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Annual Report
and Form 20-F
CRH is the leading building materials business in the world
Our materials, products and integrated building solutions can be found throughout the built
environment in a wide range of construction projects from major public infrastructure to homes
and commercial buildings.
Strategy
Our strategy is to continue
to grow and improve our
business and in doing so to
maximise long‑term value
and deliver superior returns
for our shareholders and
for society.
Values
Our values unite us in the
way we work, every day, all
over the world. We put safety
first, we continuously create
value, we do what we say,
we lead with integrity, we
build enduring relationships
and we operate locally, but
act as one company globally.
Sustainability
Sustainability is a
strategic imperative for
our business. We are
committed to growing
and improving in a way
that creates financial and
non‑financial value for all
stakeholders and that has
a positive impact on the
world around us.
Contents
Overview
Our Business at a Glance
Chairman’s Introduction
Strategy Review
Why Invest in CRH
Chief Executive’s Review
Market Backdrop
Our Strategy
Business Model
Key Performance Indicators
Sustainability
Risk Management
Business Performance
and Segmental Reviews
Finance Director’s Review
Americas Materials
Europe Materials
Building Products
2
4
8
10
12
14
16
18
20
32
38
42
46
50
Governance
Board of Directors
Corporate Governance Report
Directors’ Remuneration Report
Directors’ Report
56
60
80
110
Principal Risks and Uncertainties 116
Financial Statements
Independent Auditors' Reports
124
Consolidated Financial
Statements
Accounting Policies
Notes on Consolidated
Financial Statements
Supplemental 20-F
and Other Disclosures
Shareholder Information
Other Information
Cross Reference to Form 20‑F
Index
140
145
155
216
246
258
269
270
This document constitutes the Annual Report and Financial
Statements in accordance with Irish and UK requirements
and the Annual Report on Form 20‑F in accordance with the
US Securities Exchange Act of 1934, for CRH plc for the year
ended 31 December 2021. A cross reference to Form 20‑F
requirements is included on page 269.
The Directors’ Statements (comprising the Statement of
Directors’ Responsibilities, the Viability Statement and the
Directors’ Compliance Statement on pages 112 to 114), the
Principal Risks and Uncertainties (on pages 116 to 121), the
Independent Auditors' Reports (on pages 124 to 134), the
Parent Company financial statements of CRH plc (on pages
211 to 215) and EU Taxonomy (on page 243) do not form
part of CRH’s Annual Report on Form 20‑F as filed with the
Securities and Exchange Commission (SEC).
Forward-Looking Statements
This document contains forward‑looking statements,
which by their nature involve risk and uncertainty. Please see
Disclaimer/Forward‑Looking Statements on page 111 for more
information about these statements and certain factors that
may cause them to prove inaccurate.
View the Report on our website:
www.crh.com/investors/annual-reports/
This copy of the statutory annual report of CRH plc for the year ended 31 December 2021 is not presented in the ESEF-format as specified in the Regulatory Technical Standards
on ESEF (Delegated Regulation (EU) 2019/815). The ESEF annual report is available at: www.crh.com/investors/annual-reports/
2021 Annual Report and Form 20-F 1
Our 2021 Performance Highlights
SALES
PROFIT AFTER TAX
$31.0 billion
+12%
$2.6 billion
+125%
$27.6bn
$31.0bn
2020
2021
$1.2bn
$2.6bn
2020
2021
EBITDA (AS DEFINED)*
EARNINGS PER SHARE
$5.35 billion
+16%
328.8 cent
+130%
$4.6bn
$5.35bn
2020
2021
142.9c
328.8c
OPERATING PROFIT
DIVIDEND PER SHARE
$3.6 billion
121.0 cent
+58%
$2.3bn
$3.6bn
2020
2021
115.0c
121.0c
2020
2021
2020
2021
+5%
PEOPLE
CLIMATE
22%
females in senior
leadership
6% 1.2
kg CO2/ $ revenue
Greenhouse Gas Emissions Scope 1
and Scope 2 CO2 Emissions
-8%
16%
22%
2020
2021
1.3kg CO2/$
1.2kg CO2/$
2020
2021
CIRCULAR ECONOMY
SUSTAINABLE PRODUCTS
39.5 million tonnes
of alternative fuels and
raw materials recycled
8% $11.5
billion revenue
from products with enhanced
sustainability attributes
17%
36.5mt
39.5mt
2020
2021
$9.8bn
$11.5bn
2020
2021
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals
and the Group’s share of equity accounted investments’ profit after tax.
2
2021 Annual Report and Form 20-F 3
Our business at a glance
We are organised as three operating Divisions of scale comprising
Americas Materials, Europe Materials and Building Products.
Our Three Operating Divisions
Americas Materials
SALES
$12.4 billion
+10% 2020: $11.3 billion
c. 28,300 employees
c. 1,605 operating locations
46 US states, six Canadian provinces
Products & Services
Aggregates • Cement • Paving and Construction
Services • Readymixed Concrete • Asphalt
Europe Materials
SALES
$10.6 billion
+16% 2020: $9.1 billion
c. 25,600 employees
c. 1,120 operating locations
20 Countries
Products & Services
Aggregates • Cement • Lime • Paving and
Construction Services • Infrastructural
Concrete • Readymixed Concrete • Asphalt
Building Products
SALES
$8.0 billion
+11% 2020: $7.2 billion
c. 23,500 employees
c. 510 operating locations
19 Countries
Products & Services
Architectural Products • Building Envelope
Infrastructure Products • Construction
Accessories
Our Integrated Building Solutions Story
Mineral Reserves and Resources
Our mineral reserves and resources are
found in our extensive network of quarry
locations.
Building Materials
We process our mineral reserves to produce
primary building materials including cement, lime,
aggregates, asphalt and readymixed concrete.
40%
GLOBAL
SALES
34%
GLOBAL
SALES
26%
GLOBAL
SALES
Building Products
We also produce and supply a wide range
of products for construction markets globally
including Architectural Products, Building
Envelope Products, Infrastructure Products
and Construction Accessories.
2
2021 Annual Report and Form 20-F 3
The leading building materials business in the world
28
Countries
c. 3,235
Locations
c. 77,400
People
North
America
Europe
Residential Solutions
We then add value to the
building materials and
products, supplying a range
of integrated solutions for
use in homes.
Commercial Solutions
We work with architects, contractors
and building owners to design, engineer,
test and manufacture solutions for the
building envelope including curtain walls,
storefronts and architectural glass.
Utility Solutions
We combine and bundle
building materials and products
to create highly engineered
systems to collect, connect &
protect vital utility infrastructure.
Transport Infrastructure Solutions
We design, manufacture, install, maintain
and recycle end‑to‑end infrastructure
solutions which connect communities
using uniquely integrating materials,
products, solutions and services.
4
2021 Annual Report and Form 20-F 5
Chairman's Introduction1
CRH successfully managed through the challenges of the
ongoing COVID-19 pandemic during 2021, continuing to
leverage our safety-first culture and practices as well as
operating in accordance with pandemic-related guidance and
policies of national and local health agencies. Management
provided comprehensive support for the physical and mental
well-being of our employees during this challenging period.
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on
disposals and the Group’s share of equity accounted investments’ profit after tax.
1. See cautionary statement regarding forward‑looking statements on page 111.
2. Operating cash flow refers to net cash inflow from operating activities as reported in the Consolidated Statement of Cash
Flows on page 144.
3. TSR represents the total accumulated value delivered to shareholders (via gross dividends reinvested and share
appreciation). Details of how non‑GAAP measures are calculated are set out on pages 219 to 223.
A Record Financial Performance
2021 saw a record financial performance for CRH,
attributable to the hard work of our employees, the
consistent execution of our clear, focused strategy,
the resilience and flexibility of the Group’s business
model and ongoing initiatives to enhance and
improve business and operational performance.
These results also reflect the value which customers
place on the depth and breadth of CRH's products
and the expertise with which its skilled employees
provide solutions for customers' needs in a
fast‑evolving construction environment.
CRH grew its revenues, profit, margins, cash
generation and returns on capital during 2021 with
Operating Cash Flow2 of $4.2 billion (2020: $3.9
billion) arising from record EBITDA (as defined)* of
$5.35 billion (2020: $4.6 billion), enabling, amongst
other investment activities, capital expenditure of
$1.6 billion (2020: $1.0 billion) in existing businesses.
CRH continues to actively manage its portfolio of
businesses, assessing the ability of each business
to continue to contribute to CRH’s long‑term
strategy and evaluating the potential for acquisitions
to enhance our business platforms through the
provision of value‑added solutions for customers.
The strength of CRH’s business model, balance
sheet and cash generation provide the Board with
significant optionality to invest in businesses which fit
our clearly defined strategy and which can generate
enhanced value for our shareholders. During 2021,
CRH invested $1.5 billion (2020: $0.4 billion) on
acquisitions and we have a strong pipeline of
development opportunities.
Further details on the record performance in 2021
and implementation of CRH’s value creation strategy
are set out in the Chief Executive’s report on pages
10 to 11.
Delivering Cash Returns And
Capital Growth For Shareholders
Dividends paid to CRH shareholders with respect
to the 2020 financial year of 115.0c per share
represented an increase of 25% compared to
the total dividends per share declared for the
2019 financial year. In addition, during 2021 CRH
continued its share buyback programme, investing
$0.9 billion (2020: $0.2 billion).
Reflecting your Board’s confidence in CRH and its
future prospects, and our objective of continuing to
have a sustainable, progressive dividend policy, the
Board is recommending a final dividend of 98.0c
for the 2021 financial year. This represents a total
dividend of 121.0c per share for the 2021 financial
year, an increase of 5% compared to 2020. Since
1970 CRH's compound annual Total Shareholder
Return ('TSR')3 has been 15.5% (2020: 15.1%).
At the 2022 Annual General Meeting, the Board will
seek a renewal of the annual authority enabling the
Board to continue with the share buyback programme.
2021 Annual Report and Form 20-F 5
Health & Safety
A Continuing Priority
In relation to COVID‑19, the Board regularly
monitored CRH’s approach, initiatives and the
outcomes therefrom against available research,
best practice and the experiences of the wider
populations where our businesses are located.
The safety of our employees and contractors
continued to receive attention during the year.
Through the Board’s Safety, Environment and Social
Responsibility (SESR) Committee we inputted into
policies and practices relating to safety, culture
and monitored performance. Notwithstanding
this focus, very sadly, there were four workplace
related fatalities in 2021. The background to, and
the potential learnings from, each accident was
carefully examined by the SESR Committee and the
full Board.
The Board offers its sympathy to the families of
any CRH employees and contractors who suffered
bereavement as a result of COVID‑19 or any
other illness or as a consequence of a workplace
accident.
During 2021 CRH conducted a comprehensive
Group‑wide employee survey seeking insights into
a wide range of matters relating to their experiences
as employees. This survey was complemented by a
series of direct engagements, with similar objectives,
between the SESR Committee and groups of
employees from across CRH. In assessing the
relevant information gathered from the survey and
direct engagement, the Committee was able to
report to the Board that safety, employee health
and well‑being were recognised by employees as
being very important priorities for CRH and that
this, including how CRH has supported employees
throughout the COVID‑19 pandemic, is appreciated
and valued.
The Board is actively monitoring the very recent
developments in Ukraine with a focus on the safety
and security of the c.800 people who work in our
Ukrainian operations.
Delivering Against
Challenging ESG Targets
CRH is, and will continue to be, a leader in
providing solutions in the built environment for the
challenges and opportunities arising from mitigating
and managing the impact of climate change and
supporting environmentally sustainable economic
growth.
Our 2020 Sustainability Report set out challenging
targets for mitigating our environmental impact,
enhancing the contributions our products and
customer‑solutions make to the circular economy
and sustainable economic growth, ensuring the
safety of our people and progressing our inclusion
and diversity (I&D) agenda.
During 2021 we made positive progress against
these targets and I am pleased to advise that
we expect to deliver on our decarbonisation
target ahead of schedule. As a result, the SESR
Committee has agreed with management and the
Group has adopted an updated 2030 Group‑wide
carbon reduction target as set out on page 21.
In addition, to support our ongoing transparency
on these matters, the Audit Committee oversaw
the significant expansion of our disclosures in this
document in line with the expectations of the Task
Force on Climate‑Related Financial Disclosure
(TCFD), the emerging EU Taxonomy and further
disclosures in respect of relevant accounting
estimates and judgements.
In relation to diversity, as we develop our future
leaders, we are focused on ensuring that CRH
benefits from people with diverse backgrounds
and experiences and has the structures in place to
support them as they develop during their careers
in the Group.
Your Board Making
A Positive Contribution
As Chairman I am pleased to report that your Board
continues to operate very effectively and cohesively
in the ongoing assessment of strategy and business
performance, the purpose and culture of CRH and
the quality and contributions of its people. This is
due to the experience and attributes of individual
Directors and the collective efforts of a diverse
team of people. The performance of the Board was
evaluated by an external evaluator in 2021. This
process similarly concluded that the Board was
performing very effectively.
During the year, Caroline Dowling and Badar
Khan joined your Board bringing their relevant
backgrounds, experiences and qualities to
enhance the Board’s overall makeup and ability
to contribute.
After a thorough process supported by an
independent third party, which identified and
assessed potential external and internal candidates
for the role, the Board unanimously decided to
appoint Jim Mintern to the role of Finance Director
of CRH and to the Board in June 2021.
Since his appointment, the Group has benefited
from the considerable strategic, financial and
operational experience which Jim brings to the role.
As is CRH’s policy and practice, Caroline, Badar
and Jim will retire at the AGM and along with all
other current members of the Board will stand for
re‑election by shareholders. The background and
experience of each Board member, along with
CRH’s policies and approach to ongoing Board
assessment and renewal are covered in more detail
in the Nomination and Governance Committee’s
Report on pages 70 to 75.
Long‑term succession planning for senior executive
roles continued to be a core focus for the Board in
2021. Details in relation to the Board’s approach to
this important topic is set out in the Nomination &
Corporate Governance Report on page 71.
Shareholder Engagement
And Board Priorities
I have again had the benefit of considerable
engagement with CRH shareholders over the past
12 months, discussing with them progress against
the Board’s priorities. This has enabled me to gain
a detailed understanding of their perspectives
and thoughts on CRH. Reports of all shareholder
engagements are shared with my colleagues on the
Board.
Informed by this shareholder engagement and
the Board’s deliberations, the Board’s priorities
during 2022 will include:
‑ A continued focus on the ongoing safety of our
people, monitoring and assessing the alignment
of CRH’s culture with our values and purpose,
overseeing talent management and succession
planning and ensuring that people with diverse
backgrounds and experiences are actively
encouraged and supported;
‑ Ensuring that CRH continues to be a leader in
managing the challenges and opportunities arising
from the impact of climate change and contributing
to environmentally sustainable economic progress;
‑ Encouraging and assessing management’s
ongoing initiatives to enhance and improve CRH’s
businesses and business performance, including
the contributions of businesses working together
in the provision of comprehensive customer‑
focused solutions;
‑ Continuing to ensure that CRH has the
appropriate, clearly communicated and
shareholder‑endorsed strategy and business
model and capital allocation policy to support
continued success and value creation.
Delivery against these priorities will support CRH’s
responsibility to continue to provide attractive cash
returns and capital growth to CRH’s shareholders
over the short, medium and long term. I look
forward to continued engagement with CRH
shareholders over the next year to report on and
hear their views on progress against these priorities.
Conclusion
Despite considerable external challenges, 2021 was
another year of very strong delivery by CRH against
its strategic and financial objectives and goals.
This delivery was made possible by the dedication,
skill and quality of CRH‘s people working together
as a team and benefiting from the commitment,
focus, inclusiveness, and strategic insights of our
CEO, Albert Manifold. The Board is very appreciative
of the contributions of all of the people in CRH to its
success and is very encouraged for the future given
their commitment to CRH and their capabilities and
potential.
Richie Boucher
Chairman
2 March 2022
2021 Annual Report and Form 20-F 7
Our ambition to play a
leadership role in our industry’s
transition to carbon neutrality
is underpinned by a strategy
to grow and improve our
business in a sustainable and
responsible way.
2021 Annual Report and Form 20-F 7
2021 Annual Report and Form 20-F 7
Strategy
Review
6-35
Why Invest in Us
Chief Executive’s Review
Market Backdrop
Our Strategy
Business Model
Key Performance Indicators
Sustainability
Risk Management
8
10
12
14
16
18
20
32
An employee at Standard Materials Group, part of CRH’s America’s Materials
Division and a leading provider of readymixed concrete and materials transportation
in Northwest Arkansas and Oklahoma. CRH’s Americas Materials Division employs
28,300 people in the United States and Canada.
8
2021 Annual Report and Form 20-F 9
Why Invest in CRH
The ways in which we maximise shareholder value.
Sustainability
strategy embedded
$11.5 billion
2021 Revenue from Products with
Enhanced Sustainability Attributes
To create long-term value, we embed
sustainability principles in all areas of
our strategy and business model. CRH
has set a target of 50% revenue from
products with sustainability attributes
by 2025.
Unique solutions
capability
35% Infrastructure
33% Non-Residential
32% Residential
CRH’s breadth of materials, products
and services, together with its
balanced exposure to construction
end use demand, provides a unique
opportunity to deliver integrated
solutions for customers.
Experienced
leadership
CRH’s world class leadership
team has a proven track record of
performance delivery, underpinned
by ongoing talent development and
succession planning.
Capital
allocation record
$6.5 billion
Cash returned to shareholders via share
buybacks and dividends since 2017
Our disciplined, value focused approach
to capital allocation, made possible
by our industry leading balance sheet
strength provides us with optionality
and the ability to return cash to
shareholders through dividends
and buybacks.
SBTi approved
climate target
25%
Targeted reduction in absolute
group-wide emissions by 2030
Our commitment to tackle climate
change and decarbonise our operations
includes a Science Based Targets
Initiative (SBTi) approved reduction in
absolute group-wide Scope 1 and
Scope 2 CO2 emissions. We have
also set an ambition to become
a net-zero business by 2050.
Operational and
commercial efficiency
12.3%
Return on Net Assets (RONA)1
+160 bps since 2017
CRH continues to demonstrate
consistent growth and improvement in
our returns, driven by a relentless focus
on margin management, operating
efficiencies and tight working capital
management.
Albert Manifold
Group Chief Executive
Jim Mintern
Group Finance Director
Gina Jardine
Chief Human
Resources Officer
Randy Lake
Chief Operating Officer
David Dillon
Executive Vice President,
Chief of Staff
1. RONA is a non‑GAAP measure as defined on page 222. The GAAP figures that are most directly comparable to the components of RONA include: Group operating profit (2021: $3,585 million, 2020:
$2,263 million), impairment of property, plant and equipment and intangible assets (2021: $nil million, 2020: $673 million) and total assets and total liabilities (2021: $44,670 million and $23,756 million
respectively; 2020: $44,944 million and $24,596 million respectively).
8
2021 Annual Report and Form 20-F 9
Long-term growth
fundamentals
27%
Revenue Growth
since 2017
There is a natural demand for CRH
products driven by population and
economic growth and the need to
continually build and maintain the
built environment.
Proven acquisition
model
$9.1 billion
Development Spend
since 2017
CRH builds and grows successful
businesses by regularly acquiring
small to mid-sized companies that
complement our portfolio and adding
larger strategic deals to create further
platforms for growth.
Cash generation
track-record
70%
Operating Cash Flow
growth since 2017
Strong financial discipline and an
unrelenting focus on value creation are
hallmarks of CRH. We have a proven,
robust track record in cash generation.
Continuous business
improvement
370 bps
EBITDA (as defined)* Margin
Improvement 2017 to 2021
CRH is relentlessly focused on
building better businesses through
operational and commercial excellence,
coordinated and driven from the
centre and delivered locally by our
businesses around the world.
Industry Leading Returns
Since formation in 1970 CRH has delivered an industry-leading
compound annual TSR of 15.5% (2020: 15.1%). €100 invested
in CRH shares in 1970, with dividends reinvested, would now
be worth €165,000.
+15.5%
Compound Annual Total
Shareholder Return
Dan Stover
President,
Americas Materials
Nathan Creech
President,
Building Products
Onne van der Weijde
President,
Europe Materials
Juan Pablo San Agustin
Chief Innovation &
Sustainability Officer
Isabel Foley
Group General Counsel
Executive Leadership Team as of 2 March 2022. Biographies included on page 265.
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
10
Chief Executive’s Review1
CRH delivered a record financial performance in 2021, driven
by the strategic reshaping and repositioning of our business
over recent years. CRH has been transformed from a sole
supplier of commodity products and base materials to a fully
integrated provider of value-added products and integrated
building solutions, which are more sustainable and help to
reduce the impact of construction on our world.
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on
disposals and the Group’s share of equity accounted investments’ profit after tax.
1. See cautionary statement regarding forward‑looking statements on page 111.
2. Net Debt and Net Debt/EBITDA (as defined)* are non‑GAAP measures as defined on page 222. The GAAP figures
that are most directly comparable to the components of Net Debt/EBITDA (as defined)* include: interest‑bearing loans
and borrowings: (2021: $10,487 million, 2020: $12,215 million) and profit after tax (2021: $2,621 million, 2020: $1,165
million).
3. Net of cash disposed and including deferred consideration proceeds in respect of prior year divestments.
An Evolving CRH
Market demand and societal expectation for
building materials and products is evolving. As our
climate changes there is an increased emphasis
on the sustainability performance of structures and
buildings on a full life‑cycle basis. By combining
our materials, products and services, including
recycled end‑of‑life materials, into integrated
solutions which can be delivered more efficiently
and sustainably, we can better serve the emerging
needs of customers and support them in meeting
the challenges of modern construction.
We continue to build out our integrated solutions
strategy across our materials and products
businesses. It is increasingly a differentiating feature
of CRH's offering as we work closely with our
customers to better understand and align with their
specific challenges. At the same time we continue
our focus on innovation to deliver value added
solutions that improve the life cycle performance
of buildings and climate resilient infrastructure.
This in turn has helped us to identify additional
opportunities for growth and value creation. As a
result, CRH continues to be a strong and resilient
business, delivering a record financial performance,
with continued improvement in sales, profitability
and cash generation.
Climate Change
In many of our markets CRH has become a valued
partner in the delivery of a safer and more resilient
built environment that helps to mitigate the impacts
of climate change on communities.
We also recognise the importance of
decarbonisation in addressing the challenges of
climate change. We have a long track record in
successful emissions reduction initiatives and we
recently set ourselves a new, industry leading target
to reduce our Group's absolute carbon emissions
by 25% by 2030. For further information on this
target please refer to page 21.
We will continue to strive for further improvements
across our operating footprint in support of our
ambition to become a net‑zero business by 2050.
As CRH and the world around us transitions
to a low carbon economy over the coming
decades, how we navigate climate‑related risks
and opportunities will be increasingly important.
Information on how our disclosures meet the
requirements of the TCFD is included on pages 28
to 31.
Performance Highlights
In 2021 CRH benefited from recovering market
demand as economies reopened and construction
activity returned to more normal levels. Positive
underlying demand drove increased sales
volumes in North America and Europe, while a
continued focus on price improvements, coupled
2021 Annual Report and Form 20-F 11
with decisive action taken to control costs and
improve operational efficiencies, helped improve
our margins despite an inflationary input cost
environment.
Sales increased 12% to $31.0 billion
(2020: $27.6 million) and EBITDA (as defined)* of
$5.35 billion (2020: $4.6 billion) increased by 16%
reflecting the benefits of our integrated solutions
strategy along with strong demand growth and
continued commercial discipline. On a like‑for‑like1
basis EBITDA (as defined)* was 11% ahead of
2020, while EBITDA (as defined)* margin of 17.3%
(2020: 16.8%) increased by 50 basis points.
Net debt of $6.3 billion at year end (2020:
$5.9 billion) reflects strong inflows from operations,
disciplined capital expenditure and value focused
investments. The Group’s Net Debt/EBITDA (as
defined)*2 was 1.2x (2020: 1.3x) at year end.
Profit after tax was significantly ahead of 2020 at
$2.6 billion (2020: $1.2 billion) driven by a strong
trading performance and the non‑recurrence
of non‑cash impairment charges and one‑off
restructuring costs in the prior year. Earnings per
share (EPS) for the year was 130% higher than
2020 at 328.8c (2020: 142.9c), reflecting a strong
trading performance and the non‑recurrence of
non‑cash impairment charges and restructuring
charges in the prior year. This represented a 35%
increase on a pre‑impairment basis (2020 EPS
pre‑impairment: 243.3c). Our relentless focus
on continuous business improvement helped
contribute to a further increase in returns. RONA for
the year was 12.3% (2020: 10.1%).
Portfolio Management
And Capital Allocation
We continued to maintain our disciplined and
value‑focused approach to capital allocation.
Development activity returned to more normal
levels as visibility improved and COVID‑19 related
disruption eased. During the year the Group
invested $1.5 billion (2020: $0.4 billion) in 20
bolt‑on acquisitions. This included the addition of
businesses such as National Pipe & Plastics (NPP)
in the United States (US) which further enhance our
end‑to‑end solutions offering to our customers.
Total proceeds from business divestments and
asset disposals3 was $0.5 billion (2020: $0.3 billion)
including the sale of our Brazil cement operations
for a total consideration of $0.2 billion.
We also continued our share buyback programme
with a further $0.9 billion (2020: $0.2 billion) of
shares repurchased during 2021, reflecting CRH's
strong financial position and commitment to
returning cash to shareholders.
On 28 February 2022, the Group entered into
a binding agreement to divest of its Building
Envelope business to KPS Capital Partners, LP for
an enterprise value of $3.8 billion. The transaction
is subject to customary conditions and regulatory
approvals. The decision to divest, at an attractive
valuation, follows a comprehensive review of the
business and demonstrates CRH’s active approach
to portfolio management, the efficient allocation
of capital and the creation of a simpler and more
focused Group.
Operational Highlights
Sustainability
In our Americas Materials Division, solid volumes,
pricing progression and good operating
performance resulted in EBITDA (as defined)*
of $2.6 billion (2020: $2.4 billion) up 7% on
a like‑for‑like basis with sales of $12.4 billion (2020:
$11.3 billion).
In Europe Materials, EBITDA (as defined)*
of $1.4 billion (2020: $1.1 billion) on sales of
$10.6 billion (2020: $9.1 billion) was 22% ahead
of prior year on a like‑for‑like basis reflecting good
volume growth and price progress against a prior
year comparative that was heavily impacted by the
COVID‑19 pandemic.
Strong demand for residential construction
drove increased sales across all platforms in our
Building Products Division, which reported sales
of $8.0 billion (2020: $7.2 billion) with EBITDA (as
defined)* of $1.4 billion (2020: $1.2 billion) 8%
ahead on a like‑for‑like basis.
Across all of our divisions positive pricing actions,
cost savings and performance initiatives helped to
minimise the impact of a challenging inflationary
environment.
Sustainability is deeply embedded in our business
strategy, ensuring that CRH continues to prosper
and grow in the long term. We believe that our
actions have a positive impact on the world around
us. In 2021 this included further increases in our
use of alternative and recycled materials in our
products and integrated building solutions, and
increasing the amount of revenue attributable to
sustainable products.
Safety
We continue to maintain our uncompromising
approach to ensuring the health and safety of
our employees, contractors, customers and the
general public. In 2021 this included the further
development of best practice safety management
systems and health and wellbeing programmes
across all our locations.
Despite our best efforts I regret to report that there
were four workplace related fatalities in 2021,
one of which involved an employee at one of our
facilities and three road traffic incidents involving the
fatality of a contractor and two third parties.
Our People
The record performance achieved in 2021 is
testament to the hard work, commitment and
resilience of each and every one of our employees,
who despite the challenging backdrop of the
ongoing COVID‑19 pandemic, continued to deliver
for the customers and communities that depend
on us. We are fortunate to have an exceptionally
talented and diverse team operating across our
global business. As our business evolves, so do
the demands on our leadership team. To deliver
differently we must organise differently. In 2021
Randy Lake was appointed Chief Operating Officer,
responsible for ongoing business improvement,
formulating and executing our climate strategy,
ensuring we align our teams and processes to
drive innovation, and positioning CRH for further
growth and the achievement of its full potential.
I am also pleased to report that 2021 saw CRH
continue to make progress on building a more
inclusive company, one which fosters a sense
of belonging and empowers people to be their
best. Our agenda for change in this area is Chief
Executive led and remains a top priority for CRH.
Outlook
We expect the underlying demand and pricing
backdrop to remain favourable in 2022 albeit
against an inflationary input cost environment and
continued supply chain challenges. Our Americas
Materials Division benefits from continuing
favourable economic conditions and strong market
positions. Federal funding for infrastructure is
underpinned by the passing of the $1.2 trillion
infrastructure package by the US Congress, while
the residential market is expected to continue to
grow driven by robust demand. The backdrop in
Europe is expected to be positive with continued
growth in our key markets. In our Europe
Materials Division, we continue to benefit from
strong market positions in growing economies in
Eastern Europe and attractive markets in Western
Europe. Although cost inflation headwinds are
anticipated to continue in the near‑term, we expect
to deliver further progress in 2022 supported by
good demand and commercial discipline. We
expect our Building Products Division to deliver
further growth supported by good commercial
management, increased activity and continued
cost saving initiatives. Although there are a number
of challenges and uncertainties across our markets,
CRH’s uniquely integrated and value‑added
solutions strategy, together with a strong and
flexible balance sheet, leaves us well positioned for
another year of progress.
Albert Manifold
Chief Executive
2 March 2022
12
2021 Annual Report and Form 20-F 13
Market Backdrop
Building materials play an essential role in shaping the world around us. Market fundamentals including
population and economic growth, drive demand for CRH's materials, products and solutions.
CRH is the global leader in
building materials, serving
the needs of the construction
industry in 28 countries around
the world.
We support the delivery of critical infrastructure
required for society to function. As communities
develop, populations grow and economic activity
increases, so too does demand for our materials,
products and customer‑focused solutions.
CRH is ideally positioned to service the demand
requirements of construction projects in local
markets through its extensive network of mineral
reserves, production, manufacturing and logistics
assets which are strategically located in mature
attractive construction markets globally.
Economic
Development
Construction‑related spending currently
accounts for c. 13% of global GDP.
Economic development and growth
drives investment in residential,
infrastructure and commercial projects
from the houses, roads, bridges, ports
and airports that serve our growing
cities to office blocks, retail centres and
industrial and leisure complexes.
Demand Fundamentals
At CRH we aim to have a portfolio which is appropriately exposed to each of of the
following three primary demand fundamentals, thereby ensuring we benefit from growth
and value‑creation opportunities associated with each.
Population Growth
By 2050 an estimated additional two billion people will have been added to the global
population. The majority of these people will live in towns and cities as part of the
estimated 68% of the world's population that will live in towns and cities by then.
Our materials, products and solutions play an important role in shaping the built
environment in these urban areas. This means there is a natural market for our products
wherever there is growth in population. The associated construction demand can be
expected to drive day‑to‑day organic growth for our businesses.
Ongoing Repair
& Maintenance
There is a recurring need to continually
repair and maintain the existing built
environment as structures age over time.
12
2021 Annual Report and Form 20-F 13
Market Development
CRH maintains a consistent focus on
continuously shaping, reshaping and optimising
our footprint in the markets where we do
business. We prudently allocate capital to the
parts of our business that are positively exposed
to fundamental demand drivers that can be
expected to persist and create value for CRH
in the medium to long‑term.
Our vertically integrated business model
and unique integrated solutions strategy
enhances our ability to complement organic
growth by identifying suitable businesses which
can be acquired and seamlessly integrated
into CRH.
Through our enduring relationships and
deep market insight we identify and acquire
established businesses with a proven track
record of performance and a capacity to hold
strong leadership positions in local markets.
The extensive footprint of our materials
businesses in North America and Europe sees
us well positioned to capitalise on value creating
opportunities for market consolidation and
expansion of existing operations.
North America
In North America, which includes the world’s
largest economy, the US, CRH is the largest
building materials business. Growth in North
America is underpinned by a population that
grows by 25 million people every decade, driving
associated construction growth. The market for
materials remains largely unconsolidated. For
example, the top ten aggregates businesses
account for less than one third of production.
In recent years we have reshaped and redirected
our businesses in the US to increase CRH’s
exposure to positive demand fundamentals in the
southern and western areas of the country.
Europe
CRH is a leading building materials business in
Europe where the European Union (EU) is the
largest economic bloc in the world. In Europe,
there is an attractive mix of stable, developed
markets which continue to deliver along with less
developed, higher growth markets which offer
opportunities for organic growth and acquisition
activity.
Other Markets
Our Building Products Division produces high
value‑added, highly engineered products some of
which can be economically transported over long
distances, opening up important export markets
for CRH beyond our core geographic footprint.
Ongoing innovation and product development
ensures that we meet the needs of customers
today and also addresses the longer‑term
opportunities presented by economic
development, changing demographics and
investments in a sustainable future.
Our Integrated Solutions Strategy
As the nature of construction changes
customers are increasingly demanding
more holistic solutions which reduce cost,
time and complexity and can improve the
overall environmental performance of a
project.
The ‘building site’ has evolved into the
‘assembly site' with more and more
of the actual construction carried out
in specialised locations off‑site before
completed structural elements are
transported and lifted into place on‑site.
Because of the breadth of materials we
produce, CRH is uniquely positioned to
service the demand to develop these
customer focused solutions, which
integrate multiple different materials to
service the more complex needs of our
customers.
Our effectiveness in meeting this evolving
demand has become a major driver of
growth and profitability for CRH.
A significant portion of our business today
can be categorised as either value‑added
products or integrated building solutions.
This means for the bulk of our customers,
CRH is no longer a provider of a single type
of product or a particular material. Instead
we are providing complete or integrated
solutions, incorporating multiple materials
and value‑added expertise.
This in turn broadens our exposure along
the value chain, and importantly opens up
new opportunities for growth and value
creation, as construction continues to
change and demand for integrated building
solutions increases.
The move from individual products to
integrated building solutions requires
a breadth of expertise, businesses
and products, as well as market scale
and customer insight. CRH is uniquely
positioned in this regard and consequently
holds a significant competitive advantage.
14
2021 Annual Report and Form 20-F 15
Our Strategy
Maximising long-term value and delivering superior returns
At CRH we are focused on
creating long-term value and
delivering superior returns for
all our stakeholders.
Our strategy is driven through four core pillars:
continuously improving our business, focused
growth, harnessing the benefits of scale and
integration and developing the leaders that will
deliver the value creation and superior returns for
CRH into the future.
The successful implementation of our strategy
is directed by these four strategic pillars, which
drive our ability to generate superior margins,
returns and cash on a continuous basis.
Strategic Focus
Strategic Pillars
To continue to serve
the societal need for
building materials
products and
integrated solutions
and in doing so create
long-term value
and deliver superior
returns for all our
stakeholders.
1
2
3
4
Continuous
Improvement
Improving the operational, commercial,
sustainability and financial performance of our
business to maximise long‑term value and
deliver superior returns.
Focused
Growth
Optimising our business for maximum
long‑term value through the disciplined and
focused allocation of capital.
Benefits of Scale
and Integration
Scale and market leadership positions allow
us to drive value by harnessing the benefits
of integrating operations.
Developing Future
Leaders
Identifying and developing the next generation
of performance orientated, innovative and
entrepreneurial leaders.
14
2021 Annual Report and Form 20-F 15
Strategy in Action
Our strategy guides the continuous
improvement and enhancement of our
business while building resilience and future‑
proofing CRH in the face of evolving market
demand. In recent years our improved
performance has been underpinned by a
focus on higher growth markets in the South
and West of the US and Central and Eastern
Europe. Positive demand fundamentals
and significant long‑term infrastructure
needs in particular in these markets provide
optimum conditions for superior growth and
performance. In addition, our scale in these
markets has enabled us to bundle individual
materials and products into value‑added
integrated solutions, changing the way CRH
delivers for its customers as their requirements
evolve. Our integrated solutions strategy
which now accounts for a significant portion
of sales, increases our exposure to large‑
scale infrastructure construction and deepens
customer relationships, safeguarding existing
business and market share.
Strategy in Action in 2021
Future Focus
KPIs
• Through a range of operational excellence
initiatives including energy and alternative fuel
optimisation, process improvements and logistics‑
related initiatives aimed at improving operational
performance, our Europe Materials Division
delivered c. $81 million of savings in 2021.
• We will continue to rigorously monitor
and measure performance across our
businesses while implementing our detailed
plans to make our businesses better
through incremental improvement initiatives
to structurally improve our margins, cash
and returns year‑after‑year.
• In 2021 we invested $1.5 billion (2020: $0.4 billion)
in 20 bolt‑on acquisitions. The majority of these
businesses are part of the ongoing development of
our integrated solutions strategy.
• We also invested $1.6 billion (2020: $1.0 billion)
in capital expenditure projects to support further
organic growth in our existing businesses.
• We will continue to adjust our asset base,
allocating and reallocating capital to higher
growth areas with more sustainable returns.
• Investing in our existing businesses to build
capacity and improve efficiency.
• Monitor evolving market trends and
developments to ensure CRH is positioned for
long‑term sustainable growth.
• CRH's Group Technical Services (GTS) unit provides
advice and expertise to businesses across our
cement portfolio, supporting our plants around the
world to optimise their performance and to develop
and deliver their capital investment pipeline. In 2021
GTS worked with our cement businesses to improve
performance in areas such as Reserve Management
and Alternative Fuel utilisation where CRH is the
global leader at 33% substitution and to manage a
portfolio of capital projects.
• 2,600 employees in 17 countries participated in our
Frontline Leadership Program (FLP).
• Over 5,000 leaders and managers have received
their initial I&D awareness training.
• 175 high potential global leaders participating in over
1,200 1:1 coaching hours.
• Over 3,000 hours of virtual training, aimed at building
soft‑skill capabilities was successfully delivered to
more than 420 employees.
• Continue to take a group‑wide view of our
business, leveraging our core strengths
and collective capabilities in operating
integrated and value‑adding businesses to
which we can apply a centrally coordinated
focus on improving efficiency, sustainability,
productivity and cost saving measures.
• Further roll‑out of the global FLP across the
US and mainland Europe with extensive
design, train‑the‑trainer and translation
investments made to support further delivery.
• Diversify further training and learning
capability into remote live sessions and
digital eLearning to facilitate scalable learning
for all.
• Further inclusive leadership skill‑building
training to be delivered.
Value creation
Cash Generation
Shareholder Returns
Environment
Safety
Leadership
Value creation
Cash Generation
Financial Discipline
Shareholder Returns
Environment
Safety
Leadership
Value creation
Cash Generation
Shareholder Returns
Environment
Safety
Leadership
Value creation
Cash Generation
Shareholder Returns
Environment
Safety
Leadership
16
2021 Annual Report and Form 20-F 17
Business Model
How we maximise value and deliver superior returns
Through disciplined capital management and operational efficiency CRH creates value for both its
shareholders and for society.
Our Resources
Our Strategy
How We Create Value
1. Continuous
Improvement
How we manage our
business
$26.5bn
Capital and Net Debt1
22.8bn
Tonnes Reserves 2021
$6.9bn
Raw Materials Spend1
2. Focused
Growth
3. Benefits of Scale
and Integration
c. 77,400
Employees
4. Developing
Future Leaders
Disciplined Financial
Management
Our financial strength allows us to
benefit from a lower cost of capital.
Dynamic Capital
Management
We take a disciplined and focused approach
to capital allocation and reallocation to
ensure our capital is deployed to where we
see optimum opportunity for growth.
Balanced
Portfolio
Our business is balanced across materials,
products and end‑use, servicing the
breadth of construction and mitigating the
impact of cyclical changes in our industry.
Risk
Mitigation
CRH uses a dynamic Enterprise Risk
Management (ERM) framework to identity,
manage and report risk in a manner that
supports our strategic planning processes,
allowing us to conduct business in a
sustainable manner.
Intellectual
Property
Business
Systems
Why it Matters
Benefits to CRH
Financial Strength
To support resilience, flexibility
and optionality
Investment
To drive continuous improvement
and optimise returns
Lower Capital Costs
Supports our ability to fund
value‑creating investments
Shareholder Returns
Through dividends, share buybacks
and share price appreciation
1. Capital and Net Debt of $26.5 billion (2020: $25.6 billion) and raw materials spend of $6.9 billion (2020: $5.8 billion) as outlined in notes 22 and 4 to the Consolidated Financial Statements,
respectively on pages 189 and 160. Net Debt is a non‑GAAP measures as defined on page 222.
16
2021 Annual Report and Form 20-F 17
Continuous Improvement
We continually focus on building
better businesses through operational
and commercial excellence initiatives
designed to maximise performance.
Central
Coordination /
Local Delivery
Our relentless focus
on performance is
strategically coordinated
and driven from the
centre and delivered
locally by our operating
businesses.
How we
operate our
businesses
Benefits of Scale
and Integration
CRH’s global scale and
integrated business
model allow us to
harness cost savings
and synergies across
our Group.
Proven Acquisition Model
We have a proven ability to identify
high‑potential businesses to integrate into
our Group that complement our existing
portfolio and create further platforms for
growth at attractive valuations.
Value Created in 2021
$5.35bn
EBITDA (as defined)*
2020: $4.6 billion
$2.6bn
Profit After Tax
2020: $1.2 billion
$4.2bn
Operating Cash Flow
2020: $3.9bn
12.3%
RONA
2020: 10.1%
$0.6bn
Taxes Paid
2020: $0.6bn
Why it Matters
Benefits to Society
Customer Focused Solutions
Sustainable products that meet
the needs of our customers
Job Creation
Responsible employer in local
communities
Partner to Suppliers
Resilient and reliable business
partner
Taxation Contribution
Taxes paid to Governments
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
18
2021 Annual Report and Form 20-F 19
Key Performance Indicators
CRH measures its progress in achieving its strategic objectives through the use of specific financial
and non-financial key performance indicators (KPIs). KPIs are a consistent feature of how we operate
our business and fundamental to how we track progress. CRH regularly reviews these KPIs to ensure
they remain appropriate for its business.
Sustainability
Performance
Sustainability is a strategic imperative for CRH as we
strive to create both financial and non-financial value
for all our stakeholders. We view strong sustainability
performance as a key driver in a competitive market
and one which can lead to increased business
opportunities. We are committed to reporting on the
breadth of our sustainability performance. A selection
of KPIs relating to three of our sustainability priority
areas is set out on this page:
94%
94%
94%
Safety
94%
% Zero-Accident
in our Locations
2019
2020
2021
What do we measure?
A strong safety culture is a key element of our business strategy.
We measure a wide range of health and safety KPIs including the
percentage of locations that had zero accidents.
How did we do?
In 2021, we continued to achieve a high level (94%) of zero accident
locations and continued to integrate COVID-19 protection measures
into our existing safe systems of work.
Our focus for 2022
We continue to invest in safety initiatives and technologies, with the
overall aim of realising a culture of safety and wellness while working
towards zero harm.
Environment
1.2 kg/$ Revenue
Greenhouse Gas Emissions1 Scope 1 and
Scope 2 CO2 Emissions (kg/$ Revenue)
1.2kg/$ 1.3kg/$ 1.2kg/$
People
14%
% Females in Senior Management3
13%
14%
11%
2019
2020
2021
2019
2020
2021
What do we measure?
We recognise the need to reduce our direct emissions and contribute to
the circular economy. We measure direct and indirect CO2 emissions as
well as specific indicators of efficiency, including progress towards targets.
What do we measure?
As part of our focus on building a more inclusive and diverse CRH,
we closely monitor the percentage of females in senior management,
in pursuit of our target of 33% female senior leadership by 2030.
How did we do?
While our Scope 1 and 2 CO2 emissions increased, kg CO2/$ decreased
by 8% and we maintained our progress towards our cement emissions
reduction target of 520kg net CO2/tonne cementitious product by 2025
(2021: 586kg; 2020: 586kg2).
Our focus for 2022
In line with our new targets, we will continue to accelerate our carbon
reduction programme to drive our ambition and ensure that the vital
products we provide can be delivered on a carbon neutral basis by 2050.
How did we do?
The percentage of females in senior management was 14% in 2021
and as of 31 December 2021, 33% of the Directors of CRH plc and
22% of senior leadership were female. We continued to focus on
executing our I&D strategy across the Group.
Our focus for 2022
We continue to focus on increasing the share of females in senior
management and build on our ambition to be a business where
everyone has the same opportunity to develop and progress.
1. CO2 emissions subject to final verification under the European Union Emissions Trading Scheme (EU ETS). For further detail on our CO2 metrics and targets as well as calculation methodology see
page 31.
2. Due to the impact of the divestment of our cement assets in Brazil on our net CO2 emissions per tonne of cementitious product, we are providing the 2020 figure excluding Brazil as a prior year
comparator. The previously reported figure for 2020, including Brazil, was 573kg.
3. Please refer to page 24 for further information on I&D, including additional indicators.
18
2021 Annual Report and Form 20-F 19
Financial Performance
CRH uses a balanced set of financial KPIs to measure our strategic progress, foster positive performance
behaviour, evaluate operating effectiveness and make strategic financial decisions. KPIs relating to four
of our financial priority areas are set out below:
12.3%
10.0% 10.1%
Creating
Value
12.3%
Return on Net Assets (RONA)
Financial
Discipline
17.2x
EBITDA (as defined)* Net Interest Cover1
17.2x
12.3x
11.9x
2019
2020
2021
2019
2020
2021
What do we measure?
RONA is a measure of pre-tax and pre-impairment returns through
excellence in operational performance.
How did we do?
The Group achieved a RONA of 12.3% (2020 10.1%) which reflected
continued enhancement of operating efficiencies and improved profit
margins.
Our focus for 2022
A continued and relentless focus on margin management, operating
efficiencies and tight working capital management.
$3.9bn
$3.9bn
$4.2bn
Cash
Generation
$4.2bn
Operating Cash Flow (OCF)2
What do we measure?
EBITDA (as defined)* Net Interest Cover is a measure of financial
liquidity and capital resources which underpins investment-grade
credit ratings and the ability to access finance.
How did we do?
EBITDA (as defined)* Net Interest Cover at 17.2x improved in 2021 due
to improved profitability and Net Debt/EBITDA (as defined)* finished at
1.2x (2020: 1.3x) reflecting robust financial discipline.
Our focus for 2022
Maintain financial discipline to ensure Net Interest Cover remains strong.
We remain committed to protecting our investment-grade credit ratings
of BBB+, Baa1, BBB+ from Standard & Poors, Moody's and Fitch
respectively.
Shareholder
Returns
$1.8bn
Cash Paid to Shareholders
$1.6bn
$0.9bn
$1.8bn
$0.9bn
$0.9bn
$0.7bn
$0.2bn
$0.7bn
$0.9bn
2019
2020
2021
2019
2020
2021
What do we measure?
We measure cash flows generated to fund organic and acquisitive
growth, dividends to shareholders, share buybacks and debt
repayment.
How did we do?
OCF was ahead in 2021 due to strong cash generation, prudent
management of working capital and other cash flows.
Our focus for 2022
Continued focus on prudent management of working capital and
other cash flows to maintain strong operating cash flows in 2022.
What do we measure?
Cash returned to shareholders each year through dividends and our
share buyback programme are among a range of shareholder returns
we measure.
How did we do?
We returned a further $0.9 billion to shareholders through our share
buyback programme in addition to dividends of $0.9 billion paid during
the year. Since formation in 1970, CRH has delivered a compound
annual total shareholder return of 15.5% (2020: 15.1%).
Our focus for 2022
We will continue our focus on improving performance, growing our
business and creating value. A further share buyback tranche of $0.3
billion is underway and a final dividend of 98.0c was recommended by
the Board, a 5% increase on 2020's full year dividend.
Shares Re‑purchased
Dividends Paid
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
1. EBITDA (as defined)* Net Interest Cover is a non‑GAAP measure as defined on page 221. The GAAP figures that are most directly comparable to the components of EBITDA (as defined)* Net Interest Cover
include: profit after tax: $2,621 million (2020: $1,165 million), and finance costs: $311 million (2020: $389 million). Details of how non‑GAAP measures are calculated are set out on pages 219 to 223.
2. Operating cash flow refers to net cash inflow from operating activities as reported in the Consolidated Statement of Cash Flows on page 144.
20
Sustainability
Creating long-term environmental,
social and economic value
By innovating across all areas of sustainability, we aim to create
financial and non-financial value for all stakeholders and to have
a positive impact on the world around us.
Our Sustainability Priority Areas:
Safety
Environment
People
Products
Collaboration
Integrity
Building a more
sustainable future
At CRH, we strive to contribute to a safer, more
climate resilient world. We play a leading role in
the building materials industry by leveraging our
global knowledge and scale to help establish best
practices worldwide. By developing value‑added
sustainable products and integrated building
solutions, we contribute positively to society,
address negative potential impacts and create
long‑term value for our stakeholders.
We are reducing the impact of construction on our
world. To achieve this, we continue to develop our
products to improve the life‑cycle performance
of buildings, provide innovative solutions for
climate‑resilient infrastructure and projects, and
support our customers to meet the changing
needs of modern construction.
Driving our
sustainability agenda
Sustainability continues to be at the core of our
strategy. CRH is a sustainability leader in our
sector, as determined by the major Environmental,
Social and Governance (ESG) rating agencies.
We are a constituent member of indices including
the MSCI Leaders ESG Indexes, FTSE4Good
Index, the STOXX® Global ESG Leaders Index
and the Dow Jones Sustainability Index. We are
also a long‑term participant in CDP (formerly
Carbon Disclosure Project) and were awarded an
A‑ for both our 2021 climate and water security
disclosures.
Partnering for
sustainable progress
We advance with intent and contribute to the
delivery of global goals, such as the United
Nations Sustainable Development Goals (UN
SDGs) and the Paris Agreement. We recognise
that partnership is key to progress in these areas.
By collaborating across the value chain with a
wide range of stakeholders, we are helping to
advance our shared priorities. For example we
are a member of the World Business Council
for Sustainable Development (WBCSD) and the
Global Cement and Concrete Association (GCCA).
In responding to ESG trends, we also use our
influence and scale to promote sustainability
initiatives by collaborating with non‑governmental
organisations (NGOs) and charitable organisations.
In doing so we strengthen local relationships and
champion the causes most important to society.
Our contributions have been recognised and
many of our operating companies have achieved
awards for excellence in sustainability.
2021 Annual Report and Form 20-F 21
Our ambitions and targets
Safety
Our ambition is to have a culture of safety
and wellness working towards zero harm
Target: Zero fatalities, in any year
People
Our ambition is to be a business where
everyone has the same opportunity to
develop and progress
Target: 33% female senior leadership by 2030
Environment
Our ambition is to address climate change
as we strive for carbon neutrality along the
cement and concrete value chain by 2050
Target: In early 2022, the Group adopted a new SBTi
approved* target for a 25% absolute reduction in
group‑wide Scope 1 and Scope 2 CO2 emissions by 2030
(on a 2020 baseline); this is supported by our target for our
cement plants to reduce emissions to 520kg CO2/tonne
cementitious product by 2025 (accelerated from 2030)
Products
Our ambition is to deliver innovative products
and solutions to drive progress towards a
resilient, net-zero built environment
Target: 50% product revenue from products with enhanced
sustainability attributes** by 2025
Managing risks and performance
Prioritising sustainability
Valuing transparency
We regularly review our sustainability policies
and take a strategic approach in responding
to global trends, including climate change,
biodiversity impacts, demographic changes and
technological advancements.
Risks related to sustainability are recognised and
managed in our Enterprise Risk Management
(ERM) Framework. Our non‑financial due
diligence processes are well established in our
business and supply chains, and we made no
material changes to these in 2021.
Our performance is monitored using KPIs
across the areas of health and safety, social
and environment. Our most relevant KPIs are
provided on pages 18 and 20 to 26. We provide
training to our employees to raise awareness of
our performance standards and the importance
of upholding them across our business. Our
training and awareness tools include our non‑
financial policies and our Code of Business
Conduct (CoBC).
For more detail on our sustainability
risks see pages 32 to 35, 118 to 119
and 235 to 237
We address the changing needs of society
and the environment by identifying the most
important ESG issues through a range of internal
and external processes. These include annual
sustainability reporting by our businesses to
the Group, review of issues raised through
ERM processes and regular formal materiality
assessment reviews, the outcomes of which
guide our strategy and reporting. This helps us
respond to our customers' needs and develop
the solutions needed to reduce the impact of
construction on the environment.
These internal and external processes allow us
to monitor opportunities and risks and articulate
what matters most to society. They also assist
us in identifying the areas in which we can create
the most value and mitigate potential negative
impacts that our operations may cause.
We are committed to reporting on the breadth of
our performance in key sustainability areas. This
includes information on environmental, social and
employee matters, respect for human rights, anti‑
corruption and bribery matters.
We comply with the EU Non‑Financial Reporting
Directive and the EU Taxonomy Regulation and
we make disclosures consistent with TCFD.
Our Sustainability Report is prepared in line with
the Global Reporting Initiative (GRI) standards
and the Sustainability Accounting Standards
Board (SASB). Our independently‑assured 2021
Sustainability Report will be published in March
2022 on www.crh.com.
Additionally, our ‘Commitment to human rights’
Modern Slavery Statement is published annually
and discloses our risks, progress and targets
related to preventing modern slavery within our
operations.
For more on our stakeholder
engagement see pages 26 and 27
For more on our disclosures consistent
with TCFD see pages 28 to 31
* The SBTi’s Target Validation Team has classified our Scope 1 and 2 target ambition and has determined that it is in line with a well‑below 2°C trajectory. The target boundary includes biogenic
emissions and removals from bioenergy feedstocks.
** Products with enhanced sustainability attributes are defined as products that incorporate recycled materials, products for which alternative energy/fuel sources are used in production,
products which have a lower carbon footprint, and products that address sustainability challenges in the built environment.
22
2021 Annual Report and Form 20-F 23
Sustainability - continued
Embedding sustainability across our business
Safety
Leading with our
commitment to safety
Targeting zero
harm
The safety of those working for CRH continues to
be our number one priority. We strive to address
risks and eliminate accidents to ensure that
the wellbeing of all those who interact with our
operations is protected.
Key to achieving a culture of safety excellence
are our Health and Safety Policy and Life Saving
Rules. Our global network of safety officers works
closely with our businesses in implementing
policy and practice. Our health and wellbeing
programmes provide tools, social support and
strategies for physical and mental health to
support our employees as we move towards a
post COVID‑19 world.
Achieving our ambition of zero harm is an
ongoing challenge. We deeply regret to report
that one employee fatality occurred at one of
our facilities in 2021. In addition, three road
traffic accidents resulted in one contractor and
two third‑party fatalities. We extend our sincere
sympathies to their families. We thoroughly
investigate all fatalities and share the lessons
learned as we focus on our zero fatality target.
>$300
million
Invested in safety
initiatives in the past
5 years
8%
average annual
reduction in accident
frequency rate over
the last decade*
Our Health and Safety Policy
Our Health and Safety Policy aims to
equip everyone at CRH with the training
and authority necessary to uphold our
culture of health and safety excellence, to
comply with applicable legislation and to
lead the way in industry best practice.
* Accident frequency rate is the number of accidents per million work‑hours
22
2021 Annual Report and Form 20-F 23
Environment
Implementing environmental
management systems
For decades we have worked with stakeholders
to manage environmental risks, drive
improvements in performance and promote
emissions reduction and resource efficiency.
It is our goal to protect the environment in which
we operate.
Strengthening environmental
stewardship
We practice and promote responsible waste
management and use of resources such as
water, energy and land. Our operations have
a focus on reducing and recycling waste and
water where possible. Additionally, we monitor
and control our air emissions in order to preserve
air quality to further protect the health of our
environment and of society.
For more on our disclosures consistent
with TCFD see pages 28 to 31
Investing in biodiversity
Our aim is to protect and conserve biodiversity.
We strive to enhance and rehabilitate natural
habitats through internal initiatives and through
partnerships with environmental NGOs.
We actively manage biodiversity at over 500
locations. Additionally, we ensure that restoration
plans are in place at all relevant extractive
locations.
Committing to carbon reduction
At CRH, we are striving to achieve carbon
neutrality across our value chain by 2050. In
working towards this ambition, in 2021 we
accelerated our target to decrease the carbon
intensity of our cement production, bringing
forward our 2030 target for 520kg CO2/tonne
cementitious product to 2025. We also
recognised the need for absolute emissions
reductions and have recently adopted an SBTi
approved target, for a 25% absolute group‑wide
reduction in Scope 1 and 2 CO2 emissions by
2030 on a 2020 baseline.
$207 million
Invested in environmental
initiatives in 2021
(2020: $173 million)
100%
Of our locations
have restoration
plans in place
Our Environmental Policy
Our Environmental Policy aims to address
climate change and work towards a
healthier environment by supplying
sustainable products, enhancing
biodiversity and ensuring environmental
protection throughout our business in
order to reduce our emissions and comply
with all applicable legislation.
We have assessed the detailed targets
behind each of the 17 SDGs and identified
the four that most closely align to where
we, as a building materials business, can
have the most impact and influence.
Read more about how we are supporting
the UN SDGs on crh.com/sustainability
24
2021 Annual Report and Form 20-F 25
Sustainability - continued
Embedding sustainability across our business
People
Encouraging inclusion
and diversity
We strive to develop a more diverse and
inclusive work environment and to build
awareness at all levels of the organisation.
Our Global I&D Council, chaired by our
Chief Executive, is responsible for driving
the strategy and accountability on I&D
across CRH. I&D committees have also
been established across our three divisions
and our corporate offices, and many of our
operating companies now have their own
I&D plans in place at local level. In addition,
Employee Resource Groups (ERGs) have been
established to further drive an inclusive culture.
Empowering our employees
Our employee engagement processes help us
to understand our employees' needs. We collect
information on levels of engagement and findings
are actioned by management.
We have an ongoing focus on training to enable
employees to acquire the attributes necessary to
support performance, growth and success.
During 2021, we conducted an organisational
health survey across our business which
highlighted our overall good performance and
identified priority areas for improvement. We are
developing action plans in line with these priority
areas, which will be implemented across the
business.
Throughout the COVID‑19 pandemic, CRH has
ensured regular internal communication across
the business on regulatory updates, workplace
changes and health and wellbeing.
14%
of senior management
were female
(2020: 13%)
15%
Female employees
(2020: 14%)
46%
of clerical and
administrative staff
were female (2020: 45%)
7%
of operational staff
were female
(2020: 7%)
Our Social Policy
Our social policy outlines our goal to
respect, empower, and protect our people
by supporting freedom of association,
valuing merit above all else, and prohibiting
modern slavery in all its forms across our
entire supply chain.
24
2021 Annual Report and Form 20-F 25
Products
Developing value-added solutions
We work with our customers in the design,
delivery and application of sustainable products
and solutions through construction, building
materials and technical support. We offer
multiple products and building solutions with
enhanced sustainability attributes, and many of
our products can help customers achieve higher
scores in green building rating schemes such as
BREEAM®, DGNB, and LEED®. Our ranges of
products with enhanced sustainability attributes
include concrete products used in water
management systems, products containing
recycled content and products that deliver
sustainability benefits for the built environment.
Creating carbon solutions
Concrete has a role to play in delivering a
net‑zero built environment. We are collaborating
across the construction value chain and
the wider scientific community to provide
lower‑carbon products, infrastructure and
building solutions to shape the path towards
carbon neutrality. For example, we are involved
in collaborative initiatives and research projects
to progress carbon capture, utilisation and
storage (CCUS) solutions.
Driving resource efficiency
The circular economy represents a growth
opportunity for CRH. We are already a
significant contributor to the circular economy.
For example, approximately 25% of every
mile of road we build is made from recycled
materials. We aim to develop building materials
to improve resource efficiency, minimise
construction waste and progress the circular
economy by considering the full life‑cycle of
our products. It is our goal to deliver more
sustainable outcomes for our customers.
39.5 million
tonnes
of alternative fuels and
raw materials recycled*
(2020: 36.5m tonnes)
28%
relevant product
revenue from products
used in certified
building standards**
(2020: 25%)
46%
of product revenue is
derived from products
with enhanced
sustainability attributes
(2020: 46%)
c. 25%
of our raw materials
requirements for our
US asphalt business
are met by recycled
asphalt pavement
(RAP) and shingles
* Alternative raw materials and fuels are selected wastes and by‑products which can be used to replace natural substances and fossil fuels. This metric demonstrates to investors our focus on the circular
economy. We monitor this KPI in order to evaluate our performance in contributing to the circular economy which, as noted above, represents a growth opportunity for CRH.
** External revenue from products that can be used directly in structures certified to BREEAM®, Green Globes®, LEED®, IC‑700, etc. Products may qualify for points as a result of certifications such as
ISO14001, BES6001, local sourcing, recycle content and other characteristics.
26
2021 Annual Report and Form 20-F 27
Sustainability - continued
Embedding sustainability across our business
Collaboration
Strengthening our
stakeholder engagement
Reinforcing our approach
to human rights
Taking action for
human rights
We aim to develop and strengthen positive
relationships with our stakeholders through
open communication. Our stakeholders include
investors, customers, employees, suppliers,
NGOs, communities, assessment organisations,
advocacy groups and other interested parties.
We engage and align suppliers with our core
values, driving improvement actions at the point
where we have most influence.
Creating positive change
Our policy is to be a good neighbour and
we contribute to local communities through
employment, educational development and
supporting local businesses. Despite COVID‑19
constraints, we made donations in 2021 to areas
including community relations and development,
environment and conservation, education and
employment, health and wellness, arts and
culture and provision of shelter.
We develop our approach to human rights
through the identification of salient human rights
related to CRH operations. Key human rights
risks faced by CRH include the health and
safety of those working on our sites, the health
of neighbouring communities and the labour
rights of workers in our extended supply chain.
Risk assessment and management processes
play a critical role in driving our human rights
performance. Additionally, we apply the UN
Guiding Principles on Business and Human
Rights to support our human rights approach.
c. 1,100
stakeholder
engagement events
hosted by Group
companies in 2021
(2020: c. 800)
$7.1 million
Donated to local
organisations
and initiatives
in 2021
(2020: $8.3 million)
Actions we have taken to protect human rights
include improved training and awareness through
our Modern Slavery e‑module, the updating of
our Code of Business Conduct (CoBC) and of
our Supplier Code of Conduct (SCoC) and the
identification of salient human rights issues. In
response to supply chain risks, we increase
our assurance and due diligence processes as
required. By engaging with industry partnership
schemes, we aim to help improve standards
across industry sectors.
We monitor our progress regarding human rights
using KPIs, which include zero harm measures
and increased training and awareness. We
publish our CRH Modern Slavery Statement
annually, available on www.crh.com.
For more on our stakeholder
engagement see page 27
Integrity
Leading with integrity
At CRH, we are committed to conducting
business in the right way, complying with the law
and working responsibly. A “Speak‑up” culture
encourages employees, customers, suppliers
and other stakeholders to raise good faith
concerns through the CRH hotline.
Practicing good business conduct
Our refreshed Code of Business Conduct
(CoBC) was launched in 2021. Our CoBC
applies to all employees. We take a zero‑
tolerance approach to bribery, corruption and
fraud. Globally our senior management complete
an Annual Compliance Certification, confirming
their business’s compliance with our CoBC and
accompanying policies.
Regular training on our CoBC is provided to
relevant employees. Certain employees, based
on risk profile, undertake annual advanced
compliance training (ACT) covering Anti‑Bribery,
Competition/Antitrust, Anti‑Fraud and Anti‑Theft.
Following the update of our Supplier Code of
Conduct (SCoC), we have further developed our
core due diligence processes to increase the
visibility and insights we get into our suppliers.
These actions are taken with the goal of ensuring
that good business practices are upheld
throughout our supply chain.
c. 32,600
employees completed
CoBC training in 2021
(2020: c. 32,100)
c. 8,500
employees completed
ACT training in 2021
(2020: c. 9,000)
Complying with applicable
legislation
CRH is committed to the highest level of legal,
ethical and moral standards. It does not tolerate
any illegal behaviour and all CRH companies
respect and comply with the laws and
obligations in the countries and regions in which
they operate.
CRH applies this same approach to political
contributions. For example, in the US, CRH
supports the rights of employees to participate
in the political process through employee‑funded
Political Action Committees (PACs) and CRH's
US operations provide administrative support
(consistent with applicable laws) to their affiliated
federal and state PACs.
26
2021 Annual Report and Form 20-F 27
How we engage with our stakeholders
Feedback from stakeholder engagement is reported to, and carefully considered by, the SESR Committee and the Board.
Employees
Local
communities
Investors
Customers
Suppliers
Governments
and regulators
Academic
and scientific
community
Media
NGOs and
pressure
groups
Key areas
of interest
• Business
• Community
• Business
performance
issues
performance
• Building
solutions
• Quality &
delivery
• Health &
safety
• Environment
& climate
• Business
• Corporate
performance
governance
• Health, safety
& wellbeing
• Planning
matters
• Strategic
growth
• Inclusion &
diversity
• Potential
local impact
• Capital
allocation
• Corporate
governance
• Human
rights
• Potential
local impact
• Sustainability
• ESG topics
• Board and
Executive
remuneration
• Inclusion &
diversity
• Customer
relations &
contracts
• Health &
safety
• Sustainable
products
• Product
innovation
• Quality &
delivery
• Health &
safety
• Environment
& climate
• Contract
performance
• Corporate
governance
• Local
impacts
• Planning
matters
• Corporate
governance
• Natural
capital
• Human
rights
• Product
standards
• Collaboration
• Environment
& climate
• Product
efficiency &
innovation
• Human rights
• Natural capital
• Graduates &
apprentices
• Health &
safety
• Environment
& climate
• Inclusion &
diversity
• Human
rights
• Environment
& climate
• Eco‑efficiency
• Product
innovation
• Corporate
governance
Key
methods of
engagement
• Team
meetings
• One‑to‑one
meetings
• Results
presentations
• Customer
surveys
• Employee
newsletters
• Open
days
• Annual General
• Formal market
Meeting
research
• Performance
reviews
• Site tours
and virtual
events
• One‑to‑one
• Negotiations
meetings & calls
• Town Hall
meetings
• Employee
surveys
• One‑to‑one
meetings/
briefings
• Surveys
• Investor & ESG
conferences &
roadshows
• Participation
in local events
• Employee
engagement
processes
• Exhibitions
• Product
information on
packaging
• Customer
relationship
development
• Company
websites &
social media
• Supplier
• Industry
surveys and
audits
associations
• One‑to‑one
meetings
• Media
surveys
• One‑to‑one
meetings
• Briefings &
direct meetings
• Seminars &
lectures
• Media
briefings
• Participation
in events
• Audits
• Open days
• Multi‑
stakeholder
forums
• Round table
discussions
• Press
releases
• Presentations
• Social media
• Intern, graduate
& apprenticeship
programmes
• Interviews
• Presentations
• Open days
• Contractual
meetings
• Tenders
• Information
requests
• E‑tendering
platforms
• Assessment
and due
diligence
2021
Outcomes
Improved engagement with employees
This helps to attract, develop, retain and
motivate our workforce, sustaining our
competitive advantage and long‑term
success. In 2021, it also helped us
strengthen our approach to inclusion and
diversity across our businesses.
Further improved our community
relationships
Engaging with our local communities
during 2021 ensured that we increased our
understanding of their needs and priorities,
addressed any concerns and identified areas
for value creation.
Continued engagement with investors
Engagement with investors helps us
understand their expectations of our risk
management and our financial and ESG
performance. During 2021, investor focus
continued around emissions reduction,
employee engagement and innovation.
Understood and met customer
requirements
Engaging with suppliers to drive
best practices
Engaging with our customers ensures we
listen to their needs and help them to meet
their sustainability commitments. In 2021,
we continued to work with our customers on
sustainable product development.
Progress in research and development,
innovation and sustainability
By engaging with academic and scientific
institutions during 2021, we continued to
support partnerships and collaborations
on research development, championing
innovative advances and collaborating on
innovative products that contribute to a
more sustainable built environment.
We engage with suppliers to develop a
responsible and sustainable supply chain
needed to deliver innovative and sustainable
products. During 2021, we worked with
our suppliers to drive improvements across
sustainability priority areas including health
and safety and environment.
Continued engagement with governments
and regulators
In 2021, our engagement with local and
national regulators, governments and
industry associations, ensured that we
contributed appropriately to issues relevant
to our activities, improved our sustainable
performance and compliance and progressed
projects for the enhancement of society.
Engagement with media
Productive engagement with NGOs
We continued to improve our engagement
with media to ensure that specific
sustainability issues were addressed
appropriately and effectively. During 2021,
engagement focused on how we are
addressing climate change and delivering
integrated solutions.
Through our memberships and partnerships
with NGOs we continue to be involved in
developing industry best practices across a
range of established sustainability topics and
collaborating on integrated solutions across
the value chain.
28
2021 Annual Report and Form 20-F 29
Transparency on Climate
Task Force on Climate-related Financial Disclosures
We have a long-term commitment to transparency for our investors and stakeholders on how we
are managing climate-related risks and opportunities in the transition to a low-carbon economy.
In this section, we provide information consistent with the Task Force on Climate-related Financial
Disclosures (TCFD) recommendations and recommended disclosures*.
Governance
Board oversight
The Board is responsible for promoting the
long‑term sustainable success of the Group,
generating value for shareholders and ensuring
that the Group makes a positive contribution to
wider society. Its role is to provide leadership; to
establish and monitor the Group’s purpose, values
and strategy; to set the Group’s risk appetite;
and to ensure that there is a robust framework of
effective controls to enable risks and opportunities,
including those related to climate change, to be
successfully assessed and managed.
Sustainability, including the impact of climate
change, is embedded in the Group’s strategy
and business model. The Board recognises the
importance of decarbonisation in addressing the
challenges of climate change and believes that
the Group’s integrated strategy of value‑added
products and innovative solutions have a key
role to play in delivering a more resilient and
sustainable built environment.
Climate change and sustainability are frequent
discussion topics at Board and Committee
Board oversight of climate-related risks and opportunities
meetings, with the Board and its Committees
discussing various aspects of the Group’s
climate strategy, the linkage between the
Group’s remuneration policies and practices
and the Group’s sustainability (and climate‑
related) objectives, stakeholder expectations,
the regulatory environment and CRH’s carbon
reduction targets during 2021. In addition,
climate change and sustainability‑related
matters form an integral part of discussions
on the Group’s strategy and business model,
capital allocation and risk management. The
SESR Committee, to which the Board has
delegated primary responsibility for monitoring
developments related to sustainability, including
climate, and providing strategic direction,
oversight and support to the Board on these
important topics, meets every quarter and
provides a detailed report of discussion and
recommendations to the Board following the
conclusion of each meeting.
Further details in relation to the role and
responsibilities of the Board and its five
permanent Committees are set out in the
Governance Report on pages 60 to 109.
This includes details of proposed revisions to
Board
the Group’s Remuneration Policy to include
sustainability metrics, including a climate‑
related metric, in the Group’s long‑term
performance share plan.
Management responsibility
The Chief Executive is responsible for the
operational and profit performance of the Group
and is accountable to the Board for all authority
delegated to executive management. The Chief
Executive executes strategy agreed with the
Board and regularly reports to the Board on
the progress and performance of the Group,
including in relation to climate‑related matters.
The Chief Executive is supported by the Group
Leadership Team, which is responsible for
implementing strategy, pursuing performance
delivery and progressing the Group’s
sustainability and climate‑related agenda.
Responsibility for formulating and executing our
climate strategy sits with the Chief Operating
Officer (COO). As detailed in the table below, the
Group Leadership Team receives support from
various executive‑level committees and other
working groups and functions on sustainability
and climate‑related issues.
Safety, Environment & Social
Responsibility Committee (SESR):
Audit
Committee:
Remuneration
Committee:
Nomination & Corporate
Governance Committee:
Acquisitions, Divestments
& Finance Committee:
Monitoring developments related
to sustainability, including climate,
and providing strategic direction,
oversight and support to the Board.
Monitoring and assessing the
Group's risk management
processes (including climate
risk) and internal control
systems across the Group.
Designing incentive structures which
support the achievement of the
key strategic priorities such as our
climate and sustainability objectives.
Monitoring the Board's structure,
size, composition and balance of
skills to ensure that the Board can
meet its strategic objectives and
regulatory responsibilities.
Reviewing the strategic rationale
and impact of proposed
acquisitions, disposals and large
capital expenditure projects.
Management’s role in assessing and managing climate-related risks and opportunities
Chief Executive
Group Leadership Team
Risk Committee: sets the Group’s risk
strategy and oversees the Group’s risk
governance model and how the Group
identifies, assesses and manages the
principal and emerging risks the Group
encounters in pursuit of its strategic
objectives.
Climate Change Committee: is
chaired by the COO, and is responsible
for considering and developing climate
strategies for consideration by the Group
Leadership Team and Board and for
ensuring that they are fully embedded in
the Group’s corporate priorities.
Capital Markets & ESG Team:
co‑ordinating stakeholder engagement
on climate‑related matters and monitoring
climate targets and KPIs through the
Annual Sustainability Review process.
Strategy, Sustainability & Innovation
Team: focusing on our longer‑term group
strategy, with a particular emphasis on the
sustainability and climate change agenda,
and to drive value creation through the
development of sustainable products,
processes and building solutions.
Group Divisions & Operating Companies: participate in and support central initiatives by considering and developing strategy proposals, reporting progress on sustainability
and climate‑related metrics, identifying and managing risks, and ensuring that risk management frameworks are operating effectively and that the control environment is robust.
* As required by the FCA Listing Rule 9.8.6R(8) which applies to issuers with a premium listing on the London Stock Exchange.
28
2021 Annual Report and Form 20-F 29
Strategy
Risk Management
How climate change impacts our strategy
CRH is a global leader in sustainable building
materials and addressing climate change is a
cornerstone of our approach to sustainability.
We strive to be a leader in the production of
high‑performing, climate‑friendly materials
and products aimed at climate adaptation
and mitigation. By developing value‑added
products and services for sustainable building
solutions, we aim to contribute to a better
built environment, address potentially negative
impacts of climate change and ensure the
creation of long‑term financial and societal value.
We have provided two illustrative examples
of how climate‑related issues impact our
businesses, strategy and financial planning on the
right of this page.
Strategic management of risks
Potential strategic risks to CRH, including
climate, are identified, assessed and managed
in line with our defined ERM to determine
materiality and the potential timelines over
which the strategic impact may materialise. In
considering the impact, we utilise our strategic
planning horizon (and split these internally into
short‑term (<1 year), medium‑term (1 ‑ 3 years)
and long‑term exposures (3 ‑ 5 years).
Risks may be evaluated as emerging (e.g.
expected to occur over materially longer periods
or exposures where the impact cannot yet be
fully understood) informing, for example, the
management of risks related to climate change
and our associated 2050 ambition as well as our
2030 targets.
Using the risk identification process outlined
in ‘Risk Management’ on page 32, we have
identified several climate‑related risks and
opportunities within our strategic planning
horizon. A selection of these can be seen in our
climate scenario analysis disclosure on page 30.
Additional strategic climate impacts, which may
occur over the short‑, medium‑ and long‑term,
including, acute, chronic, technology, legal,
regulatory, market and reputation can be seen as
part of our Form 20‑F disclosure on page 235.
The process used to determine which risks and
opportunities could have a material financial
impact can be seen in our Risk Management
disclosure on this page.
Further information is included as part of our Risk
Governance reporting on page 32.
