Business context and reporting period
CRH plc’s Form 20-F is an audited annual report for the fiscal year ended December 31, 2022, prepared under IFRS as issued by the IASB, with figures presented in U.S. dollars. It is not a standalone fourth-quarter report; the filing does not provide a clear set of Q4-only results. Unless noted, income-statement figures below are for continuing operations. CRH supplies building materials and construction solutions across North America, Europe and Asia.
Financial performance and liquidity
| Metric | 2022 | 2021 | Change |
|---|---|---|---|
| Revenue | $32.7bn | $29.2bn | +12% |
| EBITDA (company-defined, non-GAAP) | $5.6bn | $5.0bn | +13% |
| Operating profit | $3.9bn | $3.3bn | +17% |
| Profit after tax from continuing operations | $2.7bn | $2.4bn | +10% |
| Total group profit after tax, including discontinued operations | $3.9bn | $2.6bn | +48% |
| Basic EPS from continuing operations | $3.50 | $3.06 | +14% |
| Total basic EPS, including discontinued operations | $5.07 | $3.29 | +54% |
| Net cash inflow from operating activities | $4.0bn | $4.2bn | -6% |
| Net debt at year-end | $5.1bn | $6.3bn | Down $1.1bn |
| Net debt / EBITDA | 0.9x | 1.3x | Improved |
EBITDA margin was approximately 17.2%, compared with 17.1% in 2021; operating margin was approximately 11.9%, compared with 11.4%. Development and replacement capital expenditure was $1.5bn. The company attributed the lower operating cash flow mainly to higher tax payments related to divestment profits; working capital was a $518m cash outflow.
Year-end cash and cash equivalents were $5.9bn, with $3.7bn in undrawn committed facilities. Interest-bearing loans and borrowings were $9.6bn and lease liabilities were $1.3bn. CRH reported a weighted-average maturity of remaining term debt of 12.2 years and stated that it had adequate resources to meet obligations for at least 12 months.
Material changes versus the prior comparable period
- Growth reflected pricing, resilient demand and the integrated-solutions strategy, despite significant inflation in energy, materials, labour and transport costs. Currency translation reduced reported results, particularly in Europe.
- Americas Materials revenue increased 15% to $14.3bn; EBITDA rose 6% to $2.7bn, while margin decreased to 19.2% from 20.9% as higher input costs and lower volumes in some markets offset pricing.
- Building Products revenue increased 26% to $7.8bn and EBITDA rose 52% to $1.5bn, with acquisition contributions, pricing and operating improvements. Barrette Outdoor Living was acquired for approximately $1.9bn in July 2022.
- Europe Materials revenue was broadly flat in reported dollars at $10.6bn, while like-for-like sales increased 11%. EBITDA declined 4% to $1.4bn in reported dollars, but rose 8% like-for-like; currency effects and weaker activity weighed on reported performance.
- CRH completed the sale of Building Envelope in April 2022. It is classified as discontinued operations; the sale generated $3.5bn of cash proceeds and a $1.5bn disposal profit. This significantly boosted total group profit and EPS, so continuing-operations results are more indicative of ongoing trading.
- Acquisition and investment spending was $3.3bn versus $1.5bn in 2021; disposal proceeds were $3.9bn, primarily from Building Envelope. Share buybacks totaled $1.2bn, and cash dividends paid to shareholders were $0.9bn.
Outlook, commentary and risks
Management expected resilient demand and increased pricing in 2023, while noting macroeconomic uncertainty and continued cost inflation. In North America, infrastructure funding and non-residential investment were expected to support activity, with weakness anticipated in new-build residential construction due to higher interest rates. In Europe, management expected pricing to offset lower volumes, with RMI and infrastructure demand providing support. These are forward-looking statements, not guarantees.
- Key risks include construction-market cyclicality, rising rates, inflation, severe weather, competition and the possibility that pricing may not offset costs.
- Supply-chain continuity, availability and cost of energy and raw materials, labour constraints, foreign-exchange movements, and the conflict in Ukraine were identified as risks. CRH said it closed its Ukraine operations in February 2022 and later resumed operations while continuing to prioritize employee safety.
- Cybersecurity, climate-related regulation and physical impacts, permitting and mineral-reserve availability, acquisition integration, taxation and other legal or compliance matters are additional disclosed risks.
- Five reportable fatalities occurred in 2022: one employee and four contractors. Management reaffirmed its zero-fatality ambition.
- The filing reported no pending site-remediation legal proceedings expected to have a material adverse effect and no material environmental liability identified in internal reviews. It also stated that no off-balance-sheet arrangements were material to investors.
- CRH’s 2030 carbon-reduction target was revised and validated by the Science Based Targets initiative in early 2023: a 30% reduction in absolute emissions from a 2021 base year. The company estimated incremental capital expenditure of about $150m annually for its 2030 decarbonisation roadmap.
- Effective January 2023, CRH reorganized into Americas and Europe divisions; its reportable segments were subsequently expanded from three to four. Comparative segment information was to be restated in 2023 reporting.
The auditor issued unqualified opinions on the consolidated financial statements and internal control over financial reporting. Barrette was excluded from management’s and the auditor’s internal-control assessment following its 2022 acquisition.
Important facts for investors to verify
- Separate ongoing trading from the Building Envelope disposal: confirm the $1.5bn disposal gain, discontinued-operations treatment and contribution to total profit and EPS.
- Review the company-defined EBITDA and like-for-like measures alongside IFRS results, including how acquisitions, divestments, currency translation and other adjustments affect comparisons.
- Assess cash conversion and capital needs: operating cash flow was $4.0bn, capital expenditure was $1.5bn, and working capital absorbed $518m; the filing does not present a single free-cash-flow figure in the supplied text.
- Check debt maturities, interest-rate exposure, committed facility availability and the continued effect of buybacks and acquisitions on leverage and liquidity.
- Evaluate whether pricing can continue to offset inflation and lower volumes, particularly in Europe and residential markets, and whether the 2023 outlook assumptions are being met.
- Monitor Barrette integration and the 2023 segment reorganization, including the comparability of future segment results.
- Track progress, costs and assumptions underlying emissions targets, including carbon pricing and the planned decarbonisation investment.