
Other financial expense (40) (42)
Share of equity accounted investments' profit - 55
------ ------
Profit before tax from continuing operations 3,469 3,103
====== ======
(i) (Loss)/profit on disposals
Americas Materials 38 126
Building Products 3 (27)
Europe Materials (90) 17
------ ------
Total Group from continuing operations (49) 116
------ ------
2022 2021
$m % $m %
------- ------ ------- ------
Total assets
Americas Materials 17,609 45.8 17,064 45.0
Building Products 9,165 23.9 8,504 22.4
Europe Materials 11,622 30.3 12,367 32.6
------- -------
Subtotal 38,396 100.0 37,935 100.0
====== ======
Reconciliation to total assets as reported
in the Consolidated Balance Sheet:
Investments accounted for using the equity
method 649 653
Other financial assets 14 12
Derivative financial instruments (current and
non-current) 42 136
Income tax assets (current and deferred) 151 151
Cash and cash equivalents 5,936 5,783
------- -------
Total assets as reported in the Consolidated
Balance Sheet 45,188 44,670
======= =======
Total liabilities
Americas Materials 3,227 33.9 3,292 33.0
Building Products 2,045 21.5 2,579 25.9
Europe Materials 4,245 44.6 4,100 41.1
------- ------ -------
Subtotal 9,517 100.0 9,971 100.0
====== ======
Reconciliation to total liabilities as reported
in the Consolidated Balance Sheet:
Interest-bearing loans and borrowings (current
and non-current) 9,636 10,487
Derivative financial instruments (current and
non-current) 128 14
Income tax liabilities (current and deferred) 3,570 3,284
------- -------
Total liabilities as reported in the Consolidated
Balance Sheet 22,851 23,756
======= =======
6. Earnings per Ordinary Share
The computation of basic and diluted earnings per Ordinary Share
is set out below:
2022 2021
$m $m
------- -------
Numerator computations
Group profit for the financial year 3,874 2,621
Profit attributable to non-controlling interests (27) (56)
------- -------
Profit attributable to ordinary equity holders
of the Company - numerator for basic/diluted earnings
per Ordinary Share 3,847 2,565
Profit after tax for the financial year from discontinued
operations - attributable to equity holders of
the Company 1,190 179
------- -------
Profit attributable to ordinary equity holders
of the Company - numerator for basic/diluted earnings
per Ordinary Share from continuing operations 2,657 2,386
------- -------
Number Number
of of
Shares shares
------- -------
Denominator computations
Weighted average number of Ordinary Shares (millions)
outstanding for the year 758.3 780.2
Effect of dilutive potential Ordinary Shares (employee
share awards) (millions) 5.8 6.6
------- -------
Denominator for diluted earnings per Ordinary
Share 764.1 786.8
------- -------
Earnings per Ordinary Share
- basic $5.07 $3.29
- diluted $5.03 $3.26
Earnings per Ordinary Share from continuing operations
- basic $3.50 $3.06
- diluted $3.48 $3.03
======= =======
7. Dividends
2022 2021
------------ ------
Net dividend paid per share $1.22 $1.16
Net dividend declared for the year $1.27 $1.21
Dividend cover - continuing operations 2.8x 2.5x
The Board is recommending a final dividend of $1.03 per share.
This would give a total dividend of $1.27 for the year (2021:
$1.21), an increase of 5% over last year.
Existing currency elections and currency payment defaults will
remain in place unless revoked or otherwise amended by certificated
shareholders. Therefore, the final dividend will be paid in euro,
Pound Sterling and US Dollar to shareholders in accordance with
their existing payment instructions. If no such instructions are in
place, the currency for dividend payments will be based on
shareholders' addresses on CRH's Share Register, or will, in the
case of shares held in the Euroclear Bank system, continue to be
paid automatically in euro, unless a currency election is made for
the final dividend. Investors holding CREST Depositary Interests
(CDIs) should refer to the CREST International Service Description.
In respect of the final dividend, the latest date for receipt of
currency elections (and DWT exemption forms) is 31 March 2023.
Earlier closing dates may apply to holders in Euroclear Bank and in
CREST.
If shareholders receive dividend payments in euro or Pound
Sterling, the exchange rate is expected to be set on Thursday, 20
April 2023.
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 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 31
December 2022.
The table below sets out the proceeds and related profit
recognised on divestment which were included in profit after tax
for the financial year from discontinued operations.
