Form 6-K CRH PUBLIC LTD CO For: Aug 22
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, DC
20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A - 16 OR 15D - 16 OF
THE SECURITIES EXCHANGE ACT OF 1934
22 August 2019
Commission
File No. 001-32846
____________________________
CRH
public limited company
(Translation of registrant's name into English)
____________________________
Belgard Castle, Clondalkin,
Dublin 22, Ireland.
(Address of principal executive offices)
____________________________
Indicate
by check mark whether the registrant files or will file annual
reports
under
cover of Form 20-F or Form 40-F:
Form
20-F X Form
40-F___
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by
Regulation
S-T Rule 101(b)(1):_________
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by
Regulation
S-T Rule 101(b)(7):________
Enclosure:
2019 Interim
Results
2019 Interim Results
Key Highlights
●
Record H1 EBITDA1 of
€1.54bn, 36% ahead of 2018 (19% ahead excluding IFRS
16 Leases)
●
Sales of €13.2bn, ahead 11%
●
Good margin progress in H1
●
EPS 51% ahead of 2018
●
Continued portfolio refinement: c. €2bn divestments; c.
€0.5bn acquisitions
●
Strong financial discipline; expect Net Debt/EBITDA <2x at year
end
●
Share buyback €550m year-to-date; further €350m planned
by year end
●
Group-wide profit improvement programme progressing
well
|
|
|
|
|
||
Six months ended 30 June
|
2019
|
2018
|
|
|
|
|
|
€m
|
€m
|
Change
|
|
|
|
Sales
revenue
|
13,217
|
11,944
|
+11%
|
|
|
|
EBITDA
|
1,540
|
1,130
|
+36%
|
|
|
|
EBITDA
margin
|
11.7%
|
9.5%
|
+220bps
|
|
|
|
|
|
|
|
|
|
|
EPS
from continuing operations (€ cent)
|
67.8
|
45.0
|
+51%
|
|
|
|
|
Albert Manifold,
Chief Executive, said
today:
“On the back
of our strategic initiatives, CRH has delivered significant profit
growth in the first half of 2019, with a good performance in our
heritage business and strong contributions from recent
acquisitions. We are pleased to report that the Board plans to
continue our share buyback programme with a further tranche of
€350 million to be completed by year end. This will bring our
total share repurchases in 2019 to €900 million. With our
continued strong cash generation and financial discipline, we
expect year-end debt metrics to be below normalised levels. We
anticipate further progress in the second half of the year with
benefits from positive underlying momentum in all Divisions as well
as good contributions from acquisitions.”
Announced Thursday,
22 August 2019
See pages 37 to 39 for glossary of alternative
performance measures used throughout this interim
report.
2019 Interim Results
Overview
Trading
for the first half of 2019 benefited from a positive underlying
demand backdrop in both Europe and North America. With strong
contributions from acquisitions and tailwinds from currency
exchange movements, Group sales of €13.2 billion were 11%
ahead of the same period last year and 3% ahead on a like-for-like
basis.
●
In Americas
Materials, with a healthy economic environment,
like-for-like sales were 2% ahead of the first six months of 2018;
however, adverse weather conditions in certain regions hampered
activity.
●
In Europe
Materials, good underlying activity prevailed in key markets
in Western and Eastern Europe and like-for-like sales growth of 6%
reflected a more normalised weather pattern compared with the first
half of 2018 along with price progress across all product lines. In
the United Kingdom (UK), construction activity continued to decline
amidst Brexit-related uncertainty.
●
Like-for-like sales
in our Building
Products Division were 3% ahead of the first half of 2018,
reflecting a positive demand and pricing backdrop in our main
markets.
With
the benefit of margin-enhancing acquisitions, continued emphasis on
performance in all our businesses and the impact of IFRS 16,
overall EBITDA was 36% ahead of the first half of 2018 and EBITDA
margin increased to 11.7% (H1 2018: 9.5%). On a like-for-like
basis, EBITDA for the Group was 5% ahead.
●
Americas
Materials like-for-like EBITDA was up 3% driven primarily by
price increases across all products and strong cost
control.
●
In Europe
Materials, like-for-like EBITDA was 2% ahead, reflecting
volume growth and price improvements across the Division with the
exception of the UK due to its challenging market
conditions.
●
Like-for-like
EBITDA in Building
Products was 8% ahead of the first half of 2018 on the back
of improved volumes and prices and a continued focus on profit
improvement initiatives.
Depreciation and
amortisation charges of €789 million were higher than last
year (H1 2018: €518 million) reflecting the impact of IFRS 16
and additional depreciation from acquisitions.
Divestments and
asset disposals during the period generated total profit on
disposals of €171 million (H1 2018: €46 million). This
primarily relates to the European Shutters & Awnings business
which was divested in June 2019.
The
Group’s €20 million share of profits from equity
accounted investments was broadly in line with the first half of
2018 (H1 2018: €19 million).
Net
finance costs for the period were higher than the first six months
of 2018 at €235 million (H1 2018: €160 million) due to
the impact of
IFRS
16, lower interest income and higher average debt levels in the
period.
First-half profit
before tax from continuing operations was €707 million,
compared with a profit of €497 million in the first half of
2018. The interim tax charge, which represents an effective tax
rate of 21.5% of profit before tax, has been estimated, as in prior
years, based on current expectations of the full year tax charge.
Earnings per share from continuing operations were 51% higher than
last year at 67.8c (H1 2018: 45.0c), reflecting higher profits
along with the decrease in the weighted average number of shares in
issue to 808.7 million (H1 2018: 839.6 million) due to our ongoing
share buyback programme.
Note 2
on page 18 analyses the key components of the first-half 2019
performance.
Dividend
The
Board has decided to increase the interim dividend to 20c per
share, an increase of 2% compared with last year’s level of
19.6c per share. It is proposed to pay the interim dividend on 25
September 2019 to shareholders registered at the close of business
on 6 September 2019. The interim dividend will be paid wholly in
cash.
Finance
Net
debt of €10.2 billion at 30 June 2019 was €2.1 billion
higher than the figure reported at 30 June 2018 (H1 2018:
€8.1 billion), primarily reflecting the transition impact of
IFRS 16 (€2.0 billion). A first-half cash inflow of
€0.3 billion from operations reflects strong working capital
control and profit delivery. As in prior years, we expect a strong
operating cash inflow in the second half of 2019 and, given the
focused approach to portfolio management together with the
Group’s strong track record of converting a significant
proportion of its EBITDA into operating cash flow, we expect
year-end 2019 debt metrics to be below normalised
levels.
In
April 2019, the Group successfully carried out an amendment and
extension of its €3.5 billion revolving credit facility. Net
debt at 30 June 2019 included US$0.75 billion issued under the US
Dollar Commercial Paper Programme and €0.26 billion issued
under the Euro Commercial Paper Programme. These programmes add to
the funding sources available to the Group and are used to fund
working capital and short-term liquidity needs.
The
Group maintains a strong investment grade credit rating and
following a recent upgrade by the rating agency Fitch, the Group
has a BBB+ or equivalent rating with each of the three main rating
agencies, reflecting strong deleveraging following earlier
acquisitions, successful integration of acquisitions and strong
cash conversion.
Capital
Allocation
In H1
2019 the Group spent c. €320 million on 28
acquisition/investment transactions (including deferred and
contingent consideration in respect of prior year acquisitions).
Since 30 June 2019, the Group has completed a further eight bolt-on
acquisitions and investments for a total spend of c. €150
million, bringing total year-to-date development spend to c.
€470 million.
On the
divestment front in H1 2019, the Group completed three transactions
and realised total business and asset disposal proceeds
of
c.
€370 million, which demonstrates CRH’s ongoing
commitment to active portfolio management. Since 30 June 2019, the
Group reached agreement to divest of its Europe Distribution
business for an enterprise value of €1.64 billion and also
reached agreement to divest of its Perimeter Protection business in
Europe. Both transactions are expected to close later this year. On
completion, total divestment proceeds will approximate €2
billion in 2019.
2019 Acquisitions and
Investments
The
Building Products Division completed eight bolt-on acquisitions in
H1 2019 amounting to a total spend of c. €170 million. The
largest acquisition was in our Architectural Products Group (APG)
where it acquired certain assets of Allied Concrete in Virginia.
This strategic bolt-on serves as a geographic in-fill for APG along
the eastern seaboard of the United States (US), connecting
APG’s position in the Washington DC area to those in the
Carolinas while enhancing its ability to serve mid-Atlantic
hardscape and masonry installers. The other seven bolt-on
acquisitions in the Building Products Division comprise four in the
US and one in each of Poland, the Netherlands and
Germany.
The
Americas Materials Division completed one investment along with 14
bolt-on acquisitions in the US, and two acquisitions in Canada,
adding almost 90 million tonnes of permitted reserves. These
transactions involved the strategic expansion and strengthening of
existing aggregates operations, particularly in Oregon and
Florida.
The
Europe Materials Division completed one acquisition in Poland
adding approximately 30 million tonnes of reserves, and two small
investments in Ukraine.
2019 Divestments and
Disposals
The
largest divestment in H1 2019 was the sale of our European Shutters
& Awnings business to StellaGroup for a total consideration of
c. €0.3 billion. Two further small divestments of non-core
business assets were completed in the period along with proceeds of
€52 million from the disposal of surplus property, plant and
equipment.
On 16
July 2019, the Group announced that it had reached agreement to
divest of its Europe Distribution business to private equity funds
managed by Blackstone for an enterprise value of €1.64
billion. The business comprises CRH’s entire General Builders
Merchants business in Europe, including its Sanitary, Heating and
Plumbing business. This divestment follows a comprehensive
strategic review of the business over the last several months which
considered all options to maximise value for shareholders. It
concludes the exit from our distribution businesses across the
Group, creating a simpler and more focused business. The Group also
reached agreement to divest of its Perimeter Protection business in
Europe.
Share Buyback
Programme
On 7
August 2019, the Group completed the latest phase of its share
buyback programme, returning a further €350 million of cash
to shareholders. Between 29 April and 7 August 2019, 12.2 million
ordinary shares were repurchased on the London Stock Exchange and
Euronext Dublin at an average discount of 0.75% to the volume
weighted average price over the period. This brings total cash
returned to shareholders under our ongoing share buyback programme
to €1.35 billion since its commencement in May 2018. In light
of our strong balance sheet and cash generation, the Board plans to
continue our share buyback programme with a further tranche of up
to €350 million to be completed by the year end.
Outlook
Against
a backdrop of continued positive momentum in North American
construction markets and with good contributions from acquisitions,
we expect second-half EBITDA in Americas Materials to be ahead of
2018. In Europe Materials, we expect broadly similar trends to
those experienced in the first half, with second-half EBITDA ahead
of 2018 amid a challenging environment in the UK. In Building
Products, EBITDA is anticipated to show further growth against a
positive backdrop in Europe and North America. For the Group
overall, assuming normal weather patterns for the remainder of the
season, we expect further progress in the second half with benefits
from good trading conditions, contributions from acquisitions,
currency tailwinds and the impact of IFRS 16.
Americas Materials
|
|
|
Analysis of change
|
|
|
|||||
€ million
|
2018
|
Exchange
|
Acquisitions
|
Divestments
|
IFRS
16
|
Organic
|
2019
|
%
change
|
||
Sales
revenue
|
3,178
|
+205
|
+597
|
-19
|
-
|
+51
|
4,012
|
+26%
|
||
EBITDA
|
297
|
+24
|
+126
|
-4
|
+49
|
+10
|
502
|
+69%
|
||
Operating
profit
|
94
|
+12
|
+56
|
-3
|
+4
|
+4
|
167
|
+78%
|
||
EBITDA/sales
|
9.3%
|
|
|
|
|
|
12.5%
|
|
||
Operating
profit/sales
|
3.0%
|
|
|
|
|
|
4.2%
|
|
With a
continued healthy economic backdrop, good momentum in
infrastructure activity and solid underlying demand in residential
and non-residential markets, Americas Materials reported first-half
organic sales 2% ahead of 2018. The increase in sales was primarily
driven by price improvements across all regions and products as our
volumes in Q2 were hampered by wet weather conditions mainly in our
Central and West markets. Organic operating profit was 4% ahead of
2018, despite the impact of higher production costs with
weather-related delays and energy cost increases. Energy costs were
higher in the first half of the year, although at a lower rate of
increase than experienced in 2018. With price improvements across
all products and a continued focus on operational and commercial
initiatives, margins increased compared with the first half of
2018. A strong contribution from our Ash Grove acquisition, which
was acquired at the end of June 2018, led to significant growth in
the Division in the first half of the year.
The
commentary that follows excludes the impact of IFRS 16, as
separately identified in the table above.
Aggregates
Total
aggregates volumes, including the impact of acquisitions and
divestments, were 6% ahead of 2018 while like-for-like volumes
declined 1%, impacted by multiple flooding events in our Central
region and inclement weather in the West. The decline was partly
offset by higher aggregates volumes in Canada as
prior year backlogs were delivered in the current year. Total and
like-for-like average prices increased by 6%, with solid increases
in every region supported by good underlying market
demand.
Asphalt
After a
shortfall in asphalt volumes in Q2 across most regions, impacted by
the wet weather conditions, first-half total volumes were 3% behind
2018, while average prices increased by 7% against a backdrop of
higher input costs.
Readymixed Concrete
Readymixed concrete
volumes were 1% ahead of 2018 on a like-for-like basis, and average
prices increased 5%. Total volumes including acquisitions were 22%
ahead of the same period last year, primarily driven by the Ash
Grove acquisition.
Paving and Construction
Services
Total
sales in our paving and construction services business increased 1%
over 2018 with mixed activity across our regions. Margins were
impacted by project mix with lower margin projects in place
compared with the same period in 2018.
Cement
Our
cement operations in the United States
delivered higher volumes in the first half of 2019 due to the
acquisition of Ash Grove which completed at the end of June 2018.
Despite adverse weather impacting some of our main markets, synergy
delivery and strong price realisation across all cement businesses
contributed to good operating profit in the first half of 2019
which was in line with expectations. Cement volumes in Canada
declined in 2019, reflecting adverse weather, project delays and
the timing of a divestment in 2018. Increased logistics and
production costs in the cement business resulted in first-half
operating profit behind 2018. In Brazil,
although the weakness in the construction market continued during
the first half of 2019, cement volumes and prices were ahead with
comparatives impacted by a national transportation strike in 2018.
With a continued focus on commercial and operational initiatives,
sales and operating profit improved compared with the first half of
2018.
Europe Materials
|
|
|
|
Analysis of change
|
|||||||
€ million
|
2018
|
Exchange
|
Acquisitions
|
Divestments
|
IFRS
16
|
Organic
|
2019
|
%
change
|
|||
Sales
revenue
|
3,827
|
+26
|
+25
|
-23
|
-
|
+230
|
4,085
|
+7%
|
|||
EBITDA
|
395
|
+4
|
+1
|
-
|
+54
|
+7
|
461
|
+17%
|
|||
Operating
profit
|
194
|
+2
|
-
|
+2
|
+4
|
+7
|
209
|
+8%
|
|||
EBITDA/sales
|
10.3%
|
|
|
|
|
|
11.3%
|
|
|||
Operating
profit/sales
|
5.1%
|
|
|
|
|
|
5.1%
|
|
Europe
Materials organic sales and operating profit increased by 6% and 4%
respectively in the first half of the year, reflecting positive
trading conditions in the majority of our key markets and pricing
progress across all products. Overall, a more normalised weather
pattern was experienced compared with the first half of 2018,
particularly in the first quarter. Challenging market conditions
continued in the UK as prolonged political uncertainty led to a
decline in construction activity.
The
commentary that follows excludes the impact of IFRS 16, as
separately identified in the table above.
UK
Against
a backdrop of lower commercial, housing and retail construction
activity, volumes of aggregates and asphalt were behind the prior
year, while cement volumes were broadly in line; the contracting
division also experienced delays in Government-backed road
projects. First-half sales were ahead of prior year driven by the
contribution of 2018 acquisitions and price increases in cement,
asphalt and aggregates; however, higher input costs together with
volume pressure resulted in operating profit behind
2018.
