Interim Results
CRH PLC
02 September 2003
2003 INTERIM RESULTS
Six months ended 30th June 2003
2003 2002 % change
euro m euro m
Sales 4,661 4,801 -3%
Operating profit * 245 295 -17%
Profit before tax 161 196 -18%
euro cent euro cent
Earnings per share - before goodwill amortisation 28.89 33.51 -14%
Earnings per share - after goodwill amortisation 22.16 26.78 -17%
Cash earnings per share 69.95 76.59 -9%
Dividend 8.20 7.43 +10%
* Operating profit including share of joint ventures but before goodwill
amortisation and profit on sale of fixed assets.
In the Republic of Ireland, residential construction was particularly buoyant
and activity on major infrastructure projects continued at a good pace. Against
this background operating profit increased by 14% to euro 68 million.
In Britain and Northern Ireland, although underlying operating profits advanced,
the weakness of Sterling versus the euro resulted in reported operating profit
being unchanged at euro 30 million.
In Mainland Europe, generally weak trading patterns for the Materials Division
were exacerbated by an exceptionally cold first quarter in Poland and Finland,
resulting in a 27% decline in operating profit to euro 33 million. With the
incremental impact of acquisitions, the Products & Distribution Division
recorded a 10% increase in operating profit to euro 54 million.
Reported euro results for the Americas operations were adversely affected by the
impact of a 19% weakening of the average US dollar exchange rate versus the
euro. The traditional first half operating loss in the Materials Division rose
from euro 30 million to euro 39 million with the impact of exceptionally wet
weather in the Northeast and Midwest during the second quarter only partly
offset by contributions from acquisitions. In a challenging market and economic
environment for all of its product groups, the Products & Distribution Division
reported a 30% operating profit decline to euro 99 million.
Overall, currency translation effects, principally arising from the strength of
the euro versus the US dollar, had a euro 10 million adverse impact at profit
before tax level in the period.
The interim dividend has been increased by 10%, the 20th consecutive year of
dividend increase.
Total acquisition and investment spend amounted to euro 577 million on 20 deals.
Since period-end, we have agreed to acquire Cementbouw's distribution and
building products operations in Holland for euro 646 million and to invest euro
47 million in a leveraged buyout of Cementbouw's materials operations.
Liam O'Mahony, Chief Executive, said today:
'Our pre-close Interim trading update statement of 30th June indicated expected
pre-tax profit of euro 155 million to euro 160 million for the first half of the
year. A solid performance in June, particularly in our European markets, has
resulted in actual profits slightly above the upper end of the indicated range.
The second half of the year is significantly more profitable for CRH than the
first six months, mainly due to the marked second half bias in the activity
levels and profitability of our operations in the US. Although wet weather
continued to hamper our US businesses in July and early August, we expect that,
given reasonable weather from now to year-end, full year profit before tax for
the Group, excluding adverse currency translation effects currently projected at
euro 77 milllion, will be ahead of last year.
Our financial capacity to make acquisitions continues to be strong, and our
development teams remain busy; we expect to deliver a further good level of
development spend in the remaining months of the year in addition to the
completion of the Cementbouw transactions announced in July.'
Announced Tuesday, 2nd September 2003
INTERIM STATEMENT
Highlights
The results highlights for the first six months of 2003 are set out below.
Sales: euro 4,661 million, down 3%
Operating profit*: euro 245 million, down 17%
Basic earnings per share before goodwill amortisation: 28.89c, down 14%
Cash earnings per share: 69.95c, down 9%
Operating profit including share of joint ventures but before goodwill
amortisation and profit on sale of fixed assets.
Translation effects in the first six months of 2003 had an adverse impact of
euro 10 million on profit before tax compared with the first half of 2002, with
average US dollar and Sterling exchange rates in 2003 significantly weaker
versus the euro than in the corresponding period in 2002.
Goodwill amortisation (including share of joint ventures) amounted to euro 35.3
million (2002: euro 35.1 million). Spending on acquisitions and investments in
the first half of 2003 amounted to euro 577 million (2002: euro 607 million).
The Group profit and loss account on page 8 separately discloses the impact of
acquisitions made during the six months to 30th June 2003.
Dividends
The Board has decided to pay an interim dividend of 8.20c per share, an increase
of 10.4% on the 2002 interim dividend of 7.43c. Dividends will be paid on 7th
November 2003 to shareholders registered at the close of business on 12th
September 2003.
A scrip dividend alternative is being offered to shareholders.
Acquisitions and disposals
First half acquisition and investment expenditure of euro 577 million includes
expenditure of euro 189 million on the S.E. Johnson Group in the Midwestern
United States while the remaining euro 388 million includes the cost of 19 small
to medium-sized deals in Europe and North America. The euro 646 million
acquisition of Cementbouw's distribution and building products operations in
Holland and euro 47 million investment in a leveraged buyout of Cementbouw's
materials operations, which were announced in July 2003 and which are subject to
regulatory approvals, are both expected to close before the end of the year.
Proceeds from disposal of fixed assets amounted to euro 35 million.
