8-K

CRH PUBLIC LTD CO 8-K Report (Feb 28, 2020)

Filed February 28, 2020For Securities:CRH

Summary

CRH Public Limited Company (CRH) reported strong full-year 2019 results, demonstrating significant growth and improved profitability. The company announced an impressive 25% increase in EBITDA to €4.2 billion, driven by a 6% rise in sales to €28.3 billion, with like-for-like sales up 3%. This performance was underpinned by positive demand in the Americas and key European regions, alongside contributions from strategic acquisitions and operational efficiencies, leading to a notable increase in EBITDA margin of 230 basis points. The company also highlighted robust financial discipline, with net debt to EBITDA at a healthy 1.7x, and a strong generation of €3.5 billion in cash from operations, enabling substantial returns to shareholders. CRH continued its active portfolio management strategy with significant divestments totaling €2.1 billion, including the sale of its European Distribution business, and strategic acquisitions amounting to €0.7 billion, focusing on bolt-on transactions to strengthen its existing operations. The company also made strides in sustainability by setting ambitious carbon reduction targets for 2030. Reflecting its confidence in sustained performance, CRH is recommending a 15% increase in its full-year dividend to 83.0 cents per share. Furthermore, CRH announced its intention to change its reporting currency to the US Dollar effective January 1, 2020, to mitigate foreign exchange volatility.

Key Highlights

  • 1EBITDA increased by 25% to €4.2 billion, exceeding 2018 by €0.8 billion.
  • 2Sales grew by 6% to €28.3 billion, with a 3% like-for-like increase.
  • 3EBITDA margin improved by 230 basis points to 14.8%.
  • 4Strong cash generation of €3.5 billion from operations.
  • 5Returned €1.4 billion to shareholders through dividends and share buybacks.
  • 6Completed €2.1 billion in divestments and €0.7 billion in acquisitions, indicating active portfolio management.
  • 7Recommended a 15% increase in full-year dividend to 83.0 cents per share.

Frequently Asked Questions

CRH's strong performance in 2019 was driven by a combination of factors including positive demand in key markets across the Americas and Europe, successful integration of recent acquisitions, and a continued focus on operational and commercial excellence. Like-for-like sales growth, coupled with margin expansion initiatives and disciplined cost management, also contributed significantly to the improved profitability and cash generation.

CRH demonstrated active portfolio management by completing significant divestments totaling €2.1 billion, which included the sale of its European Distribution business. Concurrently, the company invested €0.7 billion in strategic acquisitions, primarily bolt-on transactions aimed at strengthening its existing business segments. The company returned €1.4 billion to shareholders in 2019 through dividends and share buybacks, signaling a commitment to enhancing shareholder returns.

Effective January 1, 2020, CRH is changing its reporting currency from the Euro to the US Dollar. This strategic move is intended to reduce the potential for foreign exchange volatility in the company's future reported earnings, given that a significant portion of CRH's earnings are generated in non-Euro denominated markets, particularly the US.

CRH is committed to leading the industry in reducing carbon emissions. The company has set ambitious targets for 2030, aiming for 520kg of net CO2 per tonne of cementitious product, representing a 33% reduction from 1990 levels. Furthermore, CRH has an aspiration to achieve carbon neutrality across the cement and concrete value chain by 2050.