Interim Results
CRH PLC
31 August 2004
2004 INTERIM RESULTS
Six months ended 30th June 2004
2004 2003 % change
euro m euro m
• Sales 5,670 4,661 +22%
• Operating profit * 385 245 +57%
• Profit before tax 275 161 +71%
euro cent euro cent
• Earnings per share - before goodwill amortisation 47.3 28.9 +64%
• Earnings per share - after goodwill amortisation 38.1 22.2 +72%
• Cash earnings per share 93.1 70.0 +33%
• Dividend 9.6 8.2 +17%
* Operating profit including share of joint ventures and associates but before
goodwill amortisation and profit on sale of assets.
• In the Republic of Ireland, residential construction grew strongly with
increases in cement, concrete blocks, readymixed concrete and blacktop
volumes, although prices failed to compensate for cost increases.
While margins declined profits were similar at euro 68 million.
• In Britain and Northern Ireland, underlying organic profit improvements
combined with a slight strengthening of Sterling resulted in an 8% first
half operating profit advance to euro 32 million.
• In Mainland Europe, more normal weather conditions than in 2003 resulted in
a much better demand backdrop for our Materials Division with a particularly
strong organic performance contributing to a 91% increase in operating
profit to euro 63 million. The Products & Distribution Division continued to
experience subdued markets but benefited from internal improvements and
strong contributions from the record 2003 development spend delivering a
124% increase in operating profits to euro 121 million.
• Against a background of higher energy input costs overall early season
activity in the Americas Materials Division was broadly in line with
expectations and the traditional first half trading loss declined from
euro 39 million to euro 31 million. The Products & Distribution Division had
a very strong first half with residential construction continuing at a good
level and ongoing evidence of a recovering non-residential construction
sector. Despite an adverse translation impact this Division delivered a 33%
increase in operating profit to euro 132 million.
• Overall, currency translation effects, principally arising from the strength
of the euro versus the US Dollar, had a euro 4 million adverse impact at
profit before tax level in the period.
• The interim dividend has been increased by 17%, the 21st consecutive year of
dividend increase.
• Total acquisition and investment spend amounted to euro 700 million on 21
deals.
Liam O'Mahony, Chief Executive, said today:
'CRH has had a particularly strong first half with a good organic bounce back
from weather depressed 2003, significant incremental contributions from
acquisitions and only a modest adverse profit translation impact due to
seasonally low first half US Dollar operating profits.
Second half performance will be affected by continuing high world energy prices
and rising input costs, a lower incremental acquisition impact than in the first
half and, at current exchange rates, an adverse translation impact of
approximately euro 26 million at profit before tax level compared with 2003.
However, markets are on balance better and with improved activity across much of
our business we expect to deliver a healthy full year profit advance.
With the improved trading outlook the Board has decided that a higher ongoing
annual dividend increase is appropriate and accordingly has decided to raise the
interim dividend by 17% making 2004 the 21st consecutive year of dividend
increase.'
Announced Tuesday, 31st August 2004
Contact at Dublin 404 1000 (+353 1 404 1000)
Liam O'Mahony Chief Executive
Myles Lee Finance Director
Maeve Carton Group Controller
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
INTERIM STATEMENT
Highlights
The results highlights for the first six months of 2004 are set out below.
• Sales: euro 5,670 million, up 22%
• Operating profit*: euro 385 million, up 57%
• Profit before tax: euro 275 million, up 71%
• Basic earnings per share before goodwill amortisation: 47.3c, up 64%
• Cash earnings per share: 93.1c, up 33%
* Operating profit including share of joint ventures and associates but before
goodwill amortisation and profit on sale of assets.
Strong organic growth, reflecting more normal seasonal weather patterns in
Northern Europe and North America and modest market improvements, combined with
incremental contributions from 2003 and 2004 acquisitions, has resulted in a
significant increase in sales, profits and earnings compared with the first half
of 2003.
Although the average first half US Dollar exchange rate was some 10% weaker
versus the euro than in the corresponding period in 2003, translation effects in
the first six months of 2004 had an adverse impact of just euro 4 million on
profit before tax reflecting the traditionally low US profitability in the first
half of the year.
Goodwill amortisation (including share of joint ventures and associates)
amounted to euro 48.7 million (2003: euro 35.3 million). Profit on disposal of
fixed assets amounted to euro 6.4 million (2003: euro 6.4 million).
The Group profit and loss account on page 8 separately discloses the impact of
acquisitions made during the six months to 30th June 2004 while Note 2 on page
12 analyses the key components of first half 2004 performance.