2022
$m
-------------
Assets/(liabilities) disposed of at net carrying amount:
- non-current assets* 2,016
- cash and cash equivalents 27
- inventories, receivables, payables and provisions 406
- lease liabilities (338)
- interest-bearing loans and borrowings (6)
- deferred tax (42)
- retirement benefit obligations (14)
-------------
Net assets disposed 2,049
Reclassification of currency translation effects on disposal 5
-------------
Total 2,054
Proceeds from disposal (net of disposal costs) 3,525
-------------
Profit on disposal from discontinued operations 1,471
=============
Net cash inflow arising on disposal
Proceeds from disposal from discontinued operations 3,525
Less: cash and cash equivalents disposed (27)
-------------
Total 3,498
-------------
*Non-current assets comprise property, plant and equipment,
intangible assets and investments accounted for using the equity
method .
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 year are set out as follows:
2022 2021
$m $m
------------- --------
Revenue 645 1,775
Cost of sales (i) (412) (1,143)
------------- --------
Gross profit 233 632
Operating costs (i) (138) (378)
------------- --------
Operating profit 95 254
Profit on disposals 1,471 3
------------- --------
Profit before finance costs 1,566 257
Finance costs (6) (18)
------------- --------
Profit before tax 1,560 239
Attributable income tax expense (ii) (370) (60)
------------- --------
Profit after tax for the financial year from
discontinued operations 1,190 179
============= ========
Profit attributable to:
Equity holders of the Company 1,190 179
------------- --------
Profit for the financial year from discontinued
operations 1,190 179
============= ========
Basic earnings per Ordinary Share from discontinued
operations $1.57 $0.23
Diluted earnings per Ordinary Share from discontinued
operations $1.55 $0.23
============= ========
Cash flows from discontinued operations
Net cash (outflow)/inflow from operating activities
(iii) (435) 234
Net cash inflow/(outflow) from investing activities
(iv) 3,446 (102)
Net cash outflow from financing activities (6) (28)
============= ========
(i) The depreciation and amortisation charge for discontinued
operations amounted to $26 million and $10 million respectively
(2021: $78 million and $28 million).
(ii) 2022 attributable income tax expense includes $347 million
relating to the profit on disposal of discontinued operations.
(iii) Includes the corporation tax paid on the sale of discontinued operations.
(iv) Includes the proceeds from the disposal of discontinued operations.
9. Business and Non-Current Asset Disposals
Disposal of
Business other non-current
disposals assets Total
2022 2021 2022 2021 2022 2021
Continuing operations $m $m $m $m $m $m
Net assets disposed 321 188 65 80 386 268
Reclassification of currency
translation effects on
disposal (4) 29 - - (4) 29
------ ----- ---------- --------- ------ -----
Total 317 217 65 80 382 297
Proceeds from disposals
(net of disposal costs) 218 295 115 118 333 413
------ ----- ---------- --------- ------ -----
(Loss)/profit on disposals
from continuing operations (99) 78 50 38 (49) 116
Discontinued operations
------ ----- ---------- --------- ------ -----
Profit on disposals from
discontinued operations
(note 8) 1,471 - - 3 1,471 3
------ ----- ---------- --------- ------ -----
Net cash inflow arising
on disposal
Continuing operations
Proceeds from disposals
from continuing operations 218 295 115 118 333 413
Less: cash and cash equivalents
disposed (4) (31) - - (4) (31)
Less: deferred proceeds
arising on disposal - (1) - - - (1)
------ ----- ---------- --------- ------ -----
Net cash inflow arising
on disposal from continuing
operations 214 263 115 118 329 381
Discontinued operations
Net cash inflow arising
on disposal from discontinued
operations 3,498 - - 6 3,498 6
------ ----- ---------- --------- ------ -----
Total Group net cash inflow
arising on disposal 3,712 263 115 124 3,827 387
====== ===== ========== ========= ====== =====
10. Net Finance Costs
Continuing operations
2022 2021
$m $m
----------- -----------
Finance costs 401 357
Finance income (65) -
Net other financial expense 40 42
----------- -----------
Total net finance costs 376 399
=========== ===========
The overall total is analysed as follows:
Net finance costs on interest-bearing loans and
borrowings including leases and cash and cash
equivalents 337 361
Net credit re change in fair value of derivatives
and fixed rate debt (1) (4)
----------- -----------
Finance costs less income 336 357
Unwinding of discount element of provisions for
liabilities 16 18
Unwinding of discount applicable to deferred and
contingent acquisition consideration 20 20
Unwinding of discount applicable to deferred divestment
proceeds (8) (12)
Unwinding of discount applicable to leased mineral
reserves 6 6
Pension-related finance cost (net) (note 15) 6 10
----------- -----------
Total net finance costs 376 399
=========== ===========
11. Net Debt
2022 2021
Book Fair Book Fair
value value value value
$m $m $m $m
-------- -------- -------- ---------
Non-current assets
Derivative financial instruments 3 3 97 97
Current assets
Cash and cash equivalents 5,936 5,936 5,783 5,783
Derivative financial instruments 39 39 39 39
Non-current liabilities
Interest-bearing loans and borrowings (i) (8,145) (7,517) (9,938) (10,786)
Lease liabilities (1,059) (1,059) (1,374) (1,374)
Derivative financial instruments (77) (77) - -
Current liabilities
Interest-bearing loans and borrowings (i) (1,491) (1,484) (549) (554)
Lease liabilities (260) (260) (297) (297)
Derivative financial instruments (51) (51) (14) (14)
-------- -------- -------- ---------
Group net debt (5,105) (4,470) (6,253) (7,106)
======== ======== ======== =========
(i) Interest-bearing loans and borrowings are Level 2
instruments whose fair value is derived from quoted market
prices.