Regional review
REPUBLIC OF IRELAND
Including share of joint ventures Analysis of change
------------------------------------------------------------
Total Acquisitions
euro million 2003 2002 change Exchange 2002 2003 Organic
Sales 353 309 +44 - - - +44
% change +14% +14%
Operating profit* 68 60 +8 - - - +8
% change +14% +14%
Margin 19.4% 19.6%
Operating profit is arrived at before goodwill amortisation charges and profit
on sale of fixed assets.
The trends in construction demand evident in the second half of 2002 continued
through the first half of 2003 boosted by very favourable weather conditions in
March and April. Residential construction was particularly buoyant resulting in
double-digit percentage volume increases in cement, concrete blocks and
readymixed concrete. Activity on major infrastructural projects under the
National Development Plan continued at a good pace through the first six months
although completion of a number of major projects resulted in a decline in
blacktop volumes compared with 2002. Commercial and industrial construction
continued weak during the period.
BRITAIN AND NORTHERN IRELAND
Including share of joint ventures Analysis of change
--------------------------------------------------------------
Total Acquisitions /
disposals
euro million 2003 2002 change Exchange 2002 2003 Organic
Sales 341 330 +11 -31 +6 -4 +40
% change +3% -10% +2% -1% +12%
Operating profit* 30 30 - -3 +1 - +2
% change -10% +3% +7 %
Margin 8.6% 8.9%
Operating profit is arrived at before goodwill amortisation charges and profit
on sale of fixed assets.
Compared with first half 2002, the euro was on average approximately 9% stronger
versus Sterling in the first half of 2003 giving rise to an adverse translation
impact on sales and operating profit for the first half of 2003.
While Ibstock's first half brick volumes were broadly in line with 2002, a
combination of price improvements together with the benefits of a more
favourable natural gas supply contract offset the impact of increased costs
resulting in improved profitability. Our concrete and insulation activities also
reported underlying profit advances while our fencing operations benefited from
the inclusion of Geoquip, the manufacturer of electronic intrusion detection
systems which was acquired in August 2002.
In the Materials Division, residential demand in Northern Ireland continued at a
reasonable level while, after a slow start, road maintenance activity has
improved. Profits were similar to the first half of last year.
MAINLAND EUROPE - MATERIALS
Including share of joint ventures Analysis of change
----------------------------------------------------------------------
Total Acquisitions Re-org.
euro million 2003 2002 change Exchange 2002 2003 costs Organic
Sales 444 460 -16 -24 +12 +10 - -14
% change -3% -5% +3% +2% -3%
Operating profit* 33 45 -12 -2 +1 +1 +7 -19
% change -27% -4% +2% +2% +15% -42%
Margin 7.3% 9.8%
Operating profit is arrived at before goodwill amortisation charges and profit
on sale of fixed assets, and includes no re-organisation costs in 2003 (2002:
euro 7 million).
Trading patterns in the first half of 2003 were generally weak exacerbated by an
exceptionally cold first quarter in Northeastern Europe. Cement demand in Poland
was severely affected in the first quarter and although demand improved in the
second quarter, first half volumes declined by 13% with a consequent severe
impact on profit. Our Finnish operations also suffered first half volume and
profit declines although to a lesser extent than in Poland.
In Switzerland, we experienced more normal seasonal demand levels with our
cement and aggregates activities benefiting from major infrastructure projects.
However, with a slowing economy, readymixed concrete volumes and profits lagged
2002 levels. In Spain, our operations saw further strong volume gains, but a
very competitive market resulted in a first half outcome similar to last year.
Our 25% Israeli cement joint venture performed well in the first half of the
year.
MAINLAND EUROPE - PRODUCTS & DISTRIBUTION
Including share of joint ventures Analysis of change
---------------------------------------------------------------------
Total Acquisitions Re-org.
euro million 2003 2002 change Exchange 2002 2003 costs Organic
Sales 1,116 939 +177 -5 +168 +32 - -18
% change +19% -1% +18% +3% -1%
Operating profit* 54 49 +5 - +8 +2 - -5
% change +10% +16% +4% -10%
Margin 4.9% 5.2%
Operating profit is arrived at before goodwill amortisation charges and profit
on sale of fixed assets, and includes re-organisation costs of euro 2 million
(2002: euro 2 million).
Our Products & Distribution Division reported higher operating profit than in
2002 reflecting the incremental benefit of 2002 and 2003 acquisitions.
The Concrete Products Group continued to be affected by general weakness in
residential and commercial markets but, as a result of the inclusion of EHL
(acquired May 2002) and Douterloigne (acquired August 2002), reported higher
first half operating profit than last year.
In both the Clay Products and Insulation Groups, markets have remained difficult
resulting in little change in operating profit compared with 2002.
In the Building Products Group, our Fencing & Security business has maintained
underlying profits while benefiting from the inclusion of Adronit (acquired
March 2003). The Daylight & Ventilation activities continued to experience
difficult market conditions in Germany and reported lower profits. The inclusion
of Plakabeton, the Belgium-based metal building accessories business acquired in
April 2003, contributed positively to first half results.