Dividends
Over the past three years, despite challenging trading conditions the Group has
delivered earnings growth and a compound annual dividend increase of 10.6% while
maintaining high dividend cover, strong free cash flow and sustained development
spend. With the improved trading outlook the Board has decided that a higher
ongoing annual dividend increase is appropriate and accordingly has decided to
pay an interim dividend of 9.6 cent per share, an increase of 17.1% on the 2003
interim dividend of 8.2 cent. The Interim dividend will be paid on 5th November
2004 to shareholders registered at the close of business on 10th September 2004.
A scrip dividend alternative is being offered to shareholders.
Acquisitions and disposals
First half acquisition and investment expenditure of euro 700 million includes
euro 333 million for the Group's 49% equity stake in the Portuguese cement
producer Secil completed on 3rd June. The remaining euro 367 million includes
the cost of 20 small to medium-sized deals in Europe and the Americas. With our
strong cash flow and interest cover we retain substantial capacity to capitalise
on further attractive development opportunities as they arise.
Proceeds from disposal of fixed assets amounted to euro 59 million.
Regional review
REPUBLIC OF IRELAND
Including share of joint ventures Analysis of change
Total Acquisitions
euro million 2004 2003 change Exchange 2003 2004 Organic
Sales 386 353 +33 - - - +33
% change +9% +9%
Operating profit* 68 68 - - - - -
% change
Margin 17.7% 19.4%
* Operating profit is arrived at before goodwill amortisation charges and profit
on sale of fixed assets.
In Ireland, residential construction grew strongly in the first half while
commercial and industrial activity remained flat. After the expected slow start,
infrastructure activity accelerated in the second quarter. First half volumes
overall showed satisfactory progress on 2003 levels, with strong increases in
cement, concrete blocks, readymixed concrete and blacktop, but prices failed to
compensate for cost increases. As a result, while margins declined somewhat,
first half operating profits were similar.
BRITAIN AND NORTHERN IRELAND
Including share of joint ventures Analysis of change
Total Acquisitions
euro million 2004 2003 change Exchange 2003 2004 Organic
Sales 366 341 +25 +5 - +1 +19
% change +7% +1% +6%
Operating profit* 32 30 +2 +1 - - +1
% change +8% +4% +4%
Margin 8.6% 8.6%
* Operating profit is arrived at before goodwill amortisation charges and profit
on sale of fixed assets.
First half Ibstock brick volumes were slightly below 2003 levels, consistent
with the market. Further price improvements more than offset cost increases
resulting in a modest profit improvement. Our British concrete products
activities enjoyed good demand. Our insulation activities reported lower profits
as a result of higher input costs. In the Materials Division, our Northern
Ireland operations saw higher activity in housing and infrastructure markets.
Underlying organic profit improvements combined with a slight strengthening of
Sterling resulted in a first half profit advance in euro terms.
MAINLAND EUROPE - MATERIALS
Including share of joint ventures Analysis of change
Total Acquisitions
euro million 2004 2003 change Exchange 2003 2004 Organic
Sales 567 444 +123 -14 +13 +75 +49
% change +28% -3% +3% +17% +11%
Operating profit* 63 33 +30 - +1 +7 +22
% change +91% +3% +21% +67%
Margin 11.1% 7.3%
* Operating profit is arrived at before goodwill amortisation charges and profit
on sale of fixed assets.
More normal 2004 weather conditions in Northeast Europe resulted in a much
better demand backdrop for our Materials operations than in the first half of
2003. Our Polish cement operations had a particularly strong start to the year
and demand following the 1st May Value Added Tax increase on building materials
continued at a satisfactory, if slightly lower, level, resulting in a 17%
increase in first half cement volumes. Finland also benefited from better early
weather with cement volumes up approximately 10%. In Switzerland we enjoyed
ongoing strong demand from major tunnelling works and a good initial
contribution from Hastag which was acquired in January. Although readymixed
concrete volumes in Spain declined in the first half, price improvements and
cost efficiencies led to a similar outcome. The results include CRH's 49% share
of Secil's sales and operating results for the month of June.
Overall, first half profits from Mainland Europe Materials show a substantial
improvement on 2003 levels with a particularly strong organic performance
following a difficult first half in 2003.
