28th Aug 2007 07:03
CRH PLC28 August 2007 2007 INTERIM RESULTS Six months ended 30th June 2007 2007 2006 % change euro m euro mRevenue 9,698 8,028 + 21%EBITDA* 1,141 925 + 23%Operating profit* 771 613 + 26%Profit on disposal of fixed assets 22 17 + 29%Profit before tax 670 526 + 27% euro cent euro centEarnings per share 92.8 73.7 + 26%Cash earnings per share 160.9 131.7 + 22%Dividend 20.0 13.5 + 48%* EBITDA and operating profit are stated before profit on disposal of fixed assets. • With a particularly strong performance in Europesignificantly outweighing more challenging conditions in the Americas, profitbefore tax for the six months to 30th June increased by 27% to euro 670 millionwhile earnings per share grew by 26% to 92.8 cent. • Operating profit in Europe advanced by euro 165 million toeuro 495 million, an increase of 50%. Organic growth, which accounted for euro120 million or 73% of the first half increase, is substantially ahead of thefull year 2006 organic growth of euro 81 million. • Operating profit in the Americas declined by euro 7million (2.5%) to euro 276 million. Robust organic performances in our Materialsand Products activities plus an excellent contribution from APAC were outweighedby lower profits in Distribution and the impact of a weaker US$. • Profit on disposal of fixed assets at euro 22 million wasahead of Interim 2006 (euro 17 million). It is anticipated that profit ondisposal of fixed assets for the full year will exceed last year's euro 40million and that disposal of surplus properties will be an ongoing feature ofthe Group's activities. • EBITDA/net interest cover remains high at over 9 times forthe twelve months to June 2007, well above the Group's comfort level ofapproximately 6 times. CRH is committed to optimising the use of its balancesheet while maintaining an investment grade credit rating. • The 48% interim dividend increase reflects both theongoing adjustment in dividend cover from 4.8 times in 2005 to a target of 3.5times in 2008 and the broad re-establishment of the traditional split betweeninterim and final dividends. • First half expenditure on acquisitions and investmentstotalled almost euro 1 billion including the purchase of publicly-quoted Swissbuilders merchant Getaz Romang and CRH's first transactions in China and Turkey. Liam O'Mahony, Chief Executive, said today: "CRH's geographic, sectoral and product balance continues to deliver in 2007both in terms of overall trading performance and development activity. With anongoing focus on price and cost effectiveness driving organic performance,benefits from the record 2006 acquisition spend and a sustained developmentemphasis, we expect strong full year profit growth." Announced Tuesday, 28th August 2007 This Results Announcement contains certain forward-looking statements as definedunder US legislation. By their nature, such statements involve uncertainty; as aconsequence, actual results and developments may differ from those expressed inor implied by such statements depending on a variety of factors including thespecific factors identified in this statement and other factors discussed in ourAnnual Report on Form 20-F filed with the SEC. Contact CRH at Dublin 404 1000 (+353 1 404 1000) Liam O'Mahony Chief ExecutiveMyles Lee Finance DirectorEimear O'Flynn Head of Investor RelationsMaeve Carton Group Controller INTERIM STATEMENT HIGHLIGHTS With a particularly strong start in Europe significantly outweighing morechallenging conditions in the Americas profit before tax for the six months to30th June increased by euro 144 million (+27%) compared with the reported 2006outcome of euro 526 million. The results include the proportionate consolidation of joint ventures in theGroup's income statement, cash flow statement and balance sheet while theGroup's share of profit after tax of associates is included as a single lineitem in arriving at Group profit before tax. • Sales revenue: euro 9,698 million, up 21% • EBITDA*: euro 1,141 million, up 23% • Operating profit*: euro 771 million, up 26% • Profit on disposal of fixed assets: euro 22 million, up 29% • Profit before tax: euro 670 million, up 27% • Basic earnings per share: 92.8c, up 26% • Cash earnings per share: 160.9c, up 22% • Dividend per share: 20.0c, up 48% * EBITDA (earnings before interest, tax, depreciation and amortisation) andoperating profit do not include any profit on disposal of fixed assets The average first half US Dollar exchange rate was 7.5% weaker versus the eurothan in the corresponding period in 2006. This had a negative impact of euro 16million on profit before tax. Note 3 on page 14 analyses the key components of first half 2007 performance. DIVIDEND In March 2007, the Board announced a full year 2006 dividend of 52.0c (up 33%versus the previous year) with dividend cover of 4.3 times. This comprised aninterim dividend of 13.5c (up 20%) and a final dividend of 38.5c (up 39%) andrepresented a first step in a phased adjustment in dividend cover from 4.8 timesin 2005 to a targeted 3.5 times for 2008. In line with this policy, and to re-establish the traditional split betweeninterim and final dividends, the Board has decided to pay an interim dividend of20.0c per share, an increase of 48% on the 2006 interim dividend of 13.5c. DEVELOPMENT First half acquisition and investment expenditure amounted to approximately euro1 billion. This included the purchase of publicly-quoted Swiss builders merchantGetaz Romang, completed in May, in addition to CRH's first acquisitions in Chinaand Turkey. In February, CRH completed the acquisition of a modern 650,000tonne cement plant in Heilongjiang province in northeast China while April sawthe purchase of 50% of Denizli Cement, an integrated cement and readymixedconcrete business with a modern 1.8 million tonne cement plant and extensivelimestone reserves operating in the Aegean region of south-western Turkey. Inaddition, the Group completed more than 30 