CRH plc (NYSE:CRH) (LSE:CRH):
Key Highlights
Summary Financials (U.S. GAAP)
2023
Change
Total revenues
$34.9bn
+7%
Income from continuing operations
$3.1bn
+14%
Income from continuing operations
margin
8.8%
+60bps
Adjusted EBITDA*
$6.2bn
+15%
Adjusted EBITDA margin*
17.7%
+120bps
EPS (continuing operations)
$4.36
+22%
EPS (continuing operations)
pre-impairment*
$4.65
+30%
Return on net segment assets
14.4%
+130bps
Return on Net Assets*
15.3%
+200bps
Net cash provided by operating
activities
$5.0bn
+32%
- Strong performance; further growth in revenues, Adj. EBITDA*,
EPS, cash & returns
- FY23 Adj. EBITDA* $6.2bn (IFRS Adj. EBITDA* $6.5bn, ahead of
c.$6.3bn guidance)
- Integrated solutions strategy delivering 10th consecutive year
of margin expansion1
- $2.1bn acquisition of materials assets in high-growth Texas
market
- $0.7bn invested in 22 strategic bolt-on acquisitions; robust
pipeline of opportunities
- $0.7bn agreement to acquire majority stake in Adbri in
Australia
- Ongoing share buyback; $3bn 12-month program complete;
commencing $0.3bn quarterly tranche
- FY23 dividend $1.33 (+5%); announcing new quarterly dividend of
$0.35 (+5% annualized)
- Strong & flexible balance sheet; significant optionality
for long-term value creation
- Expect FY24 Net income of $3.55bn to $3.80bn; Adj. EBITDA* of
$6.55bn to $6.85bn
Albert Manifold, Chief Executive, said:
"2023 marked another record year of financial delivery for CRH,
supported by good underlying demand across our key end-use markets,
further pricing progress and the continued benefits of our
differentiated, customer-focused strategy. Over the last decade our
business has evolved from being a supplier of base materials into a
fully integrated provider of value-added solutions. Through our
technical expertise and the advancements we have made in product
innovation, we are solving complex problems for our customers while
making the construction process simpler, safer and more
sustainable. Despite continued inflationary cost pressures during
2023 we expanded our margins and delivered further growth in
profits, cash generation and returns. The strength of our balance
sheet together with our relentless focus on the efficient
allocation of capital enables us to capitalize on the opportunities
we see for further growth and value creation in 2024 and beyond."
Announced Thursday, February 29, 2024
______________________________
* Represents non-GAAP measure. See
'Non-GAAP Reconciliation and Supplementary Information' below.
1 Numbers based on IFRS financial
reporting to 2022 and U.S. GAAP for 2023.
2023 Full Year Results
Performance Overview
CRH delivered a strong performance in 2023 supported by good
underlying demand in key end-use markets, positive pricing and
contributions from acquisitions. Total revenues of $34.9 billion
(2022: $32.7 billion) were 7% ahead of 2022 while organic revenues*
were 3% ahead. Income from continuing operations was 14% ahead of
2022 at $3.1 billion (2022: $2.7 billion) and Adjusted EBITDA* of
$6.2 billion (2022: $5.4 billion) was 15% ahead, reflecting the
continued delivery of our integrated solutions strategy, strong
commercial management, ongoing cost control and further operational
efficiencies. Organic Adjusted EBITDA* was 10% ahead of 2022. CRH’s
income from continuing operations margin of 8.8% (2022: 8.2%) and
Adjusted EBITDA margin* of 17.7% (2022: 16.5%) were ahead of the
prior year.
- Americas Materials Solutions' total revenues were 8%
ahead of 2022, primarily driven by price increases across all lines
of business. Adjusted EBITDA was 16% ahead, as good commercial
management offset the impact of higher input costs.
- Americas Building Solutions delivered a positive
performance with total revenues 13% ahead of 2022, led by price
improvements across both Building & Infrastructure Solutions
and Outdoor Living Solutions as well as contributions from
acquisitions. Adjusted EBITDA was 18% ahead supported by price
progression and operational efficiencies along with strong
performances from recent acquisitions.
- Europe Materials Solutions benefited from continued
pricing progress which more than offset the impact of lower
activity levels, resulting in total revenues 4% ahead of 2022.
Adjusted EBITDA was 17% ahead, driven by commercial excellence
measures along with a continued focus on cost management.
- Europe Building Solutions' total revenues were 2% behind
2022, as positive pricing was offset by subdued demand in new-build
residential markets. Adjusted EBITDA was 17% behind as a result of
lower activity levels, partially offset by cost saving
actions.
CRH's earnings per share from continuing operations was 22%
higher than 2022 at $4.36 (2022: $3.58). Earnings per share
pre-impairment* from continuing operations was 30% higher than 2022
at $4.65 (2022: $3.58).
Sustainability
Sustainability is deeply embedded in all aspects of our
business. We continue to integrate our materials, products and
services to offer more sustainable solutions for our customers and
advance circularity. We also continue to make progress on our
target to deliver a 30% reduction in absolute carbon emissions by
2030. The Science Based Targets initiative (SBTi) has validated our
2030 decarbonization targets in line with a 1.5°C trajectory,
keeping us on the path to achieving our overall ambition of
becoming a net-zero business by 2050.