11. Net Debt - continued
Gross debt, net of derivatives, matures as
follows:
2022 2021
$m $m
------- -------
Within one year 1,763 821
Between one and two years 881 1,642
Between two and three years 1,403 866
Between three and four years 920 1,399
Between four and five years 982 971
After five years 5,092 6,337
------- -------
Total 11,041 12,036
======= =======
Reconciliation of opening to closing net debt:
At Movement Movement Mark-to-market At 31
1 January attributable attributable and other December
31 December Book Cash to acquired to disposed non-cash Translation Book
2022 value flow companies companies adjustments adjustment value
$m $m $m $m $m $m $m
----------- -------- -------------- -------------- --------------- ------------ ----------
Cash and cash
equivalents 5,783 393 22 (31) - (231) 5,936
Interest-bearing
loans and
borrowings (10,487) 326 (8) 6 159 368 (9,636)
Lease liabilities (1,671) 249 (107) 342 (189) 57 (1,319)
Derivative
financial
instruments
- financing 122 11 - - (194) (9) (70)
----------- -------- -------------- -------------- --------------- ------------ ----------
Liabilities
from financing
activities (12,036) 586 (115) 348 (224) 416 (11,025)
Derivative
financial
instruments
- non-financing - (58) - - 38 4 (16)
----------- -------- -------------- -------------- --------------- ------------ ----------
Group net debt (6,253) 921 (93) 317 (186) 189 (5,105)
=========== ======== ============== ============== =============== ============ ==========
The equivalent disclosure for the prior year is as follows:
31 December
2021
Cash and cash
equivalents 7,721 (1,617) 7 (31) - (297) 5,783
Interest-bearing
loans and
borrowings (12,215) 1,183 (3) - 90 458 (10,487)
Lease liabilities (1,635) 264 (88) 3 (249) 34 (1,671)
Derivative
financial
instruments
(net) 188 37 - - (52) (51) 122
----------- -------- -------------- -------------- --------------- ------------ ----------
Group net debt (5,941) (133) (84) (28) (211) 144 (6,253)
=========== ======== ============== ============== =============== ============ ==========
Market capitalisation
Market capitalisation, calculated as the year end share price
multiplied by the number of Ordinary Shares in issue, is as
follows:
2022 2021
$m $m
------- -------
Market capitalisation - Euronext Dublin (i) 29,462 40,593
======= =======
(i) The market capitalisation figure of EUR27.6 billion (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.
11. 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 31 December 2022.
2022 2021
$m $m
Within one year - 19
Between three and four years 3,736 -
Between four and five years 9 3,964
Total 3,745 3,983
====== ======
Net debt metrics
The net debt metrics based on net debt as shown in note 11 are
as follows:
2022 2021
----- -----
Net debt as a percentage of market capitalisation 17% 15%
Net debt as a percentage of total equity 23% 30%
12. Future Purchase Commitments for Property, Plant and
Equipment
2022 2021
(i)
$m $m
--------- ---------
Contracted for but not provided in the financial
statements 862 628
Authorised by the Directors but not contracted
for 530 417
========= =========
(i) Includes contracted for but not provided for and authorised
by the Directors but not contracted for commitments of $11 million
and $25 million respectively relating to discontinued
operations.
13. Related Party Transactions
Sales to and purchases from joint ventures and associates are as
follows:
Joint Ventures Associates
2022 2021 2022 2021
$m $m $m $m
---------- --------- -------- --------
Continuing operations
Sales 192 157 45 42
Purchases 41 29 20 19
========== ========= ======== ========
Loans extended by the Group to joint ventures and associates are
included in financial assets. Amounts receivable from and payable
to equity accounted investments (arising from the aforementioned
sales and purchases transactions) as at the balance sheet date are
included in trade and other receivables and trade and other
payables respectively in the Consolidated Balance Sheet.
14. Business Combinations
The acquisitions completed during the year ended 31 December
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);
Kentucky: Hinkle Contracting, LLC (13 May);
Mississippi: Krystal Gravel, Inc. (23 December);
Texas: LD Construction Company and PTSS Investments, LLC (2
December) and Moore Brothers Construction Company (16
December);
Utah: Chapman Construction (16 December); and
West Virginia: Jefferson Asphalt Products Company (23
September).