Western Europe
Residential
construction in Ireland continued
to see good growth in the first half of 2019, with strong volumes
and improved pricing across all major products resulting in solid
operating profit delivery. In France,
higher demand in the non-residential and civil engineering sectors
offset reduced residential demand and our French cement and
readymixed concrete operations delivered good volumes and price
growth, while our precast business also experienced increased
activity in core projects; overall operating profit was ahead of
2018. In the Benelux,
sales were broadly in line with 2018 as cement and readymixed
concrete pricing improvements were offset by lower sales in the
Belgian structural business, mainly due to project delays as a
result of poor weather conditions. Operating profit finished behind
2018, impacted by the non-recurrence of one-off income. Results in
Denmark were
positively impacted by the continued strong pricing environment and
additional production capacity, with operating profit ahead in the
first half. While cement volumes in Finland were
impacted by the completion of a one-off project in early 2019,
price increases in aggregates and cement drove sales improvements
in the first half of 2019; overall operating profit was behind due
to lower volumes. Cement volumes in Switzerland
were behind the first half of 2018 due to challenging market
conditions, partly compensated by improved cement pricing;
operating profit was slightly behind 2018. Against the backdrop of
a steady market, cement pricing in Germany
improved; however, overall volumes were behind in the first half
which, combined with cost inflation, resulted in operating profit
behind 2018. Lime volumes in Fels were behind the first half of
2018, impacted by lower demand in the civil engineering and
environmental sectors. In Spain,
trends experienced in the prior year continued, with improved
pricing in cement and readymixed concrete positively impacting
operating profit.
Eastern Europe
In
Poland,
strong growth in cement volumes more than offset lower readymixed
concrete volumes which were impacted by the timing of
infrastructure projects. Robust price increases for all products
resulted in sales and operating profit increases in the first half
of 2019. In Ukraine, cement
volumes were in line with 2018 and with price increases offsetting
ongoing cost inflation, operating profit was ahead of 2018. In
Romania, cement
volumes were marginally ahead of the first half of 2018 with second
quarter volumes impacted by heavy rainfall. While cement prices
progressed, operating profit was behind 2018 due to increased
electricity and transportation costs. In Hungary and
Slovakia,
sales increased in the first half, with strong cement pricing and
good readymixed concrete volumes against a backdrop of continued
construction growth. With a strong start to the construction season
supported by favourable weather, our cement operations in
Serbia
delivered volumes and price growth and operating profit was ahead
of 2018.
Asia
Demand
in the Philippines
grew modestly in H1 due to resilient growth in both residential and
non-residential markets; however, some slowdown in the
infrastructure segment was evident due to delays in government
budget approval and an election-related construction ban in the
second quarter. Cement volumes and prices for the
first half of 2019 were ahead of 2018 and operating profit
improved.
In
addition to our subsidiary businesses in the Philippines, the Group
also has a share of profit after tax from its stakes in Yatai
Building Materials in China and My
Home Industries Limited (MHIL) in India, which
are reported within the Group’s share of equity accounted
investments’ profit. Competitive pricing pressure persisted
in Yatai Building Materials but cement volumes were ahead of 2018
due to increased market demand; as a result, operating profit was
higher than the first half of 2018. MHIL benefited from higher
cement volumes and prices compared with 2018, with operating profit
also ahead.
Building Products
|
|
|
Analysis of change
|
|
||||||
€ million
|
2018
|
Exchange
|
Acquisitions
|
Divestments
|
IFRS
16
|
Organic
|
2019
|
%
change
|
||
Sales
revenue
|
4,939
|
+163
|
+197
|
-326
|
-
|
+147
|
5,120
|
+4%
|
||
EBITDA
|
438
|
+22
|
+17
|
-29
|
+90
|
+39
|
577
|
+32%
|
||
Operating
profit
|
304
|
+17
|
+8
|
-2
|
+9
|
+39
|
375
|
+23%
|
||
EBITDA/sales
|
8.9%
|
|
|
|
|
|
11.3%
|
|
||
Operating
profit/sales
|
6.2%
|
|
|
|
|
|
7.3%
|
|
This
newly formed Division experienced good price increases and improved
volumes supported by a positive demand backdrop and more favourable
early season weather in Europe; as a result, like-for-like sales in
the first half of 2019 were 3% ahead of 2018. Selling price
increases, strong cost control and commercial and operational
initiatives helped deliver margin improvement and organic operating
profit was 12% ahead of 2018.
Recent
portfolio activity makes this Division a more focused and
integrated platform, well positioned for further growth. The Group
completed the divestment of its European Shutters & Awnings
business for a total consideration of c. €0.3 billion in June
2019 and, in July 2019, reached agreement to divest of its Europe
Distribution and Perimeter Protection businesses.
The
commentary that follows excludes the impact of IFRS 16, as
separately identified in the table above.
Architectural Products
In
North America, APG is the leading supplier of concrete masonry and
hardscape products and has strong national positions in dry mixes
and packaged lawn and garden products. In addition to
contractor-based new construction, the DIY and professional repair,
maintenance and improvement (RMI) segments are significant
end-users. Selling price increases partly offset some volume
declines, and like-for-like sales in APG increased 1% compared with
first half 2018. With logistics cost pressures subsiding somewhat
compared to 2018, changes in product mix towards higher margin
hardscape products along with commercial and operational
initiatives, APG recorded a good increase in operating
profit.
Our
architectural products businesses in Europe are leading producers
of exterior hardscape products across Germany, the Netherlands,
Poland, Belgium and Slovakia. Like-for-like sales for the first
half of the year were 6% ahead of 2018, benefiting from good market
conditions and positive pricing. This top line growth together with
product mix improvements resulted in operating profit ahead of
2018.
BuildingEnvelope®
Our
BuildingEnvelope® business is
North America’s largest supplier of architectural glass,
aluminium glazing systems and custom hardware products to the glass
and glazing industry. Like-for-like revenue growth of 3% was driven
by increased demand and selling prices in our C.R. Laurence and
aluminium glazing operations. This revenue growth together with
more stable aluminium input costs and a continued focus on overhead
cost management led to operating profit being ahead of
2018.
Infrastructure Products
Our
Infrastructure business in North America supplies a broad range of
value-added concrete and related utility infrastructure products
and accessories with the electrical, telecommunications, water and
transportation sectors being major end-markets. Like-for-like sales
advanced 6% in the first half of 2019, with price increases in the
concrete products business. Volume growth was supported by good
demand in the non-residential sector but hampered in some key
markets due to poor weather. Good margin expansion was experienced
as price increases offset input cost inflation and operating profit
was ahead of 2018.
Network
Access Products, with operations in the UK, Ireland, the
Netherlands and Australia, recorded a strong increase in sales,
primarily due to recent acquisition activity. Organic improvement
in sales to the French and UK markets was partly offset by reduced
demand from a key customer in Australia; however, with a strong
focus on cost control, operating profit was ahead of the first half
of 2018.
Both
sales and operating profit in the Perimeter Protection business
were broadly in line with the first half of 2018, with good
underlying market demand in the mobile perimeter protection
business offsetting decreases in some permanent fencing markets. In
July 2019, the Group reached agreement to divest of its Perimeter
Protection business and the transaction is expected to close later
this year.
Construction Accessories
Our
Construction Accessories businesses in Europe and Australia supply
a broad range of connecting, fixing and anchoring systems to the
construction industry. Like-for-like sales grew by 4%, with a good
performance from UK masonry projects. Overall price increases more
than offset cost inflation, resulting in operating profit
improvement.
Europe Distribution
A
strong performance in our German, Dutch and French businesses,
aided by milder weather conditions, was partly offset by a
challenging residential market in Switzerland and like-for-like
sales for the Distribution platform increased 3%. In line with the
growth in sales, operating profit was ahead of 2018.
Following a
detailed strategic review of the business, the Group announced in
July 2019 that it reached agreement to divest of its Europe
Distribution business for an enterprise value of €1.64
billion. The transaction is expected to close in the fourth quarter
of this year.
Condensed
Interim
Financial Statements
and
Summarised Notes
Six
months ended 30 June 2019
Condensed Consolidated Income Statement
|
|
|
|
|
Year ended
|
|
Six months ended 30 June
|
|
31 December
|
||
|
2019
|
|
2018
|
|
2018
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
€m
|
|
€m
|
|
€m
|
|
|
|
|
|
|
Revenue
|
13,217
|
|
11,944
|
|
26,790
|
Cost of sales
|
(9,067)
|
|
(8,236)
|
|
(18,152)
|
Gross profit
|
4,150
|
|
3,708
|
|
8,638
|
Operating costs
|
(3,399)
|
|
(3,116)
|
|
(6,461)
|
Group operating profit
|
751
|
|
592
|
|
2,177
|
Profit/(loss) on disposals
|
171
|
|
46
|
|
(24)
|
Profit before finance costs
|
922
|
|
638
|
|
2,153
|
Finance costs
|
(183)
|
|
(167)
|
|
(339)
|
Finance income
|
7
|
|
23
|
|
34
|
Other financial expense
|
(59)
|
|
(16)
|
|
(46)
|
Share of equity accounted investments’ profit
|
20
|
|
19
|
|
60
|
Profit before tax from continuing operations
|
707
|
|
497
|
|
1,862
|
Income tax expense – estimated at
interim
|
(152)
|
|
(119)
|
|
(426)
|
Group profit for the financial period from continuing
operations
|
555
|
|
378
|
|
1,436
|
Profit after tax for the financial period from discontinued
operations
|
-
|
|
1,083
|
|
1,085
|
Group profit for the financial period
|
555
|
|
1,461
|
|
2,521
|
|
|
|
|
|
|
Profit attributable to:
|
|
|
|
|
|
Equity holders of the Company
|
|
|
|
|
|
From
continuing operations
|
548
|
|
378
|
|
1,432
|
From
discontinued operations
|
-
|
|
1,083
|
|
1,085
|
Non-controlling interests
|
|
|
|
|
|
From
continuing operations
|
7
|
|
-
|
|
4
|
Group profit for the financial period
|
555
|
|
1,461
|
|
2,521
|
|
|
|
|
|
|
Basic earnings per Ordinary Share
|
67.8c
|
|
174.0c
|
|
302.4c
|
Diluted earnings per Ordinary Share
|
67.4c
|
|
173.1c
|
|
300.9c
|
|
|
|
|
|
|
Basic earnings per Ordinary Share from continuing
operations
|
67.8c
|
|
45.0c
|
|
172.0c
|
Diluted earnings per Ordinary Share from continuing
operations
|
67.4c
|
|
44.8c
|
|
171.2c
|
|
|
|
|
|
|
|
Condensed Consolidated Statement of Comprehensive
Income
|
|||||
|
|
|
|
|
Year ended
|
|
Six months ended 30 June
|
|
31 December
|
||
|
2019
|
|
2018
|
|
2018
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
€m
|
|
€m
|
|
€m
|
Group profit for the financial period
|
555
|
|
1,461
|
|
2,521
|
|
|||||
Other comprehensive income
|
|||||
Items that may be reclassified to profit or loss in subsequent
periods:
|
|||||
Currency translation effects
|
142
|
|
124
|
|
276
|
Gains/(losses) relating to cash flow hedges
|
29
|
|
8
|
|
(40)
|
Tax relating to cash flow hedges
|
(4)
|
|
(1)
|
|
5
|
|
167
|
|
131
|
|
241
|
Items that will not be reclassified to profit or loss in subsequent
periods:
|
|||||
Remeasurement of retirement benefit obligations
|
(131)
|
|
58
|
|
10
|
Tax relating to retirement benefit obligations
|
15
|
|
(11)
|
|
(1)
|
|
(116)
|
|
47
|
|
9
|
|
|
|
|
|
|
Total other comprehensive income for the financial
period
|
51
|
|
178
|
|
250
|
Total comprehensive income for the financial period
|
606
|
|
1,639
|
|
2,771
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
Equity holders of the Company
|
587
|
|
1,654
|
|
2,768
|
Non-controlling interests
|
19
|
|
(15)
|
|
3
|
Total comprehensive income for the financial period
|
606
|
|
1,639
|
|
2,771
|
Condensed Consolidated Balance Sheet
|
As at 30
|
|
As at 30
|
|
As at 31
|
|
June 2019
|
|
June 2018
|
|
December 2018
|
|
Unaudited
€m
|
|
Unaudited
€m
|
|
Audited
€m
|
ASSETS
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
Property, plant and equipment*
|
17,845
|
|
15,607
|
|
15,761
|
Intangible assets
|
8,525
|
|
8,615
|
|
8,433
|
Investments accounted for using the equity method
|
1,181
|
|
1,111
|
|
1,163
|
Other financial assets
|
23
|
|
24
|
|
23
|
Other receivables
|
180
|
|
164
|
|
181
|
Derivative financial instruments
|
78
|
|
30
|
|
30
|
Deferred income tax assets
|
68
|
|
84
|
|
71
|
Total non-current assets
|
27,900
|
|
25,635
|
|
25,662
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Inventories
|
3,228
|
|
3,151
|
|
3,061
|
Trade and other receivables
|
5,258
|
|
5,084
|
|
4,074
|
Current income tax recoverable
|
21
|
|
7
|
|
15
|
Derivative financial instruments
|
9
|
|
31
|
|
15
|
Cash and cash equivalents
|
1,399
|
|
1,848
|
|
2,346
|
Total current assets
|
9,915
|
|
10,121
|
|
9,511
|
|
|
|
|
|
|
Total assets
|
37,815
|
|
35,756
|
|
35,173
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
Capital and reserves attributable to
the Company’s
equity holders
|
|
|
|
|
|
Equity share capital
|
287
|
|
287
|
|
287
|
Preference share capital
|
1
|
|
1
|
|
1
|
Share premium account
|
6,534
|
|
6,534
|
|
6,534
|
Treasury Shares and own shares
|
(1,200)
|
|
(224)
|
|
(792)
|
Other reserves
|
272
|
|
264
|
|
296
|
Foreign currency translation reserve
|
21
|
|
(247)
|
|
(109)
|
Retained income
|
9,719
|
|
8,862
|
|
9,812
|
Capital and reserves attributable to the Company’s equity
holders
|
15,634
|
|
15,477
|
|
16,029
|
Non-controlling interests
|
544
|
|
494
|
|
525
|
Total equity
|
16,178
|
|
15,971
|
|
16,554
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
Lease liabilities
|
1,502
|
|
-
|
|
-
|
Interest-bearing loans and borrowings
|
8,806
|
|
8,557
|
|
8,698
|
Derivative financial instruments
|
-
|
|
37
|
|
18
|
Deferred income tax liabilities
|
2,213
|
|
2,059
|
|
2,209
|
Other payables
|
475
|
|
435
|
|
472
|
Retirement benefit obligations
|
573
|
|
454
|
|
424
|
Provisions for liabilities
|
731
|
|
748
|
|
719
|
Total non-current liabilities
|
14,300
|
|
12,290
|
|
12,540
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Lease liabilities
|
358
|
|
-
|
|
-
|
Trade and other payables
|
5,073
|
|
5,155
|
|
4,609
|
Current income tax liabilities
|
492
|
|
564
|
|
443
|
Interest-bearing loans and borrowings
|
1,023
|
|
1,356
|
|
618
|
Derivative financial instruments
|
22
|
|
14
|
|
41
|
Provisions for liabilities
|
369
|
|
406
|
|
368
|
Total current liabilities
|
7,337
|
|
7,495
|
|
6,079
|
Total liabilities
|
21,637
|
|
19,785
|
|
18,619
|
|
|
|
|
|
|
Total equity and liabilities
|
37,815
|
|
35,756
|
|
35,173
|
Includes leased right-of-use assets with net carrying amount of
€1,829 million (see note 13).