Turnover in our Distribution Group increased from euro 491 million to euro 578
million principally reflecting the impact of Vicom (acquired June 2002) and BBH
Baubedarf (acquired October 2002) which substantially enlarged our Distribution
presence in Switzerland. The integration of these businesses with our existing
Richner operation in Switzerland is progressing well but it will be some time
before the full benefits are realised. A modest contribution from these deals
combined with good performances from our Dutch DIY and French builders
merchanting activities resulted in a profit advance for this Group.
THE AMERICAS - MATERIALS
Including share of joint ventures Analysis of change
--------------------------------------------------------------
Total Acquisitions
euro million 2003 2002 change Exchange 2002 2003 Organic
Sales 921 1,108 -187 -208 +47 +36 -62
% change -17% -19% +4% +3% -5%
Operating loss* (39) (30) -9 +6 +2 +3 -20
% change -31% +20% +7% +10% -68%
Margin -4.3% -2.7%
Operating loss is arrived at before goodwill amortisation charges and profit on
sale of fixed assets.
The average US dollar profit and loss account translation rate for the first
half of 2003 was US$1.1049 to the euro versus US$0.8979 in the first half of
2002 which gives rise to an adverse translation impact on sales for the Americas
Materials Division compared with 2002. However, as this Division traditionally
reports seasonal losses in the first half of the year, the weaker dollar
resulted in a favourable exchange impact at operating level.
Although overall state contract lettings continued at a stable level through the
first half of the year, exceptionally wet weather in the Northeast and Midwest
during the second quarter delayed the commencement of the construction season
and resulted in significantly lower volumes and profits from underlying
operations. Our businesses in the Western states enjoyed more normal weather
conditions and reported similar results to last year. Excluding the impact of
recent acquisitions, our heritage companies saw volume declines of approximately
12% in aggregates and asphalt and 8% in readymixed concrete compared with first
half 2002, although there were substantial regional variations.
THE AMERICAS - PRODUCTS & DISTRIBUTION
Including share of joint ventures Analysis of change
--------------------------------------------------------------
Total Acquisitions
euro million 2003 2002 change Exchange 2002 2003 Organic
Sales 1,486 1,655 -169 -307 +143 +67 -72
% change -10% -19% +9% +4% -4%
Operating profit* 99 141 -42 -26 +6 +10 -32
% change -30% -18% +4% +7% -23%
Margin 6.7% 8.5%
Operating profit is arrived at before goodwill amortisation charges and profit
on sale of fixed assets.
The Products & Distribution Division was also impacted by poor weather, which
restricted both residential and non-residential construction activity and
product shipments, and overall first half profits in US dollar terms for this
Division were down on 2002 levels. The weaker US dollar also resulted in adverse
exchange translation variances in reported euro results for the Division at both
sales and operating profit levels compared with 2002.
The Precast Group suffered most against a backdrop of continuing declines in
non-residential construction. The Architectural Products Group experienced a
slower than anticipated first half pick-up in seasonal homecentre demand, due to
wet weather, while brick sales declined largely as a result of slowing activity
in high-end residential and institutional construction. The Glass Group
continued to perform well despite the challenging environment; however, a
decline from strong 2002 levels in the Southern and Central regions led to some
margin erosion. The Distribution Group had a robust underlying performance and,
with the benefit of good contributions from 2002 and 2003 acquisitions,
delivered further margin improvement in the half year.
In September 2002, CRH announced that companies in CRH's Distribution Group in
the United States had been named, together with a large number of other
unrelated parties, in asbestos cases involving 251 claimants. These cases
alleged personal injury as a result of exposure to asbestos in products
manufactured by others and allegedly distributed by companies in the
Distribution Group prior to ownership by CRH. Since then 35 new claims have been
received and 11 have been disposed of, with the number of claimants as at the
end of August 2003 amounting to 275. We believe that the outcome of these claims
will not have a material impact on CRH.
Finance and taxation
The lower first half interest charge in 2003 reflects the benefits of lower
interest rates worldwide and a favourable translation impact due primarily to
the weaker US dollar, partly offset by the additional financing costs of
significant 2002 and first half 2003 development activity. The robust cash
generation characteristics of the Group continue to underpin the Group's strong
financial capacity to avail of attractive acquisition opportunities as they
arise in our various geographic, product and sectoral markets.
Exchange rate movements between year-end 2002 and 30th June 2003 (mainly the
weakening of the US dollar rate) reduced the euro amount of foreign currency net
debt by euro 144 million while shareholders' funds were reduced by euro 256
million.
As in prior years, the interim taxation charge is an estimate based on the
current expected full year tax rate.
Outlook
In Ireland, while housing continues to be strong, the completion of a number of
major infrastructure projects is expected to lead to lower overall activity in
the second half of the year. Total construction output for the year as a whole
should be broadly similar to 2002.
Our markets in Britain have tended to soften slightly in recent months; however,
Ibstock price increases should generate further benefits in the second half and
full year Sterling profits are expected to be ahead of 2002.
