CRH(US:CRH)2022-03-03 15:04Financial Data and Key Metrics Changes - CRH reported a robust performance with sales up by 12% and profits up by 16% in 2021, with a focus on margin improvement and cash generation [10][8][7] - The company converted 80% of its EBITDA into cash, resulting in a strong balance sheet with net debt at $6.3 billion, or 1.2 times net debt-to-EBITDA [33][31] - A proposed dividend of $0.121 was announced, marking a 5% increase from the previous year [9] Business Line Data and Key Metrics Changes - The Americas Materials business saw sales and EBITDA growth in 2021, with strong backlogs continuing into 2022 [18] - The Building Products division also performed well, achieving profit and margin growth for the ninth consecutive year, driven by the integrated solution strategy [22] - The Europe Materials division reported sales and EBITDA ahead of both 2020 and 2019, indicating recovery and growth post-COVID [28] Market Data and Key Metrics Changes - North America accounts for about 70% of CRH's group EBITDA, with a strong focus on infrastructure and residential markets [12][15] - In Europe, resilient demand was noted in key markets such as France, Germany, the UK, and Ireland, with strong residential spending [23][28] - Central and Eastern European markets, particularly Poland and Romania, benefited from EU stimulus packages, driving demand for residential construction [25] Company Strategy and Development Direction - CRH is focused on repositioning its business to adapt to changing construction demands, emphasizing an integrated solutions model that combines products and services [5][58] - The company aims to maintain a disciplined approach to capital allocation, with a strong pipeline for M&A activity in high-growth markets [34][41] - Sustainability and decarbonization are central to CRH's strategy, with a commitment to reducing CO2 emissions by 25% by 2030 [67][69] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating challenges posed by rising energy costs and geopolitical uncertainties, focusing on cost control and cash management [79][88] - The outlook for 2022 is positive, with strong order books and demand, despite anticipated challenges [79] Other Important Information - CRH divested its Oldcastle BuildingEnvelope division for $3.8 billion, allowing for capital redeployment into core competencies [9][38] - The company has a strong commitment to sustainability, being the largest recycler of building waste in the U.S. and aiming for increased use of recycled materials in construction [71][72] Q&A Session Summary Question: Impact of rising energy costs in 2021 and expectations for 2022 - Energy costs were about 9% to 11% of revenue in 2021, with expectations for a rise towards the higher end in 2022 due to ongoing inflation [90][89] Question: Strategic rationale behind the divestment of the Building Envelope business - The divestment was driven by a lack of M&A opportunities in that space and a focus on core competencies in infrastructure and residential markets [86][84] Question: Intentions for redeploying capital from the Building Envelope divestment - The capital will be redeployed into smaller, fragmented businesses that align with CRH's growth strategy, focusing on creating shareholder value [94][95] Question: Details on achieving the 25% reduction in carbon emissions by 2030 - The reduction will focus on process improvements, innovative materials, and transitioning to less carbon-intensive fuels, with ongoing capital expenditure to support these initiatives [92][93]