MAINLAND EUROPE - PRODUCTS & DISTRIBUTION
Including share of joint ventures and associates Analysis of change
Total Acquisitions Re-org.
euro million 2004 2003 change Exchange 2003 2004 costs Organic
Sales 1,742 1,116 +626 -9 +599 +4 - +32
% change +56% -1% +54% + 3%
Operating profit* 121 54 +67 - +57 - - +10
% change +124% +106% +18%
Margin 6.9% 4.9%
* 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
(2003: euro 2 million).
The Products & Distribution Division in Mainland Europe continued to experience
subdued markets in the first half but benefited from internal improvements and
strong contributions from the record 2003 development spend. First half
operating profits show a significant advance on 2003.
The Concrete Products Group saw some recovery in residential demand in the
Benelux and in the utility sector in France. In Germany, the Ehl Group continued
to perform well although profits declined slightly due to delays in passing on
cement price increases. Overall profits improved with an organic advance and
good first-time contributions from 2003 acquisitions. The Sand Lime Brick Group
acquired with the Cementbouw transaction in October 2003 performed strongly in
the first half. Our Clay Products Group had improved results in continuing tough
markets.
Operating profits in the Insulation Group increased aided by a strong
performance in Poland and inclusion of Unidek acquired in October 2003. In the
Building Products Group our Fencing & Security business benefited from 2003
acquisitions while Daylight & Ventilation profits improved in continuing
difficult markets. Meanwhile, the Concrete Accessories group formed following
the acquisition of Plakabeton in April 2003 has met expectations. The Cementbouw
Joint Venture in materials trading and readymixed concrete in the Netherlands
experienced weakening demand in infrastructure markets.
Sales in the Distribution Group increased by 55% from euro 578 million to euro
895 million principally reflecting the impact of Cementbouw's distribution
activities which roughly doubled CRH's existing distribution business in the
Netherlands. Combined with underlying improvements in our heritage operations in
the Benelux and Switzerland, this resulted in an increase of approximately 2
percentage points in first half Distribution operating margins.
THE AMERICAS - MATERIALS
Including share of joint ventures Analysis of change
Total Acquisitions
euro million 2004 2003 change Exchange 2003 2004 Organic
Sales 955 921 +34 -92 +38 +15 +73
% change +4% -10% +4% +2% +8%
Operating loss* (31) (39) +8 +4 -6 +2 +8
% change +21% +10% -15% +5% +21%
Margin -3.2% -4.3%
* Operating loss is arrived at before goodwill amortisation charges and profit
on sale of fixed assets.
Against a background of higher energy input costs, overall early season activity
in this Division was broadly in line with expectations and the traditional first
half US Dollar trading loss was lower than in 2003. The average US Dollar profit
and loss account translation rate for the first half of 2004 was US$1.2273 to
the euro versus US$1.1049 in the first half of 2003. This movement gives rise to
an adverse translation impact on sales and a favourable impact at operating
level due to the seasonal loss.
In New England activity picked up in May and June after a slow start. Our New
York/New Jersey operations turned in a better performance against a background
of more normal weather conditions than in 2003. In the Central region experience
was mixed, with good early demand in Ohio and Pennsylvania largely offset by a
weak start in Michigan and the inclusion of first-time seasonal winter losses
from S.E. Johnson, which was acquired in May 2003. In the West our operations
enjoyed a strong start to the season with across the board improvements in this
large geographical region. Excluding the impact of recent acquisitions, our
heritage companies saw volume increases of approximately 6% in aggregates and
15% in readymixed concrete and a decline of approximately 2% in asphalt compared
with first half 2003, although as usual there were regional variations.
THE AMERICAS - PRODUCTS & DISTRIBUTION
Including share of joint ventures Analysis of change
Total Acquisitions
euro million 2004 2003 change Exchange 2003 2004 Organic
Sales 1,654 1,486 +168 -142 +94 +57 +159
% change +11% -10% +6% +4% +11%
Operating profit* 132 99 +33 -11 +9 +8 +27
% change +33% -11% +9% +8% +27%
Margin 8.0% 6.7%
* Operating profit is arrived at before goodwill amortisation charges and profit
on sale of fixed assets.
The Products & Distribution Division had a very strong first half with
residential construction continuing at a good level and ongoing evidence of a
recovering non-residential construction sector. Although the weaker US$ had an
adverse translation impact the Division delivered strong increases in euro
terms.