|
|
|
Condensed Consolidated Statement of Changes in Equity
|
Attributable to the equity holders of the Company
|
|
|
|||||
|
|
|
Treasury
|
|
Foreign
|
|
|
|
|
Issued
|
Share
|
Shares/
|
|
currency
|
|
Non-
|
|
|
share
|
premium
|
own
|
Other
|
translation
|
Retained
|
controlling
|
Total
|
|
capital
|
account
|
shares
|
reserves
|
reserve
|
income
|
Interests
|
equity
|
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
For the financial period ended 30 June 2019
(unaudited)
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
At 1
January 2019
|
288
|
6,534
|
(792)
|
296
|
(109)
|
9,812
|
525
|
16,554
|
Group
profit for the period
|
-
|
-
|
-
|
-
|
-
|
548
|
7
|
555
|
Other
comprehensive income
|
-
|
-
|
-
|
-
|
130
|
(91)
|
12
|
51
|
Total
comprehensive income
|
-
|
-
|
-
|
-
|
130
|
457
|
19
|
606
|
Share-based
payment expense
|
-
|
-
|
-
|
38
|
-
|
-
|
-
|
38
|
Shares
acquired by CRH plc (Treasury Shares)
|
-
|
-
|
(436)
|
-
|
-
|
(114)
|
-
|
(550)
|
Treasury/own
shares reissued
|
-
|
-
|
27
|
-
|
-
|
(27)
|
-
|
-
|
Shares
acquired by the Employee Benefit Trust (own shares)
|
-
|
-
|
(61)
|
-
|
-
|
-
|
-
|
(61)
|
Shares
distributed under the Performance Share Plan Awards
|
-
|
-
|
62
|
(62)
|
-
|
-
|
-
|
-
|
Tax
relating to share-based payment expense
|
-
|
-
|
-
|
-
|
-
|
1
|
-
|
1
|
Share
option exercises
|
-
|
-
|
-
|
-
|
-
|
15
|
-
|
15
|
Dividends
(including shares issued in lieu of dividends)
|
-
|
-
|
-
|
-
|
-
|
(425)
|
(5)
|
(430)
|
Non-controlling
interests arising on acquisition of subsidiaries
|
-
|
-
|
-
|
-
|
-
|
-
|
1
|
1
|
Transactions
involving non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
4
|
4
|
At 30
June 2019
|
288
|
6,534
|
(1,200)
|
272
|
21
|
9,719
|
544
|
16,178
|
For the financial period ended 30 June 2018
(unaudited)
|
||||||||
|
|
|
|
|
|
|
|
|
At 1
January 2018
|
287
|
6,417
|
(15)
|
285
|
(386)
|
7,903
|
486
|
14,977
|
Group
profit for the period
|
-
|
-
|
-
|
-
|
-
|
1,461
|
-
|
1,461
|
Other
comprehensive income
|
-
|
-
|
-
|
-
|
139
|
54
|
(15)
|
178
|
Total
comprehensive income
|
-
|
-
|
-
|
-
|
139
|
1,515
|
(15)
|
1,639
|
Issue
of share capital (net of expenses)
|
-
|
62
|
-
|
-
|
-
|
-
|
-
|
62
|
Share-based
payment expense
|
-
|
-
|
-
|
35
|
-
|
-
|
-
|
35
|
Shares
acquired by CRH plc (Treasury Shares)
|
-
|
-
|
(214)
|
-
|
-
|
(136)
|
-
|
(350)
|
Treasury/own
shares reissued
|
-
|
-
|
8
|
-
|
-
|
(8)
|
-
|
-
|
Shares
acquired by the Employee Benefit Trust (own shares)
|
-
|
-
|
(3)
|
-
|
-
|
-
|
-
|
(3)
|
Shares
distributed under the Performance Share Plan Awards
|
1
|
55
|
-
|
(56)
|
-
|
-
|
-
|
-
|
Tax
relating to share-based payment expense
|
-
|
-
|
-
|
-
|
-
|
(5)
|
-
|
(5)
|
Share
option exercises
|
-
|
-
|
-
|
-
|
-
|
2
|
-
|
2
|
Dividends
(including shares issued in lieu of dividends)
|
-
|
-
|
-
|
-
|
-
|
(409)
|
(9)
|
(418)
|
Non-controlling
interests arising on acquisition of subsidiaries
|
-
|
-
|
-
|
-
|
-
|
-
|
31
|
31
|
Transactions
involving non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
1
|
1
|
At 30
June 2018
|
288
|
6,534
|
(224)
|
264
|
(247)
|
8,862
|
494
|
15,971
|
Condensed Consolidated Statement of Changes in Equity -
continued
|
Attributable to the equity holders of the Company
|
|
|
|||||
|
|
|
Treasury
|
|
Foreign
|
|
|
|
|
Issued
|
Share
|
Shares/
|
|
currency
|
|
Non-
|
|
|
share
|
premium
|
own
|
Other
|
translation
|
Retained
|
controlling
|
Total
|
|
capital
|
account
|
shares
|
reserves
|
reserve
|
income
|
Interests
|
equity
|
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
For the financial year ended 31 December 2018
(audited)
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
At 1
January 2018
|
287
|
6,417
|
(15)
|
285
|
(386)
|
7,903
|
486
|
14,977
|
Group
profit for the financial year
|
-
|
-
|
-
|
-
|
-
|
2,517
|
4
|
2,521
|
Other
comprehensive income
|
-
|
-
|
-
|
-
|
277
|
(26)
|
(1)
|
250
|
Total
comprehensive income
|
-
|
-
|
-
|
-
|
277
|
2,491
|
3
|
2,771
|
Issue
of share capital (net of expenses)
|
-
|
62
|
-
|
-
|
-
|
-
|
-
|
62
|
Share-based
payment expense
|
-
|
-
|
-
|
67
|
-
|
-
|
-
|
67
|
Shares
acquired by CRH plc (Treasury Shares)
|
-
|
-
|
(789)
|
-
|
-
|
-
|
-
|
(789)
|
Treasury/own
shares reissued
|
-
|
-
|
15
|
-
|
-
|
(15)
|
-
|
-
|
Shares
acquired by the Employee Benefit Trust (own shares)
|
-
|
-
|
(3)
|
-
|
-
|
-
|
-
|
(3)
|
Shares
distributed under the Performance Share Plan Awards
|
1
|
55
|
-
|
(56)
|
-
|
-
|
-
|
-
|
Tax
relating to share-based payment expense
|
-
|
-
|
-
|
-
|
-
|
(2)
|
-
|
(2)
|
Share
option exercises
|
-
|
-
|
-
|
-
|
-
|
7
|
-
|
7
|
Dividends
(including shares issued in lieu of dividends)
|
-
|
-
|
-
|
-
|
-
|
(572)
|
(12)
|
(584)
|
Non-controlling
interests arising on acquisition of subsidiaries
|
-
|
-
|
-
|
-
|
-
|
-
|
48
|
48
|
At 31
December 2018
|
288
|
6,534
|
(792)
|
296
|
(109)
|
9,812
|
525
|
16,554
|
Condensed Consolidated Statement of Cash Flows
|
|
|
|
|
Year
ended
|
|
Six months ended 30 June
|
|
31
December
|
||
|
2019
|
|
2018
|
|
2018
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
€m
|
|
€m
|
|
€m
|
Cash flows from operating activities
|
|
|
|
|
|
Profit
before tax from continuing operations
|
707
|
|
497
|
|
1,862
|
Profit
before tax from discontinued operations
|
-
|
|
1,415
|
|
1,558
|
Profit
before tax
|
707
|
|
1,912
|
|
3,420
|
Finance
costs (net)
|
235
|
|
160
|
|
351
|
Share
of equity accounted investments’ profit
|
(20)
|
|
(19)
|
|
(60)
|
Profit
on disposals
|
(171)
|
|
(1,466)
|
|
(1,539)
|
Group
operating profit
|
751
|
|
587
|
|
2,172
|
Depreciation
charge
|
760
|
|
488
|
|
1,071
|
Amortisation
of intangible assets
|
29
|
|
30
|
|
61
|
Impairment
charge
|
-
|
|
20
|
|
56
|
Share-based
payment expense
|
38
|
|
35
|
|
67
|
Other
(primarily pension payments)
|
7
|
|
10
|
|
(67)
|
Net
movement on working capital and provisions
|
(1,002)
|
|
(1,108)
|
|
(463)
|
Cash
generated from operations
|
583
|
|
62
|
|
2,897
|
Interest
paid (including leases)*
|
(202)
|
|
(158)
|
|
(335)
|
Corporation
tax paid
|
(111)
|
|
(215)
|
|
(663)
|
Net cash inflow/(outflow) from operating activities
|
270
|
|
(311)
|
|
1,899
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
Proceeds
from disposals (net of cash disposed and deferred
proceeds)
|
367
|
|
2,386
|
|
3,009
|
Interest
received
|
7
|
|
23
|
|
34
|
Dividends
received from equity accounted investments
|
14
|
|
22
|
|
48
|
Purchase
of property, plant and equipment
|
(635)
|
|
(509)
|
|
(1,121)
|
Acquisition
of subsidiaries (net of cash acquired)
|
(285)
|
|
(3,214)
|
|
(3,505)
|
Other
investments and advances
|
(8)
|
|
(1)
|
|
(2)
|
Deferred
and contingent acquisition consideration paid
|
(26)
|
|
(28)
|
|
(55)
|
Net cash outflow from investing activities
|
(566)
|
|
(1,321)
|
|
(1,592)
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
Proceeds
from issue of shares (net)
|
-
|
|
11
|
|
11
|
Proceeds
from exercise of share options
|
15
|
|
2
|
|
7
|
Transactions
involving non-controlling interests
|
4
|
|
1
|
|
-
|
Increase
in interest-bearing loans, borrowings and finance
leases**
|
955
|
|
2,138
|
|
1,434
|
Net
cash flow arising from derivative financial
instruments
|
(11)
|
|
19
|
|
6
|
Treasury/own
shares purchased
|
(497)
|
|
(217)
|
|
(792)
|
Repayment
of interest-bearing loans, borrowings and finance
leases**
|
(524)
|
|
(250)
|
|
(246)
|
Repayment
of lease liabilities***
|
(169)
|
|
-
|
|
-
|
Dividends
paid to equity holders of the Company
|
(425)
|
|
(358)
|
|
(521)
|
Dividends
paid to non-controlling interests
|
(5)
|
|
(9)
|
|
(12)
|
Net cash (outflow)/inflow from financing activities
|
(657)
|
|
1,337
|
|
(113)
|
(Decrease)/increase in cash and cash equivalents
|
(953)
|
|
(295)
|
|
194
|
|
|
|
|
|
|
Reconciliation of opening to closing cash and cash
equivalents
|
|
|
|
|
|
Cash and cash equivalents at 1 January
|
2,346
|
|
2,135
|
|
2,135
|
Translation
adjustment
|
6
|
|
8
|
|
17
|
(Decrease)/increase
in cash and cash equivalents
|
(953)
|
|
(295)
|
|
194
|
Cash and cash equivalents at 30 June
|
1,399
|
|
1,848
|
|
2,346
|
* Leases include finance leases previously capitalised under IAS 17
Leases in 2018 and all capitalised leases included as lease
liabilities under IFRS 16 Leases in 2019.
** Finance leases as previously capitalised under IAS 17 in
2018.
*** Repayment of lease liabilities capitalised under IFRS 16 in
2019 amounted to €204 million, of which €35 million
related to interest paid which is presented in cash flows from
operating activities.
Supplementary Information
Selected Explanatory Notes to the Condensed Consolidated Interim
Financial Statements
1.
Basis of Preparation and Accounting
Policies
Basis of Preparation
The financial information presented in this report
has been prepared in accordance with the Group’s accounting
policies under International Financial Reporting Standards (IFRS)
as approved by the European Union, as issued by the International
Accounting Standards Board (IASB) and in accordance with IAS
34 Interim
Financial Reporting.
These
Condensed Consolidated Interim Financial Statements do not include
all the information and disclosures required in the Annual
Consolidated Financial Statements and should be read in conjunction
with the Group’s 2018 Annual Report and Form
20-F.
The
accounting policies and methods of computation employed in the
preparation of the Condensed Consolidated Interim Financial
Statements are the same as those employed in the preparation of the
Annual Consolidated Financial Statements in respect of the year
ended 31 December 2018, except for the adoption of new standards,
interpretations and standard amendments effective as of 1 January
2019.
Adoption of IFRS and International Financial Reporting
Interpretations Committee (IFRIC)
interpretations
The
following new standards, interpretations and standard amendments
became effective for the Group as of 1 January 2019:
●
IFRS 16 Leases
●
IFRIC 23 Uncertainty over Income Tax
Treatments
●
Amendments to IFRS 9 Financial
Instruments
●
Amendments to IAS 19 Employee
Benefits
●
Amendments to IAS 28 Investments in Associates and
Joint Ventures
●
Annual Improvements to IFRSs: 2015 – 2017
Cycle – Amendments to IFRS 3 Business
Combinations, IFRS 11
Joint
Arrangements, IAS 12
Income
Taxes and IAS 23
Borrowing
Costs
The
new standards, interpretations and standard amendments did not
result in a material impact on the Group’s results, with the
exception of IFRS 16 which is detailed below.
IFRS 16 Leases
IFRS 16
replaces IAS 17 Leases. CRH
adopted IFRS 16 by applying the modified retrospective approach on
the transition date of 1 January 2019. The Group applied the
recognition exemption for both short-term leases and leases of low
value assets. The Group did not avail of the practical expedient
not to separate non-lease components from lease components or the
practical expedient allowing leases previously classified as
operating leases and ending within 12 months of the date of
transition, to be accounted for as short-term leases. The
right-of-use asset has been calculated as the lease liability at 1
January 2019 adjusted for any prepayments, accruals and onerous
lease provisions with no adjustment to opening retained
earnings.
1.
Basis of Preparation and Accounting
Policies - continued
The
adoption of IFRS 16 had a material impact on the Group’s
Condensed Consolidated Interim
Financial Statements and certain key financial metrics,
which is quantified in the table below and further explained in the
subsequent text:
Primary statement line item / financial metric / alternative
performance measure
|
|
|
|
|
Six months ended 30 June 2019
€m
|
Condensed
Consolidated Income Statement
|
EBITDA
|
+ 193
|
|
Depreciation
|
+ 176
|
|
Finance
costs
|
+ 35
|
|
Profit
before tax; Group profit for the financial period
|
- 18
|
|
EPS
|
- 2.2c
|
|
|
|
|
|
As at 1 January 2019
€m
|
Condensed
Consolidated Balance Sheet
|
Property,
plant and equipment (i)
|
+1,939
|
|
Lease
liabilities; net debt (i)
|
+ 1,954
|
|
|
|
|
|
Six months ended 30 June 2019
€m
|
Condensed
Consolidated Statement of Cash Flows
|
Operating
cash flow
|
+ 158
|
(i)
The impact of the
adoption of IFRS 16 on property, plant and equipment and net debt
is net of existing finance leases (€23 million at 31 December
2018) which have been recorded as part of the right-of-use assets
and lease liabilities at 1 January 2019.
Income
Statement
Cost
of sales and operating costs (excluding depreciation) have
decreased, as the Group previously recognised operating lease
expenses in either cost of sales or operating costs (depending on
the nature of the relevant operations and of the lease). The
Group’s operating lease expense for the six months ended 30
June 2018 was €283 million. Payments for leases which meet
the recognition exemption criteria and certain other lease payments
which do not meet the criteria for capitalisation (excluding
depreciation) have been recorded as an expense within cost of sales
and operating costs. Due to business seasonality, certain assets
are leased on a short-term basis (i.e. 12 months or less) to deal
with peak demand. Accordingly, a portion of costs previously
classified as operating lease expenses have not been capitalised on
the Group’s Condensed Consolidated Balance Sheet and continue
to be expensed in the Group’s Condensed Consolidated Income
Statement (see note 13).
Depreciation
and finance costs have increased due to the capitalisation of a
right-of-use asset under IFRS 16 which is depreciated over the term
of the lease with an associated finance cost applied annually to
the lease liability.
Balance
Sheet
The Group has identified the minimum lease
payments outstanding (including payments for renewal options which
are reasonably certain to be exercised) and has applied the
appropriate discount rate to calculate the present value of the
lease liability and right-of-use asset recognised on the Condensed
Consolidated Balance Sheet. The discount rates applied were arrived
at using a methodology to calculate the incremental borrowing rates
across the Group. The weighted average incremental borrowing
rate applied to lease liabilities on the Condensed Consolidated
Balance Sheet was 3.95% at 1 January 2019.