Capital Allocation
Our strong financial position and cash generation capabilities
provide us with the opportunity to continue to return cash to our
shareholders, while at the same time investing in our business and
delivering on our strategic growth initiatives.
In November 2023 the Board announced the acceleration of the
2023 dividend payment by distributing a second interim dividend of
$1.08 per ordinary share in lieu of a final dividend (2022: $1.03).
This resulted in a full-year dividend per share of $1.33 for 2023
(2022: $1.27), representing a 5% increase compared to the prior
year. This second interim dividend was paid on January 17, 2024. As
previously announced, commencing in Q1 2024, CRH will transition to
quarterly dividends. The Board has declared a quarterly dividend of
$0.35 per share, representing an annualized increase of 5% on the
prior year. The dividend will be paid wholly in cash on April 17,
2024 to shareholders registered at the close of business on March
15, 2024. The ex-dividend date will be March 14, 2024.
As part of its ongoing share buyback program, CRH repurchased
54.9 million (2022: 29.8 million) ordinary shares in 2023 for a
total consideration of $3.0 billion (2022: $1.2 billion). On
December 21, 2023, the Company announced a new tranche of $0.3
billion which completed on February 28, 2024. We are pleased to
announce that we are extending the program with an additional $0.3
billion tranche to be completed no later than May 9, 2024. We will
continue to assess our share buyback program throughout 2024 with
further updates on a quarterly basis.
Consistent with CRH’s disciplined approach to capital
allocation, the ongoing share repurchases demonstrate 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 a policy of consistent
long-term dividend growth and maintaining our strong
investment-grade credit rating.
2024 Full Year Outlook
Overall, we expect a favorable market backdrop and continued
positive pricing momentum in 2024 driven by significant
infrastructure investment and re-industrialization activity across
our key markets in North America and Europe.
Our operations in North America are expected to benefit from
increased infrastructure activity underpinned by strong federal and
state funding, while investments in critical manufacturing and
clean energy initiatives are expected to support key
non-residential segments. New-build residential activity is
expected to remain subdued in 2024 due to ongoing affordability
constraints arising from the current interest rate environment,
while residential repair and remodel activity is expected to remain
resilient.
In Europe, we expect to benefit from positive pricing,
disciplined cost control and good underlying demand in
infrastructure and key non-residential markets which are supported
by government and EU funding initiatives, while residential
construction activity is expected to remain subdued.
Assuming normal seasonal weather patterns and no major
dislocations in the macroeconomic environment, CRH remains well
positioned for another year of growth in 2024 as we continue to
execute our uniquely integrated and value-added solutions strategy,
supported by the strength and flexibility of our balance sheet and
disciplined approach to capital allocation.
2024 Guidance
(in $ billions, except per share
data)
Low
High
Net income (i)
3.55
3.80
Adjusted EBITDA*
6.55
6.85
EPS (i)
$5.15
$5.45
Capital expenditure
2.2
2.4
(i) 2024 Net income and EPS are based on
approximately $0.4 billion interest expense, net, effective tax
rate of approximately 23% and approximately 690 million of common
shares currently outstanding.
Americas Materials Solutions
Analysis of Change
in $ millions
2022
Currency
Acquisitions
Divestitures
Organic
2023
% change
Total revenues
14,324
(44)
+242
–
+913
15,435
+8%
Adjusted EBITDA
2,638
(6)
+42
–
+385
3,059
+16%
Adjusted EBITDA margin
18.4%
19.8%
Americas Materials Solutions’ total revenues were 8% ahead of
2022, 6% ahead on an organic* basis, driven primarily by price
progression across all business lines and partly offset by lower
activity levels in certain regions.
In Essential Materials total revenues increased by 10%,
supported by double-digit pricing growth in both aggregates and
cement, which were ahead by 14% and 15%, respectively. Aggregates
volumes declined by 1% and cement volumes declined by 3%, impacted
by unfavorable weather in certain regions.
In Road Solutions, total revenues increased by 7% driven by
increased pricing and positive infrastructure activity underpinned
by Infrastructure Investment and Jobs Act (IIJA) funding. Asphalt
prices increased by 7% while asphalt volumes were in line with the
prior year as improved demand in the South and West during the
second half of the year was offset by lower volumes in the Great
Lakes and Northeast regions. Paving and construction revenues
increased by 6%. Readymixed concrete pricing was 12% higher
compared with 2022, however volumes were 2% behind due to lower
activity levels in the South.
Adjusted EBITDA in Americas Materials Solutions of $3.1 billion
was 16% ahead of 2022 as increased pricing across all lines of
business and operational efficiencies mitigated the impact of
higher labor and subcontractor costs. Organic Adjusted EBITDA* was
15% ahead of 2022. Adjusted EBITDA margin increased by 140bps.
Americas Building Solutions
Analysis of Change
in $ millions
2022
Currency
Acquisitions
Divestitures
Organic
2023
% change
Total revenues
6,188
(14)
+751
–
+92
7,017
+13%
Adjusted EBITDA
1,219
(4)
+153
–
+74
1,442
+18%
Adjusted EBITDA margin
19.7%
20.6%
Americas Building Solutions recorded total revenues growth of
13%, driven by the continued execution of our integrated solutions
strategy, good commercial progress through price increases and
contributions from prior year acquisitions, primarily Barrette
Outdoor Living (Barrette). Organic total revenues* were 1% ahead of
2022.