Identifying climate-related risks and
opportunities
Risks are identified through a number of different
forums such as risk workshops, risk champion
forums and engagement with senior leaders and
other stakeholders. During 2021, as part of our
continued commitment to understanding the
potential climate‑related risks and opportunities
that CRH faces, we undertook a number of risk
workshops focused on where climate‑related
risks could adversely impact the Group, and
where we see potential opportunities for CRH to
create value and contribute to the development
of a more resilient built environment and a more
sustainable future. The outputs of our workshops
are included as part of our climate scenario
analysis disclosure on page 30.
A robust risk catalogue is used to inform our
bottom‑up risk identification processes and
ensure our businesses consider the full breadth
of climate‑related risks and opportunities.
Assessing climate-related risks and
opportunities
Climate‑related risks and opportunities are
considered over our short‑, medium‑ and
long‑term horizons. The Group operates a bottom‑
up and top‑down risk assessment process,
thereby allowing risk information flows from our
Operating Companies to inform our Group‑wide
assessment and allowing key risk topics from a
Group perspective to filter down and inform local
risk identification and assessment. Common risk
criteria and topic hierarchies are used to assess
and consistently categorise risks and opportunities
which helps identify and manage aggregate
exposures that may be more effectively managed
centrally.
The size and significance of each risk is determined
according to the product of its assessed impact on
the organisation and its likelihood of occurrence,
with consideration of factors such as impact
velocity, for example, informing the prioritisation
of risks for subsequent management to within
agreed acceptable levels. Our disclosure of climate‑
related risks (see page 235) distinguishes between
transitional and physical risks and associated risks
within each category.
While climate‑related risks and opportunities are a
specific focus for CRH, they form part of a range
of interconnected risks that the Group manages
through our ERM framework. To understand more
about our processes for identifying, assessing and
managing risk, please see our Risk Governance
section on page 32.
Future-proofing our business
Throughout our business there is a
constant focus on making our business
more resilient and sustainable. This includes
reducing emissions, increasing the use
of alternative materials, accelerating
sustainable product innovation and
anticipating the evolving needs of our
customers in response to the changing
climate and weather patterns. Evidence
of our on‑going commitment to deliver a
more resilient built environment was the
strategic acquisition of NPP, Inc. during
the year. This transaction strengthens
CRH’s ability to provide fully integrated
solutions that connect and protect critical
utility infrastructure and enhance the built
environment.
Integration in our processes
We prioritise resource efficiency, the use
of recycled materials and the recyclability
of products at end‑of‑life. For example,
we support the circular economy through
investment in our asphalt plants and
processes to deliver higher levels of
recycled asphalt pavement (RAP) into
asphalt mixes.
In addition, we use an internal carbon
price in relevant capital expenditure
approval and strategic planning
processes, with the aim of directing
investments towards efficiency,
optimisation and lower‑carbon solutions.
30
2021 Annual Report and Form 20-F 31
Transparency on Climate - continued
Task Force on Climate-related Financial Disclosures
Climate scenario analysis
In line with the recommendations of TCFD,
we undertook a qualitative assessment to
identify climate risks and opportunities,
potential impacts on our financial position
and consider how our business strategy may
perform. In line with TCFD guidance, we used
the following two warming scenarios (with
time‑horizons between 2020 and 2100) which
are sufficiently diverse to capture key impacts
and uncertainties:
• A well below 2oC world – where
transition impacts are likely to be most
impactful as society acts rapidly to limit
greenhouse gas emissions. Based on the
IPCC's SSP11‑RCP2.62 with reference to
the IEA ETP203.
• 4oC world – where physical impacts are
likely to be most impactful as climate policy
is less ambitious. Based on the IPCC's
SSP34‑RCP8.55.
Below is an illustration of certain impacts that
could arise under each warming scenario
together with their relevant potential impact on
our financial position and business strategy.
Transition
Physical
As part of
our analysis,
we looked at
climate-related
risks and
opportunities
associated
with these
categories:
Examples
Market
Reputational
Policy
Technological
Changing
Weather
Patterns
Extreme
Weather
Events
Drought
Rising
Sea
Levels
Risk
$
Opportunity
Risk
Opportunity
Carbon Pricing
Innovation
Extreme Acute and
Chronic Weather Events
Resilient Building
Materials
Which may
lead to:
Increased carbon pricing
regulation
Increased demand for circular
products
How this
may impact:
Increased cost of purchasing
allowances or credits to meet
carbon emission caps
How we are
managing:
We are committed to reducing
our emissions through
transitioning to low carbon
energy technologies and
reducing the carbon footprint
of our products
Reduced direct costs as a
result of resource efficiency,
and the emphasis on
recycling in our products
We are committed to
advancing circularity in our
businesses. For example, we
plan to use 100 million tonnes
of RAP by 2030
Greater chance of disruption
due to acute and chronic
weather events (e.g. storms
and hurricanes)
Increased customer demand
for sustainable products
Increased indirect costs
for clean‑up and mitigation
activities
Increased revenues from
products which deliver climate
adaptation
Our balanced portfolio provides
some natural mitigation and
through an annual assessment
of our key locations
We will continue to bring
sustainable products to the
market and advance research
through our Innovation Centre
for Sustainable Construction
This initial assessment identified a number of transition and physical risks and opportunities which may adversely or positively impact the operational and
financial performance of the Group, without considering any mitigation or adaptation actions CRH may take. CRH continually assesses its strategy, business
model and ongoing business performance to make sure that they are driving sustainable growth and value creation for its stakeholders. As CRH continues
to assess and re‑assess its strategy and associated risks and opportunities, new risks and opportunities may become apparent attributable to climate,
sustainability, or other topics that the Group considers as part of its strategic planning. Should such risks and opportunities be identified, CRH’s approach
enables the Group to refresh elements of its strategy. Based on this initial assessment of the risks and opportunities that need to be managed, the Group do
not believe that its business model would need to materially change. For more information on the Group's financial resilience, including its viability statement,
see page 35. For more information on climate‑related risks and opportunities, see pages 118 and 235.
1. Intergovernmental Panel on Climate Change’s (IPCC) Shared Socioeconomic Pathway 1 scenario expects net‑zero after 2050 with temperatures stabilising around 1.8C higher by the end of the century.
2. Representative Concentration Pathway 2.6 is a "very stringent" pathway which expects carbon dioxide (CO2) emissions to start declining by 2020 and go to zero by 2100.
3. International Energy Agency’s Energy Technology Perspectives 2020 scenario expects the global energy system to achieve net‑zero emissions by 2070.
4. Intergovernmental Panel on Climate Change’s Shared Socioeconomic Pathway 5 scenario expects low international priority for addressing environmental concerns.
5. Representative Concentration Pathway 8.5 expects emissions to continue to rise throughout the 21st century. Since the IPCC's 5th Assessment Report was published, this has been thought to be very
unlikely, but still possible as feedbacks are not well understood.
30
2021 Annual Report and Form 20-F 31
Metrics and Targets
As a leader in our industry, we strive to address the climate‑related risks and opportunities that arise as we transition to a low‑carbon economy. In line with our
continuous improvement philosophy, we will continue to develop our disclosure practices to better measure and improve our performance across the value chain.
We provide reliable, verifiable and objective climate‑related metrics to effectively measure our progress against climate‑related targets.
Scope 1
2021 33.4m
2020 32.4m
2019 33.9m
tonnes of direct CO2 emissions
from use of fuels, chemical
decarbonisation from cement
and lime production and transport
of raw materials and finished
products in our own vehicles
Indirect CO2
emissions
from purchased
electricity
Scope 2
2021 2.6m
2020 2.6m
2019 2.6m
Scope 3
2021 12.0 m
2020 10.9m
2019 13.6m
tonnes of indirect
emissions from other
activities
Scope 3 Downstream
0.3m
Tonnes of indirect
emissions from
customer transport
Scope 3 Upstream
11.7m
Tonnes of indirect emissions
from sources including:
• purchased goods
• fuel and energy related activities
• contracted transport
• waste generated
• employee commuting
Alternative fuels
2.1 million tonnes
of carbon neutral biomass and non‑fossil
fuels used in our cement plants (2020:
2.1 million tonnes), providing 33% of fuel
requirements for cement on a Group
level, 50% in the EU alone.
Recycled materials
8.0 million tonnes
of waste materials and by‑products used
to replace virgin materials and clinker in
our cement manufacturing (2020: 8.5
million tonnes).
Physical climate risk
<1%
of our active locations are identified as
being in areas under “High” or “Extremely
High” risk of drought severity.
Research and innovation
>60
research projects ongoing across the
Group in partnership with the industry
and academic institutions to develop new
and innovative technologies.
Climate-related targets
25%
reduction in absolute group‑wide Scope
1 and Scope 2 CO2 emissions by 2030
(from a 2020 baseline).
520kg CO2
per tonne cementitious product is our
target for our cement plants, accelerated
from 2030 and expected to be achieved
by 2025.
50%
product revenue from products with
enhanced sustainability attributes by
2025.
For more information on our targets
including progress, see pages 21 to 26.
For reporting CO2 emissions we use the GCCA 'Sustainability Guidelines for the monitoring and reporting of CO2 from cement manufacturing' and the accompanying Excel spreadsheet, ‘Cement
CO2 and Energy Protocol, Version 3.1, CO2 Emissions and Energy Inventory’. In this methodology, CO2 from biomass fuels is considered climate neutral. We calculate CO2 emissions from other
activities using appropriate emission factors and in line with the World Resources Institute Greenhouse Gas Protocol (Revised Edition). We calculate Scope 2 emissions from electricity in line with the
location‑based method of the World Resources Institute Greenhouse Gas Protocol Scope 2 Guidance (2015), using 'International Energy Agency (2021) Emissions Factors' (published in 2021) and
eGRID2019 'Summary Table' for emissions factors (published in 2020). We calculate Scope 3 emissions estimations in line with the GHG Protocol's Scope 3 Standard and the GHG Protocol's Scope
3 Standard for cement companies, using the UK Government 'GHG conversion factors for company reporting 2021'. Reported Scope 3 emissions include the most relevant emissions categories for
CRH operating company activities.
32
2021 Annual Report and Form 20-F 33
Risk Management
Integrated and effective risk management supports the realisation of our strategic objectives and the
continued success of our business. Like all businesses, CRH faces a level of uncertainty in executing
on our strategic objectives, inherently creating risks and opportunities. Our Enterprise Risk Management
(ERM) framework is a critical tool in managing the uncertainties our business faces in our relentless
focus on value-creation, protecting our people and generating long-term, sustainable growth.
Making Better Decisions
ERM is a process embedded throughout
the Group which provides a structured and
consistent global approach to identifying,
assessing and managing our most material
threats and opportunities. Ultimately, the purpose
of ERM is to assist our people in making better
decisions by focusing decision‑makers on taking
the right risk for the right reward, encouraging
the effective and informed interaction with risk to
protect and grow our business.
Our framework, which is aligned to the
Committee of Sponsoring Organisations of
the Treadway Commission (COSO) principles,
is embedded across the Group and is a key
element in our decision‑making practices.
Our risk intelligent culture is key to embedding
ERM into decision‑making, and whilst
accountability for the effective management of
risk sits with leadership throughout the Group,
all employees are encouraged to be risk
managers and proactively manage risk.
We believe that the key to ensuring risk is
managed effectively is to integrate ERM into
our businesses' day‑to‑day decision‑making
activities. While formally considered as part of
our strategic planning and budgeting processes,
regular discussion on risk at management
meetings drives day‑to‑day operational decision‑
making and enables our risk framework to be
truly value‑adding.
Key elements of our Framework
1
2
3
4
5
Culture &
Governance
Risk &
Strategy
Framework
& Process
Appetite
& Tolerance
Ownership
& Reporting
Risk workshops, facilitated by Group Risk,
bring together leaders from across the Group
to identify risks and opportunities, and define
mitigation. Uncertainties that present themselves
as downside risks are assessed in line with the
Group's risk appetite and those which present
themselves as opportunities are sufficiently
explored and captured, where possible.
Our risk appetite and tolerance framework is a
critical element of our overall ERM framework,
defining key risk parameters within which
strategic decision‑making takes place and
assisting with our objectives of disciplined and
focused growth. The Board determines our risk
appetite against our strategic objectives and
approves the framework on an annual basis in line
with good corporate governance practice.
ERM in Action
ERM is applied to strengthen our portfolio
management processes to further enhance our
confidence to undertake investments and step
into new markets, such as our purchase of Pebble
Technology International which represented
strategic entry into a new adjacent outdoor
category for our Architectural Products Group.
Our framework allows us to add depth to our
understanding of our customers and markets
and generate new ways to meet their needs,
and despite ongoing challenges, such as the
ongoing COVID‑19 pandemic, our performance
continues to highlight the resilience and agility of
our people, our business model and our proven
record of delivery through uncertainty.
Enterprise Risk Process
Identification
Assessment
Management
Reporting
Businesses undertake
bottom‑up and top‑down
risk identification activity to
identify and quantify the risks
and opportunities that could
impact the delivery of strategic
objectives, or the interests
of our key stakeholder
groups (e.g. our suppliers,
shareholders, employees,
customers, communities,
environment and climate).
Identified ‘severe, but plausible
risk events’ are consistently
assessed on inherent and
residual bases across a
number of risk lenses such as
Health & Safety, Environmental,
Climate and Financial, with
equally weighted impact criteria
thresholds defined for each.
Consistent likelihood criteria are
equally applied group wide.
Risks are evaluated against our
appetite thresholds, objectively
informing any subsequent
response and/or required
escalation to the relevant
management and/or Board
oversight committee. Formal
processes are in place to
monitor critical risks which feed
into our risk reporting practices.
Our enterprise risks are
reported to the Risk Committee
quarterly, as well as to the Audit
Committee throughout the year.
Any risks that warrant attention
at other committees are
discussed and decisions made
at those committees (internal
control and Sustainability risks,
for example, being discussed
at the Audit and SESR
Committees respectively).
32
2021 Annual Report and Form 20-F 33
Risk Governance Structure
Board
Ultimately responsible for strategy, risk and governance across CRH.
Sets the risk appetite and ensures risks are managed within appetite.
Delegates responsibility to Audit Committee.
Safety, Environment & Social
Responsibility Committee (SESR)
Responsible for monitoring developments
related to sustainability risks including
safety, health, environment, climate and
social performance, and providing strategic
direction, oversight and risk assurance.
Audit Committee
Responsible for monitoring and assessing the
Group’s risk management and internal control
systems. Receives regular updates on risk
management strategies, mitigation and action plans.
Other CRH
Committees
Committees include: Acquisitions,
Divestments & Finance; Nomination &
Corporate Governance; and Remuneration.
Refer to the Governance section on page
54 for further information.
Global Leadership Team (GLT)
Responsible for setting strategy, pursuing performance delivery and progressing
our ambitious sustainability agenda. Delegates responsibility for risk strategy,
oversight and governance to the Risk Committee.
Risk Committee
Responsible for setting risk strategy and overseeing our
governance model and how we identify, assess and manage
the principal and emerging global risks the Group encounters
in the pursuit of our strategic objectives.
Other Leadership Councils
Responsible for overseeing aspects of strategy, policy, targets and
objectives related to a particular priority area for the Group, such
as health and safety, climate and information security.
Regional Leadership
Responsible for identifying and managing divisional risks,
ensuring risk management frameworks are operating effectively
and capturing upside of risk, where possible.
Risk Champion Network
Embedded across businesses, functions and divisions.
Responsible for integration of risk management frameworks,
regular reporting of risks and sharing best practice mitigation.
First Line of Defence
Operating company/business leaders
are responsible for risk identification,
management and ensuring that the
control environment is robust.
Second Line of Defence
CRH has various oversight functions
which are responsible for providing
subject matter expertise, defining
standards and ensuring adherence.
Third Line of Defence
Group Internal Audit provides
independent assurance over the control
environment on a continuous basis.
Emerging Risks
A dynamic threat watchlist is maintained to
enable early recognition of threats which could
impact the long‑term performance of many areas
of our business. The watchlist is consolidated
using data received from our businesses,
subject matter experts, risk champion network
and external providers of thought leadership.
Whilst the watchlist is primarily utilised as a
mechanism to monitor emerging risks, the Group
understands that associated opportunities may
arise from developing a deep understanding of
our emerging risks.
We define an emerging risk to be a potentially
significant threat where the impact can’t yet
be fully understood, restricting our ability
to confidently define a strategy and build
capabilities to significantly influence the
materiality of the risk. While considered as part
of our identification processes, the assessment
of such risks can be difficult to quantify due to
a lack of data or longer time horizons. While
emerging risks are generally new and unknown,
they can be known risks that have evolved to
present new challenges to the Group.
The Risk Committee reviews the watchlist and
deems certain threats to be accepted risks, which
are integrated into our risk register and are subject
to oversight by the Risk and Audit Committees.
Key emerging risks in this category include
extreme weather events, which can present
physical barriers to work onsite, dampen
demand and hinder performance, and labour
model disruption, where tightening labour pools
materialise within our industry due to a negative
convergence of demographic, educational and
economic trends.
34
2021 Annual Report and Form 20-F 35
Risk Management - continued
Principal Risks and Uncertainties
Our principal risks and uncertainties, presented below and defined in more detail on pages 116 to 121 and 232 to 240, are
reviewed regularly and represent the key risks faced by the Group at the time of publication. The Risk Committee helps ensure
the risks highlighted in this report reflect those risks which could have the most material impact on the Group achieving its
strategic objectives. These risks form the basis of Board and Audit Committee communications and discussions.
Link between Principal Risks
and Strategic Objectives
Continuous
Improvement
Focused
Growth
Benefits of
Scale and
Integration
Developing
Future
Leaders
Strategic
Industry Cyclicality and Economic Conditions
People Management
Commodity Products and Substitution
Portfolio Management
Public Policy & Geopolitics
Strategic Mineral Reserves
Climate Change and Policy
Information Technology and/or Cyber Security
Operational
Health and Safety Performance
Sustainability and Corporate Social Responsibility
COVID‑19 Pandemic
Compliance
Laws, Regulations and Business Conduct
Taxation Charge and Balance Sheet Provisioning
Financial and
Reporting
Financial Instruments
Goodwill Impairment
Foreign Currency Translation
Changes
Brexit was removed as a principal risk as the effects of the United Kingdom's decision to leave the European Union became clearer,
along with the improvement in performance for our United Kingdom businesses during the course of 2021. Our Defined Benefit and
Pension Schemes risk has been downgraded as an enterprise risk as mitigation brings the risk under Group materiality thresholds.
Activities of the Risk Committee
Over the course of 2021, the Risk Committee continued to play a pivotal role in risk strategy, performance and oversight. The activities that the committee
focused on included:
First Line of Defence
Second Line of Defence
Third Line of Defence
Framework Enhancements
The committee undertook risk
challenge sessions with our key
Divisions to ensure that the risks
being faced within our businesses
are being effectively managed
within the Group’s risk appetite.
The committee received regular
updates from our second line
functions, including Group
Sustainability, Legal & Compliance,
Information Security, Tax, Treasury
and Security, to name a few.
Updates were provided by the
Group Head of Internal Audit,
including an independent
assessment of the risk
environment and the Internal
Audit plans which were designed
on a risk-based methodology.
The committee received regular
updates on risk projects including
our updated Risk Appetite
framework, Risk Ownership, Risk
Charter and other corporate
governance items that fall under
committee remit.
34
2021 Annual Report and Form 20-F 35
Longer Term Viability Statement
Viability Assessment: Period
Viability Assessment: Approach
Our Viability Statement, which does not form part
of the Annual Report and Form 20‑F as filed with
the SEC, has been prepared in accordance with
the UK Corporate Governance Code 2018.
Assessment of Prospects
The Board has carried out a robust assessment
of our current position and the principal risks
facing the Group, including those which would
threaten its strategy, business model, future
performance, solvency or liquidity. Each of the
above is dealt with in the following sections of this
Annual Report and Form 20‑F:
Current Position
‑> Why Invest in CRH, page 8
‑> Market Backdrop, page 12
Strategy & Business Model
‑> Our Strategy, page 14
‑> Business Model, page 16
Principal Risks
‑> Key Performance Indicators, page 18
‑> Principal Risks & Uncertainties, page 116
The Board’s consideration of the long‑term
prospects of the Group is an extension of
the strategic planning process. This process
includes regular budget reviews as part of the
internal reporting cycle, financial forecasting
and performance reviews, a comprehensive
enterprise risk management assessment and
scenario planning involving our principal risks and
uncertainties. Our business strategy is focused
on creating long‑term value and delivering
superior returns for all our stakeholders through
disciplined capital management and operational
efficiency.
The Board has reviewed the length of time to be
covered by the Viability Statement, particularly
given its primary purpose of providing investors
with a view of financial viability that goes beyond
the period of the Going Concern Statement.
Using the Group Strategic Plan (the ‘Plan’), which
is prepared annually on a bottom‑up basis and is
approved by the Board, the viability of the Group
has been assessed over a three‑year period from
1 January 2022 to 31 December 2024 inclusive.
The Board believes that a three‑year viability
statement is appropriate for the following
reasons:
•
It aligns with our normal strategic planning
time horizon;
• Construction activity, and therefore demand
for the Group’s products, is inherently cyclical
as it is influenced by global and national
economies;
•
It aligns with our long‑term management
incentives, such as the deferred element of
the Annual Performance‑related Incentive
Plan; and
• Uncertainty increases inherently with
expanding time horizons potentially impacting
the large number of external variables that
need to be factored.
Overall, a three‑year period is deemed to achieve
a suitable balance between long and short‑term
influence.
The viability of the Group is assessed against
the Plan and projections considering the Group’s
cash flows, committed funding and liquidity
positions, forecast future funding requirements,
other key financial ratios, including those relevant
to maintaining the Group’s investment grade
credit ratings and the Group’s 2025 climate
targets.
In conducting the viability assessment, the
Board has considered our strong balance sheet
and cash flow generation, our dynamic capital
allocation model underpinned by comprehensive
portfolio reviews and capital appraisals, and our
philosophy of continuous improvement.
Appropriate stress testing of certain key
performance, solvency and liquidity assumptions,
such as EBITDA (as defined)* margins and
Net Debt/EBITDA (as defined)*, underlying the
Plan has been conducted taking account of
the principal risks and uncertainties faced and
possible severe but plausible combinations of
those risks and uncertainties. For more detail
on our principal risks and uncertainties, how
they could impact the Group and how the Group
manages these risks, see pages 116 to 121
of the Governance report.
Conclusion
While the Board acknowledges that the
potential severity, complexity and velocity of
the risks assessed may change, based on their
assessment of viability as described, the Board
has a reasonable expectation that the Group will
be able to continue in operation and meet its
liabilities as they fall due over the aforementioned
three‑year period to 31 December 2024.
In assessing the viability of the Group,
three separate severe but plausible
scenarios were modeled taking account
of the principal risks and uncertainties
faced by the Group.
The scenarios were designed to reflect a
material reduction in growth, the impact
of a potential one‑off expense and a
scenario where both overlap.
Scenario Modelled
Relevant Principal Risks
Scenario 1: Recessionary environment
Economic slowdown/recession resulting in
revenue reductions and margin compression
Industry Cyclicality and Economic Conditions
•
• Portfolio Management
• Public Policy and Geopolitics
• COVID‑19 Pandemic
Scenario 2: One-Off Expense
Impact of a potential large event, fine
and/or penalty
• Laws, Regulations and Business Conduct
• Public Policy and Geopolitics
•
Information Technology and/or Cyber Security
Scenario 3: Combination (1 and 2)
Combination of prior scenarios overlapping
or occurring simultaneously
• Combination of relevant risks from prior
scenarios
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
The performance of our business
is enabled by the skills and talent
of our 77,400 employees in 28
countries. We strive to create
a collaborative, diverse and
inclusive working environment
to stimulate our global workforce
to deliver our strategy.
2021 Annual Report and Form 20-F 37
Business
Performance
and Segmental
Reviews
36-53
Finance Director’s Review
Americas Materials
Europe Materials
Building Products
38
42
46
50
An operator at a TexasBit asphalt plant. Part of CRH’s America’s Materials
Division, TexasBit provides asphalt and paving solutions to a variety of contractors,
businesses, municipalities, and government agencies in the growing Dallas-Fort
Worth and Tyler areas of Texas, United States.
38
Finance Director’s
Review 20211
2021 was another year of growth for CRH driven by our
integrated solutions strategy and positive underlying
momentum in North America and Europe.
Group sales of $31.0 billion (2020: $27.6 billion)
were 12% ahead of 2020 reflecting improved
pricing and volume growth. Year end net debt
of $6.3 billion (2020: $5.9 billion) was reflective
of our continued strong cash generation,
disciplined capital expenditure and value
focused investments. Net acquisition spend
totaled $1.5 billion (2020: $0.4 billion) and total
distributions to shareholders of $1.8 billion
(2020: $0.9 billion). Net Debt/EBITDA (as
defined)* was 1.2x (2020: 1.3x).
Segmental reviews
The sections on pages 42 to 53 outline the scale
of CRH's operations in 2021 and provide a more
detailed review of performance in each of CRH's
reporting segments.
Key Components
of 2021 Performance
Americas Materials benefited from increased
construction activity in 2021 due to strong
residential demand in North America. Underlying
good operating performance offset the impacts
of higher input costs and inclement weather. Like-
for-like sales in 2021 increased by 6% against
2020, due to positive volume growth and pricing
progression.
Europe Materials saw like-for-like sales 11%
ahead of 2020 reflecting good volume growth,
and pricing progress against a prior year
comparative which was heavily impacted by
pandemic restrictions. Positive pricing actions
and strong fixed cost control offset cost inflation
headwinds.
Building Products delivered like-for-like sales
5% ahead of 2020 driven by strong demand for
residential construction and a moderate recovery
in the non-residential sector.
EBITDA (as defined)* of $5.35 billion was 16%
ahead (2020: $4.6 billion) reflecting the benefits
of our integrated solutions strategy with strong
demand growth and continued commercial
discipline. Profit after tax was significantly
ahead of 2020 at $2.6 billion (2020: $1.2 billion)
driven by a strong trading performance and the
non-recurrence of non-cash impairment charges
and one-off restructuring costs in the prior year.
The US Dollar strengthened against most major
currencies by the end of 2021. However, during
2021 the US Dollar weakened against most
major currencies resulting in the average US
Dollar/Euro rate weakening from 0.8771 in 2020
* EBITDA is defined as earnings before interest, taxes,
depreciation, amortisation, asset impairment charges,
profit on disposals and the Group’s share of equity
accounted investments’ profit after tax.
1. See cautionary statement regarding forward-looking
statements on page 111.
2021 Annual Report and Form 20-F 39
to 0.8460 in 2021 and likewise the US Dollar/
Pound Sterling weakening from an average
0.7798 in 2020 to 0.7270 in 2021. Overall
currency movements resulted in a favourable
net foreign currency translation impact on our
results as shown in the table above. The average
and year end 2021 exchange rates of the major
currencies impacting on the Group are set out
on page 154.
Sales revenue
$30
$25
$20
$15
$10
$5
$0
$bn
7.0
9.5
7.2
9.1
11.6
11.3
8.0
10.6
12.4
2019
2020
2021
Americas Materials
Europe Materials
Building Products
Liquidity and Capital Resources -
2021 compared with 2020
The comments that follow refer to the major
components of the Group’s cash flows for
2021 and 2020 as shown in the Consolidated
Statement of Cash Flows on page 144.
Despite significantly increased trading activity
compared to 2020, the Group remained
focused on cash management. Management
delivered a net working capital outflow of
$228 million (2020: $196 million inflow) and
the Group’s operating cash flow increased to
$4.2 billion (2020: $3.9 billion).
Working capital was $2.5 billion at year end
(2020: $2.4 billion) representing 8.0% of sales
(2020: 8.7%). CRH believes that its current
working capital is sufficient for the Group’s
present requirements.
Focused investment in property, plant and
equipment in markets and businesses with
increased demand and efficiency requirements,
resulted in higher cash outflows of $1.6 billion
(2020: $1.0 billion), with spend in 2021
representing 110% of depreciation on owned
assets (2020: 74%).
Reflective of the ongoing strategy of active
portfolio management, the Group invested
$1.5 billion in bolt-on acquisitions (2020: $0.4
billion) which was partly financed by divestment
and disposal proceeds1 of $0.5 billion (2020:
$0.3 billion).
Reflecting our strong financial position and
commitment to returning cash to shareholders,
the Group continued its share buyback
programme in 2021 repurchasing 17.8 million
(2020: 6.0 million) ordinary shares for a total
consideration of $0.9 billion (2020: $0.2 billion).
The Group announced a further $0.3 billion
tranche of the ongoing share buyback
programme on 24 December 2021 to be
completed no later than 30 March 2022.
These buybacks, together with cash dividend
payments of $0.9 billion (2020: $0.7 billion),
reflect the Group’s continued commitment to
returning cash to shareholders.
Year end interest-bearing loans and borrowings
were $10.5 billion (2020: $12.2 billion) and
year-end net debt of $6.3 billion ($5.9 billion)
reflects strong inflows from operations and an
increase in disciplined capital expenditure and
value-focused investments. The Group is in a
good financial position. It is well funded and
EBITDA (as defined)* Net Interest Cover is 17.2x
(2020: 11.9x).
The Group ended 2021 with total liquidity of
$9.8 billion, comprising $5.8 billion of cash
and cash equivalents on hand and $4.0 billion
of undrawn committed facilities which are
available until 2026. At year end, the Group had
sufficient cash balances to meet all maturing
debt obligations (including leases) for the next
five years and the weighted average maturity of
the remaining term debt was 11.9 years.
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
1. Net of cash disposed and including deferred consideration proceeds in respect of prior year divestments
Key Components of 2021 Performance (i)$ millionSales revenueEBITDA (as defined)*Operating profitProfit on disposalsFinance costs (net)Assoc. and JV PAT (ii)Pre-tax profit202027,5874,6302,2639(490)(118)1,664Exchange effects56350111(9)-32020 at 2021 rates28,1504,6802,27410(499)(118)1,667Incremental impact in 2021 of: - 2020/2021 acquisitions85610152-(3)-49 - 2020/2021 divestments(182)(58)(51)102--51 - One-offs (iii)-122122---122 - Impairments--673--154827 - Organic2,15750551578519626202130,9815,3503,585119(417)553,342% Total change12%16%58%101%% Organic change8%11%23%38%(i) For a discussion of our results of operations for the year ended 31 December 2020 compared to the year ended 31 December 2019, please see our Annual Report on Form 20-F for the fiscal year ended 31 December 2020. (ii) CRH’s share of after-tax results of joint ventures and associated undertakings.(iii) One-offs primarily due to 2020 COVID-19 related restructuring costs.
40
Finance Director’s Review 2021 - continued
A $400 million US dollar denominated bond was
repaid on maturity in January 2021 and a €0.6
billion euro denominated bond due to mature in
July was repaid early in April after exercising a
three month par-call option.
The Group also has a $2.0 billion US Dollar
Commercial Paper Programme and a €1.5 billion
Euro Commercial Paper Programme of which
there were no outstanding issued notes at year
end. The purpose of these programmes is to
provide short-term liquidity at attractive terms.
Contractual obligations and Off-Balance Sheet
arrangements are disclosed on page 244 of this
Annual Report and Form 20-F.
Jim Mintern
Finance Director
Development Review
2021
2020
The Americas Materials Division completed
seven bolt-on acquisitions across the US and
Canada for a total spend of $163 million. The
Building Products Division completed six bolt-
on acquisitions amounting to a total spend
of c. $180 million including the acquisition
of Martin Enterprises. Europe Materials
completed four acquisitions, with a total spend
of c. $8 million for the Division. The Group also
paid $54 million of deferred and contingent
consideration related to prior year acquisitions.
On the divestment front, the Group completed
12 transactions and realised total business
and asset disposal cash proceeds of $307
million, inclusive of $123 million relating
to the receipt of deferred proceeds from
prior year divestments. The sale of precast
concrete production assets located in
Spokane, Washington represented the largest
divestment in 2020 and was completed by our
Building Products Division. The divestment of
the building materials business in La Réunion
was the second largest divestment, completed
by our Europe Materials Division, with 10 other
divestments completed across the Divisions.
In addition to these business divestments,
the Group realised proceeds of $128 million
from the disposal of surplus property, plant
and equipment and other non-current assets.
Cash proceeds of $123 million were received
relating to prior year divestments, of which $95
million related to the divestment of the Group’s
equity interest in MHIL.
The Group invested $1.5 billion in 20 bolt-on
acquisitions in 2021 (including deferred
and contingent consideration in respect
of prior year acquisitions).
The largest of these in 2021 was the
acquisition of Angel Brother Enterprises, an
asphalt paving and infrastructure solutions
business in Texas. In addition, the Americas
Materials Division completed a further seven
bolt-on acquisitions across the US and
Canada for a total spend of $0.7 billion.
The Building Products Division completed
eight acquisitions amounting to a total spend
of c. $0.8 billion including NPP a water and
energy infrastructure solutions business in
the eastern region of the US. This acquisition
will further enhance our end-to-end solutions
offering to our customers.
The Europe Materials Division completed
four acquisitions, with a total spend of
c. $17 million. The Group also paid $33 million
of deferred and contingent consideration
related to prior year acquisitions.
On the divestment front, the Group completed
11 transactions and realised total business
and asset disposal cash proceeds of
$0.5 billion, inclusive of $0.1 billion relating
to the receipt of deferred proceeds from
prior year divestments, the majority of which
related to the divestment of the Group's equity
interest in My Home Industries (MHIL), in India.
The sale of the Brazil cement operations by
the Americas Materials Division represented
the largest divestment during the year, with
a further 10 other divestments completed
across the Group.
In addition to these business divestments, the
Group realised proceeds of $0.1 billion from
the disposal of surplus property, plant and
equipment and other non-current assets.
Angel Brother Enterprises and Gulf Coast delivered a 4,700 foot four-lane concrete boulevard including double bridges over
Little Cypress Creek, near Houston, Texas. The Creek plays an important role in the area’s essential food risk mitigation systems
and the new bridges will allow the local community to traverse the Creek without compromising its drainage features and
detention basins. The bridge will improve mobility for the local community and provide faster access for emergency services.
2021 Annual Report and Form 20-F 41
42
Americas Materials
Our Americas Materials Division comprises vertically integrated businesses which produce and
supply building materials and services for use in construction projects throughout the US and
Canada.
What we do
CRH’s Americas Materials Division is the
largest building materials business in North
America, serving customers in attractive local
construction markets across 46 US states and
six Canadian provinces.
Our businesses utilise an extensive network of
reserve backed quarry locations, to produce
and supply a range of materials including
cement, aggregates, readymixed concrete
and asphalt. These materials are used widely
in a variety of construction projects including
public infrastructure, homes and commercial
buildings.
Over several decades CRH has built up market
leading positions throughout North America
in aggregates and readymixed concrete while
currently being the largest producer of asphalt.
CRH is a leading producer of cement in North
America. CRH is also the leading supplier
of products for road construction and repair
and maintenance in the US. Approximately
50% of the Division's business relates to the
construction of infrastructure, a significant
proportion of which is awarded by public
tender for federal, provincial, state and local
government authority road and infrastructure
projects.
Through innovation, recycling, and the use of
alternative materials, many of our materials
have enhanced sustainability attributes
which help address the changing needs of
construction, including the need for a more
resilient and sustainable built environment.
How we create value
CRH’s vertically integrated business model
enables us to create value throughout the
supply chain. Materials produced by our
aggregates and cement businesses can
be supplied to our downstream materials
businesses for use in products such as
readymixed concrete and asphalt.
By integrating our operations we can also
provide customers with more complete
end-to-end solutions which bundle different
materials, value-added products and services
to provide customers with a value enhancing
one-stop-shop. This helps to reduce logistical
complexity and save the customer time and
money, while allowing CRH to deepen its
relationships and increase the spend from
each customer.
This approach is fundamental to our
development strategy and sets CRH apart
within its industry.
In recent years we have grown our presence
in higher growth southern states in the US to
increase CRH’s exposure to the favourable
demand fundamentals of higher population
growth and positive migration trends, which
underpin good demand for our materials.
The largely unconsolidated US building
materials market presents further opportunities
for value creation by allowing us to identify
businesses that can be integrated efficiently
into our existing network.
How we are structured
CRH combines the flexibility, speed, close
customer relationships and in-depth market
knowledge of local businesses with the
strength, shared expertise and operational
excellence of a national network. This focus on
operational excellence and local knowledge is
supported by a strong strategic centre which
enables CRH to leverage talent, procurement
synergies and efficiencies across the Division.
During 2021 our Americas Materials
Division was re-organised from three to four
geographical regions (Great Lakes, Northeast,
South and West). We also have a cement
platform which spans North America. The
Great Lakes division comprises operations in
seven states and two Canadian provinces, the
Northeast division comprises operations in 11
states, the South division operates across 11
states, while the West division has operations
in 19 states. The cement platform operates
across 20 states and six Canadian provinces.
In total, the Division has a network of 1,605
operating locations and employs approximately
28,300 people.
Our integrated materials, products and services
Where we are located
Reserves and Resources
Reserves comprise mineral deposits found within our extensive network of quarry
locations in attractive local markets throughout North America. For additional
information on the Group’s mineral reserves and resources see page 226.
Cement
Cement is the primary binding agent in the
production of concrete products for the
construction industry.
Aggregates
Aggregates refers to crushed stone, produced
from naturally occurring mineral deposits. Our
businesses process these materials for sale to
customers.
Readymixed Concrete
Readymixed concrete is a highly versatile
building material comprised of aggregates
bound together with cement and water.
Asphalt
Asphalt is an aggregates based product, used
primarily in road surfacing and other transport
infrastructure including airport runways.
Paving & Construction Services
CRH is the leading supplier of product for road construction and repair/maintenance
demand in North America. Annually, our crews complete approximately $4.7 billion in
paving and construction projects.
2021 Annual Report and Form 20-F 43
2021 Performance Highlights
$ million
% of Group
Sales
EBITDA (as defined)*
Operating Profit
Net Assets1
12,407
2,588
1,788
14,153
40%
49%
50%
48%
SALES BY END-USE2
New Build
Repair, Maintenance and
Improvement (RMI)
50%
50%
SALES BY GEOGRAPHY2
10%
Canada
90%
United States
SALES BY SECTOR2
Residential
Non-Residential
Infrastructure
20%
30%
50%
Annualised Sales Volumes3
Aggregates:
200.7m
tonnes
Cement:
13.0m
tonnes
Readymixed
Concrete:
13.3m m3
Asphalt:
47.9m
tonnes
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset
impairment charges, profit on disposals and the Group’s share of equity accounted
investments’ profit after tax.
1. Net Assets at 31 December 2021 comprise segment assets less segment liabilities
excluding lease liabilities as defined on page 222.
2. Geography, sector exposure and end-use balance are based on sales.
3. Throughout this document annualised volumes have been used which reflect the full-year
impact of development activity during the year and may vary from actual volumes sold.
44
2021 Annual Report and Form 20-F 45
Operations Review - Americas Materials
Prior Year 2020
Results
$ million
Sales revenue
EBITDA (as defined)*
Operating profit
EBITDA (as defined)*/sales
Operating profit/sales
2019
Exchange
Acquisitions
Divestments
Analysis of change
-37
-2
+1
+43
+8
+5
-39
+2
+5
11,626
2,194
1,423
18.9%
12.2%
Impairment/
One-offs1
-
-24
-25
Organic
2020
% change
-320
+227
+222
11,273
2,405
1,631
21.3%
14.5%
-3%
10%
15%
1One-offs primarily due to COVID-19 related restructuring costs
Americas Materials generated EBITDA (as
defined)* of $2.4 billion, 10% ahead of 2019 and
operating profit of $1.6 billion, 15% ahead of
2019 despite lower sales which were 3% behind.
COVID-19 restrictions negatively impacted sales
volumes in the second quarter, particularly in the
Northeast and Great Lakes divisions, with sales
in the South division impacted by project delays
in key states. Solid price progression, operational
efficiencies, focused cost containment and lower
energy costs drove margin expansion across
all regions and product lines. Strong demand in
the central and western parts of the US resulted
in like-for-like sales growth across all lines of
business in the West region.
Overall economic and construction activity
across our markets was impacted by the global
pandemic; however, government stimulus to
help support the US economy was implemented,
while infrastructure investment was underpinned
by a one-year extension of the US FAST Act.
During 2020 Americas Materials completed seven
acquisitions in the US and Canada including
aggregates, asphalt, readymixed concrete,
paving and construction operations at a total cost
of $163 million. These acquisitions in addition to
several mineral reserve purchases in the US will
continue to support future growth in key markets.
Materials
On a like-for-like basis, aggregates volumes
were 2% lower but margins improved as prices
were 4% higher compared to 2019. Volumes in
the Northeast and Great Lakes divisions were
predominantly impacted by COVID-19 restrictions
in the second quarter of the year while the South
division experienced lower demand primarily
due to unfavourable weather in the first half
of the year. Solid underlying business activity
in the West division generated sales growth
during the year. Prices were favourable across all
divisions with the strongest contributions from the
Northeast and South divisions.
Asphalt volumes were 6% lower on a like-for-like
basis due to the impact of COVID-19 restrictions
in the Northeast and Great Lakes divisions and
slower project bidding in key states in the South.
Volumes in the West division were ahead of 2019
with a strong order book of business supported
by more favourable weather. Asphalt margins
improved, benefiting from good commercial
management, lower input costs, operational
efficiencies and strong cost control.
Readymixed concrete volumes were 4% behind
2019 levels on both a total and like-for-like basis
as higher volumes in the South division during
the second half of the year did not fully offset
lower volumes in the Northeast, Great Lakes and
West. Strong commercial discipline delivered
total and like-for-like prices up 6%, more than
offsetting lower sales volumes, resulting in
improved margins.
Paving and construction revenues were 6%
behind 2019 levels on a total and like-for-like
basis. COVID-19 impacted the Northeast and
Great Lakes divisions through government
mandated restrictions, while the South
experienced delayed bidding on projects in key
markets due to uncertainty in state and local
funding sources. The West division experienced
significant growth in revenues driven by strong
demand in the Central West and Mountain West
regions. Overall construction margins finished
ahead of 2019.
Regional Performance
Like-for-like sales for the Northeast division were
8% lower than 2019 as COVID-19 restrictions
impacted volumes across the business.
Operating profit for the Northeast division was
negatively impacted by lower volumes, partly
offset by strong prices and lower input costs.
Great Lakes sales were 8% behind 2019, as
a result of lower volumes due to rising prices,
which was offset by lower input costs and
savings initiatives.
The South division’s total sales were 3% behind
2019 driven by lower asphalt and construction
volumes in key states as projects were delayed.
Like-for-like readymixed concrete volumes
were higher than 2019 levels as growth in our
core Florida and Texas markets continued.
Commercial and operational excellence across
all product lines supported strong operating
profit performance.
The West division increased total sales by 3%
by executing on strong backlogs with support
from favourable weather in comparison
to the first half of 2019. Good incremental
volumes coupled with strong price discipline
and cost control resulted in operating profit
improvements.
Cement
Our cement business delivered operating profit
growth in 2020, driven primarily by strong
price realisation, performance improvement
initiatives and cost saving measures. Sales
volumes in the US operations were 2% ahead of
2019 on a total and like-for-like basis as strong
demand in the west more than offset COVID-19
related impacts in other regions. Volumes in
Canada were behind 2019 due to the impact
of COVID-19 restrictions, particularly during the
first half of the year.
Cement consumption in Southeast Brazil
increased in 2020 enabling CRH to achieve
volume growth combined with increased prices
which resulted in operating profit improvement.
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
44
2021 Annual Report and Form 20-F 45
Current Year 2021
Results
$ million
Sales revenue
EBITDA (as defined)*
Operating profit
EBITDA (as defined)*/sales
Operating profit/sales
2020
Exchange
Acquisitions
Divestments
Analysis of change
+73
+5
-2
+468
+30
+3
-96
-48
-45
11,273
2,405
1,631
21.3%
14.5%
Impairment/
One-offs1
-
+24
+28
Organic
2021
% change
+689
+172
+173
12,407
2,588
1,788
20.9%
14.4%
10%
8%
10%
1One-offs primarily due to 2020 COVID-19 related restructuring costs
Sales in the West were well ahead of 2020,
driven by robust demand and positive pricing
across all lines of business. Operating profit
improved as higher volumes and prices coupled
with cost saving initiatives offset higher input
costs.
Cement
Our cement business delivered a strong
performance driven by a growth in sales
which were 12% and 11% ahead of prior year
on a total and like-for-like basis respectively.
Operating profit was ahead of 2020 driven by a
5% increase in volume, strong price realisation
and cost saving measures which offset
increases in input costs. Both US and Canada
volumes were ahead of 2020 due to good
market demand and strong backlog execution.
Readymixed concrete volumes were 4% ahead
on a total and like-for-like basis as residential
demand remained strong; good commercial
discipline delivered price increases of 5%.
Paving and construction revenues were 7%
ahead of 2020, and 1% behind on a like-for-like
basis, due to unfavourable weather in the
South and a slower start to the season in both
Great Lakes and Northeast. Revenues were
higher in the West driven by an early start to
the construction season and solid underlying
demand. Construction margins were ahead of
2020.
Regional Performance
Sales in the Northeast were ahead of 2020 as
volumes improved following a prior year which
was impacted by COVID-19 restrictions. Higher
volumes and pricing across all lines of business
were offset by higher input costs resulting in
operating profit in line with 2020.
Great Lakes sales were ahead of 2020 driven
by solid residential and commercial demand.
Operating profit growth was led by good
commercial and operational performance
offsetting higher input costs.
South sales were ahead of 2020 driven primarily
by positive pricing and continued growth in
readymixed concrete volumes in our Florida
and Texas markets. Operating profit marginally
declined as an improved commercial and
operational performance was offset by the
impacts of unfavourable weather and higher
input costs.
Americas Materials generated sales of
$12.4 billion and EBITDA (as defined)* of
$2.6 billion, 10% and 8% ahead of prior year
respectively. Operating profit was 10% ahead
of 2020. Solid volume and pricing progression
across all lines of business coupled with operating
efficiencies offset the inflationary input cost
environment. Like-for-like sales were 6% ahead
of 2020, while like-for-like EBITDA (as defined)*
increased by 7%.
US construction activity recovered in 2021
with increased residential demand along with a
moderate recovery in non-residential markets.
Infrastructure funding levels were maintained at
similar levels to prior year ahead of the recently
approved multi-year federal infrastructure
package. Canada experienced continued strong
demand within its residential sector.
During 2021 Americas Materials completed eight
acquisitions in the US and Canada for a total
spend of $0.7 billion, the largest of which was
the acquisition of Angel Brothers Enterprises,
an asphalt paving and infrastructure solutions
business in Texas. The divestment of the Brazil
cement operations was completed in the first half
of 2021 for consideration of $0.2 billion.
Materials
Aggregates volumes were 3% ahead of 2020 on
a like-for-like basis driven by good demand in
our Northeast, Great Lakes and West divisions.
The South division was negatively impacted
by adverse weather particularly in the first half
of 2021. Our selling prices improved 4% on a
mix-adjusted basis, resulting in good margin
expansion overall.
Like-for-like asphalt volumes were 2% ahead
of 2020, while like-for-like average prices
also increased. Good market conditions in
the Northeast, Great Lakes and West offset
unfavourable weather conditions in the South.
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
46
Europe Materials
Our Europe Materials Division manufactures and supplies a broad range of materials for use in
construction projects in Europe and parts of Asia.
What we do
Our Europe Materials Division is the leading
building materials business in Europe, serving
customers in construction markets across 18
countries in Europe and two countries in Asia.
Our materials, including aggregates, cement,
lime, readymixed concrete, concrete products
and asphalt are used extensively in a wide
range of construction applications, from major
public road and infrastructure projects, to the
development and refurbishment of homes and
commercial buildings.
Utilising an extensive network of resource
backed assets including our quarry and pit
locations, the Division has regional leadership
positions in aggregates and readymixed
concrete and is a leading producer of cement
and lime in Europe. Within Asia, it is the
largest producer of cement in the Philippines
and has a regional leadership position in
northeastern China.
Our businesses leverage their valuable market
insights and long-term relationships to service
the evolving needs of customers including
national, regional and local governments,
building contractors and other construction
product and service providers. Our businesses
work closely with their customers to understand
and adapt to emerging market needs including
the increasing requirement for innovative
products which contribute to a more resilient
and sustainable built environment.
We are continually improving the environmental
performance of our operations through actions
including extending our use of alternative fuels,
alternative raw materials and other technologies
to produce and deliver more sustainable
building materials for our customers.
How we create value
Our businesses are vertically integrated which
allows us to use materials produced at our
quarry locations to self-supply to our own
downstream operations as well as in sales to
our customers. This enables us to create value
throughout the supply chain and also allows
us to develop end-to-end solutions for our
customers which increase the overall volume
of materials supplied to individual construction
projects. This approach enables our businesses
to leverage the benefits of scale and best
practice, while differentiating themselves in local
markets by understanding and meeting the
unique needs of local customers.
We seek out opportunities to extend and
strengthen our positions in regional markets
through identifying bolt-on and new acquisition
opportunities which can be efficiently integrated
with existing operations. This enables us to
capitalise on growth opportunities and further
expand our offering to local customers. Our
strong track record in acquiring businesses that
provide vertical integration opportunities helps
ensure that we are competitive in all product
lines and well positioned to deliver a strong
return on our assets.
We place a great emphasis on commercial and
operational excellence across our extensive
network leveraging talent, synergies for
procurement, cost and logistics management.
How we are structured
Our Europe Materials Division operates in 18
countries in Europe and two in Asia and during
2021 was re-organised across five operational
clusters (UK & Ireland, Europe North, Europe
West, Europe East and Asia). The Division
employs approximately 25,600 people at
1,120 locations. A further 5,810 people
are employed in our equity accounted
investment in China.
Where our products are used
Where we are located
Aggregates
Aggregates are typically used in building
foundations, underpinning road and rail
infrastructure and in the production of
products including concrete and asphalt.
Lime
In addition to its use in building materials,
lime is used in multiple industries including
iron and steel, sugar, agriculture and forestry.
Cement
Cement is a binding agent used in concrete
products including readymixed concrete,
precast concrete and mortars which are
used extensively throughout the built
environment.
Asphalt
Asphalt is widely used as a surface material
in transport infrastructure including, roads,
bridges, runways, footpaths along with
amenities such as racetracks, tennis
courts and playgrounds.
Readymixed Concrete
Concrete is the most used man-made
material on earth. It forms the foundations
of buildings and homes, roads, tunnels and
bridges, clean water systems and clean
energy structures.
Infrastructural Concrete
Infrastructural Concrete includes precast and
pre-stressed concrete products such as floor
and wall elements, beams and vaults, pipes
and manholes. These products are delivered
to and assembled at construction sites.
Paving & Construction Services
In certain markets we provide installation services including crews, equipment and specialist
expertise needed for preparation, paving and maintenance on projects including roads,
roundabouts and interchanges, car parks and airport runways.
2021 Annual Report and Form 20-F 47
2021 Performance Highlights
$ million
% of Group
10,581
1,410
814
8,784
34%
26%
23%
30%
RMI
30%
Sales
EBITDA (as defined)*
Operating Profit
Net Assets1
SALES BY END-USE2
New Build
70%
SALES BY GEOGRAPHY2
45%
UK & Ireland
6%
Asia
13%
Europe North
15%
Europe East
21%
Europe West
SALES BY SECTOR2
Residential
Non-Residential
Infrastructure
35%
30%
35%
Annualised Sales Volumes3
Aggregates:
108.8m
tonnes
Cement:
35.8m
tonnes
Readymixed
Concrete:
16.9m m3
Asphalt:
10.8m
tonnes
Lime:
7.7m
tonnes
Concrete
Products:
7.9m
tonnes
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset
impairment charges, profit on disposals and the Group’s share of equity accounted
investments’ profit after tax.
1. Net Assets at 31 December 2021 comprise segment assets less segment liabilities
excluding lease liabilities as defined on page 222.
2. Geography, sector exposure and end-use balance are based on sales.
3. Throughout this document annualised volumes have been used which reflect the full-year
impact of development activity during the year and may vary from actual volumes sold.
48
2021 Annual Report and Form 20-F 49
Operations Review - Europe Materials
Prior Year 2020
Results
$ million
Sales revenue
EBITDA (as defined)*
Operating profit/(loss)
EBITDA (as defined)*/sales
Operating profit/(loss)/sales
2019
Exchange
Acquisitions Divestments
Analysis of change
+105
+14
+5
+63
+7
+1
-27
-3
-2
9,509
1,208
622
12.7%
6.5%
Impairment/
One-offs1
-
-83
-743
Organic
2020
% change
-509
-88
-73
9,141
1,055
-190
11.5%
-2.1%
-4%
-13%
-131%
1One-offs primarily due to COVID-19 related restructuring costs
Europe Materials experienced a challenging year
as the recovery in the second half of the year
could not fully mitigate the significant impact
of COVID-19 related restrictions in the second
quarter. Overall sales, EBITDA (as defined)* and
operating performance finished below 2019
levels as strong performances in our Eastern
European businesses were offset by a more
challenging backdrop in a number of countries
across Western Europe. A combination of volume
growth, progress in pricing, good cost control
and performance improvement initiatives drove
some recovery in the second half of the year.
Arising from the Group’s impairment testing
process and as a result of the combined
economic impacts of COVID-19 and Brexit, total
non-cash impairment charges of $0.8 billion were
recognised in 2020. Europe Materials recorded
impairment charges of $0.7 billion in its operating
profit, primarily related to its UK business. A further
$0.15 billion impairment charge was recorded on
the Group’s associate investment in China.
UK & Ireland
In our UK & Ireland businesses, strict COVID-19
restrictions resulted in widespread plant
shutdowns during the second quarter which
significantly impacted volumes during this period.
Trading recovered as the year progressed, with
strong cement volumes and increased paving
activity in the second half of the year supporting
improved aggregates and asphalt volumes;
however, readymixed concrete volumes were
slower to recover due to market uncertainty.
Operating profit, impacted by the lower volumes,
impairment charges and restructuring costs,
finished below 2019 levels.
Europe North
Europe East
Europe North (Finland, Germany and
Switzerland) businesses did not experience
significant COVID-19 related shutdowns and
overall sales in Europe North ended ahead
of 2019 levels supported by some larger
aggregates projects. However, operating profit
fell below 2019 due to a less favourable product
mix and higher input and restructuring costs.
Despite a good level of pricing progress and
cost saving initiatives they were not enough to
offset the lower cement, lime and readymixed
concrete volumes and increased costs.
Europe West
Despite a good recovery in the second half of
the year and a robust performance throughout
the year in our Precast businesses, Europe
West (France, Benelux, Denmark and Spain)
sales ended the year down on 2019 as trading
was significantly impacted by COVID-19
restrictions in the first half of the year. Volumes
in France were severely impacted by the
COVID-19 restrictions in the second quarter of
2020 as cement, aggregates and readymixed
concrete volumes were significantly below
2019 levels. Price increases and cost saving
actions were implemented to improve trading
performance, but overall operating profit ended
the year below 2019.
Europe East (Poland, Ukraine, Romania,
Hungary, Slovakia and Serbia) trading continued
robustly in 2020 with cement volumes and sales
ahead of 2019. Strong cost control, lower fuel
costs and positive pricing all contributed to
operating profit finishing strongly ahead of 2019
levels. Romania, in particular, experienced a very
positive trading performance in 2020 with sales
and operating profit both significantly ahead
of 2019, as a continuation of infrastructure
projects, the positive impact of local and national
elections and increased residential repair works
contributed to growing cement demand with
pricing above 2019 levels. Overall, with minimal
COVID-19 restrictions, positive underlying trading
conditions combined with business improvement
initiatives, Europe East saw a continuation of
growth in sales and operating profit performance
in 2020.
Asia
Domestic demand for cement in the Philippines
was severely impacted between mid-March and
May as COVID-19 restrictions resulted in plant
shutdowns. Despite this challenging backdrop
and lower pricing, operating profit finished well
ahead of 2019 due to cost savings, performance
improvement initiatives and improved volumes in
the second half of the year.
CRH's operations include a 26% stake in Yatai
Building Materials in China where, despite a
severe COVID-19 impact in the first quarter, full
year cement volumes ended ahead of 2019.
Pricing remained challenging in the region which,
in addition to the non-cash impairment charge
resulted in operating profit below 2019 levels.
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
48
2021 Annual Report and Form 20-F 49
Current Year 2021
Results
$ million
Sales revenue
EBITDA (as defined)*
Operating (loss)/profit
EBITDA (as defined)*/sales
Operating (loss)/profit/sales
2020
Exchange
Acquisitions
Divestments
Analysis of change
+403
+34
+7
+8
-
-
-57
-5
-2
9,141
1,055
-190
11.5%
-2.1%
Impairment1/
One-offs2
-
+83
+748
Organic
2021
% change
+1,086
+243
+251
10,581
1,410
814
13.3%
16%
34%
528%
7.7%
1Includes $0.7 billion 2020 impairment charge
²One-offs primarily due to 2020 COVID-19 related restructuring costs
Europe West
Asia
Sales and operating profit in the Philippines
were significantly ahead of 2020, which was
severely impacted by COVID-19 restrictions.
Cement volumes were well ahead in 2021 as the
market recovered. Despite a competitive pricing
environment and rising input costs, operational
improvements and cost containment initiatives
resulted in operating profit ahead of 2020.
CRH's operations include a 26% stake in
Yatai Building Materials in China, where strong
price increases offset lower volumes to deliver
significantly improved operating profit in 2021.
Europe West (France, Benelux, Denmark and
Spain) delivered a good trading performance with
higher cement volumes combined with continued
pricing progress across all markets. France in
particular experienced a strong recovery as a
result of improved underlying trading conditions
which, together with significant cost saving
actions implemented in 2020, have resulted in
like-for-like operating profit well ahead of 2020.
Our precast operations also delivered sales
and operating profit ahead of 2020 despite
experiencing significant raw material and energy
cost inflation. Overall, continued cost saving
actions and commercial initiatives resulted in
operating profit well ahead of prior year.
Europe East
Europe East (Poland, Ukraine, Romania,
Hungary, Slovakia and Serbia) experienced mild
weather in the fourth quarter and robust demand
throughout the year, which resulted in cement
volumes ahead of 2020 and continued growth in
downstream products. Operating profit in Poland
was significantly ahead of prior year due to good
volume and price increases combined with
strong cost control. Despite rising energy cost
inflation in the second half of the year, overall
operating profit was well ahead of 2020 with
good cost control and strong price increases
across all markets.
Europe Materials benefited from continued growth
in Eastern Europe and strong market recovery
following the easing of COVID-19 restrictions
in many of our key markets. Europe Materials
generated sales of $10.6 billion and EBITDA (as
defined)* of $1.4 billion, 16% and 34% ahead of
prior year respectively with an operating profit of
$0.8 billion. Like-for-like sales were 11% ahead
of 2020, while EBITDA (as defined)* increased by
22%. Energy market volatility resulted in increased
cost inflation but positive pricing actions and a
continued focus on cost savings and performance
initiatives delivered margin expansion.
UK & Ireland
UK & Ireland sales were well ahead of prior
year reflecting an improved trading environment
following significant COVID-19 disruption in
2020. Operating profit was also significantly
ahead due to improved volumes across all
product lines but also assisted by cost saving
and restructuring initiatives which commenced
in 2020. Significant pricing actions were
undertaken in the second half of the year to
offset input cost inflation, which also contributed
to the strong 2021 performance.
Europe North
Despite prolonged winter weather, demand in
Europe North (Finland, Germany and Switzerland)
improved as the year progressed. Cement and
lime volumes were ahead of prior year which,
combined with strong price increases, resulted
in increased sales. Europe North experienced
significant energy cost inflation, particularly in the
second half, but additional pricing actions and a
continued focus on cost saving initiatives resulted
in operating profit well ahead of 2020 levels.
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
50
Building Products
Our Building Products Division comprises businesses which manufacture, supply and deliver a wide
range of high quality, value-added, innovative products and integrated solutions globally.
What we do
CRH’s Building Products Division is a leading
manufacturer and supplier of high value-
added building products for use primarily
in both residential and non-residential
construction projects globally.
Our diverse range of products includes
brickwork supports that keep walls standing,
glazing systems that hold glass in place,
products that collect, connect and protect
vital utility infrastructure and pavers, blocks
and patio products used to pave our city
centres and create unique outdoor living
spaces.
The Division operates across 19 countries
and is comprised of four strategic product
platforms: Architectural Products, Building
Envelope, Infrastructure Products and
Construction Accessories (operating under
the Leviat brand). The Division has leading
positions, across multiple markets, in all four
product areas.
Our businesses combine deep customer
understanding with an innovation focused
mindset to deliver solutions that are tailored
to meet current market demand while
also working with customers to innovate
and develop new solutions that address
longer-term opportunities presented
by economic development, changing
demographics, sustainable development and
other evolving global construction trends.
How we create value
Our global division, balanced across
geographies and end-use sectors allows us
to leverage scale, talent, brands, customer
relationships and technical expertise, to create
value and deliver superior performance.
An innovation-led approach to the
development of integrated building products
and solutions is a key characteristic of our
business, while our ability to customise and
create bespoke products and end-to-end
solutions creates competitive advantage
and helps to drive sustainable growth.
Our strategy is to build and grow scalable
businesses and to adapt and grow as our
markets evolve.
Our development focus aims to deepen our
position in existing business platforms and to
broaden our differentiated product portfolio.
We assess development opportunities
through the lens of providing access to growth
markets that are favourably exposed to global
megatrends including increasing urbanisation,
the growth of cities and the demand for more
sustainable forms of construction.
How we are structured
Our Building Products Division is structured
around four core product groups:
Architectural Products, Building Envelope,
Infrastructure Products and Construction
Accessories (operating under the Leviat
brand). The Division employs approximately
23,500 people at close to 510 locations
across 19 countries.
Our products
Architectural Products
Our Architectural Products include
pavers, blocks and kerbs, retaining
walls and slabs, patio products and
decking, lawn and garden products
as well as bagged dry-mix cements
for both private and public use.
Where we are located
Building Envelope
Our Building Envelope products
include architectural glass, storefront
systems, custom engineered curtain
and window wall, architectural
glazing systems and related
hardware.
Infrastructure Products
CRH’s Infrastructure Products’
range of precast concrete, PVC and
polymer-based products include
stormwater products, underground
vaults, drainage pipe and structures,
utility enclosures and modular
precast structures.
Construction Accessories
Our Construction Accessories
products include a broad range of
engineered anchoring, fixing and
connection solutions as well as lifting
systems, formwork accessories and
general accessories for construction
applications.
2021 Annual Report and Form 20-F 51
2021 Performance Highlights
Sales
EBITDA (as defined)*
Operating Profit
Net Assets1
$ million
% of Group
7,993
1,352
983
6,698
26%
25%
27%
22%
SALES BY END-USE2
New Build
RMI
55%
45%
SALES BY PRODUCT GROUP2
48%
Architectural
Products
9%
Construction
Accessories
21%
Infrastructure
Products
22%
Building
Envelope
SALES BY SECTOR2
Residential
Non-Residential
Infrastructure
50%
40%
10%
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset
impairment charges, profit on disposals and the Group’s share of equity accounted
investments’ profit after tax.
1. Net Assets at 31 December 2021 comprise segment assets less segment liabilities
excluding lease liabilities as defined on page 222.
2. Products, sector exposure and end-use balance are based on sales.
52
2021 Annual Report and Form 20-F 53
Operations Review - Building Products
Prior Year 2020
Results
$ million
Sales revenue
EBITDA (as defined)*
Operating profit
EBITDA (as defined)*/sales
Operating profit/sales
2019
6,997
1,076
748
15.4%
10.7%
In 2020, Building Products recorded like-for-like
sales growth of 4% due to strong residential
RMI demand, especially in North America, which
more than offset the effect of a more subdued
non-residential sector. Ongoing business
improvement initiatives and COVID-19 mitigating
actions delivered higher margins through
production efficiencies, commercial excellence,
procurement savings and overhead cost control.
On a like-for-like basis EBITDA (as defined)*
increased by 8% and operating profit by 11%,
as a result of the improved sales growth and
continued progress with cost reductions.
Following a strong start to the year, economic
conditions in North America and Europe were
significantly impacted by COVID-19. The
pandemic particularly affected non-residential
construction activity while the residential sector
was bolstered by increased home improvement
activity.
Activity levels in North America were impacted
by COVID-19 restrictions from the first quarter
of 2020, mostly affecting the West Coast,
Northeastern US, and Canada. In Europe,
construction markets showed resilience in
Central and Eastern European countries, while
much of Western Europe, notably the UK,
France, and Belgium, saw more severe volume
impacts from lockdown restrictions, particularly
in the first half of the year.
Two divestments and six bolt-on acquisitions
were completed in 2020. Building Products’
largest acquisitions were two manufacturers
of underground enclosures in Tennessee and
Texas, both within Infrastructure Products.
Analysis of change
Exchange
Acquisitions
Divestments
+14
-
-1
+262
+50
+26
-347
-32
-17
Impairment/
One-offs1
-
-15
-19
Organic
2020
% change
+247
+91
+85
7,173
1,170
822
16.3%
11.5%
3%
9%
10%
Architectural Products
Infrastructure Products
1One-offs primarily due to COVID-19 related restructuring costs
Architectural Products in North America delivered
strong sales growth in 2020, reflecting positive
market demand across all product groups and
regions. With North America seeing heightened
residential RMI demand, sales through both
our retail and professional channels increased.
The businesses delivered significant margin
expansion from the continued focus on
operational excellence, as well as modest price
growth and tight overhead cost control. Sales in
our European businesses were ahead mainly due
to volume growth in Germany and Poland.
Building Envelope
Building Envelope’s sales were lower than
2019, with COVID-19 restrictions unfavourably
impacting volumes across key products and
geographies, particularly at C.R. Laurence.
Volumes were impacted by the softening of
non-residential markets, with a number of
projects being delayed or cancelled, while the
selling price environment remained competitive.
As restrictions eased, the rate of sales decline
lessened over the course of the second half.
Operating profit was behind 2019 as a result of
lower volumes, partly offset by cost management
initiatives.
Like-for-like sales were lower than 2019 because
of reduced demand as a number of non-residential
and public infrastructure projects were delayed
or cancelled due to COVID-19. However, sales of
key products to the communications sector and
electric utilities proved to be resilient as demand
for IT infrastructure was strong. The business
recorded increased like-for-like operating profit due
to continued performance improvement measures
and focused cost control. Europe recorded lower
like-for-like sales in 2020 because of COVID-19
restrictions in key markets, particularly the UK. In
Australia, like-for-like sales were below 2019 due
to continued challenges in the telecom sector in
the country.
Construction Accessories
Like-for-like sales were lower than 2019
because of COVID-19 shutdowns affecting
project activity particularly in the first half. In
Europe, sales were worst affected in Western
Europe, with Central and Eastern European
markets experiencing more resilient demand.
Sales in Australia benefited from several large
infrastructure projects, while North America
recorded lower like-for-like sales due to
increased competition, further compounded
by COVID-19. Operating profit was lower in
2020, as the unfavourable volume impact was
only partly offset by overhead cost savings and
benefits from ongoing procurement, commercial
and operational initiatives.
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
52
2021 Annual Report and Form 20-F 53
Analysis of change
Exchange
Acquisitions
Divestments
+87
+11
+6
+380
+71
+49
-29
-5
-4
Impairment/
One-offs1
-
+15
+19
Organic
2021
% change
+382
+90
+91
7,993
1,352
983
16.9%
12.3%
11%
16%
20%
Building Envelope
Construction Accessories
1One-offs primarily due to 2020 COVID-19 related restructuring costs
Like-for-like sales in Construction Accessories
were ahead of 2020 driven by strong volumes
as the business benefited from higher residential
demand and project activity. Sales growth was
primarily led by North America, the UK and
France. Increased sales and continued cost
saving initiatives more than offset input cost
inflation, resulting in like-for-like operating profit
ahead of prior year.
Building Envelope’s sales increased driven by
strong pricing and early signs of recovery in the
non-residential market. Operating profit was
ahead of prior year driven by improved pricing,
operational excellence initiatives and other cost
savings, partly offset by input cost inflation.
Infrastructure Products
Infrastructure Products experienced strong sales
growth in 2021. Sales to the communications
and utilities sectors were resilient and demand
for IT infrastructure was strong. The business
delivered increased operating profit due to
continued performance improvement measures
and good cost control. Total sales and operating
profit also benefited from the acquisition of NPP
in the third quarter. Our European businesses
contributed to the strong sales growth and
operating profit was ahead. Our Australian
business experienced lower sales due to
COVID-19 restrictions which hindered production
and limited deliveries.
Current Year 2021
Results
$ million
Sales revenue
EBITDA (as defined)*
Operating profit
EBITDA (as defined)*/sales
Operating profit/sales
2020
7,173
1,170
822
16.3%
11.5%
Building Products delivered sales growth of 11%
due to strong demand for residential construction,
particularly in North America, along with a good
recovery in certain parts of the non-residential
sector. Ongoing business improvement initiatives
delivered higher margins through production
efficiencies, good commercial management,
procurement savings and overhead cost control.
EBITDA (as defined)* increased by 16% while
operating profit was 20% ahead. Like-for-like
sales were 5% ahead of 2020, while like-for-like
EBITDA (as defined)* increased by 8%.
During 2021 Building Products completed
eight bolt-on acquisitions, primarily in the US
and across all product platforms, at a total
spend of $0.8 billion. The largest acquisition
was Infrastructure Products’ purchase of NPP,
a water, energy and infrastructure solutions
business.
Architectural Products
Architectural Products in North America
delivered strong sales growth in 2021, reflecting
positive market demand and robust residential
RMI activity. Operating profit increased due
to improved pricing and volume growth, a
continued focus on operational improvements
and strong overhead cost control. Sales in our
European businesses were slightly ahead, with
operating profit growth driven by operational and
commercial excellence initiatives and improved
product mix.
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
Through a values-driven culture
we strive to maintain the highest
standards of corporate governance
and responsible leadership.
At CRH, our culture of ethical
behaviour allows us to build trust
with our stakeholders and create
long-term sustainable value.
2021 Annual Report and Form 20-F 55
Governance
54-121
Board of Directors
Corporate Governance
Report
Audit Committee Report
Nomination & Corporate
Governance Committee Report
Safety, Environment & Social
Responsibility Committee Report
Directors' Remuneration Report
56
60
64
70
76
80
Directors' Report
110
Principal Risks and Uncertainties 116
Heembeton, part of CRH’s Europe Materials Division based in the Netherlands, is a
leading producer of prefab building systems and solutions including prefab concrete
walls and facades which enable quicker and more efficient construction of both
commercial and residential structures.
56
2021 Annual Report and Form 20-F 57
Board of Directors
Richie Boucher
Chairman
Appointed to the Board: March 2018
Nationality: Irish Age: 63
Committee membership:
Albert Manifold
Chief Executive
Appointed to the Board: January 2009
Nationality: Irish Age: 59
Committee membership:
Jim Mintern
Group Finance Director
Appointed to the Board: June 2021
Nationality: Irish Age: 54
Committee membership:
ADF
N
R
S
ADF
S
ADF
Skills and experience:
Skills and experience:
Skills and experience:
Richie has extensive experience in all
aspects of financial services and was
Chief Executive of Bank of Ireland Group
plc between February 2009 and October
2017. He also held a number of key senior
management roles within Bank of Ireland,
Royal Bank of Scotland and Ulster Bank.
He is a past President of the Institute of
Banking in Ireland and of the Irish Banking
Federation.
Qualifications: Bachelor of Arts
(Economics) from Trinity College, Dublin;
Fellow of the Institute of Banking in Ireland.
External appointments:
Listed: Director of Kennedy-Wilson
Holdings, Inc., a global real estate
investment company.
Non-listed: Non-executive Director
of Clonbio Group Limited, which
manufactures sustainable bio products
and produces renewable energy.
Albert joined CRH in 1998. Prior to joining
CRH, he was Chief Operating Officer with a
private equity group. While at CRH he has
held a variety of senior positions, including
Finance Director of the Europe Materials
Division, Group Development Director and
Managing Director of Europe Materials. He
became Chief Operating Officer in January
2009 and was appointed Group Chief
Executive with effect from 1 January 2014.
Qualifications: FCPA, MBA, MBS.
External appointments:
Listed: Non-executive Director of
LyondellBasell Industries N.V., one of the
largest plastics, chemicals and refining
companies in the world.
Non-listed: Not applicable.
Jim has over 30 years' experience in the
building materials industry, nearly 20 years
of which have been with CRH. Jim joined
CRH as Finance Director for Roadstone
and since then has held several senior
positions across the Group, including
Country Manager for Ireland, Managing
Director of each of the Western and Eastern
regions of our Europe Materials Division
and most recently Chief of Staff to the Chief
Executive, where he worked closely with
divisional and operational leadership and
had oversight of the Group's Performance,
Safety and Special Projects activities and
led a number of Performance Improvement
initiatives in recent years. He was appointed
to the Board and became Group Finance
Director with effect from 1 June 2021.
Qualifications: Fellow of Chartered
Accountants Ireland. Jim also holds a
Bachelor of Commerce from University
College Dublin.
External appointments:
Listed: Not applicable.
Non-listed: Not applicable.
Board Committees
A
Audit
ADF
Acquisitions,
Divestments & Finance
N
R
Nomination &
Corporate Governance
S
Safety, Environment
& Social Responsibility
Remuneration
Committee Chairman
56
2021 Annual Report and Form 20-F 57
Gillian L. Platt
Senior Independent Director
Appointed to the Board: January 2017
Nationality: Canadian Age: 68
Committee membership:
Caroline Dowling
Non-executive Director
Appointed to the Board: March 2021
Nationality: Irish Age: 54
Committee membership:
Richard Fearon
Non-executive Director
Appointed to the Board: December 2020
Nationality: United States Age: 65
Committee membership:
N
R
S
ADF
R
S
A
ADF
Skills and experience:
Skills and experience:
Skills and experience:
Caroline was, until her retirement in
February 2018, a Business Group President
of Flex, an industry leading Fortune 500
company, with operations in 30 countries.
In this role she led the Telecommunications,
Enterprise Compute, Networking and Cloud
Data Centre and was also responsible for
managing the Global Services Division,
supporting complex supply chains.
Prior to this, Caroline held a range of
senior executive roles in Flex, including
responsibility for development & strategy,
marketing, retail & technical services and
global sales.
External appointments:
Listed: Non-executive Director of DCC plc
and IMI plc.
Non-listed: Non-executive Director of
Orion SCM, Inc., a US-based software firm.
During the course of her executive
career, Gillian has held a number of
senior leadership positions in a variety of
industries, geographies and roles including
human resources, corporate affairs and
strategy. Most recently she was Executive
Vice President and Chief Human Resources
Officer at Finning International, Inc. (the
world’s largest Caterpillar equipment
dealer) with global responsibility for
human resources, talent development and
communications. She previously held senior
executive roles at Aviva, the multinational
insurance company, as Executive Vice
President Human Resources and Executive
Vice President Strategy and Corporate
Development.
Qualifications: Bachelor of Arts from
the University of Western Ontario and a
Masters of Education from the University
of Toronto.
External appointments:
Listed: Non-executive Director of Interfor
Corporation, a Canadian listed company,
which is one of the world’s largest providers
of lumber.
Non-listed: Not applicable.
Richard was, until March 2021, the Vice
Chairman and Chief Financial and Planning
Officer of Eaton Corporation plc, a global
power management company, roles he
held since 2009 and 2002, respectively.