1.
Basis of Preparation and Accounting
Policies - continued
A
reconciliation of the operating lease commitment previously
reported under IAS 17 to the discounted lease liability as at 1
January 2019 under IFRS 16 is as follows:
|
|
As at 1 January 2019
€m
|
|
|
|
Operating lease commitment under IAS 17
|
1,911
|
|
Lease
extensions beyond break date
|
632
|
|
Leases
that are cancellable at any time
|
35
|
|
Existing IAS 17
finance leases (i)
|
23
|
|
Other
lease payments not included in discounted lease liability under
IFRS 16 (ii)
|
(108)
|
|
Undiscounted lease liability under IFRS 16
|
2,493
|
|
Less
impact of discounting
|
(516)
|
|
Discounted lease liability under IFRS 16
|
|
1,977
|
(i)
Existing IAS 17
finance leases are presented at discounted amounts as the impact of
discounting on these leases is not considered
material.
(ii)
Other lease
payments not included in discounted lease liability under IFRS 16
include payments related to short-term and low-value leases which
were included in the operating lease commitment under IAS 17 but
are exempt from capitalisation under IFRS 16.
Leases
accounting policy – Note 13
The
Group enters into leases for a range of assets, principally
relating to property. These property leases have varying terms,
renewal rights and escalation clauses, including periodic rent
reviews linked with a consumer price index and/or other indices.
The Group also leases plant and machinery, vehicles and equipment.
The terms and conditions of these leases do not impose significant
financial restrictions on the Group.
A
contract contains a lease if it is enforceable and conveys the
right to control the use of a specified asset for a period of time
in exchange for consideration, which is assessed at inception. A
right-of-use asset and lease liability are recognised at the
commencement date for contracts containing a lease, with the
exception of leases with a term of 12 months or less, leases where
the underlying asset is of low value and leases with associated
payments that vary directly in line with usage or sales. The
commencement date is the date at which the asset is made available
for use by the Group.
The
lease liability is initially measured at the present value of the
future minimum lease payments, discounted using the incremental
borrowing rate or the interest rate implicit in the lease, if this
is readily determinable, over the remaining lease term. Lease
payments include fixed payments, variable payments that are
dependent on a rate or index known at the commencement date,
payments for an optional renewal period and purchase and
termination option payments, if the Group is reasonably certain to
exercise those options. The lease term is the non-cancellable
period of the lease adjusted for any renewal or termination options
which are reasonably certain to be exercised. Management applies
judgement in determining whether it is reasonably certain that a
renewal, termination or purchase option will be
exercised.
Incremental
borrowing rates are calculated using a portfolio approach, based on
the risk profile of the entity holding the lease and the term and
currency of the lease.
After
initial recognition, the lease liability is measured at amortised
cost using the effective interest method. It is remeasured when
there is a change in future minimum lease payments or when the
Group changes its assessment of whether it is reasonably certain to
exercise an option within the contract. A corresponding adjustment
is made to the carrying amount of the right-of-use
asset.
The
right-of-use asset is initially measured at cost, which comprises
the lease liability adjusted for any payments made at or before the
commencement date, initial direct costs incurred, lease incentives
received and an estimate of the cost to dismantle or restore the
underlying asset or the site on which it is located at the end of
the lease term. The right-of-use asset is depreciated over the
lease term or, where a purchase option is reasonably certain to be
exercised, over the useful economic life of the asset in line with
depreciation rates for owned property, plant and equipment. The
right-of-use asset is tested periodically for impairment if an
impairment indicator is considered to exist.
Non-lease
components in a contract such as maintenance and other service
charges are separated from minimum lease payments and are expensed
as incurred.
1.
Basis of Preparation and Accounting
Policies - continued
IFRS
and IFRIC interpretations being
adopted in subsequent years
IFRS 3
Business
Combinations
In
October 2018, the IASB issued amendments to IFRS 3, regarding the
definition of a business. The amendments clarify that the process
required to meet the definition of a business (together with inputs
to create outputs) must be substantive and that the inputs and
process must together significantly contribute to creating outputs.
The definition of outputs has been narrowed to focus on goods and
services provided to customers and other income from ordinary
activities. In addition, the amendments indicate that an
acquisition of primarily a single asset or group of similar assets
is unlikely to meet the definition of a business. The amendments
will be applied prospectively for acquisitions occurring on or
after 1 January 2020. The Group is finalising its review of the
impact of this amendment, but does not expect the clarification to
have a material impact on the value of acquisitions or additions to
property, plant and equipment.
Impairment
As at
30 June 2019, the Group performed a review of indicators of
impairment relating to goodwill allocated to cash-generating units
for which sensitivity analysis of the recoverable amounts was
disclosed in the year-end 2018 Consolidated Financial Statements.
The carrying values of items of property, plant and equipment were
also reviewed for indicators of impairment. These reviews did not
give rise to any impairment charges in the first half of 2019 (H1
2018: €nil million). An impairment charge of €20
million was recognised in H1 2018 in order to write down the assets
of the DIY business, divested in July 2018, to their recoverable
amounts at 30 June 2018.
As part
of our annual process, we will update our impairment reviews prior
to the finalisation of the full year Consolidated Financial
Statements for 2019. We will assess the impact of any of the
Group’s markets that remain challenging (and of our
consequential management actions) to determine whether they have an
impact on the long-term valuation of our cash-generating
units.
Going Concern
The
Group has considerable financial resources and a large number of
customers and suppliers across different geographic areas and
industries. In addition, the local nature of building
materials means that the Group’s products are not usually
shipped cross-border.
Having
assessed the relevant business risks, the Directors believe that
the Group is well placed to manage these risks successfully and
they have a reasonable expectation that CRH plc, and the Group as a
whole, has adequate resources to continue in operational existence
for the foreseeable future with no material uncertainties. For this
reason, the Directors continue to adopt the going concern basis in
preparing the Condensed Consolidated Interim Financial
Statements.
Translation of Foreign Currencies
The
financial information is presented in euro. Results and cash flows
of operations based in non-euro countries have been translated into
euro at average exchange rates for the period, and the related
balance sheets have been translated at the rates of exchange ruling
at the balance sheet date. The principal rates used for translation
of results, cash flows and balance sheets into euro
were:
|
Average
|
|
Period end
|
||||
|
Six months
ended
|
Year ended
|
|
Six
months ended
|
Year ended
|
||
|
30 June
|
31 December
|
|
30 June
|
31 December
|
||
euro 1 =
|
2019
|
2018
|
2018
|
|
2019
|
2018
|
2018
|
|
|
|
|
|
|
|
|
Brazilian
Real
|
4.3417
|
4.1415
|
4.3085
|
|
4.3511
|
4.4876
|
4.4440
|
Canadian
Dollar
|
1.5069
|
1.5457
|
1.5294
|
|
1.4893
|
1.5442
|
1.5605
|
Chinese
Renminbi
|
7.6678
|
7.7086
|
7.8081
|
|
7.8185
|
7.7170
|
7.8751
|
Hungarian
Forint
|
320.4198
|
314.1128
|
318.8897
|
|
323.3900
|
329.7700
|
320.9800
|
Indian
Rupee
|
79.1240
|
79.4903
|
80.7332
|
|
78.5240
|
79.8130
|
79.7298
|
Philippine
Peso
|
58.9809
|
62.9356
|
62.2101
|
|
58.3350
|
62.1740
|
60.1130
|
Polish
Zloty
|
4.2920
|
4.2207
|
4.2615
|
|
4.2496
|
4.3732
|
4.3014
|
Pound
Sterling
|
0.8736
|
0.8798
|
0.8847
|
|
0.8966
|
0.8861
|
0.8945
|
Romanian
Leu
|
4.7418
|
4.6543
|
4.6540
|
|
4.7343
|
4.6631
|
4.6635
|
Serbian
Dinar
|
118.0807
|
118.3134
|
118.2302
|
|
117.9355
|
118.8546
|
118.3157
|
Swiss
Franc
|
1.1295
|
1.1697
|
1.1550
|
|
1.1105
|
1.1569
|
1.1269
|
Ukrainian
Hryvnia
|
30.3931
|
32.3560
|
32.0987
|
|
29.7730
|
30.6845
|
31.6900
|
US
Dollar
|
1.1298
|
1.2104
|
1.1810
|
|
1.1380
|
1.1658
|
1.1450
|
2.
Key Components of Performance for the
First Half of 2019
Continuing operations
€
million
|
Sales revenue
|
EBITDA
|
Operating profit
|
Profit on disposals
|
Finance costs (net)
|
Assoc. and JV PAT (i)
|
Pre-tax profit
|
|
|
|
|
|
|
|
|
First
half 2018
|
11,944
|
1,130
|
592
|
46
|
(160)
|
19
|
497
|
Exchange
effects
|
394
|
50
|
31
|
4
|
(6)
|
-
|
29
|
2018
at 2019 rates
|
12,338
|
1,180
|
623
|
50
|
(166)
|
19
|
526
|
Incremental impact in 2019 of:
|
|
|
|
|
|
|
|
2018/2019
acquisitions
|
819
|
144
|
64
|
-
|
(29)
|
-
|
35
|
2018/2019
divestments
|
(368)
|
(33)
|
(3)
|
115
|
1
|
-
|
113
|
IFRS 16
impact
|
-
|
193
|
17
|
-
|
(35)
|
-
|
(18)
|
Organic
|
428
|
56
|
50
|
6
|
(6)
|
1
|
51
|
First
half 2019
|
13,217
|
1,540
|
751
|
171
|
(235)
|
20
|
707
|
|
|
|
|
|
|
|
|
%
Total change
|
11%
|
36%
|
27%
|
|
|
|
42%
|
%
Organic change
|
3%
|
5%
|
8%
|
|
|
|
10%
|
(i)
CRH’s
share of after-tax profits of joint ventures and associated
undertakings.
3.
Seasonality
Activity
in the construction industry is characterised by cyclicality and is
dependent to a considerable extent on the seasonal impact of
weather in the Group’s operating locations, with activity in
some markets reduced significantly in winter due to inclement
weather. As shown in the table above, the Group’s operations
exhibit a high degree of seasonality and can be significantly
impacted by the timing of acquisitions and divestments; for example
first half EBITDA from continuing operations in the 2018 financial
year accounted for 34% of the EBITDA reported for the full year
2018.
4.
Revenue
Effective
1 January 2019 the Group implemented a simplified new structure
reducing its operating segments from six to three: Europe Materials
(formerly Europe Heavyside and Asia), Americas Materials and a new
Building Products segment. The Building Products segment brings
together our former Europe Lightside, Europe Distribution and
Americas Products segments. Comparative revenue and segment (note
5) amounts for 2018 have been restated where necessary to reflect
the new format for segmentation.
As
a result of the more simplified operating structure, certain
categories by which revenue had previously been disaggregated were
amended to better reflect the basis on which management now reviews
its businesses. Accordingly, the revenue formally disaggregated
across construction accessories, perimeter protection, shutters
& awnings, network access products, architectural and precast
products has now been reorganised and presented in two new
categories: Architectural products and Infrastructure products.
Comparative amounts for 2018 have been restated where necessary to
reflect the new format for disaggregation of revenue.
Disaggregated revenue
In
the following tables, revenue is disaggregated by primary
geographic market and by principal activities and products. Due to
the diversified nature of the Group, the basis on which management
reviews its businesses varies across the Group. Geography is the
primary basis for the Europe Materials and Americas Materials
businesses; while activities and products are used for the Building
Products businesses.
|
Six months ended 30 June 2019 - Unaudited
|
|
Six
months ended 30 June 2018 - Unaudited
|
||||||
|
Europe
Materials
|
Americas
Materials
|
Building
Products
|
Total
|
|
Europe
Materials
|
Americas
Materials
|
Building
Products
|
Total
|
|
€m
|
€m
|
€m
|
€m
|
|
€m
|
€m
|
€m
|
€m
|
Primary
geographic market
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
|
|
|
|
|
|
Republic of Ireland
(Country of domicile)
|
283
|
-
|
-
|
283
|
|
202
|
-
|
-
|
202
|
Benelux
(mainly the Netherlands)
|
285
|
-
|
814
|
1,099
|
|
290
|
-
|
1,050
|
1,340
|
United
Kingdom
|
1,511
|
-
|
122
|
1,633
|
|
1,479
|
-
|
112
|
1,591
|
Rest of
Europe (i)
|
1,760
|
-
|
1,617
|
3,377
|
|
1,650
|
-
|
1,500
|
3,150
|
United
States
|
-
|
3,585
|
2,357
|
5,942
|
|
-
|
2,775
|
2,029
|
4,804
|
Rest of
World (ii)
|
246
|
427
|
210
|
883
|
|
206
|
403
|
248
|
857
|
Total
Group from continuing operations
|
4,085
|
4,012
|
5,120
|
13,217
|
|
3,827
|
3,178
|
4,939
|
11,944
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
United
States – Americas Distribution
|
|
|
|
-
|
|
|
|
|
6
|
Total
Group
|
|
|
|
13,217
|
|
|
|
|
11,950
|
Footnotes
(i) and (ii) appear on page 20.
4.
Revenue -
continued
|
Six months ended 30 June 2019 - Unaudited
|
|
Six
months ended 30 June 2018 - Unaudited
|
||||||
|
Europe
Materials
(iii)
|
Americas
Materials
(iii)
|
Building
Products
|
Total
|
|
Europe
Materials
(iii)
|
Americas
Materials
(iii)
|
Building
Products
|
Total
|
|
€m
|
€m
|
€m
|
€m
|
|
€m
|
€m
|
€m
|
€m
|
Principal activities and products
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
|
|
|
|
|
|
Cement,
lime and cement products
|
1,279
|
538
|
-
|
1,817
|
|
1,184
|
198
|
-
|
1,382
|
Aggregates, asphalt
and readymixed products
|
1,493
|
2,081
|
-
|
3,574
|
|
1,386
|
1,686
|
-
|
3,072
|
Construction
contract activities*
|
757
|
1,393
|
92
|
2,242
|
|
727
|
1,294
|
105
|
2,126
|
Architectural
products
|
467
|
-
|
1,507
|
1,974
|
|
436
|
-
|
1,394
|
1,830
|
Infrastructure
products
|
89
|
-
|
890
|
979
|
|
94
|
-
|
800
|
894
|
Architectural glass
and glazing systems and wholesale hardware
distribution
|
-
|
-
|
785
|
785
|
|
-
|
-
|
669
|
669
|
General
Builders Merchants, DIY and Sanitary, Heating &
Plumbing
|
-
|
-
|
1,846
|
1,846
|
|
-
|
-
|
1,971
|
1,971
|
Total
Group from continuing operations
|
4,085
|
4,012
|
5,120
|
13,217
|
|
3,827
|
3,178
|
4,939
|
11,944
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
Exterior and
interior products - Americas Distribution
|
|
|
|
-
|
|
|
|
|
6
|
Total
Group
|
|
|
|
13,217
|
|
|
|
|
11,950
|
* Revenue principally recognised over time. Construction contracts
are generally completed within the same financial reporting
year.
Footnotes to revenue disaggregation on pages 19 &
20
(i)
The
Rest of Europe principally includes Austria, Czech Republic,
Denmark, Finland, France, Germany, Hungary, Poland, Romania,
Serbia, Slovakia, Spain, Sweden, Switzerland and
Ukraine.
(ii)
The
Rest of World principally includes Australia, Brazil, Canada and
the Philippines.
(iii)
Europe
Materials and Americas Materials both operate vertically integrated
businesses, which are founded in resource-backed cement and
aggregates assets and which support the manufacture and supply of
aggregates, asphalt, cement, readymixed and precast concrete and
landscaping products. Accordingly, for the purpose of
disaggregation of revenue we have included certain products
together, as this is how management review and evaluate this
business line.
5.