other transactions across its variousproduct segments. SEGMENT REVIEW EUROPE - MATERIALS Analysis of change ___________________________________________________ Total Acquisitionseuro million 2007 2006 Change Organic 2006 2007 ExchangeSales revenue 1,686 1,334 +352 +307 +21 +27 -3% change +26% +22% +2% +2% -Operating profit* 222 152 +70 +59 +5 +6 -% change +46% +39% +3% +4% -Margin 13.2% 11.4%*Operating profit is before profit on disposal of fixed assets With a continuing positive demand and pricing environment in most major marketsand with favourable seasonal weather conditions in the early months, EuropeMaterials has delivered a significant increase in first half operating profitand margin primarily driven by organic growth. Ireland: Lower residential activity in the first half was offset by improvednon-residential construction and accelerating infrastructure investment. Thechanges in sectoral demand compared with 2006 resulted in strong volumeincreases in stone and blacktop, similar cement and readymixed concrete volumesand a decline in concrete block sales. Price increases broadly kept pace withrising input costs while our Northern Ireland contracting activities had aparticularly busy six months. Overall profits were maintained while marginsdeclined reflecting the changing mix of activity. Finland/Baltics: Broad-based strength in Finnish construction activitycontributed to double-digit percentage advances in cement, aggregates andreadymixed concrete volumes. This combined with positive price developmentresulted in a very good uplift in operating profit in Finland. Our operations inEstonia, Latvia and St. Petersburg also benefited from strong demand and allreported improvements in operating performance. Central/Eastern Europe: Construction demand in Poland was exceptionally strongdriven mainly by the industrial and commercial sectors. All our activitiesbenefited from this positive backdrop most particularly our cement operations.First half volumes increased by approximately 40% having benefited fromexceptionally good weather. The market in Ukraine also enjoyed strong growth andour cement volumes increased by just over 20%. Significant savings were achievedfrom the new coal mill which has reduced dependence on high-priced natural gas.Operating profit from this region showed a very substantial increase. Switzerland: First half cement volumes showed a good advance compared with2006, helped by demand from a number of large projects. Our downstreamaggregates and readymixed concrete activities also experienced good activitylevels in the residential and non-residential sectors and overall operatingprofit was well ahead of the previous year's levels. Iberia: Although readymixed concrete volumes were slightly lower than in thefirst half of 2006, our Spanish readymixed concrete and concrete productsoperations delivered improvements in both operating profit and margin throughgood recovery of higher input costs which adversely impacted margins in 2006.Results from Spanish cement producer Corporacion Uniland, in which CRH has a26.3% stake, are included in share of associates' profit after tax; no interimprofits were recognised from Uniland in 2006. Our Secil joint ventureexperienced further reductions in Portuguese construction activity. However,strong cement exports, good demand in its Tunisian operations and benefits fromSecil's increased shareholding in Lebanese cement producer Ciment de Siblineresulted in operating profit levels being maintained. Eastern Mediterranean: In April CRH acquired a 50% stake in Denizli Cement, aleading cement and readymixed concrete producer in the Aegean region ofsouth-western Turkey. Denizli's performance in its first three months with theGroup was well up to expectations. In Israel our 25% associate reported animproved performance despite the continuing very difficult political situationin the region. EUROPE - PRODUCTS Analysis of change ___________________________________________________ Total Acquisitionseuro million 2007 2006 Change Organic 2006 2007 ExchangeSales revenue 1,826 1,486 +340 +122 +185 +28 +5% change +23% +8% +13% +2% -Operating profit* 180 112 +68 +44 +21 +3 -% change +61% +39% +19% +3% -Margin 9.9% 7.5%*Operating profit is before profit on disposal of fixed assets Improving economies and favourable building conditions through the winter monthshave contributed to a marked uplift in operating performance and significantmargin advance for our Europe Products operations. Concrete Products: The group, which accounts for approximately half of EuropeProducts' operating profit, enjoyed a substantial advance in its Architecturaloperations (pavers, tiles and blocks) as well as good growth across itsStructural operations (floor & wall elements, beams, vaults and drainageproducts). Architectural operations benefited from a strong pick-up inprofitability in concrete paving and landscape walling activities in Germanywhere a lower cost structure and a more favourable product mix coupled withprice improvements contributed to a strong uplift in margins. Our UK operationswere boosted by the inclusion of six months trading for Supreme Concrete whichwas acquired in April 2006. Architectural activities in France, Denmark andSlovakia all improved while trading in the Benelux was somewhat mixed with gooddemand in landscaping products offset by slower order drawdown in othersegments. Structural operations also experienced some delays in order off-takein the Netherlands; however, this was more than compensated by improvements inunderlying operations in Belgium and Denmark. The Structural out-turn wasenhanced by good contributions from acquisitions in Belgium, France, Denmark andPoland. Overall first half profitability in Concrete Products advancedstrongly. Clay Products: First half operating profit was substantially ahead of last yearreflecting in particular the absence of the extensive production shut-downswhich affected