He had responsibility and oversight for a
number of key operational and strategic
functions at Eaton, including accounting,
control, corporate development, information
systems, internal audit, investor relations,
strategic planning, tax and treasury
functions. Prior to joining Eaton, he served
in development and strategic planning
management positions at several large
diversified companies, including as Senior
Vice President of Corporate Development
at Transamerica Corporation, General
Manager of Corporate Development
for Singapore-based NatSteel Ltd and
Director of Strategic Planning at The Walt
Disney Company. He has also served as
a management consultant at the Boston
Consulting Group, Booz Allen Hamilton and
Willow Place Partners.
Qualifications: Bachelor of Arts in
Economics from Stanford University;
Masters of Business Administration from
Harvard Business School; and a Juris
Doctor from Harvard Law School.
External appointments:
Listed: Non-executive and Lead Director of
Avient Corporation; non-executive Director
of Crown Holdings, Inc and non-executive
and Lead Director of Hennessy Capital
Investment Corp. VI.
Non-listed: Not applicable.
Audit Committee Financial Expert as determined by the Board
58
2021 Annual Report and Form 20-F 59
Board of Directors - continued
Johan Karlström
Non-executive Director
Appointed to the Board: September 2019
Nationality: Swedish Age: 65
Committee membership:
Shaun Kelly
Non-executive Director
Appointed to the Board: December 2019
Badar Khan
Non-executive Director
Appointed to the Board: October 2021
Nationality: Dual United States & Irish
Nationality: Dual British & United States
Age: 62 Committee membership:
Age: 50 Committee membership:
ADF
R
S
A
ADF
R
A
S
Skills and experience:
Skills and experience:
Skills and experience:
Johan was President and Chief Executive
Officer of Skanska AB, a leading
multinational construction and project
development company until 2017. Over a
thirty-year career with Skanska, he held a
variety of leadership roles in Europe and
America, before becoming President and
Chief Executive in 2008. He also served
as President and Chief Executive Officer of
BPA (now Bravida), a listed mechanical and
installation group from 1996 to 2000.
Qualifications: Masters degree in
Engineering from the KTH Royal Institute of
Technology, Sweden.
External appointments:
Listed: Not applicable.
Non-listed: Non-executive Director of
Sandbacken AB.
Badar is currently President of National
Grid US, a major business segment of the
leading energy transmission and distribution
company, National Grid plc. Prior to this,
he held a variety of roles in National Grid,
including responsibility for strategy and
innovation. Before joining National Grid he
worked at Centrica plc (2003 to 2017), a
leading international energy services and
solutions company, where he held a variety
of senior executive positions in the UK and
US, and has prior experience in marketing,
consulting and project management.
Qualifications: Bachelor of Engineering
from Brunel University and an MBA from
The Wharton School of the University of
Pennsylvania.
External appointments:
Listed: Not applicable.
Non-listed: Non-executive Director of the
American Gas Board.
Shaun was until September 2019, the
Global Chief Operating Officer of KPMG
International, where he was responsible for
the execution of the firm’s global strategy
and for the delivery of various global
initiatives. Over a thirty-year career with
KPMG, the majority of which was spent in
the US, he held a variety of senior leadership
positions, including Partner in Charge,
US Transaction Services (2001 to 2005),
Vice Chair and Head of US Tax (2005 to
2010) and Vice Chair Operations and Chief
Operating Officer Americas (2010 to 2015),
before his appointment as Global Chief
Operating Officer in 2015.
Qualifications: Fellow of Chartered
Accountants Ireland and a US Certified
Public Accountant; Bachelor of Commerce
and Diploma in Professional Accounting
from University College Dublin; and an
honorary doctorate from Queen’s University
Belfast.
External appointments:
Listed: Not applicable.
Non-listed: Non-executive Director of Park
Indemnity Limited. Shaun holds a number
of non-profit board memberships.
Audit Committee Financial Expert as determined by the Board
Board Committees
A
Audit
ADF
Acquisitions,
Divestments & Finance
N
R
Nomination &
Corporate Governance
S
Safety, Environment
& Social Responsibility
Remuneration
Committee Chairman
58
2021 Annual Report and Form 20-F 59
Lamar McKay
Non-executive Director
Appointed to the Board: December 2020
Mary K. Rhinehart
Non-executive Director
Appointed to the Board: October 2018
Siobhán Talbot
Non-executive Director
Appointed to the Board: December 2018
Nationality: United States Age: 63
Nationality: United States Age: 63
Committee membership:
Committee membership:
Nationality: Irish Age: 58
Committee membership:
A
ADF
N
R
S
N
R
S
A
ADF
N
Skills and experience:
Skills and experience:
Skills and experience:
Lamar was until July 2020 Chief Transition
Officer of BP plc. During a 40 year career in
Amoco and subsequently with BP, following
the merger of the two companies, Lamar
held a variety of senior executive roles,
including responsibility for BP’s interests
in the TNK-BP joint venture, Chairman
and CEO of BP Americas (during which
period he acted as President of the Gulf
Coast Restoration Organisation and Chief
Executive Officer for BP’s world-wide
Upstream Division). From April 2016 to
February 2020 he was Deputy Group Chief
Executive Officer of BP, a role in which
he had a wide range of accountabilities,
including safety, operational risk, legal
affairs, technology, economic insight, long
range planning and strategy with the latter
responsibilities particularly influencing
capital allocation planning and BP’s
sustainability initiatives.
Qualifications: Bachelor of Science
from Mississippi State University.
External appointments:
Listed: Non-executive Director
of APA Corporation.
Non-listed: Not applicable.
Mary became non-executive Chairman of
Johns Manville Corporation in September
2020, prior to which she held the role of
Chairman, Chief Executive Officer and
President. Johns Manville is a Berkshire
Hathaway company, which is a leading
global manufacturer of premium quality
building products and engineered specialty
materials. Over nearly 40 years with Johns
Manville she has held a wide range of
global leadership roles, encompassing
responsibility for business management
and strategic business development and
was also Chief Financial Officer. Mary was
until recently a non-executive Director of
Ply Gem Holdings Inc., a leader in exterior
building products in North America and
Lead Director of CoBiz Financial Inc.
Qualifications: Bachelor’s degree in
Finance from the University of Colorado;
MBA from the University of Denver.
External appointments:
Listed: Non-executive Director of Graphic
Packaging Holding Company.
Non-listed: Non-executive Chairman of
Johns Manville Corporation; and member
of the Board of Trustees of the University of
Denver.
Siobhán is Group Managing Director of
Glanbia plc, a global nutrition company
with operations in 32 countries, a position
she has held since 2013. She has been a
member of the Glanbia Board since 2009
and was previously Finance Director, a
role which encompassed responsibility
for Glanbia’s strategic planning. Prior
to joining Glanbia, she worked with
PricewaterhouseCoopers in Dublin and
Sydney.
Qualifications: Fellow of Chartered
Accountants Ireland; Bachelor of
Commerce; and a Diploma in Professional
Accounting from University College Dublin.
External appointments:
Listed: Group Managing Director of
Glanbia plc.
Non-listed: Director of the Irish Business
Employers Confederation (IBEC).
Audit Committee Financial Expert as determined by the Board
60
Corporate
Governance Report
The Corporate Governance Report contains details of CRH’s
governance structures and highlights areas of focus for the
Board over the last year. In keeping with prior years, details
of CRH’s general governance practices are available in the
governance appendix on CRH’s website, www.crh.com
(the ‘Governance Appendix’)1. CRH implemented the 2018
UK Corporate Governance Code (the ‘2018 Code’) and this
Report explains how the principles of the 2018 Code have
been applied.
Operation of the Board
Following the onset of COVID-19, the Board met
virtually for a period of 18 months up to mid-2021.
Whilst this worked well, and did not hinder the
Board in fulfilling its responsibilities and duties,
I am pleased to report that we recommenced
in-person meetings with suitable safety protocols
in place in the second half of the year. This has
enhanced the richness of discussion at Board and
Committee meetings, and non-executive Director
sessions. It has also helped forge relationships
between the four directors appointed since March
2020 and existing Board members, and has led to
increased and more in-depth interactions with the
senior management team. During the course of
2022, we intend to recommence our twice-yearly
site visits to operations in Europe and the US.
Senior Executive Succession
Senior executive succession planning continued
to be an area of focus for the Board and
Nomination & Corporate Governance Committee.
Details on activity in this area during 2021 are set
out on page 71.
The Board also received regular updates on
the bench strength and diversity of the senior
management team, together with detailed plans
for development generally and by individual role.
Board Committees
Detailed reports on the areas of focus for the
Audit, Nomination & Corporate Governance,
Remuneration and Safety, Environment and Social
Responsibility (SESR) Committees are included on
pages 64 to 109.
The performance of the Board’s Committees was
assessed as part of the external Board evaluation
process referred to below.
During 2021, the Board approved minor
changes to the Terms of Reference of the
Audit, Nomination & Corporate Governance,
Remuneration and SESR Committees. The
changes were primarily to align the Terms of
Reference with current Board practices and
terminology and to ensure they remain aligned
with evolving best practice, where relevant. The
updated Terms of Reference are available on the
CRH website, www.crh.com.
1. The Governance Appendix is published in conjunction with
the Directors’ Report in compliance with Section 1373 of the
Companies Act 2014. For the purposes of Section 1373(2) of
the Companies Act 2014, the Governance Appendix and the
risk management disclosures on pages 32 to 35 and 116 to
121 form part of, and are incorporated by reference into, this
Corporate Governance Report.
The primary (premium) listing of CRH plc is on the LSE, with
the listing on Euronext Dublin characterised as secondary.
For this reason, CRH plc is not subject to the same ongoing
listing requirements as would apply to an Irish company with
a primary listing on Euronext Dublin. For further information,
shareholders should consult their financial adviser. Further
details on the Group’s listing arrangements, including its
premium listing on the LSE, are set out on page 74.
2021 Annual Report and Form 20-F 61
In line with prior
years, there was
regular and extensive
engagement on
governance matters
during the past
year with more
than 20 meetings
with shareholders
representing just
over 35% of the
issued share capital."
Richie Boucher
Chairman
Board Evaluation
During 2021, the Board engaged Christopher
Saul Associates to undertake an external board
performance evaluation. The report presented
to the Board (the '2021 Report') concluded that
the Board is operating effectively. It is collegiate
and well-led, it operates to high standards of
professionalism and benefits from quality support.
The Committees observed work diligently and
effectively and are well-integrated into Board
processes. The relationship between the Board
and management is respectful and constructive.
It also contained recommendations to further
enhance our effectiveness including in relation to:
• Board paper content and circulation;
• Giving consideration to whether the
Nomination & Corporate Governance
Committee could broaden and deepen its
activities, for example, in relation to human
capital management without undue overlap
with the SESR Committee and separately
undertaking a review of the breadth of the
SESR Committee's responsibilities; and
• Enhancing Board interaction further, leveraging
on the experience of the non-executive
Directors and looking at increasing the
regularity of non-executive Director sessions
2018 Code – Compliance Statement
The principles set out in the 2018 Code emphasise the value of good corporate governance to the
long-term sustainable success of listed companies. These principles, and the supporting provisions,
cover five broad themes:
1. Board Leadership and Corporate Purpose
2. Division of Responsibilities
3. Composition, Succession and Evaluation
4. Audit, Risk and Internal Controls
5. Remuneration
As demonstrated by the disclosures in this Report and the details of CRH's general governance
practices in the Governance Appendix, CRH applied the principles and complied with the provisions
of the 2018 Code in 2021, with the exception of the following provision:
• Provision 38: alignment of pension contribution rates with wider workforce – see page 101 for
more details.
A copy of the 2018 Code can be obtained from the Financial Reporting Council’s website,
www.frc.org.uk.
Whilst no particular skill or diversity gaps
were identified, the 2021 Report included
considerations to take into account to developing
Board composition priorities.
The internal and external board performance
evaluation processes are one element in the
process for identifying strategic themes for
discussion by the Board. The 2021 Report
highlighted topics that were currently front of mind
for the non-executive Directors. The process used
for the evaluation is set out on page 72 in the
Nomination & Corporate Governance Committee
Report.
External Board Appointments
The external directorships of each Director are
detailed in their biographies on pages 56 to 59.
Richard Fearon and Johan Karlström sought and
received approval to take up additional Board
roles during 2021. The Board was satisfied that
these new commitments do not impinge on their
non-executive duties on the CRH Board.
Corporate Purpose
As reported last year, a project has been
underway to more fully articulate CRH's purpose -
a purpose which captures our aspirations beyond
financial returns, inspires our people and guides
our day-to-day operations, our culture, and our
strategy.
The framework used during the project utilised
insights from CRH's Values, work on CRH
brands, historical documents, focus groups and
test panels of employees across the geographies
and Divisions of CRH, along with insights from
a range of external experts from a number of
specialist fields.
This work is now complete and will be launched
with our employees during 2022.
As part of the purpose project, our Values have
been refined, to align and further support the
organisation in living our purpose.
Stakeholder Engagement
The Board has delegated responsibility for
workforce engagement to the SESR Committee.
Given the footprint of CRH with c.77,400
employees in 28 countries, we believe this is
the best and most effective way of ensuring
that the views of employees are understood
and are taken into consideration in the Board’s
decision-making processes. The Board receives
regular updates and recommendations from
the SESR Committee, the work of which is
described in detail on pages 76 to 79.
Board members also attended a seminar of
management from across the Group held during
the year with appropriate social restrictions
and safety protocols, which focused on key
issues facing the Group, including, sustainability
challenges and opportunities, the work of
exploration groups made up of high potential
talented employees who were focused on
horizon scanning in relation to the future of
the construction industry, the work ongoing to
embed customer perspectives in our approach
to business and the project to articulate CRH’s
purpose referred to above.
In line with prior years, there was regular
and extensive engagement on governance
matters during the past year with more than
20 meetings with shareholders representing
just over 35% of the issued share capital.
Typically the meetings covered topics such as
the safety of our employees, particularly in the
context of COVID-19, Board renewal priorities,
executive succession planning, strategy, capital
allocation, the oversight of the Board in relation
to business improvement initiatives, the areas of
focus for the Board in relation to sustainability
and remuneration arrangements. Shareholder
62
2021 Annual Report and Form 20-F 63
Corporate Governance Report - continued
Conclusion
The CRH Board and its Committees continued
to perform effectively in the past year and I very
much appreciate the individual and collective
efforts of my executive and non-executive
colleagues. I am satisfied that we have made
good progress on our key governance priorities
in the areas of succession planning, board
renewal, more comprehensively articulating
CRH's purpose, sustainability and ensuring we
understand the views and perspectives of our
stakeholders when making decisions. Your Board
is also committed to ensuring that CRH continues
to be a leader in managing the challenges and
opportunities arising from the impact of climate
change and to transparently reporting on our
progress in this important area.
Richie Boucher
Chairman
2 March 2022
engagement is a regular topic on Board agendas
and feedback from these meetings is circulated
with Board papers in order that all Directors have
a comprehensive understanding of shareholder
perspectives on these topics when making Board
decisions.
In a separate consultation process, we sought
feedback from shareholders representing just
over 50% of the issued share capital in relation to
proposals for the updated remuneration policy to
be considered at the 2022 AGM. I am pleased to
report that c.60% of the shareholders contacted
provided us with their considered perspectives
on the Remuneration Committee’s proposals.
Full details of the consultation process and the
final remuneration policy proposals are set out
in the Directors' Remuneration Report on pages
80 to 97.
Following engagement with investor groups,
during the year we undertook a review of climate
change lobbying practices to ensure there is
an alignment between those practices and the
expectations of the Board and our stakeholders.
Further detail is set out on page 79 in the
SESR Committee Report. We also published
the CRH Group Tax Strategy, which sets out
the tax objectives, strategy and governance
framework of the Group due to the increasing
importance for tax transparency across a number
of different stakeholders including Governments,
sustainability analysts and investors.
The full range of ways in which we engage with
our stakeholders are set out on page 27, which
also includes a summary of each stakeholder’s
main areas of interest and the outcomes of the
various engagement processes in 2021.
Litigation and Compliance
The Group General Counsel regularly updates the
Board on relevant legal and compliance matters
and provides reports on any material matters
that arise requiring Board decisions or detailed
consideration.
Dematerialisation of
Share Certificates
Under the EU Central Securities Depositories
Regulation (EU) 909/2014 (CSDR), there is a
requirement for all shares in Irish issuers to be
held in book-entry form. The period by which
this transition must happen is between January
2023 and January 2025. Book-entry form means
an electronic record of ownership such as an
entry in an electronic register, without any further
or other document such as a share certificate.
The Irish market is intending to dispense with
share certificates with effect from 1 January
2023. Therefore, from that date all CRH share
certificates in issue will be cancelled. However,
this will be the only change as these holdings are
currently recorded in electronic form on the CRH
register of members.
The removal of share certificates will bring benefits
to shareholders by reducing the paperwork
associated with share transactions such as sales
or share transfers and by removing the need for
expensive insurance cover in the event that share
certificates have been lost or mislaid. Industry
participants, such as brokers and registrars, are
currently updating their systems to ensure there
is no impact on shareholders who currently hold
share certificates.
We understand that the Irish government is
planning to introduce legislation to update Irish
company law in a way that will override references
in the Articles of Association of all Irish issuers to
share certificates. Once this legislation is in place,
we will seek shareholder approval to align the
Articles of Association with the new legislation.
Re-election of Directors
Table 6 on page 72 provides a summary of
competencies, important to the long-term
success of the Group, that each Director seeking
re-election at the 2022 AGM brings to the Board.
I have evaluated the performance of each Director
and am satisfied that each Director is committed
to their role, provides constructive challenge and
devotes sufficient time and energy to contribute
effectively to the performance of the Board.
I strongly recommend that shareholders vote in
favour of the re-appointment of each Director
going forward for re-election at the 2022 AGM.
62
2021 Annual Report and Form 20-F 63
Oldcastle Infrastructure, part of CRH’s Building Products Division, is one of North America’s largest manufacturers of infrastructure products for the telecommunications, energy,
transportation, and water markets, including solutions for stormwater management and drainage, wastewater, irrigation, marine and potable water.
64
Audit Committee
Report
On behalf of the Committee, I am pleased to introduce the
Audit Committee Report for the year ended 31 December
2021. The purpose of this report is to provide shareholders
with an insight into the workings of, and principal matters
considered by, the Committee in 2021, together with how the
Committee has discharged its responsibilities and provided
assurance on the integrity of the 2021 Annual Report and
Form 20-F.
Introduction
The responsibilities of the Committee are set out
in full in its Terms of Reference, which is available
on our website, www.crh.com. General details
in relation to the role and responsibilities of the
Committee, its operation and the policies applied
by it, can be found in the Governance Appendix,
which is also available on our website.
While the Committee continued to focus on
monitoring the effectiveness of the Group's
financial reporting and Enterprise Risk
Management framework and the integrity of the
Group's internal and external audit processes
during 2021, we also spent time considering and
discussing with management CRH's reporting
on climate-related risks, including the impact on
the Group's accounting judgements, disclosures
and financial statements and their alignment
with CRH's carbon reduction targets, and its
approach with regard to compliance with the
recommendations of various regulatory bodies
(International Accounting Standards Board,
International Audit and Assurance Standards
Board, Financial Reporting Council, European
Securities and Markets Authority), the Task Force
on Climate-related Financial Disclosures (`TCFD')
and the emerging EU Taxonomy requirements.
The Committee, and indeed the wider Board
and management team, take the issue of
climate change very seriously and, as we work
towards our ambition of carbon neutrality by
2050, we understand the importance of ensuring
transparency for all stakeholders on our plans and
progress. Further details on the impact of climate
change on CRH can be found on pages 28 to 31.
Table 1 on pages 66 and 67 outlines the principal
areas that the Committee focused on in 2021.
Audit Committee Membership
The Committee currently consists of five
non-executive Directors considered by the Board
to be independent. The biographical details
of each member are set out on pages 57 to
59. Together, the members of the Committee
bring a broad range of relevant experience and
expertise from a variety of industries which is vital
in supporting effective governance and enabling
the Committee to discharge its responsibilities.
Richard Fearon, Siobhán Talbot and I have been
designated by the Board as the Committee’s
financial experts and meet the specific
requirements for recent and relevant financial
experience, as set out in the 2018 Code.
Audit Committee Meetings
During 2021, the Committee held eight
meetings in order to discharge its duties and
responsibilities. Meetings of the Committee
are generally scheduled around the financial
2021 Annual Report and Form 20-F 65
The Committee
spent time
considering and
discussing with
management the
Group's reporting
on climate-related
risks, including
the impact on the
Group's accounting
judgements,
disclosures
and financial
statements..."
Shaun Kelly
Chairman of Audit
Committee
reporting cycle to allow the Committee to
discharge its duties in relation to the Group’s
financial statements and generally take place
in advance of Board meetings to enable me to
provide the Board with a detailed update on
the key items discussed at each Committee
meeting. The Board also receives copies of the
minutes of all Committee meetings.
The Finance Director, Head of Internal Audit
and representatives of the Group’s external
auditors, Deloitte, typically attend Committee
meetings. Other senior finance personnel attend
Committee meetings to provide updates on
certain key areas of the business, as appropriate.
As Chairman of the Committee, I am available
to all Board members to discuss any audit or
risk related issues they may have. I meet with
Deloitte and the Head of Internal Audit on a
regular basis, in order to discuss any issues
which may have arisen.
External Auditor
Deloitte was appointed as the Group’s external
auditor with effect from 1 January 2020 following
the completion of a competitive tender process
in 2018. Richard Muschamp is the Group’s lead
audit engagement partner.
Effectiveness
The Committee, on behalf of the Board, is
responsible for the relationship with the external
auditor and for monitoring the effectiveness and
quality of the external audit process and the
independence of the auditor. The Committee’s
primary means of assessing the effectiveness
of the external audit process is by monitoring
performance against the agreed audit plan.
The Committee also considers the experience
and knowledge of the external audit team and the
results of post-audit interviews with management
and the Audit Committee Chairman. These annual
procedures are supplemented by periodic formal
reviews of the performance of the external auditor.
In June 2021, the Committee met with Deloitte
to agree the 2021 external audit plan. Table 2
on page 68 outlines the key areas identified as
being potentially significant and how these were
addressed during the year. The Committee met
regularly with Deloitte during 2021 to monitor
progress in relation to the 2021 plan. In February
2022, the Committee received and considered
a report from Deloitte on its key audit findings,
including the key risks and significant areas of
judgement, prior to making a recommendation to
the Board in relation to the approval of this 2021
Annual Report and Form 20-F.
Further details in relation to the external auditor,
including information on how auditor objectivity
and independence are maintained, are included in
Section 2 of the Governance Appendix.
Following consideration of the above processes,
the Committee is satisfied with the services
provided by Deloitte to CRH during 2021.
Non-audit Fees
In order to ensure auditor independence
and objectivity, the Committee has a policy
governing the provision of audit and non-audit
services by the external auditor. In 2021, Deloitte
provided a number of audit services, including
Sarbanes-Oxley Section 404 attestation1. Deloitte
was also engaged during 2021 on a limited
number of non-audit services mainly in relation to
potential divestments, as well as to provide help
with local tax compliance, advice on taxation laws
and other related matters, assignments which
typically involve relatively low fees. The Committee
is satisfied that the external auditors’ knowledge
of the Group was an important factor in choosing
them to provide these services. The Committee
is also satisfied that the fees paid to Deloitte for
non-audit work in 2021, which amounted to
$1.8 million and represented less than 9% of
the total fees for the year, did not compromise
their independence or objectivity. Details of the
amounts paid to the external auditor during the
year for audit and other services are set out in
note 5 to the Consolidated Financial Statements
on page 161 (see also Table 3 on page 68).
Further details in relation to the Group’s policy
regarding non-audit fees are set out in Section 2
of the Governance Appendix.
Internal Audit Effectiveness
In December 2020, the Committee received and
considered the Internal Audit Charter and audit
plan for 2021. During the year, the Committee
was updated regularly by the Head of Internal
Audit on the delivery of the 2021 plan and on the
principal findings from the work of Internal Audit
and management’s responses thereto.
External Quality Assessments of Internal Audit
are conducted periodically to ensure that the
Internal Audit function continues to work efficiently
and effectively and in compliance with good
practice standards, with the latest assessment
being conducted during 2021 by KPMG.
The assessment included interviews with key
stakeholders across the Group (including the
members of the Committee) and the examination
of the information provided to the Committee.
The results identified some areas where the
effectiveness of the function could continue to be
enhanced. A detailed action plan to address the
recommendations has been agreed and will be
implemented in 2022.
Audit Committee Effectiveness
and Priorities for 2022
During 2021, the Board undertook an externally
facilitated Board effectiveness review, which
assessed our performance as a Committee.
I am happy to confirm that the evaluation
concluded that the Committee continues to
operate effectively. I would like to thank my fellow
Committee members, the management team,
Internal Audit and Deloitte for their commitment
and input to the work of the Committee during
2021. Looking ahead to 2022, the Committee
will continue to focus on the key ongoing areas
outlined in Table 1 on pages 66 and 67, and will
also continue to monitor and assess the potential
impact of the principal and emerging risks and
uncertainties (including climate change) on the
Group's Consolidated Fnancial Statements.
Shaun Kelly
Chairman of Audit Committee
2 March 2022
1. A copy of Section 404 of the Sarbanes Oxley Act 2002 can be obtained from the SEC's website, www.sec.gov.
66
2021 Annual Report and Form 20-F 67
Audit Committee Report - continued
Key Areas of Focus in 2021
Table 1
In addition to the Committee's responsibilities under section 167(7) of the Companies Act 2014, the key areas of focus for the Committee in 2021 included
the following:
External
Auditor
Financial
Reporting
& External
Audit
Climate
Change
Deloitte has been the Group’s external auditors since 2020. Richard Muschamp has been the Group’s lead audit
engagement partner since Deloitte’s appointment as external auditor. Following an assessment of Deloitte’s continued
independence, objectivity and performance, and having received confirmation of their willingness to continue in office, the
Committee has recommended to the Board their continuance in office for the 2022 financial year. Their continuance in office
will be subject to a non-binding advisory vote at the 2022 AGM.
We also considered and approved the remuneration of Deloitte. Further details of the remuneration received by Deloitte in
2021 are set out in note 5 of the Consolidated Financial Statements on page 161.
We reviewed the 2021 Annual Report and Form 20-F and the appropriateness of the Group's accounting principles,
practices and policies, including the key estimates, judgements and disclosures made by management, together with the
annual and half-year financial statements, and recommended them to Board for approval.
In June 2021, we met with Deloitte to agree the 2021 external audit plan. This included robust discussion and challenge with
both Deloitte and management on the scope, materiality thresholds and structure of the 2021 external audit plan. Table 2 on
page 68 outlines the key areas identified as being potentially significant and how we addressed these during the year. We
met with Deloitte in February 2022 to discuss Deloitte's findings, observations and recommendations arising from the 2021
external audit.
A particular area of focus for the Committee in its review of the 2021 Annual Report and Form 20-F was the Group's
reporting on climate-related risks, including the impact on the Group's accounting judgements, disclosures and financial
statements, including their alignment with CRH's carbon reduction targets, and its approach with regard to compliance
with the recommendations of various regulatory bodies (International Accounting Standards Board, International Audit and
Assurance Standards Board, Financial Reporting Council, European Securities and Markets Authority), the Task Force
on Climate-related Financial Disclosures (TCFD) and the emerging EU Taxonomy requirements. In conjunction with the
SESR Committee, which took a lead role in analysing the TCFD recommendations and EU Taxonomy regulations and the
Company's response thereto, the Committee reviewed the climate disclosures including the TCFD disclosures on pages 28
to 31 and agreed that these are appropriate and that the assumptions used in the financial statements were consistent with
these disclosures.
Accounting
& Regulatory
Developments
We considered and discussed with management and Deloitte various accounting and reporting changes that impacted on the
2021 Annual Report and Form 20-F and/or future financial periods, including:
• The new SEC mining property reporting requirements effective for the year ended 31 December 2021 (see pages 226 to
231 for more details); and
• The new requirements under the EU Transparency Directive and European Single Electronic Format (ESEF) Regulation
effective for 2021 in relation to the preparation and publication of annual reports in a single, structured, electronic format
that are `machine-readable'
Impairment
Testing
Through discussions with both management and Deloitte, we reviewed management's impairment testing methodology and
processes, including key judgement areas, assumptions and alignment with our 2025 carbon reduction targets, as well as
the relevant accounting and disclosure requirements. We found the methodology to be robust and the results of the testing
process appropriate. Further details in relation to the impairment outcome for 2021 are outlined in Table 2 on page 68.
66
2021 Annual Report and Form 20-F 67
Key Areas of Focus in 2021 - continued
Table 1
Risk
Management
& Internal
Control
We continued to monitor and assess the Group’s Enterprise Risk Management framework and the principal and emerging
risks and uncertainties facing the Group, including those that could threaten its business model, future performance,
solvency or liquidity. This included discussion on the impact of climate-related risks on the Group’s accounting judgements,
disclosures, processes and financial statements.
We also considered an assessment of the Group’s risk management and internal control systems. This had regard to risk
management strategies and all material controls, including financial, operational and compliance controls that could affect the
Group’s business. Following this review, we concluded that the Company’s systems of risk management and internal control
were effective and appropriate in the context of the Group.
IT Governance
and Cyber
Security
Internal
Audit
Going
Concern
& Viability
Statements
Directors’
Compliance
Statements
We continued to monitor and discuss with management the Group’s IT governance and information security programme and
the Group’s ability to address evolving cyber security threats.
During the year, we received regular updates from the Head of Internal Audit on delivery of the 2021 Internal Audit Plan
and on the principal findings from the work of Internal Audit and management’s responses thereto. In December 2021, the
Committee considered and approved the proposed Internal Audit plan and approach for 2022, together with the Internal
Audit Charter.
We also considered the results of an independent external assessment of the Internal Audit function which was conducted
by KPMG during 2021. The assessment included interviews with key stakeholders across the Group (including the members
of the Committee) and the examination of the information provided to the Committee. The results, which were generally very
positive, identified some areas where the effectiveness of the function could be enhanced. A detailed action plan to address
the recommendations has been agreed and will be implemented in 2022.
We reviewed the Going Concern Statement (see page 112), including the underlying assumptions (including alignment with
the Group's 2025 carbon reduction targets) and analysis to support the Going Concern Statement, and recommended to
the Board that it approve the Going Concern Statement.
We also reviewed and discussed with management the methodology and processes underlying the Viability Statement,
including the alignment with the Group's 2025 carbon reduction targets, as set out on page 35. We found the methodology
and processes to be robust and recommended to the Board that it approve the Viability Statement.
We considered the requirements of the Irish Companies Act 2014 in relation to the Directors’ Compliance Statement and
received a report from management on the review undertaken during the financial year of the compliance structures and
arrangements in place to ensure the Company’s material compliance with its relevant obligations. On the basis of this review,
we confirmed to the Board that the Company, in our opinion, is in material compliance with its relevant obligations.
68
2021 Annual Report and Form 20-F 69
Audit Committee Report - continued
Areas Identified for Focus During the 2021 External Audit Process
Table 2
Impairment
of Goodwill
Contract
Revenue
Recognition
For the purposes of its annual impairment testing process, the Group assesses the recoverable amount of each of CRH's
cash-generating units (CGUs—see details in note 14 to the Consolidated Financial Statements) based on a value-in-use
computation. The annual goodwill impairment testing was conducted by management, and papers outlining the methodology
and assumptions used in, and the results of, that assessment were presented to the Committee. This included review of key
judgement areas and assumptions such as CGU determination, discount rates, growth rates and alignment with the Group's
2025 carbon reduction targets. Following its deliberations, the Committee was satisfied that the methodology used by
management (which was consistent with prior years) and the results of the assessment, together with the disclosures in note
14, were appropriate.
As outlined in note 14, no impairment charge was recorded in 2021 (2020: $0.4 billion).
IFRS 15 Revenue from Contracts with Customers requires revenue and expenses to be recognised on uncompleted
contracts, with the underlying principle that, once the outcome of a long-term construction contract can be reliably estimated,
revenue and expenses associated with that contract should be recognised by reference to the percentage of completion. If it is
anticipated that the contract will be onerous (i.e. its unavoidable cost exceeds the economic benefit of the contract), a provision
is created.
Following discussion with management, recognising that the majority of contracts were completed within one year, the
Committee was satisfied that the recognition of contract revenue (including the associated disclosures) was appropriate for the
Group in 2021.
Percentage of Audit and Non-audit Fees(i)
Table 3
2019 - EY
6%
2020 - Deloitte
1%
2021 - Deloitte
9%
94%
99%
91%
Audit Services
Non-audit Services
(i) Following a formal and extensive audit tender process, Deloitte replaced EY as the Group's external auditor with effect from the financial year commencing 1 January 2020.
68
2021 Annual Report and Form 20-F 69
A road grader working with aggregates in preparation for surfacing works and paving. Staker Parson Materials & Construction, part of CRH’s Americas Materials Division, is a leading
producer of quality sand, rock, landscape products, readymixed concrete and asphalt serving customers in Utah, Idaho, Nevada, and Arizona, United States. The company is also a
leading general contractor specialising in road and highway construction, site development, excavating and demolition.
70
Nomination &
Corporate Governance
Committee Report
On behalf of the Committee, I am pleased to present the
Nomination & Corporate Governance Committee Report to
shareholders, which summarises the areas of focus for the
Committee over the course of the last year. In line with previous
years, general details in relation to the role and responsibilities of
the Committee, its operation and the policies applied by it, can
be found in the Governance Appendix, available on our website,
www.crh.com.
Diversity was a
core component
for the executive
and non-executive
search processes
conducted by or
overseen by the
Committee in the
past 12 months."
Richie Boucher
Chairman
Committee Membership
and Operation
The Committee currently consists of five
non-executive Directors, considered by the
Board to be independent. The biographical
details of each member are set out on pages
56 to 59. The Chief Executive normally attends
meetings of the Committee. The Chief Human
Resources Officer attends meetings, as required.
Detailed reports of Committee discussions and
recommendations are provided to the Board
following the conclusion of each meeting. The
Committee’s papers and the minutes of its
meetings are available to all Board Directors.
Board Renewal
In March 2021 and October 2021 respectively,
Caroline Dowling and Badar Khan joined the
Board following recommendations from the
Committee. They have extensive operational
experience as senior executives in global
businesses, knowledge of US markets and
enhance the Board’s skills in the areas of
technology, capital-intensive industries and in
providing solutions for climate change. Their
detailed biographies are set out on pages 57 and
58 respectively.
2021 Annual Report and Form 20-F 71
These non-executive recruitment processes
were supported by Egon Zehnder1. Potential
candidate lists are collated based on
specifications agreed following Committee
input and reviews of a skills matrix maintained
to identify particular skills that would enhance
the Board or which might need to be replaced
following planned Board retirements. The
Committee reviews candidate lists and selects
individuals for interview. Once a preferred
candidate is identified other members of the
Board are invited to meet with them prior to
formal consideration of their appointment to the
Board.
During 2021, the Committee also recommended
to the Board that Mary Rhinehart and Siobhán
Talbot, both of whom had completed their initial
three-year term as a non-executive Director, be
appointed for a second three-year term.
Following the AGM in April 2021, Heather Ann
McSharry and Lucinda Riches retired from the
Board after nine and six years respectively.
Senan Murphy also retired as a Director after
the conclusion of the 2021 AGM. Following an
extensive process, supported by Spencer Stuart,
which considered both internal and external
candidates, the Committee recommended to
the Board that Jim Mintern succeed Senan as
Finance Director. Jim, who has over 30 years
of experience in the building materials industry,
nearly 20 years of which have been with CRH,
was appointed Finance Director and joined the
Board with effect from 1 June 2021. His detailed
biography is set out on page 56.
Details of the remuneration arrangements put
in place for Jim Mintern as Finance Director are
set out in the Directors’ Remuneration Report on
page 83.
Executive Director Succession
Planning
Enhancing our long-term succession planning
has been an area of particular focus in recent
years.
During the past year the Committee managed
the Finance Director succession process noted
above.
Although our Chief Executive, Albert Manifold,
has a contract of employment currently until age
62, the Committee also continued to support the
Board during the year in relation to the long-term
process of planning for Chief Executive
succession. We have worked with Egon
Zehnder, which was selected for this purpose
following a tender process, on the development
of deliverables for the Board’s consideration
in relation to role specification, development
plans for potential internal candidates, external
Membership of the CRH Board (as at 31 December 2021)
Table 4
Independence (determined
by CRH Board annually)
17%
Tenure of Non-executive
Directors
40%
83%
60%
Independent
Non-Independent
0-3 years
3-6 years
Geographical Spread
(by residency)
8%
Ethnicity (based on information provided
by Directors in line with the Parker Review)
8%
50%
42%
92%
N. America
Ireland
White
Asian
Mainland Europe
Gender Diversity
33%
Percentage of Female Directors at
31 December
67%
29%
33%
30%
23%
42% 42%
38%
33%
Male
Female
candidate pools and the identification of key
attributes and traits for a successful transition.
Whilst the Committee and the Board have
developed a number of planning scenarios,
including emergency arrangements for
unexpected events, no decisions have been
taken in relation to timing or potential candidates.
Succession planning is typically an agenda item
at each meeting of the Committee and most
Board meetings.
Board Committee Structure and
Composition
As part of a planned succession for the
Remuneration Committee Chairman role,
Lamar McKay joined the Committee in August
2021 and was appointed Committee Chairman
with effect from February 2022. Lamar's
non-executive experience as a member of CRH's
Remuneration Committee and the Management
Development and Compensation Committee of
APA Corporation, coupled with his experience
2014 2015 2016 2017 2018 2019 2020
2021
on the CRH Board and as Deputy Group Chief
Executive Officer and Chief Transition Officer at
BP, provide him with very extensive knowledge
of remuneration matters and, in particular, EU
and UK legislative requirements, UK Code
provisions and stakeholder perspectives. As
part of the transition process, Gillian Platt, an
experienced Remuneration Committee member,
was asked to serve as an interim Chair and
provide leadership in supporting the work of
the Remuneration Committee in preparing an
updated remuneration policy for consideration
by shareholders at the 2022 AGM. Details of the
proposed updated remuneration policy are set
out in the Directors' Remuneration Report on
page 80 to 97.
A summary of Committee composition changes
for current Board members in the past 12
months is set out in Table 5 on page 72.
In 2018, the Board constituted a new Committee
to focus on important initiatives in the areas of
safety, the environment and social responsibility
1. Egon Zehnder provide executive recruitment and support services as and when requested. Otherwise, they do not have any connection with CRH or individual directors.
72
2021 Annual Report and Form 20-F 73
Nomination Committee Report - continued
Summary of Committee composition changes
Table 5
External Board Evaluation
Name
C. Dowling
J. Karlström
S. Kelly
B. Khan
L. McKay
J. Mintern
Joined
ADF, Remuneration and SESR
Remuneration
Audit and SESR
Remuneration and Nomination
ADF
Ceased
Audit
Audit
M. K. Rhinehart
S. Talbot
Nomination
– the SESR Committee. Since then, the work
of this Committee has become embedded as a
key component of the Board’s structures. The
Committee has recommended to the Board that
it would be appropriate for Mary Rhinehart to
succeed me as Chair of the SESR Committee
after the conclusion of the 2022 AGM.
Senior Independent Director
Gillian Platt is the Board appointed Senior
Independent Director. The responsibilities of the
Senior Independent Director are set out in the
Governance Appendix.
Diversity
Board renewal and senior management
succession are a constant process. As such, the
priorities for renewal and succession evolve over
time. Diversity is a core criteria of the Board's
renewal policy, which is set out on page 74,
and work in overseeing senior management
Summary of Director Competencies
succession. Accordingly, diversity, including but
not limited to gender and ethnicity, is an integral
part of developing short lists of internal and
external candidates and is part of the search
specification agreed with external agents. In
particular, diversity was a core component
for the executive and non-executive search
processes conducted by or overseen by the
Committee in the past 12 months.
The Committee and the SESR Committee
collectively work with management on the
Inclusion & Diversity agenda at below Board
level across CRH and monitor progress against
agreed Group objectives and targets such as the
Board’s target of having a minimum of 33% of
senior leaders being women by 2030.
Details of Board gender and ethnicity are set out
in Table 4 on page 71.
Details of the current gender balance across the
group, including of the senior leadership team
and their direct reports is set out on page 18.
The Committee recommended to the Board
that Christopher Saul Associates2 be engaged
to conduct an evaluation of the effectiveness
of the Board and its Committees in 2021.
Christopher Saul, who led the evaluation, was
Senior Partner at Slaughter and May from 2008
to 2016 and has extensive experience as a
business leader, board adviser, practitioner in
corporate transactions and in governance best
practice. The outcome of the evaluation, which
involved in-person interviews with each Director
and members of the senior management team,
reviews of Board papers and observing Board
and Committee meetings, is summarised on
page 61.
Corporate Governance
The Committee is responsible for reviewing
the independence of Board members and
has recommended to the Board that all of
the non-executive Directors be deemed
to be independent. The Committee also
monitors developments in best practice in
relation to corporate governance and makes
recommendations to the Board in relation
to changes and enhancements to current
procedures, where appropriate.
Richie Boucher
Chairman of the Nomination &
Corporate Governance Committee
2 March 2022
Table 6
Accounting,
Internal
Control &
Financial
Expertise
Financial
Services
Governance M&A
Building
Materials or
Capital
Intensive
Industry
Experience
IT & Cyber
Security
Talent
Management
Remuneration
Safety &
Sustainability
(including
climate)
Strategy
Global
Experience
R. Boucher
C. Dowling
R. Fearon
J. Karlström
S. Kelly
B. Khan
A. Manifold
J. Mintern
L. McKay
G. Platt
M.K. Rhinehart
S. Talbot
▲
▲
▲
▲
▲
▲
▲
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▲
▲
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▲
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▲
▲
▲
▲
▲
▲
▲
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▲
▲
▲
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▲
▲
▲
▲
▲
▲
▲
2. Christopher Saul Associates does not have any connection with CRH or individual Directors.
72
2021 Annual Report and Form 20-F 73
Board of Directors
Membership Structure
of the Board
We consider the current size and composition
of the Board to be within a range which is
appropriate. The spread of nationalities of the
Directors reflects the geographical reach of the
Group and we consider that the Board as a whole
has the appropriate blend of skills, knowledge
and experience, from a wide range of industries,
regions and backgrounds, necessary to lead the
Group. Section 1 of the Governance Appendix on
the CRH website (www.crh.com) contains further
details on the Board’s structures and the Board’s
policies with regard to the appointment and
retirement of Directors.
Role and Responsibilities
The Board is responsible for the leadership,
oversight, control, development and long-term
success of the Group. It is also responsible for
instilling the appropriate culture, values and
behaviour throughout the organisation. There is a
formal schedule of matters reserved to the Board
for consideration and decision. This includes the
matters set out in Table 7.
The Group’s strategy, which is regularly
reviewed by the Board, and business model
are summarised on pages 14 to 17. The Board
has delegated some of its responsibilities to
Committees of the Board. While responsibility
for monitoring the effectiveness of the Group’s
risk management and internal control systems
has been delegated to the Audit Committee3,
the Board retains ultimate responsibility for
determining the Group’s risk appetite and
tolerance, and annually considers a report
in relation to the monitoring, controlling and
reporting of identified risks and uncertainties.
In addition, the Board receives regular reports
from the Chairman of the Audit Committee in
relation to the work of that Committee in the
area of risk management. Individual Directors
may seek independent professional advice, at
the expense of the Company, in the furtherance
of their duties as a Director. The Group has a
Directors’ and Officers’ Liability insurance policy
in place. Directors are provided with access to
all Board and Committee papers in advance of
each meeting. If any Director cannot attend a
meeting, they can communicate their opinions
and comments on the matters to be considered
via the Chairman or the relevant Committee
Chairman prior to the relevant meeting.
Matters Reserved
to the Board
Table 7
• Appointment of Directors
• Strategic plans for the Group
• Annual budget
• Major acquisitions and disposals
• Significant capital expenditure
• Approval of full-year results and
the Annual Report and Form 20-F
• Approval of the interim results
Independence of Directors
The Board has determined that each non-executive
Director remains independent.
Chairman
Richie Boucher was appointed Chairman of
the Group with effect from 1 January 2020.
On his appointment as Chairman, he met the
independence criteria set out in the 2018 Code.
Although he holds other directorships, the Board
has satisfied itself that these do not adversely
impact on his role as Chairman.
Attendance at Scheduled Meetings during the year ended 31 December 2021
Table 8
Name
R. Boucher
C. Dowling (iii)
R. Fearon
J. Karlström (vi)
S. Kelly
B. Khan (iv)
A. Manifold
J. Mintern
S. Murphy (v)
L. McKay
H.A. McSharry (v)
G. Platt
M.K. Rhinehart (vi)
L.J. Riches (v)
S. Talbot (vi)
Board
Total Attended
ADF
Audit
Total
Attended
Total
Attended
Nomination (i)
Total Attended
Remuneration
Total Attended
SESR (ii)
Total
Attended
5
4
5
5
5
1
5
3
1
5
1
5
5
1
5
5
4
5
5
5
1
5
3
1
5
1
5
5
1
5
5
3
4
4
5
-
5
3
1
4
-
-
-
1
5
5
3
4
4
5
-
5
3
1
4
-
-
-
1
4
-
-
5
3
8
-
-
-
-
5
3
-
3
3
8
-
-
5
2
8
-
-
-
-
5
2
-
3
3
5
8
-
-
-
-
-
-
-
-
-
2
8
8
6
8
-
-
-
-
-
-
-
-
-
2
8
8
6
8
5
-
8
6
-
-
-
-
2
2
8
6
-
-
8
5
-
7
6
-
-
-
-
2
2
8
5
-
-
4
2
-
4
-
-
4
-
-
3
-
4
4
-
-
4
2
-
4
-
-
4
-
-
3
-
4
4
-
-
(i) Nomination & Corporate Governance Committee.
(ii) Safety, Environment & Social Responsibility Committee.
(iii) Appointed March 2021.
(iv) Appointed October 2021.
(v) Retired April 2021.
(vi) Johan Karlström, Mary Rhinehart and Siobhán Talbot were unable to attend some meetings during the course of 2021 due to diary conflicts.
3. In accordance with Section 167(7) of the Companies Act 2014.
74
2021 Annual Report and Form 20-F 75
Policy on Diversity
We are committed to ensuring that the Board is
sufficiently diverse and appropriately balanced.
In its work in the area of Board renewal and
succession planning, the Nomination & Corporate
Governance Committee looks at the following four
criteria when considering non-executive Director
roles:
•
international business experience, particularly in
the regions in which the Group operates or into
which it intends to expand;
• skills, knowledge and expertise (including
education or professional background) in areas
relevant to the operation of the Board;
• diversity in all aspects, including nationality,
gender, social and ethnic backgrounds,
cognitive and personal strengths; and
•
the need for an appropriately sized Board
During the ongoing process of Board renewal,
each, or a combination, of these factors can take
priority. To date, the Board has not set any policy
regarding age. The ages of the Directors range
from 50 to 68, which the Nomination & Corporate
Governance Committee believes is appropriate at
the current time.
Committees
The Board has established five permanent
Committees to assist in the execution of
its responsibilities. The current permanent
Committees are:
• Acquisitions, Divestments & Finance;
• Audit;
• Nomination & Corporate Governance;
• Remuneration; and
• Safety, Environment & Social Responsibility
Ad-hoc Committees are formed from time to time
to deal with specific matters.
Substantial Holdings
Each of the permanent Committees has Terms
of Reference1, under which authority is delegated
to them by the Board. The Chairman of each
Committee reports to the Board on its deliberations
and minutes of all Committee meetings are
circulated to all Directors. The Chairmen of the
Committees attend the AGM and are available to
answer questions from shareholders.
Each of the Committees reviewed their respective
Terms of Reference during 2021 and minor
changes were made to the Terms of Reference of
the Audit, Nomination & Corporate Governance,
Remuneration and SESR Committees in order
to align these with current Board practices and
terminology and to ensure that they remain aligned
to evolving best practice. The Terms of Reference
of each Committee are available on the CRH
website, www.crh.com.
Substantial Holdings
The Company is not owned or controlled directly or
indirectly by any government or by any corporation
or by any other natural or legal person severally
or jointly. The major shareholders do not have
any special voting rights. Details of the substantial
holdings as at 31 December 2021 are provided in
Table 9.
Stock Exchange Listings
CRH, which is incorporated in Ireland and subject
to Irish company law, has a premium listing on
the London Stock Exchange (LSE), a secondary
listing on Euronext Dublin (formerly the Irish Stock
Exchange) and its American Depositary Shares
are listed on the New York Stock Exchange
(NYSE).
Legal and Compliance
CRH's Legal and Compliance function supports
the Group in operating consistently with its
values, providing advice, guidance and support
to executive and operational management and
working closely with them to provide compliance
training to our employees. Legal and Compliance
provides support on a range of matters including
establishing policies and procedures, providing
compliance training and communications,
providing legal advice on compliance and
business issues, monitoring and investigating
Hotline calls, competition/antitrust law, and
ensuring the Group is informed of any changes to
regulation and/or reporting requirements.
Code of Business Conduct
Our culture as a company is built on our
commitment to upholding the CRH Values and
in particular, doing what we say and leading
with integrity. This means we do the right things
in the right way, comply with the law and work
responsibly. The foundation of the Legal and
Compliance programme is the Code of Business
Conduct (CoBC) and supporting policies,
which set out our standards of legal, honest
and ethical behaviour. The CoBC complies with
the applicable code of ethics regulations of the
SEC arising from the Sarbanes-Oxley Act. The
CoBC is applicable to all employees of the CRH
Group, including the Chief Executive, our Global
Leadership Team and senior financial officers. A
refreshed CoBc was launched during 2021.
CRH's Internal Audit function works side-by-side
with Legal and Compliance in monitoring
compliance with the CoBC and supporting
policies, and in providing an integrated approach
to assurance. This cross-functional collaboration
supports CRH's goal: to ensure CRH leads with
integrity.
Awareness and Training
In line with our commitment to maintain high
ethical business conduct standards, we continue
to update and improve awareness and training
efforts. All new employees are provided with the
CoBC and relevant employees undertake CoBC
training and Advanced Compliance Training on
a regular basis. Additional training modules are
developed for more focused topics and audiences
where necessary.
Table 9
As at 31 December 2021, the Company had received notification of the interests outlined in the table below in its Ordinary Share capital, which were equal to, or in
excess of, 3%. Between 31 December 2021 and 2 March 2022, the Company was advised by Baillie Gifford & Co. that its holding in CRH was 23,157,274 (3.01%).
Name
BlackRock, Inc. (i)
Cevian Capital II GP Limited
UBS AG
31 December 2021
31 December 2020
31 December 2019
Holding/
Voting Rights
% at
year end
Holding/
Voting Rights
% at
year end
Holding/
Voting Rights
% at
year end
56,891,415
27,534,705
26,380,604
7.38
3.57
3.34
59,047,330
27,534,705
26,380,604
7.52
3.51
3.34
53,813,273
-
26,380,604
6.82
-
3.34
(i)
BlackRock, Inc. has advised that its interests in CRH shares arise by reason of discretionary investment management arrangements entered into by it or
its subsidiaries.
1. The Terms of Reference of these Committees comply fully with the 2018 Code.
74
2021 Annual Report and Form 20-F 75
CRH Hotline
US Listing - Additional Information
Table 10
CRH engages an external service provider to
administer an independent 24/7 multi-lingual
confidential “Hotline” facility. The CRH Hotline
allows employees, customers, suppliers and/
or other external stakeholders to raise good faith
concerns that may be relevant to the CoBC,
inappropriate or illegal behaviour or violations
of any CRH policies or local laws. All concerns
are handled discreetly and are professionally
investigated with appropriate actions taken based
on investigation findings. CRH is committed to
creating an atmosphere where employees feel
empowered to speak up when they have good
faith concerns. Retaliation or reprisals are not
tolerated at CRH.
Communications
with Shareholders
Communications with shareholders are given
high priority and the Group devotes considerable
time and resources each year to shareholder
engagement. We recognise the importance of
effective dialogue as an integral element of good
corporate governance. The Investor Relations
team, together with the Chief Executive, Finance
Director and other senior executives, regularly
meet with institutional shareholders (each year
covering over 60% of the shareholder base).
Detailed reports on the issues covered in those
meetings and the views of shareholders are
circulated to the Board after each group of
meetings. Table 11 provides a brief outline of the
nature of the activities undertaken by our Investor
Relations team.
In addition to the above, major acquisitions and
disposals are notified to the Stock Exchanges in
accordance with the requirements of the Listing
Rules and development updates, giving details
of other acquisitions or disposals completed and
major capital expenditure projects, are issued
periodically.
During 2021, the Chairman, Remuneration
Committee Chair and Company Secretary again
participated in a number of meetings with some of
the Group’s major shareholders in advance of the
2021 AGM and as part of the Group's ongoing
engagement processes. Also, as outlined in the
Remuneration Committee Chairman’s introduction
to the Directors’ Remuneration Report on pages
81 and 82, there was extensive engagement with
the Group’s major shareholders in 2021 on the
Remuneration Committee’s proposals regarding
the 2022 Directors’ Remuneration Policy.
We respond throughout the year to
correspondence from shareholders on a wide
range of issues.
Additional details in relation to CRH’s general corporate governance practices are set out in
the Governance Appendix, which is included as an exhibit to the Annual Report on Form 20-F
as filed with the SEC. For the purposes of the Annual Report on Form 20-F, the Governance
Appendix, and in particular the following sections thereof, are incorporated by reference herein:
Section 1 - Frequently Asked Questions
• Page 2: For what period are non-executive
Directors appointed?
• Page 3: What are the requirements
regarding the retirement and re-election
of Directors?
Section 2 - Operation of the Board’s
Committees
• Page 5: Audit Committee: Role and
Responsibilities
• Page 5: Audit Committee: Meetings
• Page 6: Audit Committee: Non-audit Fees
Details of the executive Directors’ service
contracts and the policy for loss of office are
set out in the section entitled 'Service
Contracts' on page 95.
Investor Relations Activities
Table 11
•
Investor Briefings: in addition to regular
contact with investors and analysts
during the year, the Company periodically
holds capital market days, which include
presentations on various aspects of CRH’s
operations and strategy and provides an
opportunity for investors and analysts to
meet with CRH’s wider management team
• Media Briefings: each year, the Company
provides media briefings on various issues
•
•
•
Formal Announcements: including the
release of the annual and interim results
and the issuance of trading statements.
These announcements are typically
accompanied by presentations and
webcasts or conference calls
Investor Roadshows: typically held
following the release of formal
announcements, provide an opportunity
for the management team to meet existing
and/or potential investors in a concentrated
set of meetings
Industry Conferences: attendance at key
sector and investor conferences affords
members of the senior management
team the opportunity to engage with key
investors and analysts
The following are available on www.crh.com
Table 12
Governance
Investors
• Governance Appendix
• Annual and Interim Reports, the Annual
• Directors’ Remuneration Policy
• Terms of Reference of the Acquisitions,
Divestments & Finance, Audit, Nomination &
Corporate Governance, Remuneration and
Safety, Environment & Social Responsibility
Committees
• Memorandum and Articles of Association of
the Company
• Pre-approval policy for non-audit services
provided by the external auditor
•
Compliance & Ethics statement, Code
of Business Conduct and Hotline
contact numbers
Report and Form 20-F (separate
documents up to 2015) and the
annual Sustainability Report
• News releases
• Webcast recordings of results briefings
•
General Meeting dates, notices,
shareholder circulars, presentations
and poll results
• Answers to Frequently Asked Questions,
including questions regarding dividends
and shareholder rights in respect of general
meetings
76
Safety, Environment &
Social Responsibility
Committee Report
I am pleased to introduce the Safety, Environment & Social
Responsibility (SESR) Committee Report to shareholders.
The report sets out the primary focus areas for the
Committee in the areas of safety, climate change and
sustainability, Inclusion & Diversity and workforce matters.
Sustainability
has been deeply
embedded in
all aspects of
our strategy and
business model
for many years."
Richie Boucher
Chairman
Committee Membership and
Operation
The Committee currently consists of seven
non-executive Directors and the Chief Executive.
Typically, new Board members join this Committee
in order that they can gain an understanding of
the important issues as they relate to CRH and its
industry. This approach also enables the Board
to quickly leverage their expertise in these key
matters, and particularly in relation to climate
change. The biographical details of each member
of the Committee are set out on pages 56 to 59.
The Committee meets every quarter and
provides a detailed report of discussion and
recommendations to the Board following the
conclusion of each meeting. The Committee’s
papers and the minutes of its meetings are
available to all Board Directors.
Climate Change and Sustainability
Sustainability has been deeply embedded in all
aspects of our strategy and business model for
many years. We recognise the importance of
decarbonisation in addressing the challenges of
climate change and believe that our integrated
strategy of value-added products and innovative
solutions has an important part to play in the
delivery of a more resilient built environment and a
more sustainable future.
In 2021, we announced that we expect to achieve
our 2030 carbon emissions reduction target by
2025. The Committee has, therefore, worked with
management to put in place updated stretching
targets for 2030 as part of our stated ambition to
achieve carbon neutrality by 2050 in accordance
with the Paris Agreement. Those updated stretch
targets are set out on page 21.
2021 Annual Report and Form 20-F 77
Key Areas of Focus in 2021
Table 13
Sustainability
/Environment
Safety
We worked with management to put in place updated stretching targets for 2030 as part of our stated ambition to achieve
carbon neutrality by 2050 in accordance with the Paris Agreement. The updated targets are set out on page 21.
In the context of the importance of concrete as a sustainable building material, we also considered and discussed CRH’s
energy usage, including the plans and initiatives in place to reduce CRH’s CO2 emissions.
We continued to review and consider reports on the outcomes of operational sustainability audits.
We also worked with the Remuneration Committee in relation to the incorporation of Sustainability and Inclusion & Diversity
metrics into the Group's Performance Share Plan (see Table 40 on page 105 for more details).
We received and discussed with management regular updates covering the Group’s safety performance, policies, action plans,
and the background, impact and required remediation actions in relation to any serious incidents.
Social
Responsibility
Employee Engagement: In line with the authority delegated to the Committee by the Board, we undertook a series of employee
engagement exercises and considered and reported to the Board on the feedback received from employees.
Inclusion & Diversity: We received and considered updates from management on the status of the ongoing work in the area of
Inclusion & Diversity.
Corporate Purpose: We continued to monitor and review progress in relation to the ongoing project to more fully define and
articulate the Group’s corporate purpose (see page 61 for more details).
Climate Lobbying: We undertook a review of CRH's climate-related lobbying practices to ensure that there is alignment
between those practices and the expectations of the Board and our stakeholders.
Reporting
We considered and approved the Group’s 2020 Sustainability Report, which was released in March 2021, and the various
non-financial disclosures included in this Report on pages 20 to 31. We also reviewed and considered the proposed structure
and format of the 2021 Sustainability Report, which will be published in March 2022.
We also considered and discussed with management the work undertaken to ensure CRH's compliance with the new TCFD
and EU taxonomy requirements applicable for 2021 (see pages 26 to 31 and 243 for more details).
The Group continues to review carbon
roadmaps in the context of technical, regulatory,
environmental and other developments, as
carbon reduction is an important near-term
component of the Group's carbon neutrality
ambition by 2050. In this regard, the Group is
active with a broad range of stakeholders such
as the Global Cement and Concrete Association
(GCCA), Science Based Target initiative (SBTi)
and others to develop resources and innovations
that will ultimately support cement manufacturing
transition to a lower carbon production process.
For example, CRH is a member of the SBTi's
expert working group to develop the necessary
resources to help companies producing cement
to align with the goals of the Paris agreement.
There is also significant participation by the
Group in initiatives aimed at further developing
the circular economy, supporting and benefiting
from sustainable growth and climate neutrality.
This presents significant opportunities for CRH,
as we focus on producing a new generation of
low-carbon, sustainable building solutions for the
built environment. By considering the full lifecycle of
products and innovating to drive more sustainable
outcomes - such as using waste materials and
alternative fuels and renewable energy in providing
products and solutions for our customers' needs
- we can both meet changing customer demands
and protect the environment.
While CRH's continuous improvement processes
will continue to deliver improvements for
sustainability, new technologies will be required
to reach our net zero aim, which do not currently
exist in commercial form. To support this, the
Board will be putting in place an innovation fund
of $250 million to support this work within CRH.
Through the GCCA, the Group is taking a leading
role at industry level in setting the cement and
concrete industry roadmap for net zero concrete.
Public policy is central to these efforts and there
is a need for a comprehensive policy framework
to make low-carbon cement manufacturing
investable, to stimulate demand for low-carbon
products and to create a circular infrastructure
and net zero manufacturing environment.
The GCCA is actively working in partnership
with policymakers, investors, researchers and
customers.
Oversight and Assurance
The Committee receives reports on the outcomes
of operational sustainability audits, which includes
reports from Group Sustainability as well as from
Internal Audit on any safety and environmental
observations when completing an audit
programme. In addition, DNV, one of the world's
leading certification bodies, reviews management
systems, interviews management, engages with
external stakeholders and identifies opportunities
for improvement as part of the independent
assurance of the CRH Sustainability Report.
78
2021 Annual Report and Form 20-F 79
SESR Committee - continued
Incorporating ESG Metrics in
CRH’s Remuneration Incentive
Structures
The Remuneration Committee has consulted
with shareholders on the incorporation of
Sustainability and Inclusion & Diversity metrics,
into the long-term Performance Share Plan. The
targets proposed for the first cycle of awards in
2022 using these measures were reviewed and
recommended by the SESR Committee. Details of
the proposed targets are set out in the Directors’
Remuneration Report on page 82.
Employee Welfare and
Engagement
In 2021, the Board and management continued
to focus attention on the adherence to health
guidelines, and the needs of employees,
customers and suppliers in relation to COVID-19
and our organisational health index. The Board
is satisfied that CRH's experience during the
pandemic is reflective of the experience in wider
society in the jurisdictions and geographies in
which we operate.
The Committee and the Board receive regular
updates in relation to fatalities of employees and
colleagues with confirmed cases of COVID-19 and
on cases across the Group.
In relation to safety generally, the Committee
receives regular reports on lagging safety
indicators, such as frequency and severity ratios,
and on leading indicators, such as high potential
learning events, safety audits and safety culture
assessments.
We very much regret that there were four
reportable fatalities in 2021 involving one
employee, one contractor and two third-parties.
The Committee received and considered detailed
reports on each incident and discussed with
the Divisional Presidents responsible for each
business safety training and work processes and
safety culture in the operations concerned. The
Committee reports the findings of its reviews to
the Board. Learnings from accidents and “near
misses” are shared across the organisation. The
Committee advised the Remuneration Committee
that it did not consider that there were any issues
arising from its safety reviews that would require
an override of remuneration incentive outcomes
in 2021.
During the year management undertook an
extensive employee survey. Just under 38,000
employees were invited to participate, with a very
strong response rate of 65%. The findings, which
were consistent across the organisation, showed
a strong organisation health score. Areas for
potential improvement have been identified and
action plans have been put in place. However,
the Committee and the Board noted that no
fundamental or critical issues had been identified.
The Board also undertook an employee
engagement exercise, led by the Committee
and supported by the Human Resources team,
whereby we engaged with employees from
Europe and the US in a number of two-way
sessions. Due to COVID-19 restrictions, these
sessions were held virtually. We discussed a range
of topics under the broad themes of safety &
compliance, performance (including remuneration
policies) & development and people & culture.
The sessions provided valuable insights into the
lived experiences, perceptions and opinions of the
Group’s employees. The consolidated feedback,
which was considered by the Committee and
shared with the Board, was closely aligned to
the outcome of the employee survey referred
to above. A majority of the members of the
Remuneration Committee was involved in the
sessions and, as outlined on page 82, our
employees' views of remuneration matters was
considered by that Committee.
Common areas identified in both the employee
survey and engagement sessions were that:
• Professional standards and values are
homogenously understood and practiced
across the Group;
• Employees feel a strong sense of connection
to the Group but would welcome a defined
organisational purpose (see also the section on
corporate purpose on page 61);
• There is an opportunity to strengthen
employees' understanding of the link
between their performance and organisational
performance;
• Employees believe that the organisation is
making progress on Inclusion & Diversity,
and noted many positive steps so far,
but understand that this is an area where
continued focus must remain
Overall, the Committee and the Board believes
the outcome of both exercises provide positive
support for its view that there is good alignment
between CRH’s values, strategy and culture
and that this will further benefit from the current
project to more comprehensively articulate CRH’s
corporate purpose.
The Committee also continued to review and
consider reports arising from the Group's 'Hotline'
facility, including trends by category of hotline
reports, the status of investigations into those
reports, outcomes and actions taken.
Regulatory environment
CRH has a long-established commitment to
transparency on sustainability and the Committee
monitors regulatory and other requirements in
relation to climate-based disclosures. During
2021, we noted further developments in this area,
including the establishment of the International
Sustainability Standards Board by the IFRS
Foundation Trustees, the EU's proposed
Corporate Sustainability Reporting Directive as well
as further development in relation to the Securities
and Exchange Commission's potential climate-
related disclosure rules.
In respect of new requirements for 2021
Reporting, the Committee reviewed reports on
work completed in relation to both the Task Force
on Climate-related Financial Disclosures (TCFD)
and the EU Taxonomy Regulation. The TCFD
standards require disclosure on climate-related
governance, strategy, risk management as well as
metrics and targets. CRH previously used TCFD
standards on a voluntary basis, and in line with
our commitment to transparency, our disclosures
are now consistent with TCFD recommendations
and recommended disclosures.
EU Taxonomy, which is an EU regulatory
classification system that defines environmentally
sustainable activities by providing “technical
screening criteria” thresholds for activities to be
reported as 'sustainable', requires CRH to
disclose the percentage of activities that are
taxonomy-eligible in 2021.
TCFD and EU Taxonomy related disclosures have
been reviewed by the Committee and are set out
on pages 28 to 31 and 243 respectively.
78
2021 Annual Report and Form 20-F 79
Climate Lobbying
Inclusion & Diversity
We recognise that a supportive climate policy
environment is essential for the Group to deliver its
2050 ambition and ensure its business activities
align with the Paris Agreement. The CRH Board
and management are committed to transparency
on climate lobbying activities, both in respect of
direct advocacy and indirect representation via our
trade associations and firmly believe that lobbying
must be consistent with the highest professional
and legal standards. Public policy is central to
efforts to deliver a net zero built environment
and there is a need for a comprehensive
policy framework to make low-carbon cement
manufacturing investable, to stimulate demand
for low-carbon products and to create a circular
infrastructure and net zero manufacturing
environment. The GCCA is actively working
in partnership with policymakers, investors,
researchers and customers.
During 2021, we undertook a review of CRH's
climate-related lobbying practices. The purpose
was to ensure there is an alignment between
those practices and the expectations of the Board
and our stakeholders. The Group will publish a
report on the outcome of this review in conjunction
with the publication of the 2021 Sustainability
Report. The review did not identify material direct
climate-related lobbying or any inconsistencies
between our climate positions and those of our
main trade associations.
The Board and management are committed to
building an inclusive and diverse organisation
in which talented people of all backgrounds are
welcome and can work in an environment which
supports them in performing at their best. This
is supported by a specific target of having a
minimum of 33% of senior leaders being women
by 2030. The Committee uses a dashboard to
track progress against this target and diversity
generally in relation to executive roles.
Inclusion & Diversity is also a standing item on
SESR Committee agendas, with the Committee
receiving regular updates in relation to initiatives
to build an inclusive culture in each Division and
global function, and progress in the areas of
learning and development such as mentorship
programmes and I&D modules in training
programmes. Following significant progress in
2021 around 5,000 leaders and managers have
participated in I&D awareness training. In addition,
a video series designed for all employees has been
piloted and modules have been developed for our
Frontline Leadership Programme.
Richie Boucher
Chairman of the Safety, Environment
& Social Responsibility Committee
2 March 2022
80
Directors’
Remuneration Report
On behalf of the Remuneration Committee, I am pleased to
introduce the Directors' Remuneration Report (the `Report')
for the financial year ended 31 December 2021.
2021 was another
year of record
delivery for the
Group, with
full-year EBITDA
(as defined)* of
$5.35bn."
Lamar McKay
Chairman of the
Remuneration
Committee
Chairman's Overview
Similar to prior years, this Report is split into three
sections:
•
•
•
this introductory Overview (pages 80 to 86),
which sets out the key issues dealt with by the
Committee in the last year and summarises
the way in which the Committee implemented
CRH’s remuneration policy in respect of 2021,
the consultation process undertaken in respect
of proposed updates to CRH’s remuneration
policy and how we intend to implement the
policy in 2022;
the proposed updated 2022 remuneration
policy, which will be submitted to shareholders
for approval at the 2022 AGM (pages 88 to
97); and
the Annual Report on Remuneration (pages
98 to 109), which contains details of CRH's
remuneration arrangements and includes
various legislative, regulatory and best
practices disclosures
Context and Performance in 2021
2021 was another year of record delivery for
the Group, with full-year EBITDA (as defined)* of
$5.35 billion. Our uniquely integrated solutions
strategy supported further margin expansion
across our businesses, while our strong cash
generation and disciplined approach to capital
allocation provides further opportunities to create
value for all of our stakeholders.
*
EBITDA is defined as earnings before interest, taxes,
depreciation, amortisation, asset impairment charges, profit
on disposals and the Group’s share of equity accounted
investments’ profit after tax.
2021 Annual Report and Form 20-F 81
2021 Performance Highlights
Table 14
OPERATING
CASH FLOW
7%
(2020: $3.9bn)
(2019: $3.9bn)
$4.2bn
RETURN ON
NET ASSETS
220 bps
(2020: 10.1%)
(2019: 10.0%)
12.3%
328.8 c
SALES
EBITDA (AS
DEFINED)*
$31.0bn
12%
(2020: $27.6bn)
(2019: $28.1bn)
$5.35bn
16%
(2020: $4.6bn)
(2019: $4.5bn)
121.0c
EARNINGS
PER SHARE**
35%
(2020: 243.3c)
(2019: 203.8c)
DIVIDEND PER
SHARE
5%
(2020: 115.0c)
(2019: 92.0c)
The key outcomes of CRH’s performance in
2021 are summarised in Table 14. This is a
tribute to all of our people and the leadership
of our senior management team. Reflecting its
continued confidence in CRH's financial position,
business performance and future prospects, the
Board has proposed an increase of 5% in the
dividend for the full year of 2021.
Remuneration Policy Review and
Shareholder Consultation
Shareholders approved the current remuneration
policy at the 2019 AGM, with 87% of the votes
cast in favour of the resolution. This policy expires
at the conclusion of the 2022 AGM. Therefore, an
updated policy will be put forward to shareholders
for consideration at the 2022 AGM. It is intended
that the updated policy will apply for a period of
up to three years from that date.
In developing proposals for the updated policy,
the Committee conducted a review of the current
policy to ensure it remains fit-for-purpose, and
continues to deliver against its stated purpose to:
• Motivate and reward executives to perform in
the long-term interests of the shareholders;
• Attract and retain executives of the highest
calibre;
• Reflect the spread of the Group’s operations so
that remuneration packages in each geography
are appropriate and competitive for that talent
market;
• Foster entrepreneurship by rewarding value
creation for shareholders through organic and
acquisitive growth;
• Provide an appropriate blend of fixed and
variable remuneration and short and long-term
incentives; and
• Reflect the risk policies and appetite of the
Group
Summary of Key Decisions/Activities
Table 15
Remuneration
Review
/Stakeholder
Engagement
We consulted with stakeholders on the renewal of the Group's remuneration
policy and proposals to incorporate sustainability and diversity measures
into our incentive plans (see Table 40 on page 105 for more details).
The 2022 Policy will be submitted to shareholders for approval at the 2022
AGM (see pages 88 to 97).
Salary
We approved a 2.75% increase in salary for executive Directors in 2022. The
approved increase is in line with the general workforce increase in Ireland
and the UK.
Annual
Bonus Plan
We reviewed performance against the 2021 Annual Bonus Plan targets
and approved the 2021 bonus payments (see Table 32 on page 98 for
more details). We also reviewed and approved the 2022 Annual Bonus Plan
structure, which is similar to the structure of the 2021 Annual Bonus Plan
(see page 104 for more details).
Performance
Share Plan
(PSP)
We reviewed the performance of the Performance Share Plan award granted
in 2019 against the applicable performance conditions and approved
the vesting outcome (see Table 33 on page 99 for more details). We also
reviewed and approved the metrics and targets for the PSP awards granted
in 2021 and to be granted in 2022.
Finance Director
Remuneration
Arrangements
We considered and approved the remuneration arrangements for Jim Mintern,
who was appointed to the Board and as Finance Director with effect from
1 June 2021 (see Table 17 on page 83 for more details).
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and
the Group’s share of equity accounted investments’ profit after tax.
** Comparative amounts are Earnings per Share pre-impairment which is a non-GAAP measure as calculated on page 222. Earnings per
Share as reported in the Consolidated Income Statement on page 140 are 2020: 142.9 cent and 2019: 203.0 cent.
82
2021 Annual Report and Form 20-F 83
Chairman's Overview - continued
In line with the commitment made in the
Directors’ Remuneration Report submitted to
the 2021 AGM, the Committee also reviewed
CRH’s incentive structures to ensure they are
appropriately aligned with the Board’s strategic
ESG priorities and ambitions, including those
related to sustainability and diversity.
The PSP is viewed as being the most effective
vehicle for incentivising progress towards our
sustainability ambition, recognising the long-term
nature of our targets. The PSP is cascaded to
c. 775 participants across the organisation on
consistent terms, reinforcing collective behaviours
to deliver our goals.
various measures, the Committee has concluded
that the structure outlined above remains
appropriate for the 2022 award cycle. This position
will continue to be kept under review for future
awards under the PSP, to ensure the scorecard
continues to align closely with our strategic
priorities.
Having reflected on feedback from shareholders
during the Board's on-going and regular
shareholder engagement process, considered
the evolving external environment (including the
perspectives of wider stakeholder groups), and
reviewed the current policy in the context of CRH’s
overall strategy and the priorities and ambitions
mentioned above, the Committee concluded that
the core elements of the current policy continue to
be appropriate for CRH at this time. We, therefore,
invited feedback from shareholders on a proposal
to submit for approval a largely unchanged policy,
with the exception of a proposed reduction in
the minimum weighting for any measure in the
Performance Share Plan (PSP) scorecard to
15% of the award opportunity (currently 25%).
This proposed change provides greater flexibility
around measure selection for future award cycles
and allows for the inclusion of sustainability and
diversity measures for the 2022 award as outlined
below. All other aspects of the current policy (and
our approach to its implementation) will remain
unchanged.
Proposed 2022 PSP scorecard
Following the review referred to above, the
proposed change to our policy will enable the
Committee to incorporate sustainability and
diversity metrics into the PSP for 2022, with a
weighting of 15% of the total award opportunity.
This would supplement the current financial
metrics which we propose to reweight as set out
in Table 16.
For 2022, it is proposed that the Sustainability
& Diversity component would comprise three
subcategories of 5% each:
• Driving towards carbon neutrality;
• Revenue from Products with Enhanced
Sustainability Attributes; and
•
Inclusion & Diversity
The Committee considered alternative approaches
to accommodating this additional performance
category to the PSP scorecard, but concluded
that the proposed weightings strike an appropriate
balance between ensuring a meaningful focus
on sustainability and broadly maintaining the
existing relative weighting of our financial metrics.