Segment
Information
|
Six months ended 30 June
|
|
Year ended 31
|
||||||||
|
Unaudited
|
|
Unaudited
|
|
December - Audited
|
||||||
|
2019
|
|
2018
|
|
2018
|
||||||
|
€m
|
%
|
|
€m
|
%
|
|
€m
|
%
|
|||
Revenue
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
|
|
|
|
|
|
|
|||
Europe
Materials
|
4,085
|
30.9
|
|
3,827
|
32.0
|
|
8,042
|
30.0
|
|||
Americas
Materials
|
4,012
|
30.4
|
|
3,178
|
26.6
|
|
8,951
|
33.4
|
|||
Building
Products
|
5,120
|
38.7
|
|
4,939
|
41.3
|
|
9,797
|
36.5
|
|||
Total
Group from continuing operations
|
13,217
|
100.0
|
|
11,944
|
99.9
|
|
26,790
|
99.9
|
|||
Discontinued
operations - Americas Distribution
|
-
|
-
|
|
6
|
0.1
|
|
7
|
0.1
|
|||
Total
Group
|
13,217
|
100.0
|
|
11,950
|
100.0
|
|
26,797
|
100.0
|
|||
|
|
|
|
|
|
|
|
|
|||
Group
EBITDA
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
|
|
|
|
|
|
|
|||
Europe
Materials
|
461
|
29.9
|
|
395
|
35.1
|
|
936
|
27.8
|
|||
Americas
Materials
|
502
|
32.6
|
|
297
|
26.4
|
|
1,493
|
44.4
|
|||
Building
Products
|
577
|
37.5
|
|
438
|
38.9
|
|
936
|
27.9
|
|||
Total
Group from continuing operations
|
1,540
|
100.0
|
|
1,130
|
100.4
|
|
3,365
|
100.1
|
|||
Discontinued
operations - Americas Distribution
|
-
|
-
|
|
(5)
|
(0.4)
|
|
(5)
|
(0.1)
|
|||
Total
Group
|
1,540
|
100.0
|
|
1,125
|
100.0
|
|
3,360
|
100.0
|
|||
|
|
|
|
|
|
|
|
|
|||
Depreciation,
amortisation and impairment
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
|
|
|
|
|
|
|
|||
Europe
Materials
|
252
|
31.9
|
|
201
|
37.4
|
|
449
|
37.8
|
|||
Americas
Materials
|
335
|
42.5
|
|
203
|
37.7
|
|
484
|
40.7
|
|||
Building
Products
|
202
|
25.6
|
|
134
|
24.9
|
|
255
|
21.5
|
|||
Total
Group from continuing operations
|
789
|
100.0
|
|
538
|
100.0
|
|
1,188
|
100.0
|
|||
Discontinued
operations - Americas Distribution
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|||
Total
Group
|
789
|
100.0
|
|
538
|
100.0
|
|
1,188
|
100.0
|
|||
|
|
|
|
|
|
|
|
|
|||
Group
operating profit
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
|
|
|
|
|
|
|
|||
Europe
Materials
|
209
|
27.8
|
|
194
|
33.0
|
|
487
|
22.4
|
|||
Americas
Materials
|
167
|
22.3
|
|
94
|
16.0
|
|
1,009
|
46.5
|
|||
Building
Products
|
375
|
49.9
|
|
304
|
51.8
|
|
681
|
31.3
|
|||
Total
Group from continuing operations
|
751
|
100.0
|
|
592
|
100.8
|
|
2,177
|
100.2
|
|||
Discontinued
operations - Americas Distribution
|
-
|
-
|
|
(5)
|
(0.8)
|
|
(5)
|
(0.2)
|
|||
Total
Group
|
751
|
100.0
|
|
587
|
100.0
|
|
2,172
|
100.0
|
|||
|
|
|
|
|
|
|
|
|
|||
Profit/(loss)
on disposals – continuing operations
|
|
|
|
|
|
|
|
|
|||
Europe
Materials
|
16
|
|
|
14
|
|
|
7
|
|
|||
Americas
Materials
|
8
|
|
|
30
|
|
|
44
|
|
|||
Building
Products
|
147
|
|
|
2
|
|
|
(75)
|
|
|||
Total
Group
|
171
|
|
|
46
|
|
|
(24)
|
|
5.
Segment Information -
continued
|
|
|
|
|
|
|
Year
ended
|
|
|||||||||
|
Six months ended 30 June
|
|
31
December
|
|
|||||||||||||
|
Unaudited
|
|
Audited
|
|
|||||||||||||
|
2019
|
|
|
2018
|
|
|
2018
|
||||||||||
|
€m
|
|
|
€m
|
|
|
€m
|
|
|||||||||
Reconciliation
of Group operating profit to profit before tax:
|
|
|
|
|
|
|
|
|
|||||||||
Group
operating profit from continuing operations (analysed on page
21)
|
751
|
|
|
592
|
|
|
2,177
|
|
|
||||||||
Profit/(loss) on
disposals
|
171
|
|
|
46
|
|
|
(24)
|
|
|
||||||||
Profit
before finance costs
|
922
|
|
|
638
|
|
|
2,153
|
|
|
||||||||
Finance
costs less income
|
(176)
|
|
|
(144)
|
|
|
(305)
|
|
|
||||||||
Other
financial expense
|
(59)
|
|
|
(16)
|
|
|
(46)
|
|
|
||||||||
Share
of equity accounted investments’ profit
|
20
|
|
|
19
|
|
|
60
|
|
|
||||||||
Profit
before tax from continuing operations
|
707
|
|
|
497
|
|
|
1,862
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
Year ended
|
|
|||||||||
|
Six months ended 30 June
|
|
31 December
|
|
|||||||||||||
Unaudited
|
|
Unaudited
|
Audited
|
|
|||||||||||||
|
2019
|
|
2018
|
|
2018
|
|
|||||||||||
|
€m
|
%
|
|
€m
|
%
|
|
€m
|
%
|
|
||||||||
Total
assets
|
|
|
|
|
|
|
|
|
|
||||||||
Europe
Materials
|
11,400
|
32.5
|
|
10,675
|
32.7
|
|
10,509
|
33.3
|
|
||||||||
Americas
Materials
|
15,031
|
42.9
|
|
14,003
|
42.9
|
|
13,798
|
43.8
|
|
||||||||
Building
Products
|
8,605
|
24.6
|
|
7,943
|
24.4
|
|
7,203
|
22.9
|
|
||||||||
Total
Group
|
35,036
|
100.0
|
|
32,621
|
100.0
|
|
31,510
|
100.0
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation
to total assets as reported in the Condensed Consolidated Balance
Sheet:
|
|
|
|
|
|
|
|
|
|
|
|||||||
Investments
accounted for using the equity method
|
1,181
|
|
|
1,111
|
|
|
1,163
|
|
|||||||||
Other
financial assets
|
23
|
|
|
24
|
|
|
23
|
|
|||||||||
Derivative
financial instruments (current and non-current)
|
87
|
|
|
61
|
|
|
45
|
|
|||||||||
Income
tax assets (current and deferred)
|
89
|
|
|
91
|
|
|
86
|
|
|||||||||
Cash
and cash equivalents
|
1,399
|
|
|
1,848
|
|
|
2,346
|
|
|||||||||
Total
assets
|
37,815
|
|
|
35,756
|
|
|
35,173
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
6.
Earnings per Ordinary
Share
The
computation of basic and diluted earnings per Ordinary Share is set
out below:
|
|
|
|
|
Year
ended
|
|
Six months ended 30 June
|
|
31
December
|
||
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
2019
|
|
2018
|
|
2018
|
|
€m
|
|
€m
|
|
€m
|
Numerator computations
|
|
|
|
|
|
Group
profit for the financial period
|
555
|
|
1,461
|
|
2,521
|
Profit
attributable to non-controlling interests
|
(7)
|
|
-
|
|
(4)
|
Profit attributable to ordinary equity holders of the Company -
numerator for basic/diluted earnings per Ordinary
Share
|
548
|
|
1,461
|
|
2,517
|
Profit
after tax for the financial period from discontinued
operations
|
-
|
|
1,083
|
|
1,085
|
Profit attributable to ordinary equity holders of the Company -
numerator for basic/diluted earnings per Ordinary Share from
continuing operations
|
548
|
|
378
|
|
1,432
|
|
|
|
|
|
|
|
Number of
|
|
Number
of
|
|
Number
of
|
|
Shares
|
|
Shares
|
|
Shares
|
Denominator computations
|
|
|
|
|
|
Weighted
average number of Ordinary Shares (millions) outstanding for the
financial period
|
808.7
|
|
839.6
|
|
832.4
|
Effect
of dilutive potential Ordinary Shares (employee share options)
(millions)
|
4.4
|
|
4.3
|
|
4.2
|
Denominator for diluted earnings per Ordinary Share
|
813.1
|
|
843.9
|
|
836.6
|
|
|
|
|
|
|
Earnings per Ordinary Share
|
|
|
|
|
|
-
basic
|
67.8c
|
|
174.0c
|
|
302.4c
|
-
diluted
|
67.4c
|
|
173.1c
|
|
300.9c
|
|
|
|
|
|
|
Earnings per Ordinary Share from continuing operations
|
|
|
|
|
|
-
basic
|
67.8c
|
|
45.0c
|
|
172.0c
|
-
diluted
|
67.4c
|
|
44.8c
|
|
171.2c
|
7.
Dividends
|
|
|
|
|
Year
ended
|
|
Six months ended 30 June
|
|
31
December
|
||
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
2019
|
|
2018
|
|
2018
|
Net
dividend paid per share
|
52.4c
|
|
48.8c
|
|
68.4c
|
Net
dividend declared for the period
|
20.0c
|
|
19.6c
|
|
72.0c
|
Dividend
cover (Earnings per share/Dividend declared per share) –
continuing and discontinued operations
|
3.4x
|
|
8.9x
|
|
4.2c
|
Dividend
cover – continuing operations
|
3.4x
|
|
2.3x
|
|
2.4c
|
The
Board has decided to increase the interim dividend to 20.0c per
share, an increase of 2% compared with last year’s level of
19.6c per share. It is proposed to pay the interim dividend on 25
September 2019 to shareholders registered at the close of business
on 6 September 2019.
In
connection with the share buyback programme, CRH announced the
suspension of the scrip dividend alternative on 2 May
2018. Therefore, the interim dividend will be paid wholly in
cash.
Dividends
are generally paid in euro. However, to avoid costs to
shareholders, dividends are paid in Pounds Sterling and US Dollars
to shareholders whose addresses, according to CRH’s Share
Register, are in the UK and the US respectively. However, where
shares are held in the CREST system, dividends are automatically
paid in euro unless a currency election is made. In respect of the
interim dividend, the latest date for receipt of currency elections
is 6 September 2019.
8.
Assets Held for Sale and Discontinued
Operations
A. Held for sale assessment
In
July 2019, the Group reached agreement with private equity funds
managed by Blackstone to divest of its Europe Distribution
business, which is part of the Building Products segment, for an
enterprise value of c. €1.6 billion. In 2018, the business
generated EBITDA of €155 million on sales of €3.7
billion and profit before tax for the year amounted to €124
million.
The transaction is subject to regulatory approval.
At 30 June 2019, there were a number of other substantive steps,
outside of the control of the Group, requiring completion before
the transaction met the “held for sale” criteria under
IFRS 5 Non-Current Assets Held for
Sale and Discontinued Operations. As a result, the Europe Distribution business
was not classified as held for sale at 30 June
2019.
Assets
and liabilities that met the IFRS 5 criteria at 30 June 2019 have
not been separately disclosed as held for sale as they were not
considered material in the context of the Group. The businesses
divested in 2019 are not considered to be either separate major
lines of business or geographical areas of operation and therefore
do not constitute discontinued operations as defined in IFRS
5.
B. Profit on disposal of discontinued operations
On
2 January 2018, the Group completed the divestment of its 100%
holding in Allied Building Products, the trading name of our former
Americas Distribution segment. The assets and liabilities
associated with this transaction met the "held for sale" criteria
set out in IFRS 5 and were reclassified accordingly as assets or
liabilities held for sale as at 31 December 2017. As the business
was divested in 2018, all opening balances were reclassified back
to the relevant asset and liability categories prior to their
divestment for presentation purposes.
The
table below sets out the proceeds and related profit recognised on
the divestment which is included in profit after tax for the
financial period from discontinued operations.
|
Six
months ended 30 June
|
||
|
|
Unaudited
|
|
|
|
2018
|
|
|
|
€m
|
|
Net assets disposed
|
|
843
|
|
Reclassification of currency translation effects on
disposal
|
|
(27)
|
|
Total
|
|
816
|
|
Proceeds from disposal (net of disposal costs)
|
|
2,236
|
|
Profit on disposal of discontinued operations
|
|
1,420
|
|
|
|
|
|
Net cash inflow arising on disposal
|
|
|
|
Proceeds from disposal of discontinued operations
|
|
2,236
|
|
Less: cash and cash equivalents disposed
|
|
(18)
|
|
Total
|
|
2,218
|
8.
Assets Held for Sale and Discontinued
Operations - continued
C. Results of discontinued operations
The
results of the discontinued operations included in the Group profit
for the financial period are set out as follows:
|
Six months ended 30 June
|
||
|
|
Unaudited
|
|
|
|
2018
|
|
|
|
€m
|
|
Revenue
|
|
6
|
|
|
|
|
|
EBITDA
|
|
(5)
|
|
Depreciation
|
|
-
|
|
Amortisation
|
|
-
|
|
Operating loss
|
|
(5)
|
|
Profit
on disposals
|
|
1,420
|
|
Profit before tax
|
|
1,415
|
|
Attributable
income tax expense
|
|
(332)
|
|
Profit after tax
|
|
1,083
|
|
|
|
|
|
Cash flows from discontinued operations
|
|
|
|
Net
cash outflow from operating activities
|
|
(71)
|
|
Net
cash inflow from investing activities (i)
|
|
2,218
|
|
Net
cash outflow from financing activities
|
|
(5)
|
|
Net cash inflow
|
|
2,142
|
Basic
earnings per Ordinary Share from discontinued operations for the
six months to 30 June 2018: 129.0c. Diluted earnings per Ordinary
Share from discontinued operations for the six months to 30 June
2018: 128.3c. There were no equivalent earnings per Ordinary Share
from discontinued operations for the six months to 30 June
2019.
(i)
Includes
the proceeds from the sale of Allied Building
Products.
9.
Share of Equity Accounted
Investments’ Profit
The
Group’s share of joint ventures’ and associates’
profit after tax is equity accounted and is presented as a single
line item in the Condensed Consolidated Income Statement; it is
analysed as follows between the principal Condensed Consolidated
Income Statement captions:
|
|
|
|
|
Year
ended
|
|
Six months ended 30 June
|
|
31
December
|
||
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
2019
|
|
2018
|
|
2018
|
|
€m
|
|
€m
|
|
€m
|
Group share of:
|
|
|
|
|
|
Revenue
|
714
|
|
696
|
|
1,575
|
EBITDA
|
65
|
|
58
|
|
138
|
Operating
profit
|
33
|
|
26
|
|
74
|
Profit
after tax
|
20
|
|
19
|
|
60
|
Analysis of Group share of profit after tax:
|
|
|
|
|
|
Share
of joint ventures’ profit after tax
|
16
|
|
13
|
|
33
|
Share
of associates’ profit after tax
|
4
|
|
6
|
|
27
|
Share
of equity accounted investments’ profit after
tax
|
20
|
|
19
|
|
60
|
10.
Net Finance Costs
Continuing operations
|
|
|
|
|
|
|
|
|
|
|
Year
ended
|
|
Six months ended 30 June
|
|
31
December
|
||
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
2019
|
|
2018
|
|
2018
|
|
€m
|
|
€m
|
|
€m
|
Finance
costs
|
183
|
|
167
|
|
339
|
Finance
income
|
(7)
|
|
(23)
|
|
(34)
|
Other
financial expense
|
59
|
|
16
|
|
46
|
Total net finance costs
|
235
|
|
160
|
|
351
|
|
|
|
|
|
|
The overall total is analysed as follows:
|
|
|
|
|
|
Net
finance costs on interest-bearing loans and borrowings and cash and
cash equivalents
|
174
|
|
143
|
|
308
|
Net
cost/(credit) re change in fair value of derivatives and fixed rate
debt
|
2
|
|
1
|
|
(3)
|
Net
debt-related interest costs
|
176
|
|
144
|
|
305
|
Unwinding
of discount element of lease liabilities
|
35
|
|
-
|
|
-
|
Net
pension-related finance cost
|
7
|
|
4
|
|
10
|
Charge
to unwind discount on provisions/deferred and contingent
acquisition consideration
|
17
|
|
12
|
|
36
|
Total net finance costs
|
235
|
|
160
|
|
351
|
|
|
|
|
|
|
11.