performance in our UK and German activities in early 2006. Inthe UK, Ibstock brick volumes were lower than in 2006 impacted by a tough firstquarter and considerable disruption to deliveries as a result of the very heavyrainfall in the second half of June. However, with a better cost profile and thebenefit of full production runs, profits recovered strongly. Exceptionallystrong construction demand in Poland contributed to volume and priceimprovements and our clay operations delivered a very significant uplift inprofitability. The Netherlands had a satisfactory first half with strength inclay paver demand offset by some softness in clay brick shipments. Our clayoperations in Germany turned in an improved performance helped by the mildwinter and increased exports to the Polish market. Building Products: The Building Products Group comprises three broad productsegments: Construction Accessories, Insulation and the Building Envelopebusinesses which comprise Fencing & Security (F&S), Daylight & Ventilation (D&V)and Roller Shutters & Awnings (RSA). The Construction Accessories business,enlarged through the acquisition of Halfen in May 2006, outperformed with veryfavourable trading as a result of good demand across this mainly non-residentialoriented business. Our Insulation business has continued its strong recoverydelivering further improvements particularly in its Dutch and German activities,which had declined significantly in 2005, and in its Polish operations whichenjoyed very strong growth. In improving markets our F&S and D&V operationsdelivered good organic growth in both sales and operating profit while our RSAbusiness, acquired in August 2006, continued to perform well. EUROPE - DISTRIBUTION Analysis of change ___________________________________________________ Total Acquisitionseuro million 2007 2006 Change Organic 2006 2007 ExchangeSales revenue 1,559 1,319 +240 +83 +25 +140 -8% change +18% +6% +2% +11% -1%Operating profit* 93 66 +27 +17 +1 +9 -% change +41% +26% +1% +14% -Margin 6.0% 5.0%*Operating profit is before profit on disposal of fixed assets The first half of 2007 has seen a much improved performance across the EuropeDistribution business segment. Builders Merchants: Our Builders Merchanting activities recorded overall organicsales growth of approximately 5%. Operations in the Netherlands performedparticularly well and good underlying progress was also achieved in our variousFrench and German businesses. Sales in our Austrian activities showed someimprovement but margins still lag our original expectations. First halfacquisitions in the Netherlands, France and Germany contributed positively tothe overall Builders Merchants result. Swiss operations benefited from organicgrowth in the German-speaking eastern half of the country and a strong initialcontribution from Getaz Romang, the former publicly-quoted leader inFrench-speaking western Switzerland, which was acquired in May. DIY: Following moderate growth in 2006, underlying sales in Benelux DIYoperations increased by over 8% and underlying operating profit advancedstrongly. Bauking's DIY activities in Germany performed well and benefited fromthe February acquisition of Mobau whose turnover is split approximatelyone-third DIY/two-thirds Builders Merchanting. Costs associated with the openingof four new stores by our Portuguese joint venture resulted in similar operatingprofit. This business now operates from 26 locations throughout Portugal. Overall, results from Europe Distribution were well up on the 2006 outcome withgood margin progress in both Builders Merchanting and DIY activities. AMERICAS - MATERIALS Analysis of change ___________________________________________________ Total Acquisitionseuro million 2007 2006 Change Organic 2006 2007 ExchangeSales revenue 2,181 1,393 +788 +93 +791 +8 -104% change +57% +7% +57% - -7%Operating profit* 66 35 +31 +2 +31 +1 -3% change +89% +6% +89% +3% -9%Margin 3.0% 2.5%*Operating profit is before profit on disposal of fixed assets The severe weather conditions in many of Americas Materials' markets in thefirst four months of 2007 contrasted with the mild weather which facilitatedearly 2006 private sector construction activity. Our heritage companies sawaggregates volumes decline by 7% with readymixed concrete volumes down 12% andasphalt volumes 16% lower. Despite the tough volume backdrop, overall pricesincreased 6% for aggregates, 9% for readymixed concrete and 17% for asphalt, theproduct most impacted by input cost increases. The advances in pricing andcontinuing benefits from cost reduction efforts maintained underlying operatingprofit and this was augmented by a strong initial first half contribution fromAPAC, which was acquired at end-August 2006. New England: First half activity levels were hampered by poor early weather andby a low level of highway construction in Massachusetts and Rhode Island.However, a more favourable backdrop in Connecticut combined with good price andcost management helped contain the decline in operating profit in this region. New York/New Jersey: These operations were also impacted by weather conditionsand by slower demand in commercial and residential markets in Upstate New York.However, our businesses in the greater New York Metro region were less affectedand, with improved margins, first half operating profit was broadly in line withthe 2006 outcome. Central: Good markets in Pennsylvania combined with effective cost managementhelped to more than compensate for a mixed demand backdrop across Ohio andMichigan contributing to an improvement in operating profit compared with 2006. West: This region has continued to benefit from generally strong demand withincreased commercial and public construction only partly offset by declininghome building activity. Markets in Utah, Idaho, Oregon and Washington wereparticularly busy. The main exception to this positive picture was Iowa whereweaker residential activity and the lack