In Mainland Europe, with better recent demand in Poland and Finland, and with
the incremental impact of 2002 and 2003 acquisitions, we anticipate that the
Materials Division should largely recover the reported first half operating
profit decline. The market backdrop for our Products & Distribution businesses
remains weak; however, we continue to benefit from the 2002 restructuring and
from the inclusion of results from 2003 development activity (not including
Cementbouw which we hope to complete as planned before the end of the year).
Overall, following a substantial increase in 2002, we expect a further good full
year profit advance for the Products & Distribution Division.
In North America, despite good backlogs, wet weather through July and early
August, particularly in the Northeast, has continued to hamper the ability of
our Materials operations to fully claw back the underlying volume deficits
experienced in the first half. Energy costs remain high but are being largely
recovered through better pricing. Our Products & Distribution activities are
benefiting from strength in the housing and homecentre markets. Reasonable
weather from now to year-end and contributions from acquisitions should result
in higher full year operating profit in US dollar terms. However, the weaker US
dollar will have a more significant adverse translation impact than in the first
half due to the marked second half bias of US profitability.
A continuation of the US dollar/euro exchange rate of US$1.09 would result in a
full year average rate of US$1.1032 (2002: US$0.9456) which, combined with the
projected average rates for other currencies versus the euro, would have an
adverse full year impact of euro 77 million, equivalent to approximately 9% of
last year's pre-tax profit level.
We remain focussed on cash generation, cost control and efficiency improvements,
combined with the recovery of higher input costs and delivery of a further good
level of development spend in the second half of the year. These measures are
unlikely to be sufficient to offset the adverse currency impact of the stronger
euro on our results for the year as a whole. However, given reasonable weather
for the remainder of 2003, we expect that, before the adverse currency
translation impact, full year profit before tax will be ahead of last year.
* * * *
This interim results announcement contains certain forward-looking statements as
defined under US legislation. By their nature, such statements involve
uncertainty; as a consequence, actual results and developments may differ from
those expressed in or implied by such statements depending on a variety of
factors including the specific factors identified in this interim results
announcement and other factors discussed in our Annual Report on Form 20-F filed
with the SEC.
Group profit and loss account
Six months ended 30th June - Unaudited Year ended
----------------------------------------------------------------- 31st December
Continuing operations Audited
Acquisitions Total Total
2003 2003 2003 2002 2002
euro m euro m euro m euro m euro m
Sales including share of joint ventures 4,519.5 141.4 4,660.9 4,800.6 10,794.1
Less share of joint ventures (111.1) (0.5) (111.6) (135.0) (276.9)
----------- --------- --------- --------- -----------
Group sales 4,408.4 140.9 4,549.3 4,665.6 10,517.2
Cost of sales (3,139.8) (91.9) (3,231.7) (3,317.4) (7,293.5)
----------- --------- --------- --------- -----------
Gross profit 1,268.6 49.0 1,317.6 1,348.2 3,223.7
Operating costs excluding goodwill (1,051.9) (32.5) (1,084.4) (1,066.9) (2,209.1)
amortisation
----------- --------- --------- --------- -----------
Group operating profit 216.7 16.5 233.2 281.3 1,014.6
Share of joint ventures' operating profit 11.6 (0.1) 11.5 13.5 33.5
----------- --------- --------- --------- -----------
Operating profit excluding goodwill 228.3 16.4 244.7 294.8 1,048.1
amortisation
Goodwill amortisation (33.2) (2.1) (35.3) (35.1) (69.6)
Profit on disposal of fixed assets 6.4 - 6.4 10.3 15.7
----------- --------- --------- --------- -----------
Profit on ordinary activities before interest 201.5 14.3 215.8 270.0 994.2
Group net interest payable =========== ========= (52.8) (70.1) (131.4)
Share of joint ventures' net interest payable (2.2) (4.3) (7.1)
--------- --------- -----------
Profit on ordinary activities before taxation 160.8 195.6 855.7
Taxation on profit on ordinary activities (42.0) (53.0) (226.8)
(estimated)
--------- --------- -----------
Profit on ordinary activities after taxation 118.8 142.6 628.9
Profit applicable to minority equity interests (2.5) (2.8) (5.5)
Preference dividends - - (0.1)
--------- --------- -----------
Profit for the period attributable to ordinary 116.3 139.8 623.3
shareholders
Dividends paid - - (39.1)
Dividends proposed (43.1) (38.9) (94.2)
--------- --------- -----------
Profit retained for the financial period 73.2 100.9 490.0
========= ========= ===========
Earnings per share for the period
Basic
- Including goodwill amortisation 22.16c 26.78c 119.22c