Building Products:
Substantial Acquisition: on 8 July, CRH acquired Barrette
Outdoor Living, Inc. (Barrette), North America's leading provider
of residential fencing and railing solutions headquartered in
Middleburg Heights, Ohio, US. The assets acquired are all in the US
and are expected to enhance our existing offering of sustainable
outdoor living solutions in North America.
Americas
California: Calstone Company (29 March);
Ohio: Normandy Industries, Inc. (21 October);
South Carolina: Sterling Sand, LLC (19 October);
Texas: certain assets of Rinker Materials (18 April); Soil
Mender Products (25 July); and Inwesco, Inc. (12 December); and
West Virginia: Grant County Mulch, Inc. (19 December).
Other
Ireland: RS Sockets Ltd. (15 December); and
Poland: certain assets of Libet Company (2 September).
Europe Materials:
Croatia: Thermostone (1 April);
Denmark: Confac Holdings A/S (1 April) and Gunderup (1
December);
Finland: Terrawise Oy Stone Aggregates (31 May);
Poland: Mabau Group (75%, 21 March);
Romania: certain assets of SUT-ICIM and Irca SRL (23 February)
and Simbeton SRL (29 July); and
Slovakia: certain assets of U.S. Steel Košice, s.r.o. (1
January) and certain assets of COLAS Slovakia, a.s. (10
January).
14. Business Combinations - continued
The identifiable net assets acquired, including adjustments to
provisional fair values, were as follows:
Other
Barrette acquisitions Total
2022 2022 2022 2021
ASSETS $m $m $m $m
---------- -------------- ---------- ----------
Non-current assets
Property, plant and equipment 309 597 906 609
Intangible assets (i) 809 178 987 131
Equity accounted investments - 28 28 -
---------- -------------- ---------- ----------
Total non-current assets 1,118 803 1,921 740
---------- -------------- ---------- ----------
Current assets
Inventories 247 128 375 157
Trade and other receivables (ii) 168 59 227 191
Cash and cash equivalents 8 14 22 7
---------- -------------- ---------- ----------
Total current assets 423 201 624 355
---------- -------------- ---------- ----------
LIABILITIES
Trade and other payables (148) (47) (195) (143)
Provisions for liabilities (16) (3) (19) (1)
Lease liabilities (48) (59) (107) (88)
Interest-bearing loans and borrowings - (8) (8) (3)
Deferred income tax liabilities (192) (55) (247) (37)
---------- -------------- ---------- ----------
Total liabilities (404) (172) (576) (272)
---------- -------------- ---------- ----------
Total identifiable net assets at
fair value 1,137 832 1,969 823
Goodwill arising on acquisition
(iii) 774 546 1,320 679
---------- -------------- ---------- ----------
Total consideration 1,911 1,378 3,289 1,502
========== ============== ========== ==========
Consideration satisfied by:
Cash payments 1,911 1,364 3,275 1,501
Deferred consideration (stated at
net present cost) - 10 10 -
Contingent consideration - 4 4 1
---------- -------------- ---------- ----------
Total consideration 1,911 1,378 3,289 1,502
========== ============== ========== ==========
Net cash outflow arising on acquisition
Cash consideration 1,911 1,364 3,275 1,501
Less: cash and cash equivalents
acquired (8) (14) (22) (7)
---------- -------------- ---------- ----------
Total outflow in the Consolidated
Statement of Cash Flows 1,903 1,350 3,253 1,494
========== ============== ========== ==========
Footnotes (i), (ii) and (iii) appear on page 29.
14. Business Combinations - continued
The acquisition balance sheet presented on the previous page
reflects the identifiable net assets acquired in respect of
acquisitions completed during 2022, together with adjustments to
provisional fair values 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.
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 Business
Combinations. The acquisition of Barrette is deemed to be a
material acquisition. None of the remaining acquisitions completed
during the financial year were considered sufficiently material to
warrant separate disclosure of the attributable fair values. Due to
the size and scale of the Barrette acquisition, the determination
of the fair values of identifiable assets acquired and liabilities
assumed as disclosed above are provisional (principally in respect
of property, plant and equipment, provisions for liabilities and
the associated goodwill and deferred tax aspects). 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.
Footnotes to the acquisition balance sheet on page 28
(i) Marketing-related, customer-related and contract-based
intangible assets of $174 million, $594 million and $41 million
respectively arose on the acquisition of Barrette. These primarily
related to brand names, patents and non-contractual customer
relationships. 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.