The Committee also considered including safety
performance as a PSP measure. However, the
Committee believes that safety should remain an
override consideration when assessing outcomes
under the short-term annual bonus plan.
The targets for these Sustainability & Diversity
measures for the 2022 cycle, which were
developed by the SESR Committee in conjunction
with management, are set out on in Table 40 on
page 105.
Shareholder Consultation
In November 2021, we shared details of the
proposed policy update with shareholders,
requesting their feedback on this. In total we
contacted investors holding just over 50% of
CRH’s share capital, with responses received
representing in excess of 30% of our share capital.
Overall, the proposals were positively received.
The Committee and the Board was appreciative
of shareholders’ engagement through the
consultation, and the feedback received. The
Committee considered specific comments from
two shareholders about the relative weighting of
TSR compared to the other financial measures
and whether this was at the right level, and
whether the sustainability measures could be
upweighted by incentivising the I&D measure
in the annual bonus plan rather than the PSP.
In weighing up this feedback, the Committee
particularly noted the strong level of support for
the proposals which formed the basis of the
consultation. Therefore, while noting the small
number of suggestions regarding reweighting
Proposed 2022 PSP scorecard
Table 16
Measure
Cash Flow
RONA
Relative TSR
Sustainability & Diversity
2021 PSP
50%
25%
25%
-
2022 PSP
(proposed)
45%
20%
20%
15%
Workforce Engagement
As outlined in the SESR Committee report
on page 78, the SESR Committee, whose
members include the majority of the members
of the Remuneration Committee, undertook an
employee engagement exercise, supported by the
Group’s Human Resources team, with employees
from Europe and the US in a number of sessions
promoting two-way dialogue. From a remuneration
perspective, we explained the Group’s approach
to remuneration, which for roles with greater
levels of responsibility has a higher emphasis
on performance related pay (and, in particular,
long-term performance), and the way in which
incentive structures are cascaded through the
organisation generally. The broad feedback from
employees was that our remuneration structures
support a focus on long-term sustainable success
and there was an appreciation that the significant
level of variable pay, a significant proportion of
which is payable in CRH shares and subject
to deferral periods and potential clawback,
incentivises long-term value creation and a strong
alignment with the interests of shareholders and
other stakeholders. Employees also told us that
there was strong support for the proposals to
incorporate Sustainability & Diversity measures into
the remuneration policy, given the importance of
those initiatives to the workforce and wider society
more generally.
Group Finance Director
The Board appointed a new Finance Director, Jim
Mintern, on 1 June 2021. Jim was previously Chief
of Staff in the Office of the Chief Executive and
has held various senior operational and financial
roles in CRH since he joined the Group in 2002.
Details of the remuneration package agreed by
the Committee for Jim with effect from his date of
appointment are set out in Table 17 on page 83.
The Committee was mindful of ensuring that this
package is in keeping with our principles (as set
out earlier) of being motivational, fair and providing
an appropriate blend of fixed remuneration, short
and long-term incentives, that aligns closely with
shareholder interests. To inform this decision, the
Committee reviewed the internal equity of the
package and, with the support of our external
adviser benchmarked it relative to other FTSE50
companies (excluding financial services, and on
82
2021 Annual Report and Form 20-F 83
which basis the package is broadly median).
Taking into account these additional reference
points, the Committee believes that the package
is appropriate.
Senan Murphy retired from the Board following
the 2021 AGM and as Finance Director on 1 June
2021. He continued as an executive in order to
support the successful transition of the Finance
Director role and will remain for a time as an
employee to facilitate the completion of a number
of ongoing projects/initiatives. He is expected to
retire from CRH in 2022 and relevant remuneration
details will be disclosed at the appropriate time.
2021 Remuneration
The Committee's approach to remuneration,
and the way in which the metrics selected by the
Committee incentivise management are aligned
with CRH's strategy and support the long-term
performance of the Group, are summarised
in Tables 19 and 21 on pages 85 and 86
respectively. A summary of 2021 remuneration is
set out in Table 18 on page 85.
Fixed Pay
As reported in the 2020 Directors’ Remuneration
Report, salary increases of 2.75% were awarded
to the executive Directors in January 2021, in line
with the average increase awarded to the general
workforce.
The planned phased reduction of the Chief
Executive’s payment in lieu of pension
contributions continued to be implemented
in 2021, with a further 10% reduction in the
amount that would otherwise have been paid.
It has been reduced further from 1 January 2022
to below 25% of his 2022 salary, reducing to
zero in August 2022 in line with his contractual
arrangements.
Incentive Targets in 2021
As was noted in the 2020 Directors’ Remuneration
Report, the targets for the 2021 annual bonus
plan and the 2021 PSP awards were set in
early 2021 in the context of unprecedented
uncertainty presented by the COVID-19 pandemic.
Therefore, we noted that, in the event that certain
assumptions underlying the process of setting
those targets did not transpire, revised targets
might be required to appropriately assess the
underlying performance of the Group.
2021 Annual Bonus Plan
As visibility improved on the impact of COVID-19
on the economies and construction markets in
which CRH operates, mid-way through the year
the Committee reviewed and revised upwards
the financial targets for the 2021 annual bonus
plan. Performance against these revised targets
determined the outcome of the financial element of
the bonus, which represents 80% of the potential
bonus opportunity.
As a result of the record financial performance of
the Group in 2021 and highest ever EBITDA (as
defined)* outturn of $5.35 billion, the maximum
target under each of the financial metrics was
exceeded, resulting in a calculated payout level of
100%. Details of the revised targets for 2021 for
each of the EPS, operating cash flow and RONA
metrics, and the very strong performance against
those targets, are set out in Table 32 on page 98.
The remaing 20% of the annual bonus plan related
to personal and strategic objectives. These are
outlined on page 99.
Notwithstanding the outperformance during the
year, both management and the Committee
recognise the ongoing economic and social
impact of the pandemic, and in that context
judged that it would be appropriate to cap the
bonus outcome in respect of the 2021 Annual
Bonus Plan at 85% of maximum.
In line with CRH's remuneration policy, 33% of
the earned bonus payments will be deferred into
shares for a period of three years. For Jim Mintern,
a deferral of 25% applied for the period up to his
appointment as Finance Director in June 2021.
Jim Mintern - Remuneration Arrangements (i)
Table 17
Component
Level
Context
2021 Salary
€838,000 p.a. (pro-rated)
In line with previous Finance Director, and reflective of 20+ years' senior
operational and finance experience in CRH
Pension
10% of salary
Aligned to the wider workforce in Ireland and the UK
Annual
Bonus
PSP opportunity
(2022 onwards)
Holding
Requirements
Maximum opportunity: 200% of salary
Within policy limits; 33% of payout will be satisfied by share awards deferred
for three years
Award opportunity: 250% of salary
Within policy limits; vested awards are subject to a two-year holding period
In post: 250% of salary, to be achieved by 1 June 2024
In line with policy
Post-employment: 150% of salary for a period of two years
post-employment
In line with policy
(i) Mr. Mintern was appointed Finance Director and to the Board with effect from 1 June 2021.
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
84
2021 Annual Report and Form 20-F 85
Chairman's Overview - continued
2021 PSP Award
The Committee also reviewed the targets for the
2021 PSP awards mid-way through the year and
revised upwards the targets for the RONA and
cash flow metrics (see Table 36 on page 100 for
more details).
2019 PSP Award
The vesting of the 2019 PSP award, which
covered the three financial years from 2019
to 2021 inclusive, has been assessed by the
Committee against the cash flow, TSR and RONA
targets which were set in early 2019. CRH's
strong performance against these measures
resulted in the vesting of 100% of these awards
(see Table 33 on page 99 for more details).
Overall incentive outcome
The Committee is satisfied that there is a very
strong alignment between the incentive outcomes
outlined above for 2021 and the performance
of the Company. The Committee also took into
account a number of factors, including, feedback
from other Committees in relation to matters such
as safety performance, whether any extraneous
factors outside the control of management had
unduly influenced the outcome and considered
progress in relation to strategic objectives not
captured by the financial measures used for
remuneration purposes, and the experience of
key stakeholder groups (including employees).
The Committee concluded that there was no
requirement to use its discretion to adjust incentive
outcomes in respect of any of these matters.
As outlined previously, the metrics for the PSP
awards in 2022 will comprise cash flow, TSR,
RONA and Sustainability & Diversity measures.
The targets are set out in Table 40 on page 105.
Non-executive Directors
A Committee of the Chairman and the executive
Directors recommended that the fees of the
non-executive Directors be increased with effect
from 1 January 2022 by reference to the wider
workforce increase of 2.75% in Ireland and the
UK. The non-executive Director fee structure to
apply under the 2022 Policy is set out in Table 41
on page 105.
Group Chairman
The Committee has reviewed the fee level
for the Group Chairman, taking into account
the performance of the Chairman since his
appointment in 2020 and the nature and extent
of his time commitment to fulfil his responsibilities.
We also reviewed CRH’s fee level relative to other
FTSE50 companies (excluding financial services).
The Committee has increased the Chairman’s fee
from €630,000, the amount set for the role when
the current policy was approved by Shareholders
in 2019, to €647,250 with effect from 1 January
2022 by reference to the increase for the wider
workforce in Ireland and the UK of 2.75%.
2022 AGM
At the 2022 AGM, shareholder approval will be
sought in respect of three separate remuneration
related resolutions:
Conclusion
As set out above, 2021 was another year of
strong performance and value creation for
shareholders due to the efforts of our employees
and the leadership of the senior executive team.
The Committee strongly believes there is a very
close alignment between this performance and
the remuneration outcomes for the executive
Directors. We also believe that the enhancements
to the remuneration policy will support and
incentivise the achievement of our strategic
priorities and the long-term sustainable success
of the Group, and are in line with the expectations
of our shareholders and wider stakeholders.
We look forward to your support for the
remuneration-related resolutions on the agenda
of the 2022 AGM.
Lamar McKay
Chairman of the Remuneration Committee
2 March 2022
Implementation of Remuneration
Policy in 2022
•
Fixed Pay
The Committee has reviewed the executive
Directors' base salaries and concluded that salary
increases of 2.75% should also be awarded
to Albert Manifold and Jim Mintern in 2022 in
recognition of their continued strong performance,
contribution and leadership of CRH. The approved
increase is in line with the general workforce
increase in Ireland and the UK.
Incentives
The 2022 annual bonus plan will continue to
reflect the structure, weightings and metrics used
in prior years: EPS, operating cash flow, RONA
and personal/strategic objectives. The targets
attaching to the 2022 bonus will be disclosed in
the 2022 Directors’ Remuneration Report.
the Directors’ Remuneration Report, which
is an advisory vote on the way in which our
remuneration policy was implemented in 2021,
and the Committee’s proposed approach to its
implementation in 2022;
•
the updated 2022 remuneration policy, which
includes the policy changes outlined above;
and
• a resolution to increase the limit on Directors’
fees. In accordance with the Articles of
Association of the Company and Irish company
law, shareholders set the maximum aggregate
amount of the fees (basic salary) payable to
non-executive Directors. The current limit of
€1,000,000 was set by shareholders at the
2019 AGM. Approval will be sought at the
2022 AGM to increase the limit to €1,200,000.
This change is required as a result of an
increased number of non-executive Directors
on the Board and to provide flexibility for fee
increases over time.
84
2021 Annual Report and Form 20-F 85
2021 Remuneration Snapshot (full details of 2021 remuneration are set out in Table 22 on page 87)
Table 18
Director
Fixed
Salary
Albert Manifold
€1,607,430
Jim Mintern (i)
Senan Murphy (ii)
€488,833
€279,600
Annual Bonus
(iii) (% of Max)
85%
85%
85%
Performance-related Variable Remuneration
2019 PSP Award (iv) (% of Max)
100%
100%
100%
(i)
Appointed as Finance Director and to the Board with effect from 1 June 2021. Accordingly, the salary in the Table above covers the period from 1 June 2021 to 31
December 2021. Details of Mr. Mintern's remuneration arrangements as Finance Director are set out in Table 17 on page 83.
(ii) Retired from the Board on 29 April 2021. Accordingly, the salary in the Table above is pro-rated for service from 1 January 2021 to 29 April 2021. The equivalent
salary for 12 months would be €838,800. Mr. Murphy remains a current executive to facilitate the completion of some outstanding projects/initiatives. He is
expected to retire from CRH during 2022 and details of his remuneration arrangements on retirement will be disclosed in due course.
(iii) For the reasons outlined on page 83, the Committee and the executive Directors judged that the payout under the 2021 annual bonus plan should be capped
at 85% of maximum.
(iv) The awards, for which performance was measured over the three-year period to end 2021, will vest at 100%. The award for Mr. Mintern, which was granted before
his appointment to the Board, is not subject to an additional holding period and will vest in April 2022. The awards for Mr. Manifold and Mr. Murphy are subject to an
additional two-year holding period and, therefore, will vest in 2024. Further details in relation to the estimated value of the awards, split between the value created
for performance and the value created through share price growth, are included in Table 22 on page 87. The market value per share on the date of award (in March
2019) was €29.86.
Alignment of Executive Remuneration with Strategy
Performance Measure (i) Annual Bonus
PSP Reason for Selection
Table 19
EPS
Cash Flow
RONA
TSR
Sustainability &
Diversity
EPS is a key measure of the underlying profitability
Cash flow is a key measure of CRH’s ability to generate cash to fund organic and acquisitive growth and provide
returns to our shareholders via dividends and share buybacks
RONA is a key measure of CRH's ability to create value through excellence in operational performance
TSR is a key measure of CRH's returns to shareholders through the cycle
Sustainability is deeply embedded in all aspects of the Group's strategy and business model. We recognise the
importance of decarbonisation in addressing the challenges of climate change and we are fully committed to
achieving our ambition of carbon neutrality by 2050. We also believe that our integrated model of value-added
products and innovative solutions strategy has a key part to play in the delivery of a more resilient built
environment and a more sustainable future. Furthermore, we consider that an inclusive working environment,
policies and practices will assist in further developing the diversity of our workforce and leadership teams, which
will positively contribute to growing shareholder value over the longer term
Personal/Strategic
Objectives
Personal strategic objectives enable a focus on specific factors aligned with CRH's short and medium-term
strategic objectives that promote long-term performance
(i)
Please see the footnotes to Tables 32 and 33 on pages 98 and 99 respectively for further information on the operation of the financial metrics for the purposes of the Group's
incentive schemes.
Most Recent Remuneration Related Votes
Table 20
Directors’ Remuneration Report (“Say on Pay”)
Directors’ Remuneration Policy Report
2021
2019
91.46%
8.54%
86.73%
13.27%
655,868
4,846,043
530,703,797
496,827,532
67.61%
61.43%
Year of
AGM
%
in Favour
%
Against
No. of
Votes Withheld
Total No. of Votes Cast
(incl. Votes Withheld)
% of Issued Share
Capital Voted
86
2021 Annual Report and Form 20-F 87
Chairman's Overview - continued
Committee’s Approach to Remuneration
Table 21
The key principles underpinning the Committee’s approach to setting remuneration at a level that:
Is fair and balanced
Is market competitive, enabling the Company to recruit and retain talented executives
Incentivises executives in a way that focuses on delivering the Company’s strategic objectives
Aligns the interests of the executive team with those of shareholders
The Committee also seeks to ensure that updates to the Policy take into account the views of stakeholders and evolving best practice. The Board and the Committee are
regularly updated on the perspectives of our employees and take these perspectives into account when making remuneration decisions. Further details in relation to
workforce engagement on remuneration matters are set out on page 82.
The Committee also has oversight of remuneration policy across the Group and endeavours to keep the principles and structure of remuneration consistent in so far as is
possible given CRH's international footprint.
Generally speaking, total remuneration is more variable (and, in particular, weighted towards long-term performance) for roles with greater levels of responsibility and scope.
In setting the remuneration policy and practices for executive Directors, the Committee also takes into consideration the six pillars outlined in the 2018 Code; clarity,
simplicity, risk, predictability, proportionality and alignment to culture, and is satisfied that the 2022 Policy addresses each of these areas (see page 88 for further details).
86
2021 Annual Report and Form 20-F 87
Individual Executive Remuneration for the year ended 31 December 2021 (Audited)
Table 22
Albert Manifold
Jim Mintern (i)
Senan Murphy (ii)
Fixed Pay
Basic Salary (iii)
Benefits (iv)
Retirement Benefit Expense (v)
Total Fixed Pay
Performance-related Pay
Annual Bonus (vi):
Cash Element
Deferred Shares
Total Annual Bonus
Long-term Incentives (vii):
Performance Share Plan
- value delivered through performance
- value delivered through share price growth
Total Long-term Incentives
2021
€000
1,607
23
551
2020
€000
1,469
27
612
2019
€000
1,523
43
667
2,181
2,108
2,233
2,049
1,025
3,074
5,992
2,659
8,651
2,018
1,009
3,027
5,075
990
6,065
1,964
982
2,946
3,834
298
4,132
Total Performance-related Pay
11,725
9,092
7,078
Total Single Figure
13,906
11,200
9,311
(fixed and performance-related)
Total Fixed v. Total Remuneration
Total Variable v. Total Remuneration
16%
84%
19%
81%
24%
76%
2021
€000
489
21
49
559
554
277
831
1,146
509
1,655
2,486
3,045
18%
82%
2020
€000
2019
€000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2021
€000
280
6
68
354
238
119
357
2020
€000
768
13
204
985
689
344
2019
€000
794
27
199
1,020
683
342
1,033
1,025
1,928
855
2,783
1,632
319
1,951
1,028
80
1,108
3,140
2,984
2,133
3,494
3,969
3,153
10%
90%
25%
75%
32%
68%
(i)
Mr. Mintern was appointed as Finance Director and to the Board with effect from 1 June 2021. Accordingly, his remuneration reflected in the above Table relates to
remuneration for the period 1 June 2021 to 31 December 2021. Full details of Mr. Mintern's remuneration arrangements for this period are in line with the 2019
Remuneration Policy (and the proposed 2022 Remuneration Policy) and are set out in Table 17 on page 83.
(ii) Mr. Murphy retired as Finance Director and from the Board with effect from 29 April 2021. Accordingly, his remuneration reflected in the above Table relates to
remuneration for the period 1 January 2021 to 29 April 2021. Mr. Murphy remains employed by CRH and is anticipated to retire from CRH during 2022. Full details
of Mr. Murphy's remuneration arrangements on retirement will be disclosed in due course.
(iii) Basic Salary: As outlined on page 74 of the 2020 Annual Report and Form 20-F, the executive Directors voluntarily waived 25% of their salaries for a period of three
months in 2020.
(iv) Benefits: For executive Directors these relate principally to the use of company cars (or car allowances), medical insurance and life assurance and, where relevant,
the value of the non-taxable discount on the grant of options under the Group’s 2010 SAYE Scheme.
(v) Retirement Benefit Expense: As noted on page 101, Albert Manifold receives a supplementary taxable non-pensionable cash allowance, in lieu of prospective
pension benefits foregone. This allowance is similar in value to the reduction in the Company’s liability represented by the pension benefit foregone. It is calculated
based on actuarial advice as the equivalent of the reduction in the Company’s liability to Mr. Manifold and spread over the term to retirement as annual
compensation allowances. The phased reduction of Mr. Manifold's allowance, details of which were outlined in the 2019 Directors' Remuneration Report, continued
to be implemented in 2021, with a 10% reduction in the amount that would otherwise have been paid. Senan Murphy received a supplementary taxable
non-pensionable cash supplement equivalent to 25% of his 2020 base salary in lieu of a pension contribution (see page 101 for more details). Mr. Mintern receives a
supplementary taxable non-pensionable cash supplement equivalent to 10% of his annual base salary in lieu of a pension contribution, in line with that available to
the Irish and UK workforce.
(vi) Annual Bonus Plan: Under the executive Directors’ Annual Bonus Plan for 2021, a bonus was payable for meeting clearly defined and stretch targets and strategic
goals. The structure of the 2021 Plan, together with details of the performance against targets and payouts in respect of 2021, are set out on pages 98 and 99. In
the case of Mr. Mintern and Mr. Murphy, the bonuses disclosed in the above Table reflect the portion attributable to their tenure as an executive Director. A third of
the 2021 bonuses to be paid to executive Directors will be deferred into shares for a period of three years, with no additional performance conditions. For Mr.
Mintern, for the period up to his appointment as Finance Director on 1 June 2021 a deferral of 25% applies. For 2019 and 2020 bonuses, a third of executive
Directors’ bonuses respectively were paid in Deferred Shares, vesting after three years, with no additional performance conditions.
(vii) Long-term Incentives: In February 2022, the Remuneration Committee determined that 100% of the maximum PSP awards made in 2019 will vest, based on
performance. The awards for Mr. Manifold and Mr. Murphy are subject to a further two-year holding period and will vest in 2024. The award for Mr. Mintern, which
was granted prior to his appointment as Finance Director, is not subject to an additional holding period and will vest in April 2022. For the purposes of this Table, the
value of these has been estimated using a share price of €43.11, being the three-month average share price to 31 December 2021. Amounts in the long-term
incentive column for 2020 for Mr. Manifold and Mr. Murphy reflect the value of long-term incentive awards with a performance period ending in 2020 (i.e. the PSP
awards granted in 2018), which the Remuneration Committee determined in February 2021 had met the applicable performance targets. The awards are scheduled
to vest in 2023 following the completion of a two-year holding period. For the purposes of this Table, the value of these awards has been estimated using a share
price of €33.01, being the three-month average share price to 31 December 2020. Amounts in the long-term incentive column for 2019 reflect the value of long-term
incentive awards with a performance period ending in 2019 (i.e. the PSP awards granted in 2017), which the Remuneration Committee determined in February 2020
had met the applicable performance targets. The awards are scheduled to vest in 2022 following the completion of a two-year holding period. For the purposes of
this Table, the value of these awards has been estimated using a share price of €33.38, being the three-month average share price to 31 December 2019.
88
2021 Annual Report and Form 20-F 89
Directors' Remuneration Report
Proposed 2022 Directors’
Remuneration Policy
CRH’s Approach to Remuneration
The purpose of the 2022 Policy is to:
Reward and motivate executives to perform in the long-term interests of the
shareholders
Attract and retain executives of the highest calibre
Foster entrepreneurship within the Group by rewarding the creation of shareholder
value through organic and acquisitive growth
Provide an appropriate blend of fixed and variable remuneration and short and
long-term incentives
Reflect the spread of the Group’s operations so that remuneration packages in
each geography are appropriate and competitive for that area
Reflect the risk policies and appetite of the Group
In formulating the 2022 Policy, the Committee sought to ensure that it and the Group's
remuneration practices were consistent with the six factors set out in Provision 40 of the
2018 Code:
Clarity
The 2022 Policy is designed to be sustainable and simple. The policy updates in 2022 are few in
number and focused on enabling alignment with clearly defined and communicated strategic priorities
Simplicity
The 2022 Policy utilises market standard annual bonus and long-term incentive plans, the operation of
both of which are clearly explained in detail and well-understood by participants
Risk
The 2022 Policy has been designed to ensure that inappropriate risk taking is discouraged with a
balanced use of annual and longer term incentives, best practice measures such as significant
in-employment and post-employment shareholding requirements to align the long-term interests of
executives and shareholders; and the use of clawback and malus provisions. In addition, the Committee
retains discretion to override formulaic outcomes; any use of such discretion will be disclosed in the
relevant Remuneration Report
Predictability
The possible outcomes under the 2022 Policy are quantifiable. Illustrations of potential outcomes under
various scenarios are included in this report
Proportionality
The 2022 Policy has been designed to ensure that there is a clear link between pay outcomes and the
delivery of the Group's strategy and performance. A significant proportion of the executive Directors'
potential remuneration is `at risk' and is subject to clearly defined and stretching performance targets
Alignment to Culture
The 2022 Policy is designed to promote the long-term sustainable success of the Group. The
performance metrics and targets used in the annual and long-term incentive plans reflect our values and
key strategic priorities
As outlined in the Committee Chairman’s Statement
on page 81, the Committee carried out a detailed
review of the Group’s remuneration arrangements
during 2021. In doing so, the Committee took into
account the strong support from shareholders for the
2019 Policy and our approach to its implementation
over its life, as well as feedback from shareholders
during the year. The Committee also noted the
support from employees in various engagement
sessions during 2021 for the introduction of ESG
targets in the long-term performance share plan.
The principal proposed changes to the 2019 Policy,
which was approved by shareholders at the 2019
AGM, are set out on page 82. The following sets out
the full updated 2022 Policy (the "2022 Policy").
The 2022 Policy, if approved, will provide the
framework for remuneration decisions made by
the Remuneration Committee. It is the Company’s
intention that the 2022 Policy will apply until the
2025 AGM, unless the Remuneration Committee
seeks shareholder approval for a renewed policy at
an earlier date.
The Remuneration Committee’s aim is to make sure
that CRH’s pay structures are fair, responsible and
competitive, in order that CRH can attract and retain
staff of the calibre necessary for it to compete in all
of its markets.
The Group’s remuneration structures are designed
to drive performance and link reward to the
responsibilities and individual contribution of
executives, while at the same time reflecting the
risk policies of the Group. It is our policy to grant
participation in the Group’s performance-related
plans to key management to encourage alignment
with shareholders’ interests.
In setting remuneration levels, the Remuneration
Committee takes into consideration the
remuneration practices of other international
companies of similar size and scope and trends
in executive remuneration generally, in each of the
regions in which the Company operates.
The Committee is mindful of managing any
conflicts of interest. Therefore, no individual is
involved in determining his/her own remuneration
arrangements. The Committee determines the
remuneration of the Chairman and the executive
Directors, with neither the Chairman nor any
executive Director being being present when
their respective individual remuneration is being
considered or approved. The remuneration of the
non-executive Directors, including the Committee
members, is determined by a committee of the
Chairman and the executive Directors.
88
2021 Annual Report and Form 20-F 89
Regulatory Backdrop
Under the Shareholder Rights Directive 2017/2018 which was transposed into Irish law by the EU (Shareholders' Right) Regulations 2020 ("SRD II"), public
limited companies must submit a remuneration policy to an advisory vote at least every four years or earlier if there is a proposed material change to the
approved policy. In order to continue alignment with general practice in the UK, the Committee intends to seek approval from shareholders to renew/
update the policy every three years.
Future Policy Table
Further details regarding the operation of the 2022 Policy for the 2022 financial year can be found on pages 98 to 109 of the Directors’ Remuneration Report.
Policy Table
Table 23
Element
Fixed Base Salary
Fixed Pension
Purpose and
link to
strategy
• Competitive salaries help to attract and retain staff with the
experience and knowledge required to enable the Group to
compete effectively in its markets
Operation
• Base salaries are set by the Committee taking into account:
–
–
–
the size and scope of the executive Director’s role and
responsibilities;
the individual’s skills, experience and performance;
salary levels at FTSE listed companies of a similar size and
complexity to CRH and other international construction and
building materials companies; and
– pay and conditions elsewhere in the Group
• Base salary is normally reviewed annually with changes
generally effective on 1 January, although the Committee
may make an out-of-cycle increase if it considers it to be
appropriate
Maximum
opportunity
• Base salaries are set at a level which the Committee considers
to be appropriate taking into consideration the factors outlined
in the “operation” section above
• While there is no maximum base salary, normally increases
will be in line with the typical level of increase awarded to
other employees in the Group but may be higher in certain
circumstances. These circumstances may include:
– Where a new executive Director has been appointed at
a lower salary, higher increases may be awarded over an
initial period as the executive Director gains in experience
and the salary is moved to what the Committee considers
is an appropriate positioning;
– Where there has been a significant increase in the scope
or responsibility of an executive Director’s role or where
an individual has been internally promoted, higher salary
increases may be awarded; and
– Where a larger increase is considered necessary to reflect
significant changes in market practice
• Pension arrangements provide competitive and appropriate retirement
plans
• Given the long-term nature of the business, pension is an important part
of the remuneration package to support creation of value and succession
planning
• Irish-based executive Directors may participate in a contributory defined
benefit scheme or, if they joined the Group after 1 January 2012, in a
defined contribution scheme as the defined benefit scheme which the
Directors participate in is closed to new entrants
• For new appointments to the Board the Committee may determine that
alternative pension provisions will operate (for example a cash contribution).
When determining pension arrangements for new appointments the
Committee will give regard to existing entitlements, the cost of the
arrangements, market practice and the pension arrangements received
elsewhere in the Group. Pension contribution rates for any newly
appointed executive Directors will not exceed the norm for pension related
contributions/allowances for new recruits, across the general workforce, in
the individual’s home jurisdiction or, if applicable, the jurisdiction in which
the individual is to be based in their executive Director role
• The entitlement of individuals participating in defined contribution schemes
reflects the accumulated individual and matching company contributions
paid into the schemes. At present no Ireland-based executive Directors are
members of a defined contribution scheme
• In relation to Mr. Manifold, who joined the Group prior to 31 December
2011, the defined benefit pension is provided through an Irish-revenue
approved retirement benefit scheme (the ‘Scheme’). Accrued benefits for
service to 31 December 2011 are based on pensionable salary and years
of service as at that date (annual accrual of 1/60th), with this tranche being
revalued annually at the Consumer Price Index subject to a 5% ceiling.
For service subsequent to that date a career-average revalued earnings
system was introduced with each year of service being subject to annual
revaluation on the same basis as outlined above. Mr. Manifold has elected
to cease accruing pension benefits and to receive a supplementary taxable
non-pensionable cash allowance in lieu of pension benefits foregone as a
result of the pension cap (see page 101 for more details). This allowance
is similar in value to the reduction in the Company’s liability represented
by the pension benefit foregone. Whilst there is no absolute maximum to
the quantum of these payments they are calculated based on actuarial
advice as the equivalent of the reduction in the liability the Company
would otherwise have had under the Scheme in respect of Mr. Manifold’s
benefits and spread over the term to retirement as annual compensation
allowances. Mr. Manifold has voluntarily reduced the monetary value of the
pension contribution/allowance so that it is below 25% of his base salary
as at 1 January 2022. His contractual entitlement to compensation in lieu of
pension payments will cease in August 2022 when he reaches age 60
Performance
measure
• Not applicable
• Not applicable
90
2021 Annual Report and Form 20-F 91
Directors’ Remuneration Report - continued
Policy Table | continued
Element
Fixed Benefits
Purpose and
link to strategy
• To provide a market competitive level of benefits for executive Directors
Operation
• The Committee’s policy is to set benefit provision at an appropriate market competitive level taking into account market practice, the level
of benefits provided for other employees in the Group, the individual’s home jurisdiction and the jurisdiction in which the individual is based
• Employment-related benefits include the use of company cars (or a car allowance), medical insurance for the executive Director and
his/her family and life assurance
• In the event that the Chief Executive falls ill or is injured in such a way as which would constitute ill-health or disablement so that the Chief
Executive could not work for a period of more than six months, in lieu of the early ill-health retirement provisions in the pension scheme
which would otherwise operate in such cases, he shall be entitled to receive a disability salary of €1,000,000 per annum. Such payment
would cease when the Chief Executive reaches age 60, returns to work or if the service agreement is terminated
• Benefits may also be provided in relation to legal fees incurred in respect of agreeing service contracts, or similar agreements (for which the
Company may settle any tax incurred by the executive Director) and a gift on retirement
• The Committee may remove benefits that executive Directors receive or introduce other benefits if it is considered appropriate to do so.
The Company may also pay the tax due on benefits if it considers that it is appropriate to do so
• All-employee share schemes - executive Directors are eligible to participate in the Company’s all-employee share schemes on the same
terms as other employees. Executive Directors may also receive other benefits which are available to employees generally
• Re-location policy - where executive Directors are required to re-locate to take up their role, the Committee may determine that they
should receive appropriate re-location and ongoing expatriate benefits. The level of such benefits would be determined based on individual
circumstances taking into account typical market practice
Maximum
opportunity
• The level of benefit provided will depend on the cost of providing individual items and the individual’s circumstances, and therefore the
Committee has not set a maximum level of benefits
Performance
measure
• Not applicable
90
2021 Annual Report and Form 20-F 91
Policy Table | continued
Performance-related pay - Annual Bonus
Performance-related pay - 2014 Performance Share Plan
• The Annual Performance-related Incentive Plan is designed to reward the
creation of shareholder value through operational excellence and organic and
acquisitive growth. The Plan incentivises executive Directors to deliver Group
and individual goals that support long-term value creation
• The purpose of the 2014 Performance Share Plan is to align the interest
of key management across different regions and nationalities with those
of shareholders through an interest in CRH shares and by incentivising the
achievement of long-term performance goals
• A Deferred Annual Performance-related Incentive Plan element links the
• “Malus” and clawback provisions enable the Company to mitigate risk
value of executive Directors’ reward with the long-term performance of the
CRH share price and aligns the interests of executive Directors with those of
shareholders
• “Malus” and clawback provisions enable the Company to mitigate risk
• The Annual Performance-related Incentive Plan rewards executive Directors for
meeting Company performance goals over a financial year of the Company.
Targets are set annually by the Committee
• Awards (in the form of conditional share awards or nil-cost options) normally
vest based on performance over a period of not less than three years.
Awards may also be settled in cash in exceptional circumstances
• The annual bonus is paid in a mix of cash and shares (structured as a deferred
• Awards are normally subject to an additional holding period ending on
share award)
• For 2022:
– 66.7% of the bonus will be paid in cash; and
– 33.3% will be paid in shares
• In future years, the Committee may determine that a different balance between
cash and shares is appropriate and adjust the relevant payments accordingly
the fifth anniversary of the grant date (or another date determined by the
Committee)
• Dividend equivalents may be paid on PSP awards that vest in respect
of dividends paid during the vesting period until the end of the holding
period. These payments may be made in cash or shares and may assume
reinvestment on a cumulative basis
• “Malus” and clawback provisions (as set out in the rules of the 2014 Plan)
• When assessing performance and determining bonus payouts the Committee
will apply to awards
also considers the underlying financial performance of the business to ensure it
is consistent with the overall award level
• The deferred element of the bonus will be structured as a conditional share
award or nil-cost option and will normally vest after three years from grant (or a
different period determined by the Committee). Deferred share awards may be
settled in cash in exceptional circumstances
• Dividend equivalents may be paid on deferred share awards in respect of
dividends paid during the vesting period. These payments may be made in
cash or shares and may assume the reinvestment of dividends on a cumulative
basis
• For deferred awards, “malus” provisions apply. Cash bonus payments are
subject to clawback of the net amount paid for a period of three years from
payment
• Maximum annual opportunity of 225% of base salary
• Maximum annual opportunity of up to 365% of base salary
• For 2022, the intended maximum award levels are:
• For 2022, the intended award levels are:
– 225% of base salary for Chief Executive; and
– 200% of base salary for the Finance Director
– 365% of base salary for Chief Executive; and
– 250% of base salary for Finance Director
• The performance-related incentive plan is based on achieving clearly defined
and stretching annual targets and strategic goals set by the Committee each
year based on key business priorities
• Awards to be granted in 2022 will vest based on cumulative cash flow
(45%), a relative TSR test compared to a tailored group of key peers (20%),
RONA (20%) and a number of Sustainability & Diversity measures (15%)
• The performance metrics used are a mix of financial targets including return
• For threshold levels of performance, 25% of the award vests
goals and personal/strategic objectives generally. Currently 80% of the bonus is
based on financial performance measures
• The Committee may vary the weightings of measures but no less than 50%
shall be based on financial performance measures
• Where applicable, when determining vesting under the PSP the Committee
reviews whether the TSR performance has been impacted by unusual
events and whether it therefore, reflects the underlying performance of the
business
• A portion of the bonus metrics for any Director may be linked to his/her specific
• The Committee may adjust the weightings of the measures at the start of
area of responsibility
each cycle, with no measure’s weighting falling below 15%
• Up to 50% of the maximum bonus will be paid for achieving target levels of
• The Committee may amend the performance conditions if an event occurs
performance
that causes it to consider that an amended performance condition would be
more appropriate and would not be materially less difficult to satisfy
92
2021 Annual Report and Form 20-F 93
Directors’ Remuneration Report - continued
Notes to Policy Table
Changes to 2019
Remuneration Policy
Proposed changes to the 2019 Policy are outlined
in the Remuneration Committee Chairman's
Overview on pages 80 to 84.
Plan Rules
The 2014 Deferred Share Bonus Plan and the
2014 Performance Share Plan form part of the
2022 Policy and shall be operated in accordance
with the relevant plan rules. Awards may be (i)
adjusted in accordance with the rules in the event
of a variation of the Company’s share capital,
merger, de-merger, special dividend or other
event that, in the opinion of the Committee,
materially affects the price of shares; and (ii)
amended in accordance with the plan rules.
Clawback/Malus
For Deferred Annual Performance-related
Incentive plan awards and Performance Share
Plan awards, the Committee has the discretion to
reduce or impose further conditions on awards
prior to vesting in certain circumstances, including
but not limited to:
• a material misstatement of the Group’s audited
financial results;
• a material failure of risk management; or
• serious reputational damage to the Group
or one of its businesses as a result of a
participant’s misconduct or otherwise
Cash bonus payments are subject to clawback
of the net amount paid for a period of three years
from payment in the circumstances outlined.
Vested PSP awards are subject to clawback for a
period of three years from the date of vesting.
Other elements of remuneration are not subject to
clawback or malus provisions.
General
The Committee reserves the right to make any
remuneration payments and payments for loss
of office (including exercising any discretions
available to it in connection with such payments)
notwithstanding that they are not in line with
the policy set out above where the terms of the
payment were agreed (i) before 7 May 2014 (the
date the Company’s first shareholder-approved
Directors’ Remuneration Policy came into effect);
(ii) before the policy set out above came into
effect, provided that the terms of the payment
were consistent with the shareholder-approved
Directors’ Remuneration Policy in force at the
time they were agreed; (iii) at a time when the
relevant individual was not a director of the
Company and, in the opinion of the Committee,
the payment was not in consideration for the
individual becoming a director of the Company;
or (iv) in settlement of statutory employment
rights. For these purposes “payments” includes
the Committee satisfying awards of variable
remuneration and, in relation to an award over
shares, the terms of the payment are “agreed” at
the time the award is granted.
Minor Amendments
The Committee may make minor changes to the
2022 Policy for regulatory, exchange control, tax
or administrative purposes or to take account of a
change in legislation without seeking shareholder
approval for that amendment.
Information Supporting
the Policy Table
Selection of Performance Measures and
Targets
(i) Annual bonus
Annual incentive plan targets are selected each
year to incentivise executive Directors to achieve
annual financial, operational, strategic and
personal goals across a range of metrics which
are considered important for delivering long-term
performance excellence.
(ii) Performance share plan
The ultimate goal of our strategy is to provide
growth and long-term sustainable value for all
of our shareholders. Performance measures
are selected each year. For PSP awards to be
granted in 2022, the measures are, therefore,
focused on generating cash in the business,
achieving relative outperformance of TSR against
our key peers, generating a return on net assets
and promoting the achievement of the Group's
key sustainability and diversity objectives.
Targets and measures for the annual bonus
and PSP are set each cycle by the Committee
taking into account internal plans and external
expectations. Targets are calibrated to be
stretching but motivational to management and
to be aligned with the long-term creation of
shareholder value.
Remuneration Arrangements
Throughout the Group
CRH operates significant operations in c. 3,235
locations in 28 countries with approximately
77,400 employees across the globe.
Remuneration arrangements throughout the
organisation, therefore, differ depending on
the specific role being undertaken, the level of
seniority and responsibilities, the location of
the role and local market practice. However,
remuneration arrangements are designed based
on a common set of principles: that reward
should be set at a level which is appropriate to
retain and motivate individuals of the necessary
calibre to fulfil the roles without paying more than
is considered necessary. The reward framework
is designed to incentivise employees to deliver
the requirements of their roles and add value for
shareholders.
The Group operates share participation plans and
savings-related share option schemes for eligible
employees, including executive Directors, in all
regions where the regulations permit the operation
of such plans.
Remuneration Policy for
New Hires
CRH has a strong history of succession planning
and developing internal executive talent.
The Committee’s key principle when
determining appropriate remuneration
arrangements for a new executive Director
(appointed from within the organisation or
externally) is that arrangements are in the best
interests of both CRH and its shareholders
without paying more than is considered
necessary by the Committee to recruit an
executive of the required calibre to develop and
deliver the business strategy.
92
2021 Annual Report and Form 20-F 93
The Committee would generally seek to align
the remuneration package offered with our
remuneration policy outlined in Table 23 on
pages 89 to 91. When determining appropriate
remuneration arrangements the Committee will
take into account all relevant factors including
(among others) the level of opportunity, the type
of remuneration opportunity being forfeited and
the jurisdiction the candidate was recruited from.
Any remuneration offered would be within the
limit on variable pay outlined in this 2022 Policy.
Variable remuneration in respect of an executive
Director’s appointment shall be limited to 590%
of base salary measured at the time of award.
This limit is in line with the plan maximum
outlined in Table 23 on pages 89 to 91. This
limit excludes any awards made to compensate
the Director for awards forfeited from his or her
previous employer.
The Committee may make awards on
appointing an executive Director to “buy-out”
remuneration terms forfeited on leaving a
previous employer. In doing so the Committee
will take account of relevant factors including
any performance conditions attached to these
awards, the form in which they were granted
(e.g. cash or shares) and the time over which
they would have vested. The Committee’s key
principle is that generally buy-out awards will be
made on a comparable basis to those forfeited.
To facilitate awards outlined above, the
Committee may grant awards under Company
incentive schemes or under UK Listing Rule
9.4.2 which allows for the granting of awards,
to facilitate, in unusual circumstances, the
recruitment of an executive Director, without
seeking prior shareholder approval or under
other relevant company incentive plans. The
use of Listing Rule 9.4.2 shall be limited to buy-
out awards.
In the event that an internal candidate is
promoted to the Board, legacy terms and
conditions will normally be honoured, including
any outstanding incentive awards.
In the event of the appointment of a new
Chairman or non-executive Director,
remuneration arrangements will normally
reflect the policy outlined in Table 24. Other
remuneration arrangements may be provided
to a new Chairman or non-executive Director if
these arrangements are considered appropriate
in accordance with the principles set out in
Table 24.
Remuneration Policy for Non-Executive Directors
Table 24
Approach to Setting Fees
Basis of Fees
Other Items
• The remuneration of non-executive Directors is
• Fees are paid in cash
determined by a Board committee of the Chairman
and the executive Directors
• The Remuneration Committee determines
the remuneration of the Chairman within the
framework or broad policy agreed with the Board
• Remuneration is set at a level which will attract
individuals with the necessary experience and
ability to make a substantial contribution to the
Company’s affairs and reflect the time and travel
demands of Board duties
• Fees are set taking into account typical practice at
other companies of a similar size and complexity
to CRH
• Fees are reviewed annually
• Non-executive Director fees policy is to pay:
– a basic fee for membership of the Board;
– an additional fee for chairing a Committee;
• The non-executive Directors do not
participate in any of the Company’s
performance-related incentive plans or share
schemes
• Non-executive Directors do not receive
– an additional fee for the role of Senior
pensions
Independent Director;
– an additional fee to reflect committee work
(combined fee for all committee roles); and
– an additional fee based on the location of the
Director to reflect time spent travelling to Board
meetings
• Other fees may also be paid to reflect other Board
roles or responsibilities
• In accordance with the Articles of Association,
shareholders set the maximum aggregate amount
of the fees payable to non-executive Directors.
The current limit of €1,000,000 was set by
shareholders at the Annual General Meeting held in
2019. Approval will be sought at the 2022 AGM to
increase the limit to €1,200,000.
• Where relevant, the Group Chairman may be
reimbursed for expenses incurred in travelling
from his residence to his CRH office on a
gross up basis so that he is not at a net loss
after deduction of tax
• Benefits including retirement gifts (provided
they do not exceed the de minimis threshold
outlined on page 104) may be provided if,
in the view of the Board (for non-executive
Directors or for the Chairman), this is
considered appropriate. The Company
may gross up any expenses so that the
non-executive Directors are not at a net
loss after deduction of tax. Details regarding
any benefit provided will be disclosed in the
relevant year of receipt
94
2021 Annual Report and Form 20-F 95
Directors’ Remuneration Report - continued
Remuneration Outcomes in
different Performance Scenarios
Remuneration Outcomes in different Performance
Scenarios
Table 25
Remuneration at CRH consists of fixed pay
(salary, pension and benefits), short-term variable
pay and long-term variable pay. A significant
portion of executive Directors’ remuneration is
linked to the delivery of key business goals over
the short and long-term and the creation of
shareholder value.
Table 27 shows hypothetical values of the
remuneration package for executive Directors
under four assumed performance scenarios
(based on 2022 proposals).
No share price growth or the payment of dividend
equivalents has been assumed in these scenarios
(other than where specified). Potential benefits
under all-employee share schemes have not been
included.
Hypothetical Remuneration Values
Chief Executive (Albert Manifold)
Finance Director (Jim Mintern)
(i) Based on 2021 expenses.
Performance Scenario
Payout Level
Minimum
• Fixed pay (see Table 26 for each executive Director)
• No bonus payout
• No vesting under the Performance Share Plan
On-target performance
• Fixed pay (see Table 26 for each executive Director)
• 50% annual bonus payout (112.5% of salary for the
Chief Executive and 100% for the Finance Director)
• 25% vesting under the Performance Share Plan (91.25% of salary for
the Chief Executive and 62.5% for the Finance Director)
Maximum performance
(at constant share prices
and assuming a 50%
increase in share price)
• Fixed pay (see Table 26 for each executive Director)
• 100% annual bonus payout (225% of salary for the Chief Executive and
200% of salary for the Finance Director)
• 100% Performance Share Plan vesting (365% of salary for the Chief
Executive and 250% for the Finance Director)
Salary
With effect from
1 January 2022
€1,651,635
€861,045
Benefits
Level paid
in 2021 (i)
€23,000
€21,000
Estimated
Pension (ii)
€412,500
€86,105
(ii) See page 101 for details in relation to retirement benefit arrangements.
Performance-related Remuneration Outcomes
€m
€15.0
€14.0
€12.0
€10.0
€8.0
€6.0
€4.0
€2.0
€0
e
v
i
t
u
c
e
x
E
i
f
e
h
C
€14,850
61%
€11,835
51%
€5,454
28%
34%
38%
€2,087
100%
31%
25%
18%
14%
€m
€6.0
€5.0
€4.0
€3.0
€2.0
€1.0
€0
€5,919
55%
€4,843
44%
36%
29%
20%
16%
€2,367
23%
36%
41%
€968
100%
r
o
t
c
e
r
i
D
e
c
n
a
n
F
i
Minimum
On-target
performance
Maximum
Constant share
price
Performance
Share price
+50%
Minimum
On-target
Maximum
performance Constant share
price
Performance
Share price
+50%
Fixed Pay
Annual Bonus
Long-term incentives
Table 26
Total
Fixed Pay
€2,087,135
€968,150
Table 27
94
2021 Annual Report and Form 20-F 95
Executive Director Service
Contracts and Policy on
Payment for Loss of Office
When determining leaving arrangements for
an executive Director the Committee takes
into account any contractual agreements
(including any incentive arrangements) and the
performance and conduct of the individual.
Service Contracts
The Chief Executive and Finance Director
have entered into service contracts with the
Company. The summaries in Tables 28 and 29
set out the key remuneration terms of those
contracts. All incentive arrangements remain at
the discretion of the Committee.
The Committee reserves the right to make any
other payments in connection with a director’s
cessation of office or employment where the
payments are made in good faith in discharge
of an existing legal obligation (or by way of
damages for breach of such an obligation) or
by way of a compromise or settlement of any
claim arising in connection with the cessation
of a director’s office or employment.
Under Irish company law, CRH is not required
to make service contracts available for
inspection as the notice period is not more
than 12 months. Service contracts will only be
available with the executive Director’s consent
due to data protection reasons.
Annual Cash Bonus
Executive Directors may, at the discretion
of the Committee, remain eligible to receive
an annual bonus award for the financial
year in which they leave employment. Such
awards will be determined by the Committee
taking into account time in employment and
performance.
Share Plan Rules – Leaver Provisions
The treatment of outstanding share awards
in the event that an executive Director leaves
is governed by the relevant share plan rules.
Table 30 on page 96 summarises leaver
provisions under the executive share plans.
“Good leaver” circumstances are defined in the
2014 Performance Share Plan and deferred
annual performance-related incentive plans
as ill-health, injury, disability, the participant’s
employing company or business being sold
out of the Group or any other reason at the
Committee’s absolute discretion (except where
a participant is summarily dismissed).
Chief Executive Service Contract
Table 28
Notice period
• 12 months’ notice by the Company or the executive
Expiry date
• Indefinite duration
• Terms of contract will automatically terminate on the executive’s 62nd birthday
Termination
payments
• On lawful termination of employment, the Committee may, at its absolute
discretion, make a termination payment in lieu of 12 months’ notice based on base
salary, benefits and pension contribution due during that period
Disability
• Where the Company terminates the contract lawfully without notice then no
payment in lieu of notice shall be due
• If, in the event of a change of control, there is a diminution in the role and
responsibilities of the Chief Executive he may terminate the contract; on such
termination a payment equal to one year’s remuneration (being salary, pension,
other benefits and vested incentive awards) will be made to the executive
• In the event that the Chief Executive falls ill or is injured in such a way as which
would constitute ill-health or disablement so that the Chief Executive could not
work for a period of more than six months, in lieu of the early ill-health retirement
provisions in the pension scheme which would otherwise operate in such cases,
he shall be entitled to receive a disability salary of €1,000,000 per annum. Such
payment would cease when the Chief Executive reaches age 60, returns to work or
if the service agreement is terminated
Other
information
• The Company retains the ability to suspend the executive from employment on full
salary and to require the executive to observe a period of “garden leave” of up to
12 months on full salary, contractual benefits and pension contribution
Group Finance Director Service Contract
Table 29
Notice period
• 12 months’ notice by the Company or the executive
Expiry date
• Indefinite duration
• Terms of contract will automatically terminate on the executive’s 65th birthday
Termination
payments
• On lawful termination of employment, the Committee may, at its absolute discretion,
make a termination payment in lieu of 12 months’ notice based on base salary,
benefits and pension contribution due during that period
Disability
• Where the Company terminates the contract lawfully without notice then no
payment in lieu of notice shall be due
• In the event that the Finance Director falls ill or is injured in such a way as which
would constitute ill-health or disablement so that the Finance Director could not
work for a period of more than six months, in lieu of the early ill-health retirement
provisions in the pension scheme which would otherwise operate in such cases, he
shall be entitled to receive a disability salary equivalent to two-thirds of basic salary
per annum. Such payment would cease when the Finance Director reaches age 65,
returns to work or if the service agreement is terminated
Other
information
• The Company retains the ability to suspend the executive from employment on full
salary and to require the executive to observe a period of “garden leave” of up to 12
months on full salary, contractual benefits and pension contribution
Where an individual leaves by mutual agreement
the Committee has discretion to determine the
treatment of outstanding share awards.
Individuals who are dismissed for gross
misconduct would not be treated as “good
leavers”.
Awards under the Savings-related Share Option
Scheme are treated in accordance with the rules.
The rules provide that awards may be exercised
by a participant’s executor within 12 months of
the date of death, and six months from the date of
termination of employment in other circumstances
where options automatically become exercisable,
for example in the case of retirement.
Where an executive ceases employment on his
own volition or as a result of summary dismissal
they will normally forfeit outstanding share
incentive awards.
96
2021 Annual Report and Form 20-F 97
Directors’ Remuneration Report - continued
The Committee may allow awards to vest early
at its discretion in the event an executive Director
is to be transferred to a jurisdiction where he
would suffer a tax disadvantage or he would
be subject to restrictions in connection with
his award, the underlying shares or the sales
proceeds.
Change of Control
In the event of a change in control of the
Company, the Committee will consider
whether it would be appropriate for awards
to be exchanged for equivalent awards in the
purchaser’s shares.
Unless the Committee determines otherwise, in
the event of a change in control of the Company:
• awards granted under the 2014 Plan will vest
taking into account the extent to which any
performance condition has been satisfied
and, unless the Committee determines
otherwise the period of time that has elapsed
since grant and the relevant event (or if the
event occurs during an applicable holding
period, to the beginning of the holding
period); and
• awards granted under the 2014 Deferred
Annual Performance-related Incentive Plan
may, at the discretion of the Committee, vest
in full
If the Company is wound up or there is a
de-merger, de-listing, special dividend or other
similar event which the Committee considers
may affect the price of the Company’s shares:
• awards granted under the 2014 Plan may, at
the Committee’s discretion, vest taking into
account the extent to which any performance
condition has been satisfied and, unless the
Committee determines otherwise, the period
of time that has elapsed since the date of
grant and the relevant event (or if the event
occurs during an applicable holding period, to
the beginning of the holding period); and
•
awards granted under the 2014 Deferred
Annual Performance-related Incentive
Plan will vest to the extent the Committee
determines
Shareholding Guideline for
Executive Directors
Executive Directors are required to build up (and
maintain) a minimum holding in CRH shares. The
shareholding guidelines for the Chief Executive
and Finance Director are 3.5 times basic salary
and 2.5 times basic salary respectively, with the
guidelines to be achieved by 31 December 2023
and 1 June 2024, respectively.
For the purposes of determining the number
of shares held by the executive Directors, the
relevant calculation will include shares beneficially
owned by the executive Directors, annual bonus
awards which are deferred into shares for
three years and PSP awards that have met the
financial performance criteria but are subject to
a two-year holding period prior to release (on a
net of tax basis). The deferred share awards and
PSP awards subject to a two-year hold period
are not subject to any further performance
criteria other than continued employment with
the Group.
Leaver Provisions
Death
Deferred Annual
Performance
Incentive Plan
2014
• Unvested awards vest, unless the
Committee determines otherwise,
to the extent determined by the
Committee
• Awards in the form of nil-cost options
may be exercised for 12 months from
death (or another period determined
by the Committee)
Performance
Share Plan 2014
• Unvested awards shall vest as soon
as practicable following death unless
the Committee determines otherwise.
The number of shares vesting shall be
determined by the Committee taking
into account the extent to which the
performance condition has been met
and, if the Committee determines, the
length of time that has elapsed since
the award was granted until the date
of death (or if death occurs during
an applicable holding period, to the
beginning of the holding period)
• Awards in the form of nil-cost options
may be exercised for 12 months from
death (or another period determined
by the Committee)
“Good Leavers” as determined by the Committee in accordance
with the plan rules
Leavers in other
circumstances
• Awards shall normally vest in full at the normal vesting date.
• Unvested
Table 30
Awards will
lapse on the
individual’s
cessation
of office or
employment
• Unvested
Awards will
lapse on the
individual’s
cessation
of office or
employment
Alternatively, the Committee may determine that awards should
vest at the time the individual leaves, subject to the Committee
determining that the individual has a shareholding sufficient to meet the
post-employment shareholding requirement
• Where awards vesting in such circumstances are granted in the form
of nil-cost options participants shall have six months from vesting to
exercise their award
• Where awards have already vested at cessation of employment,
participants shall have six months from cessation of employment to
exercise their option
• Awards shall normally vest at the normal vesting date. Alternatively
the Committee may determine that awards should vest at the time
the individual leaves, subject to the Committee determining that the
individual has a shareholding sufficient to meet the shareholding
requirement post-cessation
• The level of vesting shall be determined by the Committee taking into
account the extent to which the performance condition has been met
and, unless the Committee determines otherwise, the period of time
that has elapsed since the date of grant until the date of cessation (or if
cessation occurs during an applicable holding period, to the beginning
of the holding period)
• Awards vesting in such circumstances in the form of nil-cost options
may be exercised for six months from vesting (or another period
determined by the Committee). Where a nil-cost option was already
vested at cessation of employment, participants may exercise such
options for six months from cessation (or another period determined by
the Committee)
96
2021 Annual Report and Form 20-F 97
In the event that the shareholding guidelines
are not met by the applicable deadlines, the
Remuneration Committee will consider what
action to take at that time.
Post-employment Holding
Requirements
The Chief Executive and Finance Director are
required to hold shares equivalent to 2 times and
1.5 times basic salary respectively for a period of
two years post-employment in a third party trust.
Until the limit is achieved, an agreed portion of
any Deferred Share or PSP awards which vest
will be transfered on a net of tax basis to the
third party to be held in trust for their benefit. The
shares will be held in Trust on a rolling basis, until
their employment ceases and a subsequent two
year period has elapsed.
External Board Appointments
Executive Directors may accept external
non-executive directorships with the prior
approval of the Board. The Board recognises the
benefits that such appointments can bring both
to the Company and to the Director in terms of
broadening their knowledge and experience.
Whether any related fees are retained by the
individual or remitted to the Group is considered
on a case-by-case basis.
Non-executive Director –
Letters of Appointment
Non-executive Directors serve under letters of
appointment, copies of which are available for
inspection at the Company’s Registered Office
and at the AGM.
In line with the 2018 Code, all non-executive
Directors submit themselves for re-election
by shareholders every year at the AGM. All
non-executive Director appointments can be
terminated by either party without notice. There
is no payment in lieu of notice provided.
Considering Employee Views
The Board is regularly kept abreast of
employees’ perspectives and takes them
into account when making decisions. In
particular, the Remuneration Committee has
oversight of remuneration policy across the
Group and endeavours to keep the structure
of remuneration consistent as far as possible.
Further details of how the Committee seeks and
takes into account employee views when setting
remuneration for the executive Directors is set
out on page 82.
Consulting with Shareholders
The Committee believes that it is very important
to maintain open dialogue with shareholders on
remuneration matters. CRH consults regularly
with shareholders and engaged extensively
with shareholders in relation to the 2022 Policy.
Shareholder views, and broad indications of
support, were important in shaping the final
proposals outlined in the 2022 Policy.
The Committee will continue to liaise with
shareholders regarding remuneration matters
more generally and CRH arrangements as
appropriate. It is the Committee’s intention to
continue to consult with major shareholders
in advance of making any material changes to
remuneration arrangements.
Executive Director Shareholdings as a % of 2022 Base Salary (i)
Guideline
(% of Salary)
To be
achieved by
Holdings as of 2 March 2022
A. Manifold
350%
2023
234%
115%
399%
0%
100%
200%
300%
400%
500%
600%
700%
800%
J. Mintern
250%
2024
Value of shares (% of salary)
168%
21%
0%
50%
100%
150%
200%
250%
Value of shares (% of salary)
Beneficially Owned Shares (as at 2 March 2022).
Estimated after tax value of Deferred Share Awards made in 2019, 2020 and 2021, as appropriate.
Estimated after tax value of PSP awards subject to a two-year hold period only.
(i) For the purposes of this table, the interests have been valued using the three-month average share price to 31 December 2021 (€43.11).
Table 31
Total Interests
(% of Salary)
748%
189%
98
2021 Annual Report and Form 20-F 99
Annual Report on Remuneration
The Remuneration Committee
The Remuneration Committee consists of seven
non-executive Directors considered by the
Board to be independent. They bring the range
of experience of large organisations and public
companies, including experience in the area of
senior executive remuneration, to enable the
Committee to fulfil its role. Their biographical
details are set out on pages 56 to 59.
A schedule of attendance at Committee
meetings is set out in Table 8 on page 73.
The main focus of the Committee is to:
• determine and agree with the Board the
Group’s policy on executive remuneration;
• seek shareholder approval for the Directors’
Remuneration Policy at least every three years;
• ensure that CRH’s remuneration structures are
fair and responsible; and
• consider and approve salaries and other
terms of the remuneration packages for
the executive Directors and the fee for the
Chairman
In addition, the Committee:
•
recommends and monitors the level
and structure of remuneration for senior
management; and
• oversees the preparation of this Directors’
Remuneration Report
In considering remuneration levels for executive
Directors particularly, the Committee takes into
account remuneration trends across the CRH
Group, which has a diverse range of operations
in 28 countries, in geographic regions which are
often at different stages in the economic cycle.
The Committee also engages regularly with
shareholders and (via the SESR Committee -
see page 78 for more details) employees on
the structure of the remuneration policy and
executive incentives.
Remuneration Received
by Executive Directors
in Respect of 2021
Details of individual remuneration for executive
Directors for the year ended 31 December 2021,
including explanatory notes, are given in Table 22
on page 87. Details of Directors’ remuneration
charged against profit in the year are given in
Table 49 on page 109.
The Group changed its reporting currency from
euro to US Dollar with effect from 1 January
2020. Notwithstanding this, as the executive
Directors are paid in euro, the Committee
considers it appropriate that the remuneration
figures disclosed in this Report continue to be
presented in euro.
2021 Annual Bonus Plan
CRH’s Annual Bonus Plan for 2021 was based
on a combination of financial targets and
personal/strategic goals. The metrics for target
payout, which is up to a maximum of 50% of
the total annual bonus opportunity, are based
on achieving the budget set by the Board in
respect of each metric. The threshold level for
bonus payouts in 2021 was for the achievement
of 92.5% of budget, whereas maximum payout
is achieved for stretch performance of 107.5% of
budget. The relative weighting of the components
of the 2021 plan are set out in Table 32.
When setting the targets for the annual bonus
plan, the Committee makes assumptions
regarding exchange rates and development
activity. The Committee also compares the
proposed targets to the outturn for the previous
year to ensure that the targets are sufficiently
stretching. In this regard, it is important to note
that the metrics in the plan are influenced by
the economic cycle and other factors, such as
ongoing portfolio management, government
infrastructure spending programmes and items
outside of management's control and which may
not continue into the next financial year.
When reviewing performance against the bonus
plan, the Committee typically makes a number
of routine adjustments to the financial targets,
for example, to reflect, significant development
activity and actual share buyback activity during
the year.
2021 Annual Bonus Plan - Achievement
Table 32
Measure
CRH EPS (iii)
CRH Cash Flow (iii)
CRH RONA (iii)
Personal/Strategic
Total
2021 Targets - Performance needed for payout at (i) (ii)
Weighting
(% of total bonus)
Threshold
Target
Maximum
2021
Performance
Achieved (iii)
Percentage of
Maximum
Awarded (iv)
25%
30%
25%
20%
100%
247.2c
267.3c
287.3c
320.8c
$3,000m
$3,244m
$3,487m
$3,874m
9.9%
10.7%
11.5%
12.4%
See page 99
21.25%
25.50%
21.25%
17.00%
85.00%
(i)
0% of each element is earned at threshold, 50% at target and 100% at maximum, with a straight-line payout schedule between these points. For the reasons
outlined on page 83, the financial targets which were originally set in early 2021 where reviewed and revised upwards mid-way through the year. The revised
targets are set out in the Table above.
(ii) Targets have been adjusted to reflect the impact of the share buyback programme and major development activity.
(iii) For the purposes of the annual bonus plan, the EPS outcome in the Table above differs from that disclosed elsewhere in this Report as it excludes profits on
divestments. Operating cash flow and RONA have been defined as reported internally. For cash flow the figure differs from the net cash inflow from operating
activities reported in the Consolidated Statement of Cash Flows, primarily because it is calculated after deducting cash outflows on the purchase of property, plant
and equipment (PP&E), net proceeds from the disposal of PP&E, and before deducting interest and tax payments. Similarly, RONA as reported internally differs
from the RONA reported in the Non-GAAP Performance Measures in this report as it reflects seasonality and the timing impact of development activity.
(iv) For the reasons outlined on page 83, the Committee and the executive Directors judged that the payout under the 2021 annual bonus plan should be capped at 85%.
98
2021 Annual Report and Form 20-F 99
As outlined in the Remuneration Committee
Chairman's overview on page 83, the targets
for the 2021 Annual Bonus Plan were set in
early 2021 in the context of unprecedented
uncertainty presented by the COVID-19
pandemic. As visibility improved on the
impact of COVID-19 on the economies and
construction markets in which CRH operates,
mid-way through the year the Committee
reviewed and revised upwards the financial
targets for the 2021 annual bonus plan.
Performance against these revised targets
determined the outcome of the financial
element of the bonus, which represents 80%
of the potential bonus opportunity. As a result
of the record financial performance of the
Group in 2021 and highest ever EBITDA (as
defined)* outturn of $5.35 billion, the maximum
target under each of the financial metrics was
exceeded, resulting in a calculated payout
level of 100%. Details of the revised targets
for 2021 for each of the EPS, operating cash
flow and RONA metrics, and the very strong
performance against those targets, are set out
in Table 32 on page 98.
The remaining 20% of the 2021 Annual Bonus
Plan was linked to performance against key
personal and strategic objectives, including
inclusion & diversity, organsiational change
management and management succession and
strategy.
Achievements in relation to these objectives
included:
• advancing the I&D agenda, driving "tone from
the top" actions and supporting inclusive
behaviours across the senior leadership team,
communicating CRH's vision and aspirations
in this area, ensuring capability training was
delivered and that the proper structures and
supports are in place to drive towards CRH's
2030 targets in this area;
• providing leadership together with the senior
leadership team to drive organisational change
programmes across the Group and working
closely with the Board in relation to designing
the process for the long-term CEO succession
process and senior management succession
generally; and
•
the continued assessment of strategic
alternatives for the Group and working closely
with the senior leadership team to align
the organisational structure of CRH with its
evolving strategy
Notwithstanding the outperformance during the
year, both management and the Committee
recognise the ongoing economic and social impact
of the pandemic, and in that context judged that it
would be appropriate to cap the bonus outcome
in respect of the financial metrics and personal
strategic measures at 85% of maximum. Further
details are set out in Table 32 on page 98.
In line with CRH's remuneration policy, 33% of
the earned bonus payments will be deferred
into shares for a period of three years. For Mr.
Mintern, for the period up to his appointment as
Finance Director on 1 June 2021 a deferral of
25% applies.
Long-term Incentives
Performance Share Plan — 2019 awards
In 2019, the executive Directors were granted
conditional awards under the 2014 Performance
Share Plan. The awards were based on TSR
(25% of the award) against a tailored group of
key peers (see Table 37 on page 100, Cumulative
Cash Flow (50% of the award) and RONA (25%
of the award), and performance was measured
over the three-year period 1 January 2019 to 31
December 2021. In respect of the TSR element,
CRH's TSR over the period is ranked in the top
quartile of the tailored peer group weighted by
market capitalisation and warrants 100% vesting
for the TSR element. In respect of the cumulative
cash flow element, the actual outturn over the
period was $7.9 billion, which exceeded the
stretch target of $5.5 billion, resulting in 100%
vesting for the cash flow element. In respect
of the RONA element, the RONA outturn was
12.4%, resulting in 100% vesting for the RONA
element.
When reviewing performance against the
metrics, the Committee considered a number of
adjustments, for example, to neutralise the impact
of significant acquisitions and divestments, to
reflect the Group's change in reporting currency
from euro to US Dollar with effect from 1 January
2020, the impact of the implementation of IFRS
16 Leases and the impairment of subsidiaries in
2020.
2019 Performance Share Plan Award Metrics
Table 33
Cumulative cash flow
(50% of award) (i)
100%
Vesting Level
25%
0%
$4.2bn
$5.5bn
$7.9bn
)
t
n
e
m
e
e
l
f
o
%
(
g
n
i
t
s
e
V
TSR vs. tailored peer group
(25% of award) (ii)
100%
Vesting Level
25%
0%
Median
Upper quartile
)
t
n
e
m
e
e
l
f
o
%
(
g
n
i
t
s
e
V
)
t
n
e
m
e
e
l
f
o
%
(
g
n
i
t
s
e
V
RONA (2021)
(25% of award) (iii)
100%
Vesting Level
25%
0%
8.7%
11.2%
12.4%
Element vested at 100% (iv)
Element vested at 100% (iv)
Element vested at 100% (iv)
(i) Further information on how cash flow is calculated for PSP awards is set out on page 101.
(ii) The methodology for calculating TSR assumes all dividends are reinvested on the ex-dividend date at the closing share price on that day; the open and close price is
based on the three-month average closing price on the last day before the start of the performance period and the final day of the performance period respectively.
For the 2019 awards, TSR performance is assessed on a weighted market capitalisation basis.
(iii) RONA is also defined as reported internally and differs from the RONA reported in the Non-GAAP Performance Measure in this report as it reflects seasonality and
timing impact of development activity.
(iv) For the purposes of the 2019 Award, TSR performance was in the top quartile against the tailored peer group (see Table 37 on page 100). The cumulative cash flow for
the three years to end 31 December 2021 was $7.9 billion. RONA at 31 December 2021 was 12.4%.
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
100
2021 Annual Report and Form 20-F 101
Annual Report on Remuneration - continued
Pension Entitlements - Defined Benefit (Audited)
Executive Director
Albert Manifold
Increase in accrued personal
pension during 2021 (i)
€000
-
Transfer value of increase in
dependants pension (i)
€000
167
Table 34
Total accrued personal
pension at year end (ii)
€000
273
(i)
As noted above, the pension of Albert Manifold has been capped in line with the provisions of the Irish Finance Acts. However, dependants’ pensions continue to
accrue resulting in Greenbury transfer values which have been calculated on the basis of actuarial advice. These amounts do not represent sums paid out or due
in 2021 in the event of Mr. Manifold leaving service.
(ii) The accrued pensions shown are those which would be payable annually from normal retirement date.
2019 Performance Share Plan Award Vesting Details
Table 35
Executive Director
Interests Held
Vesting Outcome
(% of max)
Interests
Due to Vest
Date of Vesting
Assumed
Share Price (i)
Estimated Value
Albert Manifold
Jim Mintern
Senan Murphy
200,671
38,399
64,552
100%
100%
100%
200,671
38,399
64,552
March 2024
April 2022
March 2024
€43.11
€43.11
€43.11
€8,650,927
€1,655,381
€2,782,837
(i)
As the share price on the date of vesting is not yet known, for the purposes of this Table, the value of these awards, which were subject to a three-year performance
period ending in 2021, has been estimated using a share price of €43.11, being the three-month average share price to 31 December 2021.
2021 Performance Share Plan Award Metrics
Table 36
Cumulative cash flow
(50% of award) (i)
TSR vs. tailored peer group
(25% if award) (i)
RONA (2023)
(25% of award) (i)
)
t
n
e
m
e
e
l
f
o
%
(
g
n
i
t
s
e
V
100%
25%
0% $6.5 bn
$7.5bn
(i)
See footnotes to Table 33 on page 99.
)
t
n
e
m
e
e
l
f
o
%
(
g
n
i
t
s
e
V
100%
25%
0% Median
Upper Quartile
)
t
n
e
m
e
e
l
f
o
%
(
g
n
i
t
s
e
V
100%
25%
0%
10.8%
12.6%
Peer Group for Performance Share Plan Awards
Table 37
ACS
Boral
Cemex
Heidelberg Cement
Buzzi Unicem
Holcim
Martin Marietta
Saint Gobain
Skanska
Titan Cement
Vicat
Vinci
Vulcan Materials
Wienerberger
(i) Martin Marietta and Vulcan Materials were added to the peer group with effect from the PSP awards made in 2021.
2021 Performance Share Plan Award - Grant Details
Table 38
Executive Director
Date of Grant
Number of Shares
Market Price on which
Award was Based
Face Value at Date
of Award
Face Value on which Award was Based
(% of salary)
Albert Manifold
9 March 2021
Jim Mintern (i)
9 March 2021
Senan Murphy
9 March 2021
158,785
30,280
51,080
€36.95
€36.95
€36.95
€5,867,106
€1,118,846
€1,887,406
(i) Award granted in early 2021 prior to Mr. Mintern's appointment as Finance Director and not in relation to his appointment.
365%
n/a
225%
100
2021 Annual Report and Form 20-F 101
The Committee considers that the vesting
outcome is reflective of the Company’s underlying
performance over the performance period. In
accordance with the Policy, the 2019 awards to
Albert Manifold and Senan Murphy will vest in
2024 on completion of an additional two-year
holding period. The 2019 award for Jim Mintern
was granted prior to his appointment as Group
Finance Director and, under the terms of the
award, is not subject to an additional holding
period. Accordingly, the award will vest in April
2022. Vested awards will be adjusted to accrue
dividend equivalents based on dividends in
the period from grant to the applicable date of
vesting. Table 33 on page 99 sets out details of
the relevant targets. Table 35 sets out details of
the awards.
Performance Share Plan — 2021 awards
During 2021, awards under the 2014
Performance Share Plan were made to the
executive Directors, details of which are
summarised in Table 38. 50% of each award
granted in 2021 is subject to a cumulative cash
flow metric. The definition of cash flow, which
applies to the cash metric for all PSP awards,
is the net increase/decrease in cash and cash
equivalents adjusted to exclude:
• dividends to shareholders;
• acquisition/investment expenditure;
• proceeds from divestments and movements in
working capital;
Performance for the awards made in 2021
will be assessed over the three-year period to
31 December 2023.
As explained in last year’s Report, the 2021 PSP
targets were set in the context of unprecedented
and ongoing uncertainty currently presented
by the COVID-19 pandemic. Therefore, the
Committee retained the discretion to revise
the financial targets (the TSR targets not being
impacted) in the event that it subsequently
transpired that using these targets would be
inappropriate for assessing the underlying
performance of the Group. Mid-way through
the year (see page 83 for more details), the
Committee concluded that the cash flow and
RONA targets attaching to the 2021 PSP should
be revised upwards in light of improved visibility
primarily on trading expectations. These revised
targets are considered to represent significant
stretch compared to the Board’s strategic plan
and prevailing macroeconomic conditions.
Vesting will remain subject to the Committee’s
discretionary assessment of the formulaic
outcome in the context of underlying Group
performance. Details of the performance targets
are set out in Table 36 on page 100.
Awards, to the extent that they vest, will be
adjusted for dividend equivalents based on
dividends in the period from grant to the date of
vesting in 2025. “Malus” and clawback provisions
apply to the awards.
• share issues (scrip dividend, share
Other Employee Share Plans
options, other);
• financing cash flows (new loans/repayments);
• back funding pension schemes; and
•
foreign exchange translation
The Remuneration Committee considers that it is
appropriate to make these adjustments to align
with the performance targets, or to remove items
that do not reflect the quality of management’s
operational performance, or are largely outside
of the Company’s control. The Remuneration
Committee will also make adjustments that may
be required to cash flows, for example, as a result
of acquisitions/divestments completed during the
performance period or a significant underspend
or delay in budgeted capital expenditure, both
ordinary and extraordinary.
25% of each award is subject to a TSR metric,
with performance being measured against a
tailored peer group and on a market capitalisation
weighted basis (see Table 37). The remaining
25% of each award is subject to a RONA metric,
a key measure used by management to assess
investment opportunities and to run the business.
The executive Directors are eligible to participate
in Irish Revenue approved Savings-related
Option Schemes (the 'SAYE Scheme') and
Share Participation Schemes (the `Participation
Scheme') on consistent terms with all other
employees. The SAYE Scheme is open to all Irish
and UK employees, although at present there is
currently no financial services provider supporting
new awards under Irish SAYE schemes following
the exit from the market of the current provider in
2021. Participants may save up to €500/£500 a
month from their net salaries for a fixed term of
three or five years and at the end of the savings
period they have the option to buy CRH shares
at a discount of up to 15% of the market price
on the date of invitation of each savings contract.
Details of the outstanding awards of executive
Directors under the 2010 SAYE Scheme are set
out in Table 39 on page 102.
The Participation Scheme is an Irish Revenue
approved plan and is open to all employees in
Ireland. Grants can be made to participants up to
a maximum of €12,700 annually in CRH shares.
Albert Manifold, Jim Mintern and Senan Murphy
participated in the Participation Scheme in 2021.
