8-K

CRH PUBLIC LTD CO 8-K Report (Aug 22, 2019)

Filed August 22, 2019For Securities:CRH

Summary

CRH Public Limited Company (CRH) filed an 8-K report on August 22, 2019, detailing its interim results for the six months ended June 30, 2019. The company reported a significant increase in financial performance, with record H1 EBITDA of €1.54 billion, up 36% year-over-year. This strong growth was driven by an 11% increase in sales to €13.2 billion and good margin progress. Earnings per share (EPS) from continuing operations also saw a substantial rise of 51% to 67.8 cents. CRH continues to actively manage its portfolio, completing approximately €2 billion in divestments and €0.5 billion in acquisitions during the period. The company maintained strong financial discipline, expecting its Net Debt/EBITDA ratio to remain below 2x by year-end. Furthermore, CRH demonstrated its commitment to shareholder returns by executing a €550 million share buyback year-to-date, with an additional €350 million planned by year-end. The Group-wide profit improvement program is also progressing well, contributing to the positive results.

Key Highlights

  • 1Record H1 EBITDA of €1.54 billion, a 36% increase compared to the prior year (19% excluding IFRS 16 impact).
  • 2Sales revenue grew by 11% to €13.2 billion, with like-for-like sales up 3% driven by positive demand and pricing.
  • 3EPS from continuing operations increased by 51% to 67.8 cents.
  • 4Active portfolio management resulted in approximately €2 billion in divestments and €0.5 billion in acquisitions year-to-date.
  • 5Strong financial discipline is expected to result in Net Debt/EBITDA below 2x by year-end.
  • 6CRH has returned €550 million to shareholders via share buybacks year-to-date, with an additional €350 million planned by year-end, totaling €900 million for 2019.
  • 7The adoption of IFRS 16 Leases had a material impact, increasing EBITDA by €193 million and adding €1.95 billion to property, plant, and equipment, and net debt.

Frequently Asked Questions

CRH's strong performance was driven by several factors including a positive underlying demand backdrop in Europe and North America, significant contributions from recent acquisitions, favorable currency exchange movements, and successful price increases across its product lines. The company also benefited from its Group-wide profit improvement program and the initial impact of adopting IFRS 16.

CRH is actively managing its portfolio through strategic divestments (€2 billion year-to-date) and acquisitions (€0.5 billion year-to-date). The company is committed to shareholder returns, having completed €550 million in share buybacks year-to-date with a further €350 million planned by year-end, bringing the total planned repurchases for 2019 to €900 million. The interim dividend has also been increased by 2% to 20 cents per share.

The adoption of IFRS 16 Leases, effective January 1, 2019, had a material impact. It increased EBITDA by €193 million, depreciation by €176 million, and finance costs by €35 million for the first half of 2019. It also resulted in the recognition of €1.95 billion in lease liabilities and corresponding right-of-use assets on the balance sheet, increasing net debt.

CRH anticipates further progress in the second half of 2019, expecting second-half EBITDA to be ahead of 2018 across all divisions. This positive outlook is supported by continued momentum in North American construction markets, good contributions from acquisitions, favorable trading conditions, currency tailwinds, and the ongoing benefits of IFRS 16. However, the UK market is expected to remain challenging due to Brexit-related uncertainty.