(ii) Trade and other receivables
Gross contractual amounts Loss allowance Fair value
due
2022 2021 2022 2021 2022 2021
$m $m $m $m $m $m
---------------- -------------------- ---------------- ---------------- ---------------- ----------------
Barrette 169 - 1 - 168 -
Other
acquisitions 60 192 1 1 59 191
---------------- -------------------- ---------------- ---------------- ---------------- ----------------
Total 229 192 2 1 227 191
================ ==================== ================ ================ ================ ================
(iii) 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. $1,289 million of the goodwill recognised in
respect of acquisitions completed in 2022 is expected to be
deductible for tax purposes (2021: $284 million).
Acquisition-related costs
2022 2021
$m $m
---------------- ----------------
Barrette 27 -
Other acquisitions 12 13
---------------- ----------------
Total 39 13
================ ================
The above acquisition-related costs, which exclude
post-acquisition integration costs, have been included in operating
costs in the Consolidated Income Statement.
14. Business Combinations - continued
The following table analyses the 29 acquisitions completed in
2022 (2021: 20 acquisitions) by reportable segment and provides
details of the goodwill and consideration figures arising in each
of those segments:
Number of acquisitions Goodwill Consideration
2022 2021 2022 2021 2022 2021
Reportable segments $m $m $m $m
------------- ---------- ------------ --------- ------- -------
Continuing operations
Americas Materials 10 8 172 239 493 694
Building Products 10 7 1,205 417 2,652 734
Europe Materials 9 4 34 1 144 17
------------- ---------- ------------ --------- ------- -------
Total Group from continuing
operations 29 19 1,411 657 3,289 1,445
Discontinued operations
Building Products - Building
Envelope - 1 - 17 - 56
------------ --------- ------- -------
1,411 674 3,289 1,501
Adjustment to provisional fair value of prior year acquisitions (91) 5 - 1
------------ --------- ------- -------
Total 1,320 679 3,289 1,502
============ ========= ======= =======
Post-acquisition impact
The post-acquisition impact of acquisitions completed during the
year on the Group's profit for the financial year was as
follows:
Other
Barrette acquisitions Total
2022 2022 2022 2021
$m $m $m $m
--------- -------------- -------- ---------
Continuing operations
Revenue 347 414 761 524
(Loss)/profit before tax for
the financial year (33) 25 (8) 55
--------- -------------- -------- ---------
The revenue and profit of the Group for the financial year
determined in accordance with IFRS as though the acquisitions
effected during the year had been at the beginning of the year
would have been as follows:
CRH Group
excluding Consolidated
2022 2022 Group including
acquisitions acquisitions acquisitions
$m $m $m
------------------ ------------------ ---------------------
Revenue 1,730 31,962 33,692
Profit before tax for the financial
year 51 3,477 3,528
------------------ ------------------ ---------------------
There have been no 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.
15. Retirement Benefit Obligations
The Group operates either defined benefit or defined
contribution pension schemes in all of its principal operating
areas.
Financial assumptions - scheme liabilities
The major long-term assumptions used by the Group's actuaries in
the computation of scheme liabilities and post-retirement
healthcare obligations are as follows:
United States
Eurozone and Canada Switzerland
2022 2021 2022 2021 2022 2021
% % % % % %
------ ------ ---------- --------- --------- --------
Rate of increase in:
- salaries 3.30 2.92 3.00 3.03 2.50 1.25
- pensions in payment 2.10 1.90 - - - -
Inflation 2.30 1.90 2.10 2.00 2.00 0.75
Discount rate 4.20 1.43 5.20 2.82 2.20 0.30
Medical cost trend rate n/a n/a 1.87 5.91 n/a n/a
------ ------ ---------- --------- --------- --------
The following table provides a reconciliation of scheme assets
(at bid value) and the actuarial value of scheme liabilities (using
the aforementioned assumptions):
Year ended 31 December 2022
----------------------------------------------------
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 (5) - (5) - (5)
Current service cost - (46) (46) - (46)
Past service credit (net) - 1 1 - 1
Interest income on scheme assets 52 - 52 - 52
Interest cost on scheme liabilities - (58) (58) - (58)
Disposals - 25 25 - 25
Remeasurement adjustments:
-return on scheme assets excluding
interest income (534) - (534) - (534)
-experience variations - (48) (48) - (48)
-actuarial gain from changes
in financial assumptions - 951 951 - 951
-actuarial loss from changes
in demographic assumptions - (2) (2) - (2)
-impact of asset ceiling - - - (88) (88)
Employer contributions paid 35 - 35 - 35
Contributions paid by plan participants 7 (7) - - -
Benefit and settlement payments (142) 142 - - -
Translation adjustment (144) 154 10 - 10
------- ------------ ------ ---------- ---------
At 31 December (i) 2,443 (2,371) 72 (88) (16)
======= ============ ====== ==========
Related deferred income tax asset 22
---------
Net pension asset 6
=========
(i) Reconciliation to Consolidated