In Building & Infrastructure Solutions, total revenues
growth was 6% due to increased demand in the water and energy
sectors as well as contributions from recent acquisitions.
In Outdoor Living Solutions, total revenues growth was 18%,
driven by positive pricing, resilient retail demand and the
incremental impact of the Barrette acquisition in July 2022.
Adjusted EBITDA in Americas Building Solutions was 18% ahead of
the prior year, 6% ahead on an organic* basis, driven by positive
pricing and contributions from recent acquisitions which offset the
impact of increased labor and raw materials costs. As a result, the
Adjusted EBITDA margin was 90bps ahead of the prior year.
Europe Materials Solutions
Analysis of Change
in $ millions
2022
Currency
Acquisitions
Divestitures
Organic
2023
% change
Total revenues
9,349
+186
+61
(157)
+251
9,690
+4%
Adjusted EBITDA
1,195
+30
+10
(12)
+172
1,395
+17%
Adjusted EBITDA margin
12.8%
14.4%
Europe Materials Solutions’ performance in 2023 was driven by
continued pricing progress which more than offset lower activity
levels, resulting in total revenues growth of 4%, or 3% ahead of
2022 on an organic* basis.
In Essential Materials, total revenues were 5% ahead of 2022
driven by positive pricing for aggregates and cement which were
ahead by 9% and 18%, respectively. Aggregates volumes declined by
7% while cement volumes were 13% behind (10% behind excluding the
impact of 2022 divestitures) as activity levels were impacted by
lower new-build residential activity and unfavorable weather in
several key markets.
In Road Solutions, notwithstanding the impact of adverse weather
in the first half of the year, pricing progress across all key
markets resulted in total revenues for the year 2% ahead of 2022.
Asphalt pricing increased by 10%, while volumes declined by 6%.
Paving and construction revenues increased by 10%. Readymixed
concrete pricing improved by 17%, while volumes decreased by
14%.
In 2023 Adjusted EBITDA in Europe Materials Solutions was $1.4
billion, 17% ahead of 2022 and 14% ahead on an organic* basis.
Adjusted EBITDA growth was primarily driven by positive pricing and
lower haulage and raw materials costs, which offset lower volume
levels. Adjusted EBITDA margin increased by 160bps compared with
2022.
Europe Building Solutions
Analysis of Change
in $ millions
2022
Currency
Acquisitions
Divestitures
Organic
2023
% change
Total revenues
2,862
+69
+95
–
(219)
2,807
(2)%
Adjusted EBITDA
336
+4
+8
–
(68)
280
(17)%
Adjusted EBITDA margin
11.7%
10.0%
Total revenues in Europe Building Solutions declined by 2% as
increased infrastructure demand was more than offset by subdued
new-build residential activity. Organic revenues* were 7% behind
the prior year.
Within Building & Infrastructure Solutions, total revenues
declined by 3% compared with 2022. Infrastructure Products
delivered growth in total revenues as positive pricing more than
offset slower new-build residential activity across most European
markets. Precast revenues were behind 2022 as positive commercial
progress was offset by lower market activity. Revenues in
Construction Accessories were behind the prior year as price
increases were offset by subdued new-build residential activity in
several markets.
Revenues in Outdoor Living Solutions were 4% ahead of the prior
year as positive pricing more than offset the impact of lower
demand and unfavorable weather in certain key markets.
Despite disciplined commercial management, cost saving
initiatives and lower raw materials and haulage costs, Adjusted
EBITDA in Europe Building Solutions declined by 17% compared with
the prior year, a 20% decrease on an organic* basis, primarily
driven by a slowdown in residential construction activity.
Consequently, Adjusted EBITDA margin decreased by 170bps compared
with the prior year.
Other Financial Items
Depreciation, depletion and amortization charges of $1.6 billion
were in line with the prior year (2022: $1.6 billion).
Arising from CRH’s annual impairment testing process, non-cash
impairment charges of $0.3 billion were recognized in 2023 (2022:
$nil) related to the Philippines business which has been impacted
by challenging market conditions. An additional impairment charge
of $0.1 billion was recognized primarily related to assets held for
sale.
Gains on disposal of long-lived assets of $66 million were
higher than 2022 (2022: $50 million).
Interest income of $206 million (2022: $65 million) was
significantly higher than 2022 as a result of increased interest
rates on deposits. Interest expense of $376 million (2022: $344
million) was higher than the prior year primarily as a result of
higher interest rates on floating rate debt, interest rate swaps
and new fixed rate debt issued, partially offset by interest on
maturing debt.
Income from continuing operations before income tax expense and
income from equity method investments was $4.0 billion (2022: $3.5
billion), and the associated tax charge of $925 million (2022: $762
million) represented an effective tax rate of 23% (2022: 22%). The
increase in the effective tax rate is primarily due to the impact
of the non-cash impairment charges recognized in 2023.
Earnings per share from continuing operations was 22% higher
than 2022 at $4.36 (2022: $3.58). Excluding non-cash impairment
charges, earnings per share of $4.65* was 30% higher than the prior
year.