1. Salary is defined as basic annual salary and excludes any fluctuating emoluments.
Retirement Benefit Expense
Albert Manifold is a participant in a contributory
defined benefit plan which is based on an
accrual rate of 1/60th of salary1 for each year of
pensionable service and is designed to provide
two-thirds of career average salary at retirement
for full service. Albert Manifold will become
entitled to a deferred pension, payable from
Normal Retirement Age, if he leaves service prior
to Normal Retirement Age. The Finance Act
2006 established a cap on pension provisions
by introducing a penalty tax charge on pension
assets in excess of the higher of €5.4 million (in
the Finance Act 2011, this threshold was reduced
to €2.3 million and reduced further to €2 million
by the Finance (No. 2) Act 2013) or the value of
individual accrued pension entitlements as at
7 December 2005.
As a result of these legislative changes, the
Remuneration Committee decided that executive
Directors should have the option of continuing
to accrue pension benefits as previously, or
of choosing an alternative arrangement—by
accepting pension benefits limited by the
cap—with a similar overall cost to the Group.
Albert Manifold has opted for an arrangement
whereby his pension is capped in line with the
provisions of the Finance Act 2006 and receives
a supplementary taxable non-pensionable
cash supplement in lieu of pension benefits
foregone. There was, therefore, no additional
accrual in 2021. The cash pension supplement
for 2021 is detailed in Table 22 on page 87. This
supplement is similar in value to the reduction in
the Company’s liability represented by the pension
benefits foregone. It is calculated based on
actuarial advice as the equivalent of the reduction
in the Company’s liability to Mr. Manifold and
spread over the term to retirement as annual
compensation allowances. In 2020, Mr. Manifold
agreed to a voluntary reduction of 10% of the
amount that would otherwise have been due to
him. This was reduced by a further 10% in 2021
and will be below 25% of salary form 1 January
2022, reducing to zero in August 2022. The
contributory defined benefit plan in which Albert
Manifold participates closed to new entrants at
the end of 2011. Details regarding the pension
entitlements of Albert Manifold are set out in Table
34 on page 100.
Senan Murphy receives a taxable non-pensionable
cash payment in lieu of a pension contribution,
which, for the reasons set out in the previous
year's report, is capped at 25% of his 2020
base salary. As outlined on page 83, Jim Mintern
receives a taxable non-pensionable cash payment
of 10% of salary in lieu of a pension contribution
in line with that available to the wider UK and Irish
workforce.
102
2021 Annual Report and Form 20-F 103
Annual Report on Remuneration - continued
Summary of Outstanding Share Incentive Awards (Audited)
Table 39
Year of
Award
Performance Period
Release
Date
Market Value at
Date of Award
Exercise
Price
Balance at 31
December 2020
Granted
in 2021
Released
in 2021
Exercised
in 2021
Lapsed
in 2021
Balance at 31
December 2021
Dividends Awarded
Market Value on Date
& Released
of Exercise/Released
Albert Manifold
Annual Bonus Plan (Deferred Share Awards) (i)
2014 Performance Share Plan (ii)
2010 Savings-Related Share Option Scheme
Jim Mintern (iii)
Annual Bonus Plan (Deferred Share Awards) (i)
2014 Performance Share Plan (ii)
2010 Savings-Related Share Option Scheme
Senan Murphy
Annual Bonus Plan (Deferred Share Awards) (i)
2014 Performance Share Plan (ii)
2018
2019
2020
2021
2016
2017
2018
2019
2020
2021
2018
2020
2021
2019
2020
2021
2019
2018
2019
2020
2021
2016
2017
2018
2019
2020
2021
01/01/17-31/12/2017
01/01/18-31/12/2018
01/01/19-31/12/2019
01/01/20-31/12/2020
01/01/16-31/12/2018
01/01/17-31/12/2019
01/01/18-31/12/2020
01/01/19-31/12/2021
01/01/20-31/12/2022
01/01/21-31/12/2023
n/a
01/01/19-31/12/2019
01/01/20-31/12/2020
01/01/19-31/12/2021
01/01/20-31/12/2022
01/01/21-31/12/2023
n/a
01/01/17-31/12/2017
01/01/18-31/12/2018
01/01/19-31/12/2019
01/01/20-31/12/2020
01/01/16-31/12/2018
01/01/17-31/12/2019
01/01/18-31/12/2020
01/01/19-31/12/2021
01/01/20-31/12/2022
01/01/21-31/12/2023
2021
2022
2023
2024
2021
2022
2023
2024
2025
2026
2023
2022
2023
2022
2023
2024
2024
2021
2022
2023
2024
2021
2022
2023
2024
2025
2026
€30.42
€24.90
€33.38
€33.01
€24.56
€32.24
€27.62
€29.86
€33.10
€36.95
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
€23.39
€33.38
€33.01
€29.86
€33.10
€36.95
n/a
n/a
n/a
n/a
n/a
n/a
€24.24
€30.42
€24.90
€33.38
€33.01
€24.56
€32.24
€27.62
€29.86
€33.10
€36.95
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
25,619
27,337
29,419
-
123,052
115,380
196,278
186,106
172,509
-
1,293
4,206
-
35,612
32,860
-
1,247
8,352
9,510
10,235
-
30,101
30,941
63,134
59,867
55,492
-
25,619
2,010
€39.58
30,568
123,052
15,670
€39.58
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
158,785
4,393
30,280
10,428
51,080
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,352
30,101
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
25,957
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
--
8,349
27,337
29,419
30,568
-
-
115,380
170,321
186,106
172,509
158,785
1,293
4,206
4,393
35,612
32,860
30,280
1,247
-
-
9,510
10,235
10,428
30,941
54,785
59,867
55,492
51,080
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
655
€39.58
3,831
€39.58
The market price of the Company's shares at 31 December 2021 was €46.52 and the range during 2021 was €34.38 and €46.96.
(i)
The Remuneration Committee has determined that dividend equivalents should accrue on awards under the Annual Bonus Plan. Such dividend equivalents will be
released to participants on the date of release of the Deferred Shares.
The Remuneration Committee has determined that dividend equivalents should accrue on awards under the 2014 Performance Share Plan. Subject to satisfaction
of the applicable performance criteria, such dividend equivalents will be released to participants in the form of additional shares on vesting.
(ii)
(iii) The awards for Mr. Mintern shown in the Table above were granted to him in connection with his former roles within CRH.
102
2021 Annual Report and Form 20-F 103
Summary of Outstanding Share Incentive Awards (Audited)
Table 39
Year of
Award
Performance Period
Release
Market Value at
Exercise
Balance at 31
Date
Date of Award
Price
December 2020
Granted
in 2021
Released
in 2021
Exercised
in 2021
Lapsed
in 2021
Balance at 31
December 2021
Dividends Awarded
& Released
Market Value on Date
of Exercise/Released
2010 Savings-Related Share Option Scheme
n/a
n/a
€23.39
1,293
Albert Manifold
Annual Bonus Plan (Deferred Share Awards) (i)
2014 Performance Share Plan (ii)
Jim Mintern (iii)
Annual Bonus Plan (Deferred Share Awards) (i)
2014 Performance Share Plan (ii)
Senan Murphy
Annual Bonus Plan (Deferred Share Awards) (i)
2014 Performance Share Plan (ii)
2018
2019
2020
2021
2016
2017
2018
2019
2020
2021
2018
2020
2021
2019
2020
2021
2019
2018
2019
2020
2021
2016
2017
2018
2019
2020
2021
01/01/17-31/12/2017
01/01/18-31/12/2018
01/01/19-31/12/2019
01/01/20-31/12/2020
01/01/16-31/12/2018
01/01/17-31/12/2019
01/01/18-31/12/2020
01/01/19-31/12/2021
01/01/20-31/12/2022
01/01/21-31/12/2023
01/01/19-31/12/2019
01/01/20-31/12/2020
01/01/19-31/12/2021
01/01/20-31/12/2022
01/01/21-31/12/2023
01/01/17-31/12/2017
01/01/18-31/12/2018
01/01/19-31/12/2019
01/01/20-31/12/2020
01/01/16-31/12/2018
01/01/17-31/12/2019
01/01/18-31/12/2020
01/01/19-31/12/2021
01/01/20-31/12/2022
01/01/21-31/12/2023
2021
2022
2023
2024
2021
2022
2023
2024
2025
2026
2023
2022
2023
2022
2023
2024
2024
2021
2022
2023
2024
2021
2022
2023
2024
2025
2026
€30.42
€24.90
€33.38
€33.01
€24.56
€32.24
€27.62
€29.86
€33.10
€36.95
€33.38
€33.01
€29.86
€33.10
€36.95
€30.42
€24.90
€33.38
€33.01
€24.56
€32.24
€27.62
€29.86
€33.10
€36.95
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
25,619
27,337
29,419
123,052
115,380
196,278
186,106
172,509
-
-
-
-
-
-
4,206
35,612
32,860
8,352
9,510
10,235
30,101
30,941
63,134
59,867
55,492
2010 Savings-Related Share Option Scheme
n/a
n/a
€24.24
1,247
The market price of the Company's shares at 31 December 2021 was €46.52 and the range during 2021 was €34.38 and €46.96.
(i)
The Remuneration Committee has determined that dividend equivalents should accrue on awards under the Annual Bonus Plan. Such dividend equivalents will be
released to participants on the date of release of the Deferred Shares.
(ii)
The Remuneration Committee has determined that dividend equivalents should accrue on awards under the 2014 Performance Share Plan. Subject to satisfaction
of the applicable performance criteria, such dividend equivalents will be released to participants in the form of additional shares on vesting.
(iii) The awards for Mr. Mintern shown in the Table above were granted to him in connection with his former roles within CRH.
-
-
-
30,568
-
-
-
-
-
158,785
-
-
4,393
-
-
30,280
-
-
-
-
10,428
-
-
-
-
-
51,080
25,619
-
-
-
123,052
-
-
-
-
-
-
-
-
-
-
-
-
8,352
-
-
-
30,101
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
25,957
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,349
-
-
--
-
27,337
29,419
30,568
-
115,380
170,321
186,106
172,509
158,785
1,293
4,206
4,393
35,612
32,860
30,280
1,247
-
9,510
10,235
10,428
-
30,941
54,785
59,867
55,492
51,080
2,010
€39.58
-
-
-
-
-
-
15,670
€39.58
-
-
-
-
-
-
-
-
-
-
-
-
655
-
-
-
3,831
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
€39.58
-
-
-
€39.58
-
-
-
-
-
104
2021 Annual Report and Form 20-F 105
Annual Report on Remuneration - continued
Shareholding Guideline for
Executive Directors
The shareholding guideline for the executive
Directors is set out on page pages 96 and
97, together with a table showing the current
shareholdings of the executive Directors as a
multiple of base salary.
Proposed Implementation of
Remuneration in 2022
Basic Salary and Benefits
Details of the executive Directors' salaries for
2022 compared with 2021 are set out in the
Committee Chairman's Overview on page 83.
The Committee has reviewed the executive
Directors' base salaries and concluded that
salary increases of 2.75% should also be
awarded to the executive Directors in 2022
in recognition of their continued strong
performance, contribution and leadership of
CRH. The approved increase is in line with the
general workforce increase in Ireland and the
UK. Executive Directors will receive benefits
in line with the 2022 Policy in 2022. The level
of benefits provided will depend on the cost
of providing individual items and the individual
circumstances.
Retirement Benefit Expense
As outlined in the Remuneration Committee
Chairman's overview on page 83, the monetary
value of the pension contribution/allowance
for Mr. Manifold has been reduced to
below 25% of his salary for 2022 and will
expire in August 2022. The annual pension
contribution/allowance for Jim Mintern remains
at 10% of his base salary.
2022 Annual Bonus Plan
The Remuneration Committee has determined
that the 2022 Annual Bonus Plan will be
operated broadly in line with the 2021 Annual
Bonus Plan. 80% of the bonus will be based
on financial targets and the remaining 20% on
individual objectives aligned to key strategic
areas for each executive Director. The targets
attaching to the 2022 bonus will be disclosed in
the 2022 Annual Report and Form 20-F.
2022 Performance Share Plan Awards
For the 2022 PSP awards, awards will be
assessed over the three-year period to 31
December 2024. The metrics, weightings
and opportunity for the 2022 PSP awards are
summarised in Table 40 on page 105.
Fees Paid to Former Directors
Total Shareholder Return
The 2013 Large and Medium-sized Companies
and Groups (Accounts and Reports)
(Amendment Regulations) Regulations in
the UK, require disclosure of payments to
former Directors in certain circumstances. No
payments have been made to individual former
Directors in those circumstances which exceed
the de minimis threshold of €20,000 per annum
set by the Remuneration Committee. For the
purposes of Section 1110N of the Companies
Act 2014, details of the payments made to
former Directors are included in Table 49 on
page 109.
Executives’ External
Appointments
The executive Directors may accept external
appointments with the prior approval of the
Board provided that such appointments do
not prejudice the individual’s ability to fulfil their
duties at the Group. Whether any related fees
are retained by the individual or remitted to the
Group is considered on a case-by-case basis.
Non-executive Directors
The remuneration of non-executive Directors is
determined by the Board of Directors. The fees
were last increased in 2019. As outlined in the
Remuneration Committee Chairman's overview
on page 84, a Committee of the Chairman and
the executive Directors recommended that the
fees of the non-executive Directors be increased
with effect from 1 January 2022 by reference
to the wider workforce increase of 2.75% in
Ireland and the UK. The fee structure for non-
executive Directors to apply under the 2022
Policy is set out in Table 41 on page 105. Taking
into account the performance of the Chairman
since his appointment in 2020 and the nature
and extent of his time commitment to fulfil his
responsibilities, the Committee reviewed CRH’s
fee levels relative to other FTSE50 companies
(excluding financial services) and recommended
that the Chairman’s fee be increased from
€630,000, the amount set for the role when the
current policy was approved by Shareholders in
2019, to €647,250, with effect from 1 January
2022, by reference to the increase for the wider
workforce of 2.75%. Details of the remuneration
paid to non-executive Directors in 2021 are set
out in Table 42 on page 106.
The value at 31 December of €100 invested
in CRH in 2011, compared with the value of
€100 invested in the Eurofirst 300 Index and the
FTSE100 Index (which CRH joined in December
2011) is shown in Table 45 on page 107.
TSR performance has been compared against
the FTSE100 and the Eurofirst 300 as these are
broad general market indices of which CRH is a
constituent. The Committee, therefore, considers
that they offer a reasonable comparison for
performance. Compound annual TSR since
the formation of the Group in 1970 (assuming
the reinvestment of dividends) is 15.5%
(2020: 15.1%).
Workforce Engagement
Engagement of our workforce is at the heart of
what we do at CRH. The proximity of our senior
leaders to daily operations across CRH is a key
reason for the Company's continued success
and growth. The Company operates an annual
talent and performance review process, where
colleagues and their managers work together to
review performance and set annual goals. The
outcome of the review process is closely aligned
to remuneration, both in terms of any increase
in base salary for the next year, and any variable
remuneration component.
In order to guide our leaders' discussions with
employees across the group on remuneration
structures, there is a reward policy section,
which is based on the principles of remuneration
applied by the Remuneration Committee and
remuneration policy approved by shareholders,
in policy documents issued to the managing
directors of our operating companies.
The SESR Committee has taken formal
responsibility for workforce engagement.
Remuneration Committee members are kept
up-to-date on the workings of the SESR
Committee and the feedback it receives from
employees on all matters including remuneration.
Further details in relation to the engagement with
employees on remuneration matters during 2021
is included on page 82.
Changes in the remuneration
of the Directors
Table 48 on page 109 shows the percentage
change in the executive and non-executive
Directors' salary/fees, benefits and bonus
between 2020 and 2021 compared to the
change in total average employment costs in
respect of employees in the Group as a whole
between 2020 and 2021.
1. Salary is defined as basic annual salary and excludes any fluctuating emoluments.
104
2021 Annual Report and Form 20-F 105
Performance Share Plan Metrics - 2022 Awards
Table 40
Cumulative cash flow
(45% of award) (i)
TSR vs. tailored peer group
(20% of award) (ii)
RONA (2024)
(20% of award) (iii)
100%
25%
0%
)
t
n
e
m
e
e
l
f
o
%
(
g
n
i
t
s
e
V
$7.1bn
$8.2bn
Sustainability scorecard (15% of award)
Measure
5% - Driving to Carbon Neutrality:
)
t
n
e
m
e
e
l
f
o
%
(
g
n
i
t
s
e
V
100%
25%
0% Median
Upper Quartile
)
t
n
e
m
e
e
l
f
o
%
(
g
n
i
t
s
e
V
100%
25%
0% 11.2%
13.0%
Baseline
Threshold
(25% vesting)
Stretch (iv)
(100% vesting)
Reason for selection
• Delivery of roadmap for target of 25%
33.7mt of CO2
emissions reduction by 2030
This element will be based on a qualitative assessment by
the Committee (and feedback from the SESR Committee)
in early 2025 in relation to the development and
implementation of a strategy to meet this ambition.
Assessment will be informed by a range of criteria, which
will be disclosed fully in the relevant Remuneration Report.
Aligns with the Group’s revised SBTI
approved (v) target for a 25% reduction in
absolute Scope 1 and Scope 2 CO2
emissions by 2030 (from a 2020 baseline)
• Embedding sustainability programmes in relevant operating companies:
–
–
–
for waste management (1/3)
for biodiversity (1/3)
for water management (1/3)
95%
91%
80%
5% - Progress Toward a Net Zero Built Environment
• Revenue from Products with Enhanced
46%
Sustainability Attributes
5% - Creating an Inclusive & Diverse Company
• Representation of Women in Senior
14%
Management
• Improvement in Inclusion Assessment
68
96%
92%
81%
47%
16%
70
98%
94%
91%
49%
19%
73
Aligns directly with progress towards stated
targets for 2030 (waste management target
reflects acceleration of ambition to 2025)
Aligns directly with our ambition to achieve
50% by 2025
Aligns directly with our roadmap to our
stated 2030 Ambition
Consistent with CRH’s focus on inclusion
as a driver of diversity and enabler of
innovation. Quantitative assessment based
on an externally validated Enterprise Score
from engagement surveys
(i), (ii) and (iii) see Table 33 on page 99.
(iv) Vesting between threshold and stretch will be calculated on a straight-line sliding scale basis.
(v) The SBTi’s Target Validation Team has classified CRH's Scope 1 and Scope 2 target ambition and has determined that it is in line with a well-below 2o trajectory.
The target boundary includes biogenic emissions and removals from bioenergy feedstocks.
Non-executive Director Fee Structure
Role
Group Chairman (including non-executive Director salary and fees for Committee work)
Basic non-executive Director fee
Committee fee
Additional fees
Senior Independent Director
Remuneration Committee Chairman
Audit Committee Chairman
Combined Senior Independent Director and Committee Chairman
SESR Committee Chairman
Fee for Europe-based non-executive Directors
Fee for US-based non-executive Directors
Table 41
2022
2021
€647,250
€630,000
€90,250
€32,750
€88,000
€32,000
€25,500
€30,750
€40,000
€40,000
€30,750
€15,000
€30,000
€25,000
€30,000
€39,000
€39,000
-
€15,000
€30,000
106
2021 Annual Report and Form 20-F 107
Annual Report on Remuneration - continued
Remuneration Paid to
Chief Executive 2012 – 2021
Table 43 on page 107 shows the total
remuneration paid to the Chief Executive in the
period 2012 to 2021 inclusive and shows bonuses
and vested long-term incentive awards as a
percentage of the maximum bonus and award
that could have been received in respect of each
year. Albert Manifold succeeded Myles Lee as
Chief Executive in January 2014.
Chief Executive Pay Ratio
compared to UK-based employees
As required by the reporting regulations with
which CRH complies, Table 44 on page 107
summarises the ratio of the Chief Executive’s
remuneration compared with the UK workforce
(which represents only 13% of the Group’s
c.77,400 employees). In last year’s Report, the
Committee noted an expectation for year-on-year
variations in the reported pay ratio to be driven
by performance-based pay outcomes which,
in line with our remuneration policy, comprise a
significant proportion of the total remuneration
for the Chief Executive. While the majority of
employees across CRH also participate in
performance-related incentives, these typically
comprise a lower proportion of the package (in
line with competitive market practices for these
roles and levels). Consistent with our philosophy
across the Group that incentives should be linked
to performance that an individual can influence,
these more commonly reflect an individual’s own
(and own business unit) performance, compared
with a linkage to Group performance for the Chief
Executive and other senior executives.
In keeping with our remuneration philosophy
and policy, a significant proportion of the total
remuneration for Executive Directors is derived
from variable, performance-based remuneration.
Total remuneration for the Chief Executive—
and therefore the pay ratio— is likely to vary
year-on-year based on the Group's performance,
as illustrated in the scenario charts on page 94.
Noting that the total remuneration pay ratio will
be volatile over time, the Committee has elected
to continue also disclosing the pay ratio for base
salary. In line with the Committee's policy that
Executive Directors' base salaries will normally
increase in line with the typical level of increase
awarded to other employees in the Group, it is
anticipated that this ratio will be more stable - and
representative of relative changes in fixed pay -
over time.
The median total remuneration pay ratio for 2021
of 289:1 demonstrates continued alignment
of the Chief Executive's remuneration with the
performance of CRH over the longer-term.
A significant proportion (62%) of the Chief
Executive's total remuneration for 2021 is derived
from the vesting of the 2019 PSP award, which
was based on the delivery of sustained financial
performance and above-market shareholder
returns over the last three years. Through the
denomination of this award in CRH shares, its
value also reflects directly CRH's share price
performance over this period; 31% of the PSP
value reported in the Single Figure of Total
Remuneration table derives from share price
appreciation. These shares cannot be sold for
a further two years, further aligning the Chief
Executive's interests with those of shareholders
over the longer-term.
Individual Remuneration for Non-executive Directors for the year ended 31 December 2021 (Audited)
Table 42
Basic fees (i)
€000
Benefits (ii)
€000
Other fees (iii)
€000
Total
€000
2021
2020
2021
2020
2021
2020
2021
2020
2019
Non-executive Directors
R. Boucher
C. Dowling (iv)
R. Fearon (v)
J. Karlström (vi)
S. Kelly (vii)
B. Khan (viii)
L. McKay (v)
H.A. McSharry (ix)
G.L. Platt
M.K. Rhinehart
L.J. Riches (ix)
S. Talbot
88
69
88
88
88
4
88
29
88
88
29
88
83
-
7
83
83
-
7
83
83
83
83
83
5
3
-
-
-
-
-
-
-
-
-
3
835
678
11
-
-
-
-
-
-
-
-
-
-
-
-
-
557
522
37
62
47
101
10
62
25
92
62
16
47
-
3
44
95
-
3
72
82
58
44
44
650
109
150
135
189
14
150
54
180
150
45
138
605
165
-
10
127
178
-
10
155
165
141
127
127
-
-
36
15
-
-
151
175
150
135
137
964
1,118
967
1,964
1,645
(i) Further information in relation to the non-executive Director fee structure are set out in Table 41 on page 105.
(ii) Benefits: Includes the cost of hotel accommodation for Irish based non-executive Directors in respect of meetings held in Ireland which have been grossed up for
Irish tax purposes.
(iii) Other Remuneration: Includes remuneration for Chairman, Board Committee work and allowances for non-executive Directors based outside of Ireland.
(iv) Caroline Dowling became a Director on 22 March 2021
(v) Rick Fearon and Lamar McKay became Directors on 3 December 2020
(vi) Johan Karlström became a Director on 26 September 2019
(vii) Shaun Kelly became a Director on 3 December 2019
(viii) Badar Khan became on Director on 27 October 2021
(ix) Heather Ann McSharry and Lucinda Riches retired as Directors on 29 April 2021
106
2021 Annual Report and Form 20-F 107
Remuneration paid to Chief Executive (2012-2021)
Table 43
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Single figure Remuneration (€m) (i)
€2.5m
€4.2m
€4.3m
€5.4m
€9.9m
€8.7m
€8.2m
€9.3m
€11.2m
€13.9m
Annual Bonus (% of max)
28%
30%
100%
100%
98%
96%
81%
86%
86%
85%
Long-term incentive
award vesting (% of max)
0%
PSP: 49%
LTIP: 34%
PSP: 0%
Options:
75%
PSP: 78%
Options:
37%
100%
79%
59%
71%
87%
100%
(i) Single figure remuneration comprises the total fixed pay, annual bonus and the value of long-term incentives vesting in respect of each year.
Chief Executive Pay Ratios
Total Remuneration Pay Ratios compared to UK-based employees
Table 44
Year
2021
2020
2019
Calculation
Methodology
C
C
C
P25 (lower quartile)
P50 (median)
P75 (upper quartile)
Chief Executive
Total remuneration
€35,700
€30,400
€32,200
Ratio
390:1
368:1
289:1
Total remuneration
€48,200
€42,000
€44,900
Ratio
289:1
267:1
207:1
Total remuneration
€62,400
€54,600
€58,900
Ratio
223:1
205:1
158:1
Total remuneration
€13,906,922
€11,200,211
€9,311,400
Salary Pay Ratios compared to UK-based employees
Year
2021
2020
2019
Calculation
Methodology
C
C
C
P25 (lower quartile)
P50 (median)
P75 (upper quartile)
Chief Executive
Salary
€26,900
€28,200
€28,500
Ratio
60:1
52:1
53:1
Salary
€36,800
€37,800
€42,400
Ratio
44:1
39:1
36:1
Salary
€54,400
€46,800
€49,900
Ratio
30:1
31:1
31:1
Salary
€1,607,400
€1,469,100
€1,522,500
1. Salary and total remuneration figures have been rounded to the nearest 100.
2. Employee remuneration data converted into Euros at the average quarter four EUR:GBP exchange rate (source: Central Bank of Ireland). For 2021 this rate was
0.85:1 (2020: 0.90:1; 2019: 0.86:1).
3. Total remuneration for the lower quartile, median and upper quartile employees are determined using the ‘single figure’ methodology. This methodology was chosen
as it provides a like-for-like comparison between the CEO and other employees. For practical reasons (primarily relating to the number of employing entities and
employees covered by this analysis), the ranking of employees to identify the three individuals representing P25, P50 and P75 is conducted in November each year.
Given the timing, for the purpose of the ranking exercise, total remuneration is defined as the sum of base salary, employer pension contributions and other taxable
benefits for the period 1 January to 31 October, and the incentive paid in the period in respect of the prior year. All elements of remuneration are calculated on a
full-time and full-year equivalent basis. In the following January, total remuneration is updated for the three employees representing P25, P50 and P75 using the
same single figure methodology used to report CEO remuneration.
4. The Committee considered the pay data for the three individuals identified and believes that they fairly reflect pay at the relevant quartiles amongst the UK employee
population, albeit noting the exact figures are likely to vary slightly year-on-year due to changes in the employee population and thus the identified individuals. The
Committee reviewed the underlying rationale for the year-on-year change in the quartile figures. Total remuneration increased year-on-year reflecting the resumption
of more normal trading conditions, including payment of overtime in the UK businesses. The year-on-year variance in salaries at the quartiles, reflects the fact that
the individuals were selected based on total remuneration and the pay mix differs by role and location. On a like-for-like basis, the budgeted salary increase across
the UK workforce in 2021 was 2.75%.
TSR Performance (2011-2021)
Table 45
CRH (DUB)
FTSE100
Eurofirst 300
€
450
400
350
300
250
200
150
100
50
0
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
108
2021 Annual Report and Form 20-F 109
Annual Report on Remuneration - continued
Relative Importance of
Spend on Pay
Table 46 sets out the amount paid by the Group
in remuneration to employees compared to
the amount returned to shareholders as part of
the share buyback programme and dividend
distributions made to shareholders in 2020 and
2021. We have also shown the change in EBITDA
(as defined)* performance year-on-year to provide
an indication of the change in profit performance.
Advisers to the Remuneration
Committee
During 2021, the Committee completed a formal
tender process for the appointment of its advisor.
Following the conclusion of this process, the
Committee selected Ellason as its independent
remuneration consultants and they succeeded
Mercer Kepler with effect from June 2021. The
Committee has satisfied itself that the advice
provided by Ellason is robust and independent
and that the Ellason engagement partner and
team that provide remuneration advice to the
Committee do not have connections with CRH
plc that may impair their independence.
Ellason are signatories to the Voluntary Code of
Conduct in relation to executive remuneration
consulting in the UK. During 2021, Ellason
provided the following remuneration services:
•
research and advice regarding remuneration
trends, best practice and remuneration levels
for executive and non-executive Directors in
companies of similar size and complexity;
• advice in relation to remuneration
matters generally; and
• attendance at Committee meetings,
when required
In 2021, the total fees paid to Ellason were
£52,376. The total fees paid to Mercer Kepler in
2021 were £20,230.
2021 Annual General Meeting
The voting outcome in respect of the
remuneration-related votes at the 2021 AGM is
set out in Table 20 on page 85.
Lamar McKay
Chair of Remuneration Committee
2 March 2022
Relative Importance of Spend on Pay
Table 46
2021
$0.9bn
$0.9bn
Total: $1.8 billion
2020
$0.2bn
$0.7bn
Total: $0.9 billion
Share
Buyback/
Dividends
Shares Repurchased
Dividends Paid
Remuneration
received by all
employees
EBITDA (as
defined)*
2021
2020
2021
2020
$6.52bn
$6.21bn
$5.35bn
$4.6bn
Shareholdings of Directors and Company Secretary
Table 47
Name
Executive Directors
A. Manifold (ii)
J. Mintern (ii) (iii)
S. Murphy (iv)
Non-executive Directors
R. Boucher
C. Dowling (v)
R. Fearon (vi)
J. Karlström
S. Kelly (vi)
B. Khan (vii)
L. McKay (vi)
H.A. McSharry (iv)
G.L. Platt
M.K. Rhinehart (vi)
L.J. Riches (iv)
S. Talbot
Company Secretary
N. Colgan
Total
Beneficially Owned (i)
31 December 2021
31 December 2020
89,727
33,603
n/a
23,300
1,000
5,000
2,000
1,000
1,000
4,000
n/a
1,082
1,000
n/a
1,550
5,087
169,349
47,061
33,603
6,068
23,300
Nil
1,000
2,000
1,000
Nil
4,000
4,170
1,064
1,000
5,000
1,550
4,769
135,585
(i)
Excludes awards of Deferred Shares, details of which are disclosed on pages 102 and 103. The Directors
and Company Secretary do not have any special voting rights.
(ii) The total interests of the executive Directors, using the methodology set out in the Shareholding
Guidelines section on page 96, are illustrated in Table 31 on page 97.
(iii) Appointed with effect from 1 June 2021. Holdings shown in the 2020 column are those as at the date of
appointment to the Board.
(iv) Retired from the Board with effect from 29 April 2021.
(v) Appointed with effect from 22 March 2021. Holdings shown in the 2020 column are those as at the date
of appointment.
(vi) Holdings in the form of American Depositary Receipts (ADRs).
(vii) Appointed with effect from 26 October 2021. Holdings shown in the 2020 column are those at the date of
appointment.
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
108
2021 Annual Report and Form 20-F 109
Changes in the remuneration of the Directors
Table 48
Percentage change from prior year
Executive Directors
A. Manifold
S. Murphy (i)
J. Mintern
Non-executive Directors
R. Boucher (ii)
C. Dowling (iii)
R. Fearon (iv)
J. Karlström (v)
S. Kelly (vi)
B. Khan
L. McKay (iv)
H.A. McSharry (i)
G.L. Platt
M.K. Rhinehart
L.J. Riches (i)
S. Talbot
Salary/Fees
2021
2020
+9%
+9%
n/a
+6%
n/a
+6%
+6%
+6%
n/a
+6%
+6%
+6%
+6%
+6%
+6%
-4%
-4%
n/a
-6%
n/a
n/a
-6%
-6%
n/a
n/a
-6%
-6%
-6%
-6%
-6%
Benefits
2021
-15%
-54%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2020
-37%
-52%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Bonus
2021
+2%
-65%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Average Workforce Costs (v)
+4.9%
+1%
(i) Retired from the Board with effect from 29 April 2021.
(ii) Appointed Chairman with effect from 1 January 2020.
(iii) Appointed with effect from 22 March 2021.
(iv) Appointed with effect from 3 December 2020.
(v) Appointed with effect from 25 September 2019.
(vi) Appointed with effect from 3 December 2019.
(vii) For the purposes of Section 1110N(e)(ii), CRH plc had no employees in each of the financial years from 2017 to 2021.
Details of Remuneration Charged against Profit in 2021 (i) (Audited)
Executive Directors
Basic Salary
Performance-related Incentive Plan
- cash element
- deferred shares element
Retirement Benefits Expense
Benefits
Total executive Directors’ remuneration
Average number of executive Directors
Non-executive Directors
Fees
Other remuneration
Benefits
Total non-executive Directors’ remuneration
Average number of non-executive Directors
Payments to former Directors (ii)
Total Directors’ remuneration
2021
€000
2,376
2,841
1,421
668
50
7,356
1.92
835
1,118
11
1,964
9.58
9
9,329
2020
€000
2,237
2,707
1,353
816
40
7,153
2.00
730
995
1,725
8.83
40
8,918
2020
+3%
+1%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Table 49
2019
€000
2,317
2,647
1,324
866
70
7,224
2.00
894
1,124
9
2,027
10.16
9
9,260
(i) See analysis of 2021 remuneration by individual in Tables 22 and 42 on pages 87 and 106 respectively.
(ii) Consulting and other fees paid to a number of former directors.
For the purposes of Section 305 of the Companies Act 2014, the total aggregate of "emoluments" paid or received by Directors in respect of qualifying services was
€9.33 million. Details of share-based payments charges through P&L can be found in note 8 on page 164.
110
2021 Annual Report and Form 20-F 111
Directors’ Report
The Directors submit their report and the audited
Consolidated Financial Statements for the year
ended 31 December 2021.
The treasury policy and objectives of the
Group are set out in detail in note 22 to the
Consolidated Financial Statements.
Principal Activity, Results for the
Year and Review of Business
CRH is the leading building materials business
in the world, employing c. 77,400 people
at over 3,200 locations in 28 countries.
CRH manufactures and supplies a range of
building materials, products and innovative
solutions for the construction industry. From
primary materials, to products that are highly
engineered and high-value-added, to integrated
building solutions that enable faster, more
sustainable construction, CRH is uniquely
positioned to address evolving trends in global
construction markets. Our products can be
found throughout the built environment in
a wide range of construction projects from
major public infrastructure to commercial
buildings and residential homes. The Group has
c.900 subsidiary, joint venture and associate
undertakings; the principal ones as at 31
December 2021 are listed on pages 260 to 264.
The Group's strategy, business model and
development activity are summarised on pages 6
to 53 and are deemed to be incorporated in this
part of the Directors' Report. As set out in the
Consolidated Income Statement on page 140,
the Group reported a profit before tax for the
year of $3.3 billion from continuing operations.
Comprehensive reviews of the financial and
operating performance of the Group during 2021
are set out in the Business Performance section
on pages 36 to 53; key financial performance
indicators are set out on pages 18 to 19.
During the year ended 31 December 2021,
17,829,602 ordinary shares were repurchased
on the Euronext Dublin for a total of $0.9 billion,
at an average price of $49.30 per share. Further
details in relation to the buyback programme and
the Company's profits available for distribution
are set on pages 113 and 205 respectively.
Dividend
CRH's capital allocation policy reflects the
Group's strategy of generating industry leading
returns through value-accretive allocation of
capital while delivering long-term dividend
growth for shareholders. The Board continues
to believe that a progressive dividend policy is
appropriate for the Group and further to the 25%
dividend increase in 2020, an interim dividend
of 23.0c (2020: 22.0c) per share was paid in
October 2021. The Board is recommending a
final dividend of 98.0c per share. This would give
a total dividend of 121.0c for the year (2020:
115.0c), an increase of 5% over last year. The
earnings per share for the year were 328.8c,
representing a cover of 2.7x the proposed
dividend for the year. It is proposed to pay the
final dividend on 5 May 2022 to shareholders
registered at the close of business on 11 March
2022. In connection with the share buyback
programme, CRH announced the suspension
of the scrip dividend scheme on 2 May 2018.
Therefore, the final dividend will be paid wholly
in cash. Reflecting the resilience of our business
model and continued strong cash generation the
Board believes that a through-the-cycle dividend
cover of 2.0 to 2.5 times is appropriate for the
Group going forward.
2022 Outlook
The 2022 outlook set out in the Chief Executive’s
Review on page 11 is deemed to be incorporated
in this part of the Directors’ Report.
Principal Risks and Uncertainties
Pursuant to Section 327(1)(b) of the Companies
Act 2014, Regulation 5(4)(c)(ii) of the Transparency
(Directive 2004/109/EC) Regulations 2007 (the
'Transparency Regulations') and the Central
Bank (Investment Market Conduct) Rules 2019,
the principal risks and uncertainties that could
affect the Group’s business are set out on pages
116 to 121 and are deemed to be incorporated
in this part of the Directors’ Report. These risks
and uncertainties reflect the international scope
of the Group’s operations and its decentralised
structure. If any of these risks occur, the Group’s
business, financial condition, results of operations,
liquidity and/or prospects could be materially
adversely affected.
Non-Financial Reporting
The European Union (Disclosure of Non-Financial
and Diversity Information by certain large
undertakings and groups) Regulations 2017
(the ‘Non-Financial Regulations’) requires CRH
to provide certain non-financial information to
investors and other stakeholders necessary
to provide them with an understanding of the
Company’s development, performance, position
and impact of its activity. Table 50 provides
more details on the information required to be
provided by the Non-Financial Regulations and
where this information has been provided in this
Annual Report and Form 20-F.
Non-Financial Reporting
Table 50
Reporting Requirement
Relevant Policies (i)
Location of Information (ii)
Pages
Environmental and Climate-Related Matters
Environmental Policy
Social & Employee Matters
Health & Safety Policy, Social Policy
Sustainability, Transparency on Climate, Risk,
Governance and The Environment and
Government Regulations
20 to 31 and 242
Sustainability, SESR Committee Report and
Risk Factors
20 to 31, 76 to 79
and 232 to 240
Human Rights
Social Policy, Code of Business Conduct
Sustainability
20 to 27 and 74
Anti-bribery & Corruption
Code of Business Conduct
Sustainability and Risk Factors
20 to 27 and 238
Business Model
Non-financial KPIs
Principal Risks
–
–
–
Business Model
Key Performance Indicators
Risk Management
16 to 17
18 to 19
32 to 35
Principal Risks and Uncertainties
116 to 121
(i) Policies are available on CRH’s website, www.crh.com.
(ii) The referenced sections are deemed to be incorporated within this Directors’ Report.
110
2021 Annual Report and Form 20-F 111
Regulatory Information1
Table 51
Companies
Act 2014
For the purpose of Section 1373, the Corporate Governance Report on pages 55 to 109, together with the Governance Appendix located on the
CRH website (www.crh.com), which contains the information required by Section 1373(2) of the Companies Act 2014 and the risk management
disclosures on pages 32 to 35 and 116 to 121, are deemed to be incorporated in the Directors’ Report and form part of the corporate governance
statement required by Section 1373 of the Companies Act. Details of the Company’s employee share schemes and capital structure can be found
in notes 8 and 29 to the Consolidated Financial Statements on pages 164 to 166 and 203 to 205 respectively.
2006 Takeover
Regulations
2007
Transparency
Regulations
Disclaimer/
Forward-
Looking
Statements
For the purpose of Regulation 21 of Statutory Instrument 255/2006 European Communities (Takeover Bids (Directive 2004/25/EC)) Regulations
2006, the rules relating to the appointment and replacement of Directors are summarised in the Governance Appendix. The Chief Executive and the
Finance Director have entered into service contracts, the principal terms of which are summarised in the 2022 Directors’ Remuneration Policy on
page 95 are deemed to be incorporated in this part of the Directors’ Report. The Company’s Memorandum and Articles of Association, which are
available on the CRH website, are also deemed to be incorporated in this part of the Directors’ Report. The Group has certain banking facilities and
bond issues outstanding which may require repayment in the event that a change in control occurs with respect to the Company. In addition, the
Company’s Share Option Schemes and Performance Share Plan contain change of control provisions which can allow for the acceleration of the
exercisability of share options and the vesting of share awards in the event that a change of control occurs with respect to the Company.
For the purpose of Statutory Instrument 277/2007 Transparency (Directive 2004/109/EC) Regulations 2007, the following sections of this Annual
Report and Form 20-F are deemed to be incorporated into this part of the Directors’ Report2: the Chairman’s Introduction on pages 4 and 5, the
Strategy Review section on pages 8 to 35, the Principal Risks and Uncertainties section on pages 116 to 121, the Business Performance section
on pages 37 to 53, the information on inclusion and diversity on pages 72 and 74, the details of earnings per Ordinary Share in note 12 to the
Consolidated Financial Statements, the details of derivative financial instruments in note 27, the details of the reissue of Treasury Shares in note 29
and the details of employees in note 7.
In order to utilise the “Safe Harbor” provisions of the US Private Securities Litigation Reform Act of 1995, CRH plc (the ‘Company’), and its
subsidiaries (collectively, ‘CRH’ or the ‘Group’) is providing the following cautionary statement.
This document contains certain statements that are, or may be deemed to be, forward-looking statements with respect to the financial condition,
results of operations, business, viability and future performance of CRH and certain of the plans and objectives of CRH including, but not limited to,
the statements under: “Chairman's Introduction,” “Strategy Review - Chief Executive's Review,” "Governance - Directors' Report" and “Strategy
Review - Our Strategy,” in each case regarding the Group's strategy, plans and expectations for future growth and delivery; “Strategy Review - Key
Performance Indicators” with regard to our focus for 2022; "Strategy Review - Sustainability" with regard to our strategies for our sustainability
priorities, our ambitions and targets, and climate-related risks and opportunities; “Business Performance and Segmental Reviews - Finance
Director's Review” with respect to our belief that the Group has sufficient resources to meet its debt obligations and capital and other expenditure
requirements in the short and long terms; “Business Performance and Segmental Reviews” with respect to our expectations regarding economic
activity and fiscal developments in our operating regions, our expectations for the residential, non-residential and infrastructure markets, and our
strategies for individual segments and business lines; “Governance - Safety, Environmental & Social Responsibility Committee Report” with regard
to our environment, social, and governance strategies and priorities; “Governance - Directors' Remuneration Report” with regard to growth
forecasts for the coming years; “Governance - Principal Risks and Uncertainties,” "Strategy Review - Risk Management" and "Supplemental 20-F
and Other Disclosures - Risk Factors" with respect to the potential impact and evolving nature of risk as well as the direction risk may be trending;
and “Supplemental 20-F and Other Disclosures - The Environment and Government Regulations” regarding policy, legal and regulatory
developments that may affect CRH.
These forward-looking statements may generally, but not always, be identified by the use of words such as “will”, “anticipates”, “should”, “could”,
“would”, “targets”, “aims”, “may”, “continues”, “expects”, “is expected to”, “estimates”, “believes”, “intends” or similar expressions. These
forward-looking statements include all matters that are not historical facts or matters of fact at the time of this document.
By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may or
may not occur in the future and reflect the Company’s current expectations and assumptions as to such future events and circumstances that may
not prove accurate. A number of material factors could cause actual results and developments to differ materially from those expressed or implied
by these forward-looking statements, certain of which are beyond our control and which include, among other things: the ongoing COVID-19
pandemic; economic and financial conditions generally in various countries and regions where we operate; the pace of growth in the overall
construction and building materials sector; demand for infrastructure, residential and non-residential construction in our geographic markets;
increased competition and its impact on prices; increases in energy and/or raw materials costs; adverse changes to laws and regulations; approval
or allocation of funding for infrastructure programmes; adverse political developments in various countries and regions; failure to complete or
successfully integrate acquisitions; the effects of climate change and related regulations on our business political stability and economic growth in
relevant areas of the world; wars and acts of terrorism; cyber-attacks or sabotage; and the specific factors identified in the discussions
accompanying such forward-looking statements and in the Principal Risks and Uncertainties included on pages 116 to 121 of the Directors’ Report
and in the Risk Factors included on pages 232 to 240 of this Annual Report and Form 20-F. You are cautioned not to place undue reliance on any
forward-looking statements. These forward-looking statements are made as of the date of this Directors’ Report. The Company expressly disclaims
any obligation or undertaking to publicly update or revise these forward-looking statements other than as required by applicable law.
The forward-looking statements in this Annual Report and Form 20-F do not constitute reports or statements published in compliance with any of
Regulations 4 to 8 and 26 of the Transparency (Directive 2004/109/EC) Regulations 2007.
Location of Information required pursuant to Listing Rule 9.8.4C
Table 52
Listing Rule
Information to be included (i):
LR 9.8.4 (12)
and (13)
Waivers of Dividends Disclosure: The Trustees of the Employee Benefit Trust have elected to waive dividends in respect of certain holdings of CRH
shares. See page 205 to the Consolidated Financial Statements.
(i) No information is required to be disclosed in respect of Listing Rules 9.8.4 (1), (2), (4), (5), (6), (7), (8), (9), (10), (11) and (14).
1. This table contains information which is required to be provided for regulatory purposes.
2. For the purposes of the Company’s Annual Report on Form 20-F as filed with the SEC, the Sustainability Report, and any reference thereto, is explicitly excluded from this Directors’ Report.
112
2021 Annual Report and Form 20-F 113
Directors’ Report - continued
Going Concern
The time period that the Directors have considered
in evaluating the appropriateness of the going
concern basis in preparing the 2021 Consolidated
Financial Statements is a period of at least twelve
months from the date of approval of these financial
statements (the 'period of assessment').
The Group's business activities, together with
the factors likely to affect its future development,
performance and position are set out in the
Strategy Review and in this report on pages 6 to
35 and pages 116 to 121. The financial position
of the Group, its cash flows, liquidity position and
borrowing facilities are described in the Business
Performance Review on pages 36 to 53. In
addition, notes 21 to 25 to the Consolidated
Financial Statements include the Group's
objectives, policies and processes for managing
its capital; its financial risk management objectives;
details of its financial instruments and hedging
activities; and its exposures to credit, currency and
liquidity risks. The Group has considerable financial
resources and a large number of customers
and suppliers across different geographic areas
and industries and the local nature of building
materials means that the Group's products are
not usually shipped cross-border. The level of
cash and liquidity available to the Group including
our ongoing ability to access the debt markets,
the quantum of our liquidity facilities, the absence
of financial covenants associated with our debt
obligations and the continuing maintenance of
strong investment grade credit ratings demonstrate
the significant financial strength and resilience of
the Group. No concerns or material uncertainties
have been identified as part of our assessment.
Having assessed the relevant business risks,
including the climate change risk on page 118,
the Directors believe that the Group is well placed
to manage these risks successfully and they
have a reasonable expectation that CRH plc, and
the Group as a whole, has adequate financial
and other resources to continue in operational
existence for the period of assessment with no
material uncertainties. For this reason, the Directors
continue to adopt the going concern basis in
preparing the Consolidated Financial Statements.
Viability Statement
The viability statement set out on page 35 is
deemed to be incorporated in this section of the
Directors' Report.
Risk Management
and Internal Control1
The Directors confirm that, in addition to the
monitoring carried out by the Audit Committee
under its Terms of Reference, they have
reviewed the effectiveness of the Group’s risk
management and internal control systems up
to and including the date of approval of the
financial statements. This review had regard to all
material controls, including financial, operational
and compliance controls that could affect the
Group’s business.
Directors’ Compliance Statement
It is the policy of the Company to comply
with its relevant obligations (as defined in the
Companies Act 2014). The Directors have
drawn up a compliance policy statement (as
defined in section 225(3)(a) of the Companies
Act 2014) and arrangements and structures
are in place that are, in the Directors’ opinion,
designed to secure material compliance with the
Company’s relevant obligations. The Directors
confirm that these arrangements and structures
were reviewed during the financial year. As
required by Section 225(2) of the Companies
Act 2014, the Directors acknowledge that they
are responsible for the Company’s compliance
with the relevant obligations. In discharging their
responsibilities under Section 225, the Directors
relied on the advice both of persons employed
by the Company and of persons retained by
the Company under contract, who they believe
have the requisite knowledge and experience
to advise the Company on compliance with its
relevant obligations.
Directors’ Remuneration Report
Resolution 3 to be proposed at the 2022 AGM
deals with the 2021 Directors’ Remuneration
Report (excluding the Remuneration Policy
Report), as set out on pages 80 to 109, which
is being presented to shareholders for the
purposes of a non-binding advisory vote in line
with the requirements of Section 1110N(6) of the
Companies Act, 2014.
Resolution 4 to be proposed at the 2022 AGM
deals with the Remuneration Policy, as set out on
pages 88 to 97. The 2022 Directors’ Remuneration
Policy will, if approved, provide the framework for
remuneration decisions made by the Remuneration
Committee. It is the Company’s intention that
this will apply until the 2025 AGM, unless the
Remuneration Committee seeks shareholder
approval for a renewed policy at an earlier date.
Directors' Fees
An ordinary resolution (resolution 5) will be
proposed at the 2022 AGM to increase the limit
of the aggregate fees for non-executive Directors
to €1,200,000. The current limit, approved at
the 2019 AGM, is €1,000,000. The proposed
increase is required as a result of an increase in
the number of non-executive Directors.
Changes to the
Board of Directors
• Ms. C. Dowling was appointed to the Board
with effect from 22 March 2021;
• Ms. H.A. McSharry, Mr. S. Murphy and Ms.
L.J. Riches retired from the Board with effect
from 29 April 2021; and
• Mr. B. Khan was appointed to the Board with
effect from 27 October 2021
Under the Company’s Articles of Association,
co-opted Directors are required to submit
themselves to shareholders for election at
the AGM following their appointment and all
Directors are required to submit themselves
for re-election at intervals of not more than
three years. However, in accordance with the
provisions contained in the UK Corporate
Governance Code, the Board has decided that
all Directors eligible for re-election should retire at
each AGM and offer themselves for re-election.
Auditor
As required under Section 381(1)(b) of the
Companies Act 2014, the AGM agenda includes
a resolution authorising the Directors to fix the
remuneration of the auditor.
Section 383 of the Companies Act 2014 provides
for the automatic re-appointment of the auditor
of an Irish company at a company’s AGM, unless
the auditor has given notice in writing of his
unwillingness to be re-appointed or a resolution
has been passed at that meeting appointing
someone else or providing expressly that the
incumbent auditor shall not be re-appointed. The
auditor, Deloitte Ireland LLP, is willing to continue
in office.
Notwithstanding the provisions of Irish company
law, the Board has decided to provide
shareholders with an opportunity to have a say on
the continuance in office of Deloitte Ireland LLP and
a non-binding resolution has been included on the
agenda for the 2022 AGM for this purpose.
1. For more information in relation to the Group’s risk management and internal control systems, please see the Risk Management and Internal Control section in the Supplemental 20-F and Other
Disclosures section on page 240.
112
2021 Annual Report and Form 20-F 113
Authority to Allot Shares
The Directors require the authority of the
shareholders to allot any unissued Ordinary Share
capital of the Company. Accordingly, an ordinary
resolution will be proposed at the 2022 AGM
(resolution 9) to renew the annual authority for that
purpose. The authority will be for an amount which
represents just under 50% of the issued Ordinary
Share capital as at 2 March 2022. Any allotment
exceeding 33% of the issued Ordinary Share
capital will only be made pursuant to a pre-emptive
issue and no issue of shares will be made which
could effectively alter control of the Company
without prior approval of the Company in General
Meeting.
The Directors have no present intention of making
any issue of shares, other than in connection
with the Group’s share incentive plans and, if
applicable, scrip dividend scheme.
If approved, this authority will expire on the earlier
of the date of the AGM in 2023 or 27 July 2023.
Disapplication of
Pre-emption Rights
Resolutions 10 and 11 are special resolutions
which, if approved by shareholders, will renew
the annual authorities of the Directors to disapply
statutory pre-emption rights in relation to
allotments of Ordinary Shares for cash in certain
circumstances.
Resolution 10 will, if approved, authorise
the Directors to allot Ordinary Shares on a
non-pre-emptive basis and for cash (otherwise
than in connection with a rights issue or similar
pre-emptive issue) up to a maximum nominal
value of €12,386,000. This amount represents
approximately 5% of the issued Ordinary Share
capital as at 2 March 2022, being the latest
practicable date prior to publication of this
document. This resolution will also allow the
Directors to disapply pre-emption rights in order
to accommodate any regulatory restrictions in
certain jurisdictions where the Company might
otherwise wish to undertake a pre-emptive issue.
Resolution 11 will, if approved, afford the
Directors with an additional power to allot
Ordinary Shares on a non-pre-emptive basis
and for cash up to a further 5% of the issued
share capital as at 2 March 2022. The power
conferred by this resolution can be used only
in connection with an acquisition or a specified
capital investment which is announced
contemporaneously with the issue, or which has
taken place in the preceding six-month period
and is disclosed in the announcement of the
issue.
The 5% limits in the disapplication resolutions
include any Treasury Shares reissued by the
Company during the same period.
The Directors confirm that in respect of these
resolutions, they intend to follow the Statement
of Principles updated by the Pre-Emption Group
in that allotments of shares for cash and the
reissue of Treasury Shares on a non-pre-emptive
basis (other than for an open offer or rights issue
to Ordinary Shareholders, the operation of CRH’s
employee share schemes or in connection with
an acquisition or specified capital investment) will
not exceed 7.5% of the issued Ordinary Share
capital within a rolling three-year period without
prior consultation with shareholders.
Transactions in Own Shares
Under the share buyback programme, a total
of 17,829,602 Ordinary Shares, equivalent to
2.2% of the Company’s issued share capital,
were repurchased during 2021, at an average
price of $49.30 per share. 21,000,000 Ordinary
Shares, equivalent to 2.6% of the Company’s
issued share capital were cancelled on
29 December 2021 as part of the Group's
management of its Treasury Share requirements.
As at 2 March 2022, 8,240,813 shares were
held as Treasury Shares, equivalent to 1.06%
of the Ordinary Shares in issue (excluding
Treasury Shares). The Treasury Share balance at
31 December 2021 was 3,476,859, equivalent
to 0.5% of the Ordinary Shares in issue
(2020: 10,087,161 (1.28%)).
During 2021, 3,439,904 (2020: 1,375,338)
Treasury Shares were reissued under the Group’s
employees’ share schemes.
A special resolution will be proposed at the 2022
AGM (resolution 12) to renew the authority of the
Company, or any of its subsidiaries, to purchase
up to 10% of the Company’s Ordinary Shares in
issue at the date of the AGM.
If approved, the minimum price which may be
paid for shares purchased by the Company
shall not be less than the nominal value of the
shares and the maximum price will be 105% of
the higher of the last independent trade in the
Company’s shares (or current independent bid,
if higher) and the average market price of such
shares over the preceding five days. A special
resolution will also be proposed for the purpose
of renewing the authority to set the maximum
and minimum prices at which Treasury Shares
(effectively shares purchased and not cancelled)
may be reissued off-market by the Company.
If granted, both of these authorities will expire
on the earlier of the date of the AGM in 2023
or 27 July 2023. As at 2 March 2022, options
to subscribe for a total of 1,217,351 Ordinary
Shares are outstanding, representing 0.16%
of the issued Ordinary Share capital (excluding
Treasury Shares). If the authority to purchase
Ordinary Shares was used in full, the options
would represent 0.17% of the remaining shares
in issue.
As outlined on page 19, during 2021 the
Group returned a further $0.9 billion of cash
to shareholders under its share buyback
programme. A further buyback tranche of
$0.3 billion is underway and is scheduled to
complete by 30 March 2022.
While no decision has been made to extend the
programme beyond this, the Board believes that
the Company should retain the ability to buyback
its own shares so that it can be used in the best
interests of shareholders generally.
Annual General Meeting
The Notice of Meeting for the 2022 AGM will
be published in March on the CRH website
(www.crh.com) and is expected to be posted to
shareholders on 30 March 2022.
Statement of Directors’
Responsibilities
The Directors as at the date of this report,
whose names are listed on pages 56 to 59, are
responsible for preparing the Annual Report and
Form 20-F and Consolidated Financial Statements
in accordance with applicable laws and regulations.
Irish company law requires the Directors to
prepare financial statements for each financial
year which give a true and fair view of the assets,
liabilities, financial position of the Parent Company
and of the Group, and of the profit or loss of
the Group taken as a whole for that period (the
‘Consolidated Financial Statements’).
In preparing the Consolidated Financial
Statements, the Directors are required to:
• select suitable accounting policies and then
apply them consistently;
• make judgements and estimates that are
reasonable and prudent;
• comply with applicable International Financial
Reporting Standards as adopted by the
European Union, subject to any material
departures disclosed and explained in the
financial statements; and
• prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that the Group will continue in
business
114
2021 Annual Report and Form 20-F 115
Directors’ Report - continued
Each of the Directors confirms that, to the best
of their knowledge and belief, and as required by
the Transparency Regulations,
•
•
the Consolidated Financial Statements,
prepared in accordance with IFRS and
the Parent Company Financial Statements
prepared in accordance with FRS 101, give
a true and fair view of the assets, liabilities,
financial position and profit or loss of the
Group for the financial year ended 31
December 2021; and
the Directors' Report contained on page 110
to 114 of this Annual Report and Form 20-F
includes a fair review of the development
and performance of the business and the
position of the Group and Company, together
with a description of the principal risks and
uncertainties that they face
Each of the Directors also confirm that they
consider that the Annual Report and Form 20-F
and Consolidated Financial Statements, taken
as a whole, is fair, balanced and understandable
and provides the information necessary for
shareholders to assess the Company's position,
performance, business model and strategy
For the purposes of Section 330 of the Companies
Act 2014, each of the Directors also confirms that:
• so far as they are aware, there is no relevant
audit information of which the Company’s
statutory auditor is unaware; and
•
they have taken all the steps that they
ought to have taken as Directors in order
to make themselves aware of any relevant
audit information and to establish that the
Company’s statutory auditor is aware of that
information.
On behalf of the Board,
R. Boucher, A. Manifold
Directors
2 March 2022
The Directors are required by the Transparency
(Directive 2004/109/EC) Regulations 2017 and
the Central Bank (Investment Market Conduct)
Rules 2019 to include a management report
containing a fair review of the development and
performance of the business and the position of
the Parent Company and of the Group taken as
a whole and a description of the principal risks
and uncertainties facing the Group.
The Directors confirm that to the best of their
knowledge they have complied with the above
requirements in preparing the 2021 Annual
Report and Form 20-F and Consolidated
Financial Statements.
The considerations set out above for the Group
are also required to be addressed by the
Directors in preparing the financial statements of
the Parent Company (which are set out on pages
211 to 215), in respect of which the applicable
accounting standards are those which are
generally accepted in Ireland.
The Directors have elected to prepare the
Company Financial Statements in accordance
with Irish law and accounting standards
issued by the Financial Reporting Council
and promulgated by the Institute of Chartered
Accountants in Ireland (Generally Accepted
Accounting Practice in Ireland), including
FRS 101 Reduced Disclosure Framework.
The Directors are responsible for keeping
adequate accounting records which disclose
with reasonable accuracy at any time the
financial position of the Parent Company
and which enable them to ensure that the
Consolidated Financial Statements are prepared
in accordance with applicable International
Financial Reporting Standards as adopted by the
European Union and comply with the provisions
of the Companies Act 2014 and Article 4 of the
IAS Regulation.
The Directors have appointed appropriate
accounting personnel, including a professionally
qualified Finance Director, in order to ensure
that those requirements are met. The books
and accounting records of the Company
are maintained at the Group’s administrative
head offices located at Stonemason’s Way,
Rathfarnham, Dublin 16, Ireland.
The Directors are also responsible for
safeguarding the assets of the Group and hence
for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
114
2021 Annual Report and Form 20-F 115
Cold feed bins at a Gulf Coast plant in Houston, Texas, United States. Gulf Coast is part of the Texas Region in CRH’s Americas Materials Division and provides asphalt/paving, construction
services, industrial and builder’s products to the Southeast Texas region’s growing economy.
116
2021 Annual Report and Form 20-F 117
Principal Risks and Uncertainties
Under Section 327(1)(b) of the Companies Act 2014 and Regulation 5(4)(c)(ii) of the Transparency (Directive 2004/109/EC) Regulations 2007, the Group is
required to give a description of the principal risks and uncertainties which it faces. These risks and uncertainties reflect the international scope of the Group’s
operations and the Group’s decentralised structure. The risks and uncertainties presented below (a broader discussion of which is set out on pages 232 to 240)
are reviewed on an annual basis and represent the principal risks and uncertainties faced by the Group at the time of compilation of the 2021 Annual Report and
Form 20-F. During the course of 2022, new risks and uncertainties may materialise attributable to changes in markets, regulatory environments and other factors
and existing risks and uncertainties may become less relevant.
Link to strategic objective
Continuous
Improvement
Focused
Growth
Benefits of Scale
and Integration
Developing
Future Leaders
Risk considered as part of scenarios modeled in Viability Statement assessment
Principal Strategic Risks and Uncertainties
Industry Cyclicality and Economic Conditions
Description
Impact
How we Manage the Risk
Construction activity, and therefore demand for the
Group’s products, is inherently cyclical as it is
influenced by global and national economic
circumstances, monetary policies, consumer
sentiment and weather conditions. The Group may
also be negatively impacted by unfavourable swings
in fuel and other input costs.
Risk trend:
Failure to predict and plan for cyclical events or
adverse economic conditions could negatively
impact financial performance.
• Market diversification strategies, in addition to
the Group’s multiple end-use sectors
• Constant focus on cash control, strong
cash generation and disciplined financial
management
• Disciplined and focused approach to capital
allocation and reallocation to ensure our
capital is deployed to where we see optimum
opportunity for growth
People Management
Description
Impact
How we Manage the Risk
Existing processes around people management,
such as attracting, retaining and developing people,
leadership succession planning, developing a diverse
and inclusive workforce as well as dealing with
collective representation groups, may not deliver,
inhibiting the Group achieving its strategy.
Risk trend:
Failure to effectively manage talent and plan for
leadership succession could impede the
realisation of strategic objectives.
• Talent management, succession planning and
inclusion & diversity programmes are in place
within operating companies with oversight and
support from Group Human Resources and
Talent Development
• Development interventions are in place including
enterprise-wide leadership development
training, skill building training, coaching &
mentoring programmes, and our Front Line
Leadership Program
• Positive employee and trade/labour union
relations are maintained
116
2021 Annual Report and Form 20-F 117
Commodity Products and Substitution
Description
Impact
How we Manage the Risk
Many of the Group’s products are commodities,
which face strong volume and price competition, and
may be replaced by substitute products which the
Group does not produce. Further, the Group must
maintain strong customer relationships to ensure
changing consumer preferences and approaches to
construction are addressed.
Risk trend:
Portfolio Management
Failure to differentiate and innovate could lead to
market share decline, thus adversely impacting
financial performance.
• Our integrated building solutions focused
business model and a strong focus on
customer service ensures differentiation from
competitors
• Business-led innovation and Research and
Development services aimed at ensuring the
Group aligns its products and services to the
demands of customers
• Robust cost management practices and
innovation in production processes ensure
competitively priced products
Description
Impact
How we Manage the Risk
The Group may engage in acquisition and divestment
activity during the year as part of active portfolio
management which presents risks around due
diligence, execution and integration of assets.
Additionally, the Group may be liable for liabilities of
companies it has acquired or divested.
Risk trend:
Public Policy and Geopolitics
Failure to identify and execute deals in an
efficient manner may limit the Group’s growth
potential and impact financial performance.
• Expertise in identifying and evaluating targets,
conducting due diligence and executing
integration
• Many core markets are fragmented and continue
to offer growth opportunities
• The Group’s detailed due diligence programmes
are supported by external specialists when
necessary
Description
Impact
How we Manage the Risk
Adverse public policy, economic, social and political
situations in any country in which the Group operates
could lead to a fall in demand for the Group’s
products, business interruption, restrictions on
repatriation of earnings or a loss of plant access. The
ongoing geopolitical conflict in Ukraine has
contributed to heightened uncertainty.
Risk trend:
Strategic Mineral Reserves
Changes in these conditions may adversely
affect the Group's people, business, results of
operations, financial condition or prospects.
• Mitigation strategies to protect CRH’s people and
assets are in place in high-risk areas
• Senior management and Board monitoring of
economic indicators and commentaries
• Two-phase budgeting process with prevailing
economic and market forecasts factored in
Description
Impact
How we Manage the Risk
Appropriate reserves are an increasingly scarce
commodity and licences and/or permits required to
enable operation are becoming harder to secure.
There are numerous uncertainties inherent in
reserves estimation and in projecting future rates of
production.
Risk trend:
Failure by the Group to plan for reserve
depletion, or to secure permits, may result in
operation stoppages, adversely impacting
financial performance.
• Planning for reserves enlargement and security
of permits is a key point of focus for materials
businesses
• Robust mine planning for permitted reserves
under the Group’s control ensures that the
lifetime of the mineral reserves is maximised
• The implementation of operational best practice
techniques ensures that the extraction of
minerals is in line with permit requirements, while
minimising the impact of our operations on local
environments
118
2021 Annual Report and Form 20-F 119
Principal Operational Risks and Uncertainties
Climate Change and Policy
Description
Impact
How we Manage the Risk
The impact of climate change may over time affect
the operations and cost base of the Group and the
markets in which the Group operates. This could
include physical risks, such as acute and chronic
changes in weather and/or transitional risks such as
technological development, policy and regulation
change and market and economic responses.
Risk trend:
Should the Group not reduce its greenhouse
gases (GHGs) emissions by its identified targets,
the Group may be subject to increased costs,
adverse financial performance and reputational
damage.
• The Group is working towards delivery of its
ambition for carbon neutrality along the cement
and concrete value chain by 2050, and has
set further carbon reduction targets, details of
which are set out on page 23 of this Annual
Report and Form 20-F
• Operational improvements at plants are focused
on reducing the CO2 footprint of the Group’s
businesses
• For more information please refer to the
Sustainability section on page 20 in this Annual
Report and Form 20-F or to the Group’s
independently assured Sustainability Report,
which is available on www.crh.com
Information Technology and/or Cyber Security
Description
Impact
How we Manage the Risk
The Group is dependent on information and
operational technology systems to support its
business activities. Any significant operational event,
whether caused by external attack, insider threat or
error, could lead to loss of access to systems or
data, adversely impacting business operations.
Security breaches, IT interruptions or data loss
could result in significant business disruption,
loss of production, reputational damage and/or
regulatory penalties. Significant financial costs in
remediation are also likely in a major cyber
security incident.
Risk trend:
• Ongoing strategic and tactical efforts to address
the evolving nature of cyber threats and the
challenges posed, including enhancement of
existing information and cyber security practices
towards best practices for organisational
assets, which include people, processes and
technology
• Ongoing investment and development of risk
management and governance associated with
cyber security and information technology
• Global Information Security Council oversees
cyber risk and strategic matters related to the
implementation and ongoing monitoring of
information security across the Group, focused
on high-impact cyber risks
Health and Safety Performance
Description
Impact
How we Manage the Risk
The Group’s businesses operate in an industry where
health and safety risks are inherently prominent.
Further, the Group is subject to stringent regulations
from a health and safety perspective in the various
jurisdictions in which it operates.
A serious health and safety incident could have a
significant impact on the Group’s operational
and financial performance, as well as the
Group’s reputation.
Risk trend:
• A robust health and safety framework
is implemented throughout the Group’s
operations requiring all employees to complete
formal health and safety training on a regular
basis
• The Group monitors the performance of
its health and safety framework, and takes
immediate and decisive action where
non-adherance is identified
• The development of a strong safety culture is
driven by management and employees at every
level and is a core part of doing business with
integrity. The ambition is to have a culture of
safety and wellness working towards zero harm
across the Group
118
2021 Annual Report and Form 20-F 119
Sustainability and Corporate Social Responsibility
Description
Impact
How we Manage the Risk
The nature of the Group’s activities poses inherent
environmental, social and governance (ESG) risks,
which are also subject to an evolving regulatory
framework and changing societal expectations.
Risk trend:
Failure to embed sustainability principles within
the Group's businesses and strategy may result
in non-compliance with relevant regulations,
standards and best practices and lead to
adverse stakeholder sentiment and reduced
financial performance.
• CRH’s strategy and business model are built
around sustainable, responsible and ethical
performance. CRH aims to positively contribute
to society through the delivery of materials
and products that enhance the sustainability
of structures and consider the needs of our
communities. CRH offers multiple products
and integrated building solutions that enhance
the environmental performance of the built
environment
• Sustainability performance continues to be
subject to rigorous external evaluation. The
Group’s achievements have been recognised
through its inclusion in a variety of leading
global sustainability indices
COVID-19 Pandemic
Description
Impact
How we Manage the Risk
Public health emergencies, epidemics or pandemics,
such as the emergence and spread of the COVID-19
pandemic, have the potential to significantly impact
the Group's operations through a fall in demand for
the Group's products, a reduction in staff availability
and business interruption.
Risk trend:
The emergence and spread of the COVID-19
pandemic has had a material impact across the
construction markets in which the Group
operates. The continued uncertainty around the
global pandemic could have an adverse effect
on the Group's operating results, cash flows,
financial condition and/or prospects.
• Global crisis management structures and
protocols are in place to enable swift decision-
making at times of crisis
• Business continuity management structures
and plans enacted with new working protocols
implemented to safeguard our people and
business
• Consistent contact is maintained with various
government organisations
120
2021 Annual Report and Form 20-F 121
Principal Compliance Risks and Uncertainties
Laws, Regulations and Business Conduct
Description
Impact
How we Manage the Risk
The Group is subject to a wide variety of local and
international laws and regulations (to include those
applicable to it as a listed company) across the many
jurisdictions in which it operates, which vary in
complexity, application and frequency of change.
Further discussion on this risk can be found on page
238.
Risk trend:
Potential breaches of local and international laws
and regulations could result in litigation or
investigations, the imposition of significant fines,
sanctions, adverse operational impact and
reputational damage.
• Robust governance including oversight by
Global Legal and Compliance function and
other relevant Group functions who report to
the Board, Audit Committee and/or SESR
• CRH’s Code of Business Conduct, which is
in effect mandatorily across the Group, and is
available on www.crh.com
• Proactive engagement throughout the Group,
to include, an extensive training programme, a
global speak up programme with a dedicated
whistleblowing hotline (the results of which are
reported to the Audit and SESR Committees),
risk assessments, increased data analytics
and ongoing development of policies and
procedures
Principal Financial and Reporting Risks and Uncertainties
Taxation Charge and Balance Sheet Provisioning
Description
Impact
How we Manage the Risk
The Group is exposed to uncertainties stemming
from governmental actions in respect of taxes paid or
payable in the future in all jurisdictions of operation. In
addition, various assumptions are made in the
computation of the overall tax charge and in balance
sheet provisions which may need to be adjusted over
time.
Risk trend:
Changes in tax regimes or assessment of
additional tax liabilities in future tax audits could
result in incremental tax liabilities which could
have a material adverse effect on cash flows and
the financial results of operations.
• The Group Tax Policy, supporting Tax Guidelines
and SOX controls provide a tax governance
framework operable throughout the Group
• Group Tax is managed by a team of in-house
specialists with significant experience. The
in-house expertise is supplemented by the
assistance of external advisors where required
Financial Instruments
Description
Impact
How we Manage the Risk
The Group uses financial instruments throughout its
businesses giving rise to interest rate and leverage,
foreign currency, counterparty, credit rating and
liquidity risks.
Risk trend:
A downgrade of the Group’s credit ratings may
give rise to increases in future funding costs and
may impair the Group’s ability to raise funds on
acceptable terms. In addition, insolvency of the
financial institutions with which the Group
conducts business may adversely impact the
Group’s financial position.
• The Group seeks to ensure that sufficient
resources are available to meet the Group’s
liabilities as they fall due through a combination
of cash and cash equivalents, cash flows and
undrawn committed bank facilities. Systems
are in place to monitor and control the Group’s
liquidity risks, which are reported to the Board
on a monthly basis. Cash flow forecasting
is provided to executive management on a
weekly basis
• All of the Group’s financial institution
counterparties are leading financial institutions
of international scope with a strong investment
grade credit rating with S&P and/or Moody's
• Please see note 22 to the Consolidated
Financial Statements for further detail
120
2021 Annual Report and Form 20-F 121
Goodwill Impairment
Description
Impact
How we Manage the Risk
Significant under-performance in any of the Group’s
major cash-generating units or the divestment of
businesses in the future may give rise to a material
write-down of goodwill.
While a non-cash item, a material write-down of
goodwill could have a substantial impact on the
Group’s income and equity.
Risk trend:
• Economic indicators of goodwill impairment
are monitored closely through the monthly
reporting process. Detailed impairment testing is
undertaken prior to year end
• The goodwill impairment assessment is subject
to regular review by the Audit Committee
• For further information on how the Group
manages the risk posed by goodwill impairment
and the results of the 2021 impairment
testing process, please refer to note 14 to the
Consolidated Financial Statements on pages 174
to 176
Foreign Currency Translation
Description
Impact
How we Manage the Risk
The principal foreign exchange risks to which the
Consolidated Financial Statements are exposed
pertain to (i) adverse movements in reported results
when translated into the reporting currency; and (ii)
declines in the reporting currency value of net
investments which are denominated in a wide basket
of currencies other than the reporting currency.
Risk trend:
Adverse changes in the exchange rates will
continue to negatively affect retained earnings.
The annual impact is reported in the
Consolidated Statement of Comprehensive
Income.
• The Group changed to US Dollar reporting
currency effective 1 January 2020, in
consideration of the current portfolio and
business mix which has now significantly higher
US Dollar exposure
• The Group’s established policy is to spread its
net worth across the currencies of the various
operations with the objective of limiting its
exposure to individual currencies and thus
promoting consistency with the geographical
balance of its operation
• The Group’s activities are conducted primarily in
the local currency of operation resulting in low
levels of foreign currency transactional risk
The circular economy and demand
for more sustainable forms of
construction are presenting new
value creation opportunities
for CRH as a producer of
high‑performing, climate‑resilient
materials and products for use
throughout the built environment.
2021 Annual Report and Form 20-F 123
Financials
122-215
Independent Auditors’ Reports
124
Consolidated Income Statement 140
Consolidated Statement of
Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement
of Changes in Equity
Consolidated Statement
of Cash Flows
Accounting Policies
Notes on Consolidated
Financial Statements
141
142
143
144
145
155
In 2021 CRH’s business in Slovakia, Hungary and Austria rebranded to Danucem,
A CRH Company, as part of CRH’s brand endorsement strategy which leverages
the strengths of local market brands supported by the endorsement of a leading
international parent company. Danucem is part of CRH’s Europe Materials Division
and a leading supplier of cement, concrete, aggregates and precast elements.
124
124
2021 Annual Report and Form 20-F 125
Independent Auditor’s Irish Report
to the members of CRH plc
Report on the audit of the European Single Electronic Format financial statements (the ‘financial
statements’)
Opinion on the financial statements of CRH plc (the ‘Company’) and its subsidiaries (the ‘Group’)
In our opinion the Group and Company financial statements:
• give a true and fair view of the assets, liabilities and financial position of the Group and Company as at 31 December 2021 and of the profit of the Group for the
financial year then ended; and
• have been properly prepared in accordance with the relevant financial reporting framework and, in particular, with the requirements of the Companies Act 2014
and, as regards the Group financial statements, Article 4 of the IAS Regulation.
