8-K

CRH PUBLIC LTD CO 8-K Report (Mar 3, 2009)

Filed March 3, 2009For Securities:CRH

Summary

CRH Public Limited Company (CRH) filed its annual results for the year ended December 31, 2008, on March 3, 2009. The report indicates a challenging year for the company, with profit before tax decreasing by 14% to €1,628 million compared to a record result in 2007. This decline was primarily driven by a 19% decrease in operating profit from its Americas operations, partly due to a weaker US dollar, and a 5% decrease in Europe. Despite the profit reduction, CRH demonstrated resilience by maintaining revenue levels and proposing a 1.5% increase in its dividend, marking its 25th consecutive year of dividend growth. The company highlighted robust delivery in a difficult economic climate, attributing the performance to effective cost reduction measures and strategic acquisitions. CRH also emphasized its strong financial flexibility, with a well-managed net debt to EBITDA ratio, and a solid liquidity position. The outlook for 2009 was described as extremely challenging, with expectations of a significantly weaker first half, but with a potential moderation in the second half due to stimulus packages and anticipated lower energy costs.

Key Highlights

  • 1Full-year profit before tax decreased by 14% to €1,628 million, in line with company guidance.
  • 2Revenue remained stable at €20,887 million, while EBITDA and Operating Profit saw decreases of 7% and 12% respectively.
  • 3Americas operations experienced a significant 19% drop in operating profit, partly due to currency exchange rate fluctuations.
  • 4The company proposed a 1.5% dividend increase to €0.69 per share, representing the 25th consecutive year of dividend growth.
  • 5Total acquisition spend in 2008 was €1 billion, with a deliberate curtailment of development activity in the second half due to the deteriorating economic environment.
  • 6EBITDA/net interest cover remained strong at 7.8 times, above the Group's comfort range.
  • 7CRH anticipates an extremely challenging outlook for 2009, with the first half expected to be sharply lower than 2008.

Frequently Asked Questions

CRH reported a profit before tax of €1,628 million for the year ended December 31, 2008, which was a 14% decrease compared to the record result in 2007. Revenue remained largely unchanged at €20,887 million, but EBITDA and operating profit saw declines of 7% and 12%, respectively.

The Americas operations experienced a significant 19% decrease in operating profit, impacted by a weaker US dollar and market declines. Europe's operating profit declined by 5%, with mixed performance across its divisions. Europe Materials saw an 8% increase in operating profit, while Europe Products operating profit fell by 27% and Europe Distribution operating profit decreased by 8%.

CRH views the outlook for 2009 as extremely challenging. The company anticipates a significantly weaker first half of 2009 compared to 2008, exacerbated by severe winter conditions in Europe and North America and already weak markets. However, it expects potential moderation in the second half due to factors like lower energy costs, interest rate reductions, and infrastructure stimulus packages in the US.

Despite the challenging year, CRH is recommending a 1.5% increase in its final dividend, marking its 25th consecutive year of dividend growth. The company spent €1 billion on acquisitions in 2008 but curtailed activity in the latter half of the year due to the deteriorating economic climate. Management stated that future development activity would be limited to opportunities offering compelling value and strategic fit.