CRH plc — FY2023 Form 10-K
Business context and reporting period. CRH is a global building materials and construction solutions provider operating in 29 countries. This annual report covers the year ended December 31, 2023; it is not a standalone fourth-quarter report. Effective January 1, 2023, CRH changed its accounting framework from IFRS to U.S. GAAP and reorganized into four reportable segments. Comparative figures were presented under U.S. GAAP and segment comparisons were recast.
Financial performance and liquidity
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $34.9 billion | $32.7 billion |
| Gross profit / margin | $12.0 billion / 34.2% | $10.8 billion / 33.1% |
| Operating income | $4.2 billion | $3.8 billion |
| Net income | $3.1 billion | $3.9 billion |
| Adjusted EBITDA / margin | $6.2 billion / 17.7% | $5.4 billion / 16.5% |
| Operating cash flow | $5.0 billion | $3.8 billion |
| Capital expenditure | $1.8 billion | $1.5 billion |
| Cash and cash equivalents | $6.4 billion | $5.9 billion |
| Total short- and long-term debt | $11.6 billion | $9.6 billion |
| Net debt | $5.4 billion | $3.9 billion |
Net income attributable to CRH plc was $3.2 billion, compared with $3.9 billion in 2022. Basic EPS from continuing operations rose 22% to $4.36; pre-impairment EPS was $4.65. Gross margin expanded as revenue growth outpaced cost growth. Net income fell chiefly because 2022 included $1.2 billion of income from discontinued operations related to the Building Envelope divestiture.
CRH reported $3.9 billion of undrawn committed facilities available until 2028, and stated that cash balances covered debt maturities for the next 4.7 years. The weighted average maturity of remaining term debt was 12.1 years. Operating cash flow increased 32%, with management citing positive working-capital movements. Net debt increased amid capital spending, acquisitions, dividends and share repurchases.
Material changes and segment performance
- Revenue grew 7%, reflecting positive pricing, acquisitions and good underlying demand, partly offset by lower volumes.
- Americas Materials Solutions revenue rose 8% and Adjusted EBITDA rose 16%; pricing and operating efficiencies offset lower volumes and higher labor and subcontractor costs.
- Americas Building Solutions revenue rose 13% and Adjusted EBITDA rose 18%, including acquisition contributions. Organic revenue was only 1% higher.
- Europe Materials Solutions revenue rose 4% and Adjusted EBITDA rose 17%, as pricing and lower haulage and raw-material costs offset volume declines.
- Europe Building Solutions revenue fell 2% and Adjusted EBITDA fell 17%, mainly due to subdued residential construction.
In 2023, CRH completed 22 acquisitions for total consideration of approximately $0.7 billion, versus $3.3 billion in 2022. The company repurchased approximately 54.9 million shares for $3.0 billion and paid $0.9 billion in dividends. The annual dividend increased 5% to $1.33 per share. CRH moved its primary listing from the London Stock Exchange to the NYSE in September 2023.
Outlook, risks and unusual items
Management expects a favorable market backdrop and continued positive pricing momentum in 2024, supported by infrastructure funding and re-industrialization in North America and Europe. New-build residential activity is expected to remain subdued in both regions; residential repair and remodel is expected to be more resilient in North America. The outlook assumes normal seasonal weather and no major macroeconomic dislocations. The filing provides no specific full-year 2024 revenue or earnings guidance.
- Impairment losses totaled $357 million, including a $295 million goodwill impairment for the Philippines cement business amid challenging market conditions and $62 million in Americas Materials Solutions, primarily associated with assets held for sale.
- CRH agreed to sell its European lime operations for $1.1 billion; the first phase closed in January 2024, with further phases expected in 2024. Certain Canadian cement and materials assets were also classified as held for sale; a $30 million impairment was recorded.
- A $2.1 billion Texas cement and ready-mixed concrete acquisition announced in 2023 closed in February 2024.
- Key risks include construction cyclicality, interest rates and affordability, weather, inflation and labor availability, government infrastructure spending, energy and commodity costs, permitting and mineral reserve access, climate policy and decarbonization execution, acquisition integration, cybersecurity, and foreign-exchange and funding risks.
- CRH targets a 30% reduction in absolute Scope 1 and 2 emissions by 2030 from a 2021 baseline and net zero by 2050. Scope 1 and 2 emissions fell 8% in 2023, partly reflecting lower clinker production; delivery of targets depends in part on technology, investment and regulatory conditions.
The auditor issued unqualified opinions on the financial statements and internal control over financial reporting. The change to U.S. GAAP is highlighted in the audit report. The principal critical audit matters were the Philippines goodwill impairment and revenue recognition for certain long-term contracts.
Investor verification priorities
- Review the reconciliation of net income attributable to CRH plc, consolidated net income and continuing-operations EPS, including the effects of noncontrolling interests and impairments.
- Assess how much 2023 revenue and EBITDA growth came from pricing, volume, currency and acquisitions, and whether margin gains can persist.
- Verify the timing, proceeds and accounting impacts of the European lime and Canadian asset disposals, and the integration and returns expected from the Texas acquisition.
- Monitor net debt, debt maturities, interest-rate exposure and capital returns alongside the substantial 2023 share repurchases.
- Evaluate the assumptions and sensitivity disclosures behind the Philippines impairment, remaining goodwill and long-term contract cost estimates.