Balance Sheet and Liquidity
2023 represented another year of improved cash generation for
CRH with net cash provided by operating activities of $5.0 billion
(2022: $3.8 billion) driven by higher income from continuing
operations and lower working capital compared to 2022. Total
short-term and long-term debt was $11.6 billion (2022: $9.6
billion). In April 2023, €750 million of euro-denominated notes
were repaid. Subsequently, €2 billion in new euro-denominated notes
were issued in July 2023, followed by a further repayment of €500
million of euro-denominated notes in November 2023. The increase in
year-end Net Debt* to $5.4 billion (2022: $3.9 billion) reflects
inflows from operations more than offset by outflows from the
purchase of property, plant and equipment, acquisitions and cash
returns to shareholders through share buybacks and dividends.
CRH ended 2023 with $6.4 billion of cash and cash equivalents on
hand (2022: $5.9 billion) and $3.9 billion of undrawn committed
facilities which are available until 2028. At year end, CRH had
sufficient cash balances to meet all maturing debt obligations for
the next 4.7 years and the weighted average maturity of the
remaining term debt was 12.1 years. CRH also has a $2.0 billion
U.S. Dollar Commercial Paper Program and a €1.5 billion Euro
Commercial Paper Program of which there were $1.0 billion
outstanding issued notes at year end. CRH remains committed to
maintaining its robust balance sheet and expects to maintain a
strong investment-grade credit rating with a BBB+ or equivalent
rating with each of the three main rating agencies.
Acquisitions and Divestitures
In 2023, CRH completed 22 acquisitions for a total consideration
of $0.7 billion. CRH also realized proceeds from divestitures and
disposals of long-lived assets (including deferred divestiture
consideration received) of $0.1 billion.
The largest acquisition in 2023 was in Americas Building
Solutions where CRH completed the acquisition of Hydro
International, a leading provider of stormwater and wastewater
solutions in North America and Europe. In addition, Americas
Building Solutions completed a further four acquisitions and
Americas Materials Solutions completed eight acquisitions for a
total spend of $0.4 billion. Europe Materials Solutions completed
five acquisitions and Europe Building Solutions completed four
acquisitions for a total spend of $0.3 billion.
In November 2023, CRH agreed to acquire an attractive portfolio
of cement and readymixed concrete assets and operations in Texas
for a total consideration of $2.1 billion. The transaction was
completed in February 2024, further strengthening our leading
position in the high-growth Texas market. In 2023, CRH also entered
into an agreement to divest its lime operations in Europe for $1.1
billion. The first phase of this divestiture, comprising CRH’s lime
operations in Germany, Czech Republic and Ireland, was completed in
January 2024. The remaining phases, consisting of operations in the
United Kingdom and Poland, are expected to complete in 2024.
In February 2024, CRH entered into a binding agreement to
acquire a majority stake in Adbri Ltd (Adbri), a materials business
in Australia. We will acquire approximately 53% of the issued share
capital for $0.7 billion, increasing CRH’s total shareholding to
approximately 57%. Adbri has high-quality assets and leading market
positions in Australia that complement CRH’s core competencies in
cement, concrete and aggregates while creating additional
opportunities for growth and development for our existing
Australian business. The proposed transaction is subject to
customary terms and conditions and is expected to complete in
2024.
Stock Exchange Listing & Accounting Changes
CRH transitioned its primary stock exchange listing from the
London Stock Exchange (LSE) to the New York Stock Exchange (NYSE),
effective September 25, 2023. CRH will file its Annual Report on
Form 10-K on February 29, 2024. It will also be available on
www.crh.com. As previously announced, CRH has transitioned to U.S.
GAAP reporting for periods beginning on and after January 1, 2023.
Financial restatements under U.S. GAAP, including IFRS to U.S. GAAP
reconciliation, are available on www.crh.com for 2021 and 2022 with
the 2023 reconciliation to follow later today.
CRH will host an analysts’ conference call and webcast
presentation at 08:00 ET/13:00 GMT on Thursday, February 29, 2024
to discuss the 2023 results and 2024 outlook. Registration details
are available on www.crh.com/investors. Upon registration a link to
join the call and dial-in details will be made available. The
accompanying investor presentation will be available on the
investor section of the CRH website in advance of the conference
call, while a recording of the conference call will be made
available afterwards.
Dividend Timetable
The timetable for payment of the quarterly dividend of $0.35 per
share is as follows:
Ex-dividend Date:
March 14, 2024
Record Date:
March 15, 2024
Payment Date:
April 17, 2024
The default payment currency is U.S. Dollar for shareholders who
hold their Ordinary Shares through a Depository Trust Company (DTC)
participant. It is also U.S. Dollar for shareholders holding their
Ordinary Shares in registered form, unless a currency election has
been registered with CRH’s Transfer Agent, Computershare Trust
Company N.A. by 17:00 ET/21:00 GMT on March 14, 2024.
The default payment currency for shareholders holding their
Ordinary Shares in the form of Depository Interests is euro. Such
shareholders can elect to receive the dividend in U.S. Dollar or
Pounds Sterling by providing their instructions to the Company’s
Depositary Interest provider, Computershare Investor Services plc,
by 17:00 GMT on March 19, 2024.