of major highway projects has impacteddemand. Overall, the region recorded a strong increase in operating profit. APAC: Despite exceptionally poor weather conditions in the mid-western statesof Kansas, Oklahoma and Missouri, first half trading at APAC was ahead of ourexpectations buoyed by strong performances in Florida, Kentucky and WestVirginia. Excellent progress was achieved on the ongoing realisation ofsynergies and implementation of pricing initiatives across APAC's operations. AMERICAS - PRODUCTS Analysis of change ___________________________________________________ Total Acquisitionseuro million 2007 2006 Change Organic 2006 2007 ExchangeSales revenue 1,796 1,813 -17 -109 +222 +6 -136% change -1% -6% +12% - -7%Operating profit* 180 202 -22 -7 - - -15% change -11% -3% - - -8%Margin 10.0% 11.1%*Operating profit is before profit on disposal of fixed assets The first six months of 2007 have been much more challenging than the first halfof 2006 with the significant decline in residential markets since mid-2006 andpoor early weather leading to tough comparatives. However, despite thisdifficult backdrop, continuing growth in non-residential construction andeffective cost reduction measures across these operations delivered first halfoperating profit only slightly lower in US$ terms than in the first half of2006. Architectural Products Group (APG): The impact of the downturn in US residentialconstruction was most evident in APG's masonry markets where declining demandmore than offset continuing strength in commercial activity. The adverse impacton masonry operations was partly mitigated by much improved profits from baggedsoil and mulch activities as a result of management action following adisappointing performance in first half 2006. Despite a sharp volume declinethe Glen-Gery clay brick operation reported improved operating profit helped bylower energy input costs. Overall, the decline in operating profit wascontained as a result of APG's strength in non-residential business segments andstrong action to reduce costs across its residential-oriented activities. Precast: This group, which is a leading manufacturer of precast, pre-stressedand polymer concrete and concrete pipe, continued to benefit from the ongoingadvance in non-residential construction. Strength in western and centralmarkets more than offset softness in north-eastern and south-eastern regions andoperating profit was ahead of 2006. Glass: With operations in the US and Canada, the Glass group is the largestsupplier of high-performance glazing products and services in North America.Despite increased competition arising from the decline in demand from theresidential sector, the group's strong non-residential service-oriented focusenabled it to maintain underlying sales while delivering a modest improvement inunderlying operating profit. MMI: MMI, acquired at end-April 2006, is a leading manufacturer and distributorof mainly non-residential oriented building products in three distinct productsegments: construction accessories, wire products and fencing products. Thedownturn in new housing particularly impacted MMI's residential-oriented fencingactivities and overall operating profit for the first six months of 2007 wasvery disappointing. South America: Operating profit for our businesses in Argentina and Chile wasunchanged despite the impact of sharply higher energy costs in our Argentineclay products operation. AMERICAS - DISTRIBUTION Analysis of change ___________________________________________________ Total Acquisitionseuro million 2007 2006 Change Organic 2006 2007 ExchangeSales revenue 650 683 -33 -107 +122 +3 -51% change -5% -16% +18% - -7%Operating profit* 30 46 -16 -24 +11 - -3% change -35% -52% +24% - -7%Margin 4.6% 6.8%*Operating profit is before profit on disposal of fixed assets Americas Distribution comprises two divisions which supply specialist contractorgroups; Roofing/Siding which accounts for approximately two-thirds of annualisedsales and Interior Products (wallboard, steel studs and acoustical ceilingsystems) which represents approximately one-third of sales. Roofing/Siding: Underlying sales declined from the record level achieved in 2006reflecting the downturn in residential construction, both new and remodel, harshwinter weather in the northeast and the absence of extensive first half 2006repair activity in Florida following active hurricane seasons in both 2004 and2005. Heritage sales in this business fell by 16% - with sales in Florida backto first half 2004 levels - and the operating profit margin declined. Interior Products: This business had the benefit of a strong first halfcontribution from 2006 acquisitions. Although underlying sales declined by 19%,impacted by the residential downturn and by significant price deflation ingypsum wallboard, the operating profit margin was only slightly lower due togood cost containment and an excellent performance in the Hawaiian operations. As expected, first half Americas Distribution operating profit and margin weredown on a record 2006 with strong acquisition contributions outweighed by anorganic operating profit decline, approximately 40% of which was attributable toFlorida operations. While the overall margin at 4.6% was lower than first half2006 (6.8%) and first half 2005 (5.6%), which were boosted by extensivepost-hurricane roofing/siding repair work in Florida, it was still ahead of the4.0% reported for the first half of 2004. FINANCE Higher short term interest rates and the substantial development activitycompleted over the past eighteen months resulted in an increase in net financecosts from euro 113 million in the first half of 2006 to euro 150 million in2007. As in prior years, the interim taxation charge is an estimate based on thecurrent expected full year tax rate. Net debt increased by just under euro 1 billion during the period despite atotal spend of euro 1.5 billion on acquisitions, investments