Strong pricing, significant contributions from prior year acquisitions and good
underlying demand in key end-use markets offset the impact of cost inflation
reflecting our continued focus on commercial management and operational
efficiencies along with the benefits of our integrated solutions strategy.
Net debt*
7
of $5.4 billion at year end (2022: $3.9 billion) reflects continued
strong cash generation offset by disciplined capital expenditure,
value-focused investments and cash returns to shareholders.
Net income was $3.1 billion (2022: $3.9 billion), a decrease of $0.8 billion
driven by the absence of income from discontinued operations which
contributed $1.2 billion in 2022 due to the divestiture of the Building
Envelope business. Net income from continuing operations rose 14% to
$3.1 billion in 2023, which generated EPS of $4.36 (2022: $3.58). Excluding
the non-cash impairment charge EPS was $4.65, 30% higher than prior
year (2022: $3.58). This record financial performance combined with our
disciplined allocation of capital saw RONA*
8
for the year increase to 15.3%
(2022: 13.3%).
5,6,7
Capital Allocation and Development Activity
CRH repurchased $3.0 billion of shares in 2023 as part of its ongoing
buyback program. This demonstrates management’s confidence in the
outlook for our business and our continued strong cash generation, while
retaining the financial flexibility to invest in further growth and value creation
opportunities for our shareholders. As part of our dividend growth strategy
and in line with our strong financial position, the Board in November
increased the full year dividend to $1.33 per share, a 5% increase on the
prior year. Since 2018, CRH has returned approximately $12 billion to
shareholders through share buybacks and dividends.
CRH spent a total of $0.7 billion (2022: $3.3 billion) on acquisitions and
investments in 2023, the largest of which was Hydro International, a leading
provider of innovative stormwater products, wastewater treatment
products, wastewater services, and data solutions. This is a strategically
important acquisition for CRH, supporting our vision to be a leading provider
of solutions in the circular water economy and complementing our Building
& Infrastructure Solutions businesses in both North America and Europe.
In November, CRH reached an agreement to acquire an attractive portfolio
of cement and readymixed concrete assets in Texas for a total
consideration of $2.1 billion. The transaction was completed in February
2024, further strengthening our market leading position in Texas and
increasing our exposure to attractive, high-growth markets.
In February 2024, CRH entered into a binding agreement to acquire a
majority stake in Adbri Ltd (Adbri), a materials business in Australia. We will
acquire approximately 53% of the issued share capital for $0.7 billion,
increasing CRH’s total shareholding to approximately 57%. Adbri has high-
quality assets and leading market positions in Australia that complement
CRH’s core competencies in cement, concrete and aggregates while
creating additional opportunities for growth and development for our
existing Australian business. The proposed transaction is subject to
customary terms and conditions and is expected to complete in 2024.
CRH also entered into an agreement to divest its European lime operations
for a total consideration of $1.1 billion. The first phase of the divestment
completed in January 2024. The remaining phases consisting of operations
in the United Kingdom and Poland are expected to close in 2024. These
transactions demonstrate CRH’s active and disciplined approach to
portfolio management, and will provide significant additional capital
allocation opportunities to deliver further growth and value creation for our
shareholders.
Solutions Strategy
CRH transitioned to a new organisational structure on January 1, 2023 with
two regional Divisions and four new segments. This change accelerates the
development of our integrated solutions strategy in both the United States
and Europe as we align our business with the future growth opportunities of
our industry.
It will facilitate additional integration, cross-selling and joined up thinking
across CRH as we create value for our customers by combining our
products, materials and services, into solutions that solve some of the most
pressing construction problems.
Innovation
Investing in innovation that helps solve complex problems for customers is
part of our customer-centric approach to doing business. In Europe where
EU regulations are reshaping the way the built environment is constructed,
our businesses have both the impetus and opportunity to find new ways to
build better. This allows CRH to pilot and bring to market new products and
solutions that can then be rolled out to customers in North America as the
market evolves. In 2023 we continued to collaborate with customers and
other stakeholders from the built environment through our Innovation Centre
for Sustainable Construction and our venturing arm CRH Ventures.
Sustainability
Sustainability is deeply embedded in all aspects of our business. Our
sustainability framework identifies three global challenges for society and the
built environment - water, circularity and decarbonization. Our ability to
solve these challenges, by uniquely integrating our materials, products and
services, positions us to capture further value and accelerate growth across
CRH.
We continue to make progress on our industry-leading target to deliver a
30% reduction in absolute carbon emissions by 2030, keeping us on the
path to achieving our overall ambition of becoming a net-zero business by
2050. The Science Based Targets initiative (SBTi) has validated our 2030
emissions reduction targets
9
to be in line with a 1.5°C trajectory. CRH
continues to make progress against these targets reducing Scope 1 and 2
CO
2
e emissions by 8% in 2023.
We continue to keep the safety and well-being of our people as our utmost
priority and continue to provide our teams with the training and resources
needed to help ensure that everyone who works in CRH returns home
safely to their families at the end of the working day. Regrettably, despite
our efforts, CRH recorded four employee fatalities during the year. Our
thoughts are with their families and we will continue to do everything in our
power to reach our target of zero harm and zero fatalities.
Well Positioned for Future Growth
The success of CRH, our industry-leading financial performance and our
ability to deliver superior value for our customers is testament to the hard
work and commitment of all of our people. Their capabilities, combined with
the strength of our balance sheet and our relentless focus on the efficient
allocation of capital will enable us to capitalize on the significant
opportunities we see for further growth and value creation.
On behalf of the management team and all my colleagues across CRH, we
thank you for your continued support as we stand together to reinvent the
way our world is built.
Albert Manifold
Chief Executive
February 29, 2024
Annual Report 2023 vi
* Represents a non-GAAP measure. See the 'Non-GAAP Reconciliation' on pages xi to xiii.
7
Total debt of $11.6 billion (2022: $9.6 billion) is the GAAP figure which is most comparable to net debt.
5
8
Return on Net Segment Assets 14.4% (2022: 13.1%) is the GAAP figure which is most comparable to Return on Net Assets.
6
9
The SBTi’s Target Validation Team has determined that CRH’s target ambition for Scope 1 and Scope 2, as well as Scope 3 for purchased clinker and cement, is in line with a 1.5°C trajectory.
7