Balance Sheet
Retirement benefit assets 261
Retirement benefit obligations (277)
---------
Net pension deficit (16)
=========
15. Retirement Benefit Obligations - continued
Year ended 31 December
2021
Net
Pension
Assets Liabilities Liability
$m $m $m
------- ------------ -----------
At 1 January 3,321 (3,877) (556)
Administration expenses (4) - (4)
Current service cost - (55) (55)
Past service credit (net) - 3 3
Loss on settlements - (6) (6)
Interest income on scheme assets 46 - 46
Interest cost on scheme liabilities - (56) (56)
Disposals - 1 1
Remeasurement adjustments:
-return on scheme assets excluding
interest income 165 - 165
-experience variations - (7) (7)
-actuarial gain from changes
in financial assumptions - 70 70
-actuarial gain from changes
in demographic assumptions - 36 36
Employer contributions paid 43 - 43
Contributions paid by plan participants 7 (7) -
Benefit and settlement payments (258) 258 -
Translation adjustment (146) 157 11
------- ------------ -----------
At 31 December (i) 3,174 (3,483) (309)
======= ============
Related deferred income tax asset 89
-----------
Net pension liability (220)
===========
(i) Reconciliation to Consolidated
Balance Sheet
Retirement benefit assets 166
Retirement benefit obligations (475)
-----------
Net pension deficit (309)
===========
16. Statutory Accounts and Audit Opinion
The financial information presented in this report does not
constitute the statutory financial statements for the purposes of
Chapter 4 of Part 6 of the Companies Act 2014. Full statutory
financial statements for the year ended 31 December 2022 prepared
in accordance with IFRS, upon which the Auditor has given an
unqualified audit report, have not yet been filed with the
Registrar of Companies. Full statutory financial statements for the
year ended 31 December 2021, prepared in accordance with IFRS and
containing an unqualified audit report, have been delivered to the
Registrar of Companies.
17. Annual Report and Form 20-F and Annual General Meeting
(AGM)
The 2022 Annual Report and Form 20-F is expected to be published
on the CRH website, www.crh.com , on 10 March 2023 and posted on 29
March 2023 to those shareholders who have requested a paper copy. A
paper copy of the Annual Report and Form 20-F may be obtained at
the Company's registered office from 29 March 2023.
The Company's AGM is scheduled to be held at 11:00 a.m. on 27
April 2023. The AGM Notice is expected to be posted to shareholders
on 29 March 2023.
18. Board Approval
This announcement was approved by the Board of Directors of CRH
plc on 1 March 2023.
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 from continuing operations 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 is 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
Maker(6) (Group Chief Executive, Chief Financial Officer and Chief
Operating Officer). EBITDA margin is calculated by expressing
EBITDA as a percentage of sales.
Operating profit 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
2022 2021
$m $m
----------- -----------
Group profit for the financial year 2,684 2,442
Income tax expense 785 661
----------- -----------
Profit before tax 3,469 3,103
Share of equity accounted investments' profit - (55)
Other financial expense 40 42
Finance costs less income 336 357
----------- -----------
Profit before finance costs 3,845 3,447
Loss/(profit) on disposals 49 (116)
----------- -----------
Group operating profit 3,894 3,331
Depreciation charge 1,618 1,613
Amortisation of intangibles 103 46
EBITDA 5,615 4,990
=========== ===========
6 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 the Group Chief Executive, Chief Financial Officer
and Chief Operating Officer (formerly the Group Chief Executive and
Chief Financial Officer) 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
RONA
Return on Net Assets is a key internal pre-tax and
pre-non-cash-impairment measure of operating performance throughout
the CRH Group and can be used by management and investors to
measure the relative use of assets between CRH's business segments
and to compare to other businesses. The metric measures
management's ability to generate profits from the net assets
required to support that business, focusing on both profit
maximisation and the maintenance of an efficient asset base; it
encourages effective fixed asset maintenance programmes, good
decisions regarding expenditure on property, plant and equipment
and the timely disposal of surplus assets, and also supports the
effective management of the Group's working capital base.
RONA is calculated by expressing total Group operating profit
excluding non-cash-impairment charges as a percentage of average
net assets. Net assets comprise total assets by segment (including
assets held for sale) less total liabilities by segment (excluding
lease liabilities and including liabilities associated with assets
classified as held for sale) as shown in note 5 on page 19, and
excludes equity accounted investments and other financial assets,
net debt, and tax assets and liabilities. The average net assets
for the year is the simple average of the opening and closing
balance sheet figures.