Despite higher steel costs, the improved Precast Group performance evident in
the second half of 2003 continued into 2004, particularly reflecting the
benefits of operating cost reductions implemented in recent years. The
Architectural Products Group capitalised on good first half demand for retail
and hardscape products, and also delivered improvement at its Glen-Gery brick
operation and good incremental contributions from its active 2003 acquisition
programme. Markets were strong in most regions, with the Midwest the most
notable exception. Underlying profits in the Glass Group increased somewhat on
last year's levels in modestly improving non-residential markets. The
Distribution Group continued to build on the progress of recent years and, with
the benefit of strong markets in the Northeast, delivered improved margins.
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 83 new claims have been
received and 18 have been disposed of, with the number of claimants as at 27th
August 2004 amounting to 316. We believe that the outcome of these claims will
not have a material impact on CRH.
Finance and taxation
The higher first half interest charge in 2004 reflects the impact of additional
financing costs of significant 2003 and first half 2004 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 2003 and 30th June 2004, mainly the
weakening of the euro from US$1.2630 to US$1.2155, increased the euro amount of
foreign currency net debt by euro 61 million while shareholders' funds were
increased by euro 122 million.
As in prior years, the interim taxation charge is an estimate based on the
current expected full year tax rate.
Outlook
In Ireland, the strong momentum in housing evident in the first half of the year
is continuing and an improving GDP growth outlook should stimulate
non-residential construction. As a result we expect a busy second half and a
good full year outturn although increasing price competition in downstream
products will result in lower operating margins.
In Britain we see no imminent signs of pick up in brick demand although Ibstock
price increases should generate further benefits in the second half. Our
Northern Ireland Materials operations continue to perform well. Overall full
year Sterling profits are expected to be ahead of 2003.
In Mainland Europe, our Materials operations in Poland and Finland face tougher
comparatives in the second half due to catch up in 2003 from poor early season
weather. Our Swiss operations continue to perform strongly helped by
infrastructure demand and the Hastag acquisition. Price and efficiency
improvements are expected to compensate for somewhat slower markets in Spain
while the second half will benefit from inclusion of our 49% joint venture stake
in Secil acquired in early June. Overall we expect a good full year outcome from
our Mainland Europe Materials businesses.
The market backdrop for our Mainland Europe Products & Distribution operations
remains more subdued than for our Materials operations, although the Dutch,
Belgian and Danish residential markets are showing signs of improvement.
Integration of 2003 acquisitions is largely complete and the promised synergies
are being realised. Our Concrete Products and Insulation Groups are focussed on
the recovery of higher input costs. We expect another strong full year operating
profit advance from this Division.
In North America, our Materials Division continues to experience generally good
demand across its operations. July and August saw strong activity in the West;
however, the Northeast and Midwest were hampered by extremely wet weather.
Sustained high energy prices, which reached record levels in July/August, are
feeding through into input costs and will impact negatively in the second half
of the year.
Although recent economic data suggests some slowdown in US growth, our Products
& Distribution Division continues to experience good residential demand and a
gradual pick up in non-residential activity. This Division is substantially
recovering higher input costs and overall we expect a good second half leading
to a satisfactory full year advance in operating profits.
CRH has had a particularly strong first half with a good organic bounce back
from weather depressed 2003, significant incremental contributions from
acquisitions and only a modest adverse profit translation impact due to
seasonally low first half US Dollar operating profits.
Second half performance will be affected by continuing high world energy prices
and rising input costs, a lower incremental acquisition impact than in the first
half and, at current exchange rates, an adverse translation impact of
approximately euro 26 million at profit before tax level compared with 2003.
However, markets are on balance better and with improved activity across much of
our business we expect to deliver a healthy full year profit advance.
