REG-CRH plc CRH 2023 Full Year Results
29/02/2024 07:00
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CRH 2023 Full Year Results
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 10(th) consecutive year of margin
expansion(1)
*$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
(https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.crh.com&esheet=53902930&newsitemid=20240228883990&lan=en-US&anchor=www.crh.com&index=1&md5=0da2f082c37c12c19d0bbbb7ddee8854)
. 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
(https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.crh.com&esheet=53902930&newsitemid=20240228883990&lan=en-US&anchor=www.crh.com&index=2&md5=91fa7cebaa020557d62d95eda12c90e0)
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
(https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.crh.com%2Finvestors&esheet=53902930&newsitemid=20240228883990&lan=en-US&anchor=www.crh.com%2Finvestors&index=3&md5=7237338ff2acd98934b7a3b15f73777c)
. 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 4,014 3,461
equity method investments
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 1 1
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
Common stock, €0.32 par value, 1,250,000,000 shares authorized; 734,519,598 296 302
and 752,140,338 shares issued and outstanding, as of December 31, 2023 and
December 31, 2022, respectively
Treasury stock, at cost (42,419,281 and 7,712,885 shares as of December 31, (2,199) (297)
2023 and December 31, 2022, respectively)
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 (66) (1,422)
assets, net
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 6,390 5,936
Cash Flows
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.
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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