and capitalprojects, and amounted to euro 5,450 million at the end of June 2007. EBITDA/net interest cover remains high at over 9 times for the twelve months toJune 2007, well above the Group's comfort level of approximately 6 times. CRH iscommitted to optimising the use of the Group's balance sheet while maintainingan investment grade credit rating. As part of its overall financing strategy CRH has established a Euro Medium TermNote (EMTN) programme which provides the ability to issue bonds in the euro andSterling markets when conditions in debt capital markets are favourable. OUTLOOK The overall outlook for Europe Materials remains very positive with furtherstrong progress expected in the second half. In Ireland good activity levels innon-residential and infrastructure continue to compensate for the decline inresidential construction. While the pace of advance in Finland and the Balticstates is likely to moderate we nevertheless expect good improvement in thesecond half. Poland and Ukraine remain very busy and we anticipate furtherstrong profit growth in both countries over the coming months. Our Swissoperations continue to benefit from broad-based construction activity. In Spainwe look to further profit improvement in the second half. The Portuguese marketremains difficult but Secil continues to take advantage of export opportunitiesand good growth in its operations in North Africa and Lebanon. Our recentTurkish joint venture is expected to deliver positively over the remainingmonths of 2007. In Europe Products, favourable weather conditions over the winter period andstrong markets provided a strong impetus to first half organic growth. We expectcontinued growth, but at a more moderate pace, in the second half of the year.The Concrete group benefited in particular from the good weather in the earlymonths of the year, and further progress is expected in the second half. TheClay group continues to perform well and our Building Products activities lookto a good second half performance. Comparisons for the second half will benefitfrom the absence of 2006's euro 31 million net charge in respect ofnon-recurring items. The first half of 2007 has seen further very satisfactory organic growth fromour Europe Distribution operations. We expect to deliver continued organicprogress in the second half together with a strong contribution from first halfacquisitions, in particular from Getaz Romang in Switzerland. Second halftrading comparisons in Europe Distribution will of course be affected by theabsence of 2006's euro 19 million non-recurring credit to operating profit. Overall for Europe, with first half organic operating profit growth alreadyahead of that achieved for the full year in 2006, we look to further progress inthe second half of this year augmented by good contributions from acquisitions. Americas Materials continues to benefit from good price improvements and ongoingcost reduction measures across its operations and we look to a strong organicoperating profit improvement in the second half of the year. This, combined withfurther benefits from the inclusion of APAC, acquired at end-August 2006, andthe absence of last year's APAC integration costs, is expected to lead to asignificant full year US$ profit increase for this Division. Our Americas Products operations have delivered a resilient performance throughthe first half of 2007 with growth in non-residential construction and profitimprovement measures broadly offsetting the impact of the sharp decline inresidential construction. While the recent disruption in financial markets hascontributed to added uncertainty, we anticipate that, with the broad product andend-use balance of our businesses, full year profits in US$ terms will besimilar to 2006 levels. After a difficult first half we expect that like-for-like trading comparisons inAmericas Distribution will improve somewhat over the balance of the year. Withacquisition contributions offsetting an organic decline, full year turnover inUS$ terms should be similar to 2006 with an operating profit margin in the range5% to 5.5% compared with a record 7.1% last year. Overall for the Americas we expect that continuing growth in non-residentialconstruction and a broadly favourable backdrop for infrastructure will offsetthe impact of lower residential activity, leading to similar full yearunderlying operating profit in US$. This will be augmented by positiveacquisition contributions. Notwithstanding the translation impact of a weaker USDollar, we expect higher full year profits for the Americas in euro terms. CRH's geographic, sectoral and product balance continues to deliver in 2007 bothin terms of overall trading performance and development activity. With anongoing focus on price and cost effectiveness driving organic performance,benefits from the record 2006 acquisition spend and a sustained developmentemphasis, we expect strong full year profit growth. GROUP INCOME STATEMENT Year ended 31st Six months ended 30th June December 2007 2006 2006 Unaudited Unaudited Audited euro m euro m euro mRevenue 9,698 8,028 18,737Cost of sales (6,868) (5,612) (13,123)Gross profit 2,830 2,416 5,614Operating costs (2,059) (1,803) (3,847)Group operating profit 771 613 1,767Profit on disposal of fixed assets 22 17 40Profit before finance costs 793 630 1,807Finance costs (229) (186) (407)Finance revenue 79 73 155Group share of associates' profit after tax 27 9 47Profit before tax 670 526 1,602Income tax expense (estimated at interim) (164) (123) (378)Group profit for the financial period 506 403 1,224 Profit attributable to:Equity holders of the Company 504 396 1,210Minority interest 2 7 14Group profit for the financial period 506 403 1,224 Earnings per Ordinary ShareBasic 92.8c 73.7c 224.3cDiluted 92.0c 73.0c 222.4c Cash earnings per Ordinary Share 160.9c 131.7c 352.1c GROUP BALANCE SHEET As at 30th As at 30th As at 31st June 2007 June 2006 December 2006 Unaudited