* * * *
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
Continuing operations Year ended
Acquisitions Total 31st December
2004 2004 2004 2003 2003
Audited
euro m euro m euro m euro m euro m
Sales including share of joint ventures 5,518.7 151.7 5,670.4 4,660.9 11,079.8
Less share of joint ventures (178.0) (19.4) (197.4) (111.6) (305.5)
Group sales 5,340.7 132.3 5,473.0 4,549.3 10,774.3
Cost of sales (3,739.2) (95.4) (3,834.6) (3,231.7) (7,461.3)
Gross profit 1,601.5 36.9 1,638.4 1,317.6 3,313.0
Operating costs excluding goodwill amortisation (1,256.0) (22.4) (1,278.4) (1,084.4) (2,308.5)
Group operating profit 345.5 14.5 360.0 233.2 1,004.5
Share of joint ventures' operating profit 18.8 2.6 21.4 11.5 39.5
Share of associates' operating profit 3.2 - 3.2 - 0.7
Operating profit excluding goodwill amortisation 367.5 17.1 384.6 244.7 1,044.7
Goodwill amortisation (47.0) (1.7) (48.7) (35.3) (75.5)
Profit on disposal of fixed assets 6.4 - 6.4 6.4 13.0
Profit on ordinary activities before interest 326.9 15.4 342.3 215.8 982.2
Group net interest payable (61.9) (52.8) (112.8)
Share of joint ventures' and associates' net interest (5.7) (2.2) (5.2)
payable
Profit on ordinary activities before taxation 274.7 160.8 864.2
Taxation on profit on ordinary activities (estimated) (69.0) (42.0) (217.6)
Profit on ordinary activities after taxation 205.7 118.8 646.6
Profit applicable to minority equity interests (4.5) (2.5) (5.9)
Preference dividends - - (0.1)
Profit for the period attributable to ordinary 201.2 116.3 640.6
shareholders
Dividends paid - - (43.2)
Dividends payable (50.9) (43.1) (105.0)
Profit retained for the financial period 150.3 73.2 492.4
Earnings per share for the period
Basic
- after goodwill amortisation 38.1c 22.2c 121.9c
- before goodwill amortisation 47.3c 28.9c 136.2c
Diluted
- after goodwill amortisation 37.8c 22.1c 120.6c
- before goodwill amortisation 47.0c 28.8c 134.8c
Cash earnings per share for the period 93.1c 70.0c 223.4c
Dividend per share 9.6c 8.2c 28.1c
Movements on profit and loss account
Six months ended Year ended
30th June - Unaudited 31st December
2004 2003 2003
Audited
euro m euro m euro m
At beginning of period 2,490.2 2,520.3 2,520.3
Profit retained for the financial period 150.3 73.2 492.4
Currency translation effects
- on results for the period (0.1) 1.7 (23.7)
- on foreign currency net investments 122.1 (258.2) (498.8)
At end of period 2,762.5 2,337.0 2,490.2
Statement of total recognised gains and losses
Six months ended Year ended
30th June - Unaudited 31st December
2004 2003 2003
Audited
euro m euro m euro m
Profit for the period attributable to ordinary shareholders 201.2 116.3 640.6
Currency translation effects
- on results for the period (0.1) 1.7 (23.7)
- on foreign currency net investments 122.1 (258.2) (498.8)
Total recognised gains and losses for the period 323.2 (140.2) 118.1
Group balance sheet
As at 30th June - Unaudited 31st December
2004 2003 2003 - Audited
euro m euro m euro m euro m euro m
Fixed assets
Intangible asset - goodwill 1,542.7 1,213.8 1,474.5
Tangible assets 5,491.4 5,039.1 5,145.4
Financial assets:
Joint ventures - share of gross assets 1,297.5 346.4 560.1
- share of gross liabilities (687.0) (140.5) (330.4)
- loans to joint ventures 59.7 29.4 62.3
Associates 35.4 - 44.6
Other investments 11.9 18.0 12.1
717.5 253.3 348.7
7,751.6 6,506.2 6,968.6
Current assets
Stocks 1,340.5 1,189.5 1,117.6
Debtors 2,154.8 1,873.7 1,681.2
Cash and liquid investments 941.6 1,197.4 1,298.0
4,436.9 4,260.6 4,096.8
Creditors (amounts falling due within one year)
Bank loans and overdrafts 726.0 265.7 510.3
Trade and other creditors 1,838.2 1,562.6 1,499.7
Corporation tax 55.7 25.8 77.9
Dividends payable 50.8 43.1 105.0
2,670.7 1,897.2 2,192.9
Net current assets 1,766.2 2,363.4 1,903.9
Total assets less current liabilities 9,517.8 8,869.6 8,872.5
Creditors (amounts falling due after more than
one year)
Loans 3,390.3 3,270.3 3,095.8
Deferred acquisition consideration 96.2 140.0 96.5
