8-K

CRH PUBLIC LTD CO 8-K Report (Mar 2, 2004)

Filed March 2, 2004For Securities:CRH

Summary

CRH Public Limited Company (CRH) has reported its final results for the year ended December 31, 2003. The company achieved record results, with sales increasing by 3% to €11,080 million, and operating profit remaining broadly stable at €1,045 million. Despite a significant adverse currency translation impact due to the strengthening Euro against major currencies like the US Dollar, Polish Zloty, and Sterling, the company saw underlying growth in constant currency terms across most segments. Profit before tax increased by 1% to €864 million, and earnings per share (EPS) before goodwill amortisation rose by 3% to 136.2 euro cents. The company also demonstrated a strong commitment to shareholder returns, increasing the dividend per share by 10.6% to 28.1 euro cents. A key driver for CRH's strategic progress in 2003 was its robust acquisition program, with total spend amounting to €1.6 billion across 41 deals. This strategic investment significantly boosted the performance of the Europe Products & Distribution and Americas divisions, offsetting weaker performance in some of its materials businesses due to adverse weather and market conditions. The company's outlook for 2004 is cautiously optimistic, expecting continued recovery in the US economy and benefiting from recent acquisitions, though acknowledging potential impacts from currency fluctuations.

Key Highlights

  • 1Achieved record sales of €11,080 million, a 3% increase (15% in constant currency).
  • 2Operating profit remained stable at €1,045 million, but showed 12% growth in constant currency.
  • 3Profit before tax increased by 1% to €864 million (12% in constant currency).
  • 4Earnings per share (EPS) before goodwill amortisation increased by 3% to 136.2 euro cents (13% in constant currency).
  • 5Total acquisition and investment spending reached €1.6 billion on 41 deals, a significant strategic deployment of capital.
  • 6Recommended a final dividend of 19.90 euro cents per share, a 10.7% increase, bringing the total dividend for the year to 28.1 euro cents.
  • 7Experienced a significant negative translation impact from currency fluctuations, with the Euro strengthening considerably against the US Dollar and other major currencies.

Frequently Asked Questions

The strengthening Euro had a significant negative impact on CRH's reported results. The Euro was, on average, approximately 16% stronger against the US Dollar, 12% stronger against the Polish Zloty, and 9% stronger against Sterling compared to 2002. This resulted in a net negative translation impact of €1,150 million on sales and €112 million at the operating profit level.

CRH pursued an aggressive acquisition strategy in 2003, with total spending of €1.6 billion on 41 deals. This was a record spend, matching that of 2000. The largest single transaction was the €0.7 billion acquisition of Cementbouw's distribution and building products operations. These acquisitions were a key driver for growth, particularly in the Europe Products & Distribution and Americas divisions.

CRH is optimistic about 2004, expecting continued economic recovery in the US. They anticipate the residential sector to remain strong and the non-residential sector to improve. The company also foresees benefits from its 2003 acquisitions contributing strongly. However, CRH acknowledges that reported 2004 profits may be impacted by the ongoing weakness of the US Dollar.

Performance varied by region. In Ireland, construction output was similar to 2002, with sales up 2% and operating profit flat. Britain and Northern Ireland saw a 3% increase in reported operating profit in euro terms, driven by strong local currency growth. Mainland Europe saw mixed results, with Materials division profits up 6% and Products & Distribution up significantly by 55% due to acquisitions. The Americas faced challenges from wet weather and high energy costs, resulting in a reported operating profit decrease of 11% in euro terms, despite underlying growth in US Dollar terms.