Appendices
Appendix 1 - Primary Statements
The following financial statements are an extract of the
Company’s Consolidated Financial Statements prepared in accordance
with U.S. GAAP for the year ended December 31, 2023 and do not
present all necessary information for a complete understanding of
the Company's financial condition as of December 31, 2023. The full
Consolidated Financial Statements prepared in accordance with U.S.
GAAP for the year ended December 31, 2023, including notes thereto,
will be included as a part of the Company’s Annual Report on Form
10-K filed with the U.S. Securities and Exchange Commission
(SEC).
Consolidated Statements of Income
(in $ millions, except share and per share data)
For the years ended December 31
2023
2022
Product revenues
26,156
24,519
Service revenues
8,793
8,204
Total revenues
34,949
32,723
Cost of product revenues
(14,741)
(14,123)
Cost of service revenues
(8,245)
(7,785)
Total cost of revenues
(22,986)
(21,908)
Gross profit
11,963
10,815
Selling, general and administrative
expenses
(7,486)
(7,056)
Gain on disposal of long-lived assets
66
50
Loss on impairments
(357)
–
Operating income
4,186
3,809
Interest income
206
65
Interest expense
(376)
(344)
Other nonoperating (expense) income,
net
(2)
(69)
Income from continuing operations
before income tax expense and income from equity method
investments
4,014
3,461
Income tax expense
(925)
(762)
(Loss) income from equity method
investments
(17)
–
Income from continuing
operations
3,072
2,699
Income from discontinued operations, net
of income tax expense
–
1,190
Net income
3,072
3,889
Net (income) attributable to redeemable
noncontrolling interests
(28)
(27)
Net loss attributable to noncontrolling
interests
134
–
Net income attributable to CRH
plc
3,178
3,862
Basic earnings per share attributable
to CRH plc
Continuing operations
$4.36
$3.58
Discontinued operations
–
$1.57
Net income
$4.36
$5.15
Diluted earnings per share attributable
to CRH plc
Continuing operations
$4.33
$3.55
Discontinued operations
–
$1.56
Net income
$4.33
$5.11
Weighted average common shares
outstanding
Basic
723.9
758.3
Diluted
729.2
764.1
Consolidated Balance Sheets
(in $ millions, except share data)
At December 31
2023
2022
Assets
Current assets:
Cash and cash equivalents
6,341
5,936
Accounts receivable, net
4,507
4,300
Inventories
4,291
4,194
Assets held for sale
1,268
–
Other current assets
478
403
Total current assets
16,885
14,833
Property, plant and equipment, net
17,841
17,768
Equity method investments
620
649
Goodwill
9,158
9,199
Intangible assets, net
1,041
1,088
Operating lease right-of-use assets,
net
1,292
1,175
Other noncurrent assets
632
607
Total assets
47,469
45,319
Liabilities, redeemable noncontrolling
interests and shareholders’ equity
Current liabilities:
Accounts payable
3,149
2,930
Accrued expenses
2,296
2,132
Current portion of long-term debt
1,866
1,491
Operating lease liabilities
255
238
Liabilities held for sale
375
–
Other current liabilities
2,072
1,250
Total current liabilities
10,013
8,041
Long-term debt
9,776
8,145
Deferred income tax liabilities
2,738
2,885
Noncurrent operating lease liabilities
1,125
1,000
Other noncurrent liabilities
2,196
2,208
Total liabilities
25,848
22,279
Commitments and contingencies
Redeemable noncontrolling interests
333
308
Shareholders’ equity
Preferred stock, €1.27 par value, 150,000
shares authorized and 50,000 shares issued and outstanding for 5%
preferred stock and 872,000 shares authorized, issued and
outstanding for 7% 'A' preferred stock, as of December 31, 2023 and
December 31, 2022
1
1
Common stock, €0.32 par value,
1,250,000,000 shares authorized; 734,519,598 and 752,140,338 shares
issued and outstanding, as of December 31, 2023 and December 31,
2022, respectively
296
302
Treasury stock, at cost (42,419,281 and
7,712,885 shares as of December 31, 2023 and December 31, 2022,
respectively)
(2,199)
(297)
Additional paid-in capital
454
443
Accumulated other comprehensive loss
(616)
(787)
Retained earnings
22,918
22,495
Total shareholders’ equity attributable
to CRH plc shareholders
20,854
22,157
Noncontrolling interests
434
575
Total equity
21,288
22,732
Total liabilities, redeemable
noncontrolling interests and equity
47,469
45,319
Consolidated Statements of Cash Flows
(in $ millions)
For the years ended December 31
2023
2022
Cash Flows from Operating
Activities:
Net income
3,072
3,889
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion and
amortization
1,633
1,577
Loss on impairments
357
–
Share-based compensation
123
101
Gains on disposals from discontinued
operations, businesses and long-lived assets, net
(66)
(1,422)
Deferred tax (benefit) expense
(64)
(63)
Loss (income) from equity method
investments
17
–
Pension and other postretirement benefits
net periodic benefit cost
31
30
Non-cash operating lease costs
293
273
Other items, net
68
45
Changes in operating assets and
liabilities, net of effects of acquisitions and divestitures:
Accounts receivable, net
(164)
(226)
Inventories
(60)
(655)
Accounts payable
144
403
Operating lease liabilities
(276)
(269)
Other assets
25
(45)
Other liabilities
(72)
205