The calculation of RONA is presented below:
2022 2021
$m $m
-------- --------
Group operating profit - continuing operations 3,894 3,331
Group operating profit - discontinued operations 95 254
-------- --------
Group operating profit (numerator for RONA computation) 3,989 3,585
-------- --------
Current year
Segment assets (i) 38,396 37,935
Segment liabilities (i) (9,517) (9,971)
-------- --------
Group segment net assets 28,879 27,964
Lease liabilities (ii) 1,319 1,671
-------- --------
Group segment net assets excluding lease liabilities 30,198 29,635
-------- --------
Prior year
Segment assets (i) 37,935 36,218
Segment liabilities (i) (9,971) (9,136)
-------- --------
Group segment net assets 27,964 27,082
Lease liabilities (ii) 1,671 1,635
-------- --------
Group segment net assets excluding lease liabilities 29,635 28,717
Average net assets (denominator for RONA computation) 29,917 29,176
-------- --------
RONA 13.3% 12.3%
======== ========
(i) Segment assets and liabilities as disclosed in note 5 on page 19.
(ii) Segment liabilities include lease liabilities which are
debt in nature and are therefore adjusted for in arriving at the
calculation of Group segment net assets for the calculation of
RONA. Segment lease liabilities at 31 December 2022 amounted to:
Americas Materials $393 million (2021: $381 million), Building
Products $468 million (2021: $773 million) and Europe Materials
$458 million (2021: $517 million).
Glossary of Alternative Performance Measures - continued
Net Debt and Net Debt/EBITDA
Net debt is used by management as it gives additional insight
into the Group's current debt situation less available cash. Net
debt is provided to enable investors to see the economic effect of
gross debt, related hedges and cash and cash equivalents in total.
Net debt is a non-GAAP measure and comprises current and
non-current interest-bearing loans and borrowings, lease
liabilities, cash and cash equivalents and current and non-current
derivative financial instruments (net).
Net Debt/EBITDA is monitored by management and is useful to
investors in assessing the Company's level of indebtedness relative
to its profitability. It is the ratio of Net Debt to EBITDA and is
calculated below:
2022 2021
$m $m
-------- ---------
Net debt
Cash and cash equivalents (i) 5,936 5,783
Interest-bearing loans and borrowings (i) (9,636) (10,487)
Lease liabilities (i) (1,319) (1,671)
Derivative financial instruments (net) (i) (86) 122
Group net debt (5,105) (6,253)
-------- ---------
EBITDA - from continuing operations 5,615 4,990
Times Times
-------- ---------
Net debt divided by EBITDA - from continuing
operations 0.9 1.3
======== =========
(i) These items appear in note 11 on page 24.
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
year, the Group uses organic revenue, organic operating profit and
organic EBITDA as additional performance indicators to assess
performance of pre-existing operations each year.
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 7, 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 2023, 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 and influenced by multiple factors, including
global and national economic circumstances (particularly those
affecting the infrastructure and construction markets), monetary
policy, consumer sentiment, swings in fuel and other input costs,
and weather conditions that may disrupt outdoor construction
activity.
People management: The Group may not achieve its strategic
objectives if it is not successful in attracting, engaging,
retaining and developing employees, planning for leadership
succession, developing a diverse and inclusive workforce, and
building constructive relationships with collective representation
groups.
Commodity products and substitution: Many of the Group's
products are commodities that face strong volume and price
competition. Such products may also face competition from
substitute products, including new products, that the Group does
not produce. The Group must maintain strong customer relationships
to ensure it can respond to changing consumer preferences and
approaches to construction. Failure to differentiate and innovate
could lead to market share decline, thus adversely impacting
financial performance.
Portfolio management: The Group engages in acquisition and
divestment activity 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 efficiently
identify and execute deals 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 health and safety risks for the
Group's people, a fall in demand for the Group's products, business
interruption, restrictions on repatriation of earnings or a loss of
plant access.
Strategic mineral reserves: Appropriate reserves are
increasingly scarce, and licences and permits required for
operations are becoming harder to secure. Numerous uncertainties
are inherent in estimating reserves and projecting production rates
of the minerals used in the Group's products. Failure of the Group
to plan for reserve depletion and secure or maintain 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
adversely affect the Group's operations and cost base and the
stability of markets in which the Group operates. Risks related to
climate change that could affect the Group's operations and
financial performance include both physical risks (such as acute
and chronic changes in weather) and transitional risks (such as
technological development, policy and regulation change and market
and economic responses).
Information technology and cyber security: The Group is
dependent on information and operational technology systems
(including those for which third-parties are in whole or in part
responsible) to support its business activities. Security incidents
and cyber-attacks are becoming increasingly sophisticated, and our
systems for protecting our assets and data against cyber security
risks may be insufficient. Security breaches, IT interruptions or
data loss could result in significant business disruption, loss of
production, reputational damage and/or regulatory penalties.