- Excluding goodwill amortisation 28.89c 33.51c 132.54c
Diluted
- Including goodwill amortisation 22.09c 26.56c 118.57c
- Excluding goodwill amortisation 28.80c 33.23c 131.81c
Cash earnings per share for the period 69.95c 76.59c 219.82c
Dividend per share 8.20c 7.43c 25.40c
Movements on profit and loss account
Six months ended 30th June - Unaudited Year ended 31st December
------------------------------------- Audited
2003 2002 2002
euro m euro m euro m
At beginning of period 2,520.3 2,544.5 2,544.5
Profit retained for the financial period 73.2 100.9 490.0
Currency translation effects
- on results for the period 1.7 (2.8) (31.7)
- on foreign currency net investments (258.2) (362.3) (482.5)
--------- --------- ---------
At end of period 2,337.0 2,280.3 2,520.3
========= ========= =========
Statement of total recognised gains and losses
Six months ended Year ended
30th June - Unaudited 31st December
--------------------------------- Audited
2003 2002 2002
euro m euro m euro m
Profit for the period attributable to ordinary 116.3 139.8 623.3
shareholders
Currency translation effects
- on results for the period 1.7 (2.8) (31.7)
- on foreign currency net investments (258.2) (362.3) (482.5)
--------- --------- ---------
Total recognised gains and losses for the period (140.2) (225.3) 109.1
========= ======== =========
Group balance sheet
As at 30th June 2003 - Unaudited 31st
December
2003 2003 2002 2002 2002
Audited
euro m euro m euro m euro m euro m
Fixed assets
Intangible asset - goodwill 1,213.8 1,119.9 1,154.1
Tangible assets 5,039.1 5,074.3 5,004.4
Financial assets:
Joint ventures - share of gross assets 346.4 406.5 366.1
- share of gross liabilities (140.5) (164.9) (141.8)
- loans to joint ventures 29.4 28.5 28.4
Other investments 18.0 24.4 22.1
------- ------- -------
253.3 294.5 274.8
---------- ---------- ----------
6,506.2 6,488.7 6,433.3
Current assets
Stocks 1,189.5 1,123.5 1,064.0
Debtors 1,873.7 1,824.8 1,525.4
Cash, short-term deposits and liquid 1,197.4 1,355.8 1,533.2
resources
--------- --------- ---------
4,260.6 4,304.1 4,122.6
--------- --------- ---------
Creditors (amounts falling due within
one year)
Bank loans and overdrafts 265.7 544.5 232.8
Trade and other creditors 1,562.6 1,523.7 1,387.2
Corporation tax 25.8 96.6 29.6
Dividends proposed 43.1 38.8 94.2
---------- ---------- ----------
1,897.2 2,203.6 1,743.8
---------- --------- ----------
Net current assets 2,363.4 2,100.5 2,378.8
---------- ---------- ----------
Total assets less current liabilities 8,869.6 8,589.2 8,812.1
Creditors (amounts falling due after
more than one year)
Loans 3,270.3 3,138.5 3,010.3
Deferred acquisition consideration 140.0 179.7 142.5
Corporation tax 6.6 41.3 6.6
------- ------- -------
3,416.9 3,359.5 3,159.4
Capital grants 13.8 15.5 14.6
Provisions for liabilities and charges 751.3 601.8 779.3
---------- ---------- ----------
4,687.6 4,612.4 4,858.8
========== ========== ==========
Capital and reserves
Called-up share capital
Equity share capital 178.9 177.9 178.2
Non-equity share capital 1.2 1.2 1.2
Equity reserves
Share premium account 2,061.6 2,027.3 2,038.3
Other reserves 9.9 9.9 9.9
Profit and loss account 2,337.0 2,280.3 2,520.3
---------- ---------- ----------
Shareholders' funds 4,588.6 4,496.6 4,747.9
Minority shareholders' equity interest 99.0 115.8 110.9
---------- ---------- ----------
4,687.6 4,612.4 4,858.8
========== ========== ==========
Group cash flow statement
Six months ended 30th June - Unaudited Year ended 31st
December
--------------------------------------------
2003 2002 2002 - Audited
euro m euro m euro m
Net cash inflow from operating activities 146.3 280.0 1,553.5
Dividends received from joint ventures 7.4 6.3 23.5
Returns on investments and servicing of finance:
Interest received 14.9 25.8 57.7
Interest paid (65.5) (83.9) (183.2)
Finance lease interest paid (0.3) (0.4) (0.7)
Preference dividends paid - - (0.1)
------- ------- -------
(50.9) (58.5) (126.3)
------- ------- -------
Taxation:
Irish corporation tax paid (10.2) (15.1) (17.2)
Overseas tax paid (30.3) (36.4) (145.1)
------- ------- -------
(40.5) (51.5) (162.3)
------- ------- -------
Capital expenditure:
Purchase of tangible assets (217.8) (211.9) (367.4)
Less: capital grants received - - 0.1
new finance leases - 0.8 -
Disposal of fixed assets 34.7 49.5 104.4
------- ------- -------
(183.1) (161.6) (262.9)
------- ------- -------
Acquisition/disposal of subsidiary undertakings and
joint ventures:
Acquisition of subsidiary undertakings (544.5) (470.2) (793.7)
Deferred acquisition consideration (24.1) (35.9) (80.3)
Investments in and advances to joint ventures (0.8) (7.5) (22.0)
------- ------- -------
(569.4) (513.6) (896.0)
------- ------- -------
Equity dividends paid (76.7) (70.1) (111.6)
--------- --------- ---------
Cash (outflow)/inflow before use of liquid resources and (766.9) (569.0) 17.9
financing
Cash inflow/(outflow) from management of liquid 172.0 (45.8) (169.7)
resources
Financing:
Issue of shares 1.5 5.6 13.8