Unaudited Audited euro m euro m euro mASSETSNon-current assetsProperty, plant and equipment 7,974 6,950 7,480Intangible assets 3,284 2,515 2,966Investments in associates/other financial assets 646 628 651Derivative financial instruments 41 59 74Deferred income tax assets 484 415 489Total non-current assets 12,429 10,567 11,660Current assetsInventories 2,368 2,114 2,036Trade and other receivables 3,930 3,176 3,172Derivative financial instruments 7 12 5Liquid investments 328 435 370Cash and cash equivalents 741 665 1,102Total current assets 7,374 6,402 6,685Total assets 19,803 16,969 18,345EQUITY Capital and reserves attributable to the Company's equity holdersEquity share capital 186 184 184Preference share capital 1 1 1Share premium account 2,394 2,276 2,318Treasury shares (22) (15) (14)Other reserves 60 43 52Foreign currency translation reserve (218) (14) (137)Retained income 5,103 3,898 4,659 7,504 6,373 7,063Minority interest 62 39 41Total equity 7,566 6,412 7,104LIABILITIESNon-current liabilitiesInterest-bearing loans and borrowings 5,545 4,219 5,313Derivative financial instruments 90 76 47Deferred income tax liabilities 1,401 1,155 1,301Trade and other payables 140 180 160Retirement benefit obligations 47 316 262Provisions for liabilities 328 226 320Capital grants 10 11 10Total non-current liabilities 7,561 6,183 7,413Current liabilitiesTrade and other payables 3,323 2,670 2,788Current income tax liabilities 283 309 216Interest-bearing loans and borrowings 896 1,248 645Derivative financial instruments 36 23 38Provisions for liabilities 138 124 141Total current liabilities 4,676 4,374 3,828Total liabilities 12,237 10,557 11,241Total equity and liabilities 19,803 16,969 18,345 GROUP CASH FLOW STATEMENT Year ended Six months ended 30th June 31st December 2007 2006 2006 Unaudited Unaudited Audited euro m euro m euro mCash flows from operating activitiesProfit before tax 670 526 1,602Finance costs, net 150 113 252Group share of associates' profit after tax (27) (9) (47)Profit on disposal of fixed assets (22) (17) (40)Group operating profit 771 613 1,767Depreciation charge 354 300 664Share-based payments expense 10 6 16Amortisation of intangible assets 16 12 25Net movement on provisions (7) 9 11Increase in working capital (330) (502) (132)Amortisation of capital grants (1) (1) (2)Other non-cash movements 7 7 10Cash generated from operations 820 444 2,359Interest paid (including finance leases) (170) (110) (253)Irish corporation tax paid - (3) (20)Overseas corporation tax paid (103) (58) (358)Net cash inflow from operating activities 547 273 1,728Cash flows from investing activitiesInflowsProceeds from disposal of fixed assets 62 60 252Interest received 28 16 46Dividends received from associates 13 8 22 103 84 320OutflowsPurchase of property, plant and equipment (520) (434) (832)Acquisition of subsidiaries and joint ventures (795) (614) (1,978)Investments in and advances to associates (1) (4) (7)Advances to JVs and purchase of trade investments (1) (5) (13)Deferred/contingent acquisition consideration paid (87) (59) (74) (1,404) (1,116) (2,904)Net cash outflow from investing activities (1,301) (1,032) (2,584)Cash flows from financing activitiesInflowsProceeds from issue of shares 20 56 87Shares issued to minority interests - - 3Increase in interest-bearing loans and borrowings 1,025 1,016 1,708Increase in finance lease liabilities - - 3 1,045 1,072 1,801OutflowsOrdinary Shares purchased by Employee Benefit Trust, net (31) (15) (15)Decrease/(increase) in liquid investments 36 (102) (35)Repayment of interest-bearing loans and borrowings (464) (622) (656)Repayment of finance lease liabilities (13) (1) (13)Net cash movement in derivative financial instruments (24) 103 (29)Dividends paid to equity holders of the Company (150) (135) (197)Dividends paid to minority interests (2) (6) (12) (648) (778) (957)Net cash inflow from financing activities 397 294 844Change in cash and cash equivalents (357) (465) (12)Cash and cash equivalents at beginning of period 1,102 1,149 1,149Translation adjustment (4) (19) (35)Cash and cash equivalents at end of period 741 665 1,102 GROUP STATEMENT OF RECOGNISED INCOME AND EXPENSE Year ended Six months ended 30th June 31st December 2007 2006 2006 Unaudited Unaudited Audited euro m euro m euro mItems of income/(expense) recognised directly within equity:Currency translation effects (81) (248) (371)Group defined benefit pension obligations: - Actuarial gain 225 142 155 - Movement in deferred tax asset (55) (31) (42)Movement in deferred tax asset on employee share schemes (3) 4 27Gains/(losses) relating to cash flow hedges 2 3 (2)Net income/(expense) recognised directly within equity 88 (130) (233)Group profit for the financial period 506 403 1,224Total recognised income and expense for the period 594 273 991 Equity holders of the company 593 268 980Minority interest 1 5 11Total recognised income and expense for the period 594 273 991 GROUP STATEMENT OF CHANGES IN EQUITY Year ended Six months ended 30th June 31st December 2007 2006 2006 Unaudited Unaudited Audited euro m euro m euro mTotal equity at beginning of period 7,104 6,234 6,234Issue of shares: - Share option and participation schemes 20 56 87 - Issued in lieu of dividends 58 14 25Ordinary Shares purchased by Employee Benefit Trust, net (31) (15) (15)Share-based payment expense 10 6 16Dividends (208) (149) (222)Movement in minority interest 21 - 2Items of income/(expense) recognised directly within equity:Currency translation effects (81) (248) (371)Group defined benefit pension obligations 170 111 113Movement in deferred tax asset on employee share schemes (3) 4 27Cash flow hedges 2 3 (2)Profit for the year attributable to equity holders 504 396 1,210Total equity at end of period 7,566 6,412 7,104 SUPPLEMENTARY INFORMATION 1 Basis of Preparation The financial information presented in this report has been prepared inaccordance with the Group's accounting policies under International FinancialReporting Standards as adopted by the EU (IFRS). The transition date forimplementation of IFRS by the Group was 1st January 2004. The Group's accounting policies under IFRS are based on the InternationalFinancial Reporting Standards and Interpretations issued by the InternationalAccounting Standards Board (IASB) and on International Accounting Standards(IAS) and Standing Interpretations Committee Interpretations approved by thepredecessor International Accounting Standards Committee that have beensubsequently authorised by the IASB and remain in effect. 