Health and safety performance: The Group's businesses operate in
an industry with inherent health and safety risks, including
operation of heavy vehicles, working at height, and use of
mechanised processes. Failure to ensure safe workplaces could
result in a deterioration in the Group's safety performance and
related adverse regulatory action or legal liability. Health and
safety incidents could significantly impact the Group's operational
and financial performance, as well as its reputation.
Sustainability and corporate social responsibility: The nature
of the Group's activities poses certain environmental and social
risks, which are also subject to an evolving regulatory framework
and changing societal expectations. Failure to embed sustainability
principles within the Group's businesses and strategy may result in
non-compliance with relevant regulations, standards and best
practices and lead to adverse stakeholder sentiment and reduced
financial performance.
Supply chain continuity: The Group must reliably and
economically source various raw materials, equipment and other
inputs from various third-party suppliers and then transport
finished products to satisfy customer demands and meet contractual
requirements. Our ability to balance maintaining resilient supply
chains with optimising our working capital and inventory levels is
critical to the continuity and strong financial returns of our
operations. Failure to manage any material disruption in our supply
chains could adversely impact our ability to service our customers
and result in a deterioration in operational and/or financial
performance.
Principal Risks and Uncertainties - continued
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.
There can be no assurance that the Group's policies and procedures
afford adequate protection against compliance failures or other
fraudulent and/or corrupt activities. Potential breaches of local
and international laws and regulations could result in litigation
or investigations, the imposition of significant fines, sanctions,
adverse operational impact (to include an inability to operate in
key markets/debarment) 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 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 could negatively affect
retained earnings.
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") is 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,
including but not limited to the statements under: "Key
Highlights", regarding the pipeline of opportunities and future
value creation; the Chief Executive's quote, regarding future
growth opportunities and value creation; "Listing Considerations"
regarding the proposed transition to a US primary listing, the
benefits of such transition and our expectations regarding growth
in the US market; "Sustainability", regarding the Group's
decarbonisation targets, expansion of sustainable product offerings
and establishment of CRH Ventures; "Trading Outlook", regarding
expectations for demand, sales volumes, pricing, market trends,
government funding, onshoring and macroeconomic conditions,
including interest rates and inflation; "Dividend", regarding the
timing and amount of dividend payments, as well as plans and
expectations regarding the Group's progressive dividend policy;
"Share Buyback Programme", regarding the timing and amount of share
buybacks; our intent to increase our share buyback programme, our
outlook for cash generation, our progressive dividend policy and
our credit rating; "Balance Sheet and Liquidity", with respect to
our belief that the Group has sufficient cash balances to meet all
maturing debt obligations for the next 5 years; "Annual Report and
Form 20-F and Annual General Meeting (AGM)", regarding timing of
the AGM and the publication of the Group's 2022 Annual Report and
Form 20-F; and "Principal Risks and Uncertainties", regarding the
nature and magnitude of risks and uncertainties facing the
Group.
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", "is likely to," "estimates",
"believes", "intends," "plans," "objective," 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.
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, including increased interest rates,
inflation, price volatility and/or labour and materials shortages
in 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, including in relation to climate change and
sustainability; the impact of unfavourable weather, including due
to climate change; our ability to successfully develop and
integrate sustainable solutions into our business and investor
and/or consumer sentiment regarding the importance of sustainable
practices and products; approval or allocation of funding for
infrastructure programmes; adverse political developments in
various countries and regions, including war and acts of terrorism;
failure to completely or successfully integrate acquisitions;
indirect and direct effects of the COVID-19 pandemic;
cyber-attacks, sabotage or other incidents and their direct or
indirect effects on our business; and the specific factors
identified in the section entitled "Principal Risks and
Uncertainties" herein and in the section entitled "Risk Factors" in
our 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 announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014
(including as it forms part of UK domestic law). For the purposes
of Article 2 of Commission Implementing Regulation (EU) 2016/1055,
the person responsible for arranging for the release of this
announcement on behalf of CRH plc is Jim Mintern, Chief Financial
Officer. The date and time of this statement is the same as the
date and time that it has been communicated to the media.
Appendix 1 2023 Organisational Structure
Americas Europe
============== ==============
Pro forma FY22 $ million Sales EBITDA Sales EBITDA
============================ ====== ====== ====== ======
Materials Solutions 14,324 2,748 9,349 1,246
Essential Materials 4,160 4,625
Road Solutions 10,164 4,724
Building Solutions 6,188 1,255 2,862 366
Building & Infrastructure
Solutions 2,379 2,252
Outdoor Living Solutions 3,809 610
Sub-total 20,512 4,003 12,211 1,612
---------------------------- ------ ------ ------ ------
Group 32,723 5,615
---------------------------- ------ ------ ------ ------
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END
FR EAXDFELLDEFA
(END) Dow Jones Newswires
March 02, 2023 02:00 ET (07:00 GMT)
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