Expenses paid in respect of share issues - (0.1) (0.4)
Increase in term debt 505.7 543.6 192.5
Capital element of finance leases repaid (1.6) (3.1) (5.1)
------- ------- -------
505.6 546.0 200.8
------- ------- -------
(Decrease) / increase in cash and demand debt in the
financial period (89.3) (68.8) 49.0
======= ======= =======
Reconciliation of net cash flow to movement in net debt
Six months ended 30th June - Unaudited Year ended
31st December
--------------------------------------------
2003 2002 2002 - Audited
euro m euro m euro m
(Decrease) / increase in cash and demand debt in the
financial period (89.3) (68.8) 49.0
Increase in term debt including finance leases (504.1) (540.5) (187.4)
Cash (inflow)/outflow from management of liquid resources (172.0) 45.8 169.7
---------- ---------- ----------
Change in net debt resulting from cash flows (765.4) (563.5) 31.3
Loans and finance leases, net of liquid resources, acquired
with subsidiaries (7.8) (93.4) (95.8)
New finance leases - (0.8) -
---------- ---------- ----------
(773.2) (657.7) (64.5)
Translation adjustment 144.5 224.2 248.3
---------- ---------- ----------
Movement in net debt for the period (628.7) (433.5) 183.8
Net debt at 1st January (1,709.9) (1,893.7) (1,893.7)
---------- ---------- ----------
Net debt at end of period (2,338.6) (2,327.2) (1,709.9)
========== ========== ==========
Supplementary information
Note 1. Translation of foreign currencies
These financial statements are presented in euro. Results and cash flows of
subsidiary and joint venture undertakings 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. Adjustments arising on translation of the results of
non-euro subsidiary and joint venture undertakings at average rates, and on
restatement of the opening net assets at closing rates, are dealt with in
retained profits, net of differences on related currency borrowings. All other
translation differences are included in arriving at operating profit.
Rates used for translation of results and balance sheets into euro were as
follows:
Average Period ended
-------------------------------------------------- --------------------------------------------------
Six months ended 30th June Year ended 31st 30th June 31st December
December
euro 1 = 2003 2002 2002 2003 2002 2002
US Dollar 1.1049 0.8979 0.9456 1.1427 0.9975 1.0487
Pound Sterling 0.6855 0.6217 0.6288 0.6932 0.6498 0.6505
Polish Zloty 4.2720 3.6679 3.8574 4.4775 4.0598 4.0210
Swiss Franc 1.4919 1.4690 1.4670 1.5544 1.4721 1.4524
Argentine Peso 3.3203 2.4395 2.9514 3.1967 3.7870 3.5289
Note 2. Key components of first half 2003 performance
Incremental effect Incremental effect
Exchange in 2003 of in 2003 of
translation acquisitions & rationalisation Ongoing
effects investments costs charged in operations
completed during Disposals
euro m H1 2002 2002 2003 2003 2002 2003 H1 2003
Sales 4,801 (575) 376 145 (4) - - (82) 4,661
------ ------ ------ ------ ------ ------ ------ ------ ------
Operating profit 295 (25) 18 16 - 9 (2) (66) 245
Goodwill (35) 4 (2) (2) - - - - (35)
amortisation
Profit on 10 - - - - - - (4) 6
disposals
------ ------ ------ ------ ------ ------ ------ ------ ------
Trading profit 270 (21) 16 14 - 9 (2) (70) 216
Finance costs (74) 11 (8) (4) - - - 20 (55)
------ ------ ------ ------ ------ ------ ------ ------ ------
Profit before tax 196 (10) 8 10 - 9 (2) (50) 161
====== ====== ====== ====== ====== ====== ====== ====== ======
Change -5% +4% +5% - +4% -1% -25% -18%
Note 3. Geographical analysis
Year ended
Sales Six months ended 30th June - Unaudited 31st December 2002
2003 2002 Audited
------------------- --------------------- -------------------------
euro m % euro m % euro m %
Republic of Ireland 353.1 7.6 308.8 6.4 713.9 6.6
Britain and Northern Ireland 340.9 7.3 329.9 6.9 698.4 6.5
Mainland Europe 1,559.9 33.5 1,399.1 29.1 3,020.6 28.0
The Americas 2,407.0 51.6 2,762.8 57.6 6,361.2 58.9
---------- ------ ------------ ----- ------------- -----
Total including share of jv's 4,660.9 100 4,800.6 100 10,794.1 100
Less share of joint ventures (111.6) ====== (135.0) ===== (276.9) =====
---------- ------------ -------------
Total excluding share of jv's 4,549.3 4,665.6 10,517.2
========== ============ =============
Profit before interest Operating profit Goodwill Profit on Profit before
amortisation disposal interest
% euro m euro m euro m euro m
Six months ended 30th June 2003 - unaudited
-------------------------------------
Republic of Ireland 28.0 68.6 (0.1) 2.2 70.7
Britain and Northern Ireland 12.0 29.4 (2.6) 3.0 29.8
Mainland Europe 35.5 86.7 (14.7) 1.1 73.1
The Americas 24.5 60.0 (17.9) 0.1 42.2
----- ------ ------ ------ ------
Total including joint ventures 100 244.7 (35.3) 6.4 215.8
Less share of joint ventures ===== (11.5) 0.8 (0.7) (11.4)
------ ------ ------ ------
Total excluding joint ventures 233.2 (34.5) 5.7 204.4
====== ====== ====== ======
Six months ended 30th June 2002 - unaudited
-------------------------------------------------
Republic of Ireland 20.5 60.4 (0.1) 3.5 63.8
Britain and Northern Ireland 10.0 29.5 (2.7) 1.2 28.0