Corporation tax - 6.6 -
3,486.5 3,416.9 3,192.3
Capital grants 11.9 13.8 12.7
Provisions for liabilities and charges 853.1 751.3 818.0
5,166.3 4,687.6 4,849.5
Capital and reserves
Called-up share capital
Equity share capital 180.1 178.9 179.3
Non-equity share capital 1.2 1.2 1.2
Equity reserves
Share premium account 2,114.8 2,061.6 2,078.3
Other reserves 9.9 9.9 9.9
Profit and loss account 2,762.5 2,337.0 2,490.2
Shareholders' funds 5,068.5 4,588.6 4,758.9
Minority shareholders' equity interest 97.8 99.0 90.6
5,166.3 4,687.6 4,849.5
Group cash flow statement
Six months ended 30th June - Year ended
Unaudited 31st December
2004 2003 2003 - Audited
euro m euro m euro m
Net cash inflow from operating activities 306.5 146.3 1,396.2
Dividends received from joint ventures and associates 3.9 7.4 19.4
Returns on investments and servicing of finance
Interest received 12.2 14.9 36.1
Interest paid (75.1) (65.5) (140.5)
Finance lease interest paid (0.5) (0.3) (0.7)
Preference dividends paid - - (0.1)
(63.4) (50.9) (105.2)
Taxation
Irish corporation tax paid (8.6) (10.2) (19.6)
Overseas tax paid (71.6) (30.3) (83.3)
(80.2) (40.5) (102.9)
Capital expenditure
Purchase of tangible assets (258.9) (217.8) (402.0)
Less capital grants received - - 0.1
Disposal of fixed assets 59.2 34.7 77.9
(199.7) (183.1) (324.0)
Investment in subsidiary, joint venture and associated
undertakings
Acquisition of subsidiaries (306.6) (544.5) (1,439.0)
Deferred acquisition consideration (29.2) (24.1) (56.8)
Investments in and advances to joint ventures and associates (358.9) (0.8) (79.5)
(694.7) (569.4) (1,575.3)
Equity dividends paid (78.6) (76.7) (122.8)
Cash outflow before use of liquid resources and financing (806.2) (766.9) (814.6)
Cash inflow from management of liquid investments 392.1 172.0 110.4
Financing
Issue of shares 5.5 1.5 13.7
Expenses paid in respect of share issues (0.1) - (0.1)
Increase in term debt 348.0 505.7 688.4
Capital element of new finance leases / (leases repaid) 45.4 (1.6) (3.1)
398.8 505.6 698.9
Decrease in cash and demand debt in the financial period (15.3) (89.3) (5.3)
Reconciliation of net cash flow to movement in net debt
Decrease in cash and demand debt in the financial period (15.3) (89.3) (5.3)
Increase in term debt including finance leases (393.4) (504.1) (685.3)
Cash inflow from management of liquid investments (392.1) (172.0) (110.4)
Change in net debt resulting from cash flows (800.8) (765.4) (801.0)
Loans and finance leases, net of liquid investments, acquired (5.1) (7.8) (40.0)
with subsidiaries
(805.9) (773.2) (841.0)
Translation adjustment (60.7) 144.5 242.8
Movement in net debt for the period (866.6) (628.7) (598.2)
Net debt at 1st January (2,308.1) (1,709.9) (1,709.9)
Net debt at end of period (3,174.7) (2,338.6) (2,308.1)
Supplementary information
1. Translation of foreign currencies
These financial statements are presented in euro. Results and cash flows of
subsidiary, joint venture and associated 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, joint venture and
associated undertakings at average rates, and on restatement of the opening
net assets at closing rates, are dealt with in reserves, 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 30th June 31st December
31st December
euro 1 = 2004 2003 2003 2004 2003 2003
US Dollar 1.2273 1.1049 1.1312 1.2155 1.1427 1.2630
Pound Sterling 0.6735 0.6855 0.6920 0.6708 0.6932 0.7048
Polish Zloty 4.7324 4.2720 4.3996 4.5236 4.4775 4.7019
Swiss Franc 1.5531 1.4919 1.5212 1.5242 1.5544 1.5579
Argentine Peso 3.5641 3.3203 3.3314 3.5979 3.1967 3.6955
2. Key components of first half 2004 performance
Sales Operating Goodwill Profit on Trading Finance Profit
profit amortisation disposals profit costs before
tax
euro million
H1 2003 as reported 4,661 245 (35) 6 216 (55) 161
Exchange effects (252) (6) 2 - (4) - (4)
H1 2003 at H1 2004 exch. 4,409 239 (33) 6 212 (55) 157
rates
Incremental impact in 2004
of:
- 2003 acquisitions 744 61 (14) - 47 (26) 21