Net Debt
|
As at 30 June
|
|
As at
30 June
|
|
As at
31 December
|
|||
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|||
|
Fair value
|
Book
value
|
|
Fair value
|
Book
value
|
|
Fair
value
|
Book
value
|
|
2019
|
|
2018
|
|
2018
|
|||
Net
debt
|
€m
|
€m
|
|
€m
|
€m
|
|
€m
|
€m
|
Non-current assets
|
|
|
|
|
|
|
|
|
Derivative
financial instruments
|
78
|
78
|
|
30
|
30
|
|
30
|
30
|
Current assets
|
|
|
|
|
|
|
|
|
Derivative
financial instruments
|
9
|
9
|
|
31
|
31
|
|
15
|
15
|
Cash
and cash equivalents
|
1,399
|
1,399
|
|
1,848
|
1,848
|
|
2,346
|
2,346
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
Interest-bearing
loans and borrowings*
|
(9,117)
|
(8,806)
|
|
(8,688)
|
(8,557)
|
|
(8,605)
|
(8,698)
|
Derivative
financial instruments
|
-
|
-
|
|
(37)
|
(37)
|
|
(18)
|
(18)
|
Lease
liabilities under IFRS 16**
|
(1,502)
|
(1,502)
|
|
-
|
-
|
|
-
|
-
|
Current liabilities
|
|
|
|
|
|
|
|
|
Interest-bearing
loans and borrowings*
|
(1,023)
|
(1,023)
|
|
(1,356)
|
(1,356)
|
|
(618)
|
(618)
|
Derivative
financial instruments
|
(22)
|
(22)
|
|
(14)
|
(14)
|
|
(41)
|
(41)
|
Lease
liabilities under IFRS 16**
|
(358)
|
(358)
|
|
-
|
-
|
|
-
|
-
|
Group
net debt
|
(10,536)
|
(10,225)
|
|
(8,186)
|
(8,055)
|
|
(6,891)
|
(6,984)
|
* Interest-bearing loans and borrowings include €12 million
as at 30 June 2018 (31 December 2018: €23 million) relating
to finance leases previously capitalised under IAS 17.
**
All leases capitalised under IFRS
16 have been included as lease liabilities in
2019.
11.
Net Debt -
continued
|
As at 30 June
|
|
As at
30 June
|
|
As at
31 December
|
|||
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|||
|
2019*
|
|
2018
|
|
2018
|
|||
Gross
debt, net of derivatives, matures as follows:
|
|
€m
|
|
|
€m
|
|
|
€m
|
Within
one year
|
|
1,394
|
|
|
1,339
|
|
|
644
|
Between
one and two years
|
|
1,376
|
|
|
(5)
|
|
|
748
|
Between
two and three years
|
|
826
|
|
|
1,089
|
|
|
947
|
Between
three and four years
|
|
1,303
|
|
|
599
|
|
|
370
|
Between
four and five years
|
|
744
|
|
|
1,112
|
|
|
752
|
After
five years
|
|
5,981
|
|
|
5,769
|
|
|
5,869
|
Total
|
|
11,624
|
|
|
9,903
|
|
|
9,330
|
The
Group has a €1.5 billion Euro Commercial Paper Programme and
a US$2.0 billion US Dollar Commercial Paper Programme which allows
it to fund short-term liquidity needs at attractive terms.
Commercial Paper notes in the amount of €917 million were
outstanding as at 30 June 2019 (30 June 2018: €777
million).
*
All leases capitalised under IFRS
16 are included in gross debt in 2019.
|
|
|
|
|
|
|||
|
As at 30 June
|
|
As at
30 June
|
|
As at
31 December
|
|||
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|||
|
2019
|
|
2018
|
|
2018
|
|||
Reconciliation
of opening to closing net debt:
|
|
€m
|
|
|
€m
|
|
|
€m
|
At
1 January
|
|
(6,984)
|
|
|
(5,796)
|
|
|
(5,796)
|
Effect
of adopting IFRS 16
|
|
(1,954)
|
|
|
-
|
|
|
-
|
Debt,
including lease liabilities, in acquired companies
|
|
(28)
|
|
|
(56)
|
|
|
(74)
|
Debt,
including lease liabilities, in disposed companies
|
|
38
|
|
|
-
|
|
|
-
|
Increase in
interest-bearing loans, borrowings and finance
leases**
|
|
(955)
|
|
|
(2,138)
|
|
|
(1,434)
|
Increase in lease
liabilities under IFRS 16*
|
|
(54)
|
|
|
-
|
|
|
-
|
Net
cash flow arising from derivative financial
instruments
|
|
11
|
|
|
(19)
|
|
|
(6)
|
Repayment of
interest-bearing loans, borrowings and finance
leases**
|
|
524
|
|
|
250
|
|
|
246
|
Repayment of lease
liabilities under IFRS 16*
|
|
169
|
|
|
-
|
|
|
-
|
(Decrease)/increase
in cash and cash equivalents
|
|
(953)
|
|
|
(295)
|
|
|
194
|
Mark-to-market
adjustment
|
|
27
|
|
|
5
|
|
|
2
|
Translation
adjustment
|
|
(66)
|
|
|
(6)
|
|
|
(116)
|
At
30 June
|
|
(10,225)
|
|
|
(8,055)
|
|
|
(6,984)
|
*
All leases capitalised under IFRS
16 have been included as lease liabilities in
2019.
** Interest-bearing loans and borrowings include €12 million
as at 30 June 2018 (31 December 2018: €23 million) relating
to finance leases previously capitalised under IAS 17.
Market
capitalisation
Market
capitalisation, calculated as the period-end share price multiplied
by the number of Ordinary Shares in issue, is as
follows:
|
As at 30 June
|
|
As at
30 June
|
|
As at
31 December
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
2019
|
|
2018
|
|
2018
|
|
€m
|
|
€m
|
|
€m
|
Market
capitalisation at period-end
|
22,977
|
|
25,392
|
|
18,846
|
11.
Net Debt -
continued
Liquidity
information - borrowing facilities
The
Group manages its borrowing ability by entering into committed
borrowing agreements. Revolving committed bank facilities are
generally available to the Group for periods of up to five years
from the date of inception. The undrawn committed facilities
figures shown in the table below represent the facilities available
to be drawn by the Group at 30 June 2019.
|
As at 30 June
|
|
As at
30 June
|
|
As at
31 December
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
2019
|
|
2018
|
|
2018
|
|
€m
|
|
€m
|
|
€m
|
Between
two and three years
|
13
|
|
-
|
|
15
|
Between
three and four years
|
54
|
|
50
|
|
50
|
Between
four and five years
|
3,500
|
|
3,500
|
|
3,500
|
After
five years
|
-
|
|
39
|
|
18
|
Total
|
3,567
|
|
3,589
|
|
3,583
|
Guarantees
The
Company has given letters of guarantee to secure obligations of
subsidiary undertakings as follows: €9.4 billion in respect
of loans and borrowings, bank advances, derivative obligations and
future lease obligations (2018: €9.6 billion) and €0.4
billion in respect of letters of credit (2018: €0.3
billion).
Net
debt metrics
The net
debt metrics based on net debt as shown in note 11, EBITDA as
defined on page 37 and net debt-related interest as shown in note
10 are as follows:
|
|
|
|
|
Year
ended
|
|
|
Six months ended 30 June
|
|
31
December
|
|||
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
2019
|
|
2018
|
|
2018
|
|
EBITDA
net interest cover (times) – continuing
operations
|
- six months to 30 June
|
8.8
|
|
7.8
|
|
-
|
- rolling 12
months
|
11.2
|
|
11.2
|
|
11.0
|
|
EBIT
net interest cover (times) – continuing
operations
|
- six months to 30 June
|
4.3
|
|
4.1
|
|
-
|
- rolling 12
months
|
6.9
|
|
7.3
|
|
7.1
|
|
|
|
|
|
|
|
|
Net
debt as a percentage of market capitalisation
|
45%
|
|
32%
|
|
37%
|
|
Net
debt as a percentage of total equity
|
63%
|
|
50%
|
|
42%
|
12.
Fair Value of Financial
Instruments
The
table below sets out the valuation basis of financial instruments
held at fair value by the Group:
|
Level 2 (i)
|
|
Level 3 (i)
|
||||||||
|
As at 30 June
|
As at
31 December
|
|
As at 30 June
|
As at
31 December
|
||||||
|
Unaudited
|
Audited
|
|
Unaudited
|
Audited
|
||||||
|
2019
|
|
2018
|
|
2018
|
|
2019
|
|
2018
|
|
2018
|
|
€m
|
|
€m
|
|
€m
|
|
€m
|
|
€m
|
|
€m
|
Assets measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
Fair
value hedges - interest rate swaps
|
77
|
|
25
|
|
27
|
|
-
|
|
-
|
|
-
|
Cash
flow hedges - cross-currency and commodity forwards
|
8
|
|
19
|
|
6
|
|
-
|
|
-
|
|
-
|
Net
investment hedges - cross-currency swaps
|
2
|
|
15
|
|
10
|
|
-
|
|
-
|
|
-
|
Not
designated as hedges (held for trading) - interest rate swaps and
cross-currency swaps
|
-
|
|
2
|
|
2
|
|
-
|
|
-
|
|
-
|
Total
|
87
|
|
61
|
|
45
|
|
-
|
|
-
|
|
-
|
Liabilities measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
Fair
value hedges - interest rate swaps
|
-
|
|
(37)
|
|
(16)
|
|
-
|
|
-
|
|
-
|
Cash
flow hedges - cross-currency and commodity forwards
|
(8)
|
|
-
|
|
(34)
|
|
-
|
|
-
|
|
-
|
Net
investment hedges - cross-currency swaps
|
(11)
|
|
(14)
|
|
(2)
|
|
-
|
|
-
|
|
-
|
Not
designated as hedges (held for trading) - cross-currency
swaps
|
(3)
|
|
-
|
|
(7)
|
|
-
|
|
-
|
|
-
|
Contingent
consideration
|
-
|
|
-
|
|
-
|
|
(232)
|
|
(228)
|
|
(220)
|
Total
|
(22)
|
|
(51)
|
|
(59)
|
|
(232)
|
|
(228)
|
|
(220)
|
The
carrying amount of trade and other payables approximate their fair
value largely due to the short-term maturities and nature of these
instruments. There were no transfers between Levels 2 and 3 during
the periods.
There
were no significant changes in contingent consideration recognised
in profit or loss or other comprehensive income in the current
period. Further details in relation to the inputs into valuation
models for contingent consideration are available in the
Group’s 2018 Annual Report and Form 20-F.
(i)
For financial
reporting purposes, fair value measurements are categorised into
Level 1, 2 or 3 based on the degree to which inputs to the fair
value measurements are observable and the significance of the
inputs to the fair value measurement in its entirety.
13.
Leases
A.
IFRS 16 Leases disclosures
|
Land and Buildings
|
Plant and Machinery
|
Other
|
Total
|
Leased right-of-use assets
|
€m
|
€m
|
€m
|
€m
|
At 30 June 2019 (unaudited)
|
|
|
|
|
Cost
|
1,491
|
446
|
70
|
2,007
|
Accumulated
depreciation
|
(95)
|
(70)
|
(13)
|
(178)
|
Net
carrying amount
|
1,396
|
376
|
57
|
1,829
|
|
|
|
|
|
At
1 January 2019, net carrying amount
|
-
|
-
|
-
|
-
|
Effect
of adopting IFRS 16
|
1,478
|
424
|
60
|
1,962
|
Translation
adjustment
|
8
|
4
|
-
|
12
|
Transfer
to owned assets
|
-
|
(9)
|
-
|
(9)
|
Additions
at cost
|
11
|
29
|
13
|
53
|
Arising
on acquisition
|
24
|
-
|
-
|
24
|
Disposals
at net carrying amount
|
(44)
|
(6)
|
(2)
|
(52)
|
Adjustment
as a result of remeasurement of lease liability
|
11
|
3
|
1
|
15
|
Depreciation
charge for period
|
(92)
|
(69)
|
(15)
|
(176)
|
At
30 June 2019, net carrying amount (unaudited)
|
1,396
|
376
|
57
|
1,829
|
|
|
|
|
|
Lease liabilities
|
|
|
|
|
At
1 January 2019
|
-
|
-
|
-
|
-
|
Effect
of adopting IFRS 16
|
1,493
|
425
|
59
|
1,977
|
Translation
adjustment
|
8
|
4
|
-
|
12
|
Addition
of right-of-use assets
|
11
|
29
|
13
|
53
|
Arising
on acquisition
|
24
|
-
|
-
|
24
|
Disposals
|
(44)
|
(6)
|
(2)
|
(52)
|
Remeasurements
|
11
|
3
|
1
|
15
|
Payments
|
(106)
|
(82)
|
(16)
|
(204)
|
Discount
unwinding
|
28
|
6
|
1
|
35
|
At
30 June 2019 (unaudited)
|
1,425
|
379
|
56
|
1,860
|
The
table below shows a maturity analysis of the undiscounted lease
liability arising from the Group's leasing activities. The
projections are based on the foreign exchange rates applying at the
end of the relevant financial period.
|
As at 30 June
|
|
Unaudited
|
|
2019
|
Undiscounted lease liabilities
|
€m
|
Within
one year
|
360
|
Between
one and two years
|
297
|
Between
two and three years
|
247
|
Between
three and four years
|
201
|
Between
four and five years
|
167
|
After
five years
|
1,086
|
Total
|
2,358
|
13.
Leases -
continued
The
Group avails of the exemption from capitalising lease costs for
short-term leases and low-value assets where the relevant criteria
are met. Variable lease payments directly linked to sales or usage
are also expensed as incurred. The following lease costs have been
charged to the Condensed Consolidated Income Statement as
incurred:
|
Six months ended 30 June
|
|
Unaudited
|
|
2019
|
|
€m
|
Short-term
leases
|
74
|
Lease
of low-value assets
|
4
|
Variable
lease payments not included in the lease liability
|
10
|
Total
|
88
|
|
|
Total
cash outflow for lease payments
|
292
|
Lease
commitments for short-term leases are similar to the portfolio of
short-term leases for which the costs were expensed to the
Condensed Consolidated Income Statement. The effect of excluding
future cash outflows arising from variable lease payments,
termination options, residual value guarantees and leases not yet
commenced from lease liabilities was not material for the
Group.
Income
from subleasing and gains/losses on sale and leaseback transactions
were not material for the Group.
B.
IAS 17 Leases disclosures
Operating lease
rentals charged to the Condensed Consolidated Income Statement for
2018 under IAS 17 were as follows:
|
|
|
Year
ended
|
|
Six
months ended 30 June
|
|
31
December
|
|
Unaudited
|
|
Audited
|
|
2018
|
|
2018
|
Operating lease rentals
|
€m
|
|
€m
|
Hire
of plant and machinery
|
133
|
|
324
|
Land
and buildings
|
124
|
|
243
|
Other
operating leases
|
26
|
|
61
|
Total
|
283
|
|
628
|
Lease
commitments were provided for up to the earliest break clause in
the lease.
|
As at 30 June
|
|
As at 31 December
|
|
Unaudited
|
|
Audited
|
|
2018
|
|
2018
|
|
€m
|
|
€m
|
Within
one year
|
371
|
|
353
|
After
one year but not more than five years
|
891
|
|
769
|
More
than five years
|
766
|
|
789
|
Total
|
2,028
|
|
1,911
|
14.
Future Purchase Commitments for
Property, Plant and Equipment
|
|
|
|
|
Year
ended
|
|
Six months ended 30 June
|
|
31
December
|
||
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
2019
|
|
2018
|
|
2018
|
|
€m
|
|
€m
|
|
€m
|
|
|
|
|
|
|
Contracted
for but not provided in these Condensed Consolidated Interim
Financial Statements
|
499
|
|
475
|
|
449
|
15.