Mainland Europe 31.8 93.6 (15.0) 3.5 82.1
The Americas 37.7 111.3 (17.3) 2.1 96.1
---- ------ ------ ------ ------
Total including joint ventures 100 294.8 (35.1) 10.3 270.0
Less share of joint ventures ==== (13.5) 1.6 (0.3) (12.2)
------ ------ ------ ------
Total excluding joint ventures 281.3 (33.5) 10.0 257.8
====== ====== ====== ======
Year ended 31st December 2002 - audited
-------------------------------------------------
Republic of Ireland 12.5 131.3 (0.3) 7.8 138.8
Britain and Northern Ireland 5.3 55.8 (5.4) 2.8 53.2
Mainland Europe 22.3 233.5 (28.6) 3.3 208.2
The Americas 59.9 627.5 (35.3) 1.8 594.0
----- ------- ------ ------ ------
Total including joint ventures 100 1,048.1 (69.6) 15.7 994.2
Less share of joint ventures (33.5) 2.0 (1.2) (32.7)
------- ------ ------ ------
Total excluding joint ventures 1,014.6 (67.6) 14.5 961.5
======= ====== ====== ======
Note 4. Divisional analysis
Sales Six months ended 30th June - Unaudited 31st December 2002
2003 2002 Audited
------------------ ---------------- ----------------------
euro m % euro m % euro m %
Europe Materials 913.1 19.6 874.5 18.2 1,927.0 17.9
Europe Products & Distribution 1,341.3 28.8 1,163.6 24.2 2,505.6 23.2
Americas Materials 920.3 19.7 1,108.0 23.1 3,072.1 28.5
Americas Products & Distribution 1,486.2 31.9 1,654.5 34.5 3,289.4 30.4
-------- ------- -------- ------- --------- -------
Total including share of jv's 4,660.9 100 4,800.6 100 10,794.1 100
Less share of joint ventures (111.6) ======= (135.0) ======= (276.9) =======
-------- -------- ---------
Total excluding share of jv's 4,549.3 4,665.6 10,517.2
======== ======== =========
Profit before interest Operating profit Goodwill Profit on Profit before
amortisation disposal interest
% euro m euro m euro m euro m
Six months ended 30th June 2003 - unaudited
-----------------------------------------------
Europe Materials 43.0 105.1 (8.9) 4.6 100.8
Europe Products & Distribution 32.5 79.6 (8.5) 1.7 72.8
Americas Materials (16.0) (39.2) (8.9) 1.3 (46.8)
Americas Products & 40.5 99.2 (9.0) (1.2) 89.0
Distribution
------ ------ ------ ------ ------
Total including joint ventures 100 244.7 (35.3) 6.4 215.8
Less share of joint ventures ====== (11.5) 0.8 (0.7) (11.4)
------ ------ ------ ------
Total excluding joint ventures 233.2 (34.5) 5.7 204.4
====== ====== ====== ======
Six months ended 30th June 2002 - unaudited
-----------------------------------------------
Europe Materials 36.9 108.8 (10.8) 5.5 103.5
Europe Products & Distribution 25.3 74.7 (7.0) 2.7 70.4
Americas Materials (10.1) (29.9) (9.9) 2.6 (37.2)
Americas Products & 47.9 141.2 (7.4) (0.5) 133.3
Distribution
----- ------ ------ ------ ------
Total including joint ventures 100 294.8 (35.1) 10.3 270.0
Less share of joint ventures (13.5) 1.6 (0.3) (12.2)
------ ------ ------ ------
Total excluding joint ventures 281.3 (33.5) 10.0 257.8
====== ====== ====== ======
Year ended 31st December 2002 - audited
-----------------------------------------------
Europe Materials 25.4 266.7 (19.9) 11.7 258.5
Europe Products & Distribution 14.7 153.9 (14.4) 2.2 141.7
Americas Materials 32.0 335.8 (19.8) 3.3 319.3
Americas Products & 27.9 291.7 (15.5) (1.5) 274.7
Distribution
----- ------- ------- ------ ------
Total including joint ventures 100 1,048.1 (69.6) 15.7 994.2
Less share of joint ventures (33.5) 2.0 (1.2) (32.7)
------- ------- ------ ------
Total excluding joint ventures 1,014.6 (67.6) 14.5 961.5
======= ======= ====== ======
Note 5. Earnings per share
The computation of basic, diluted and cash earnings per share is set out below:
Six months ended Year ended
30th June - Unaudited
2003 2002 31st December 2002
Audited
euro m euro m euro m
Numerator for basic and diluted earnings per share
Profit for the period attributable to ordinary shareholders 116.3 139.8 623.3
Goodwill amortisation including share of joint ventures 35.3 35.1 69.6
------- ------- ------
Attributable profit excluding goodwill amortisation 151.6 174.9 692.9
Depreciation charge 215.5 224.9 456.3
------- ------- ----------
Numerator for cash earnings per share 367.1 399.8 1,149.2
-------- ------- ----------
Denominator for basic earnings per share
Weighted average number of shares (millions) in issue 524.8 522.0 522.8
Effect of dilutive potential Ordinary Shares (employee 1.6 4.3 2.9
share options)
------- ------- ----------
Denominator for diluted earnings per share 526.4 526.3 525.7
------- ------- ----------
Basic earnings per Ordinary Share: euro cent euro cent euro cent
- Including goodwill amortisation 22.16 26.78 119.22
- Excluding goodwill amortisation 28.89 33.51 132.54
Diluted earnings per Ordinary Share:
- Including goodwill amortisation 22.09 26.56 118.57
- Excluding goodwill amortisation 28.80 33.23 131.81
Cash earnings per Ordinary Share (i) 69.95 76.59 219.82
i. Cash earnings per share, a non-GAAP financial measure, is presented here for
information as management believes it is a useful financial indicator of a
company's ability to generate cash from operations.