The financial statements we have audited comprise:
the Group financial statements:
•
•
•
•
•
•
the Consolidated Income Statement;
the Consolidated Statement of Comprehensive Income;
the Consolidated Balance Sheet;
the Consolidated Statement of Changes in Equity;
the Consolidated Statement of Cash Flows; and
the related notes 1 to 33, including a summary of significant accounting policies as set out at the beginning of the notes.
the Company financial statements:
•
•
•
the Company Balance Sheet;
the Company Statement of Changes in Equity; and
the related notes 1 to 13, including a summary of significant accounting policies as set out in note 2.
The relevant financial reporting framework that has been applied in the preparation of the Group financial statements is the Companies Act 2014 and International
Financial Reporting Standards (IFRS) as adopted by the European Union (“the relevant financial reporting framework”). The relevant financial reporting framework that
has been applied in the preparation of the Company financial statements is the Companies Act 2014 and FRS 101 “Reduced Disclosure Framework” issued by the
Financial Reporting Council (“the relevant financial reporting framework”).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and applicable law. Our responsibilities under those standards
are described below in the “Auditor’s responsibilities for the audit of the financial statements” section of our report.
We are independent of the Group and Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Ireland,
including the Ethical Standard issued by the Irish Auditing and Accounting Supervisory Authority (IAASA), as applied to public interest entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
124
2021 Annual Report and Form 20-F 125
2021 Annual Report and Form 20-F 125
Summary of our audit approach
Key audit matters
The key audit matters that we identified in the current year were:
Materiality
Scoping
•
Intangible assets—assessment of the carrying value of goodwill associated with selected cash generating
units; and
• Revenue recognition for long-term contracts
• Within this report, any new key audit matters are identified with
and any key audit matters which are the
same as the prior year identified with
.
• The Group materiality that we used in the current year was $140 million, which was determined on the basis
of profit before tax as the primary benchmark.
• We structured our approach to the audit to reflect how the Group is organised as well as ensuring our audit
was both effective and risk focused.
• Our scope covered 48 components. Of these, 5 were full-scope audits, covering 82% of Group revenue, 23
were subject to specific procedures on certain account balances by component audit teams or the Group
audit team, and the remaining 20 were subject to substantive analytical procedures performed centrally by the
Group audit team.
Significant changes in our approach
• The key audit matter presented in the prior year relating to the ‘Assessment of the carrying value of property,
plant and equipment (PP&E)’ has been removed based on our audit risk assessment, which included
consideration of the fact that the assessment of the carrying value of PP&E is no longer identified as a
significant risk and of the more stable macroeconomic outlook and business performance in comparison to
the prior year.
• We adopted a different basis to determine materiality in the current year. In the prior year, materiality was
determined on the basis of a composite benchmark approach considering revenue as the primary benchmark
with EBITDA (as defined)*, cash flows from operations and total equity/net assets used as supporting
benchmarks. This year we used profit before tax, which is a focus area of investors and analysts and is the
benchmark traditionally considered for listed entities. Given the future economic outlook, the reduction in
uncertainty arising from COVID-19 and the stability in the performance of the Group, we consider profit before
tax to be an appropriate benchmark in the current year.
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
126
126
2021 Annual Report and Form 20-F 127
Independent Auditor’s Irish Report - continued
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is
appropriate.
Our evaluation of the directors’ assessment of the Group and Company’s ability to continue to adopt the going concern basis of accounting included:
• obtaining an understanding of the Group’s controls over the development and approval of the projections and assumptions used in the cash flow forecasts to
support the going concern assumption and testing the operating effectiveness of these controls;
•
testing the clerical accuracy of the cash flow forecast model;
• performing an assessment of the financing facilities, including the nature of facilities and their maturity profile;
• completing an assessment of the consistency of the models used to prepare the forecasts in line with other areas of our audit, such as the models used in the
assessment of the carrying value of goodwill;
• performing a look back analysis of the historical accuracy of forecasts prepared by management;
• assessing the appropriateness of the sensitivity analysis prepared by management; and
• assessing the adequacy of the disclosures in the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast
significant doubt on the Group and Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are
authorised for issue.
In relation to the Group’s reporting on how they have applied the UK Corporate Governance Code and the Irish Corporate Governance Annex, we have nothing
material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to adopt the
going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current financial year
and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on:
the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of
our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
The key audit matter presented in the prior year relating to the ‘Assessment of the carrying value of PP&E’ has been removed based on our audit risk assessment.
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2021 Annual Report and Form 20-F 127
Intangible assets – assessment of the carrying value of goodwill associated with selected cash
generating units
Key audit matter
description
As described in the accounting policies and note 14, the goodwill balance was $9.5 billion as at 31 December 2021 (2020: $9.0 billion).
The Group did not record an impairment charge during the year.
The Group’s evaluation of the carrying value of goodwill for impairment involves the comparison of the recoverable amount of goodwill of
each cash generating unit (CGU) to its carrying value. The Group used the value-in-use approach, which deploys a discounted cash flow
model to estimate the recoverable amount. This requires management to make significant estimates and assumptions related to discount
rates, short-term forecasts of revenues and margins, and long-term growth rates which drive net cash flows. Changes in these
assumptions could have a significant impact on the recoverable amount, the amount of any goodwill impairment charge, or both.
We focused on CGUs where the recoverable amount exceeded its carrying value by an insignificant amount and on CGUs which had a
significant change in cash flow forecasts compared to the prior year. Based on these procedures we identified certain CGUs of interest
and performed sensitivities on key management estimates and assumptions, with the assistance of our valuation specialists. We
determined that the assessment of the carrying value of goodwill of one selected CGU was a key audit matter because it required a high
degree of auditor judgement and an increased extent of effort when performing audit procedures to evaluate the reasonableness of
management’s estimates and assumptions related to short-term forecasts of revenues and long-term growth rates.
The Audit Committee discussion of this key audit matter is set out on page 68.
How the scope of our
audit responded to
the key audit matter
Our audit procedures related to the short-term forecasts of revenues and long-term growth rates of one CGU, as described above, used
by management to estimate the recoverable amount of the selected CGU included the following, among others:
• We tested the operating effectiveness of controls over management’s determination of the short-term forecasts of revenues and
long-term growth rates used to determine the recoverable amount of the selected CGU.
• We agreed the underlying cash flow forecasts to the Board approved projections and we evaluated management’s ability to accurately
forecast future revenues by:
• performing a look-back analysis and comparing actual results to management’s historical forecasts;
• assessing the reasonableness of the impact of macroeconomic activity on short-term cash flows;
• benchmarking management’s forecasts against independent third-party economic and industry projections; and
• comparing internal Group communications to management and the Board against the cash flow forecasts to evaluate for
consistency.
• We compared the long-term growth rates, used by management to grow cash flows from year 5 to year 10 in order to calculate a
terminal value at that point, to independent external sources and developed our own range to assess the reasonableness of these
rates.
• We compared the actual results for the year ended 31 December 2021 to management’s forecasts at the date of the annual
impairment test to determine if any indicators of impairment existed.
Key observations
Based on the procedures performed, we have determined management’s assumptions used in the assessment of the carrying value of
goodwill associated with selected CGUs to be reasonable.
We concluded that the related disclosures provided in the Group Financial Statements are appropriate.
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2021 Annual Report and Form 20-F 129
Independent Auditor’s Irish Report - continued
Revenue recognition for long-term contracts
Key audit matter
description
As described in the accounting policies and note 1, the Group’s revenues derived from long-term contracts accounted for 22%
($6.9 billion) of the total revenue in 2021 (2020: $6.2 billion).
The Group recognises long-term contract revenue over the contract term as the work progresses because transfer of control and the
fulfillment of performance obligations to the customer is continuous. The percentage-of-completion method is used to recognise revenue
and is calculated based on the proportion of the contract costs incurred at the balance sheet date relative to the total estimated costs of
the contract. The accounting for these contracts involves judgement, particularly as it relates to the process of estimating total costs.
We identified revenue recognition for long-term contracts as a key audit matter because of the judgements made by management to
estimate total costs for the performance obligations used to recognise revenue for certain long-term contracts in certain components. This
required extensive audit effort due to the complexity of long-term contracts and required a high degree of auditor judgement when
performing audit procedures to audit management’s estimates of total costs and evaluating the results of those procedures.
The Audit Committee discussion of this key audit matter is set out on page 68.
How the scope of our
audit responded to
the key audit matter
Our audit procedures related to management’s estimates of total costs for the performance obligations used to recognise revenue for
certain long-term contracts in selected components included the following, among others:
• We tested the operating effectiveness of controls over long-term contract revenue, including management’s controls over the
estimates of total costs for performance obligations.
• We selected a sample of long-term contracts and:
• evaluated whether the contracts were properly included in management’s calculation of long-term contract revenue based on the
terms and conditions of each contract, including whether continuous transfer of control to the customer occurred as progress was
made toward fulfilling the performance obligation;
•
tested the accuracy and completeness of the costs incurred to date for the performance obligation to supporting documentation;
• evaluated the estimates of total cost for the performance obligation by:
• comparing costs incurred to date to the costs management estimated, at either the inception of the contract or the start of the
reporting period, to be incurred to date;
• evaluating management’s ability to accurately estimate the total cost by performing corroborating inquiries with the Group’s
project managers and engineers, and comparing the estimates to management’s work plans, engineering specifications, and
supplier contracts; and
• comparing management’s estimates for the selected contracts to costs of similar performance obligations, when applicable.
•
tested the mathematical accuracy of management’s calculation of revenue for the performance obligation.
• We evaluated management’s ability to estimate total costs accurately by comparing actual costs to management’s historical estimates
for performance obligations that have been fulfilled.
Key observations
Based on the procedures performed, we are satisfied that management’s estimated percentage-of-completion at the balance sheet date
is appropriate and reasonable when assessed against our own independent expectations and our assessment of the accuracy of historical
estimates against actual costs.
Our audit procedures relating to these matters were designed in the context of our audit of the financial statements as a whole, and not to express an opinion on
individual accounts or disclosures. Our opinion on the financial statements is not modified with respect to any of the risks described above, and we do not express an
opinion on these individual matters.
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Our application of materiality
Materiality
We define materiality as the magnitude of misstatement that makes it probable that the economic decisions of a reasonably knowledgeable person, relying on the
financial statements, would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements
Company financial statements
Materiality
$140 million (2020: $110 million)
$103 million (2020: $94 million)
Basis for
determining
materiality
The materiality that we used for the Group financial
statements was determined on the basis of profit before tax
and represents 4.19% of that metric.
The materiality that we used for the Company financial statements was
determined on the basis of total equity/net assets and represents
approximately 1% of that metric.
Rationale for the
benchmark
applied
We adopted a different basis to determine materiality in the
current year. In the prior year materiality was determined on
the basis of a composite benchmark approach considering
revenue as the primary benchmark with EBITDA (as
defined)*, cash flows from operations and total equity/net
assets used as supporting benchmarks.
Given the future economic outlook, the reduction in
uncertainty arising from COVID-19 and the stability in the
performance of the Group, we consider profit before tax to
be an appropriate benchmark in the current year.
We conducted an assessment to determine the financial
statement items of most importance to investors and
analysts by reading analyst reports and CRH’s
communication to shareholders. This resulted in us selecting
profit before tax as the most appropriate benchmark.
Moreover, profit before tax is traditionally considered the
most appropriate benchmark for listed entities. Group
materiality represents:
Metric
PBT
%
4.19%
EBITDA (as defined*)
2.62%
Revenue
0.45%
The Company holds the Group’s investments and is not in itself profit-
oriented. The strength of the balance sheet is the key measure of financial
health that is important to shareholders since the primary concern for the
Company is the payment of dividends. Using a benchmark of equity/net
assets is therefore the appropriate metric.
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
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Independent Auditor’s Irish Report - continued
Profit before tax
$3,342 million
Profit before tax
Materiality
Materiality $140 million
Component materiality
range $100 million to
$40 million
Audit Committee
reporting threshold
$7 million
Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected misstatements exceed the
materiality for the financial statements. Performance materiality was set at 80% of each of Group and Company materiality for the 2021 audit (2020: 75%). In the prior
year, a lower level of performance materiality was set due to the fact that it was the first year of our audit tenure and due to the effects of the COVID-19 pandemic. In
determining the current year performance materiality, we considered the following factors:
a. our risk assessment, including our assessment of the Group’s overall control environment and that we consider it appropriate to rely on controls over a number of
business processes;
b. our experience from the prior year audit; and
c.
the level of corrected and uncorrected misstatements identified in the prior period.
Error reporting threshold
We agreed with the Audit Committee that we would report to them any audit differences in excess of $7 million (2020: $5.5 million), as well as differences below that
threshold which, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters that we identified when
assessing the overall presentation of the financial statements.
An overview of the scope of our audit
Identification and scoping of components
• The Group consists of three operating and reporting segments and is highly decentralised in nature, with a presence across 28 countries and over 3,200 operating
entities. As a result a significant portion of audit planning time was spent to ensure that the scope of our work is appropriate to address the Group’s identified risks
of material misstatement.
•
In-scope locations were identified based on their contribution to the applicable benchmarks i.e. revenue, total assets and profit before tax.
• We focused our Group audit scope primarily on the audit of 5 components which were subject to a full audit and 43 components which were subject to specified
audit procedures where the extent of our testing was based on our assessment of the associated risks of material misstatement and of the materiality of the
components operations to the Group. 23 components were subject to specific procedures on certain account balances by component audit teams or the Group
audit team, and the remaining 20 were subject to substantive analytical procedures performed centrally by the Group audit team.
• Data analytics were performed centrally and used extensively in selecting the components and addressing the residual entities which were not in-scope based on
the considerations listed. In addition, we analysed disaggregated financial data related to residual entities not subject to full or specified scope audit procedures in
order to identify any unusual movements or relationships.
• Our audit work for all components were executed at levels of materiality applicable to each individual component which were lower than Group materiality and
ranged from $40 million to $100 million.
Working with other auditors
The Group audit team planned its site visits to component auditors based on a variety of factors including size of entity and number of significant risks. Oversight and
guidance is provided to the component auditors through a combination of:
•
issuance of Group referral instructions;
• upfront team briefings to all component teams;
•
•
site visits (physically, where possible and if not virtually); and
risk assessment discussions and detailed workpaper reviews.
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2021 Annual Report and Form 20-F 131
These are designed so that the Lead Audit Partner or a senior member of the Group audit team visits all key locations across the Group. In addition we assess the
competence of our component auditors.
A combination of physical, where possible, and virtual site visits were performed at key locations during the year.
We held regular meetings with management at a regional and Group level in order to update our understanding of the Group and its environment on an ongoing basis.
PBT
Revenue
Total Assets
10%
Residual
13%
Scope C
4%
Scope B
6%
Residual
10%
Scope C
2%
Scope B
73%
Scope A
6%
Residual
8%
Scope C
13%
Scope B
82%
Scope A
73%
Scope A
We classify components according to the following scoping categories:
1) Scope A – Full scope integrated audit procedures have been performed by local audit teams to a component materiality. These are financially significant to the
Group and include risks relevant to the Group audit.
2) Scope B – Specified integrated audit procedures on prescribed balances and specific controls have been performed by component teams or the Group audit team
to component materiality. Scope B also contains Risks of Material Misstatements and associated procedures performed at Group level. The Scope B entities are
not individually financially significant to the Group.
3) Scope C – Defined audit procedures consisting of focused risk assessments and analytical reviews have been performed by the Group audit team. The Scope C
entities are not individually financially significant to the Group.
4) Residual – As Risks of Material Misstatements have been determined to be remote for components and balances included in the residual, the Group engagement
team performs analytical procedures, which are not substantive in nature, to determine whether the audit risk has been reduced to an acceptable level.
Our consideration of climate-related risks
In planning our audit, we have considered the potential impacts of the climate-related risks identified by management on the Group’s business and its financial
statements.
The Group has set out their 2025 carbon reduction targets in their sustainability review on page 21. The Group have also identified climate change and policy as part of
their principal operational risks and uncertainties on page 118. They have set out the potential impacts of their physical risks and transitional risks on their business on
page 118 and their Taxonomy eligible economic activities on page 243.
As part of our audit, we have obtained management’s climate-related risk assessment and made inquiries of management to understand their process for considering
the impact of climate-related risks. The Group reflected the impact of stated 2025 carbon reduction targets on assumptions used in setting key estimates recorded in
the financial statements in accordance with IFRS requirements.
We have performed our own risk assessment of the potential impact of the 2025 carbon reduction climate targets outlined by the Group and how they may affect
judgements and estimates included in the financial statements. The main climate-related implications considered as part of our audit relate to the impact of climate
change on cash flow projections underlying intangible assets. These projections include assumptions on costs of carbon and future climate-related capital expenditure
required to meet the 2025 carbon reduction targets. Our audit procedures were performed with the involvement of our sustainability and valuation specialists. We also
challenged how the directors considered climate change in their assessment of going concern and viability.
We assessed if the assumptions used by management in the financial statements were consistent with their 2025 carbon reduction targets and as set out in their
accounting policies, on pages 145 to 154. In early 2022, the Group adopted a new target of a 25% reduction in CO2 emissions (Scope 1 and Scope 2) by 2030
compared to 2020 levels and we considered management’s disclosure as set out on page 145.
We have also read the Group’s disclosure of climate-related information in the front half of the annual report, including the TCFD disclosures listed on pages 28 to 31.
Other information
The other information comprises the information included in the Annual Report and Form 20-F, other than the financial statements and our auditor’s report thereon.
The directors are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon.
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Independent Auditor’s Irish Report - continued
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we
are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the Statement of Directors’ Responsibilities, the directors are responsible for the preparation of the financial statements and for being
satisfied that they give a true and fair view and otherwise comply with the Companies Act 2014, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group and Company’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group and Company or
to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or
error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs (Ireland), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Group and Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the Group and Company’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor’s report. However, future
events or conditions may cause the entity (or where relevant, the Group) to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the business activities within the Group to express an opinion on the consolidated
financial statements. The Group auditor is responsible for the direction, supervision and performance of the Group audit. The Group auditor remains solely
responsible for the audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that the auditor identifies during the audit.
For listed entities and public interest entities, the auditor also provides those charged with governance with a statement that the auditor has complied with relevant
ethical requirements regarding independence, including the Ethical Standard for Auditors (Ireland), and communicates with them all relationships and other matters that
may reasonably be thought to bear on the auditor’s independence, and where applicable, related safeguards.
Where the auditor is required to report on key audit matters, from the matters communicated with those charged with governance, the auditor determines those
matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. The auditor describes these
matters in the auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, the auditor determines
that a matter should not be communicated in the auditor’s report because the adverse consequences of doing so would reasonably be expected to outweigh the
public interest benefits of such communication.
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2021 Annual Report and Form 20-F 133
Report on other legal and regulatory requirements
Opinion on other matters prescribed by the Companies Act 2014
Based solely on the work undertaken in the course of the audit, we report that:
• We have obtained all the information and explanations which we consider necessary for the purposes of our audit.
•
In our opinion the accounting records of the Company were sufficient to permit the financial statements to be readily and properly audited.
• The Company Balance Sheet is in agreement with the accounting records.
•
In our opinion the information given in those parts of the directors’ report as specified for our review is consistent with the financial statements and the directors’
report has been prepared in accordance with the Companies Act 2014.
Corporate Governance Statement required by the Companies Act 2014
We report, in relation to information given in the Corporate Governance Statement on pages 60 to 79 that:
•
•
•
In our opinion, based on the work undertaken during the course of the audit, the information given in the Corporate Governance Statement pursuant to subsections
2(c) and (d) of section 1373 of the Companies Act 2014 is consistent with the Group’s statutory financial statements in respect of the financial year concerned and
such information has been prepared in accordance with the Companies Act 2014. Based on our knowledge and understanding of the Group and its environment
obtained in the course of the audit, we have not identified any material misstatements in this information.
In our opinion, based on the work undertaken during the course of the audit, the Corporate Governance Statement contains the information required by Regulation
6(2) of the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) Regulations 2017; and
In our opinion, based on the work undertaken during the course of the audit, the information required pursuant to section 1373(2)(a),(b),(e) and (f) of the Companies
Act 2014 is contained in the Corporate Governance Statement.
Corporate Governance Statement
The Listing Rules and ISAs (Ireland) require us to review the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance Code and Irish Corporate Governance Annex specified
for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially
consistent with the financial statements and our knowledge obtained during the audit:
•
•
•
•
•
•
the directors’ statement with regards the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out on
page 112;
the directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the period is appropriate set out on page 112;
the directors’ statement on fair, balanced and understandable set out on page 114;
the board’s confirmation that it has carried out a robust assessment of the emerging and principal risks and the disclosures in the annual report that describe the
principal risks and the procedures in place to identify emerging risks and an explanation of how they are being managed or mitigated set out on pages 116 to 121.
the section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on page 112;
the section describing the work of the Audit Committee set out on pages 64 to 69.
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Independent Auditor’s Irish Report - continued
Matters on which we are required to report by exception
Based on the knowledge and understanding of the Group and the Company and its environment obtained in the course of the audit, we have not identified material
misstatements in the directors’ report.
The Companies Act 2014 also requires us to report to you if, in our opinion, the Company has not provided the information required by Regulation 5(2) to 5(7) of the
European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) Regulations 2017 (as amended) for the 31 December
2021 financial year. We have nothing to report in this regard.
The Companies Act 2014 also requires us to report to you if, in our opinion, the Company has not provided the information required by Section 1110N in relation to its
remuneration report. We have nothing to report in this regard.
We have nothing to report in respect of the provisions in the Companies Act 2014 which require us to report to you if, in our opinion, the disclosures of directors’
remuneration and transactions specified by law are not made.
The Listing Rules of the Euronext Dublin require us to review six specified elements of disclosures in the report to shareholders by the Board of Directors’ remuneration
committee. We have nothing to report in this regard.
Other matters which we are required to address
We were appointed by the shareholders of CRH plc on 23 April 2020 to audit the financial statements for the financial year ended 31 December 2020 and subsequent
financial years. The period of total uninterrupted engagement of the firm is 2 years, covering the financial years ending 31 December 2020 and 31 December 2021.
The non-audit services prohibited by IAASA’s Ethical Standard were not provided and we remained independent of the Group in conducting the audit.
Our audit opinion is consistent with the additional report to the Audit Committee we are required to provide in accordance with ISA (Ireland) 260.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Section 391 of the Companies Act 2014. Our audit work has been undertaken
so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Richard Muschamp
For and on behalf of Deloitte Ireland LLP
Chartered Accountants and Statutory Audit Firm
Deloitte & Touche House, Earlsfort Terrace, Dublin 2
2 March 2022
Notes: An audit does not provide assurance on the maintenance and integrity of the website, including controls used to achieve this, and in particular on whether any
changes may have occurred to the financial statements since first published. These matters are the responsibility of the directors but no control procedures can
provide absolute assurance in this area.
Legislation in Ireland governing the preparation and dissemination of financial statements differs from legislation in other jurisdictions.
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2021 Annual Report and Form 20-F 135
Independent Auditor’s US Reports
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of CRH public limited company (CRH plc)
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of CRH plc and subsidiaries (the ‘Company’) as at 31 December 2021 and 2020, the related
consolidated income statements and consolidated statements of comprehensive income, changes in equity and cash flows, for each of the two years in the period
ended 31 December 2021, and the related notes (collectively referred to as the ‘financial statements’). In our opinion, the financial statements present fairly, in all
material respects, the consolidated financial position of the Company as at 31 December 2021 and 2020, and the consolidated results of its operations and its cash
flows for each of the two years in the period ended 31 December 2021, in conformity with International Financial Reporting Standards as issued by the International
Accounting Standards Board.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control
over financial reporting as at 31 December 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission and our report dated 2 March 2022, expressed an unqualified opinion on the Company’s internal control over
financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements
based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to
assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that
our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be
communicated to the Audit Committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially
challenging, subjective, or complex judgements. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as
a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures
to which they relate.
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Intangible Assets – Assessment of the carrying value of goodwill associated with selected cash generating
units – Refer to accounting policies and note 14 to the financial statements
Critical Audit Matter Description
The goodwill balance was $9.5 billion as at 31 December 2021. The Company did not record an impairment charge during the year.
The Company’s evaluation of the carrying value of goodwill for impairment involves the comparison of the recoverable amount of goodwill of each cash generating unit
(CGU) to its carrying value. The Company used the value-in-use approach, which deploys a discounted cash flow model to estimate the recoverable amount. This
requires management to make significant estimates and assumptions related to discount rates, short-term forecasts of revenues and margins, and long-term growth
rates which drive net cash flows. Changes in these assumptions could have a significant impact on the recoverable amount, the amount of any goodwill impairment
charge, or both.
We focused on CGUs where the recoverable amount exceeded its carrying value by an insignificant amount and on CGUs which had a significant change in cash flow
forecasts compared to the prior year. Based on these procedures we identified certain CGUs of interest and performed sensitivities on key management estimates and
assumptions, which included the assistance of our valuation specialists.
We determined that the assessment of the carrying value of goodwill of one selected CGU was a critical audit matter because it required a high degree of auditor
judgement and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to
short-term forecasts of revenues and long-term growth rates.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the short-term forecasts of revenues and long-term growth rates of one CGU, as described above, used by management to estimate
the recoverable amount of the selected CGU included the following, among others:
• We tested the operating effectiveness of controls over management’s determination of the short-term forecasts of revenues and long-term growth rates used to
determine the recoverable amount of the selected CGU.
• We agreed the underlying cash flow forecasts to the Board approved projections and we evaluated management’s ability to accurately forecast future revenues by:
• performing a look-back analysis and comparing actual results to management’s historical forecasts;
• assessing the reasonableness of the impact of macroeconomic activity on short-term cash flows;
• benchmarking management’s forecasts against independent third-party economic and industry projections; and
• comparing internal Company communications to management and the Board against the cash flow forecasts to evaluate for consistency.
• We compared the long-term growth rates, used by management to grow cash flows from year 5 to year 10 in order to calculate a terminal value at that point, to
independent external sources and developed our own range to assess the reasonableness of these rates.
• We compared the actual results for the year ended 31 December 2021 to management’s forecasts at the date of the annual impairment test to determine if any
indicators of impairment existed.
136
2021 Annual Report and Form 20-F 137
2021 Annual Report and Form 20-F 137
Revenue recognition for long-term contracts – Refer to accounting policies and note 1 to the financial
statements
Critical Audit Matter Description
The Company’s revenues derived from long-term contracts accounted for 22% ($6.9 billion) of the total revenue in 2021.
The Company recognises long-term contract revenue over the contract term as the work progresses because transfer of control and the fulfillment of performance
obligations to the customer is continuous. The percentage-of-completion method is used to recognise revenue and is calculated based on the proportion of the
contract costs incurred at the balance sheet date relative to the total estimated costs of the contract. The accounting for these contracts involves judgement,
particularly as it relates to the process of estimating total costs.
We identified revenue recognition for long-term contracts as a critical audit matter because of the judgements made by management to estimate total costs for the
performance obligations used to recognise revenue for certain long-term contracts in certain components. This required extensive audit effort due to the complexity of
long-term contracts and required a high degree of auditor judgement when performing audit procedures to audit management’s estimates of total costs and evaluating
the results of those procedures.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to management’s estimates of total costs for the performance obligations used to recognise revenue for certain long-term contracts in
selected components included the following, among others:
• We tested the operating effectiveness of controls over long-term contract revenue, including management’s controls over the estimates of total costs for
performance obligations.
• We selected a sample of long-term contracts and:
• evaluated whether the contracts were properly included in management’s calculation of long-term contract revenue based on the terms and conditions of each
contract, including whether continuous transfer of control to the customer occurred as progress was made toward fulfilling the performance obligation;
•
tested the accuracy and completeness of the costs incurred to date for the performance obligation to supporting documentation;
• evaluated the estimates of total cost for the performance obligation by:
•
•
•
comparing costs incurred to date to the costs management estimated, at either the inception of the contract or the start of the reporting period, to be
incurred to date;
evaluating management’s ability to accurately estimate the total cost by performing corroborating inquiries with the Company’s project managers and
engineers, and comparing the estimates to management’s work plans, engineering specifications, and supplier contracts; and
comparing management’s estimates for the selected contracts to costs of similar performance obligations, when applicable.
•
tested the mathematical accuracy of management’s calculation of revenue for the performance obligation.
• We evaluated management’s ability to estimate total costs accurately by comparing actual costs to management’s historical estimates for performance obligations
that have been fulfilled.
/s/ Deloitte Ireland LLP
Dublin, Ireland
2 March 2022
The first accounting period we audited was 31 December 2020. In 2019, we began preparing for audit firm transition.
138
138
2021 Annual Report and Form 20-F 139
Independent Auditor’s US Reports - continued
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of CRH public limited company (CRH plc).
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of CRH plc and subsidiaries (the ‘Company’) as at 31 December 2021, based on criteria established in
Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the
Company maintained, in all material respects, effective internal control over financial reporting as at 31 December 2021, based on criteria established in Internal Control
– Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance
sheets of CRH plc as at 31 December 2021 and 2020, the related consolidated income statements and consolidated statements of comprehensive income, changes
in equity and cash flows for each of the two years in the period ended 31 December 2021, and the related notes (collectively referred to as the ‘financial statements’) of
the Company and our report dated 2 March 2022, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying management’s report on internal control over financial reporting. Our responsibility is to express an
opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to
be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for
our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial
reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
/s/ Deloitte Ireland LLP
Dublin, Ireland
2 March 2022
138
2021 Annual Report and Form 20-F 139
2021 Annual Report and Form 20-F 139
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of CRH public limited company (CRH plc).
Opinion on the Financial Statements
We have audited the accompanying Consolidated Income Statement and Consolidated Statement of Comprehensive Income, Changes in Equity and Cash Flows of
CRH plc (the ‘Company’) for the year ended 31 December 2019, and related notes (collectively referred to as the ‘financial statements’). In our opinion, the financial
statements present fairly, in all material aspects, the consolidated results of its operations and its cash flows for the year ended 31 December 2019, in conformity with
International Financial Reporting Standards as issued by the International Accounting Standards Board.
Change in Presentation Currency
As discussed in the Accounting Policies to the consolidated financial statements, the Company has elected to change its presentation currency from euro to US Dollar
as of 1 January 2020.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements
based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be
independent with respect to the Company in accordance with the US federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks
of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a
reasonable basis for our opinion.
/s/ Ernst & Young Chartered Accountants
We served as the Company’s auditor from 1988 to 2019.
Dublin, Ireland
27 February 2020, except for the effects of the change in presentation currency discussed in the Accounting Policies to the consolidated financial statements, as to
which the date is 3 March 2021
Note that the report set out above is included for the purposes of CRH plc’s Annual Report on Form 20-F for 2021 only and does not form part of CRH plc’s Annual
Report and Form 20-F for 2019.
140
140
2021 Annual Report and Form 20-F 141
Consolidated Income Statement
for the financial year ended 31 December 2021
Notes
1,2
4
Revenue
Cost of sales
Gross profit
4
Operating costs
2,5,7
Group operating profit
2,6
Profit/(loss) on disposals
Profit before finance costs
Finance costs
Finance income
Other financial expense
Share of equity accounted investments’ profit/(loss)
Profit before tax from continuing operations
9
9
9
2
2
10
Income tax expense
Group profit for the financial year from continuing operations
3
Profit after tax for the financial year from discontinued operations
2021
$m
2020
$m
2019
$m
30,981
27,587
28,132
(20,493)
(18,425)
(18,859)
10,488
(6,903)
9,162
9,273
(6,899)
(6,480)
3,585
119
3,704
(311)
-
(106)
55
3,342
(721)
2,621
-
2,263
9
2,272
(389)
-
(101)
(118)
1,664
(499)
1,165
-
2,793
(189)
2,604
(387)
22
(125)
67
2,181
(534)
1,647
91
Group profit for the financial year
2,621
1,165
1,738
Profit attributable to:
Equity holders of the Company
From continuing operations
From discontinued operations
Non-controlling interests
From continuing operations
From discontinued operations
Group profit for the financial year
Basic earnings per Ordinary Share
Diluted earnings per Ordinary Share
Basic earnings per Ordinary Share from continuing operations
Diluted earnings per Ordinary Share from continuing operations
12
12
12
12
2,565
1,122
1,627
-
56
-
-
43
-
90
20
1
2,621
1,165
1,738
328.8c
326.0c
328.8c
326.0c
142.9c
141.8c
142.9c
141.8c
214.3c
212.6c
203.0c
201.4c
140
2021 Annual Report and Form 20-F 141
2021 Annual Report and Form 20-F 141
Consolidated Statement of Comprehensive Income
for the financial year ended 31 December 2021
2021
$m
2020
$m
2019
$m
Notes
25
10
28
10
Group profit for the financial year
2,621
1,165
1,738
Other comprehensive income
Items that may be reclassified to profit or loss in subsequent years:
Currency translation effects
Gains relating to cash flow hedges
Tax relating to cash flow hedges
Items that will not be reclassified to profit or loss in subsequent years:
Remeasurement of retirement benefit obligations
Tax relating to retirement benefit obligations
(338)
440
34
(8)
7
-
(312)
447
264
(36)
228
(33)
11
(22)
472
27
(4)
495
(19)
(4)
(23)
Total other comprehensive income for the financial year
(84)
425
472
Total comprehensive income for the financial year
2,537
1,590
2,210
Attributable to:
Equity holders of the Company
Non-controlling interests
Total comprehensive income for the financial year
2,516
1,515
2,174
21
75
36
2,537
1,590
2,210
142
142
2021 Annual Report and Form 20-F 143
Consolidated Balance Sheet
as at 31 December 2021
2021
$m
2020
$m
Notes
13
14
15
15
17
28
25
27
16
17
25
23
29
29
29
29
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Investments accounted for using the equity method
Other financial assets
Other receivables
Retirement benefit assets
Derivative financial instruments
Deferred income tax assets
Total non-current assets
Current assets
Inventories
Trade and other receivables
Current income tax recoverable
Derivative financial instruments
Cash and cash equivalents
Total current assets
Total assets
EQUITY
Capital and reserves attributable to the Company’s equity holders
Equity share capital
Preference share capital
Share premium account
Treasury Shares and own shares
Other reserves
Foreign currency translation reserve
Retained income
Capital and reserves attributable to the Company’s equity holders
31
Non-controlling interests
Total equity
20
24
25
27
18
28
26
20
18
24
25
26
LIABILITIES
Non-current liabilities
Lease liabilities
Interest-bearing loans and borrowings
Derivative financial instruments
Deferred income tax liabilities
Other payables
Retirement benefit obligations
Provisions for liabilities
Total non-current liabilities
Current liabilities
Lease liabilities
Trade and other payables
Current income tax liabilities
Interest-bearing loans and borrowings
Derivative financial instruments
Provisions for liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
R. Boucher, A. Manifold, Directors
19,502
9,848
653
12
239
166
97
109
30,626
3,611
4,569
42
39
5,783
14,044
44,670
309
1
-
(195)
445
(97)
19,770
20,233
681
20,914
1,374
9,938
-
2,734
717
475
937
16,175
297
5,692
550
549
14
479
7,581
23,756
44,670
19,317
9,373
626
13
325
-
184
129
29,967
3,117
4,086
36
17
7,721
14,977
44,944
333
1
7,493
(386)
444
206
11,565
19,656
692
20,348
1,339
10,958
1
2,613
711
556
953
17,131
296
4,792
619
1,257
12
489
7,465
24,596
44,944
142
2021 Annual Report and Form 20-F 143
2021 Annual Report and Form 20-F 143
Consolidated Statement of Changes in Equity
for the financial year ended 31 December 2021
Attributable to the equity holders of the Company
Issued
share
capital
$m
Share
premium
account
$m
Treasury
Shares/
own
shares
$m
Other
reserves
$m
Foreign
currency
translation
reserve
$m
Retained
income
$m
Non-
controlling
interests
$m
Total
$m
Total
equity
$m
Notes
At 1 January 2021
Group profit for the financial year
Other comprehensive income
Total comprehensive income
8 Share-based payment expense
29 Shares acquired by CRH plc (Treasury Shares)
29 Treasury Shares/own shares reissued
29 Shares acquired by Employee Benefit Trust (own shares)
29 Shares distributed under the Performance Share Plan Awards
29 Reduction in Share Premium
29 Cancellation of Income Shares
29 Cancellation of Treasury Shares
10 Tax relating to share-based payment expense
Share option exercises
11 Dividends
At 31 December 2021
for the financial year ended 31 December 2020
At 1 January 2020
Group profit for the financial year
Other comprehensive income
Total comprehensive income
8 Share-based payment expense
29 Shares acquired by CRH plc (Treasury Shares)
29 Treasury Shares/own shares reissued
29 Shares acquired by Employee Benefit Trust (own shares)
29 Shares distributed under the Performance Share Plan Awards
29 Cancellation of Treasury Shares
10 Tax relating to share-based payment expense
Share option exercises
11 Dividends
6 Disposal of non-controlling interests
Transactions involving non-controlling interests
334
7,493
(386)
444
206 11,565
19,656
692 20,348
-
-
-
-
-
-
-
-
-
(16)
(8)
-
-
-
310
-
-
-
-
-
-
-
-
(7,493)
-
-
-
-
-
-
-
-
-
-
(880)
19
(16)
117
-
-
951
-
-
-
(195)
-
-
-
110
-
-
-
(117)
-
-
8
-
-
-
445
-
(303)
(303)
-
-
-
-
-
-
-
-
-
-
-
2,565
254
2,819
-
(281)
(19)
-
-
7,493
16
(951)
24
13
(909)
2,565
(49)
2,516
110
(1,161)
-
(16)
-
-
-
-
24
13
(909)
56 2,621
(84)
(35)
21 2,537
-
110
- (1,161)
-
-
(16)
-
-
-
-
-
-
-
-
-
24
-
13
-
(941)
(32)
(97) 19,770
20,233
681 20,914
336
7,493
(360)
411
(202) 11,350
19,028
607 19,635
-
-
-
-
-
-
-
-
(2)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(220)
8
(29)
65
150
-
-
-
-
-
-
-
-
96
-
-
-
(65)
2
-
-
-
-
-
-
408
408
1,122
(15)
1,107
1,122
393
1,515
-
-
-
-
-
-
-
-
-
-
-
-
-
(8)
-
-
(150)
1
6
(710)
-
(31)
96
(220)
-
(29)
-
-
1
6
(710)
-
(31)
43 1,165
425
32
75 1,590
-
-
-
-
-
-
-
-
(15)
(6)
31
96
(220)
-
(29)
-
-
1
6
(725)
(6)
-
At 31 December 2020
334
7,493
(386)
444
206 11,565
19,656
692 20,348
for the financial year ended 31 December 2019
At 1 January 2019
Group profit for the financial year
Other comprehensive income
Total comprehensive income
8 Share-based payment expense
Shares acquired by CRH plc (Treasury Shares)
Treasury Shares/own shares reissued
Shares acquired by Employee Benefit Trust (own shares)
Shares distributed under the Performance Share Plan Awards
Cancellation of Treasury Shares
10 Tax relating to share-based payment expense
Share option exercises
11 Dividends
Disposal of non-controlling interests
30 Non-controlling interests arising on acquisition of subsidiaries
Transactions involving non-controlling interests
353
7,493
(920)
378
(659) 11,705
18,350
602 18,952
-
-
-
-
-
-
-
-
(17)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(886)
42
(68)
70
1,402
-
-
-
-
-
-
-
-
-
86
-
-
-
(70)
17
-
-
-
-
-
-
-
457
457
1,717
-
1,717
1,717
457
2,174
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(42)
-
-
(1,402)
11
22
(652)
-
-
(9)
86
(886)
-
(68)
-
-
11
22
(652)
-
-
(9)
21 1,738
472
15
36 2,210
-
-
-
-
-
-
-
-
(11)
(9)
1
(12)
86
(886)
-
(68)
-
-
11
22
(663)
(9)
1
(21)
At 31 December 2019
336
7,493
(360)
411
(202) 11,350
19,028
607 19,635
144
144
2021 Annual Report and Form 20-F 145
Consolidated Statement of Cash Flows
for the financial year ended 31 December 2021
Notes
3
9
6
13,20
14
13,14,20
8
19
Cash flows from operating activities
Profit before tax from continuing operations
Profit before tax from discontinued operations
Profit before tax including discontinued operations
Finance costs (net)
Share of equity accounted investments’ (profit)/loss
(Profit)/loss on disposals
Group operating profit
Depreciation charge
Amortisation of intangible assets
Impairment charge
Share-based payment expense
Other
Net movement on working capital and provisions
Cash generated from operations
Interest paid (including leases)
Corporation tax paid
Net cash inflow from operating activities
6
15
13
30
15
19
19
21
21
21
20
29
11
11
Cash flows from investing activities
Proceeds from disposals (net of cash disposed and deferred proceeds)
Interest received
Dividends received from equity accounted investments
Purchase of property, plant and equipment
Acquisition of subsidiaries (net of cash acquired)
Other investments and advances
Deferred and contingent acquisition consideration paid
Deferred divestment consideration received
Net cash (outflow)/inflow from investing activities
Cash flows from financing activities
Proceeds from exercise of share options
Transactions involving non-controlling interests
Increase in interest-bearing loans and borrowings
Net cash flow arising from derivative financial instruments
Repayment of interest-bearing loans and borrowings
Repayment of lease liabilities (i)
Treasury Shares/own shares purchased
Dividends paid to equity holders of the Company
Dividends paid to non-controlling interests
Net cash (outflow)/inflow from financing activities
2021
$m
3,342
-
3,342
417
(55)
(119)
3,585
1,691
74
-
110
21
(228)
5,253
(401)
(642)
4,210
387
-
32
(1,554)
(1,494)
(4)
(33)
120
(2,546)
13
-
-
(37)
(1,183)
(264)
(896)
(906)
(32)
(3,305)
2020
$m
1,664
-
1,664
490
118
(9)
2,263
1,624
70
673
96
6
196
4,928
(432)
(558)
3,938
184
-
35
(996)
(351)
(1)
(54)
123
(1,060)
6
-
6,427
26
(4,943)
(258)
(249)
(707)
(15)
287
2019
$m
2,181
117
2,298
498
(81)
191
2,906
1,721
66
9
86
(3)
(71)
4,714
(469)
(364)
3,881
2,343
22
39
(1,374)
(727)
(32)
(54)
-
217
22
(21)
106
(40)
(640)
(356)
(954)
(652)
(11)
(2,546)
(Decrease)/increase in cash and cash equivalents
(1,641)
3,165
1,552
Reconciliation of opening to closing cash and cash equivalents
Cash and cash equivalents at 1 January
Translation adjustment
(Decrease)/increase in cash and cash equivalents
23
Cash and cash equivalents at 31 December
7,721
(297)
(1,641)
5,783
4,218
338
3,165
7,721
2,686
(20)
1,552
4,218
(i) Repayment of lease liabilities amounted to $328 million (2020: $326 million; 2019: $433 million), of which $64 million (2020: $68 million; 2019: $77 million) related
to interest paid which is presented in cash flows from operating activities.
144
2021 Annual Report and Form 20-F 145
2021 Annual Report and Form 20-F 145
Accounting Policies
(including key accounting estimates and assumptions)
This document constitutes both the Annual Report
and the Financial Statements in accordance with
Irish and certain relevant UK requirements, and the
Annual Report on Form 20-F in accordance with the
US Securities Exchange Act of 1934.
Basis of Preparation
The Consolidated Financial Statements of CRH plc
have been prepared in accordance with
International Financial Reporting Standards (IFRS)
as adopted by the European Union, which comprise
standards and interpretations approved by the
International Accounting Standards Board (IASB).
IFRS as adopted by the European Union differ in
certain respects from IFRS as issued by the IASB.
However, the differences have no impact on the
Consolidated Financial Statements for the financial
years presented. The Consolidated Financial
Statements are also prepared in compliance with
the Companies Act 2014 and Article 4 of the EU
IAS Regulation.
CRH plc, the Parent Company, is a publicly traded
limited company incorporated and domiciled in the
Republic of Ireland.
The Consolidated Financial Statements, which are
presented in US Dollar millions, have been prepared
under the historical cost convention as modified by
the measurement at fair value of share-based
payments, retirement benefit obligations and certain
financial assets and liabilities including derivative
financial instruments.
The accounting policies set out below have been
applied consistently by all of the Group’s
subsidiaries, joint ventures and associates to all
periods presented in the Consolidated Financial
Statements.
In accordance with Section 304 of the Companies
Act 2014, the Company is availing of the exemption
from presenting its individual profit and loss account
to the Annual General Meeting and from filing it with
the Registrar of Companies.
Adoption of IFRS and
International Financial Reporting
Interpretations Committee
(IFRIC) interpretations
beginning on or after 1 April 2021 with earlier
application permitted:
• Amendments to IFRS 16 – COVID-19-Related
Rent Concessions beyond 30 June 2021. The
amendment was adopted effective 1 January
2021 and did not result in a material impact on
the Group’s results
IFRS and IFRIC interpretations
being adopted in subsequent
years
IFRS 17 Insurance Contracts
In May 2017, the IASB issued IFRS 17 which will be
effective for reporting periods beginning on or after
1 January 2023, with presentation of comparative
figures required. The Group is currently evaluating
the impact of this standard on future periods which
is not expected to be material.
There are no other IFRS or IFRIC interpretations that
are effective subsequent to the CRH 2021 financial
year-end that are expected to have a material impact
on the results or financial position of the Group.
Climate Change and Carbon
Reduction Targets
In August 2021, the Group announced that its
carbon emissions reduction target of 520kg of CO2
per tonne of cementitious material was being
brought forward from 2030 to 2025. Climate
change risks including the impact of achieving this
target have been considered and assessed in the
preparation of the Consolidated Financial
Statements for the year ended 31 December 2021.
The table below provides details of where further
information has been provided in these
Consolidated Financial Statements.
Climate Change and 2025
Carbon Reduction Target
References
Pages
Impairment testing of goodwill and
property, plant and equipment
150 and 175
Provisions for liabilities
Inventories
147
152
198
following standard amendments became
The
effective for the Group as of 1 January 2021:
Retirement Benefit Obligations
• Amendments to IFRS 9 Financial Instruments,
IAS 39 Financial Instruments: Recognition and
measurement, IFRS 7 Financial Instruments:
Disclosures, IFRS 4 Insurance Contracts and
IFRS 16 Leases – Interest Rate Benchmark
Reform – Phase 2. The amendments did not
result in a material impact on the Group’s results
The following standard amendment was issued in
March 2021 effective for annual reporting periods
In early 2022, the Group adopted a new target of a
25% reduction in CO2 emissions (Scope 1 and
Scope 2) by 2030 compared to 2020 levels. The
Science Based Targets initiative (SBTi) has
approved our science-based emissions reduction
target. The Group’s assessment is that the impact
of the adoption of this target will be consistent with
the impact of the 2025 targets on the estimates,
judgements and assumptions set out in the relevant
disclosures referenced above.
In line with the application of our accounting
policies, estimates and underlying assumptions are
reviewed on an ongoing basis as we continue to
develop and implement our strategy to meet the
2030 targets.
Change in presentation currency
As outlined in our 2020 Annual Report and
Form 20-F, on 28 February 2020, the Group
announced that with effect from 1 January 2020 it
would be changing the currency in which it presents
its financial results from euro to US Dollar. Within
our current portfolio of businesses, our euro
denominated earnings, while sizeable, are a
relatively lower proportion of overall earnings. To
reduce the potential for foreign exchange volatility in
our future reported earnings, the Board determined
that, with effect from 1 January 2020, CRH will
present its results in US Dollar. Given the current
composition of the Group’s activities, this change is
expected to reduce the impact of currency
movements on reported results.
Key Accounting Policies which
involve Estimates, Assumptions
and Judgements
The preparation of the Consolidated Financial
Statements in accordance with IFRS requires
management to make certain estimates,
assumptions and judgements that affect the
application of accounting policies and the reported
amounts of assets, liabilities, income and expenses.
Management believes that the estimates,
assumptions and judgements upon which it relies
are reasonable based on the information available
to it at the time that those estimates, assumptions
and judgements are made. In some cases, the
accounting treatment of a particular transaction is
specifically dictated by IFRS and does not require
management’s judgement in its application.
Management considers that their use of estimates,
assumptions and judgements in the application of
the Group’s accounting policies are inter-related
and therefore discuss them together below with the
major sources of estimation uncertainty and
significant judgements separately identified.
Estimates and underlying assumptions are reviewed
on an ongoing basis. Changes in accounting
estimates may be necessary if there are changes in
the circumstances or experiences on which the
estimate was based or as a result of new
information.
146
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2021 Annual Report and Form 20-F 147
Accounting Policies - continued
involve
The critical accounting policies, which
significant estimates, assumptions or judgements,
the actual outcome of which could have a material
impact on the Group’s results and financial position
outlined below, are as follows:
Impairment of goodwill and
property, plant and equipment –
Notes 13 and 14
Goodwill
In the year in which a business combination is
effected and where some or all of the goodwill
allocated to a particular cash-generating unit (CGU)
arose in respect of that combination, the CGU is
tested for impairment prior to the end of the relevant
annual period.
Goodwill is subject to impairment testing on an
annual basis and at any time during the year if an
indicator of impairment is considered to exist.
Where the carrying value exceeds the estimated
recoverable amount (being the greater of fair value
less costs of disposal and value-in-use), an
impairment loss is recognised by writing down
goodwill to its recoverable amount.
Major sources of estimation
uncertainty: Projected EBITDA (as
defined)* margin, long-term growth
and pre-tax discount rates
The impairment testing process requires
management to make significant judgements and
estimates regarding the future cash flows expected
to be generated by CGUs to which goodwill has
been allocated. In assessing value-in-use, the net
cash flow forecasts (reflecting revenue forecasts,
projected EBITDA (as defined)* margin and
other cash flow movements) are extrapolated using
long-term growth rates to determine the basis for
an annuity-based terminal value. Future cash flows,
including the terminal value, are discounted to their
present value using a pre-tax discount rate that
reflects current market assessments of the time
value of money and the risks specific to the asset
for which the future cash flow estimates have not
been adjusted. The estimates of future cash flows
exclude cash inflows or outflows attributable to
financing activities and income tax. Future cash
flows relating to the eventual disposal of these
CGUs and other factors may also be relevant to
determine the recoverable amount of goodwill.
Management periodically evaluates and updates the
estimates based on the conditions which influence
these variables.
The assumptions and conditions for determining
impairments of goodwill reflect management’s best
assumptions and estimates, but these items involve
inherent uncertainties described above, many of
which are not under management’s control. As a
result, the accounting for such items could result in
different estimates or amounts if management used
different assumptions or if different conditions occur
in future accounting periods.
A detailed discussion of the impairment
methodology applied, key assumptions used and
related sensitivity analyses by the Group in the
context of goodwill is provided in note 14 to the
Consolidated Financial Statements.
The recoverable amount of goodwill is determined
by reference to the CGU to which the goodwill has
been allocated. Impairment losses arising in respect
of goodwill are not reversed once recognised.
Goodwill relating to associates and joint ventures is
included in the carrying amount of the investment
and is neither amortised nor individually tested for
impairment. Where indicators of impairment of an
investment arise in accordance with the
requirements of IAS 36 Impairment of Assets, the
carrying amount is tested for impairment by
comparing its recoverable amount with its carrying
amount.
Property, plant and equipment
The carrying values of items of property, plant and
equipment are reviewed for indicators of impairment
at each reporting date and are subject to
impairment testing when events or changes in
circumstances indicate that the carrying values may
not be recoverable.
Property, plant and equipment assets are reviewed
for potential impairment by applying a series of
external and internal indicators specific to the assets
under consideration. These indicators encompass
macroeconomic issues including the inherent
cyclicality of the building materials sector, actual
obsolescence or physical damage, a deterioration in
forecast performance in the internal reporting cycle
and restructuring and rationalisation programmes.
Where the carrying value exceeds the estimated
recoverable amount (being the greater of fair value
less costs of disposal and value-in-use), an
impairment loss is recognised by writing down the
assets to their recoverable amount. For an asset
that does not generate largely independent cash
inflows, the recoverable amount is determined by
reference to the CGU to which the asset belongs.
In assessing value-in-use, the estimated future cash
flows are discounted to their present value using a
pre-tax discount rate that reflects current market
assessments of the time value of money and the
risks specific to the CGU for which the future cash
flow estimates have not been adjusted. The
estimates of future cash flows exclude cash inflows
or outflows attributable to financing activities and
income tax.
Retirement benefit obligations –
Note 28
Costs arising in respect of the Group’s defined
contribution pension schemes are charged to the
Consolidated Income Statement in the period in
which they are incurred. The Group has no legal or
constructive obligation to pay further contributions
in the event that the fund does not hold sufficient
assets to meet its benefit commitments.
The liabilities and costs associated with the Group’s
defined benefit pension schemes (both funded and
unfunded) are assessed either on the basis of the
attained age, the projected unit credit, the current
unit credit or the aggregate cost methods by
professionally qualified actuaries and are arrived at
using actuarial assumptions based on market
expectations at the balance sheet date.
Major sources of estimation
uncertainty: Discount rates
The assumptions underlying the actuarial valuations
(including discount rates, rates of increase in
future compensation levels, mortality rates and
healthcare cost trends), from which the amounts
recognised in the Consolidated Financial
Statements are determined, are updated annually
based on current economic conditions and for any
relevant changes to the terms and conditions of the
pension and post-retirement plans. These
assumptions can be affected by (i) for the
discount rate, changes in the rates of return on
high-quality corporate bonds; (ii) for future
compensation levels, future labour market
conditions and (iii) for healthcare cost trend rates,
the rate of medical cost inflation in the relevant
regions. The weighted average actuarial
assumptions used and sensitivity analysis in
relation to the significant assumptions employed in
the determination of pension and other post-
retirement liabilities are contained in note 28 to the
Consolidated Financial Statements.
The assumptions that are the most significant to
the measurement of retirement benefit obligations
are the discount rates. The discount rates
employed in determining the present value of the
schemes’ liabilities are determined by reference to
market yields at the balance sheet date on high-
quality corporate bonds of a currency and term
consistent with the currency and term of the
associated post-employment benefit obligations.
Whilst management believes that the assumptions
used are appropriate, differences in actual
experience or changes in assumptions may affect
the obligations and expenses recognised in future
accounting periods. The assets and liabilities of
defined benefit pension schemes may exhibit
significant period-on-period volatility attributable
primarily to changes in bond yields and longevity.
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
146
2021 Annual Report and Form 20-F 147
2021 Annual Report and Form 20-F 147
In addition to future service contributions,
significant cash contributions may be required to
remediate past service deficits.
The net surplus or deficit arising on each of the
Group’s defined benefit pension schemes, are
shown either within non-current assets or
non-current liabilities in the Consolidated Balance
Sheet. The deferred tax impact of pension scheme
surpluses and deficits is disclosed separately within
deferred tax assets or liabilities as appropriate.
Remeasurements, comprising actuarial gains and
losses and the return on plan assets (excluding net
interest), are recognised immediately in the
Consolidated Balance Sheet with a corresponding
debit or credit to retained earnings through other
comprehensive income in the period in which they
occur. Remeasurements are not reclassified to
profit or loss in subsequent periods.
The defined benefit pension asset or liability in the
Consolidated Balance Sheet comprises the total for
each plan of the present value of the defined benefit
obligation less the fair value of plan assets out of
which the obligations are to be settled directly. Plan
assets are assets that are held by a long-term
employee benefit fund or qualifying insurance
policies. Fair value is based on market price
information and, in the case of published quoted
securities; it is the published bid price. The value of
any defined benefit asset is limited to the present
value of any economic benefits available in the form
of refunds from the plan and reductions in the future
contributions to the plan.
The Group’s obligation in respect of post-
employment healthcare and life assurance benefits
represents the amount of future benefit that
employees have earned in return for service in the
current and prior periods. The obligation is
computed on the basis of the projected unit credit
method and is discounted to present value using a
discount rate equating to the market yield at the
balance sheet date on high-quality corporate bonds
of a currency and term consistent with the currency
and estimated term of the post-employment
obligations.
Provisions for liabilities – Note 26
A provision is recognised when the Group has a
present obligation (either legal or constructive) as a
result of a past event, it is probable that a transfer of
economic benefits will be required to settle the
obligation and a reliable estimate can be made of
the amount of the obligation.
Significant judgement:
Judgement is required in determining whether the
Group has a present obligation and whether it is
probable that an outflow of economic benefits will
be required to settle this obligation. This judgement
is applied to information available at the time of
determining the liability including but not limited to
judgements around interpretations of legislation,
regulations, case law and insurance contracts
depending on the nature of the provision.
Where the Group anticipates that a provision will be
reimbursed, the reimbursement is recognised as a
separate asset only when it is virtually certain that
the reimbursement will arise. Provisions are
measured at the present value of the expenditures
expected to be required to settle the obligation.
The increase in the provision due to the passage of
time is recognised as an interest expense.
Contingent liabilities arising on business
combinations are recognised as provisions if the
contingent liability can be reliably measured at its
acquisition date fair value. Provisions are not
recognised for future operating losses. Management
is not aware of any potential changes to key
assumptions that have a significant risk of causing a
material adjustment to the carrying value of
provisions within the next financial year; however
due to the nature of some of our provisions,
estimates may depend on the outcome of future
events and need to be revised as circumstances
change in future accounting periods. Refer to note
26 for the expected timing of outflows by provisions
category.
Environmental and remediation
provisions
The measurement of environmental and remediation
provisions is based on an evaluation of currently
available facts with respect to each individual site
and considers factors such as existing technology,
currently enacted laws and regulations and prior
experience in remediation of sites. Inherent
uncertainties exist in such evaluations primarily due
to unknown conditions, changing governmental
regulations and legal standards regarding liability,
the protracted length of the clean-up periods and
evolving technologies.
The environmental and remediation liabilities
provided for in the Consolidated Financial
Statements reflect the judgement applied by
management in respect of information available at
the time of determining the liability and are adjusted
periodically as remediation efforts progress or as
additional technical or legal information becomes
available.
The impact of climate change and policy risks and
uncertainties as set out on pages 118 and 235 on
environmental and remediation provisions has been
considered, specifically the impact on timing and
extent of costs and cash outflows. Changes to
legislation, including those relating to climate
change, are factored into the assessment of
provisions when the legislation is virtually certain to
be enacted. The Group’s 2025 carbon emissions
target of 520kg of CO2 per tonne of cementitious
material is also considered in these judgements.
The measurement of our provisions is based on
reasonable and supportable assumptions that
represent management’s current best estimate of
the range of economic conditions that will exist in
the foreseeable future. These assumptions do not
have a significant risk of resulting in a material
adjustment to the carrying value of these provisions
within the next financial year and therefore do not
represent a major source of estimation uncertainty.
Due to the inherent uncertainties described above,
many of which are not under management’s
control, actual costs and cash outflows could differ
if management used different assumptions or if
different conditions occur in future accounting
periods.
Legal contingencies
The status of each significant claim and legal
proceeding in which the Group is involved is
reviewed by management on a periodic basis and
the Group’s potential financial exposure is
assessed. If the potential loss from any claim or
legal proceeding is considered probable, and the
amount can be reliably estimated, a liability is
recognised for the estimated loss.
Because of the uncertainties inherent in such
matters, the related provisions are based on the
best information available at the time; the issues
taken into account by management and factored
into the assessment of legal contingencies include,
as applicable, the status of settlement negotiations,
interpretations of contractual obligations, prior
experience with similar contingencies/claims, and
advice obtained from legal counsel and other third
parties. As additional information becomes available
on pending claims, the potential liability is
reassessed and revisions are made to the amounts
accrued where appropriate. Such revisions in the
judgements and estimates of the potential liabilities
could have an impact on the results of operations
and financial position of the Group in future
accounting periods.
Insurance provisions
Insurance provisions are subject to actuarial
valuation and are based on actuarial triangulations
which are extrapolated from historical claims
experience. These provisions include claims which
are classified as “incurred but not reported”, the
status of which are reviewed periodically by
management, in conjunction with appropriately
qualified advisors. Changes in actuarial
methodologies and assumptions, along with the
receipt of new information, could have an impact on
the financial position of the Group through
recognition of additional, or release of, provisions in
future accounting periods.
148
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2021 Annual Report and Form 20-F 149
Accounting Policies - continued
Other Significant Accounting
Policies
Basis of consolidation
The Consolidated Financial Statements include the
financial statements of the Parent Company and all
subsidiaries drawn up to 31 December each year,
and the Group’s share of the results of joint
ventures and associates which are accounted for
using the equity method. The financial year-ends of
the Group’s subsidiaries, joint ventures and
associates are coterminous.
Subsidiaries
Subsidiaries are all entities over which the Group
has control. The Group controls an entity when the
Group is exposed to, or has rights to, variable
returns from its involvement with the entity and has
the ability to affect those returns through its power
over the entity. Subsidiaries are fully consolidated
from the date on which control is transferred to the
Group. They are deconsolidated from the date that
control ceases. A change in the ownership interest
of a subsidiary without a change in control is
accounted for as an equity transaction.
When the Group holds less than the majority of
voting rights, other facts and circumstances
including contractual arrangements that give the
Group power over the investee may result in the
Group controlling the investee. The Group
reassesses whether it controls an investee if, and
when, facts and circumstances indicate that there
are changes to the elements evidencing control.
Non-controlling interests represent the portion of
the equity of a subsidiary not attributable either
directly or indirectly to the Parent Company and are
presented separately in the Consolidated Income
Statement and within equity in the Consolidated
Balance Sheet, distinguished from Parent Company
shareholders’ equity. Acquisitions of non-controlling
interests are accounted for as transactions with
equity holders in their capacity as equity holders
and therefore no goodwill is recognised as a result
of such transactions. On an acquisition by
acquisition basis, the Group recognises any
non-controlling interest in the acquiree either at fair
value or at the non-controlling interest’s
proportionate share of the acquiree’s net assets.
Investments in associates and joint
ventures – Note 15
An associate is an entity over which the Group has
significant influence. Significant influence is the
power to participate in the financial and operating
policy decisions of an entity, but is not control or
joint control over those policies.
A joint venture is a type of joint arrangement
whereby the parties that have joint control of the
arrangement have rights to the net assets of the
joint venture. Joint control is the contractually
agreed sharing of control of the arrangement, which
exists only when decisions about the relevant
activities require unanimous consent of the parties
sharing control.
The Group’s investments in its associates and joint
ventures are accounted for using the equity method
from the date significant influence/joint control is
deemed to arise until the date on which significant
influence/joint control ceases to exist or when the
interest becomes classified as an asset held for
sale.
The Consolidated Income Statement reflects the
Group’s share of result after tax of the related
associates and joint ventures. Investments in
associates and joint ventures are carried in the
Consolidated Balance Sheet at cost adjusted in
respect of post-acquisition changes in the Group’s
share of net assets, less any impairment in value.
Loans advanced to associates or joint ventures form
part of the net investment in the associate or joint
venture held on the Consolidated Balance Sheet.
The Group applies IFRS 9, including the impairment
requirements, to these loans as the equity method
does not apply. If necessary, impairment losses on
the carrying amount of an investment are reported
within the Group’s share of equity accounted
investments’ results in the Consolidated Income
Statement. If the Group’s share of losses exceeds
the carrying amount of an associate or joint venture,
the carrying amount is reduced to nil and
recognition of further losses is discontinued except
to the extent that the Group has incurred obligations
in respect of the associate or joint venture.
Joint operations
A joint operation is a type of joint arrangement
whereby the parties that have joint control of the
arrangement have rights to the assets and
obligations for the liabilities, relating to the
arrangement.
The Group’s investments in its joint operations are
accounted for by recognising its assets and its
liabilities, including its share of any assets or
liabilities held jointly; its share of the revenue from
the sale of the output by the joint operation; and its
expenses, including its share of any expenses
incurred jointly.
Revenue recognition – Note 1
The Group recognises revenue in the amount of the
price expected to be received for goods and
services supplied at a point in time or over time, as
contractual performance obligations are fulfilled and
control of goods and services passes to the
customer. It excludes trade discounts and value-
added tax/sales tax.
Revenue derived from sale of goods
(sources other than construction
contracts)
The Group manufactures and supplies a diverse
range of building materials and products. Whilst
there are a number of different activities across the
Group; recognition of revenue from the sale of
goods is similar; being at the point in time when
control is deemed to pass to the customer upon
leaving a CRH premises or upon delivery to a
customer depending on the terms of the sale.
Contracts do not contain multiple performance
obligations (as defined by IFRS 15 Revenue from
Contracts with Customers).
Across the Group, goods are often sold with
discounts or rebates based on cumulative sales
over a period. This variable consideration is only
recognised when it is highly probable that it will not
be subsequently reversed and is recognised using
the most likely amount or expected value methods,
depending on the individual contract terms. In the
application of appropriate revenue recognition,
judgement is exercised by management in the
determination of the likelihood and quantum of such
items based on experience and historical trading
patterns.
The Group is deemed to be a principal to an
arrangement when it controls a promised good or
service before transferring them to a customer and
accordingly recognises revenue on a gross basis.
Where the Group is determined to be an agent to a
transaction, based on the principle of control; the
net amount retained after the deduction of any
costs to the principal is recognised as revenue.
Within the non-construction contract businesses no
element of financing is deemed present as
transactions are all made with average credit terms
(usually 90 days), consistent with market practice.
Revenue derived from construction
contracts
The Group enters into a number of construction
contracts, to complete large construction projects.
Contracts usually commence and complete within
one year and are generally fixed price.
The Group typically recognises revenue within its
construction contract businesses over time, as it
performs its obligations. Management believe this
best reflects the transfer of control to the customer
by providing a faithful depiction of primarily the
enhancement of a customer controlled asset or the
construction of an asset with no alternative use. The
percentage-of-completion method is used to
recognise revenue when the outcome of a contract
can be estimated reliably. The
percentage-of-completion is calculated using an
input method and based on the proportion of
contract costs incurred at the balance sheet date
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2021 Annual Report and Form 20-F 149
2021 Annual Report and Form 20-F 149
relative to the total estimated costs of the contract.
In all of our construction contract arrangements the
Group has an enforceable right to payment for work
and performance obligations completed to date.
Some of the Group’s construction contracts may
contain forms of variable consideration that can
either increase or decrease the transaction price.
Variable consideration is estimated based on the
most likely amount or expected value methods
(depending on the contract terms) and the
transaction price is adjusted to the extent it is highly
probable that a significant reversal of revenue
recognised will not occur.
In some instances revenue is recognised in the
period subsequent to the contracted work being
completed when there is final certainty over the
remaining element of variable consideration.
Recognition of contract assets and
liabilities
In our construction contract businesses, amounts
are billed as work progresses in accordance with
pre-agreed contractual terms. When a performance
obligation is satisfied but a customer has not yet
been billed this is recognised as a contract asset
(unbilled revenue) and included within Trade and
Other Receivables (note 17). Retentions
(representing the percentage of consideration due
which is retained by the customer until certain
contractual activities are completed) are also a
common feature of construction contracts and are
recognised as a contract asset within Trade and
Other Receivables when we have a right to
consideration in exchange for the completion of the
contract. Retentions are consistent with industry
norms and the purpose of these is not to provide a
form of financing. Apart from retentions, the Group
does not have any construction contracts where the
period between the transfer of the promised goods
to the customer and payment by the customer
exceeds one year. As a consequence, the Group
applies the practical expedient in IFRS 15 and does
not adjust any of its transaction prices for the time
value of money.
When consideration is received in advance of work
being performed, or we have billed an amount to a
customer that is in excess of revenue recognised on
the contract; this is recognised as a contract liability
within Trade and Other Payables (note 18); and the
revenue is generally recognised in the subsequent
period when the right to recognise revenue has
been determined. As a result, advance payments
received for construction contract arrangements are
not considered a significant form of financing.
Cumulative costs incurred, net of amounts
transferred to cost of sales, after deducting onerous
provisions, provisions for contingencies and
payments on account not matched with revenue,
are included as construction contract balances in
inventories (note 16). Cost includes all expenditure
directly related to specific projects and an allocation
of fixed and variable overheads incurred in the
Group’s contract activities based on normal
operating capacity. The Group’s contracts generally
are for a duration of less than one year and
therefore the Group does not capitalise incremental
contract costs; instead expensing as incurred, as
permitted by the practical expedient under IFRS 15.
Onerous contracts and warranties
When a contract is identified as being onerous (i.e.
its unavoidable cost exceeds the economic benefit
of the contract), a provision is created; being the
lower of costs to complete the contract and the
cost of exiting the contract. The Group recognises a
provision for assurance-type (standard) warranties
offered across the Group under its terms and
conditions in accordance with IAS 37 Provisions,
Contingent Liabilities and Contingent Assets. The
Group provides assurance-type warranties for
general repairs and does not typically provide
service-type (extended) warranties.
Discontinued operations – Note 3
Discontinued operations are reported when a
component of the Group, that represents a
separate major line of business or geographical
area of operation, has been disposed of, or when a
sale is highly probable; its operations and cash
flows can be clearly distinguished, operationally and
for financial reporting purposes, from the rest of the
Group and is classified as held for sale or has been
disposed of. The Group classifies a non-current
asset or disposal group as held for sale if its
carrying value will be recovered through a sales
transaction or distribution to shareholders rather
than continuing use.
In the Consolidated Income Statement,
discontinued operations are excluded from the
results of continuing operations and are presented
as a single amount as profit or loss after tax from
discontinued operations. Corresponding notes to
the Consolidated Income Statement exclude
amounts for discontinued operations, unless stated
otherwise.
Segment reporting – Note 2
Share-based payments – Note 8
Operating segments are reported in a manner
consistent with the internal organisational and
management structure and the internal reporting
information provided to the Chief Operating
Decision Maker who is responsible for allocating
resources and assessing performance of the
operating segments.
Assets and liabilities held for sale
– Note 3
Non-current assets and disposal groups classified
as held for sale are measured at the lower of
carrying amount and fair value less costs to sell.
Non-current assets and disposal groups are
classified as held for sale if their carrying amounts
will be recovered through a sale transaction rather
than through continuing use. This condition is
regarded as met only when the sale is highly
probable and the asset or disposal group is
available for immediate sale in its present condition
subject only to terms that are usual and customary
for sales of such assets. Management must be
committed to the sale, which should be expected to
qualify for recognition as a completed sale within
12 months from the date of classification as held for
sale.
Property, plant and equipment and intangible assets
are not depreciated or amortised once classified as
held for sale. The Group ceases to use the equity
method of accounting from the date on which an
interest in a joint venture or associate becomes held
for sale. Non-current assets classified as held for
sale and liabilities directly associated with those
assets are presented separately as current items in
the Consolidated Balance Sheet.
The Group operates a number of equity-settled
share-based payment plans. Details of these plans,
together with the nature of the underlying market
and non-market performance and other vesting
conditions are outlined in note 8. The Group has no
material exposure in respect of cash-settled share-
based payment transactions and share-based
payment transactions with cash alternatives.
Awards under Performance Share
Plans
25% of the awards under the 2014 Performance
Share Plan are subject to a TSR (and hence
market-based) vesting condition measured against
a tailored sector peer group. Accordingly, the fair
value assigned to the related equity instruments at
the grant date is derived using a Monte Carlo
simulation technique to model the market-based
performance conditions; and is adjusted to reflect
the anticipated likelihood as at the grant date of
achieving the vesting condition. Awards are treated
as vesting irrespective of whether or not the market
condition is satisfied, provided that all other
performance and/or service conditions are satisfied.
The remaining awards granted under the 2014
Performance Share Plan are subject to non-market-
based vesting conditions; 50% are subject to a
cumulative cash flow target and 25% are subject to
a RONA metric. The fair value of the awards is
calculated as the market price of the shares at the
date of grant. No expense is recognised for awards
that do not ultimately vest. At the balance sheet
date the estimate of the level of vesting is reviewed
and any adjustment necessary is recognised in the
Consolidated Income Statement.
150
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2021 Annual Report and Form 20-F 151
Accounting Policies - continued
If awards which vest under the 2014 Performance
Share Plan are allotted to an Employee Benefit
Trust, an increase in nominal share capital and
share premium are recognised accordingly on
allotment.
Savings-related Share Option Scheme
The fair values assigned to options under the
Savings-related Share Option Scheme are derived
in accordance with the trinomial valuation
methodology on the basis that the services to be
rendered by employees as consideration for the
granting of share options will be received over the
vesting period, which is assessed as at the grant
date.
The cost is recognised, together with a
corresponding increase in equity, over the period in
which the performance and/or service conditions
are fulfilled. The cumulative expense recognised at
each reporting date until the vesting date reflects
the extent to which the vesting period has expired
and the Group’s best estimate of the number of
equity instruments that will ultimately vest. The
Consolidated Income Statement expense/credit for
a period represents the movement in cumulative
expense recognised at the beginning and end of
that period. The cumulative charge to the
Consolidated Income Statement is reversed only
where an employee in receipt of share options
leaves service prior to completion of the expected
vesting period and those options forfeit in
consequence.
Where an award is cancelled, it is treated as if it is
vested on the date of cancellation, and any expense
not yet recognised for the award is recognised
immediately. This includes any award where
non-vesting conditions within the control of either
the Company or the employee are not met. All
cancellations of awards are treated equally.
The proceeds received net of any directly
attributable transaction costs are credited to share
capital (nominal value) and share premium when the
options are exercised.
The dilutive effect of outstanding options is reflected
as additional share dilution in the determination of
diluted earnings per share.
Taxation – current and deferred –
Notes 10 and 27
Current tax represents the expected tax payable (or
recoverable) on the taxable profit for the year using
tax rates enacted for the period. Where items are
accounted for outside of profit or loss, the related
income tax is recognised either in other
comprehensive income or directly in equity as
appropriate.
Deferred tax is recognised using the liability method
on temporary differences arising at the balance
sheet date between the tax bases of assets and
liabilities and their carrying amounts in the
Consolidated Financial Statements. However,
deferred tax liabilities are not recognised if they arise
from the initial recognition of goodwill. In addition,
deferred income tax is not accounted for if it arises
from initial recognition of an asset or liability in a
transaction other than a business combination that,
at the time of the transaction, affects neither
accounting nor taxable profit or loss. For the most
part, no provision has been made for temporary
differences applicable to investments in subsidiaries
and joint ventures as the Group is in a position to
control the timing of reversal of the temporary
differences and it is probable that the temporary
differences will not reverse in the foreseeable future.
However, a temporary difference has been
recognised to the extent that specific assets have
been identified for sale or where there is a specific
intention to unwind the temporary difference in the
foreseeable future. Due to the absence of control in
the context of associates (significant influence only),
deferred tax liabilities are recognised where
appropriate in respect of CRH’s investments in
these entities on the basis that the exercise of
significant influence would not necessarily prevent
earnings being remitted by other shareholders in the
undertaking.
Deferred tax is determined using tax rates (and
laws) that have been enacted or substantively
enacted by the balance sheet date and are
expected to apply when the related deferred
income tax asset is realised or the deferred income
tax liability is settled. Deferred tax assets and
liabilities are not subject to discounting. Deferred tax
assets are recognised in respect of all deductible
temporary differences, carry-forward of unused tax
credits and unused tax losses to the extent that it is
probable that taxable profits will be available against
which the temporary differences can be utilised. The
carrying amounts of deferred tax assets are subject
to review at each balance sheet date and are
reduced to the extent that future taxable profits are
considered to be inadequate to allow all or part of
any deferred tax asset to be utilised.
The Group’s income tax charge is based on
reported profit and enacted statutory tax rates,
which reflect various allowances and reliefs available
to the Group in the multiple tax jurisdictions in which
it operates. The determination of the Group’s
provision for income tax requires certain judgements
and estimates in relation to matters where the
ultimate tax outcome may not be certain. The
recognition or non-recognition of deferred tax assets
as appropriate also requires judgement as it involves
an assessment of the future recoverability of those
assets. In addition, the Group is subject to tax audits
which can involve complex issues that could require
extended periods to conclude, the resolution of
which is often not within the control of the Group.