- 2004 acquisitions 152 17 (2) - 15 (4) 11
Organic 365 68 - - 68 18 86
H1 2004 as reported 5,670 385 (49) 6 342 (67) 275
% change as reported +22% +57% +58% +71%
% change at constant 2004 +29% +61% +61% +75%
rates
3. Geographical analysis
Year ended
Sales Six months ended 30th June - Unaudited 31st December 2003
2004 2003 Audited
euro m % euro m % euro m %
Republic of Ireland 385.7 6.8 353.1 7.6 731.6 6.6
Britain and Northern Ireland 366.5 6.5 340.9 7.3 691.5 6.3
Mainland Europe 2,301.6 40.6 1,559.9 33.5 3,635.3 32.8
The Americas 2,616.6 46.1 2,407.0 51.6 6,021.4 54.3
Total including share of joint ventures 5,670.4 100 4,660.9 100 11,079.8 100
Less share of joint ventures (197.4) (111.6) (305.5)
Total excluding share of joint ventures 5,473.0 4,549.3 10,774.3
Profit before interest Operating Goodwill Profit on Profit before
profit amortisation disposal interest
% euro m euro m euro m euro m
Six months ended 30th June 2004 - unaudited
Republic of Ireland 17.7 68.2 (0.1) 0.5 68.6
Britain and Northern Ireland 8.3 31.7 (2.6) (0.2) 28.9
Mainland Europe 47.6 183.1 (26.2) 1.7 158.6
The Americas 26.4 101.6 (19.8) 4.4 86.2
Total including jv's and associates 100 384.6 (48.7) 6.4 342.3
Less share of jv's and associates (24.6) 3.4 (0.7) (21.9)
Total excluding jv's and associates 360.0 (45.3) 5.7 320.4
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 share of 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 share of joint ventures 233.2 (34.5) 5.7 204.4
Year ended 31st December 2003 - audited
Republic of Ireland 12.4 129.9 (0.3) 3.4 133.0
Britain and Northern Ireland 5.5 57.4 (5.1) 3.5 55.8
Mainland Europe 28.5 297.8 (34.0) 3.1 266.9
The Americas 53.6 559.6 (36.1) 3.0 526.5
Total including jv's and associates 100 1,044.7 (75.5) 13.0 982.2
Less share of jv's and associates (40.2) 1.5 (1.1) (39.8)
Total excluding jv's and associates 1,004.5 (74.0) 11.9 942.4
4. Divisional analysis
Sales Six months ended 30th June - Unaudited 31st December 2003
2004 2003 Audited
euro m % euro m % euro m %
Europe Materials 1,076.3 19.0 913.1 19.6 1,983.8 17.9
Europe Products 1,090.0 19.2 763.6 16.4 1,720.6 15.5
Europe Distribution 895.4 15.8 577.7 12.4 1,361.8 12.3
Americas Materials 954.8 16.8 920.3 19.7 2,831.3 25.6
Americas Products 1,207.6 21.3 1,047.1 22.5 2,196.3 19.8
Americas Distribution 446.3 7.9 439.1 9.4 986.0 8.9
Total including share of joint ventures 5,670.4 100 4,660.9 100 11,079.8 100
Less share of joint ventures (197.4) (111.6) (305.5)
Total excluding share of joint ventures 5,473.0 4,549.3 10,774.3
Profit before interest Operating Goodwill Profit on Profit before
profit amortisation disposal interest
% euro m euro m euro m euro m
Six months ended 30th June 2004 - unaudited
Europe Materials 35.3 135.8 (10.1) 1.5 127.2
Europe Products 24.8 95.5 (11.3) 0.4 84.6
Europe Distribution 13.6 52.3 (7.5) 0.1 44.9
Americas Materials (8.0) (30.9) (9.5) 3.4 (37.0)
Americas Products 29.5 113.5 (8.1) 0.9 106.3
Americas Distribution 4.8 18.4 (2.2) 0.1 16.3
Total including jv's and associates 100 384.6 (48.7) 6.4 342.3
Less share of jv's and associates (24.6) 3.4 (0.7) (21.9)
Total excluding jv's and associates 360.0 (45.3) 5.7 320.4
Six months ended 30th June 2003 - unaudited
Europe Materials 43.0 105.1 (10.1) 4.6 99.6
Europe Products 24.1 59.1 (6.8) 1.4 53.7
Europe Distribution 8.4 20.5 (0.5) 0.3 20.3
Americas Materials (16.0) (39.2) (8.9) 1.3 (46.8)
Americas Products 35.5 86.9 (6.9) (1.2) 78.8
Americas Distribution 5.0 12.3 (2.1) - 10.2
Total including share of 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 share of joint ventures 233.2 (34.5) 5.7 204.4
Year ended 31st December 2003 - audited
Europe Materials 26.2 273.3 (20.3) 6.3 259.3
Europe Products 13.7 142.6 (16.1) 2.6 129.1
Europe Distribution 6.7 70.1 (3.0) 1.1 68.2
Americas Materials 27.8 290.7 (17.9) 2.8 275.6
Americas Products 20.6 215.6 (14.0) (0.7) 200.9
Americas Distribution 5.0 52.4 (4.2) 0.9 49.1
Total including jv's and associates 100 1,044.7 (75.5) 13.0 982.2