Pension and other postretirement benefits
contributions
(44)
(43)
Net cash provided by operating
activities
5,017
3,800
Cash Flows from Investing
Activities:
Purchases of property, plant and
equipment
(1,817)
(1,523)
Acquisitions, net of cash acquired
(640)
(3,253)
Proceeds from divestitures and disposals
of long-lived assets
104
3,827
Dividends received from equity method
investments
44
36
Settlements of derivatives
(1)
(11)
Deferred divestiture consideration
received
6
52
Other investing activities, net
(87)
(45)
Net cash used in investing
activities
(2,391)
(917)
Consolidated Statements of Cash Flows
(in $ millions)
For the years ended December 31
2023
2022
Cash Flows from Financing
Activities:
Proceeds from debt issuances
3,163
38
Payments on debt
(1,462)
(364)
Settlements of derivatives
7
(11)
Payments of finance lease obligations
(26)
(28)
Deferred and contingent acquisition
consideration paid
(22)
(24)
Dividends paid
(940)
(917)
Distributions to noncontrolling and
redeemable noncontrolling interests
(35)
(23)
Transactions involving noncontrolling
interests
(2)
(3)
Repurchases of common stock
(3,067)
(1,178)
Proceeds from exercise of stock
options
4
11
Net cash used in financing
activities
(2,380)
(2,499)
Effect of exchange rate changes on cash
and cash equivalents
208
(231)
Increase/(decrease) in cash and cash
equivalents
454
153
Cash and cash equivalents at the beginning
of year
5,936
5,783
Cash and cash equivalents at the end of
year
6,390
5,936
Supplemental cash flow
information:
Cash paid for interest (including finance
leases)
418
329
Cash paid for income taxes
959
1,043
Reconciliation of cash and cash
equivalents
Cash and cash equivalents presented in the
Consolidated Balance Sheets
6,341
5,936
Cash and cash equivalents included in
assets held for sale
49
–
Total cash and cash equivalents
presented on the Consolidated Statements of Cash Flows
6,390
5,936
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 December 31, 2023 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 December 31, 2022, prepared in accordance with IFRS and
containing an unqualified audit report, have been delivered to the
Registrar of Companies.
Appendix 2 - Non-GAAP Reconciliation and Supplementary
Information
CRH uses a number of non-GAAP performance measures to monitor
financial performance. These measures are referred to throughout
the discussion of our reported financial position and operating
performance on a continuing operations basis unless otherwise
defined and are measures which are regularly reviewed by CRH
management. These performance measures may not be uniformly defined
by all companies and accordingly 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 U.S. GAAP but is not itself an expressly
permitted GAAP measure. The non-GAAP performance measures as
summarized below should not be viewed in isolation or as an
alternative to the equivalent GAAP measure.
Adjusted EBITDA: Adjusted EBITDA is defined as earnings
from continuing operations before interest, taxes, depreciation,
depletion, amortization, loss on impairments, gain/loss on
divestitures, income/loss from equity method investments,
substantial acquisition-related costs and pension expense/income
excluding current service cost component. 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 Company. Adjusted EBITDA by segment is monitored by management
in order to allocate resources between segments and to assess
performance. Adjusted EBITDA margin is calculated by
expressing Adjusted EBITDA as a percentage of total revenues.
Reconciliation to its nearest GAAP measure is presented
below:
in $ millions
2023
2022
Net income
3,072
3,889
Income from discontinued operations, net
of income tax expense
–
(1,190)
Income from continuing operations
3,072
2,699
Loss (income) from equity method
investments
17
–
Income tax expense
925
762
Loss (gain) on divestitures (i)
–
99
Pension income excluding current service
cost component (i)
(3)
(30)
Other interest, net (i)
5
–
Interest expense
376
344
Interest income
(206)
(65)
Depreciation, depletion and
amortization
1,633
1,552
Loss on impairments (ii)
357
–
Substantial acquisition-related costs
(iii)
–
27
Adjusted EBITDA
6,176
5,388
Total revenues
34,949
32,723
Adjusted EBITDA margin
17.7%
16.5%
(i) Loss (gain) on divestitures, pension
income excluding current service cost component and other interest,
net have been included in Other nonoperating (expense) income, net
in the Consolidated Statements of Income in the Annual Report on
Form 10-K.
(ii) For the year ended December 31, 2023,
the total impairment loss comprised of $62 million within Americas
Materials Solutions and $295 million within Europe Materials
Solutions.
(iii) Represents expenses associated with
non-routine substantial acquisitions, which are those not bolt-on
in nature and are separately reported in Note 4 “Acquisitions” of
the audited financial statements in the Annual Report on Form 10-K.
Expenses in 2022 include legal and consulting expenses related to
the acquisition of Barrette.
Adjusted EBITDA is not defined by GAAP and should not be
considered as an alternative to earnings measures defined by GAAP.