2 Translation of Foreign Currencies This financial information is presented in euro. Results and cash flows ofsubsidiaries, joint ventures and associates based in non-euro countries havebeen translated into euro at average exchange rates for the period, and therelated balance sheets have been translated at the rates of exchange ruling atthe balance sheet date. Adjustments arising on translation of the results ofnon-euro subsidiaries, joint ventures and associates at average rates, and onrestatement of the opening net assets at closing rates, are dealt with in aseparate translation reserve within equity, net of differences on relatedcurrency borrowings. All other translation differences are taken to the incomestatement. Rates used for translation of results and balance sheets into eurowere as follows: Average Period ended Six months ended Year ended 30th June 31st December 30th June 31st Decembereuro 1 = 2007 2006 2006 2007 2006 2006US Dollar 1.3291 1.2296 1.2556 1.3505 1.2713 1.3170Pound Sterling 0.6746 0.6870 0.6817 0.6740 0.6921 0.6715Polish Zloty 3.8441 3.8901 3.8959 3.7677 4.0546 3.8310Swiss Franc 1.6318 1.5610 1.5729 1.6553 1.5672 1.6069Canadian Dollar 1.5078 1.3999 1.4237 1.4245 1.4132 1.5281Argentine Peso 4.1078 3.7733 3.8623 4.1834 3.9432 4.0373Israeli Shekel 5.5198 5.6429 5.5928 5.7574 5.6936 5.5623 3 Key Components of Performance for the First Half of 2007 Analysis of Change _______________________________________ Total Acquisitionseuro million 2007 2006 Change Organic 2006 2007 ExchangeRevenue 9,698 8,028 +1,670 +389 +1,366 +212 -297Operating Profit 771 613 +158 +91 +69 +19 -21Profit on disposals 22 17 +5 +5 - - -Trading Profit 793 630 +163 +96 +69 +19 -21Finance Costs -150 -113 -37 +14 -49 -7 +5Associates 27 9 +18 +5 +13* - -Profit before tax 670 526 +144 +115 +33 +12 -16PBT % change v. 2006 +27% +22% +6% +2% -3% * In its reported Interim results for 2006, CRH did not record any share of PATin respect of its 26% investment in Uniland (acquired in December 2005). 4 Analysis of Revenue, EBITDA and Operating Profit by Business Six months ended 30th June - Unaudited Year ended 31st December 2006 2007 2006 Audited euro m % euro m % euro m %RevenueEurope Materials 1,686 17.4 1,334 16.6 2,967 15.8Europe Products 1,826 18.8 1,486 18.5 3,186 17.0Europe Distribution 1,559 16.1 1,319 16.4 2,786 14.9Americas Materials 2,181 22.5 1,393 17.4 4,778 25.5Americas Products 1,796 18.5 1,813 22.6 3,572 19.1Americas Distribution 650 6.7 683 8.5 1,448 7.7 9,698 100 8,028 100 18,737 100EBITDA *Europe Materials 298 26.1 219 23.7 564 23.0Europe Products ** 255 22.3 179 19.4 361 14.7Europe Distribution ** 114 10.0 84 9.1 210 8.5Americas Materials 192 16.9 127 13.7 695 28.3Americas Products 242 21.2 262 28.3 506 20.6Americas Distribution 40 3.5 54 5.8 120 4.9 1,141 100 925 100 2,456 100Depreciation chargeEurope Materials 76 67 143Europe Products 70 64 134Europe Distribution 20 18 37Americas Materials 126 92 220Americas Products 55 53 116Americas Distribution 7 6 14 354 300 664Amortisation of intangible assetsEurope Materials - - -Europe Products 5 3 6Europe Distribution 1 - 1Americas Materials - - -Americas Products 7 7 15Americas Distribution 3 2 3 16 12 25Operating profit*Europe Materials 222 28.8 152 24.8 421 23.8Europe Products ** 180 23.3 112 18.3 221 12.5Europe Distribution ** 93 12.1 66 10.8 172 9.7Americas Materials 66 8.6 35 5.6 475 26.9Americas Products 180 23.3 202 32.9 375 21.2Americas Distribution 30 3.9 46 7.6 103 5.9 771 100 613 100 1,767 100Profit on disposal of fixed assetsEurope Materials 12 9 28Europe Products 2 - 2Europe Distribution - 2 4Americas Materials 7 5 2Americas Products - 1 3Americas Distribution 1 - 1 22 17 40 * Both EBITDA and Operating profit exclude profit on disposal of fixedassets. ** Full-year 2006 segment results for Europe Products include a goodwillimpairment loss of euro 50 million relating to the Cementbouw bv joint venturein the Netherlands, and euro 18.9 million of the total gain of euro 37.7 millionwhich arose in 2006 on deconsolidation of certain pension schemes in theNetherlands. The remaining euro 18.8 million of the gain was included in thesegment profit for Europe Distribution. 5 Geographical Analysis of Revenue, EBITDA and Operating Profit Six months ended 30th June - Unaudited Year ended 31st December 2006 2007 2006 Audited euro m % euro m % euro m %RevenueIreland* 695 7.2 571 7.1 1,251 6.7Benelux 1,444 14.9 1,269 15.8 2,628 14.0Rest of Europe 2,933 30.2 2,293 28.6 5,058 27.0Americas 4,626 47.7 3,895 48.5 9,800 52.3 9,698 100 8,028 100 18,737 100EBITDA**Ireland* 97 8.5 94 10.2 209 8.5Benelux*** 177 15.5 150 16.2 301 12.3Rest of Europe 393 34.4 238 25.7 624 25.4Americas 474 41.6 443 47.9 1,322 53.8 1,141 100 925 100 2,456 100Depreciation chargeIreland* 24 22 52Benelux 40 39 81Rest of Europe 102 88 181Americas 188 151 350 354 300 664Amortisation of intangible assetsIreland* - - -Benelux 1 1 2Rest of Europe 5 2 5Americas 10 9 18 16 12 25Operating profit**Ireland* 73 9.5 72 11.7 157 8.9Benelux*** 136 17.6 110 18.0 218 12.3Rest of Europe 286 37.1 148 24.1 438 24.8Americas 276 35.8 283 46.2 954 54.0 771 100 613 100 1,767 100Profit on disposal of fixed assetsIreland* 11 7 23Benelux 3 - 3Rest of Europe - 4 8Americas 8 6 6 22 17 40 * Total island of Ireland. ** EBITDA and Operating profit exclude profit on disposal of fixedassets. *** Full-year 2006 segment results for Benelux include a goodwillimpairment loss of euro 50 million relating to the Cementbouw bv joint venturein the Netherlands, and a gain of euro 37.7 million which arose in 2006 ondeconsolidation of certain pension schemes in the Netherlands. 