CRH plc — FY2021 Form 20-F
Reporting period: Year ended December 31, 2021; the filing is an annual report, not a standalone 2021 fourth-quarter filing. Financial statements are prepared under IFRS as issued by the IASB and presented in U.S. dollars.
Business context
CRH supplies building materials, products and construction solutions through three divisions: Americas Materials, Europe Materials and Building Products. It operated in 28 countries and employed approximately 77,400 people. Management cited recovering construction demand as economies reopened, alongside its integrated-solutions strategy and active portfolio management.
Financial performance
| Metric | FY2021 | FY2020 |
|---|---|---|
| Revenue | $30.981 billion | $27.587 billion |
| EBITDA, as defined by CRH (non-GAAP) | $5.350 billion | $4.630 billion |
| EBITDA margin | 17.3% | 16.8% |
| Operating profit | $3.585 billion | $2.263 billion |
| Profit after tax | $2.621 billion | $1.165 billion |
| Basic earnings per share | 328.8 cents | 142.9 cents |
| Net cash from operating activities | $4.210 billion | $3.938 billion |
| Capital expenditure on property, plant and equipment | $1.554 billion | $0.996 billion |
| Year-end net debt | $6.253 billion | $5.941 billion |
Revenue rose 12% as reported and 8% organically; EBITDA rose 16% as reported and 11% organically. Operating profit increased 58%, and profit after tax more than doubled. The EBITDA margin expanded by 50 basis points. The filing attributes much of the profit and EPS improvement to stronger trading and the non-recurrence of 2020 impairment and restructuring charges; 2020 included $827 million of impairment charges, while no impairment charge was recorded in 2021.
At year-end, CRH reported $10.487 billion of interest-bearing loans and borrowings, $5.783 billion of cash and cash equivalents, and $9.8 billion of total liquidity, including $4.0 billion of undrawn committed facilities. Net Debt/EBITDA was 1.2x, compared with 1.3x in 2020; EBITDA net interest cover was 17.2x, versus 11.9x. Management said cash balances were sufficient to meet debt maturities, including leases, for the next five years. Weighted average maturity of remaining term debt was 11.9 years.
The Board proposed a final dividend of 98 cents per share, taking the FY2021 total to 121 cents, up 5% from 2020. The proposed final dividend remained subject to shareholder approval.
Divisions and changes versus prior year
- Americas Materials: Revenue was $12.407 billion and EBITDA $2.588 billion. Revenue grew 10% as reported; like-for-like revenue and EBITDA increased 6% and 7%, respectively. Volumes and pricing improved, while higher input costs and adverse weather affected some markets.
- Europe Materials: Revenue was $10.581 billion and EBITDA $1.410 billion. Revenue rose 16% as reported and 11% like-for-like; like-for-like EBITDA increased 22%. The comparison benefited from the pandemic-affected 2020 period and the non-recurrence of prior-year impairment charges.
- Building Products: Revenue was $7.993 billion and EBITDA $1.352 billion. Revenue rose 11% as reported and 5% like-for-like; like-for-like EBITDA increased 8%. Residential demand was strong, with a recovery in some non-residential markets.
CRH spent $1.5 billion on 20 bolt-on acquisitions, compared with $0.4 billion in 2020, and repurchased $0.9 billion of shares, versus $0.2 billion. It received $0.5 billion from business and asset disposals, including proceeds from the sale of its Brazil cement operations. Net debt increased from $5.9 billion to $6.3 billion, reflecting investment and shareholder distributions despite stronger operating cash flow.
Outlook, risks and unusual items
- 2022 outlook: Management expected favourable underlying demand and pricing, but anticipated continuing input-cost inflation and supply-chain challenges. It expected further progress across all three divisions, supported by demand, pricing and cost initiatives. No quantified FY2022 revenue or earnings guidance was provided.
- Portfolio transaction after year-end: On February 28, 2022, CRH agreed to sell its Building Envelope business for an enterprise value of $3.8 billion. Completion was subject to customary conditions and regulatory approvals; the company expected closing in the first half of 2022.
- Operating risks: The filing highlights construction cyclicality, energy and raw-material costs, labour availability, weather, competition, supply chains, COVID-19, climate policy and execution/integration of acquisitions. Management also noted the developing conflict in Ukraine and focused on the safety of approximately 800 employees in its Ukrainian operations.
- Safety: Four workplace-related fatalities were reported in 2021: one employee, one contractor and two third parties. The company said it investigated the incidents and shared lessons learned.
- Climate commitments: CRH set a target to reduce absolute Scope 1 and Scope 2 emissions by 25% by 2030 from a 2020 baseline, and brought forward its cement emissions-intensity target of 520 kg CO2 per tonne of cementitious product to 2025. It stated an ambition to achieve carbon neutrality across the cement and concrete value chain by 2050.
- Liquidity and contingencies: Directors said they identified no material uncertainties affecting going concern. Environmental, insurance and legal provisions remain subject to estimates and future developments; the filing said pending legal proceedings were not expected to have a material adverse effect.
- Audit: Deloitte issued unqualified opinions on the financial statements and internal control over financial reporting. Critical audit matters included goodwill impairment assessment and revenue recognition for long-term contracts.
Investor verification points
- Confirm the basis and reconciliation of CRH’s non-GAAP EBITDA, net debt, organic growth and return-on-net-assets measures.
- Track whether pricing and productivity offset inflation, energy costs and supply-chain constraints, and compare subsequent results with management’s qualitative 2022 outlook.
- Verify completion, proceeds and use of proceeds from the proposed Building Envelope divestment, including any impact on continuing operations.
- Review cash conversion and capital allocation against the higher capital expenditure, acquisition spending, buybacks and proposed dividend.
- Assess the sensitivity of goodwill and long-term contract revenue to forecast assumptions; these were identified as significant audit judgement areas.
- Monitor the Ukraine exposure, climate targets and related capital requirements, and workplace safety performance.
- For a Q4-specific analysis, obtain quarterly results separately: this 20-F reports annual figures and does not provide a clear standalone Q4 financial summary.