10-KPeriod: FY2016

CRH PUBLIC LTD CO Annual Report, Year Ended Dec 31, 2016

Filed March 10, 2017For Securities:CRH

Summary

CRH plc's 2016 Annual Report details a strong financial performance, exceeding expectations from significant acquisitions made in 2015. The company reported a profit after tax of €1.3 billion, a 74% increase over the previous year, with earnings per share (EPS) rising by 69% to 150.2c. Sales increased by 15% to €27.1 billion, driven by the full-year contribution of the acquired LafargeHolcim (LH) assets and C.R. Laurence (CRL) business, alongside a 3% organic sales increase from underlying operations. The Group successfully integrated these businesses, realized €89 million in synergies, and improved its debt-to-EBITDA ratio to 1.7x, returning it to normalized levels ahead of commitments. The company demonstrated robust operational performance across its global segments, particularly in the Americas, which saw an 8% sales increase and a 38% profit rise. Europe also performed well, with total sales up 20% and operating profit doubling, supported by the integration of LH assets and a recovery in key markets. The Board is recommending a 4% increase in the full-year dividend to 65.0c per share, reflecting the company's strong performance and positive outlook. CRH remains committed to its strategy of continuous improvement, disciplined growth through acquisitions, and portfolio optimization, positioning itself for continued growth and value creation in 2017.

Key Highlights

  • 1Profit after tax increased by 74% to €1.3 billion.
  • 2Sales grew by 15% to €27.1 billion, driven by acquisitions and 3% organic growth.
  • 3Acquired LH Assets and CRL businesses successfully integrated, realizing €89 million in synergies.
  • 4Net debt to EBITDA ratio improved to 1.7x, returning to normalized levels.
  • 5Proposed final dividend increased by 4% to 65.0c per share.
  • 6Strong performance noted across Americas (8% sales growth, 38% profit growth) and Europe (20% sales growth, doubled operating profit).
  • 7Continued focus on bolt-on acquisitions and portfolio management to drive value creation.

Frequently Asked Questions

CRH reported a strong financial performance in 2016. Profit after tax increased significantly by 74% to €1.3 billion, and earnings per share (EPS) rose by 69% to 150.2c. Total sales grew by 15% to €27.1 billion, driven by both the full-year impact of acquisitions made in 2015 and a 3% organic sales increase from underlying operations. EBITDA (as defined) increased by 41% to €3.1 billion.

The integration of the LafargeHolcim (LH) Assets and C.R. Laurence (CRL) businesses, acquired in 2015, was successful. These businesses performed as expected and contributed significantly to the Group's profit growth. CRH realized €89 million in synergies from these integrations and managed to bring its debt-to-EBITDA ratio back to normalized levels (1.7x) ahead of schedule.

CRH anticipates continued positive momentum in the US construction sector, with expectations for growth in residential and non-residential activity, supported by stable federal funding for infrastructure. In Europe, while there is some uncertainty due to Brexit, a modest economic recovery is expected to continue. The company expects further improvement in economic and construction activity in the Philippines. Overall, CRH is well-positioned to capitalize on the improving market environment and anticipates continued growth in 2017.

CRH's capital allocation policy aims for long-term dividend growth. The Board recommended an increase in the full-year dividend for 2016 by 4% to 65.0c per share, up from 62.5c in 2015. This increase reflects the company's strong performance and is in line with its progressive dividend policy, although future increases are targeted to lag earnings per share growth to build dividend cover to three times.