Business
Combinations
The
acquisitions completed during the period ended 30 June 2019 by
reportable segment, together with the completion dates, are
detailed below; these transactions entailed the acquisition of an
effective 100% stake except where indicated to the
contrary:
Europe Materials:
Poland: land adjacent to Sitkówka
Quarry (13 March).
Americas
Materials:
Canada: Beecroft Property (14 March)
and Mirabel Property (7 May);
Colorado: Otter Creek Property (28
March);
Connecticut: Wallingford Property (30
January);
Florida: Golden Gate Property (7 March)
and Fortress Block, LLC (28 June);
Iowa: Kenyon Property (11
January);
Michigan: Ottawa Lake Property (31
January) and Delton Property (26 April);
New York: Solvay Rail Terminal (28
June);
Ohio: KMC Paving (8
March);
Oregon: Windsor Rock Products (1
March), The Dalles Concrete (29 March), Hood River Sand, Gravel and
Ready-Mix (29 March) and Pioneer Asphalt (31 May); and
Texas: JLB Contracting (25
January).
Building
Products:
Florida: Suntree Technologies, Inc. (5
March);
Germany: BVG Ranck (30
April);
Netherlands: Filoform B.V. (1
May);
Ohio: Buckeye Resources, Inc. (9
May);
Poland: Libet S.A. Lublin Paving Plant
(1 March);
Virginia: certain assets of Allied
Concrete Company, LLC (28 March); and
Washington: Quality Concrete Products,
Inc. (15 February) and Granite Precasting & Concrete, Inc. (6
June).
The
acquisition balance sheet presented on the following page reflects
the identifiable net assets acquired in respect of acquisitions
completed during 2019, together with adjustments to provisional
fair values (to the extent identified as of 30 June 2019) in
respect of acquisitions completed during 2018. The measurement
period for a number of the acquisitions completed in 2018,
including Ash Grove Cement Company, closed in 2019 with no material
adjustments identified.
15.
Business Combinations - continued
The
identifiable net assets acquired, including adjustments to
provisional fair values, were as follows:
|
Six
months ended 30 June
Unaudited
|
|
Year
ended 31 December
|
||
Audited
|
|||||
|
2019
|
|
2018
|
|
2018
|
ASSETS
|
€m
|
|
€m
|
|
€m
|
Non-current assets
|
|
|
|
|
|
Property,
plant and equipment
|
151
|
|
2,450
|
|
2,614
|
Intangible
assets
|
34
|
|
35
|
|
58
|
Equity
accounted investments
|
-
|
|
1
|
|
1
|
Total non-current assets
|
185
|
|
2,486
|
|
2,673
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Inventories
|
24
|
|
221
|
|
255
|
Trade
and other receivables (i)
|
28
|
|
264
|
|
318
|
Cash
and cash equivalents
|
2
|
|
67
|
|
69
|
Total current assets
|
54
|
|
552
|
|
642
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Trade
and other payables
|
(30)
|
|
(230)
|
|
(224)
|
Provisions
for liabilities
|
-
|
|
(92)
|
|
(84)
|
Retirement
benefit obligations
|
(1)
|
|
(122)
|
|
(115)
|
Lease
liabilities
|
(24)
|
|
-
|
|
-
|
Interest-bearing
loans and borrowings and finance leases*
|
(4)
|
|
(56)
|
|
(74)
|
Current
income tax liabilities
|
-
|
|
(20)
|
|
(15)
|
Deferred
income tax liabilities
|
(5)
|
|
(378)
|
|
(411)
|
Total liabilities
|
(64)
|
|
(898)
|
|
(923)
|
|
|
|
|
|
|
Total
identifiable net assets at fair value
|
175
|
|
2,140
|
|
2,392
|
Goodwill
arising on acquisition (ii)
|
124
|
|
1,446
|
|
1,504
|
Joint
venture becoming a subsidiary
|
-
|
|
(120)
|
|
(120)
|
Non-controlling
interests**
|
(1)
|
|
(31)
|
|
(48)
|
Total consideration
|
298
|
|
3,435
|
|
3,728
|
|
|
|
|
|
|
Consideration satisfied by:
|
|
|
|
|
|
Cash
payments
|
287
|
|
3,281
|
|
3,574
|
Asset
exchange
|
-
|
|
-
|
|
12
|
Deferred
consideration (stated at net present cost)
|
7
|
|
5
|
|
10
|
Contingent
consideration
|
4
|
|
110
|
|
93
|
Profit
on step acquisition
|
-
|
|
39
|
|
39
|
Total consideration
|
298
|
|
3,435
|
|
3,728
|
|
|
|
|
|
|
Net cash outflow arising on acquisition
|
|
|
|
|
|
Cash
consideration
|
287
|
|
3,281
|
|
3,574
|
Less:
cash and cash equivalents acquired
|
(2)
|
|
(67)
|
|
(69)
|
Total outflow in the Condensed Consolidated Statement of Cash
Flows
|
285
|
|
3,214
|
|
3,505
|
* Includes €5 million as at 30 June 2018 (31 December 2018:
€6 million) relating to finance leases previously capitalised
under IAS 17. All leases capitalised under IFRS 16 have been
included as lease liabilities in 2019.
** Non-controlling interests are measured at the proportionate
share of net assets.
Footnotes (i) and
(ii) appear on page 34.
15.
Business Combinations -
continued
CRH
performs a detailed quantitative and qualitative assessment of each
acquisition in order to determine whether it is material for the
purposes of separate disclosure under IFRS 3. None of the
acquisitions completed during the financial period were considered
sufficiently material to warrant separate disclosure of the
attributable fair values. The initial assignment of the fair values
to identifiable assets acquired and liabilities assumed as
disclosed are provisional (principally in respect of property,
plant and equipment) in respect of certain acquisitions due to
timing of close. The fair value assigned to identifiable assets and
liabilities acquired is based on estimates and assumptions made by
management at the time of acquisition. CRH may revise its purchase
price allocation during the subsequent reporting window as
permitted under IFRS 3.
Footnotes to the acquisition balance sheet on page 33
(i)
The
gross contractual value of trade and other receivables as at the
respective dates of acquisition amounted to €28 million
(2018: €268 million). The fair value of these receivables is
€28 million (all of which is expected to be recoverable)
(2018: €264 million).
(ii)
The
principal factor contributing to the recognition of goodwill on
acquisitions entered into by the Group is the realisation of cost
savings and other synergies with existing entities in the Group
which do not qualify for separate recognition as intangible assets.
Due to the asset-intensive nature of operations in the Europe
Materials and Americas Materials business segments, no significant
separately identifiable intangible assets are recognised on
business combinations in these segments. €96 million of the
goodwill recognised in respect of acquisitions completed in 2019 is
expected to be deductible for tax purposes (2018: €149
million).
Acquisition-related costs
Acquisition-related
costs, which exclude post-acquisition integration costs, amounting
to €1 million (2018: €12 million) have been included in
operating costs in the Condensed Consolidated Income
Statement.
The
following table analyses the 25 acquisitions completed in 2019
(2018: 22 acquisitions) by reportable segment and provides details
of the goodwill and consideration figures arising in each of those
segments:
|
Six months ended 30 June - unaudited
|
||||||||||
|
Number of acquisitions
|
|
Goodwill
|
|
Consideration
|
||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Reportable segments
|
|
|
|
|
€m
|
|
€m
|
|
€m
|
|
€m
|
Europe
Materials
|
1
|
|
2
|
|
-
|
|
37
|
|
5
|
|
60
|
Americas
Materials
|
16
|
|
16
|
|
31
|
|
1,363
|
|
136
|
|
3,270
|
Building
Products
|
8
|
|
4
|
|
73
|
|
25
|
|
157
|
|
104
|
Total
Group
|
25
|
|
22
|
|
104
|
|
1,425
|
|
298
|
|
3,434
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
to provisional fair values of prior period
acquisitions
|
|
20
|
|
21
|
|
-
|
|
1
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
124
|
|
1,446
|
|
298
|
|
3,435
|
Post-acquisition impact
The
post-acquisition impact of acquisitions completed during the period
on the Group's profit for the financial period was as
follows:
|
|
Six months ended 30 June
|
|||
Unaudited
|
|||||
|
|
|
2019
|
2018
|
|
|
|
|
€m
|
€m
|
|
Revenue
|
|
|
52
|
221
|
|
Profit
before tax for the financial period
|
|
|
2
|
14
|
The
revenue and profit of the Group for the financial period determined
in accordance with IFRS as though the acquisitions effected during
the period had been at the beginning of the period would have been
as follows:
|
Pro-forma 2019
|
||
|
|
CRH Group
|
Pro-forma
|
|
2019
|
excluding 2019
|
consolidated
|
|
acquisitions
|
acquisitions
|
Group
|
|
€m
|
€m
|
€m
|
Revenue
|
111
|
13,165
|
13,276
|
Profit
before tax for the financial period
|
6
|
705
|
711
|
There have been no acquisitions completed
subsequent to the balance sheet date which would be individually
material to the Group, thereby requiring disclosure under either
IFRS 3 or IAS 10 Events after the Balance Sheet
Date. Development updates,
giving details of acquisitions which do not require separate
disclosure on the grounds of materiality, are published
periodically.
16.
Related Party
Transactions
There
have been no related party transactions or changes in the nature
and scale of the related party transactions described in the 2018
Annual Report and Form 20-F that could have had a material impact
on the financial position or performance of the Group in the first
six months of 2019.
17.
Retirement Benefit
Obligations
The
Group operates either defined benefit or defined contribution
pension schemes in all of its principal operating
areas.
In
consultation with the actuaries to the various defined benefit
pension schemes (including jubilee schemes, long-term service
commitments and post-retirement healthcare obligations, where
relevant), the valuations of the applicable assets and liabilities
have been marked-to-market as at the end of the financial period,
taking account of prevailing bid values, actual investment returns,
corporate bond yields and other matters such as updated actuarial
valuations conducted during the period.
Financial
assumptions – scheme liabilities
The
discount rates used by the Group’s actuaries in the
computation of the pension scheme liabilities and post-retirement
healthcare obligations are as follows:
|
|
|
|
|
Year
ended
|
|
Six months ended 30 June
|
|
31
December
|
||
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
2019
|
|
2018
|
|
2018
|
|
%
|
|
%
|
|
%
|
Eurozone
|
1.46
|
|
2.11
|
|
2.12
|
Switzerland
|
0.40
|
|
0.85
|
|
0.85
|
United
States and Canada
|
3.30
|
|
4.02
|
|
4.10
|
The
following table provides a reconciliation of scheme assets (at bid
value) and the actuarial value of scheme liabilities (using the
aforementioned assumptions):
|
Six months ended 30 June - unaudited
|
|||||||
|
Assets
|
|
Liabilities
|
|
Net liability
|
|||
|
2019
|
2018
|
|
2019
|
2018
|
|
2019
|
2018
|
|
€m
|
€m
|
|
€m
|
€m
|
|
€m
|
€m
|
At
1 January
|
2,913
|
2,622
|
|
(3,337)
|
(2,999)
|
|
(424)
|
(377)
|
Administration
expenses
|
(2)
|
(1)
|
|
-
|
-
|
|
(2)
|
(1)
|
Current
service cost
|
-
|
-
|
|
(31)
|
(31)
|
|
(31)
|
(31)
|
Interest income on
scheme assets
|
34
|
26
|
|
-
|
-
|
|
34
|
26
|
Interest cost on
scheme liabilities
|
-
|
-
|
|
(41)
|
(30)
|
|
(41)
|
(30)
|
Arising
on acquisition
|
-
|
334
|
|
(1)
|
(456)
|
|
(1)
|
(122)
|
Remeasurement
adjustments:
|
|
|
|
|
|
|
|
|
-return on scheme assets excluding interest income
|
218
|
(15)
|
|
-
|
-
|
|
218
|
(15)
|
-actuarial (loss)/gain from changes in financial
assumptions
|
-
|
-
|
|
(349)
|
73
|
|
(349)
|
73
|
Employer
contributions paid
|
26
|
22
|
|
-
|
-
|
|
26
|
22
|
Contributions paid
by plan participants
|
7
|
7
|
|
(7)
|
(7)
|
|
-
|
-
|
Benefit
and settlement payments
|
(65)
|
(50)
|
|
65
|
50
|
|
-
|
-
|
Translation
adjustment
|
27
|
9
|
|
(30)
|
(8)
|
|
(3)
|
1
|
At
30 June
|
3,158
|
2,954
|
|
3,731
|
(3,408)
|
|
(573)
|
(454)
|
Related
deferred income tax asset
|
|
|
|
|
|
|
112
|
65
|
Net
pension liability
|
|
|
|
|
|
|
(461)
|
(389)
|
18.
Taxation
The
taxation expense for the interim period is an estimate based on the
expected full year effective tax rate on full year
profits.
19.
Share Buyback
Programme
In
April 2018, CRH announced its intention to introduce a share
repurchase programme to repurchase Ordinary Shares (including
Income Shares) of up to €1 billion (the
“Programme”). On 29 April 2019, the Programme was
extended to include the further repurchase of Ordinary Shares of up
to €350 million in the period up to 16 August 2019, bringing
the total cash returned to shareholders under the Programme to
€1.35 billion since its commencement. In the period from 1
January 2019 to 30 June 2019, CRH plc purchased a total of
15,847,079 Ordinary Shares at a total cost of €436 million. A
financial liability of €114 million has been recognised at 30
June 2019 (2018: €136 million) in respect of the 3,937,250
Ordinary Shares purchased under the Programme in the period from 1
July 2019 to 7 August 2019, the date on which the latest phase of
the Programme formally concluded. In light of our strong balance
sheet and cash generation, the Board plans to continue the
Programme with a further tranche of up to €350 million to be
completed by the year end.
20.
Statutory Accounts and Audit
Opinion
The
financial information presented in this interim report does not
represent full statutory accounts and has not been reviewed or
audited by the Company’s auditors. Full statutory accounts
for the year ended 31 December 2018 prepared in accordance with
IFRS, upon which the auditors have given an unqualified audit
report, have been filed with the Registrar of
Companies.
21.
Board Approval
This
announcement was approved by the Board of Directors of CRH plc on
21 August 2019.
22.
Distribution of Interim
Report
This
interim report is available on the Group’s website
(www.crh.com). A printed copy is available to the public at the
Company’s registered office.
Glossary of Alternative Performance Measures
CRH uses a number of alternative performance measures (APMs) to
monitor financial performance. These measures are referred to
throughout the discussion of our reported financial position and
operating performance throughout this document and are measures
which are regularly reviewed by CRH management. The APMs may not be
uniformly defined by all companies and accordingly they may not be
directly comparable with similarly titled measures and disclosures
by other companies.
Certain information presented is derived from amounts calculated in
accordance with IFRS but is not itself an expressly permitted GAAP
measure.
The APMs as summarised below should not be viewed in isolation or
as an alternative to the equivalent GAAP measure.
EBITDA
EBITDA is defined as earnings before interest, taxes, depreciation,
amortisation, asset impairment charges, profit on disposals and the
Group’s share of equity accounted investments’ profit
after tax. It is quoted by management, in conjunction with other
GAAP and non-GAAP financial measures, to aid investors in their
analysis of the performance of the Group and to assist investors in
the comparison of the Group’s performance with that of other
companies.
EBITDA and operating profit by segment are monitored by management
in order to allocate resources between segments and to assess
performance. Given that net finance costs and income tax are
managed on a centralised basis, these items are not allocated
between operating segments for the purpose of the information
presented to the Chief Operating Decision Maker (Group Chief
Executive and Finance Director). EBITDA margin is calculated by
expressing EBITDA as a percentage of sales.
Operating profit (EBIT) is defined as earnings before interest,
taxes, profit on disposals and the Group’s share of equity
accounted investments’ profit after tax.
