10-KPeriod: FY2010

CRH PUBLIC LTD CO Annual Report, Year Ended Dec 31, 2010

Filed March 31, 2011For Securities:CRH

Summary

CRH Public Limited Company's 2010 Form 20-F filing reveals a company navigating a challenging economic environment, with revenues largely stable year-over-year but facing margin pressures. The company reported a decline in operating profit and profit before tax, impacted by market conditions, increased restructuring costs, and impairment charges. Despite these headwinds, CRH maintained a strong focus on cost reduction and operational efficiency, aiming to preserve profitability and cash flow for eventual market recovery. The company continued its strategy of targeted acquisitions, although at a more measured pace than in prior years, to strengthen its regional and product positions. CRH's financial position remained robust with a strong balance sheet and sufficient liquidity to meet its obligations, while management expressed cautious optimism for market stabilization and modest revenue growth in 2011.

Key Highlights

  • 1Revenue for 2010 was €17.2 billion, broadly in line with the previous year.
  • 2EBITDA (as defined) declined by 10% to €1.6 billion, impacted by restructuring costs and market challenges.
  • 3Operating profit fell by 27% to €698 million, reflecting lower volumes and pricing pressures.
  • 4Acquisition spend increased to €567 million, focusing on bolt-on acquisitions to strengthen market positions.
  • 5The company reported a negative shareholder return of -16% for 2010, reflecting market conditions and a reduction in share price.
  • 6Net debt was reduced by 7% to €3.5 billion, leading to an improved net debt to equity ratio of 33%.
  • 7The company's outlook for 2011 projected a stabilization of demand and a return to like-for-like revenue growth, contingent on market recovery and price improvements.

Frequently Asked Questions

In 2010, CRH reported revenue of €17.2 billion, which was largely stable compared to 2009. However, EBITDA decreased by 10% to €1.6 billion, and operating profit declined by 27% to €698 million due to challenging market conditions, restructuring costs, and impairment charges. Shareholder returns were negative at -16%.

CRH successfully reduced its net debt by 7% to €3.5 billion, resulting in an improved net debt to equity ratio of 33%. The company maintained a strong liquidity position with €1.8 billion in cash and cash equivalents and liquid investments, providing sufficient resources to meet its obligations and capital expenditure requirements.

CRH continued its strategy of growth through acquisitions, spending €567 million in 2010 on bolt-on acquisitions aimed at strengthening regional and product positions. For 2011, CRH expressed cautious optimism, anticipating market stabilization and a return to like-for-like revenue growth, supported by cost efficiencies and ongoing development activity.

The Americas Materials segment was impacted by weaker-than-expected activity, leading to a 29% decline in operating profit. Europe Materials benefited from cost reduction measures, with EBITDA and operating profit close to 2009 levels. Products businesses in both Europe and the Americas faced significant demand pressures, particularly in residential and non-residential construction, resulting in lower operating profits. Distribution operations proved more resilient, with operating profit in Europe Distribution being marginally below 2009 levels.