Note 6. Movements in shareholders' funds
Six months ended 30th Year ended
June - Unaudited
31st December
2003 2002 2002
Audited
euro m euro m euro m
At beginning of period 4,747.9 4,735.4 4,735.4
Profit retained for the financial period 73.2 100.9 490.0
Currency translation effects
- on results for the period 1.7 (2.8) (31.7)
- on foreign currency net investments (258.2) (362.3) (482.5)
Issue of ordinary share capital (net of expenses) 24.0 25.4 36.7
---------- ---------- ----------
At end of period 4,588.6 4,496.6 4,747.9
========== ========== ==========
Note 7. Summarised cash flow
The table below summarises the Group's cash flows for the six months ended 30th
June 2003 and 30th June 2002 and for the full year ended 31st December 2002.
Year ended
Six months ended 30th June - Unaudited 31st December 2002
--------------------------------------
2003 2002 Audited
Inflows euro m euro m euro m
Profit before tax 161 196 856
Depreciation 216 225 456
Goodwill amortisation excluding joint ventures 34 34 68
Disposals 35 50 104
Share issues (net of expenses) 24 25 37
----- ----- -----
470 530 1,521
----- ----- -----
Outflows
Working capital movement 300 214 (90)
Capital expenditure 218 211 367
Acquisitions and investments 577 607 992
Dividends 99 90 135
Tax paid 41 52 162
Other 8 13 19
----- ----- -----
1,243 1,187 1,585
Net outflow (773) (657) (64)
----- ----- -----
Translation adjustment 144 224 248
----- ----- -----
(Increase) / decrease in net debt (629) (433) 184
===== ===== =====
Note 8. Other
Six months ended 30th June Year ended
Unaudited 31st December 2002
2003 2002 Audited
EBITDA interest cover (times):
- six months to 30th June 8.6 7.4 n/a
- rolling 12 months 12.5 10.0 11.3
EBIT interest cover (times):
- six months to 30th June 3.9 3.7 n/a
- rolling 12 months 8.0 6.4 7.3
EBITDA = earnings before interest, tax, depreciation and goodwill amortisation,
excluding share of joint ventures
EBIT = earnings before interest and tax, excluding share of joint ventures
Average shares in issue (millions) 524.8 522.0 522.8
Net dividend per share (cent) 8.20 7.43 25.40
Dividend cover (times) 2.70 3.59 4.68
Depreciation charge - euro m 215.5 224.9 456.3
Goodwill amortisation charge, subsidiaries - euro m 34.5 33.5 67.6
Goodwill amortisation charge, joint ventures - euro m 0.8 1.6 2.0
Net debt - euro m 2,338.6 2,327.2 1,709.9
Debt ratio 51% 51% 36%
Debt to market capitalisation at period-end 33% 26% 28%
Note 9. Distribution of Interim Report
These Interim Results are available on the Group's website (www.crh.com). A
printed copy will be posted to shareholders on Thursday, 4th September 2003 and
will be available to the public from that date at the Company's registered
office. Details of the Scrip Dividend Offer in respect of the Interim 2003
dividend will be posted to shareholders on Thursday, 25th September 2003.
Contact at Dublin 404 1000 (+353 1 404 1000)
Liam O'Mahony Chief Executive
Harry Sheridan Finance Director
Myles Lee Finance Director Designate
CRH plc, Belgard Castle, Clondalkin, Dublin 22, Ireland
TELEPHONE +353.1.404 1000
FAX +353.1.404 1007
E-MAIL mail@crh.com WEBSITE www.crh.com
Registered Office, 42 Fitzwilliam Square, Dublin 2, Ireland
This information is provided by RNS
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