6 Proportionate Consolidation of Joint Ventures Year ended Six months ended 30th June 31st December 2007 2006 2006 Unaudited Unaudited Audited euro m euro m euro mRevenue 493 424 901Cost of sales (340) (290) (628)Gross profit 153 134 273Operating costs (106) (96) (180)Impairment of Cementbouw bv goodwill - - (50)Operating profit 47 38 43Profit on disposal of fixed assets - 2 4Profit before finance costs 47 40 47Finance costs (net) (9) (7) (16)Profit before tax 38 33 31Income tax expense (11) (9) (18)Group profit for the financial period 27 24 13Depreciation 22 19 37 7 Earnings per Ordinary Share The computation of basic, diluted and cash earnings per share is set outbelow: Year ended Six months ended 30th June 31st December 2007 2006 2006 Unaudited Unaudited Audited euro m euro m euro mProfit attributable to equity holders of the Company 504 396 1,210Preference dividends paid - - -Numerator for basic and diluted earnings per Share 504 396 1,210Amortisation of intangibles 16 12 25Depreciation charge 354 300 664Numerator for cash earnings per Ordinary Share 874 708 1,899 Number of Number of Number ofDenominator for basic earnings per Ordinary Share Shares Shares SharesWeighted average number of shares (millions) in issue 543.2 538.2 539.4Effect of dilutive potential shares (share options) 4.6 5.1 4.7Denominator for diluted earnings per Ordinary Share 547.8 543.3 544.1 Earnings per Ordinary Share euro cent euro cent euro cent - basic 92.8c 73.7c 224.3 - diluted 92.0c 73.0c 222.4Cash earnings per Ordinary Share (i) 160.9c 131.7c 352.1 (i) Cash earnings per share, a non-GAAP financial measure, is presented herefor information as management believes it is a useful financial indicator of acompany's ability to generate cash from operations. 8 Net Debt and Finance Costs As at 31st As at 30th June - Unaudited December 2006 2007 2006 AuditedNet debt euro m euro m euro mNon-current assets Derivative financial instruments 41 59 74Current assets Derivative financial instruments 7 12 5 Liquid investments 328 435 370 Cash and cash equivalents 741 665 1,102 Non-current liabilities Interest-bearing loans and borrowings (5,545) (4,219) (5,313) Derivative financial (90) (76) (47) instrumentsCurrent liabilities Interest-bearing loans and (896) (1,248) (645) borrowings Derivative financial instruments (36) (23) (38) Total net debt (5,450) (4,395) (4,492)Including Group share of joint ventures' net debt (276) (249) (248) Finance costs (net)Net Group finance costs on interest-bearing cash and cashequivalents, loans and borrowings 144 100 234Net pensions financing credit (8) (5) (12)Charge to unwind discount on provisions/deferred consideration 16 12 27Net (credit)/charge re change in fair value of derivatives (2) 6 3Total net finance costs 150 113 252Including Group share of joint ventures' net finance costs 9 7 16 9 Summarised Cash Flow Six months ended Year ended 30th June - Unaudited 31st December 2006 2007 2006 AuditedInflows euro m euro m euro mProfit before tax 670 526 1,602Depreciation 354 300 664Amortisation of intangibles 16 12 25Proceeds from disposal of fixed assets 62 60 252Share issues 78 70 112 1,180 968 2,655OutflowsWorking capital movements 329 474 75Capital expenditure 520 434 832Acquisitions and investments 983 901 2,311Dividends 208 149 222Ordinary Shares purchased, net 31 15 15Tax paid 103 61 378Other 21 18 54 2,195 2,052 3,887Net outflow (1,015) (1,084) (1,232)Translation adjustment 57 137 188Increase in net debt (958) (947) (1,044) 10 Other Six months ended Year ended 30th June - Unaudited 31st December 2007 2006 2006 AuditedEBITDA* interest cover (times) - six months to 30th June 7.6x 8.2x n/a - rolling 12 months 9.2x 11.2x 9.7xEBIT** interest cover (times) - six months to 30th June 5.1x 5.4x n/a - rolling 12 months 6.7x 8.0x 7.0x Average shares in issue 543.2m 538.2m 539.4mNet dividend paid per share (euro cent) 38.50c 27.75c 41.25cNet dividend declared for the period (euro cent) 20.0c 13.5c 52.0cDividend cover (Earnings per share/Dividend declared per share) 4.6x 5.5x 4.3xDepreciation charge - subsidiaries (euro m) 332 281 627Depreciation charge - share of joint ventures (euro m) 22 19 37Amortisation of intangibles - subsidiaries (euro m) 16 12 25Amortisation of intangibles - share of joint ventures (euro m) - - -Share-based payment expense (euro m) 10 6 16Market capitalisation at period-end (euro m) 20,003 13,743 17,120Total equity at period-end (euro m) 7,566 6,412 7,104Net debt (euro m) 5,450 4,395 4,492Net debt as a percentage of total equity 72% 69% 63%Net debt as a percentage of market capitalisation 27% 32% 26% * EBITDA = earnings before interest, tax, depreciation and amortisation,excluding profits on disposal ** EBIT = earnings before interest and tax, excluding profits on disposal 11 Statutory Accounts The financial information presented in this interim report does not representfull statutory accounts. Full statutory accounts for the year ended 31stDecember 2006 prepared in accordance with IFRS, upon which the Auditors havegiven an unqualified audit report, have been filed with the Registrar ofCompanies. 12 Board Approval This announcement was approved by the Board of Directors of CRH plc on 27thAugust 2007. 13 Distribution of Interim Report This interim report is available on the Group's website (http://www.crh.com/).A printed copy will be posted to shareholders on Thursday 30th August 2007 andwill be available to the public from that date at the Company's registeredoffice. Details of the Scrip Dividend Offer in respect of the interim 2007dividend will be posted to shareholders on Thursday 20th September 2007. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
CRH