Although management believes that the estimates
included in the Consolidated Financial Statements
and its tax return positions are reasonable, there is
no certainty that the final outcome of these matters
will not be different than that which is reflected in the
Group’s historical income tax provisions and
accruals. Whilst it is possible, the Group does not
currently anticipate that any such differences could
have a material impact on the income tax provision
and profit for the period in which such a
determination is made nor does it expect any
significant impact on its financial position within the
next 12 months. This is based on the Group’s
knowledge and experience, as well as the profile of
the individual components which have been
reflected in the current tax liability, the status of the
tax audits, enquiries and negotiations in progress at
each year-end, previous claims and any factors
specific to the relevant tax environments.
Property, plant and equipment –
Note 13
The carrying value of property, plant and equipment
(excluding leased right-of-use assets) of
$17,938 million at 31 December 2021 represents
40% of total assets at that date. Property, plant and
equipment are stated at cost less any accumulated
depreciation and any accumulated impairments
except for certain items that had been revalued to
fair value prior to the date of transition to IFRS
(1 January 2004).
Repair and maintenance expenditure is included in
an asset’s carrying amount or recognised as a
separate asset, as appropriate, only when it is
probable that future economic benefits associated
with the item will flow to the Group and the cost of
the item can be measured reliably. All other repair
and maintenance expenditure is charged to the
Consolidated Income Statement during the financial
period in which it is incurred.
Borrowing costs incurred in the construction of
major assets which take a substantial period of time
to complete are capitalised in the financial period in
which they are incurred.
In the application of the Group’s accounting policy,
judgement is exercised by management in the
determination of residual values and useful lives.
Depreciation methods, useful lives and residual
values are reviewed at each financial year-end.
Changes in the expected useful life or the expected
pattern of consumption of future economic benefits
embodied in the asset are accounted for by
changing the depreciation period or method as
appropriate on a prospective basis.
Amongst other factors, consideration is given to
climate change and policy risks and uncertainties as
set out on pages 118 and 235 when determining
the useful lives of assets. The determination of
useful lives also considers the Group’s 2025 carbon
150
2021 Annual Report and Form 20-F 151
2021 Annual Report and Form 20-F 151
emissions target of 520kg of CO2 per tonne of
cementitious material. Capital expenditure will
continue to be required for ongoing projects and the
useful lives of future capital expenditure may differ
from current assumptions, however there were no
significant changes in the estimates of useful lives
during the current financial year.
Future developments in technology may also result in
a risk of obsolescence for the Group’s current portfolio
of plant and machinery assets, however the expected
time-frame for these developments is not currently
anticipated to impact their remaining useful lives as the
majority of the Group’s plant and machinery assets will
be fully depreciated within ten years.
Depreciation and depletion is calculated to write off
the book value of each item of property, plant and
equipment over its useful economic life on a
straight-line basis at the following rates:
Land and buildings
The book value of mineral-bearing land, less an
estimate of its residual value, is depleted over the
period of the mineral extraction in the proportion
which production for the year bears to the latest
estimates of proven and probable mineral reserves.
Land, other than mineral-bearing land, is not
depreciated. In general, buildings are depreciated at
2.5% per annum (p.a.).
Plant and machinery
These are depreciated at rates ranging from 3.3%
p.a. to 20% p.a. depending on the type of asset.
Plant and machinery includes transport vehicles
which are, on average, depreciated at 20% p.a.
Business combinations – Note 30
The Group applies the acquisition method in
accounting for business combinations. The cost of
an acquisition is measured as the aggregate of the
consideration transferred (excluding amounts
relating to the settlement of pre-existing
relationships), the amount of any non-controlling
interest in the acquiree and, in a business
combination achieved in stages, the acquisition-
date fair value of the acquirer’s previously-held
equity interest in the acquiree. Transaction costs
that the Group incurs in connection with a business
combination are expensed as incurred.
To the extent that settlement of all or any part of
consideration for a business combination is
deferred, the fair value of the deferred component is
determined through discounting the amounts
payable to their present value at the date of
exchange. The discount component is unwound as
an interest charge in the Consolidated Income
Statement over the life of the obligation. Any
contingent consideration is recognised at fair value
at the acquisition date and included in the cost of
the acquisition. The fair value of contingent
consideration at acquisition date is arrived at
through discounting the expected payment to
present value. In general, in order for contingent
consideration to become payable, pre-defined profit
and/or profit/net asset ratios must be exceeded.
Subsequent changes to the fair value of the
contingent consideration will be recognised in profit
or loss unless the contingent consideration is
classified as equity, in which case it is not
remeasured and settlement is accounted for within
equity.
The assets and liabilities arising on business
combination activity are measured at their
acquisition-date fair values. Contingent liabilities
assumed in business combination activity are
recognised as of the acquisition date, where such
contingent liabilities are present obligations arising
from past events and their fair value can be
measured reliably. In the case of a business
combination achieved in stages, the acquisition-
date fair value of the acquirer’s previously-held
equity interest in the acquiree is remeasured to fair
value as at the acquisition date through profit or
loss. When the initial accounting for a business
combination is determined provisionally, any
adjustments to the provisional values allocated to
the consideration, identifiable assets or liabilities
(and contingent liabilities, if relevant) are made
within the measurement period, a period of no more
than one year from the acquisition date.
Goodwill – Note 14
Goodwill arising on a business combination is
initially measured at cost, being the excess of the
cost of an acquisition over the fair value of the net
identifiable assets and liabilities assumed at the date
of acquisition and relates to the future economic
benefits arising from assets which are not capable
of being individually identified and separately
recognised. Following initial recognition, goodwill is
measured at cost less any accumulated impairment
losses. If the cost of the acquisition is lower than the
fair value of the net assets of the subsidiary
acquired, the identification and measurement of the
related assets and liabilities and contingent liabilities
are revisited and the cost is reassessed with any
remaining balance recognised immediately in the
Consolidated Income Statement.
The carrying amount of goodwill in respect of
associates and joint ventures is included in
investments accounted for using the equity method
(i.e. within financial assets) in the Consolidated
Balance Sheet.
Where a subsidiary is disposed of or terminated
through closure, the carrying value of any goodwill
of that subsidiary is included in the determination of
the net profit or loss on disposal/termination.
Intangible assets (other than
goodwill) arising on business
combinations – Note 14
An intangible asset is capitalised separately from
goodwill as part of a business combination at cost
(fair value at date of acquisition).
Subsequent to initial recognition, intangible assets
are carried at cost less any accumulated
amortisation and any accumulated impairment
losses. The carrying values of definite-lived
intangible assets (the Group does not currently have
any indefinite-lived intangible assets other than
goodwill) are reviewed for indicators of impairment
at each reporting date and are subject to
impairment testing when events or changes in
circumstances indicate that the carrying values may
not be recoverable.
Intangible assets are amortised on a straight-line
basis. In general, based on the current composition
of definite-lived intangible assets, the useful lives for
customer-related intangible assets range from five
to fifteen years and the useful lives for marketing
related intangible assets range from ten to twenty
years.
Amortisation periods, useful lives, expected
patterns of consumption and residual values are
reviewed at each financial year-end. Changes in the
expected useful life or the expected pattern of
consumption of future economic benefits embodied
in the asset are accounted for by changing the
amortisation period or method as appropriate on a
prospective basis.
Leases – Notes 13 and 20
The Group enters into leases for a range of assets,
principally relating to property. These property
leases have varying terms, renewal rights and
escalation clauses, including periodic rent reviews
linked with a consumer price index and/or other
indices. The Group also leases plant and
machinery, vehicles and equipment. The terms and
conditions of these leases do not impose significant
financial restrictions on the Group.
A contract contains a lease if it is enforceable and
conveys the right to control the use of a specified
asset for a period of time in exchange for
consideration, which is assessed at inception. A
right-of-use asset and lease liability are recognised
at the commencement date for contracts containing
a lease, with the exception of leases with a term of
12 months or less which do not contain a purchase
option, leases where the underlying asset is of low
value and leases with associated payments that
vary directly in line with usage or sales. The
commencement date is the date at which the asset
is made available for use by the Group.
152
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2021 Annual Report and Form 20-F 153
Accounting Policies - continued
The lease liability is initially measured at the present
value of the future lease payments, discounted
using the incremental borrowing rate or the interest
rate implicit in the lease, if this is readily
determinable, over the remaining lease term. Lease
payments include fixed payments less any lease
incentives receivable, variable payments that are
dependent on a rate or index known at the
commencement date, amounts expected to be paid
under residual value guarantees and any payments
for an optional renewal period and purchase and
termination option payments, if the Group is
reasonably certain to exercise those options. The
lease term is the non-cancellable period of the lease
adjusted for any renewal or termination options
which are reasonably certain to be exercised.
Variable lease payments that do not depend on an
index or a rate and rentals relating to low value or
short-term leases are recognised as an expense in
the period in which they are incurred. Management
applies judgement in determining whether it is
reasonably certain that a renewal, termination or
purchase option will be exercised.
Incremental borrowing rates are calculated using a
portfolio approach, based on the risk profile of the
entity holding the lease and the term and currency
of the lease.
After initial recognition, the lease liability is measured
at amortised cost using the effective interest
method. It is remeasured when there is a change in
future lease payments or when the Group changes
its assessment of whether it is reasonably certain to
exercise an option within the contract. A
corresponding adjustment is made to the carrying
amount of the right-of-use asset.
The right-of-use asset is initially measured at cost,
which comprises the lease liability adjusted for any
payments made at or before the commencement
date, initial direct costs incurred, lease incentives
received and an estimate of the cost to dismantle or
restore the underlying asset or the site on which it is
located at the end of the lease term. The
right-of-use asset is depreciated over the lease term
or, where a purchase option is reasonably certain to
be exercised, over the useful economic life of the
asset in line with depreciation rates for owned
property, plant and equipment. The right-of-use
asset is tested periodically for impairment if an
impairment indicator is considered to exist.
Non-lease components in a contract such as
maintenance and other service charges are
separated from lease payments and are expensed
as incurred.
acquiring the inventories and bringing them to their
present location and condition. Raw materials are
valued on the basis of purchase cost on a first-in/
first-out basis. In the case of finished goods and
work-in-progress, cost includes direct materials,
direct labour and attributable overheads based on
normal operating capacity and excludes borrowing
costs.
Net realisable value is the estimated proceeds of
sale less all further costs to completion, and less all
costs to be incurred in marketing, selling and
distribution. Estimates of net realisable value are
based on the most reliable evidence available at the
time the estimates are made, taking into
consideration fluctuations of price or cost directly
relating to events occurring after the end of the
period, the likelihood of short-term changes in buyer
preferences, product obsolescence or perishability
(all of which are generally low given the nature of the
Group’s products) and the purpose for which the
inventory is held.
Climate change and policy risks and uncertainties
as set out on pages 118 and 235 may also result in
additional costs, changes to selling prices or
product obsolescence impacting the valuation of
inventories in future years. There were no material
write-downs of inventories required in this regard
during the current financial year.
Materials and other supplies held for use in the
production of inventories are not written down
below cost if the finished goods, in which they will
be incorporated, are expected to be sold at or
above cost.
Trade and other receivables –
Note 17
The classification of financial assets depends on the
Group’s business model for managing the financial
assets and the contractual terms of the cash flows.
The Group’s principal financial assets are its trade
and other receivables (including contract assets).
Trade and other receivables are recognised when
the Group becomes a party to the contract and has
a legal right to receive cash. Trade receivables
(including contract assets) are carried at original
invoice amount, which is equivalent to amortised
cost, less an expected credit loss provision. Further
details on the approach the Group applies to
providing for expected credit losses is outlined in
note 17.
Inventories – Note 16
Cash and cash equivalents –
Note 23
Inventories are stated at the lower of cost and net
realisable value. Cost is based on the first-in/
first-out principle (and weighted average, where
appropriate) and includes all expenditure incurred in
Cash and cash equivalents comprise cash balances
held for the purpose of meeting short-term cash
commitments and investments which are readily
convertible to a known amount of cash and are
subject to an insignificant risk of change in value.
Cash and cash equivalents are classified as
financial assets measured at amortised cost or, in
the case of certain money market deposits, fair
value through profit or loss.
Bank overdrafts are included within current interest-
bearing loans and borrowings in the Consolidated
Balance Sheet. Where the overdrafts are repayable
on demand and form an integral part of cash
management, they are netted against cash and
cash equivalents for the purposes of the
Consolidated Statement of Cash Flows.
Interest-bearing loans and
borrowings – Note 24
All loans and borrowings are initially recorded at the
fair value of the consideration received net of
directly attributable transaction costs. The
computation of amortised cost includes any issue
costs and any discount or premium materialising on
settlement. Subsequent to initial recognition, current
and non-current interest-bearing loans and
borrowings are, in general, measured at amortised
cost employing the effective interest methodology.
Fixed rate loans and borrowings, which have been
hedged to floating rates (using interest rate swaps),
are measured at amortised cost adjusted for
changes in value attributable to the hedged risks
arising from changes in underlying market interest
rates.
Borrowing costs arising on financial instruments are
recognised as an expense in the period in which
they are incurred (unless capitalised as part of the
cost of property, plant and equipment).
Derivative financial instruments
and hedging practices – Note 25
In order to manage interest rate, foreign currency
and commodity risks and to realise the desired
currency profile of borrowings, the Group employs
derivative financial instruments (principally interest
rate swaps, currency forwards and currency
swaps). Derivative financial instruments are
recognised initially at fair value on the date on which
a derivative contract is entered into and are
subsequently remeasured at fair value. The carrying
value of derivatives is fair value based on
discounted future cash flows and adjusted for
counterparty risk. Future floating rate cash flows are
estimated based on future interest rates (from
observable yield curves at the end of the reporting
period). Fixed and floating rate cash flows are
discounted at future interest rates and translated at
period-end foreign exchange rates. Short dated
forward foreign exchange contracts are used to
hedge the forward foreign exchange risk on
currency exposures. The forward price elements to
these contracts are excluded from the hedge.
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2021 Annual Report and Form 20-F 153
2021 Annual Report and Form 20-F 153
presented in US Dollar, which is the presentation
currency of the Group. The functional currency of
the Parent Company is euro.
Transactions in foreign currencies are recorded at
the rate of exchange in effect at the date of the
transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated
at the rate of exchange in effect at the balance
sheet date. All currency translation differences are
taken to the Consolidated Income Statement with
the exception of all monetary items that provide an
effective hedge for a net investment in a foreign
operation. These are recognised in other
comprehensive income until the disposal of the net
investment, at which time they are recognised in the
Consolidated Income Statement.
Results and cash flows of subsidiaries, joint
ventures and associates with non-US Dollar
functional currencies have been translated into
US Dollar at average exchange rates for the year,
and the related balance sheets have been
translated at the rates of exchange in effect at the
balance sheet date. Adjustments arising on
translation of the results and net assets of non-US
Dollar subsidiaries, joint ventures, associates and
joint operations are recognised in a separate
translation reserve within equity, net of differences
on related currency borrowings. All other translation
differences are taken to the Consolidated Income
Statement. Goodwill and fair value adjustments
arising on acquisition of a foreign operation are
regarded as assets and liabilities of the foreign
operation and are translated accordingly.
At the inception of a derivative transaction, the
Group documents the relationship between the
hedged item and the hedging instrument together
with its risk management objective and the strategy
underlying the proposed transaction. The Group
also documents its assessment, both at the
inception of the hedging relationship and
subsequently on an ongoing basis, of the
effectiveness of the hedging instrument in offsetting
movements in the fair values or cash flows of the
hedged items. Where derivatives do not fulfil the
criteria for hedge accounting, changes in fair values
are reported in the Consolidated Income Statement
and Consolidated Balance Sheet.
Fair value and cash flow hedges
The Group uses fair value hedges and cash flow
hedges in its treasury activities. For the purposes of
hedge accounting, hedges are classified either as
fair value hedges (which entail hedging the exposure
to movements in the fair value of a recognised asset
or liability or an unrecognised firm commitment that
could affect profit or loss) or cash flow hedges
(which hedge exposure to fluctuations in future cash
flows derived from a particular risk associated with a
recognised asset or liability, or a highly probable
forecast transaction that could affect profit or loss).
Where the conditions for hedge accounting are
satisfied and the hedging instrument concerned is
classified as a fair value hedge, any gain or loss
stemming from the remeasurement of the hedging
instrument to fair value is reported in the
Consolidated Income Statement. In addition, any
gain or loss on the hedged item which is attributable
to the hedged risk is adjusted against the carrying
amount of the hedged item and reflected in the
Consolidated Income Statement. Where the
adjustment is to the carrying amount of a hedged
interest-bearing financial instrument, the adjustment
is amortised to the Consolidated Income Statement
with the objective of achieving full amortisation by
maturity.
Where a derivative financial instrument is designated
as a hedge of the variability in cash flows of a
recognised asset or liability or a highly probable
forecast transaction that could affect profit or loss,
the effective part of any gain or loss on the
derivative financial instrument is recognised as other
comprehensive income, net of the income tax
effect, with the ineffective portion being reported in
the Consolidated Income Statement. The
associated gains or losses that had previously been
recognised as other comprehensive income are
transferred to the Consolidated Income Statement
contemporaneously with the materialisation of the
hedged transaction.
Hedge accounting is discontinued when the
hedging instrument expires or is sold, terminated or
exercised, or no longer qualifies for hedge
accounting. At that point in time, any cumulative
gain or loss on the hedging instrument recognised
as other comprehensive income remains there until
the forecast transaction occurs. If a hedged
transaction is no longer anticipated to occur, the net
cumulative gain or loss previously recognised as
other comprehensive income is transferred to the
Consolidated Income Statement in the period.
Net investment hedges
Where foreign currency swaps provide a hedge
against a net investment in a foreign operation, and
the hedge is deemed to be effective, foreign
exchange differences are taken directly to a foreign
currency translation reserve. The ineffective portion
of any gain or loss on the hedging instrument is
recognised immediately in the Consolidated Income
Statement. Cumulative gains and losses remain in
equity until disposal of the net investment in the
foreign operation at which point the related
differences are transferred to the Consolidated
Income Statement as part of the overall gain or loss
on sale.
Share capital and dividends –
Notes 29 and 11
Treasury Shares and own shares
Ordinary Shares acquired by the Parent Company
through the share buyback programme (Treasury
Shares) or purchased by the Employee Benefit Trust
on behalf of the Parent Company under the terms of
the Performance Share Plans and the Restricted
Share Plan (own shares) are deducted from equity
and presented on the face of the Consolidated
Balance Sheet. No gain or loss is recognised in
profit or loss on the purchase, sale, issue or
cancellation of the Parent Company’s Ordinary
Shares. A financial liability is recorded if a
contractual obligation to repurchase shares exists at
the balance sheet date.
Dividends
Dividends on Ordinary Shares are recognised as a
liability in the Consolidated Financial Statements in
the period in which they are declared by the Parent
Company and approved by shareholders in respect
of final dividends.
Other Reserves
Other Reserves primarily comprise reserves relating
to the Group’s share-based payments expense.
Foreign currency translation
Items included in the financial statements of each of
the Group’s entities are measured using the
currency of the primary economic environment in
which the entity operates (‘the functional currency’).
The Consolidated Financial Statements are
154
154
2021 Annual Report and Form 20-F 155
Accounting Policies - continued
The principal exchange rates used for the translation of results, cash flows and balance sheets into US Dollar were as follows:
US Dollar 1 =
Brazilian Real
Canadian Dollar
Chinese Renminbi
Danish Krone
Euro
Hungarian Forint
Indian Rupee
Philippine Peso
Polish Zloty
Pound Sterling
Romanian Leu
Serbian Dinar
Swiss Franc
Ukrainian Hryvnia
Average
Year-end
2021
2020
2019
2021
2020
5.3968
5.1568
3.9423
5.5716
5.1941
1.2538
1.3412
1.3269
1.2716
1.2751
6.4493
6.9010
6.9098
6.3513
6.5404
6.2919
6.5388
6.6691
6.5652
6.0650
0.8460
0.8771
0.8933
0.8829
0.8151
303.3739
307.9331
290.5732
325.9300
296.8600
73.9391
74.1177
70.4208
74.3009
73.0706
49.2983
49.6071
51.7955
50.9800
48.0300
3.8633
3.8971
3.8389
4.0579
3.7166
0.7270
0.7798
0.7841
0.7417
0.7320
4.1641
4.2432
4.2388
4.3692
3.9683
99.4732
103.1510
105.2592
103.7590
95.8751
0.9145
0.9387
0.9937
0.9119
0.8806
27.2588
26.9857
25.8045
27.2850
28.3242
154
2021 Annual Report and Form 20-F 155
2021 Annual Report and Form 20-F 155
Notes on Consolidated Financial Statements
1. Revenue
CRH is the leading building materials business in
the world. It manufactures and supplies a range of
integrated building materials, products and
innovative solutions which can be found
throughout the built environment, from major
public infrastructure projects to commercial
buildings and homes.
The Group has three operating segments (as
identified under IFRS 8 Operating Segments)
generating revenue through the following activities:
Americas Materials businesses in the US and
Canada utilise an extensive network of reserve
backed quarry locations, to provide asphalt paving
services and to produce and supply a range of
materials including cement, aggregates,
readymixed concrete and asphalt. These materials
are used widely in a variety of construction
projects including public infrastructure,
commercial buildings and homes. This segment
also includes the Group’s cement operations in
Brazil, which were divested in April 2021.
Europe Materials businesses are predominantly
engaged in the manufacture and supply of
cement, lime, aggregates, asphalt, readymixed
concrete and concrete products, as well as paving
and construction services. Our materials are used
extensively in a wide range of construction
applications, from major public road and
infrastructure projects, to the development and
refurbishment of commercial buildings and homes.
This segment comprises businesses operating in
20 countries across Western, Central and Eastern
Europe as well as the Philippines in Asia.
Our Building Products segment includes
businesses operating across a portfolio of building
product related platforms including architectural
products, infrastructure products, construction
accessories and building envelope. Our
businesses offer a diverse range of products
including brickwork supports that keep walls
standing, glazing systems that hold glass in place,
products that collect, connect and protect vital
utility infrastructure and pavers, blocks and patio
products used to pave our city centres and create
unique outdoor living spaces. This segment
comprises businesses operating in 19 countries
primarily in the US, Canada and Western Europe.
It also included up to their disposal in 2019, our
perimeter protection and shutters & awnings
businesses.
The divestment of our Europe Distribution
business (excluding DIY Benelux), formerly part of
the Building Products segment, was completed in
2019. As a result, it was classified as discontinued
operations in 2019.
A. Disaggregated revenue
In the following tables, revenue is disaggregated
by primary geographic market and by principal
activities and products. Due to the diversified
nature of the Group, the basis on which
management reviews its businesses varies across
the Group. Geography is the primary basis for the
Americas Materials and Europe Materials
businesses; while activities and products are used
for the Building Products businesses.
Revenue from external customers (as defined in
IFRS 8) attributable to the country of domicile and
all foreign countries of operation greater than 10%
are included below. Further operating segment
disclosures are set out in note 2.
Primary geographic markets
Continuing operations
Republic of Ireland (country of domicile)
United Kingdom
Rest of Europe (i)
United States
Rest of World (ii)
Year ended 31 December
Americas
Materials
2021
$m
Europe
Materials
2021
$m
Building
Products
2021
$m
Americas
Materials
2020
$m
Europe
Materials
2020
$m
Building
Products
2020
$m
Americas
Materials
2019
$m
Europe
Materials
2019
$m
Building
Products
2019
$m
Total
2020
$m
Total
2021
$m
Total
2019
$m
-
-
-
11,172
1,235
706
3,979
5,243
-
653
-
706
244 4,223
1,085 6,328
6,021 17,193
643 2,531
-
-
-
9,984
1,289
632
3,157
4,841
-
511
-
632
180 3,337
992 5,833
-
-
-
5,479 15,463 10,307
1,319
522 2,322
655
3,478
4,845
-
531
-
655
243 3,721
1,162 6,007
5,086 15,393
506 2,356
Total Group from continuing operations
12,407
10,581
7,993 30,981 11,273
9,141
7,173 27,587 11,626
9,509
6,997 28,132
Discontinued operations
Rest of Europe (i) - Europe Distribution
Total Group
-
30,981
-
27,587
3,557
31,689
(i) The Rest of Europe principally includes Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Hungary, Luxembourg, the Netherlands,
Poland, Romania, Serbia, Slovakia, Spain, Sweden, Switzerland and Ukraine.
(ii) The Rest of World principally includes Australia, Brazil, Canada and the Philippines.
156
156
2021 Annual Report and Form 20-F 157
1. Revenue - continued
Year ended 31 December
Principal activities and products
Continuing operations
Cement, lime and cement products
Aggregates, asphalt and
readymixed products
Construction contract activities*
Architectural products
Infrastructure products
Construction accessories
Architectural glass and glazing
systems and related hardware
Total Group from continuing
operations
Discontinued operations
General Builders Merchants, DIY
Germany and Sanitary, Heating &
Plumbing - Europe Distribution
Total Group
Americas
Materials (iii)
2021
$m
Europe
Materials (iii)
2021
$m
Building
Products
2021
$m
Americas
Materials (iii)
2020
$m
Europe
Materials (iii)
2020
$m
Building
Products
2020
$m
Total
2021
$m
Americas
Materials (iii)
2019
$m
Europe
Materials (iii)
2019
$m
Building
Products
2019
$m
Total
2020
$m
Total
2019
$m
1,483
3,463
- 4,946
1,403
2,974
- 4,377
1,368
2,962
- 4,330
6,262
4,662
-
-
-
3,606
2,065
1,264
183
-
- 9,868
175 6,902
3,790 5,054
1,605 1,788
731
731
5,604
4,266
-
-
-
- 8,704
3,100
1,732
168 6,166
1,166 3,439 4,605
169 1,278 1,447
626
626
-
5,649
4,609
-
-
-
- 9,076
3,427
1,801
185 6,595
1,069 2,983 4,052
250 1,387 1,637
660
660
-
-
-
1,692 1,692
-
- 1,662 1,662
-
- 1,782 1,782
12,407
10,581
7,993 30,981
11,273
9,141 7,173 27,587
11,626
9,509 6,997 28,132
-
30,981
-
27,587
3,557
31,689
(iii) Americas Materials and Europe Materials both operate vertically integrated businesses, which are founded in resource-backed cement and aggregates assets and
which support the manufacture and supply of aggregates, asphalt, cement, readymixed and precast concrete and landscaping products. Accordingly, for the
purpose of disaggregation of revenue we have included certain products together, as this is how management reviews and evaluates this business line.
There are no material dependencies or
concentrations of individual customers which would
warrant disclosure under IFRS 8. The individual
entities within the Group have a large number of
customers spread across various activities,
end-uses and geographies.
Revenue derived through the supply of services and
intersegment revenue are not material to the Group.
The transfer pricing policy implemented by the
Group between operating segments and across its
constituent entities is described in note 32. In
addition, due to the nature of building materials,
which have a low value-to-weight ratio, the Group’s
revenue streams include a low level of cross-border
transactions.
B. Contract balances
For information on the Group’s construction
contract balances, including movements during the
year, refer to notes 16, 17 and 18. Movements in
our net contract balances are not considered
significant and are primarily driven by the timing of
billing work-in-progress within our construction
contract businesses.
31 December 2021 (2020: $2,604 million; 2019:
$2,097 million). The Group has applied the practical
expedient of IFRS 15 whereby revenue yet to be
recognised on contracts that had an original
expected duration of less than one year is not
disclosed. The majority of open contracts at
31 December 2021 will close and revenue will be
recognised within 12 months of the balance sheet
date.
C. Unsatisfied long-term construction contracts
and other performance obligations
Revenue yet to be recognised from fixed-price long-
term construction contracts, primarily within our
Americas Materials and Europe Materials
businesses, amounted to $3,177 million at
* Revenue principally recognised over time. Construction contracts are generally completed within the same financial reporting year.
156
2021 Annual Report and Form 20-F 157
2021 Annual Report and Form 20-F 157
2. Segment Information
As outlined in note 1, the Group has three
operating segments. The segments reflect the
Group’s organisational structure and the nature of
the financial information reported to and assessed
by the Group Chief Executive and Finance
Director, who are together determined to fulfil the
role of Chief Operating Decision Maker (as defined
in IFRS 8). No operating segments have been
aggregated to form these reportable segments.
The principal factors employed in the identification
of the three segments reflected in this note
include:
•
•
•
•
the Group’s organisational structure in 2021
(during 2021 each divisional President fulfilled
the role of “segment manager” as outlined in
IFRS 8);
the nature of the reporting lines to the Chief
Operating Decision Maker (as defined in
IFRS 8);
the structure of internal reporting
documentation such as management
accounts and budgets; and
the degree of homogeneity of products and
services within each of the segments from
which revenue is derived
The Chief Operating Decision Maker monitors the
operating results of segments separately in order
to allocate resources between segments and to
assess performance. Segment performance is
evaluated using EBITDA (as defined)*. Given that
net finance costs and income tax are managed on
a centralised basis, these items are not allocated
between operating segments for the purposes of
the information presented to the Chief Operating
Decision Maker and are accordingly omitted from
the detailed segmental analysis below. There are
no asymmetrical allocations to reporting segments
which would require disclosure.
A. Operating segments disclosures—Consolidated Income Statement data
Continuing operations
Americas Materials
Europe Materials
Building Products
Total Group from continuing operations
Discontinued operations
Europe Distribution
Total Group
Continuing operations
EBITDA (as defined)*
Depreciation, amortisation and impairment (i)
Group operating profit
Profit/(loss) on disposals (ii)
Finance costs less income
Other financial expense
Share of equity accounted investments’ profit/(loss) (iii)
Profit before tax from continuing operations
Year ended 31 December
Revenue
EBITDA (as defined)*
2021
$m
2020
$m
2019
$m
2021
$m
2020
$m
2019
$m
12,407 11,273 11,626
10,581 9,141 9,509
2,588 2,405 2,194
1,410 1,055 1,208
7,993 7,173 6,997 1,352 1,170 1,076
30,981 27,587 28,132 5,350 4,630 4,478
-
- 3,557
-
-
224
30,981 27,587 31,689 5,350 4,630 4,702
5,350 4,630 4,478
(1,765) (2,367) (1,685)
3,585 2,263 2,793
(189)
(365)
(125)
67
119
(311)
(106)
55
9
(389)
(101)
(118)
3,342 1,664 2,181
(i) Depreciation,
amortisation and
impairment
2020
$m
2019
$m
2021
$m
(ii) Profit/(loss) on
disposals
(note 6)
2020
$m
2019
$m
2021
$m
(iii) Share of equity
accounted investments’
profit/(loss)
2020
$m
2021
$m
2019
$m
Americas Materials
Europe Materials
Building Products
Total Group from continuing operations
(800)
(774)
(596) (1,245)
(348)
(369)
(771)
(586)
(328)
(1,765) (2,367) (1,685)
126
17
(24)
119
8
(12)
13
(2)
(283)
96
9
(189)
17
21
17
55
34
(148)
(4)
(118)
43
14
10
67
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
158
158
2021 Annual Report and Form 20-F 159
2. Segment Information - continued
B. Operating segments disclosures - Consolidated Balance Sheet data
Americas Materials
Europe Materials
Building Products
Total Group
Reconciliation to total assets as reported in the Consolidated Balance Sheet:
Investments accounted for using the equity method
Other financial assets
Derivative financial instruments (current and non-current)
Income tax assets (current and deferred)
Cash and cash equivalents
Total assets as reported in the Consolidated Balance Sheet
Reconciliation to total liabilities as reported in the Consolidated Balance Sheet:
Interest-bearing loans and borrowings (current and non-current)
Derivative financial instruments (current and non-current)
Income tax liabilities (current and deferred)
Total liabilities as reported in the Consolidated Balance Sheet
C. Operating segments disclosures - other items
Additions to non-current assets
Continuing operations
Americas Materials
Europe Materials
Building Products
Property, plant and
equipment (i) (note 13, 20)
2019
2020
$m
$m
2021
$m
750
607
417
527
384
265
750
549
353
Total Group from continuing operations
1,774
1,176
1,652
Discontinued operations
Europe Distribution
Total Group
-
-
-
1,774
1,176
1,652
As at 31 December
Total assets
Total liabilities
2021
$m
17,064
12,367
8,504
2020
$m
16,172
12,730
7,316
2021
$m
3,292
4,100
2,579
2020
$m
2,897
3,971
2,268
37,935
36,218
9,971
9,136
653
12
136
151
5,783
626
13
201
165
7,721
44,670
44,944
10,487
14
3,284
12,215
13
3,232
23,756
24,596
Total Group
2021
$m
2020
$m
2019
$m
754
607
417
528
384
265
780
550
353
1,778
1,177
1,683
-
-
1
1,778
1,177
1,684
Year ended 31 December
Financial assets
(note 15)
2020
$m
2021
$m
2019
$m
4
-
-
4
-
4
1
-
-
1
-
1
30
1
-
31
1
32
(i) Additions to property, plant and equipment include $10 million (2020: $14 million; 2019: $96 million) relating to leased mineral reserves which fall outside the
scope of IFRS 16.
158
2021 Annual Report and Form 20-F 159
2021 Annual Report and Form 20-F 159
D. Information about geographical areas
The non-current assets (as defined in IFRS 8) attributable to the country of domicile and all foreign countries of operation, for which revenue exceeds 10% of total
external Group revenue, are set out below.
Republic of Ireland (country of domicile)
United Kingdom
United States
Other
Total Group
As at 31 December
Non-current assets*
2021
$m
544
2,595
17,304
9,560
30,003
2020
$m
603
2,594
15,990
10,129
29,316
3. Assets Held for Sale and Discontinued Operations
The transaction which is subject to customary
conditions and regulatory approvals is expected to
close in the first half of 2022.
No businesses divested in 2021 or 2020 are
considered to be either separate major lines of
business or geographical areas of operation and
therefore do not constitute discontinued
operations.
No businesses met the IFRS 5 Non-Current
Assets Held for Sale and Discontinued Operations
held for sale criteria at 31 December 2021.
In February 2022, the Group reached agreement
to divest of its Building Envelope business for an
enterprise value of $3.8 billion. Building Envelope
which forms part of our Building Products
segment provides architectural glass, storefront
systems, architectural glazing systems and related
hardware to customers primarily in North America.
A. Loss on disposal of discontinued operations
In October 2019, the Group completed the
divestment of its Europe Distribution business,
formerly part of our Building Products segment.
This was considered to be a discontinued
operation as defined in IFRS 5 and was classified
accordingly in 2019.
The table below sets out the proceeds and related
loss recognised on divestment which were
included in profit after tax for the financial year
2019 from discontinued operations.
Assets/(liabilities) disposed of at net carrying amount:
- non-current assets
- cash and cash equivalents
- working capital and provisions
- current tax
- lease liabilities
- deferred tax
- retirement benefit obligations
- non-controlling interests
Net assets disposed
Reclassification of currency translation effects on disposal
Total
Proceeds from disposal (net of disposal costs)
Loss on disposal from discontinued operations
Net cash inflow arising on disposal
Proceeds from disposal from discontinued operations
Less: cash and cash equivalents disposed
Total
2019
$m
1,462
112
665
2
(410)
(32)
(47)
(9)
1,743
117
1,860
1,855
(5)
1,855
(112)
1,743
* Non-current assets comprise property, plant and equipment, intangible assets and investments accounted for using the equity method.
160
160
2021 Annual Report and Form 20-F 161
3. Assets Held for Sale and Discontinued Operations -
continued
B. Results of discontinued operations
The results of the discontinued operations included in the Group profit for the financial year 2019 are set out as follows:
Revenue
EBITDA (as defined)*
Depreciation
Amortisation
Impairment
Operating profit
Loss on disposals
Profit before finance costs
Finance costs
Share of equity accounted investments’ profit
Profit before tax
Attributable income tax expense
Profit after tax for the financial year from discontinued operations
Profit attributable to:
Equity holders of the Company
Non-controlling interests
Profit for the financial year from discontinued operations
Basic earnings per Ordinary Share from discontinued operations
Diluted earnings per Ordinary Share from discontinued operations
Cash flows from discontinued operations
Net cash inflow from operating activities
Net cash inflow from investing activities
Net cash outflow from financing activities
Net cash inflow
4. Cost Analysis
Continuing operations
Cost of sales analysis
Raw materials and goods for resale
Employment costs (note 7)
Energy conversion costs
Repairs and maintenance
Depreciation, amortisation and impairment (i)
Change in inventory
Other production expenses (primarily sub-contractor costs)
Total
Operating costs analysis
Selling and distribution costs
Administrative expenses
Total
2019
$m
3,557
224
(108)
(2)
(1)
113
(2)
111
(8)
14
117
(26)
91
90
1
91
11.3c
11.2c
36
1,722
(80)
1,678
2021
$m
2020
$m
2019
$m
6,942 5,757 5,840
4,089 3,871 3,880
1,540 1,268 1,464
1,183 1,103 1,097
1,427 1,621 1,370
(439)
(70)
5,751 4,742 5,278
20,493 18,425 18,859
63
4,849 4,454 4,547
2,054 2,445 1,933
6,903 6,899 6,480
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
160
2021 Annual Report and Form 20-F 161
2021 Annual Report and Form 20-F 161
(i) Depreciation, amortisation and impairment analysis
Depreciation and depletion (note 13, 20)
Amortisation of intangible assets (note 14)
Impairment of property, plant and equipment (note 13, 20) (ii)
Impairment of intangible assets (note 14) (ii)
Total
Cost of sales
2021
$m
1,427
-
-
-
1,427
2020
$m
1,367
-
254
-
1,621
2019
$m
1,364
-
6
-
1,370
Operating costs
2021
$m
2020
$m
2019
$m
264
74
-
-
338
257
70
9
410
746
249
64
2
-
315
2021
$m
1,691
74
-
-
1,765
Total
2020
$m
1,624
70
263
410
2,367
2019
$m
1,613
64
8
-
1,685
(ii) Total impairment charges for the year ended 31 December 2021 amounted to $nil million (2020: $827 million, including a charge of $154 million related to equity
accounted investments as detailed in note 15; 2019: $8 million).
5. Auditor’s Remuneration
Continuing operations
In accordance with statutory requirements in Ireland, fees for professional services provided by the Group’s independent auditor in respect of each of the following
categories were:
Audit fees (ii) (iii)
Other audit-related assurance fees (iii)
Tax advisory services (iii)
Total
Statutory auditor (Ireland)
EY (i)
Deloitte
2021
$m
2020
$m
2019
$m
7
-
-
7
6
-
-
6
4
-
-
4
Network firms
Deloitte
2021
$m
2020
$m
EY (i)
2019
$m
14
1
-
15
12
-
-
12
16
-
1
17
Total
Deloitte
2021
$m
2020
$m
EY (i)
2019
$m
21
1
-
22
18
-
-
18
20
-
1
21
(i) With effect from 2020, following a competitive tender process, Deloitte Ireland LLP (Deloitte) was appointed as auditor of the Group, replacing Ernst & Young (EY).
In the table above, auditor’s remuneration for services provided during the years ended 31 December 2021 and 2020 thus relates to Deloitte and for the year
ended 31 December 2019 to EY.
(ii) Audit of the Group accounts includes the audit of internal control over financial reporting and parent and subsidiary statutory audit fees, but excludes $3 million
(2020: $3 million; 2019: $3 million) paid to auditors other than Deloitte (2021 and 2020) and EY (2019).
(iii) Audit fees in 2019, including discontinued operations, amounted to $20 million. Other audit-related assurance fees in 2019, including discontinued operations,
amounted to $nil million and tax advisory services in 2019, including discontinued operations, amounted to $1 million.
There were no other fees for services provided by the Group’s independent auditor (2020: $nil million; 2019: $nil million).
162
162
2021 Annual Report and Form 20-F 163
6. Business and Non-Current Asset Disposals
Continuing operations
Assets/(liabilities) disposed of at net carrying amount:
- non-current assets
- cash and cash equivalents
- working capital and provisions
- current tax
- lease liabilities
- deferred tax
- retirement benefit obligations
- non-controlling interests
Net assets disposed
Reclassification of currency translation effects on disposal
Total
Proceeds from disposals (net of disposal costs)
Profit/(loss) on disposals from continuing operations
Discontinued operations
Business disposals
Disposal of other
non-current assets
2021
$m
2020
$m
2019
$m
2021
$m
2020
$m
2019
$m
2021
$m
Total
2020
$m
2019
$m
135
31
25
-
(3)
1
(1)
-
188
29
217
295
78
74
7
29
-
669
100
127
157
235
201
826
50
93
(1)
-
-
-
-
-
-
-
-
-
31
25
-
7
29
-
50
93
(1)
(12)
(53)
(17)
(32)
(33)
(20)
(44)
(86)
(3)
(1)
(6)
88
13
(3)
(2)
-
753
263
101
1,016
77
787
(24)
(229)
-
-
-
83
-
83
124
41
-
-
-
95
-
95
128
33
-
-
-
124
-
124
164
40
1
(1)
-
271
29
300
419
119
(3)
(1)
(6)
183
13
(3)
(2)
-
877
263
196
1,140
205
951
9
(189)
(Loss)/profit on disposals from discontinued operations (note 3)
Total Group profit/(loss) on disposals
-
78
-
(5)
(24)
(234)
-
41
-
33
3
43
-
119
-
9
(2)
(191)
Net cash inflow arising on disposal
Continuing operations
Proceeds from disposals from continuing operations
Less: cash and cash equivalents disposed
Less: deferred proceeds arising on disposal (note 19) (i)
Net cash inflow arising on disposal from continuing operations
Discontinued operations
Net cash inflow arising on disposal from discontinued operations
Total Group net cash inflow arising on disposal
295
(31)
(1)
263
-
263
77
(7)
(50)
(14)
(302)
787
124
128
164
-
-
-
-
-
-
56
435
124
128
164
419
(31)
(1)
387
205
(7)
(14)
184
951
(50)
(302)
599
-
1,743
-
-
1
-
-
1,744
56
2,178
124
128
165
387
184
2,343
(i) On 31 December 2019, CRH completed the sale of the Group’s 50% stake in its joint venture in India, My Home Industries Limited (MHIL), for deferred proceeds
of $0.3 billion which will be received in several agreed tranches.
162
2021 Annual Report and Form 20-F 163
2021 Annual Report and Form 20-F 163
7. Employment
Continuing operations
The average number of employees is as follows:
Americas Materials
Europe Materials
Building Products
Total Group
Year ended 31 December
2021
2020
2019
28,272
25,636
23,538
77,446
27,412
26,785
22,902
77,099
28,576
27,238
24,437
80,251
The average number of employees in 2019, including discontinued operations, was 86,951.
Employment costs charged in the Consolidated Income Statement for continuing operations are analysed as follows:
Wages and salaries
Social welfare costs
Redundancy, healthcare and other employment benefit costs
Share-based payment expense (note 8)
Total retirement benefits expense (note 28)
Total (i) (ii)
Total charge analysed between:
Cost of sales
Operating costs
Finance costs (net) - applicable to retirement benefit obligations (note 9)
Total
2021
$m
4,873
495
656
110
381
6,515
4,089
2,416
10
6,515
2020
$m
4,573
461
723
96
359
6,212
3,871
2,330
11
6,212
(i) Directors’ emoluments (which are included in administrative expenses in note 4) are presented in note 32.
(ii) Employment costs in 2019, including discontinued operations, are analysed as follows:
Wages and salaries
Social welfare costs
Redundancy, healthcare and other employment benefit costs
Share-based payment expense (note 8)
Total retirement benefits expense (note 28)
Total
2019
$m
4,604
473
653
83
341
6,154
3,880
2,259
15
6,154
4,988
544
676
86
369
6,663
164
164
2021 Annual Report and Form 20-F 165
8. Share-based Payment Expense
Continuing operations
Performance Share Plans and Restricted Share Plan expense
Share option expense
Total share-based payment expense (i)
2021
$m
108
2
110
2020
$m
93
3
96
2019
$m
79
4
83
(i) The total share-based payment expense in 2019, including discontinued operations, amounted to $86 million.
Share-based payment expense relates primarily to awards granted under the 2014 Performance Share Plan and the Group’s Savings-related Share Option Schemes.
The expense, which in 2019 also includes charges in relation to the 2013 Restricted Share Plan, is reflected in operating costs in the Consolidated Income Statement.
2014 Performance Share Plan
Details of the awards made under the 2014 Performance Share Plan are summarised below. An expense of $108 million was recognised in 2021 (2020:
$93 million; 2019: $78 million).
Details of awards granted under the 2014 Performance Share Plan
Granted in 2021
Granted in 2020
Granted in 2019
Number of shares
Share price at
date of award
Period to earliest
release date
Initial
award (i)
Net outstanding at
31 December 2021
€39.79
€31.50
€29.44
3 years
3 years
3 years
3,261,885
3,428,021
3,688,027
3,154,225
3,232,561
3,352,346
(i) Numbers represent the initial awards including those granted to employees of Europe Distribution in 2019. The Remuneration
Committee has determined that dividend equivalents will accrue on awards under the 2014 Performance Share Plan. Subject to
satisfaction of the applicable performance criteria, such dividend equivalents will be released to participants in the form of additional
shares on vesting.
25% of each award made is subject to TSR
performance measured against a tailored peer
group; 25% is subject to a RONA metric; with the
remaining 50% subject to a cumulative cashflow
metric. Performance for the awards will be
assessed over a three-year period.
The fair values assigned to the portion of awards
which are subject to TSR performance against
peers was €22.23 (2020: €18.52; 2019: €18.59).
The fair value of these awards was calculated
using a TSR pricing model taking account of peer
group TSR, volatilities and correlations together
with the following assumptions:
Risk-free interest rate (%)
Expected volatility (%)
2021
(0.56)
35.1
2020
(0.61)
22.1
2019
(0.37)
23.2
The expected volatility was determined using a historical sample of daily CRH share prices.
The fair value of (i) the portion of awards subject to cash flow performance and (ii) the portion of awards subject to a RONA metric was calculated as the closing CRH
share price at the date the award was granted.
164
2021 Annual Report and Form 20-F 165
2021 Annual Report and Form 20-F 165
Share Option Schemes
The 2010 Share Option Scheme was replaced in 2014 by the 2014 Performance Share Plan, and accordingly no options have been granted since 2013.
Details of movement and options outstanding under Share Option Schemes (excluding Savings-related Share Option Schemes)
Outstanding at beginning of year
Exercised (i)
Lapsed
Outstanding at end of year (ii)
Exercisable at end of year
Weighted
average exercise
price
Number of
options
2021
Weighted
average exercise
price
Number of
options
2020
Weighted
average exercise
price
Number of
options
2019
€16.19
€16.19
-
€16.19
€16.19
197,253
(51,522)
-
145,731
145,731
€16.19
€16.19
€16.19
€16.19
€16.19
278,349
(77,748)
(3,348)
197,253
197,253
€16.48
€16.65
€16.19
€16.19
€16.19
800,770
(520,115)
(2,306)
278,349
278,349
(i) The weighted average share price at the date of exercise of these options was €42.10 (2020: €31.70; 2019: €29.10).
(ii) All options granted have a life of ten years. All outstanding options are denominated in euro and have an exercise price of €16.19 (2020: €16.19; 2019: €16.19).
Weighted average remaining contractual life for the share options outstanding
at 31 December (years)
2010 and 2021 Savings-related Share Option Schemes
2021
2020
2019
1.30
2.30
3.30
In April 2021, shareholders approved the adoption of the 2021 savings-related share option schemes, which replaced the schemes approved by shareholders in May
2010. Under both schemes, participants may save up to €500/Stg£500 per month from their net salaries for a fixed term of three or five years and at the end of the
savings period they have the option to buy CRH shares at a discount of up to 15% of the market price on the date of invitation of each savings contract.
Details of options granted under the Savings-related Share Option Schemes
Outstanding at beginning of year
Exercised (i)
Lapsed
Granted (ii)
Outstanding at end of year
Exercisable at end of year
Weighted
average exercise
price
Number of
options
2021
€23.83/Stg£19.69
1,173,507
€22.77/Stg£18.69
(470,001)
€24.75/Stg£21.49
(73,411)
Stg£31.04
455,068
€24.28/Stg£25.42
1,085,163
€23.27/Stg£20.56
14,197
Weighted
average exercise
price
€23.67/Stg£20.17
€23.21/Stg£22.37
€23.25/Stg£21.54
-
€23.83/Stg£19.69
€24.66/Stg£24.51
Number of
options
2020
1,508,862
(178,773)
(156,582)
-
1,173,507
16,528
Weighted
average exercise
price
€22.15/Stg£18.74
€19.09/Stg£16.20
€23.49/Stg£20.85
€24.24/Stg£20.11
€23.67/Stg£20.17
€18.88/Stg£15.89
Number of
options
2019
1,686,176
(627,034)
(207,070)
656,790
1,508,862
13,065
(i) The weighted average share price at the date of exercise of these options was €42.53 (2020: €31.70; 2019: €28.52).
(ii) Pursuant to the 2010 and 2021 Savings-related Share Option Schemes operated by the Group, employees were granted options over 455,068 of CRH plc’s
Ordinary Shares in October 2021 (2020: nil; 2019: 556,493 share options in April 2019 and 100,297 share options in May 2019). This figure comprises options
over 346,237 (2020: nil; 2019: 518,944) shares and 108,831 (2020: nil; 2019: 137,846) shares which are normally exercisable within a period of six months after
the third or the fifth anniversary of the contract, whichever is applicable. The exercise price at which the options are granted under the scheme represents a
discount of 15% to the market price on the date of invitation of each savings contract.
166
166
2021 Annual Report and Form 20-F 167
8. Share-based Payment Expense - continued
Continuing operations
Weighted average remaining contractual life for the share options outstanding
at 31 December (years)
euro-denominated options outstanding at end of year (number)
Range of exercise prices (€)
Pound Sterling-denominated options outstanding at end of year (number)
Range of exercise prices (Stg£)
2021
2020
2019
1.81
1.14
1.87
132,769
290,627
20.83-27.86 20.83-27.86 17.67-27.86
214,826
952,394
1,218,235
16.16-31.04 16.16-24.51 14.94-24.51
958,681
The weighted fair values assigned to options issued under the Savings-related Share Option Schemes, which were computed in accordance with the trinomial
valuation methodology, were as follows:
Granted in 2021 (October)
Granted in 2019 (April)
Granted in 2019 (May)
3-year
5-year
€6.78
€7.55
€6.67
€7.05
€7.98
€7.19
The fair value of these options were determined using the following assumptions:
Weighted average exercise price (€)
Risk free interest rate (%)
Expected dividend payments over the expected life (€)
Expected volatility (%)
Expected life in years
2021
2019
3-year
5-year
3-year
5-year
October
April
May
April
May
36.83
(0.61)
3.25
23.5
3
36.83
(0.43)
5.65
21.2
5
23.30
(0.56)
2.34
19.6
3
24.24
(0.58)
2.34
20.0
3
23.30
(0.40)
4.06
21.1
5
24.24
(0.41)
4.06
21.3
5
The expected volatility was determined using a historical sample of 37 month-end CRH share prices in respect of the three-year savings-related share options and 61
month-end share prices in respect of the five-year savings-related share options. The expected lives of the options are based on historical data and are therefore not
necessarily indicative of exercise patterns that may materialise.
Other than the assumptions listed above, no other features of options grants were factored into the determination of fair value.
The terms of the options issued under the Savings-related Share Option Schemes do not contain any market conditions within the meaning of IFRS 2 Share-based
Payment.
166
2021 Annual Report and Form 20-F 167
2021 Annual Report and Form 20-F 167
9. Finance Costs and Finance Income
Continuing operations
Finance costs
Interest payable on borrowings
Net (income)/cost on interest rate and currency swaps
Mark-to-market of derivatives and related fixed rate debt:
- interest rate swaps (i)
- currency forwards and currency swaps
- fixed rate debt (i)
Net (gain)/loss on non-derivative financial instruments
Interest payable on cash and cash equivalents and other
Net finance cost on gross debt including related derivatives
Finance income
Interest receivable on loans to joint ventures and associates
Interest receivable on cash and cash equivalents and other
Finance income
Finance costs less income
Other financial expense
Unwinding of discount element of lease liabilities (note 20)
Unwinding of discount element of provisions for liabilities (note 26)
Unwinding of discount applicable to deferred and contingent acquisition consideration (note 18)
Unwinding of discount applicable to deferred divestment proceeds
Unwinding of discount applicable to leased mineral reserves
Pension-related finance cost (net) (note 28)
Net other financial expense
Total net finance costs (ii)
2021
$m
2020
$m
2019
$m
344
(31)
85
1
(90)
(4)
6
311
-
-
-
381
2
(97)
2
80
21
-
389
-
-
-
311
389
64
18
20
(12)
6
10
106
417
68
21
21
(24)
4
11
101
490
374
15
(72)
2
68
-
-
387
(5)
(17)
(22)
365
69
25
16
-
-
15
125
490
(i) The Group uses interest rate swaps to convert fixed rate debt to floating rate. Fixed rate debt, which has been converted to floating rate through the use of
interest rate swaps, is stated in the Consolidated Balance Sheet at adjusted value to reflect movements in underlying fixed rates. The movement on this
adjustment, together with the offsetting movement in the fair value of the related interest rate swaps, is included in finance costs in each reporting period.
(ii) Net finance costs in 2019, including discontinued operations, amounted to $498 million.
168
168
2021 Annual Report and Form 20-F 169
10. Income Tax Expense
Recognised within the Consolidated Income Statement
Continuing operations
(a) Current tax
Republic of Ireland
Overseas
Total current tax expense
(b) Deferred tax
Origination and reversal of temporary differences:
Retirement benefit obligations
Share-based payment expense
Derivative financial instruments
Other items
Total deferred tax expense/(income)
2021
$m
2020
$m
2019
$m
15
603
618
2
(6)
2
105
103
23
571
594
(9)
(3)
-
(83)
(95)
20
385
405
(1)
(6)
2
134
129
Income tax reported in the Consolidated Income Statement
721
499
534
Recognised outside the Consolidated Income Statement
(a) Within the Consolidated Statement of Comprehensive Income:
Deferred tax - retirement benefit obligations
Deferred tax - cash flow hedges
(b) Within the Consolidated Statement of Changes in Equity:
Current tax
Current tax - share option exercises
Deferred tax
Deferred tax - share-based payment expense
(36)
(8)
(44)
11
-
11
(4)
(4)
(8)
14
2
5
10
24
(1)
1
6
11
Income tax recognised outside the Consolidated Income Statement
(20)
12
3
168
2021 Annual Report and Form 20-F 169
2021 Annual Report and Form 20-F 169
Reconciliation of applicable tax rate to effective tax rate
Continuing operations
Profit before tax ($m)
Tax charge expressed as a percentage of profit before tax (effective tax rate):
- current tax expense only
- total income tax expense (current and deferred)
2021
2020
2019
3,342
1,664
2,181
18.5%
21.6%
35.7%
30.0%
18.6%
24.5%
The following table reconciles the applicable Republic of Ireland statutory tax rate to the effective tax rate (current and deferred) of the Group:
Irish corporation tax rate
Higher tax rates on overseas earnings
Other items
- arising from 2020 impairment
- other items (primarily comprising items not chargeable to tax/expenses not
% of profit before tax
12.5
9.8
12.5
10.6
12.5
12.8
-
8.4
-
(0.7)
21.6
(1.5)
30.0
(0.8)
24.5
deductible for tax)
Total effective tax rate
Other disclosures
Effective tax rate
The 2021 effective tax rate is 21.6% (2020: 30.0%;
2019: 24.5%).
The tax charge associated with discontinued
operations in 2019 is recognised separately in
“Profit after tax for the financial year from
discontinued operations”. See note 3 for further
details.
Changes in tax rates
The total tax charge in future periods will be
affected by any changes to the tax rates in force in
the countries in which the Group operates.
Proposed dividends
There are no income tax consequences for the
Company in respect of dividends proposed prior to
issuance of the Consolidated Financial Statements
and for which a liability has not been recognised.
2021 Annual Report and Form 20-F 171
170
170
11. Dividends
The dividends paid and proposed in respect of each class of share capital are as follows:
Dividends to shareholders (i)
Equity
Final - paid 93.00c per Ordinary Share (2020: 70.00c; 2019: 59.20c) (ii)
Interim - paid 23.00c per Ordinary Share (2020: 22.00c; 2019: 22.00c) (ii)
Total
Reconciliation to Consolidated Statement of Cash Flows
Dividends to shareholders
Translation adjustment (iii)
Dividends paid to equity holders of the Company
Dividends paid by subsidiaries to non-controlling interests
Total dividends paid
Dividends proposed (memorandum disclosure)
Equity
2021
$m
2020
$m
2019
$m
730
179
909
909
(3)
906
32
938
537
173
710
710
(3)
707
15
722
477
175
652
652
-
652
11
663
Final 2021 - proposed 98.00c per Ordinary Share (2020: 93.00c; 2019: 70.00c) (ii)
751
730
550
(i)
In 2021 the 5% Cumulative Preference Shares paid a dividend of €3,175 (2020: €3,175; 2019: €3,175) and the 7% ‘A’ Cumulative Preference Shares paid a
dividend of €77,521 (2020: €77,521; 2019: €77,521).
(ii)
Interim and final dividends per share declared previously in euro have been translated to US Dollar using the dividend record date exchange rate.
(iii) Translation adjustment arising from US Dollar declared dividends paid in non-US Dollar currencies.
170
2021 Annual Report and Form 20-F 171
2021 Annual Report and Form 20-F 171
12. Earnings per Ordinary Share
The computation of basic and diluted earnings per Ordinary Share is set out below:
Numerator computations
Group profit for the financial year
Profit attributable to non-controlling interests
Profit attributable to equity holders of the Company
Preference dividends
Profit attributable to ordinary equity holders of the Company - numerator for basic/diluted
earnings per Ordinary Share
Profit after tax for the financial year from discontinued operations - attributable to equity holders
of the Company
Profit attributable to ordinary equity holders of the Company - numerator for basic/diluted
earnings per Ordinary Share from continuing operations
2021
$m
2020
$m
2,621
(56)
2,565
-
1,165
(43)
1,122
-
2019
$m
1,738
(21)
1,717
-
2,565
1,122
1,717
-
-
90
2,565
1,122
1,627
Denominator computations
Weighted average number of Ordinary Shares (millions) outstanding for the year (i)
780.2
785.1
801.3
Effect of dilutive potential Ordinary Shares (employee share awards) (millions) (i) (ii)
Denominator for diluted earnings per Ordinary Share
6.6
6.0
6.4
786.8
791.1
807.7
Basic earnings per Ordinary Share
Diluted earnings per Ordinary Share
Basic earnings per Ordinary Share from continuing operations
Diluted earnings per Ordinary Share from continuing operations
328.8c
142.9c
214.3c
326.0c
141.8c
212.6c
328.8c
142.9c
203.0c
326.0c
141.8c
201.4c
(i) The weighted average number of Ordinary Shares included in the computation of basic and diluted earnings per Ordinary Share has been adjusted to exclude
shares held by the Employee Benefit Trust and Ordinary Shares repurchased and held by the Company (CRH plc) as Treasury Shares given that these shares do
not rank for dividend. The number of Ordinary Shares so held at the balance sheet date is detailed in note 29.
(ii) Ordinary shares, that would only be issued contingent on certain conditions (totalling 3,630,633 at 31 December 2021, 4,053,377 at 31 December 2020 and
3,618,278 at 31 December 2019) are excluded from the computation of diluted earnings per Ordinary Share where the conditions governing exercisability have
not been satisfied as at the end of the reporting period or they are antidilutive for the periods presented.
172
172
2021 Annual Report and Form 20-F 173
13. Property, Plant and Equipment
At 31 December 2021
Owned
Cost/deemed cost
Accumulated depreciation (and impairment charges)
Net carrying amount
At 1 January 2021, net carrying amount
Translation adjustment
Reclassifications
Transfer from leased assets (note 20)
Additions at cost
Additions to leased mineral reserves (note 19) (i)
Arising on acquisition (note 30)
Disposals at net carrying amount
Depreciation charge for year
At 31 December 2021, net carrying amount
Mineral-
bearing land
$m
Land and
buildings
$m
Plant and
machinery
$m
Assets in
course of
construction
$m
Total
$m
4,890
(1,244)
5,865
(1,904)
19,754
(10,360)
977
(40)
31,486
(13,548)
3,646
3,961
9,394
937
17,938
3,698
(59)
28
-
13
10
81
(11)
(114)
3,646
4,081
(111)
20
-
94
-
86
(63)
(146)
3,961
9,416
(146)
449
10
564
-
346
(92)
(1,153)
9,394
572
(22)
(501)
-
883
-
8
(3)
-
17,767
(338)
(4)
10
1,554
10
521
(169)
(1,413)
937
17,938
Land and
buildings
$m
Plant and
machinery
$m
Other
$m
Leased right-of-use assets (ii)
At 31 December 2021, net carrying amount (note 20)
1,195
313
56
1,564
Total property, plant and equipment
19,502
The equivalent disclosure for the prior year is as follows:
At 31 December 2020
Owned
Cost/deemed cost
Accumulated depreciation (and impairment charges)
Net carrying amount
At 1 January 2020, net carrying amount
Translation adjustment
Reclassifications
Transfer from leased assets (note 20)
Additions at cost
Additions to leased mineral reserves (note 19) (i)
Arising on acquisition (note 30)
Disposals at net carrying amount
Depreciation charge for year
Impairment charge for year (iii)
At 31 December 2020, net carrying amount
Mineral-
bearing land
$m
Land and
buildings
$m
Plant and
machinery
$m
Assets in
course of
construction
$m
Total
$m
4,874
(1,176)
5,928
(1,847)
19,400
(9,984)
612
(40)
30,814
(13,047)
3,698
4,081
9,416
572
17,767
3,687
82
52
-
28
14
7
(8)
(108)
(56)
3,698
4,027
109
76
5
42
-
42
(57)
(155)
(8)
4,081
9,490
232
440
2
512
-
72
(60)
(1,082)
(190)
9,416
718
13
(572)
-
414
-
1
(2)
-
-
17,922
436
(4)
7
996
14
122
(127)
(1,345)
(254)
572
17,767
Land and
buildings
$m
Plant and
machinery
$m
Other
$m
Leased right-of-use assets (ii)
At 31 December 2020, net carrying amount (note 20)
1,151
342
57
1,550
Total property, plant and equipment
19,317
172
2021 Annual Report and Form 20-F 173
2021 Annual Report and Form 20-F 173
Owned
At 1 January 2020
Cost/deemed cost
Accumulated depreciation (and impairment charges)
Net carrying amount
Mineral-
bearing land
$m
Land and
buildings
$m
Plant and
machinery
$m
Assets in
course of
construction
$m
Total
$m
4,670
(983)
3,687
5,653
(1,626)
18,292
(8,802)
757
(39)
29,372
(11,450)
4,027
9,490
718
17,922
(i) Additions relating to leased mineral reserves which fall outside the scope of IFRS 16.
(ii) See note 20 for more detailed information on right-of-use assets and lease liabilities of the Group.
(iii) No impairment charge was recognised in 2021 (2020: $263 million including $9 million related to leased right-of-use assets (note 20); 2019: $9 million). The
charge in 2020 principally relates to the write-down of specific assets relating to our UK business within our Europe Materials segment following a strategic
review of its operational footprint, together with impairments booked in respect of two CGUs in the same segment. An extended period of lower than
anticipated demand and reduced price growth resulting from the combined economic impacts of Brexit and COVID-19 were the primary drivers of the
impairment charge. The recoverable amount of these assets is their value-in-use of $185 million and is calculated using real pre-tax discount rates ranging
from 7.3% to 7.7%.
Future purchase commitments for property, plant and equipment
Contracted for but not provided in the financial statements
Authorised by the Directors but not contracted for
2021
$m
628
417
2020
$m
423
307
2021 Annual Report and Form 20-F 175
174
174
14. Intangible Assets
At 31 December 2021
Cost/deemed cost
Accumulated amortisation (and impairment charges)
Net carrying amount
At 1 January 2021, net carrying amount
Translation adjustment
Arising on acquisition (note 30)
Disposals
Amortisation charge for year (ii)
At 31 December 2021, net carrying amount
The equivalent disclosure for the prior year is as follows:
At 31 December 2020
Cost/deemed cost
Accumulated amortisation (and impairment charges)
Net carrying amount
At 1 January 2020, net carrying amount
Translation adjustment
Reclassifications
Arising on acquisition (note 30)
Disposals
Amortisation charge for year (ii)
Impairment charge for year (iii)
At 31 December 2020, net carrying amount
At 1 January 2020
Cost/deemed cost
Accumulated amortisation (and impairment charges)
Net carrying amount
Other intangible assets
Goodwill
$m
Marketing-
related
$m
Customer-
related (i)
$m
Contract-
based
$m
Total
$m
10,251
(800)
9,451
9,032
(221)
679
(39)
-
9,451
9,790
(758)
9,032
9,093
198
-
157
(6)
-
(410)
9,032
9,413
(320)
9,093
202
(98)
104
87
(1)
32
-
(14)
104
172
(85)
87
95
1
-
2
-
(11)
-
87
167
(72)
95
705
(423)
282
240
-
99
(1)
(56)
282
601
(361)
240
265
2
-
29
-
(56)
-
240
575
(310)
265
77 11,235
(1,387)
(66)
11
9,848
14
1
-
-
(4)
11
9,373
(221)
810
(40)
(74)
9,848
75 10,638
(1,265)
(61)
14
9,373
22
-
(5)
-
-
(3)
-
14
9,475
201
(5)
188
(6)
(70)
(410)
9,373
87 10,242
(767)
(65)
22
9,475
(i) The customer-related intangible assets relate predominantly to non-contractual customer relationships.
(ii) The amortisation charge primarily relates to customer-related intangible assets.
(iii) Further details on note (iii) are set out overleaf.
174
2021 Annual Report and Form 20-F 175
2021 Annual Report and Form 20-F 175
Annual goodwill testing
Cash-generating units
Goodwill acquired through business combination
activity has been allocated to CGUs that are
expected to benefit from synergies in that
combination. The CGUs represent the lowest level
within the Group at which the associated goodwill is
monitored for internal management purposes, and
are not larger than the operating segments
determined in accordance with IFRS 8. A total of
22 (2020: 22) CGUs have been identified and
these are analysed between the three business
segments below. All businesses within the various
CGUs exhibit similar and/or consistent profit
margin and asset intensity characteristics. Assets,
liabilities, deferred tax and goodwill have been
assigned to the CGUs on a reasonable and
consistent basis.
Americas Materials
Europe Materials
Building Products
Total Group
Number of
cash-generating units
2021
2020
5
16
1
22
5
16
1
22
Goodwill
2021
$m
4,292
2,195
2,964
9,451
2020
$m
4,057
2,402
2,573
9,032
Impairment testing methodology and results
Goodwill is subject to impairment testing on an
annual basis. The recoverable amount of 22 CGUs
is determined based on a value-in-use
computation, using Level 3 inputs in accordance
with the fair value hierarchy.
The cash flow forecasts are primarily based on a
five-year strategic plan document formally
approved by the Board of Directors and specifically
exclude the impact of future development activity.
To align with the Group’s acquisition modelling
methodology, these cash flows are projected
forward for an additional five years to determine the
basis for an annuity-based terminal value. As in
prior years, the terminal value is based on a
20-year annuity, with the exception of certain long-
lived cement assets, where an assumption of a
30-year annuity has been used. Projected cash
Key sources of estimation uncertainty
flows beyond the initial evaluation period have been
extrapolated using real growth rates ranging from
1.8% in the Americas, 0.8% to 2.1% in Europe and
3.1% in Asia. Such real growth rates do not
exceed the long-term average growth rates for the
countries in which each CGU operates. The
value-in-use represents the present value of the
future cash flows, including the terminal value,
discounted at a rate appropriate to each CGU. The
real pre-tax discount rates used range from 6.5%
to 8.6% (2020: 6.5% to 8.6%). These rates are in
line with the Group’s estimated weighted average
cost of capital, arrived at using the Capital Asset
Pricing Model. Net cash flows incorporate
estimated capital expenditure required to achieve
the Group’s 2025 carbon emissions target of
520kg of CO2 per tonne of cementitious material.
The 2021 annual goodwill impairment testing
process has resulted in no intangible asset
impairments. The 2020 annual impairment testing
process resulted in an impairment of $410 million
being recorded in respect of our UK CGU in Europe
Materials due to a sustained period of economic
disruption following the Brexit referendum in 2016,
the impact of the COVID-19 pandemic and the
political uncertainty that presented in the second half
of 2020 prior to the end of the Brexit transition period
between the UK and the European Union. The
assumptions underlying the 2020 value-in-use model
projections resulted in a present value (using a real
pre-tax discount rate of 7.6%) of $1,782 million and
a related goodwill impairment being recorded of
$410 million.
The cash flows have been arrived at taking into
account the Group’s strong financial position, its
established history of earnings and cash flow
generation and the nature of the building materials
industry, where product obsolescence is very low.
However, expected future cash flows are
inherently uncertain and are therefore liable to
material change over time. The key assumptions
employed in arriving at the estimates of future
cash flows factored into impairment testing are
subjective and include projected EBITDA (as
defined)* margins, long-term growth and discount
rates used and the duration of the discounted
cash flow model.
Significant under-performance in any of CRH’s
major CGUs may give rise to a material write-
down of goodwill which would have a substantial
impact on the Group’s income and equity,
however given the excess headroom on the
models the likelihood of this happening is not
considered reasonably possible.
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
176
176
2021 Annual Report and Form 20-F 177
14. Intangible Assets - continued
Significant goodwill amounts
The goodwill allocated to the Americas Cement,
AMAT South (Americas Materials segment) and
the Building Products (Building Products segment)
CGUs account for between 10% and 31% of the
total carrying amount shown on page 174. The
goodwill allocated to each of the remaining CGUs
is less than 10% of the total carrying value in all
other cases. The additional disclosures required
for the three CGUs with significant goodwill are as
follows:
Americas Cement
2021
2020
AMAT South
2021
Building Products
2020
2021
2020
Goodwill allocated to the cash-generating unit at balance sheet date
$2,157m
$2,155m
Discount rate applied to the cash flow projections (real pre-tax)
Average EBITDA (as defined)* margin over the initial 5-year period
7.5%
53.8%
7.7%
48.5%
$944m
8.3%
17.9%
$998m
$2,964m
$2,573m
8.0%
17.8%
8.3%
19.1%
8.0%
18.3%
Value-in-use (present value of future cash flows)
Excess of value-in-use over carrying amount
Long-term growth rates
$10,749m
$8,103m
$5,041m
$5,140m
$14,831m
$12,977m
$5,953m
$3,238m
$2,749m
$2,492m
$9,191m
$7,653m
1.8%
1.6%
1.8%
1.6%
1.8%
1.6%
The key assumptions and methodology used in
respect of these three CGUs are consistent with
those described above. The values applied to
each of the key estimates and assumptions are
specific to the individual CGUs and were derived
from a combination of internal and external factors
based on historical experience and took into
account the cash flows specifically associated
with these businesses. The cash flows and
annuity-based terminal value were projected in line
with the methodology disclosed above.
The Americas Cement, AMAT South and Building
Products CGUs are not included in the ‘Sensitivity
analysis’ section below. Given the magnitude of
the excess of value-in-use over carrying amount,
and our belief that the key assumptions are
reasonable, management believes that it is not
reasonably possible that there would be a change
in the key assumptions such that the carrying
amount would exceed the value-in-use.
Consequently no further disclosures relating to
sensitivity of the value-in-use computations for the
Americas Cement, AMAT South or Building
Products CGUs are considered to be warranted.
Sensitivity analysis
A qualitative and quantitative assessment has
been performed and results in additional sensitivity
disclosures for one of the total 22 CGUs. The key
assumptions, methodology used and values
applied to each of the key assumptions for this
CGU are in line with those outlined above (a
30-year annuity period has been used). The CGU
had goodwill of $565 million at the date of testing.
The table below identifies the amounts by which
each of the following assumptions may either
decline or increase to arrive at a zero excess of
the present value of future cash flows over the
book value of net assets in the CGU selected for
sensitivity analysis disclosures:
Reduction in EBITDA (as defined)* margin
Reduction in long-term growth rate
Increase in pre-tax discount rate
One cash-generating unit
5.3 percentage points
3.2 percentage points
2.7 percentage points
The average EBITDA (as defined)* margin for this
CGU over the initial five-year period was 21.5%.
The value-in-use (being the present value of the
future net cash flows) was $2,172 million and the
carrying amount was $1,538 million, resulting in an
excess of value-in-use over carrying amount of
$634 million.
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
176
2021 Annual Report and Form 20-F 177
2021 Annual Report and Form 20-F 177
15. Financial Assets
Investments accounted for
using the equity method
(i.e. joint ventures and associates)
Share of net
assets
$m
Loans
$m
609
10
-
-
(2)
55
(32)
640
747
31
-
(10)
(6)
(118)
(35)
609
17
(1)
4
(7)
-
-
-
13
28
1
1
(13)
-
-
-
17
Total
$m
626
9
4
(7)
(2)
55
(32)
653
775
32
1
(23)
(6)
(118)
(35)
626
Other
$m
13
-
-
(1)
-
-
-
12
13
-
-
-
-
-
-
13
At 1 January 2021
Translation adjustment
Investments and advances
Disposals and repayments
Return of share capital
Share of profit after tax (i)
Dividends received
At 31 December 2021
The equivalent disclosure for the prior year is as follows:
At 1 January 2020
Translation adjustment
Investments and advances
Disposals and repayments
Return of share capital
Share of loss after tax (i) (ii)
Dividends received
At 31 December 2020
(i) The Group’s share of joint ventures and associates profit/(loss) after tax is equity accounted and is presented as a single line item in the Consolidated Income
Statement. It is analysed as follows; profit after tax from joint ventures: $11 million (2020: $22 million; 2019: $46 million), profit after tax from associates:
$44 million (2020: loss after tax of $140 million; 2019: profit after tax of $21 million).
(ii)
In 2020 an impairment charge of $154 million was recorded within the loss after tax from associates which principally relates to the write-down of our equity
accounted investment in China which forms part of Europe Materials. Challenging market conditions in Northeast China affecting pricing, combined with an
increase in the discount rate and the economic impact of COVID-19, were the primary drivers of the impairment charge. In 2020, the recoverable amount of this
financial asset was its value-in-use calculated using a real pre-tax discount rate of 9.2%.
A listing of the principal equity accounted investments is contained on page 264.
16. Inventories
Raw materials
Work-in-progress (i)
Finished goods
Total inventories at the lower of cost and net realisable value
2021
$m
1,737
136
1,738
3,611
2020
$m
1,403
144
1,570
3,117
(i) Work-in-progress includes $9 million (2020: $9 million) in respect of the cumulative costs incurred, net of amounts transferred to cost of sales under
percentage-of-completion accounting, for construction contracts in progress at the balance sheet date.
An analysis of the Group’s cost of sales expense is provided in note 4 to the financial statements.
Write-downs of inventories recognised as an expense within cost of sales amounted to $2 million (2020: $9 million; 2019: $9 million).