Less share of jv's and associates (40.2) 1.5 (1.1) (39.8)
Total excluding jv's and associates 1,004.5 (74.0) 11.9 942.4
5. Earnings per share
The computation of basic, diluted and cash earnings per share is set out below:
Six months ended
30th June - Unaudited Year ended
2004 2003 31st December 2003
Audited
euro m euro m euro m
Numerator for basic and diluted earnings per share
Profit for the period attributable to ordinary shareholders 201.2 116.3 640.6
Goodwill amortisation including share of joint ventures and 48.7 35.3 75.5
associates
Attributable profit before goodwill amortisation 249.9 151.6 716.1
Depreciation charge 242.1 215.5 458.2
Numerator for cash earnings per share 492.0 367.1 1,174.3
Denominator for basic earnings per share Number of Number of Number of
shares shares shares
Weighted average number of shares (millions) in issue 528.3 524.8 525.7
Effect of dilutive potential Ordinary Shares (employee share 3.8 1.6 5.4
options)
Denominator for diluted earnings per share 532.1 526.4 531.1
Basic earnings per share euro cent euro cent euro cent
- after goodwill amortisation 38.1 22.2 121.9
- before goodwill amortisation 47.3 28.9 136.2
Diluted earnings per share
- after goodwill amortisation 37.8 22.1 120.6
- before goodwill amortisation 47.0 28.8 134.8
Cash earnings per share (i) 93.1 70.0 223.4
(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.
6. Movements in shareholders' funds
Six months ended
30th June - Unaudited Year ended
2004 2003 31st December 2003
Audited
euro m euro m euro m
At beginning of period 4,758.9 4,747.9 4,747.9
Profit retained for the financial period 150.3 73.2 492.4
Currency translation effects
- on results for the period (0.1) 1.7 (23.7)
- on foreign currency net investments 122.1 (258.2) (498.8)
Issue of ordinary share capital (net of expenses) 37.3 24.0 41.1
At end of period 5,068.5 4,588.6 4,758.9
7. Summarised cash flow
The table below summarises the Group's cash flows for the six months ended 30th
June 2004 and 30th June 2003 and for the full year ended 31st December 2003.
Six months ended 30th Year ended
June - Unaudited 31st December 2003
2004 2003 Audited
Inflows euro m euro m euro m
Profit before tax 275 161 864
Depreciation 242 216 458
Goodwill amortisation 49 35 76
Disposals 59 35 78
Share issues (net of expenses) 37 24 41
662 471 1,517
Outflows
Working capital movement 296 300 58
Capital expenditure 259 218 402
Acquisitions and investments 700 577 1,615
Dividends 111 99 150
Tax paid 80 41 103
Other 22 9 30
1,468 1,244 2,358
Net outflow (806) (773) (841)
Translation adjustment (61) 144 243
Increase in net debt (867) (629) (598)
8. Other
Six months ended 30th Year ended
June - Unaudited 31st December 2003
2004 2003 Audited
EBITDA interest cover (times) - six months to 30th June 9.8 8.6 n/a
- rolling 12 months 13.4 12.5 13.1
EBIT interest cover (times) - six months to 30th June 5.2 3.9 n/a
- rolling 12 months 8.7 8.0 8.4
EBITDA = earnings before interest, tax, depreciation and goodwill amortisation, excluding share of joint
ventures and associates
EBIT = earnings before interest and tax, excluding share of joint ventures and associates
Average shares in issue (millions) 528.3 524.8 525.7
Net dividend per share (euro cent) 9.6 8.2 28.1
Dividend cover (times) 3.95 2.70 4.32
Depreciation charge (euro m) 242.1 215.5 458.2
Goodwill amortisation charge, subsidiaries (euro m) 45.3 34.5 74.0
Goodwill amortisation charge, joint ventures and associates 3.4 0.8 1.5
(euro m)
Net debt (euro m) 3,174.7 2,338.6 2,308.1
Debt ratio 62% 51% 48%
Debt to market capitalisation at period-end 35% 33% 27%
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, 2nd September 2004 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 2004
dividend will be posted to shareholders on Thursday, 23rd September 2004.
This information is provided by RNS
The company news service from the London Stock Exchange
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