A reconciliation of Group profit before tax to EBITDA is presented
below.
|
Continuing
Operations
|
|||||
|
Six months ended 30 June
|
|
Year
ended
31
December
|
|||
|
Unaudited
|
|
Audited
|
|||
|
2019
|
|
2018
|
|
2018
|
|
|
€m
|
|
€m
|
|
€m
|
|
Group profit for the financial period
|
555
|
|
378
|
|
1,436
|
|
Income
tax expense
|
152
|
|
119
|
|
426
|
|
Profit before tax
|
707
|
|
497
|
|
1,862
|
|
Share of equity accounted investments’ profit
|
(20)
|
|
(19)
|
|
(60)
|
|
Other financial expense
|
59
|
|
16
|
|
46
|
|
Finance costs less income
|
176
|
|
144
|
|
305
|
|
Profit before finance costs
|
922
|
|
638
|
|
2,153
|
|
(Profit)/loss on disposals
|
(171)
|
|
(46)
|
|
24
|
|
Group operating
profit
|
751
|
|
592
|
|
2,177
|
|
Depreciation
charge
|
760
|
|
488
|
|
1,071
|
|
Amortisation
of intangibles
|
29
|
|
30
|
|
61
|
|
Impairment charge
|
-
|
|
20
|
|
56
|
|
EBITDA
|
1,540
|
|
1,130
|
|
3,365
|
|
|
|
|
|
|
|
|
EBITDA impact from adoption of IFRS 16 (note 1)
|
(193)
|
|
-
|
|
-
|
|
EBITDA excluding impact of IFRS 16
|
1,347
|
|
1,130
|
|
3,365
|
Net
Debt
Net debt is used by management as it gives a more complete picture
of the Group’s current debt situation than total
interest-bearing loans and borrowings. Net debt is provided to
enable investors to see the economic effect of gross debt, related
hedges and cash and cash equivalents in total. Net debt is a
non-GAAP measure and comprises current and non-current
interest-bearing loans and borrowings, current and non-current
lease liabilitites, cash and cash equivalents and current and
non-current derivative financial instruments.
Glossary of Alternative Performance
Measures - continued
EBITDA Net Interest
Cover
EBITDA
net interest cover is used by management as a measure which matches
the earnings and cash generated by the business to the underlying
funding costs. EBITDA net interest cover is presented to provide
investors with a greater understanding of the impact of CRH’s
debt and financing arrangements.
It
is calculated below:
|
|
|
|
|
Year
ended
|
|
Six months ended 30 June
|
|
31
December
|
||
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
2019
|
|
2018
|
|
2018
|
|
€m
|
|
€m
|
|
€m
|
Interest
|
|
|
|
|
|
Finance
costs (i)
|
183
|
|
167
|
|
339
|
Finance
income (i)
|
(7)
|
|
(23)
|
|
(34)
|
Net interest
|
176
|
|
144
|
|
305
|
|
|
|
|
|
|
EBITDA – continuing operations
|
1,540
|
|
1,130
|
|
3,365
|
|
|
|
|
|
|
|
Times
|
|
Times
|
|
Times
|
EBITDA net interest cover (EBITDA divided by net interest) –
continuing operations (ii)
|
8.8
|
|
7.8
|
|
11.0
|
|
Rolling 12 months ended 30 June
|
|
|
||
|
Unaudited
|
|
Unaudited
|
|
|
|
2019
|
|
2018
|
|
|
|
€m
|
|
€m
|
|
|
Interest - continuing operations
|
|
|
|
|
|
Net
interest – full year prior year (2018 and 2017)
|
305
|
|
289
|
|
|
Net
interest – H1 prior year (2018 and 2017)
|
144
|
|
150
|
|
|
Net
interest – H2 prior year (2018 and 2017)
|
161
|
|
139
|
|
|
Net
interest – H1 current year (2019 and 2018)
|
176
|
|
144
|
|
|
Net interest – rolling 12 months to 30 June
|
337
|
|
283
|
|
|
|
|
|
|
|
|
EBITDA - continuing operations
|
|
|
|
|
|
EBITDA
– full year prior year (2018 and 2017)
|
3,365
|
|
3,146
|
|
|
EBITDA
– H1 prior year (2018 and 2017)
|
1,130
|
|
1,120
|
|
|
EBITDA
– H2 prior year (2018 and 2017)
|
2,235
|
|
2,026
|
|
|
EBITDA
– H1 current year (2019 and 2018)
|
1,540
|
|
1,130
|
|
|
EBITDA – rolling 12 months to 30 June
|
3,775
|
|
3,156
|
|
|
|
|
|
|
|
|
|
Times
|
|
Times
|
|
|
EBITDA net interest cover (EBITDA divided by net
interest)
|
11.2
|
|
11.2
|
|
|
(i)
These items appear on the Condensed Consolidated Income Statement
on page 8.
(ii)
EBITDA Net Interest Cover from continuing and discontinued
operations in 2018 was 11.0x.
EBIT
net interest cover is the ratio of EBIT to net debt-related
interest costs.
Glossary of Alternative Performance
Measures - continued
Organic Revenue, Organic Operating Profit and Organic
EBITDA
The
terms ‘like-for-like’, ‘organic’ and
‘underlying’ are used interchangeably throughout this
report.
Because
of the impact of acquisitions, divestments, exchange translation,
other non-recurring items and the adoption of new accounting
standards on reported results each period, the Group uses organic
revenue, organic operating profit and organic EBITDA as additional
performance indicators to assess performance of pre-existing
operations each period.
Organic
revenue, organic operating profit and organic EBITDA are arrived at
by excluding the incremental revenue, operating profit and EBITDA
contributions from current and prior year acquisitions and
divestments, the impact of exchange translation and the impact of
any non-recurring items.
In
the Business Performance review on pages 1 to 6, changes in organic
revenue, organic operating profit and organic EBITDA are presented
as additional measures of revenue, operating profit and EBITDA to
provide a greater understanding of the performance of the Group. A
reconciliation of the changes in organic revenue, organic operating
profit and organic EBITDA to the changes in total revenue,
operating profit and EBITDA for the Group and by segment is
presented with the discussion of each segment’s performance
in tables contained in the segment discussion commencing on page
4.
Principal Risks and Uncertainties
Under
Section 327(1)(b) of the Companies Act 2014 and Regulation
5(4)(c)(ii) of the Transparency (Directive 2004/109/EC) Regulations
2007, the Group is required to give a description of the principal
risks and uncertainties which it faces. These risks and
uncertainties reflect the international scope of the Group’s
operations and the Group’s decentralised structure. During
the course of 2019, new risks and uncertainties may materialise
attributable to changes in markets, regulatory environments and
other factors and existing risks and uncertainties may become less
relevant.
Principal
Strategic Risks and Uncertainties
Industry cyclicality and adverse economic conditions:
Construction activity, and therefore demand for the Group’s
products, is inherently cyclical as it is influenced by global and
national economic circumstances, governments’ ability to fund
infrastructure projects, consumer sentiment and weather conditions.
The Group may also be negatively impacted by unfavourable swings in
fuel and other commodity/raw material prices. Failure to predict
and plan for cyclical events or adverse economic conditions could
negatively impact financial performance.
Geopolitical and/or social instability: Adverse and fast
changing economic, social, and political situations in any country
in which the Group operates could lead to business interruption,
restrictions on repatriation of earnings or a loss of plant access.
Changes in these conditions may adversely affect the Group’s
business, results of operations, financial condition or
prospects.
Brexit: Uncertainties resulting from the UK’s
withdrawal from the European Union could pose challenges with
currency devaluations, a fall in construction activity in the UK,
challenges in labour resources accessing the UK, movement of goods
and services and repatriating earnings. Failure by the Group to
manage the uncertainties posed by Brexit could result in adverse
financial performance and a fall in the Group’s net
worth.
Commodity products and substitution: Many
of the Group’s products are commodities, which face strong
volume and price competition, and may be replaced by substitute
products which the Group does not produce or distribute. Further,
the Group must maintain strong customer relationships to ensure
changing consumer preferences are addressed. Failure to
differentiate and innovate could lead to market share decline, thus
adversely impacting financial performance.
Reserves availability and planning: Appropriate
reserves are an increasingly scarce commodity and licences and/or
permits required to enable operation are becoming harder to secure.
There are numerous uncertainties inherent in reserves estimation
and in projecting future rates of production. Failure by the Group
to plan for reserve depletion, or to secure permits, may result in
operation stoppages, adversely impacting financial
performance.
Portfolio management: The Group may engage in acquisition
and divestment activity during the year as part of the
Group’s active portfolio management which presents risks
around due diligence, execution and integration of assets.
Additionally, the Group may be liable for liabilities of companies
it has acquired or divested. Failure to identify and execute deals
in an efficient manner may limit the Group’s growth potential
and impact financial performance.
Joint ventures and associates: The Group does not have
a controlling interest in certain of the businesses (i.e. joint
ventures and associates) in which it has invested and may invest,
which gives rise to increased governance complexity and a need for
proactive relationship management. The lack of a controlling
interest could impair the Group’s ability to manage joint
ventures and associates effectively and/or realise its strategic
goals for these businesses.
People management: Existing processes
around people management (such as attracting, retaining and
developing people, leadership succession planning, as well as
dealing with collective representation groups) may not deliver,
inhibiting the Group achieving its strategy. Failure to effectively
manage talent and plan for leadership succession could impede the
realisation of strategic objectives.
Principal Operational Risks and Uncertainties
Sustainability, corporate social responsibility and climate
change: The
Group may face challenges associated with developing and providing
innovative building products and solutions that help deliver a more
sustainable environment while meeting our social responsibilities,
the stringent and ever evolving laws and regulations that govern
the climate change agenda and changing consumer demand. Failure to
innovate, keep up with current technological changes or changing
consumer preferences may result in falling demand for the
Group’s products, adversely impacting financial
performance.
Health and safety performance: The Group’s businesses
operate in an industry where health and safety risks are inherently
prominent. Further, the Group is subject to stringent regulations
from a health and safety perspective in the various jurisdictions
in which it operates. A significant health and safety incident
could have a serious impact on the Group’s operational and
financial performance, as well as the Group’s
reputation.
Operational continuity: The
Group’s operating entities are subject to a wide range of
operating risks and hazards including climatic conditions,
technical failures, interruptions to power supplies, industrial
accidents and disputes, environmental hazards, fire and crime. The
occurrence of a significant adverse event could lead to prolonged
operational interruption, negatively impacting financial
performance or the Group’s prospects.
Information technology and/or cyber security: The
Group is dependent on information technology systems to support its
business activities. Any significant operational event, whether
caused by external attack, insider threat or error, could lead to
loss of access to systems or data, adversely impacting business
operations. Security breaches, IT interruptions or data loss could
result in reputational damage and regulatory penalties and
significant financial costs in remediation.
Principal Risks and Uncertainties - continued
Principal Compliance Risks and Uncertainties
Laws and regulations: The
Group is subject to a wide variety of local and international laws
and regulations across the many jurisdictions in which it operates,
which vary in complexity, application and frequency of change.
Potential breaches of local and international laws and regulations
could result in the imposition of significant fines or sanctions
and may inflict reputational damage.
Principal Financial and Reporting Risks and
Uncertainties
Financial instruments: The Group uses financial instruments
throughout its businesses giving rise to interest rate and
leverage, foreign currency, counterparty, credit rating and
liquidity risks. A downgrade of the Group’s credit ratings or
inability to maintain certain financial ratios may give rise to
increases in future funding costs and may impair the Group’s
ability to raise funds on acceptable terms. In addition, insolvency
of the financial institutions with which the Group conducts
business may adversely impact the Group’s financial
position.
Defined benefit pension schemes and related
obligations: The
assets and liabilities of defined benefit pension schemes, in place
in certain operating jurisdictions, exhibit significant
period-on-period volatility attributable primarily to asset values,
changes in bond yields/discount rates and anticipated longevity.
Significant cash contributions may be required to remediate
deficits applicable to past service. Fluctuations in the accounting
surplus/deficit may adversely impact the Group's credit metrics
thus harming its ability to raise funds.
Taxation charge and balance sheet provisioning: The
Group is exposed to uncertainties stemming from governmental
actions in respect of taxes paid and payable in all jurisdictions
of operation. In addition, various assumptions are made in the
computation of the overall tax charge and in balance sheet
provisions which may not be borne out in practice. Changes in tax
regimes or findings in future audits that additional taxes are due
could result in incremental tax liabilities which could have a
material adverse effect on cash flows, financial condition and
results of operations.
Foreign currency translation: The
principal foreign exchange risks to which the Condensed
Consolidated Financial Statements are exposed pertain to (i)
adverse movements in reported results when translated into euro and
(ii) declines in the euro value of net investments which are
denominated in a wide basket of currencies other than the euro.
Adverse changes in the exchange rates will continue to negatively
affect retained earnings. The impact is reported in the Condensed
Consolidated Statement of Comprehensive Income.
Goodwill impairment: Significant
under-performance in any of the Group’s major cash-generating
units or the divestment of businesses in the future may give rise
to a material write-down of goodwill. A write-down of goodwill
could have a substantial impact on the Group’s income and
equity.
Responsibility Statement
The
Directors of CRH plc, being the persons responsible within CRH plc,
confirm that to the best of their knowledge:
1)
the Condensed
Consolidated Unaudited Financial Statements for the six months
ended 30 June 2019 have been prepared in accordance with
International Accounting Standard 34 Interim Financial Reporting, the
accounting standard applicable to interim financial reporting
adopted pursuant to the procedure provided for under Article 6 of
Regulation (EC) no. 1606/2002 of the European Parliament and of the
Council of 19 July 2002, and give a true and fair view of the
assets, liabilities, financial position and profit or loss of the
Group for the six months ended 30 June 2019;
2)
the interim
management report includes a fair review of:
I.
the important
events that have occurred during the first six months of the
financial year, and their impact on the condensed consolidated set
of financial statements;
II.
the principal risks
and uncertainties for the remaining six months of the financial
year;
III.
any related
parties’ transactions
that have taken place in the first six months of the current
financial year that have materially affected the financial position
or the performance of the enterprise during that period;
and
IV.
any changes in the
related parties’
transactions described in the 2018 Annual Report and Form 20-F that
could have had a material effect on the financial position or
performance of the enterprise in the first six months of the
current financial year.
Albert Manifold
|
Chief Executive
|
|
|
Senan Murphy
|
Finance Director
|
Disclaimer
In
order to utilise the “Safe Harbor” provisions of the
United States Private Securities Litigation Reform Act of 1995, CRH
public limited company (the “Company”), and its
subsidiaries (collectively, “CRH” or the
“Group”) is providing the following cautionary
statement.
This
document contains statements that are, or may be deemed to be
forward-looking statements with respect to the financial condition,
results of operations, business, viability and future performance
of CRH and certain of the plans and objectives of CRH. These
forward-looking statements may generally, but not always, be
identified by the use of words such as "will", "anticipates",
"should", "could", "would", "targets", "aims", "may", "continues",
"expects", "is expected to", "estimates", "believes", "intends" or
similar expressions. These forward-looking statements include all
matters that are not historical facts or matters of fact at the
date of this document.
By
their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that may or may not occur in the future and reflect
the Company's current expectations and assumptions as to such
future events and circumstances that may not prove
accurate.
A
number of material factors could cause actual results and
developments to differ materially from those expressed or implied
by these forward-looking statements, certain of which are beyond
our control, as detailed in the section entitled “Risk
Factors” in our 2018 Annual Report on Form 20-F as filed with
the US Securities and Exchange Commission.
You are
cautioned not to place undue reliance on any forward-looking
statements. These forward-looking statements are made as of the
date of this document. The Company expressly disclaims any
obligation or undertaking to publicly update or revise these
forward-looking statements other than as required by applicable
law.
The
forward-looking statements in this document do not constitute
reports or statements published in compliance with any of
Regulations 6 to 8 of the Transparency (Directive 2004/109/EC)
Regulations 2007.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
|
CRH public limited company
|
|
(Registrant)
|
|
|
Date
22 August 2019
|
|
|
By:___/s/Neil
Colgan___
|
|
N.Colgan
|
|
Company Secretary
|
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- CRH Announces Date for Q1 2024 Results Conference Call
- AFCO Direct Partners with ePayPolicy to Make Financing Easier for Insurance Industry
- flatexDEGIRO Starts Into Expected Record Year 2024 With a Jump in Revenues and Earnings
Create E-mail Alert Related Categories
SEC FilingsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!