Reconciliation to its nearest GAAP measure for the mid-point of the
2024 Adjusted EBITDA guidance is presented below:
in $ billions
2024
Mid-Point
Net income
3.7
Income tax expense
1.1
Interest expense, net
0.4
Depreciation, depletion, amortization and
impairment
1.7
Other (i)
(0.2)
Adjusted EBITDA
6.7
(i) Other primarily relates to loss
(income) from equity method investments and loss (gain) on
divestitures.
Return on Net Assets (RONA): Return on Net Assets is a
key internal pre-tax and pre-impairment (which is non-cash) measure
of operating performance throughout the Company and can be used by
management and investors to measure the relative use of assets
between CRH’s segments. The metric measures management’s ability to
generate income from the net assets required to support that
business, focusing on both profit maximization and the maintenance
of an efficient asset base; it encourages effective fixed asset
maintenance programs, good decisions regarding expenditure on
property, plant and equipment and the timely disposal of surplus
assets. It also supports the effective management of the Company’s
working capital base. RONA is calculated by expressing operating
income from continuing operations and operating income from
discontinued operations excluding loss on impairments (which are
non-cash) 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 finance lease
liabilities and including liabilities associated with assets
classified as held for sale) as shown below and detailed in Note 3
“Assets held for sale and discontinued operations” of the audited
financial statements in the Annual Report on Form 10-K and excludes
equity method investments and other financial assets, Net Debt (as
defined below) and tax assets and liabilities. The average net
assets for the year is the simple average of the opening and
closing balance sheet figures.
Reconciliation to its nearest GAAP measure is presented
below:
in $ millions
2023
2022
Operating income
A
4,186
3,809
Operating income from discontinued
operations
—
89
4,186
3,898
Adjusted for loss on impairments (i)
357
—
Numerator for RONA computation
4,543
3,898
Current year
Segment assets (ii)
38,868
38,504
Segment liabilities (ii)
(10,169)
(8,883)
B
28,699
29,621
Finance lease liabilities
117
81
28,816
29,702
Assets held for sale (iii)
1,268
—
Liabilities associated with assets
classified as held for sale (iii)
(375)
—
29,709
29,702
Prior year
Segment assets (ii)
38,504
37,951
Segment liabilities (ii)
(8,883)
(9,246)
C
29,621
28,705
Finance lease liabilities
81
83
29,702
28,788
Denominator for RONA computation -
average net assets
29,706
29,245
Return on net segment assets (A divided
by average of B and C)
14.4%
13.1%
RONA
15.3%
13.3%
Total assets as reported in the
Consolidated Balance Sheets
47,469
45,319
Total liabilities as reported in the
Consolidated Balance Sheets
25,848
22,279
(i) Operating income is adjusted for loss
on impairments. For the year ended December 31, 2023, the total
impairment loss comprised of $62 million within Americas Materials
Solutions and $295 million within Europe Materials Solutions.
(ii) Segment assets and liabilities as
disclosed in Note 20 “Segment Information” in Item 8. “Financial
Statements and Supplementary Data” in the Annual Report on Form
10-K.
(iii) Assets held for sale and liabilities
associated with assets classified as held for sale as disclosed in
Note 3 “Assets held for sale and discontinued operations” in Item
8. “Financial Statements and Supplementary Data” in the Annual
Report on Form 10-K.
Net Debt: Net Debt is used by management as it gives
additional insight into the Company’s current debt position 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 comprises short and long-term debt,
finance lease liabilities, cash and cash equivalents and current
and noncurrent derivative financial instruments (net).
Reconciliation to its nearest GAAP measure is presented
below:
in $ millions
2023
2022
Short and long-term debt
(11,642)
(9,636)
Cash and cash equivalents (i)
6,390
5,936
Finance lease liabilities
(117)
(81)
Derivative financial instruments (net)
(37)
(86)
Net Debt
(5,406)
(3,867)
(i) Includes $49 million cash and cash
equivalents reclassified as held for sale.
Organic Revenue and Organic Adjusted EBITDA: Because of
the impact of acquisitions, divestitures, currency exchange
translation and other non-recurring items on reported results each
year, CRH uses organic revenue and organic Adjusted EBITDA as
additional performance indicators to assess performance of
pre-existing (also referred to as underlying, heritage,
like-for-like or ongoing) operations each year.
Organic revenue and organic Adjusted EBITDA are arrived at by
excluding the incremental revenue and Adjusted EBITDA contributions
from current and prior year acquisitions and divestitures, the
impact of exchange translation, and the impact of any one-off
items. Changes in organic revenue and organic Adjusted EBITDA are
presented as additional measures of revenue and Adjusted EBITDA to
provide a greater understanding of the performance of the Company.
Organic change % is calculated by expressing the organic movement
as a percentage of the prior year (adjusted for currency exchange
effects). A reconciliation of the changes in organic revenue and
organic Adjusted EBITDA to the changes in total revenues and
Adjusted EBITDA by segment, is presented with the discussion within
each segment’s performance in tables contained in the segment
discussion above.
EPS pre‑impairment: EPS pre‑impairment is a measure of
the Company's profitability per share from continuing operations
excluding any loss on impairments (which is non-cash) and the
related tax impact of such impairments. It is used by management to
evaluate the Company's underlying profit performance and its own
past performance. EPS information presented on a pre‑impairment
basis is useful to investors as it provides an insight into the
Company's underlying performance and profitability. EPS
pre‑impairment is calculated as income from continuing operations
adjusted for (i) net (income) attributable to redeemable
noncontrolling interests (ii) net loss (income) attributable to
noncontrolling interests (iii) adjustment of redeemable
noncontrolling interests to redemption value and excluding any loss
on impairments (and the related tax impact of such impairments)
divided by the weighted average number of common shares outstanding
for the year.
Reconciliation to its nearest GAAP measure is presented
below:
in $ millions, except share and per
share data
2023
Per Share - basic
2022
Per Share - basic
Weighted average common shares outstanding
– Basic
723.9
758.3
Income from continuing operations
3,072
$4.24
2,699
$3.56
Net (income) attributable to redeemable
noncontrolling interests
(28)
$(0.04)
(27)
$(0.03)
Net loss (income) attributable to
noncontrolling interests
134
$0.19
–
–
Adjustment of redeemable noncontrolling
interests to redemption value
(24)
$(0.03)
40
$0.05
Income from continuing operations for
EPS
3,154
$4.36
2,712
$3.58
Impairment of property, plant and
equipment and intangible assets
224
$0.30
–
–
Tax related to impairment charges
(9)
$(0.01)
–
–
Income from continuing operations for
EPS – pre-impairment (i)
3,369
$4.65
2,712
$3.58
(i) Reflective of CRH’s share of
impairment of property, plant and equipment and intangible assets
($224 million) and related tax effect.
Adjusted EBITDA (IFRS) to Adjusted EBITDA (U.S. GAAP)
Reconciliation:
in $ millions
2023
2022
Adjusted EBITDA (IFRS) (i)
6,500
5,692
U.S. GAAP Adjustments:
Leases
(293)
(255)
Provisions
(36)
(22)
Pensions
6
(2)
Other
(1)
(25)
Adjusted EBITDA (U.S. GAAP)
6,176
5,388
Total revenues
34,949
32,723
Adjusted EBITDA Margin (IFRS)
18.6%
17.4%
Adjusted EBITDA Margin (U.S. GAAP)
17.7%
16.5%
(i) 2023 IFRS Adjusted EBITDA includes
$0.07 billion of profit on disposal of long-lived assets which was
not included in prior guidance of IFRS EBITDA of $6.3 billion.
Appendix 3 - Disclaimer/Forward-Looking Statements
In order to utilize the “Safe Harbor” provisions of the United
States Private Securities Litigation Reform Act of 1995, CRH 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.
These forward-looking statements may generally, but not always, be
identified by the use of words such as “will”, “anticipates”,
“should”, “could”, “would”, “targets”, “aims”, “may”, “continues”,
“expects”, “is expected to”, “estimates”, “believes”, “intends” or
similar expressions. These forward-looking statements include all
matters that are not historical facts or matters of fact at the
date of this document.
In particular, the following, among other statements, are all
forward looking in nature: plans and expectations regarding
customer demand, pricing, costs, underlying drivers for growth in
infrastructure, residential and non-residential markets,
macroeconomic and market trends in regions where CRH operates, and
investments in manufacturing and clean energy initiatives; plans
and expectations regarding government funding initiatives and
priorities; plans and expectations regarding CRH’s decarbonization
targets and sustainability initiatives; plans and expectations
regarding return of cash to shareholders, including the timing and
amount of share buybacks and dividends; plans and expectations
related to growth opportunities, strategic growth initiatives and
value creation; plans and expectations regarding capital
expenditures and capital allocation, net income, Adjusted EBITDA,
earnings per share and its growth, effective tax rate, interest
expense and CRH’s 2024 full year performance; plans and
expectations regarding CRH’s ability to meet its upcoming debt
obligations, CRH’s balance sheet and investment-grade credit
rating; and plans and expectations regarding the timing of
completion of and expected benefits from acquisitions and
divestitures.
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. 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.
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 changes in interest rates,
inflation, price volatility and/or labor and materials shortages;
demand for infrastructure, residential and non-residential
construction and our products in geographic markets in which we
operate; increased competition and its impact on prices and market
position; increases in energy, labor and/or other raw materials
costs; adverse changes to laws and regulations, including in
relation to climate change; the impact of unfavorable weather;
investor and/or consumer sentiment regarding the importance of
sustainable practices and products; availability of public sector
funding for infrastructure programs; political uncertainty,
including as a result of political and social conditions in the
jurisdictions CRH operates in, or adverse political developments,
including the ongoing geopolitical conflicts in Ukraine and the
Middle East; failure to complete or successfully integrate
acquisitions or make timely divestments; cyber-attacks and exposure
of associates, contractors, customers, suppliers and other
individuals to health and safety risks, including due to product
failures. Additional factors, risks and uncertainties that could
cause actual outcomes and results to be materially different from
those expressed by the forward-looking statements in this report
include the risks and uncertainties described under “Risk Factors”
in CRH’s Annual Report on Form 20-F for the period ended December
31, 2022 as filed with the U.S. SEC and CRH's other filings with
the U.S. SEC.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240228198985/en/
Contact CRH at +353 1 404 1000 Albert Manifold, Chief
Executive Jim Mintern, Chief Financial Officer Frank Heisterkamp,
Director of Capital Markets & ESG Tom Holmes, Head of Investor
Relations
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