178
178
2021 Annual Report and Form 20-F 179
17. Trade and Other Receivables
Current
Trade receivables
Construction contract assets (i)
Total trade receivables and construction contract assets, gross
Loss allowance
Total trade receivables and construction contract assets, net
Amounts receivable from equity accounted investments
Prepayments
Other receivables
Total
Non-current
Other receivables
2021
$m
3,586
565
4,151
(131)
4,020
31
251
267
4,569
2020
$m
3,209
499
3,708
(140)
3,568
32
221
265
4,086
239
325
(i)
Includes unbilled revenue and retentions held by customers in respect of construction contracts at the balance sheet date amounting to $361 million and
$204 million respectively (2020: $297 million and $202 million respectively). The movements in these balances during the year was as follows:
At 1 January
Translation adjustment
Additional contract balances recognised
Invoiced in the period
Received from customers
Written off during the year
Disposals
At 31 December
Unbilled revenue
Retentions
2021
$m
297
(4)
318
(239)
-
(11)
-
361
2020
$m
278
7
238
(226)
-
-
-
297
2021
$m
202
(1)
130
-
2020
$m
206
3
130
-
(125)
(137)
-
(2)
204
-
-
202
Trade receivables, construction contract assets and deferred divestment consideration are measured at amortised cost (less any expected credit loss allowance) as
the Group’s business model is to “hold to collect” contractual cash flows, and the cash flows arising from trade and other receivables are solely payments of principal
and interest. The carrying amount of trade receivables, construction contract assets and deferred divestment consideration closely approximate their fair value.
Valuation and qualifying accounts (expected credit loss allowance)
The movements in the expected credit loss allowance for receivables during the financial year were as follows:
At 1 January
Translation adjustment
Disposed of during year
Written off during year
Arising on acquisition (note 30)
Net remeasurement of expected credit loss allowance
At 31 December
2021
$m
2020
$m
2019
$m
140
(5)
(1)
(14)
1
10
131
133
5
(4)
(23)
-
29
140
153
(1)
(34)
(29)
1
43
133
178
2021 Annual Report and Form 20-F 179
2021 Annual Report and Form 20-F 179
Given the common profile of CRH’s customers, how customer credit risk is managed at appropriate Group locations, and the breadth and scale of its international
operations, a disclosure of concentrations of credit risk by segment best enables users of financial statements to assess CRH’s credit risk exposure. The following
table sets out the gross carrying value of trade receivables and construction contract assets and expected credit loss allowance by segment:
Trade receivables and
construction contract
assets, gross
2020
$m
2021
$m
2019
$m
Expected credit loss
allowance
2020
$m
2021
$m
2019
$m
Americas Materials
Europe Materials
Building Products (i)
Total Group
1,735
1,427
989
1,475
1,403
830
1,520
1,379
810
27
79
25
34
83
23
31
78
24
4,151
3,708
3,709
131
140
133
(i) Analysis of Building Products segment by geographic location:
Americas
Europe
Total
821
168
989
676
154
830
662
148
810
19
6
25
17
6
23
18
6
24
Customer credit risk is managed according to
established policies, procedures and controls.
Customer credit quality is assessed in line with
strict credit rating criteria and credit limits are
established where appropriate. Outstanding
customer balances are regularly monitored for
evidence of customer financial difficulties including
payment default, breach of contract etc.
Significant balances are reviewed individually while
smaller balances are grouped and assessed
collectively. Receivables balances are in general
unsecured and non-interest-bearing. Customer
credit risk arising in the context of the Group’s
receivables is not significant and the total
expected credit loss allowance for impairment of
trade receivables and construction contract assets
amounts to 3.2% of the Group’s gross trade
receivables and construction contract assets
(2020: 3.8%). The Group considers the ageing of
past due receivables a key factor in assessing
credit risk. The trade receivables and construction
contract assets balances disclosed above
comprise a large number of customers spread
across the Group’s activities and geographies with
balances classified as “not past due” representing
68% of the total gross trade receivables and
construction contract assets balance at the
balance sheet date (2020: 66%). There have been
no significant changes to the Group’s credit risk
parameters or to the composition of the Group’s
trade receivables and construction contract assets
portfolio during the financial year.
The Group applies the simplified approach to
providing for expected credit losses (ECL)
permitted by IFRS 9 which requires expected
lifetime losses to be recognised from initial
recognition of the receivables. Receivables such
as those which relate to bonded government
contracts and receivables which fall under credit
insurance are considered lower risk and would not
attract a material ECL. Given the positive
economic outlook (e.g. forecast Gross Domestic
Product) for the next 12 months in the majority of
the economies in which we operate we consider
that our ECL adequately represents the risk of
default on our receivable balances.
Trade receivables are written off when there is no
reasonable expectation of recovery, such as a
debtor failing to engage in a repayment plan with
the company. Where recoveries are made, these
are recognised in the Consolidated Income
Statement.
Aged analysis
The aged analysis of net trade receivables and construction contract assets at the balance sheet date was as follows:
Not past due
Past due:
- less than 60 days
- 60 days or greater but less than 120 days
- 120 days or greater
Total trade receivables, net
Americas
Materials
2021
$m
Europe
Materials
2021
$m
Building
Products
2021
$m
Total
2021
$m
Americas
Materials
2020
$m
Europe
Materials
2020
$m
Building
Products
2020
$m
Total
2020
$m
1,139
1,050
626
2,815
956
958
523
2,437
469
74
26
1,708
223
44
31
1,348
227
74
37
964
919
192
94
4,020
396
65
24
1,441
310
32
20
1,320
198
59
27
807
904
156
71
3,568
Trade receivables and construction contract assets are in general receivable within 90 days of the balance sheet date.
180
180
2021 Annual Report and Form 20-F 181
18. Trade and Other Payables
Current
Trade payables
Construction contract-related payables (i)
Deferred and contingent acquisition consideration (ii)
Accruals
Other payables
Amounts payable to equity accounted investments
Total
Non-current
Other payables
Deferred and contingent acquisition consideration (ii)
Total
2021
$m
2020
$m
2,727
2,164
336
33
2,184
410
2
5,692
389
328
717
318
34
2,077
196
3
4,792
381
330
711
(i) Construction contract-related payables include billings in excess of revenue, together with advances received from
customers in respect of work to be performed under construction contracts and foreseeable losses thereon. $288 million
was recognised in the Consolidated Income Statement during 2021 which was included in the contract-related payables
balance at 31 December 2020. The movements in these balances during the year was as follows:
At 1 January
Translation adjustment
Additional contract balances recognised
Opening balances recognised as revenue
Disposals
At 31 December
Advances received
2021
$m
2020
$m
31
(3)
58
(30)
-
56
12
2
29
(12)
-
31
Billings in excess of
revenue
2021
$m
283
(5)
255
(258)
(1)
274
2020
$m
239
6
254
(216)
-
283
The carrying amounts of trade payables, construction contract-related payables and other payables approximate their fair
value largely due to the short-term maturities and nature of these instruments.
(ii) The fair value of total contingent consideration is $317 million (2020: $301 million) (Level 3 in the fair value hierarchy), and
deferred consideration is $44 million (2020: $63 million). On an undiscounted basis, the corresponding future payments
relating to contingent consideration, for which the Group may be liable, ranges from $296 million to $449 million. This is
based on a range of estimated potential outcomes of the expected payment amounts primarily dependent on underlying
performance metrics as set out in the relevant agreements. The fair value of contingent consideration is arrived at through
discounting the expected payment to present value. Based on a reasonable possible change in assumptions, the fair value
ranges from $249 million to $380 million on a discounted basis. The movement in deferred and contingent consideration
during the financial year was as follows:
At 1 January
Translation adjustment
Arising on acquisitions and investments during year (note 30)
Changes in estimate
Paid during year
Discount unwinding
At 31 December
2021
$m
364
(1)
1
10
(33)
20
361
2020
$m
376
1
7
13
(54)
21
364
180
2021 Annual Report and Form 20-F 181
2021 Annual Report and Form 20-F 181
19. Movement in Working Capital and
Provisions for Liabilities
Working Capital
Trade and
other
receivables
$m
Trade and
other
payables
$m
Provisions
for
liabilities
$m
Total
$m
Inventories
$m
At 1 January 2021
Translation adjustment
Arising on acquisition (note 30)
Disposals
Deferred and contingent acquisition consideration:
- arising on acquisitions during year (note 30)
- paid during year
Deferred divestment consideration:
- arising on disposals during year
- received during year
Shares to be acquired by CRH plc (Treasury Shares) (note 29)
Interest accruals and discount unwinding
Reclassification
Additions to leased mineral reserves
3,117
(84)
157
(22)
-
-
-
-
-
-
4
-
4,411
(102)
191
(20)
-
-
1
(120)
-
11
-
-
Increase/(decrease) in working capital and provisions for liabilities
439
436
(5,503)
(1,442)
583
147
(143)
11
(1)
33
-
-
(281)
(7)
(6)
(10)
(649)
37
(1)
6
-
-
-
-
-
(2)
204
(25)
(1)
33
1
(120)
(281)
(18)
(14)
-
-
2
(2)
(10)
228
At 31 December 2021
3,611
4,808
(6,409)
(1,416)
594
The equivalent disclosure for the prior years is as follows:
At 1 January 2020
Translation adjustment
Arising on acquisition (note 30)
Disposals
Deferred and contingent acquisition consideration:
- arising on acquisitions during year (note 30)
- paid during year
Deferred divestment consideration:
- arising on disposals during year
- received during year
Interest accruals and discount unwinding
Reclassification
Additions to leased mineral reserves
(Decrease)/increase in working capital and provisions for liabilities
At 31 December 2020
At 1 January 2019
Effect of adopting IFRS 16
Translation adjustment
Arising on acquisition (note 30)
Disposals
Deferred and contingent acquisition consideration:
- arising on acquisitions during year (note 30)
- paid during year
Deferred proceeds arising on disposals during year
Interest accruals and discount unwinding
Additions to leased mineral reserves
Increase/(decrease) in working capital and provisions for liabilities
3,080
4,587
(5,461)
(1,302)
71
23
(14)
-
-
-
-
-
20
-
(63)
107
47
(37)
-
-
14
(123)
4
(11)
-
(177)
(150)
(21)
17
(7)
54
-
-
(24)
(22)
(14)
125
904
(15)
49
(29)
(7)
54
14
(123)
(41)
(13)
(14)
(43)
-
5
-
-
-
-
(21)
-
-
(81)
(196)
3,117
4,411
(5,503)
(1,442)
583
3,505
4,872
(5,817)
(1,244) 1,316
-
2
65
3
9
73
(581)
(747)
-
-
-
-
-
89
-
-
302
(12)
-
87
13
(8)
(82)
570
(20)
54
-
(1)
(96)
(74)
1
4
(7)
17
7
49
-
(758)
-
-
-
(25)
-
(31)
(20)
54
302
(38)
(96)
71
At 31 December 2019
3,080
4,587
(5,461)
(1,302)
904
2021 Annual Report and Form 20-F 183
182
182
20. Leases
Leased right-of-use assets
At 31 December 2021
Cost
Accumulated depreciation (and impairment charges)
Net carrying amount
At 1 January 2021, net carrying amount
Translation adjustment
Transfer to owned assets
Additions at cost
Arising on acquisition (note 30)
Disposals at net carrying amount
Adjustment as a result of remeasurement of lease liability
Depreciation charge for year
At 31 December 2021, net carrying amount
The equivalent disclosure for the prior year is as follows:
At 31 December 2020
Cost
Accumulated depreciation (and impairment charges)
Net carrying amount
At 1 January 2020, net carrying amount
Translation adjustment
Transfer to owned assets
Additions at cost
Arising on acquisition (note 30)
Disposals at net carrying amount
Adjustment as a result of remeasurement of lease liability
Depreciation charge for year
Impairment charge for year
At 31 December 2020, net carrying amount
At 1 January 2020
Cost
Accumulated depreciation
Net carrying amount
Land and
buildings
$m
Plant and
machinery
$m
Other
$m
1,573
(378)
1,195
1,151
(24)
-
96
77
(12)
45
(138)
1,195
1,419
(268)
1,151
1,221
28
(5)
59
12
(32)
9
(132)
(9)
1,151
1,354
(133)
1,221
581
(268)
313
342
(9)
(10)
92
11
(5)
9
(117)
313
553
(211)
342
378
11
(2)
82
-
(11)
7
(123)
-
342
508
(130)
378
105
(49)
56
57
(1)
-
22
-
(1)
2
(23)
56
97
(40)
57
53
2
-
25
-
(2)
3
(24)
-
57
75
(22)
53
Total
$m
2,259
(695)
1,564
1,550
(34)
(10)
210
88
(18)
56
(278)
1,564
2,069
(519)
1,550
1,652
41
(7)
166
12
(45)
19
(279)
(9)
1,550
1,937
(285)
1,652
182
2021 Annual Report and Form 20-F 183
2021 Annual Report and Form 20-F 183
Lease liabilities
At 1 January 2021
Translation adjustment
Addition of right-of-use assets
Arising on acquisition (note 30)
Disposals
Remeasurements
Payments
Discount unwinding
At 31 December 2021
The equivalent disclosure for the prior year is as follows:
At 1 January 2020
Translation adjustment
Reclassifications
Addition of right-of-use assets
Arising on acquisition (note 30)
Disposals
Remeasurements
Payments
Discount unwinding
At 31 December 2020
Land and
buildings
$m
1,228
(24)
96
77
(14)
45
(164)
52
1,296
1,263
30
(6)
59
12
(31)
9
(162)
54
1,228
Plant and
machinery
$m
Other
$m
350
(9)
92
11
(5)
9
(139)
10
319
382
12
5
82
-
(11)
7
(139)
12
350
57
(1)
22
-
(1)
2
(25)
2
56
52
1
1
25
-
(2)
3
(25)
2
57
Total
$m
1,635
(34)
210
88
(20)
56
(328)
64
1,671
1,697
43
-
166
12
(44)
19
(326)
68
1,635
The table below shows a maturity analysis of the discounted and undiscounted lease liability arising from the Group’s leasing activities. The projections are based on
the foreign exchange rates applying at the end of the relevant financial year and on interest rates (discounted projections only) applicable to the lease portfolio.
Within one year
Between one and two years
Between two and three years
Between three and four years
Between four and five years
After five years
Total
As at 31 December 2021
As at 31 December 2020
Discounted
$m
Undiscounted
$m
Discounted
$m
Undiscounted
$m
297
241
190
154
126
663
1,671
302
254
208
175
150
1,099
2,188
296
241
189
154
125
630
1,635
301
255
208
177
150
1,085
2,176
2021 Annual Report and Form 20-F 185
184
184
20. Leases - continued
The Group avails of the exemption from capitalising lease costs for short-term leases and low-value assets where the relevant criteria are met. Variable lease payments
directly linked to sales or usage are also expensed as incurred. The following lease costs have been charged to the Consolidated Income Statement as incurred:
Continuing operations
Short-term leases
Lease of low-value assets
Variable lease payments not included in the lease liability
Total
2021
$m
241
8
97
346
2020
$m
210
7
86
303
Total cash outflow for lease payments
674
629
Lease commitments for short-term leases are similar to the portfolio of short-term leases for which the costs, as above, were expensed to the Consolidated Income
Statement. The effect of excluding future cash outflows arising from variable lease payments, termination options, residual value guarantees and leases not yet
commenced from lease liabilities was not material for the Group. The potential undiscounted future cash outflows arising from the exercise of renewal options that are
not expected to be exercised (and are therefore not included in the lease term) are as follows:
Within one year
Between one and two years
Between two and three years
Between three and four years
Between four and five years
After five years
Total
As at
31 December
2021
$m
As at
31 December
2020
$m
4
5
6
8
8
568
599
2
5
9
9
10
576
611
Income from subleasing and gains/losses on sale and leaseback transactions were not material for the Group.
184
2021 Annual Report and Form 20-F 185
2021 Annual Report and Form 20-F 185
21. Analysis of Net Debt
Components of net debt
Net debt comprises cash and cash equivalents, interest-bearing loans and borrowings, lease liabilities and derivative financial instrument assets and liabilities; it
enables investors to see the economic effects of these in total (see note 22 for details of the capital and risk management policies employed by the Group). Net debt is
commonly used in computations such as net debt as a % of total equity and net debt as a % of market capitalisation.
Cash and cash equivalents (note 23)
Interest-bearing loans and borrowings (note 24)*
Lease liabilities (note 20)
Derivative financial instruments (net) (note 25)
Group net debt
Reconciliation of opening to closing net debt
At 1 January
Movement in year
Increase in interest-bearing loans and borrowings
Repayment of interest-bearing loans and borrowings (i)
Debt, including lease liabilities, in acquired companies (note 30)
Debt, including lease liabilities, in disposed companies
Effect of adopting IFRS 16
Net increase in lease liabilities
Repayment of lease liabilities
Net cash flow arising from derivative financial instruments
Mark-to-market and other non-cash adjustments
Translation adjustment on financing activities
Decrease/(increase) in liabilities from financing activities
Translation adjustment on cash and cash equivalents
(Decrease)/increase in cash and cash equivalents
At 31 December
As at 31 December 2021
As at 31 December 2020
Book value
$m
Fair value
$m
Book value
$m
Fair value
$m
5,783
(10,487)
(1,671)
122
(6,253)
5,783
(11,340)
(1,671)
122
(7,106)
7,721
(12,215)
(1,635)
188
(5,941)
7,721
(13,407)
(1,635)
188
(7,133)
2021
$m
2020
$m
2019
$m
(5,941)
(7,532)
(7,998)
-
(6,427)
(106)
1,183
4,943
(91)
3
-
(249)
264
37
38
441
(12)
12
-
(153)
258
(26)
22
(529)
640
(81)
463
(2,237)
(184)
356
40
28
15
1,626
(297)
(1,641)
(6,253)
(1,912)
(1,066)
338
(20)
3,165
1,552
(5,941)
(7,532)
* Interest-bearing loans and borrowings are Level 2 instruments whose fair value is derived from quoted market prices.
186
186
2021 Annual Report and Form 20-F 187
21. Analysis of Net Debt - continued
The following table shows the effective interest rates on period-end fixed and gross debt:
Interest-bearing loans and borrowings nominal - fixed rate (ii)
Derivative financial instruments - fixed rate
Net fixed rate debt including derivatives
Interest-bearing loans and borrowings nominal - floating rate (iii)
Cumulative fair value hedge adjustment (ii)
Derivative financial instruments - floating rate (ii)
Derivative financial instruments (net) - fair value
As at 31 December 2021
As at 31 December 2020
Interest
rate
$m
(10,052)
1,800
Weighted
average
fixed period
Years
$m
(11,822)
1,835
Weighted
average
fixed period
Years
Interest
rate
(8,252)
2.9%
8.6
(9,987)
2.9%
8.4
(317)
(118)
(1,800)
122
(184)
(209)
(1,835)
188
Gross debt including derivative financial instruments, excluding lease liabilities
(10,365)
2.8%
(12,027)
2.7%
Lease liabilities - fixed rate
Gross debt including derivative financial instruments, including lease liabilities
Cash and cash equivalents - floating rate (note 23)
Group net debt
(1,671)
(12,036)
5,783
(6,253)
(1,635)
(13,662)
7,721
(5,941)
(i)
In January 2021 the Group repaid a $400 million bond upon maturity and in April 2021 a €600 million bond was repaid early when a 3-month par-call option was
exercised.
(ii) Of the Group’s nominal fixed rate debt at 31 December 2021, $1,800 million (2020: $1,835 million) is hedged to a mix of USD LIBOR and EURIBOR floating rates
using interest rate swaps.
(iii) Floating rate debt comprises bank borrowings bearing interest at rates set in advance for periods ranging from overnight to less than one year largely by reference
to inter-bank interest rates.
186
2021 Annual Report and Form 20-F 187
2021 Annual Report and Form 20-F 187
Currency profile
The currency profile of the Group’s net debt and net worth (capital and reserves attributable to the Company’s equity holders) as at 31 December 2021 and
31 December 2020 is as follows:
Cash and cash equivalents (note 23)
Interest-bearing loans and borrowings (note 24)
Lease liabilities (note 20)
Derivative financial instruments (net) (note 25)
US Dollar
$m
euro
$m
Pound
Sterling
$m
Canadian
Dollar
$m
Philippine
Peso
$m
Polish
Zloty
$m
Swiss
Franc
$m
Other (i)
$m
Total
$m
2,266 2,386
365
(4,665) (4,479)
(537)
(856)
(250)
(255)
189 1,463
(339)
274
(3)
(150)
(606)
19
166
103
204
5,783
(431)
-
(361)
(11) (10,487)
(8)
(54)
(47)
(51)
(1,671)
(91)
(184)
-
(310)
122
Net debt by major currency including derivative financial instruments
(3,066)
(880)
(766)
(485)
(511)
(72)
(305)
(168)
(6,253)
Non-debt assets and liabilities analysed as follows:
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Non-controlling interests
17,661 4,204
2,614
1,844
1,621
371
608
1,606 30,529
4,369 1,498
993
(3,115)
(714)
(431)
(2,866) (1,593)
(1,156)
564
(213)
(348)
176
161
84
377
8,222
(132)
(19)
(168)
(71)
(4,863)
(153)
(178)
(83)
(344)
(6,721)
(105)
(45)
-
-
(498)
-
(8)
(25)
(681)
Capital and reserves attributable to the Company’s equity holders
12,878 2,470
1,254
1,362
503
263
128
1,375 20,233
The equivalent disclosure for the prior year is as follows:
Cash and cash equivalents (note 23)
Interest-bearing loans and borrowings (note 24)
Lease liabilities (note 20)
Derivative financial instruments (net) (note 25)
Net debt by major currency including derivative financial instruments
Non-debt assets and liabilities analysed as follows:
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Non-controlling interests
1,886 4,586
319
(5,134) (5,589)
(543)
(797)
(282)
(247)
937
736
(344)
(3,108)
(549)
(815)
319
(6)
(156)
(774)
(617)
62
149
125
275
7,721
(546)
-
(374)
(23) (12,215)
(10)
(31)
(54)
(58)
(1,635)
(25)
(111)
-
(231)
188
(519)
7
(303)
(37)
(5,941)
16,199 4,614
2,598
1,905
1,759
368
553
1,787 29,783
3,586 1,465
871
(3,094)
(678)
(391)
(2,160) (1,654)
(980)
519
(229)
(338)
171
155
85
387
7,239
(177)
(22)
(145)
(97)
(4,833)
(165)
(175)
(91)
(337)
(5,900)
(103)
(54)
-
-
(501)
-
(8)
(26)
(692)
Capital and reserves attributable to the Company’s equity holders
11,320 3,144
1,283
1,240
568
333
91
1,677 19,656
(i) The principal currencies included in this category are the Chinese Renminbi, the Romanian Leu, the Ukrainian Hryvnia, the Serbian Dinar and the Indian Rupee.
188
188
2021 Annual Report and Form 20-F 189
21. Analysis of Net Debt - continued
Liquidity and capital resources
The following table provides certain information related to our cash generation and changes in our cash and cash equivalents position:
Net cash inflow from operating activities
Net cash (outflow)/inflow from investing activities
Net cash (outflow)/inflow from financing activities
(Decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year (note 23)
Effect of exchange rate changes
Cash and cash equivalents at end of year (note 23)
Lease liabilities
Bank overdrafts (excluding those in notional cash pooling arrangements)
Borrowings
Derivative financial instruments
Total liabilities from financing activities
Net debt at end of year
2021
$m
4,210
(2,546)
(3,305)
(1,641)
7,721
(297)
5,783
(1,671)
(111)
(10,376)
122
2020
$m
3,938
(1,060)
287
3,165
4,218
338
7,721
(1,635)
(120)
(12,095)
188
2019
$m
3,881
217
(2,546)
1,552
2,686
(20)
4,218
(1,697)
(46)
(10,081)
74
(12,036)
(13,662)
(11,750)
(6,253)
(5,941)
(7,532)
The Group believes that its financial resources (operating cash together with cash and cash equivalents of $5.8 billion and undrawn committed loan facilities of $4.0
billion) is sufficient to cover the Group’s cash requirements.
At 31 December 2021, US Dollar and euro denominated cash and cash equivalents represented 39% (2020: 24%) and 41% (2020: 59%) of total cash and cash
equivalents respectively.
Significant borrowings
The main sources of Group debt funding are public bond markets in Europe and North America. The following external bonds were outstanding as at 31 December
2021:
Swiss Franc bonds
euro bonds
euro bonds
euro bonds
US Dollar bonds
euro bonds
US Dollar bonds
US Dollar bonds
euro bonds
Pound Sterling bonds
euro bonds
US Dollar bonds (i)
US Dollar bonds
US Dollar bonds
US Dollar bonds
Annual
coupons
Outstanding
(millions)
Final
maturity
Hedged to
floating
rate
(millions)
1.375%
3.125%
0.875%
1.875%
3.875%
1.250%
3.400%
3.950%
1.375%
4.125%
1.625%
6.400%
5.125%
4.400%
4.500%
CHF330
€750
€500
€600
$1,250
€750
$600
$900
€600
£400
€750
$213
$500
$400
$600
2022
2023
2023
2024
2025
2026
2027
2028
2028
2029
2030
2033
2045
2047
2048
-
€375
-
-
$875
-
-
$500
-
-
-
-
-
-
-
(i) The $300 million bond was issued in September 2003, and at the time of issuance the bond was partially swapped to floating interest rates. In
August 2009 and December 2010, $87 million of the issued notes were acquired by CRH plc as part of liability management exercises undertaken
and the interest rate hedge was closed out. At 31 December 2021, the remaining fair value hedge adjustment on the hedged item on the
Consolidated Balance Sheet was $35 million (2020: $38 million).
188
2021 Annual Report and Form 20-F 189
2021 Annual Report and Form 20-F 189
22. Capital and Financial Risk Management
and currency. The hedges employed mitigate
identified risks and have consistently demonstrated
close economic relationships. Ineffectiveness
between the hedge item and hedge instrument are
immaterial in the overall context of the Group.
The main risks attaching to the Group’s financial
instruments are interest rate risk, foreign currency
risk, credit risk, liquidity risk and commodity price
risk. The Board reviews and agrees policies for the
prudent management of each of these risks as
documented below.
Interest rate risk
The Group’s exposure to market risk for changes in
interest rates stems predominantly from its long-
term debt obligations. Interest cost is managed
using a mix of fixed and floating rate debt. With the
objective of managing this mix in a cost-efficient
manner, the Group enters into interest rate swaps,
under which the Group contracts to exchange, at
predetermined intervals, the difference between
fixed and variable interest amounts calculated by
reference to a pre-agreed notional principal. Such
contracts enable the Group to mitigate the risk of
changing interest rates on the fair value of issued
fixed rate debt and the cash flow exposures of
issued floating rate debt.
These swaps are designated under IFRS 9 to hedge
underlying debt obligations and qualify for hedge
accounting treatment.
The Group applies hedge accounting where there is
an economic relationship between the hedged item
and the hedging instrument. The existence of an
economic relationship is determined initially by
comparing the critical terms of the hedging
instrument and those of the hedged item and it is
prospectively assessed using linear regression
analysis. The Group issues fixed rate debt and may
enter into interest rate swaps with critical terms that
match those of the debt and on a 1:1 hedge ratio
basis. The hedge ratio is determined by comparing
the notional amount of the derivative with the
notional amount of the debt. The hedge relationship
is designated for the full term and notional value of
the debt.
Capital management
Overall summary
The primary objectives of CRH’s capital
management strategy are to ensure that the Group
maintains a strong credit rating to support its
business and to create shareholder value by
managing the debt and equity balance and the cost
of capital. The Group is committed to optimising the
use of its balance sheet within the confines of the
overall objective to maintain an investment grade
credit rating.
The capital structure of the Group, which comprises
net debt and capital and reserves attributable to the
Company’s equity holders, may be summarised as
follows:
2021
$m
2020
$m
Capital and reserves attributable
to the Company’s equity holders 20,233 19,656
Net debt
Capital and net debt
6,253 5,941
26,486 25,597
The Board periodically reviews the capital structure
of the Group, including the cost of capital and the
risks associated with each class of capital. The
Group manages and, if necessary, adjusts its
capital structure taking account of underlying
economic conditions; any material adjustments to
the Group’s capital structure in terms of the relative
proportions of debt and equity are approved by the
Board. In order to maintain or adjust the capital
structure, the Group may issue new shares,
dispose of assets, amend investment plans, alter
dividend policy or return capital to shareholders.
Dividend cover for the year ended 31 December
2021 amounted to 2.7x (2020: 1.2x).
No changes were made in the objectives or policies
during 2021.
Financial risk management objectives and policies
The Group uses financial instruments throughout its
businesses: interest-bearing loans and borrowings,
cash and cash equivalents and leases are used to
finance the Group’s operations; trade receivables
and trade payables arise directly from operations;
and derivatives, principally interest rate and
currency swaps and currency forwards, are used to
manage interest rate risks and currency exposures
and to achieve the desired profile of borrowings.
In accordance with the UK Financial Conduct
Authority’s announcement on 5 March 2021, LIBOR
benchmark rates were discontinued after
31 December 2021 except for the majority of the
US dollar settings which will be discontinued after
30 June 2023. Those rates that were discontinued
were replaced by alternative risk-free rates (ARR) as
part of the inter-bank offer rate (IBOR) reform.
The Group prepared an action plan, encompassing
treasury, legal, accounting and IT functions, to
enable a smooth transition to the alternative
benchmark rates. The review identified a range of
contracts that reference IBORs, including credit
facilities, derivative instruments, money market
deposits, lease agreements, and supply contract
agreements. Action plans were developed for each
of these arrangements to ensure a smooth
transition to ARR. None of the changes had an
impact on the Group’s financing or interest rate
hedging strategies, nor did they have a material
financial impact.
At 31 December 2021, the notional value of
hedging instruments that reference 3-month US
LIBOR is $1.4 billion. While the Secured Overnight
Financing Rate (SOFR) benchmark rate has been
widely adopted by market participants and
effectively replaced US LIBOR in new contracts
since 31 December 2021, a number of US LIBOR
settings, including 3-month and 6-month US
LIBOR, will continue to be published until 30 June
2023. Accordingly, absent any agreement with
counterparties to transition to an ARR before this
date, the Group’s existing USD denominated
interest rate swaps with maturity dates beyond
30 June 2023 will only transition to ARR once US
LIBOR publication ceases. As at 31 December
2021, the Group has not transitioned any of its
existing USD denominated interest rate swaps to
ARRs. The Group’s other interest rate swaps
reference EURIBOR rates and thus are not
impacted by the IBOR reforms.
The Group does not trade in financial instruments nor
does it enter into any leveraged derivative
transactions.
The Group’s corporate treasury function provides
services to the business units, co-ordinates access
to domestic and international financial markets, and
monitors and manages the financial risks relating to
the operations of the Group. The Group Treasurer
reports to the Director of Group Finance and the
activities of the corporate treasury function are
subject to regular internal audit. Systems and
processes are in place to monitor and control the
Group’s liquidity risks. The Group’s net debt
position forms part of the monthly documentation
presented to the Board.
The Group’s hedging activity is based on
observable economic relationships, when there is
confidence that such relationships will continue for
the foreseeable future. Matching critical terms such
as notional amount, tenor, timing and currency, the
Group establishes relationships between a hedge
item and hedge instrument where directional
response to changes in fair value, driven by
underlying economic conditions, are opposing and
proportional in equal measure being an economic
relationship under IFRS 9. Hedging ratios of 1:1 are
used throughout all hedging activity as the hedge
item and hedge instrument are of the same type
190
190
2021 Annual Report and Form 20-F 191
22. Capital and Financial Risk Management - continued
The following table demonstrates the impact on
profit before tax of a range of possible changes in
the interest rates applicable to net floating rate
borrowings, with all other variables held constant.
These impacts are calculated based on the
closing balance sheet floating rate net debt for a
full year and assume that all floating interest rates
change by the same amount.
Percentage change in cost of
borrowings (i)
Impact on profit before tax
+/- 1%
2021 +/- $38m
2020 +/- $59m
2019 +/- $23m
(i) Sensitivity analysis for cost of borrowing has
been presented for continuing operations
only.
Foreign currency risk
Due to the nature of building materials, which in
general have a low value-to-weight ratio, the
Group’s activities are conducted primarily in the
local currency of the country of operation resulting
in low levels of foreign currency transaction risk;
variances arising in this regard are reflected in
operating costs or cost of sales in the
Consolidated Income Statement in the period in
which they arise.
Given the Group’s presence in 28 countries
worldwide, the principal foreign exchange risk
arises from fluctuations in the US Dollar value of
the Group’s net investment in a wide basket of
currencies other than the US Dollar; such changes
are reported separately within the Consolidated
Statement of Comprehensive Income. A currency
profile of the Group’s net debt and net worth is
presented in note 21. The Group’s established
policy is to spread its net worth across the
currencies of its various operations with the
objective of limiting its exposure to individual
currencies and thus promoting consistency with
the geographical balance of its operations. In
order to achieve this objective, the Group
manages its borrowings, where practicable and
cost effective, to act as a natural foreign currency
hedge of a portion of its foreign currency assets.
The Group’s foreign exchange hedging strategy
and activity is based on the assumption that
changes in international economic factors are
reflected in current foreign exchange rates and
impacts the translation of the Group’s non-euro
net assets (euro being the functional currency of
the ultimate parent company). The economic
relationship, being the translation impact of the
Group’s net investment in non-euro subsidiaries
(hedge item) is hedged against a foreign currency
swap (hedge instrument) to counterbalance
movements in foreign currency rates. The Group
identifies certain portions of foreign currency net
investments where foreign currency translation
movements can be mitigated through the use of
currency swaps in the same currency pairing. A
hedge ratio of 1:1 is established. As at
31 December 2021, the notional amount of
hedged net investments was $726 million (2020:
$1,028 million). The primary currency pairs in use
are euro versus Canadian Dollar, Pound Sterling,
Romanian Leu, Polish Zloty and Danish Kroner.
The fair value movements of the hedge
instruments are inverse to the impact of the
translation of the hedged net assets because the
critical terms match. This reduces the Group’s
exposure to fluctuations on the translation of the
Group’s subsidiaries with a non-euro functional
currency into euro. Potential sources of
ineffectiveness are changes in the interest rate
differentials of the hedged currency pairs,
recorded through the Consolidated Income
Statement. Past trends indicate that the economic
relationship described will continue for the
foreseeable future. The fair values and maturity
analysis of the hedge instruments are set out in
note 25. Undesignated financial instruments are
termed “not designated as hedges”.
The following table demonstrates the sensitivity of
profit before tax and equity to selected
movements in the relevant US Dollar/euro
exchange rate (with all other variables held
constant); the euro has been selected as the
appropriate currency for this analysis given the
materiality of the Group’s activities in euro. The
impact on profit before tax is based on changing
the US Dollar/euro exchange rate used in
calculating profit before tax for the period. The
impact on total equity and financial instruments is
calculated by changing the US Dollar/euro
exchange rate used in measuring the closing
balance sheet.
Percentage change in relevant
$/€ exchange rate (i)
Impact on profit before tax
Impact on total equity*
* Includes the impact on financial
instruments which is as follows:
+/- 5%
2021 -/+ $22m
2020 -/+ $19m
2019 +/- $4m
2021 +/-$123m
2020 +/-$157m
2019 +/-$177m
2021 -/+ $44m
2020 -/+ $27m
2019 -/+ $11m
(i) Sensitivity analysis for exchange rates has
been presented for continuing operations
only.
Financial instruments include deposits, money
market funds, commercial papers, bank loans,
medium-term notes and other fixed term debt,
interest rate swaps, commodity swaps and foreign
exchange contracts. They exclude trade
receivables and trade payables on the basis that
they are denominated in the currency of the
underlying operations. The Group minimises the
impact of movements in foreign exchange rates
on the Group’s income statement through
matching where possible, foreign currency
monetary assets and liabilities or the use of
derivative contracts at an entity level.
Credit/counterparty risk
In addition to cash at bank and in hand, the Group
holds significant cash balances which are invested
on a short-term basis and are classified as cash
equivalents (see note 23). These deposits,
investments and other financial instruments
(principally certain derivatives and loans and
receivables included within financial assets) give
rise to credit risk on amounts due from
counterparty financial institutions (stemming from
their insolvency or a downgrade in their credit
ratings). Credit risk is managed by limiting the
aggregate amount and duration of exposure to
any one counterparty primarily depending on its
credit rating and by regular review of these ratings
and internal treasury policies.
190
2021 Annual Report and Form 20-F 191
2021 Annual Report and Form 20-F 191
Acceptable credit ratings for deposits and other
financial instruments are higher investment-grade
ratings—in general, counterparties have ratings of
A3/A-/A- or higher from at least two of Moody’s/
Standard & Poor’s/Fitch ratings agencies. The
maximum exposure arising in the event of default
on the part of the counterparty (including
insolvency) is the carrying value of the relevant
financial instrument.
Credit rating of counterparty (Moody’s/Standard & Poor’s/ Fitch)
Aaa/AAA/AAA
Aa/AA/AA
A/A/A
Baa/BBB/BBB or lower
As at 31 December 2021
As at 31 December 2020
$m
2,021
2,394
1,216
152
5,783
%
35%
41%
21%
3%
100%
$m
916
3,074
3,536
195
7,721
%
12%
40%
46%
2%
100%
Money market liquidity funds are managed by
external third-party fund managers to maintain
Aaa/AAA long-term ratings and P1/A1 short-term
ratings from Moody’s/Standard & Poor’s. The
Group limits its investment in each fund to a
prescribed maximum amount or 5% of the fund’s
assets under management, whichever is the
lower. The Group has a number of managed
investment funds that hold fixed income euro
securities with an average credit quality of Aaa/
AAA. As at 31 December 2021, 65% (2020: 88%)
of cash and cash equivalents was held with higher
investment grade bank counterparties, and 35%
(2020: 12%) with the money market funds.
Credit risk arising in the context of the Group’s
operations is not significant with the total loss
allowance at the balance sheet date amounting to
3.2% of gross trade receivables and construction
contract assets (2020: 3.8%). Information in
relation to the Group’s credit risk management of
trade receivables is provided in note 17. Amounts
receivable from related parties (notes 17 and 32)
are immaterial. Factoring arrangements and
supplier financing arrangements are employed in
certain of the Group’s operations where deemed
to be of benefit by operational management and
are deemed immaterial.
In its worldwide insurance programme, the Group
carries appropriate levels of insurance for typical
business risks (including product liability) with
various leading insurance companies. However, in
the event of the failure of one or more of its
insurance counterparties, the Group could be
impacted by losses where recovery from such
counterparties is not possible.
Liquidity risk
The principal liquidity risks faced by the Group
stem from the maturation of debt obligations and
derivative transactions. A downgrade of CRH’s
credit ratings may give rise to increases in funding
costs in respect of future debt and may impair the
Group’s ability to raise funds on acceptable terms.
The Group’s corporate treasury function ensures
that sufficient resources are available to meet such
liabilities as they fall due through a combination of
cash and cash equivalents, cash flows and
undrawn committed bank facilities. Flexibility in
funding sources is achieved through a variety of
means including (i) maintaining cash and cash
equivalents only with a diverse group of highly-
rated counterparties; (ii) limiting the annual
maturity of such balances; (iii) borrowing the bulk
of the Group’s debt requirements under
committed bank lines or other term financing; and
(iv) having surplus committed lines of credit.
The undrawn committed facilities available to the
Group as at the balance sheet date are quantified
in note 24; these facilities span a wide number of
highly-rated financial institutions thus minimising
any potential exposure arising from concentrations
in borrowing sources. The repayment schedule
(analysed by maturity date) applicable to the
Group’s outstanding interest-bearing loans and
borrowings as at the balance sheet date is also
presented in note 24.
The Group’s €1.5 billion Euro Commercial Paper
Programme and $2.0 billion US Dollar Commercial
Paper Programme means we have framework
programmes in the money markets in place that
allow the Group to issue in the relevant markets
within a short period of time.
Commodity price risk
The principal commodity price risks are identified
in a variety of highly probable and active
commodity contracts where a significant part of
the price to be paid relies on a reference to
specific floating price indices (usually US Dollar) for
a specific period. Programmes are in place to
hedge the quantities and qualities of commodity
products, including fuel oil and related products,
electricity and carbon credits. The aim of the
programmes is to neutralise the variability in the
Consolidated Income Statement as a result of
changes in associated commodity indices over a
timeframe of approximately four years (2020: five
years). A hedge ratio of 1:1 is established. Fixed
price swap contracts in the entity’s operating
currency are used to hedge the same specific
floating index risk and currency risk where it is
determined that those risks are better managed at
a fixed price rather than being exposed to
uncontrollable price fluctuations due to the floating
price index element of the contract. Sources of
ineffectiveness can relate to timing of cash flows
and counterparty credit risk adjustments. The
derivative contracts qualify for cash flow hedge
accounting under IFRS 9 and the fair values by
maturity are set out in note 25.
The notional and fair values in respect of derivative contracts as at 31 December 2021 and 31 December 2020 were as follows:
Profile of commodity products
As at 31 December 2021
As at 31 December 2020
Notional value
$m
Fair value
$m
Notional value
$m
Fair value
$m
Commodity swaps
Derivative asset/(liability)
86
-
-
32
85
-
-
(2)
192
192
2021 Annual Report and Form 20-F 193
22. Capital and Financial Risk Management - continued
The tables below show the projected contractual undiscounted total cash outflows (principal and interest) arising from the Group’s trade and other payables, gross
debt and derivative financial instruments. The tables also include the gross cash inflows projected to arise from derivative financial instruments. These projections are
based on the interest and foreign exchange rates applying at the end of the relevant financial year.
At 31 December 2021
Financial liabilities - cash outflows
Trade and other payables
Lease liabilities
Other interest-bearing loans and borrowings
Interest payments on other interest-bearing loans and borrowings (i)
Currency forwards and currency swaps - gross cash outflows
Other derivative financial instruments
Gross projected cash outflows
Derivative financial instruments - cash inflows
Interest rate swaps - net cash inflows (ii)
Currency forwards and currency swaps - gross cash inflows
Other derivative financial instruments
Gross projected cash inflows
The equivalent disclosure for the prior year is as follows:
At 31 December 2020
Financial liabilities - cash outflows
Trade and other payables
Lease liabilities
Other interest-bearing loans and borrowings
Interest payments on other interest-bearing loans and borrowings (i)
Currency forwards and currency swaps - gross cash outflows
Other derivative financial instruments
Gross projected cash outflows
Derivative financial instruments - cash inflows
Interest rate swaps - net cash inflows (ii)
Currency forwards and currency swaps - gross cash inflows
Other derivative financial instruments
Gross projected cash inflows
Within
1 year
$m
Between
1 and 2
years
$m
Between
2 and 3
years
$m
Between
3 and 4
years
$m
Between
4 and 5
years
$m
After
5 years
$m
Total
$m
5,697
302
559
315
1,567
1
196
254
1,420
286
-
-
44
208
683
264
-
-
202
175
170
288
6,597
150
1,099
2,188
1,254
853
5,666 10,435
238
214
1,715
3,032
-
-
-
-
-
-
1,567
1
8,441
2,156
1,199
1,869
1,387
8,768 23,820
(41)
(34)
(32)
(22)
(13)
(20)
(162)
(1,559)
(32)
-
(1)
-
-
-
-
-
-
-
(1,559)
-
(33)
(1,632)
(35)
(32)
(22)
(13)
(20)
(1,754)
4,797
301
1,270
345
2,345
5
171
255
479
328
-
1
49
208
1,538
296
-
-
209
177
741
272
-
-
181
371
5,778
150
1,085
2,176
1,255
6,805 12,088
246
1,952
3,439
-
-
-
-
2,345
6
9,063
1,234
2,091
1,399
1,832 10,213 25,832
(40)
(40)
(33)
(30)
(22)
(32)
(197)
(2,350)
(4)
-
(1)
-
-
-
-
-
-
-
-
(2,350)
(5)
(2,394)
(41)
(33)
(30)
(22)
(32)
(2,552)
(i) At 31 December 2021 and 31 December 2020, a portion of the Group’s long-term debt carried variable interest rates. The Group uses the interest rates in effect
on 31 December to calculate the interest payments on the long-term debt for the periods indicated.
(ii) The Group uses interest rate swaps to help manage its interest cost. Under these contracts the Group has agreed to exchange at predetermined intervals, the net
difference between fixed and variable interest amounts calculated by reference to a pre-agreed notional principal. The Group uses the interest rates in effect on
31 December to calculate the net interest receipts or payments on these contracts.
192
2021 Annual Report and Form 20-F 193
2021 Annual Report and Form 20-F 193
23. Cash and Cash Equivalents
Cash and cash equivalents balances are spread across a wide number of highly-rated financial institutions. The credit risk attaching to these items is documented in
note 22.
Cash and cash equivalents are included in the Consolidated Balance Sheet at amortised cost and are analysed as follows:
Cash at bank and in hand
Investments (short-term deposits)
Total
2021
$m
925
4,858
5,783
2020
$m
1,482
6,239
7,721
Cash at bank earns/pays interest at floating rates based on daily deposit bank rates. Short-term deposits, which include bank and money market deposits, are made
for varying periods of between one day and three months depending on the immediate cash requirements of the Group, earning interest at the respective short-term
deposit rates.
Money market deposits are held at fair value through profit and loss and are Level 1 instruments. The fair values of money market deposits are calculated by
multiplying the net asset value per share by the investment held at the balance sheet date.
24. Interest-bearing Loans and Borrowings
Bank overdrafts
Bank loans
Bonds
Interest-bearing loans and borrowings
2021
$m
111
430
9,946
10,487
2020
$m
120
541
11,554
12,215
Interest-bearing loans and borrowings include borrowings of $nil million (2020: $nil million) secured on specific items of property, plant and equipment.
Maturity profile of loans and borrowings and undrawn committed facilities
As at 31 December 2021
As at 31 December 2020
Loans and
borrowings
$m
549
1,422
676
1,277
845
5,718
10,487
Undrawn
committed
facilities
$m
19
-
-
-
3,964
-
3,983
Loans and
borrowings
$m
Undrawn
committed
facilities
$m
1,257
467
1,552
733
1,320
6,886
12,215
10
5
61
-
4,294
-
4,370
Within one year
Between one and two years
Between two and three years
Between three and four years
Between four and five years
After five years
Total
The Group manages its borrowing ability by
entering into committed borrowing agreements.
Revolving committed bank facilities are generally
available to the Group for periods of up to five years
from the date of inception. The undrawn committed
facilities figures shown in the table above represent
the facilities available to be drawn by the Group at
31 December 2021.
The Group successfully carried out an amendment
of its €3.5 billion revolving credit facility in March
2021 whereby the Group extended the maturity
date of the facility for a further year to 2026. In
January 2021 the Group repaid a $400 million bond
upon maturity and in April 2021 a €600 million bond
was repaid early when a 3-month par-call option
was exercised.
At the end of 2021 a number of LIBOR settings
ceased to be published (including Sterling and
Swiss Franc), while certain US Dollar LIBOR
settings will continue to be provided until June
2023. There is no change to the publication of
EURIBOR rates. The Group’s syndicated revolving
credit facility (undrawn as at 31 December 2021)
previously referenced USD LIBOR, GBP LIBOR and
CHF LIBOR rates. During 2021 the Group
negotiated with its Lenders amendments to the
facility to include market standard LIBOR
replacement language. From 1 January 2022 the
agreement will adopt the Secured Overnight
Financing Rate (SOFR), Sterling Overnight Index
Average (SONIA) and Swiss Average Rate
Overnight (SARON) as the alternative benchmark
rates in respect of USD, GBP and CHF LIBOR rates
respectively.
Guarantees
The Company has given letters of guarantee to
secure obligations of subsidiary undertakings as
follows: $10.0 billion in respect of loans and
borrowings, bank advances and derivative
obligations (2020: $11.6 billion) and $0.4 billion in
respect of letters of credit (2020: $0.4 billion).
Any Irish registered wholly-owned subsidiary of the
Company may avail of the exemption from filing its
statutory financial statements for the year ended
31 December 2021 as permitted by section 357 of
the Companies Act 2014 and if an Irish registered
wholly-owned subsidiary of the Company elects to
avail of this exemption, there will be in force an
irrevocable guarantee from the Company in respect
of all commitments entered into by such wholly-
owned subsidiary, including amounts shown as
liabilities (within the meaning of section 357 (1) (b) of
the Companies Act 2014) in such wholly-owned
subsidiary’s statutory financial statements for the
year ended 31 December 2021.
194
194
2021 Annual Report and Form 20-F 195
25. Derivative Financial Instruments
The fair values of derivative financial instruments are analysed by year of maturity and by accounting designation as follows:
Fair value
hedges
$m
Cash flow
hedges
$m
Net investment
hedges
$m
Not designated
as hedges
$m
Total
$m
At 31 December 2021
Derivative assets
Within one year - current assets
Between one and two years
Between three and four years
After five years
Non-current assets
Total derivative assets
Derivative liabilities
Within one year - current liabilities
Total derivative liabilities
Net asset/(liability) arising on derivative financial instruments
The equivalent disclosure for the prior year is as follows:
At 31 December 2020
Derivative assets
Within one year - current assets
Between one and two years
Between two and three years
Between four and five years
After five years
Non-current assets
Total derivative assets
Derivative liabilities
Within one year - current liabilities
Between one and two years - non-current liabilities
Total derivative liabilities
Net asset/(liability) arising on derivative financial instruments
-
20
32
44
96
96
-
-
96
-
-
32
74
77
183
183
-
-
-
183
36
1
-
-
1
37
(2)
(2)
35
7
1
-
-
-
1
8
(6)
(1)
(7)
1
1
-
-
-
-
1
(10)
(10)
(9)
8
-
-
-
-
-
8
(2)
-
(2)
6
2
-
-
-
-
2
(2)
(2)
-
2
-
-
-
-
-
2
(4)
-
(4)
(2)
39
21
32
44
97
136
(14)
(14)
122
17
1
32
74
77
184
201
(12)
(1)
(13)
188
194
2021 Annual Report and Form 20-F 195
2021 Annual Report and Form 20-F 195
At 31 December 2021 and 2020, the Group had no
master netting or similar arrangements, no collateral
posting requirements, or enforceable right of set-off
agreements with any of its derivative counterparts.
Fair value hedges consist of interest rate swaps.
These instruments hedge risks arising from changes
in asset/liability fair values due to interest rate
movements.
Cash flow hedges consist of currency forwards,
currency swaps and commodity swaps. These
instruments hedge risks arising to future cash flows
from movements in foreign exchange rates and
commodity prices. Cash flow hedges are expected
to affect profit and loss over the period to maturity.
Net investment hedges comprise of currency
forwards and currency swaps and hedge changes
in the value of net investments due to currency
movements.
The profit/(loss) arising on fair value hedges, cash flow hedges, and related hedged items reflected in the Consolidated Income Statement is shown below:
Fair value hedges and related hedged items
Movement in cumulative fair value of the hedge adjustment of hedge instruments
Movement in cumulative fair value of the hedge adjustment of hedged items
Components of other comprehensive income - cash flow hedges
Gains/(losses) arising during the year:
- commodity swaps
- currency forwards
Total
2021
$m
(85)
87
34
-
34
2020
$m
97
(83)
(2)
9
7
2019
$m
72
(71)
30
(3)
27
Fair value hierarchy
Assets measured at fair value
Fair value hedges - interest rate swaps
Cash flow hedges - currency forwards, currency swaps and commodity swaps
Net investment hedges - currency forwards and currency swaps
Not designated as hedges (classified as held for trading) - currency forwards and currency swaps
Total
Liabilities measured at fair value
Cash flow hedges - currency forwards, currency swaps and commodity swaps
Net investment hedges - currency forwards and currency swaps
Not designated as hedges (classified as held for trading) - currency forwards and currency swaps
Total
2021
Level 2
$m
2020
Level 2
$m
96
37
1
2
183
8
8
2
136
201
(2)
(10)
(2)
(14)
(7)
(2)
(4)
(13)
At 31 December 2021 and 2020 there were no derivatives valued using Level 1 or Level 3 fair value techniques.
196
196
2021 Annual Report and Form 20-F 197
26. Provisions for Liabilities
At
1 January
$m
Translation
adjustment
$m
Arising on
acquisition
(note 30)
$m
Provided
during
year
$m
Utilised
during
year
$m
Disposed
during
year
$m
Reversed
unused
$m
Discount
unwinding
$m
At
31 December
$m
31 December 2021
Insurance (i)
Environment and remediation (ii)
Rationalisation and redundancy (iii)
Other (iv)
Total
Analysed as:
Non-current liabilities
Current liabilities
Total
The equivalent disclosure for the prior year is as follows:
31 December 2020
Insurance (i)
Environment and remediation (ii)
Rationalisation and redundancy (iii)
Other (iv)
Total
Analysed as:
Non-current liabilities
Current liabilities
Total
(4)
(18)
(1)
(14)
(37)
4
23
2
14
43
1
-
-
-
1
-
-
-
-
-
349
684
48
361
1,442
953
489
1,442
330
585
17
370
1,302
854
448
1,302
137
49
29
100
315
(76)
(26)
(36)
(63)
(201)
-
(3)
-
(3)
(6)
(17)
(15)
(19)
(65)
(116)
162
103
111
125
501
(119)
(15)
(77)
(59)
-
(5)
-
-
(34)
(19)
(5)
(92)
(270)
(5)
(150)
5
10
-
3
18
6
12
-
3
21
395
681
21
319
1,416
937
479
1,416
349
684
48
361
1,442
953
489
1,442
(i) This provision relates to obligations arising under the self-insurance components of the Group’s insurance arrangements which comprise employers’ liability
(workers’ compensation in the US), public and products liability (general liability in the US), automobile liability, property damage, business interruption and various
other insurances; a substantial proportion of the total provision pertains to claims which are classified as “incurred but not reported”. Due to the extended
timeframe associated with many of the insurances, a significant proportion of the total provision is subject to periodic actuarial valuation. The projected cash flows
underlying the discounting process are established through the application of actuarial triangulations, which are extrapolated from historical claims experience. The
triangulations applied in the discounting process indicate that the Group’s insurance provisions have an average life of four years (2020: four years).
(ii) This provision comprises obligations governing site remediation, restoration and environmental works to be incurred in compliance with either local or national
environmental regulations together with constructive obligations stemming from established best practice. The value of current obligations is $96 million (2020:
$106 million), whilst $310 million (2020: $301 million) of the total provision will be utilised in the medium-term (two to ten years). The value of legal and constructive
obligations applicable to long-lived assets (principally mineral-bearing land) that will unwind over a 30-year timeframe is $275 million (2020: $277 million). In
discounting the related obligations, expected future cash outflows have been determined with due regard to extraction status and anticipated remaining life. The
discount rates used are consistent with the timing of the expected future cash outflows of the provision and the economic environment of the jurisdiction where
the provision will be settled.
(iii) These provisions relate to irrevocable commitments under various rationalisation and redundancy programmes, none of which are individually material to the
Group. In 2021, $29 million (2020: $111 million; 2019: $32 million) was provided in respect of rationalisation and redundancy activities as a consequence of
undertaking various cost reduction initiatives across all operations. These initiatives included removing excess capacity from manufacturing and distribution
networks and scaling operations to match supply and demand. The Group expects that these provisions will primarily be utilised within one to two years of the
balance sheet date (2020: one to two years).
(iv) Other provisions primarily relate to legal claims and also include onerous contracts, guarantees and warranties and employee related provisions. The Group
expects the majority of these provisions will be utilised within one to five years of the balance sheet date (2020: one to five years); however due to the nature of the
legal provisions there is a level of uncertainty in the timing of settlement as the Group generally cannot determine the extent and duration of the legal process.
196
2021 Annual Report and Form 20-F 197
2021 Annual Report and Form 20-F 197
27. Deferred Income Tax
The deductible and taxable temporary differences in respect of which deferred tax has been recognised are as follows:
Reported in balance sheet after offset
Deferred tax liabilities
Deferred tax assets
Net deferred income tax liability
Deferred income tax assets (deductible temporary differences)
Deficits on Group retirement benefit schemes
Revaluation of derivative financial instruments to fair value
Tax loss carryforwards (primarily income tax losses)
Share-based payment expense
Provisions for liabilities and working capital-related items
Lease liabilities
Other deductible temporary differences
Total
2021
$m
2,734
(109)
2,625
98
4
93
54
446
335
87
2020
$m
2,613
(129)
2,484
128
8
176
41
402
330
59
1,117
1,144
Deferred income tax assets have been recognised in respect of all deductible temporary differences, with the exception of some tax loss carryforwards. The amount of
tax losses where recovery is not probable and is therefore not recognised in the Consolidated Balance Sheet is $1.2 billion (2020: $1.4 billion). The vast majority either
do not expire based on current tax legislation or they expire post 2026 (2020: 2025). Of the losses not recognised in the Consolidated Balance Sheet, $0.1 billion
(2020: $0.1 billion) expire within five years, $0.4 billion (2020: $0.3 billion) expire post five years and the remainder of losses do not expire.
Deferred income tax liabilities (taxable temporary differences)
Taxable temporary differences principally attributable to accelerated tax depreciation and fair value
adjustments arising on acquisition (i)
3,218
3,123
Leased right-of-use assets
Investment in subsidiaries
Surpluses on Group retirement benefit schemes
Revaluation of derivative financial instruments to fair value
Rolled-over capital gains
Total
Investments in subsidiaries
314
164
9
15
22
315
161
-
12
17
3,742
3,628
The aggregate temporary differences in relation to investments in subsidiaries for which deferred tax liabilities have not been recognised is $12.1 billion (2020:
$10.9 billion) given the Group is in a position to control the timing of reversal and management’s intention not to unwind these temporary differences. Participation
exemptions and tax credits are available in the majority of jurisdictions in which the Group operates. A deferred tax liability has been recognised in respect of any
temporary differences relating to investments in subsidiaries expected to unwind in the foreseeable future.
Movement in net deferred income tax liability
At 1 January
Translation adjustment
Net expense/(income) for the year
Arising on acquisition (note 30)
Disposals
Movement in deferred tax recognised in the Consolidated Statement of Comprehensive Income
Movement in deferred tax recognised in the Consolidated Statement of Changes in Equity
At 31 December
(i) Fair value adjustments arising on acquisition principally relate to property, plant and equipment.
2,484
2,551
(34)
103
37
1
44
(10)
2,625
41
(95)
-
(3)
(11)
1
2,484
198
198
2021 Annual Report and Form 20-F 199
28. Retirement Benefit Obligations
The Group operates either defined benefit or
defined contribution pension schemes in all of its
principal operating areas. The disclosures included
below relate to all pension schemes in the Group.
The Group operates defined benefit pension
schemes in Belgium, Canada, France, Germany,
Italy, the Netherlands, the Philippines, the
Republic of Ireland, Romania, Serbia, Slovakia,
Switzerland, the UK and the US. The Group also
operated a defined benefit pension scheme in
Brazil which was divested in April 2021. The
Group has a mixture of funded and unfunded
defined benefit pension schemes. The net surplus
of the funded schemes is $54 million (2020: net
liability of $154 million net of surpluses of
$111 million). Unfunded obligations (including
jubilee, post-retirement healthcare obligations and
long-term service commitments) comprise of a
number of schemes in Canada, France, Germany,
Italy, the Netherlands, the Philippines, Romania,
Serbia, Slovakia, Switzerland and the US, totalling
a net liability of $363 million (2020: $402 million).
Funded defined benefit schemes in the Republic
of Ireland, Switzerland and the UK are
administered by separate funds that are legally
distinct from the Group under the jurisdiction of
Trustees. The Trustees are required by law to act
in the best interests of the scheme participants
and are responsible for the definition of investment
strategy and for scheme administration. Other
schemes are also administered in line with the
local regulatory environment. The level of benefits
available to most members depends on length of
service and either their average salary over their
period of employment or their salary in the final
years leading up to retirement. For Switzerland,
the level of benefits depends on salary, level of
savings contributions, the interest rate on old age
accounts (which cannot be negative) and the
annuity conversion factor on retirement. The
Group’s pension schemes in Switzerland are
contribution-based schemes with guarantees to
provide further contributions in the event that the
plan assets are insufficient to meet the benefit
obligations.
Defined benefit pension schemes - principal
risks
Through its defined benefit pension and jubilee
schemes, long-term service commitments and
post-retirement healthcare plans, the Group is
exposed to a number of risks, the most significant
of which are detailed below:
Asset volatility: Under IAS 19 Employee Benefits ,
the assets of the Group’s defined benefit pension
schemes are reported at fair value (using bid
prices, where relevant). The majority of the
schemes’ assets comprise equities, bonds and
property, all of which may fluctuate significantly in
value from period to period including from
fluctuations arising in respect of climate change
and associated risks and uncertainties. Given that
liabilities are discounted to present value based on
bond yields and that bond prices are inversely
related to yields, an increase in the liability
discount rate (which would reduce liabilities) would
reduce bond values, though not necessarily by an
equal magnitude.
Given the maturity of certain of the Group’s
funded defined benefit pension schemes,
de-risking frameworks have been introduced to
mitigate deficit volatility and enable better
matching of investment returns with the cash
outflows related to benefit obligations. These
frameworks entail the usage of asset-liability
matching techniques, whereby triggers are set for
the conversion of equity holdings into bonds of
similar average duration to the relevant liabilities.
Discount rates: The discount rates employed in
determining the present value of the schemes’
liabilities are determined by reference to market
yields at the balance sheet date on high-quality
corporate bonds of a currency and term
consistent with the currency and term of the
associated post-employment benefit obligations.
Changes in discount rates impact the quantum of
liabilities as discussed above.
Inflation risk: A significant amount of the Group’s
pension obligations are linked to inflation; higher
inflation will lead to higher liabilities (although in
most cases, caps on the level of inflationary
increases are in place to protect the schemes
against extreme inflation).
Longevity risk: In the majority of cases, the
Group’s defined benefit pension schemes provide
benefits for life with spousal and dependent child
reversionary provisions; increases in life
expectancy (decreases in mortality assumptions)
will therefore give rise to higher liabilities.
Aggregation
For the purposes of the disclosures which follow;
the schemes in Belgium, France, Germany, Italy,
the Netherlands, the Republic of Ireland and
Slovakia have been aggregated into a “Eurozone”
category on the basis of common currency and
financial assumptions; schemes in Brazil, the
Philippines, Romania, Serbia and the UK have
been aggregated into an “Other” category.
Financial assumptions—scheme liabilities
The major long-term assumptions used by the Group’s actuaries in the computation of scheme liabilities and post-retirement healthcare
obligations are as follows:
Eurozone
2020
%
2021
%
United States
and Canada
2019
%
2021
%
2020
%
2019
%
Switzerland
2020
%
2021
%
2019
%
2.92
1.90
1.90
1.43
n/a
2.52
1.45
1.50
1.14
n/a
3.37
1.46
1.50
1.43
n/a
3.03
3.37
3.37
1.25
1.00
1.50
-
2.00
2.82
5.91
-
2.00
2.34
5.97
-
2.00
3.14
5.18
-
0.75
0.30
n/a
-
0.50
0.20
n/a
-
1.00
0.30
n/a
Rate of increase in:
- salaries
- pensions in payment
Inflation
Discount rate
Medical cost trend rate
198
2021 Annual Report and Form 20-F 199
2021 Annual Report and Form 20-F 199
The mortality assumptions employed in determining the present value of scheme liabilities under IAS 19 represent actuarial guidelines in the
relevant jurisdictions, taking account of mortality experience and industry circumstances. For schemes in the Republic of Ireland and the UK,
the mortality assumptions used are in accordance with the underlying funding valuations. For the Group’s most material schemes, the future life
expectations factored into the relevant valuations, based on retirement at 65 years of age for current and future retirees, are as follows:
Republic of Ireland
2020
2021
2019
United States
and Canada
2021
2020
2019
2021
Switzerland
2020
2019
Current retirees
- male
- female
Future retirees
- male
- female
22.6
24.5
22.5
24.4
23.0
24.5
20.5
22.4
20.1
22.2
20.2
22.3
22.6
24.4
22.6
24.7
22.6
24.7
24.9
26.8
24.8
26.7
25.4
26.8
22.2
24.1
22.0
23.9
22.1
24.2
25.4
26.9
24.8
26.8
24.8
26.8
The above data allows for future improvements in life expectancy.
Impact on Consolidated Income Statement
The total retirement benefit expense from continuing operations in the Consolidated Income Statement is as follows:
Total defined contribution expense (i)
Total defined benefit expense (i)
Total expense in Consolidated Income Statement
2021
$m
2020
$m
2019
$m
309
72
381
289
70
359
290
51
341
(i) The total defined contribution and defined benefit expense in 2019 including discontinued operations, amounted to $299 million and $70 million respectively.
At 31 December 2021, $92 million (2020: $105 million) was included in trade and other payables in respect of defined contribution pension liabilities.
Analysis of defined benefit expense
Charged in arriving at Group profit before finance costs:
Current service cost
Administration expenses
Past service (credit)/cost net
Loss on settlements
Subtotal
Included in finance income and finance costs respectively:
Interest income on scheme assets
Interest cost on scheme liabilities
Net interest expense
55
4
(3)
6
62
(46)
56
10
53
5
1
-
59
(56)
67
11
48
8
(20)
-
36
(72)
87
15
Net expense to Consolidated Income Statement
72
70
51
The composition of the net expense to the Consolidated Income Statement is as follows:
Eurozone
United States and Canada
Switzerland
Other
Total
29
21
10
12
72
30
16
12
12
70
28
6
8
9
51
200
200
2021 Annual Report and Form 20-F 201
28. Retirement Benefit Obligations - continued
Reconciliation of scheme assets (bid value)
At 1 January
Movement in year
Interest income on scheme assets
Remeasurement adjustments
- return on scheme assets excluding interest income
Employer contributions paid
Contributions paid by plan participants
Benefit and settlement payments
Administration expenses
Translation adjustment
At 31 December
The composition of scheme assets is as follows:
Eurozone
United States and Canada
Switzerland
Other
Total
Reconciliation of actuarial value of liabilities
At 1 January
Movement in year
Current service cost
Past service credit/(cost) net
Loss on settlements
Interest cost on scheme liabilities
Disposals
Remeasurement adjustments
- experience variations
- actuarial gain/(loss) from changes in financial assumptions
- actuarial gain from changes in demographic assumptions
Contributions paid by plan participants
Benefit and settlement payments
Translation adjustment
2021
$m
3,321
2020
$m
3,013
46
56
165
43
7
(258)
(4)
(146)
3,174
1,563
873
460
278
3,174
174
46
7
(158)
(5)
188
3,321
1,603
1,018
444
256
3,321
(3,877)
(3,493)
(55)
3
(6)
(56)
1
(7)
70
36
(7)
258
157
(53)
(1)
-
(67)
1
32
(251)
12
(7)
158
(208)
At 31 December
(3,483)
(3,877)
The composition of the actuarial value of liabilities is as follows:
Eurozone
United States and Canada
Switzerland
Other
Total
Net pension deficit (i)
Related deferred income tax asset
Net pension liability
The composition of the net pension liability is as follows:
Eurozone
United States and Canada
Switzerland
Other
Total
(i) Reconciliation to Consolidated Balance Sheet
Retirement benefit assets
Retirement benefit obligations
Net pension deficit
(1,671)
(1,093)
(394)
(325)
(3,483)
(1,769)
(1,293)
(425)
(390)
(3,877)
(309)
89
(220)
(87)
(164)
66
(35)
(220)
166
(475)
(309)
(556)
128
(428)
(138)
(206)
22
(106)
(428)
-
(556)
(556)
200
2021 Annual Report and Form 20-F 201
2021 Annual Report and Form 20-F 201
A UK High Court ruling in November 2020 relating to the equalisation of guaranteed minimum pensions for men and women did not materially impact the liability
associated with the Group’s UK defined benefit pension schemes.
Sensitivity analysis
The revised liabilities due to the impact of a reasonably possible change (as indicated below) in the principal actuarial assumptions would be as follows:
Eurozone
2021
$m
United States
and Canada
2021
$m
Switzerland
2021
$m
Other
2021
$m
Total Group
2021
$m
Scheme liabilities at 31 December
(1,671)
(1,093)
(394)
(325)
(3,483)
Revised liabilities
Discount rate
Inflation rate
Mortality assumption
Increase by 0.25%
Decrease by 0.25%
Increase by 0.25%
Decrease by 0.25%
Increase by 1 year
Decrease by 1 year
(1,597)
(1,750)
(1,745)
(1,602)
(1,607)
(1,736)
(1,060)
(1,127)
(1,096)
(1,090)
(1,059)
(1,127)
(378)
(411)
(395)
(393)
(380)
(408)
(310)
(341)
(334)
(319)
(314)
(335)
(3,345)
(3,629)
(3,570)
(3,404)
(3,360)
(3,606)
The above sensitivity analysis are derived through changing the individual assumption while holding all other assumptions constant.
Split of scheme assets
Investments quoted in active markets
Equity instruments (i)
Debt instruments (ii)
Property
Cash and cash equivalents
Investment funds
Unquoted investments
Equity instruments
Debt instruments (iii)
Property
Cash and cash equivalents
Assets held by insurance company
Total assets
2021
$m
752
1,874
128
40
129
2
14
71
9
155
3,174
2020
$m
862
2,025
106
56
166
2
12
69
6
17
3,321
(i) Equity instruments primarily relate to developed markets.
(ii) Quoted debt instruments are made up of $1,317 million (2020: $1,288 million) and $557 million (2020: $737 million) of government and
non-government instruments respectively.
(iii) Unquoted debt instruments primarily relate to government debt instruments.
202
202
2021 Annual Report and Form 20-F 203
28. Retirement Benefit Obligations - continued
Actuarial valuations - funding requirements
and future cash flows
In accordance with statutory requirements in the
Republic of Ireland and funding requirements set
by the Trustees in the UK, additional annual
contributions and lump-sum payments are
determined to get the plans to a fully funded
position (on a funding basis). The funding
requirements in relation to the Group’s defined
benefit schemes are assessed in accordance with
the advice of independent and qualified actuaries
and valuations are prepared in this regard either
annually, where local requirements mandate that
this be done, or at triennial intervals at a maximum
in all other cases. In the Republic of Ireland and
the UK, either the attained age or projected unit
credit methods are used in the valuations. In
Canada, Germany, Switzerland and the US,
valuations are performed in accordance with the
projected unit credit methodology. The dates of
the funding valuations range from January 2019 to
March 2021.
In general, funding valuations are not available for
public inspection; however, the results of
valuations are advised to the members of the
various schemes on request.
The Group has contracted payments (presented
on a discounted basis) to certain schemes in the
UK of $17 million (2020: $20 million; 2019:
$21 million).
The maturity profile of the Group’s contracted payments (on a discounted basis) is as follows:
Within one year
Between one and two years
Between two and three years
Between three and four years
Between four and five years
After five years
Total
2021
$m
2020
$m
2019
$m
2
2
2
2
2
7
17
2
2
2
2
2
10
20
2
2
2
2
2
11
21
Employer contributions payable in the 2022 financial year including minimum funding payments (expressed using year-end exchange rates for 2021) are estimated at
$40 million.
Average duration and scheme composition
Average duration of defined benefit obligation (years)
18.3
18.3
18.1
12.3
12.9
12.5
17.0
17.6
17.8
Eurozone
2020
2021
United States and Canada
Switzerland
2019
2021
2020
2019
2021
2020
2019
Allocation of defined benefit obligation by participant:
Active plan participants
Deferred plan participants
Retirees
69%
70%
74%
49%
43%
44%
74%
74%
74%
10%
10%
8%
15%
12%
12%
-
-
-
21%
20%
18%
36%
45%
44%
26%
26%
26%
202
2021 Annual Report and Form 20-F 203
2021 Annual Report and Form 20-F 203
29. Share Capital and Reserves
Equity share capital
Authorised
At 1 January ($m)
Cancellation of Income Shares (ii)
At 31 December ($m)
Number of Shares at 1 January (millions)
Cancellation of Income Shares (ii)
Number of Shares at 31 December (millions)
Allotted, called-up and fully paid
At 1 January ($m)
Cancellation of Income Shares (ii)
Cancellation of Treasury Shares (iii)
At 31 December ($m)
The movement in the number of shares (expressed in millions) during the financial year was as follows:
At 1 January
Cancellation of Income Shares (ii)
Cancellation of Treasury Shares (iii)
At 31 December
2021
2020
Ordinary
Shares of
€0.32 each (i)
Income
Shares of
€0.02 each
Ordinary
Shares of
€0.32 each (i)
Income
Shares of
€0.02 each
491
-
491
28
(28)
-
491
-
491
28
-
28
1,250
1,250
1,250
1,250
-
(1,250)
-
-
1,250
-
1,250
1,250
317
-
(8)
309
795
-
(21)
774
16
(16)
-
-
795
(795)
-
-
319
-
(2)
317
799
-
(4)
795
16
-
-
16
799
-
(4)
795
(i) The Ordinary Shares represent 99.53% of the total issued share capital as at 31 December 2021 (2020: 93.71%).
(ii) The Income Shares were cancelled with effect from 9 February 2021 pursuant to a resolution approved by the Shareholders at an extraordinary general meeting of
the Company held on 9 February 2021 (2020: Income Shares represented 5.86% of the total issued share capital).
(iii) During 2021, 21,000,000 Ordinary Shares (2020: 4,500,000 Ordinary Shares including Income Shares) were cancelled. The amount paid to repurchase these
shares was initially recognised in Treasury Shares/own shares and was transferred to retained income on cancellation.
Share schemes
The aggregate number of shares which may be committed for issue in respect of any share option scheme, savings-related share option scheme, share participation
scheme, performance share plan or any subsequent option scheme or share plan, may not exceed 10% of the issued ordinary share capital from time to time.
Share option schemes
Details of share options granted under the Company’s Share Option Schemes and the terms attaching thereto are provided in note 8 to the financial statements.
Under these schemes, options over a total of 521,523 Ordinary Shares were exercised during the financial year, which were satisfied by the reissue of Treasury Shares
(2020: 256,521; 2019: 1,147,149).
204
204
2021 Annual Report and Form 20-F 205
29. Share Capital and Reserves - continued
Share participation schemes
As at 31 December 2021, 8,444,240 (2020: 8,319,280) Ordinary Shares had been appropriated to participation schemes. In 2021, the appropriation was satisfied by
the purchase of 124,960 shares (2020: 144,702 satisfied by the purchase of shares). The Ordinary Shares appropriated pursuant to these schemes were issued at
market value on the dates of appropriation. The shares issued pursuant to these schemes are excluded from the scope of IFRS 2 and are hence not factored into the
expense computation and the associated disclosures in note 8.
Preference share capital
Authorised
5% Cumulative
Preference Shares of
€1.27 each
7% ‘A’ Cumulative
Preference Shares
of €1.27 each
Number of Shares
‘000s
Number of Shares
‘000s
$m
At 1 January 2021 and 31 December 2021
150
-
872
Allotted, called-up and fully paid
At 1 January 2021 and 31 December 2021
50
-
872
$m
1
1
There was no movement in the number of cumulative preference shares in either the current or the prior year.
The holders of the 5% Cumulative Preference Shares are entitled to a fixed cumulative preference dividend at a rate of 5% per annum and priority in a winding-up to
repayment of capital, but have no further right to participate in profits or assets and are not entitled to be present or vote at general meetings unless their dividend is in
arrears. Dividends on the 5% Cumulative Preference Shares are payable half-yearly on 15 April and 15 October in each year. The 5% Cumulative Preference Shares
represent 0.03% of the total issued share capital as at 31 December 2021 (2020: 0.02%).
The holders of the 7% ‘A’ Cumulative Preference Shares are entitled to a fixed cumulative preference dividend at a rate of 7% per annum, and subject to the rights of
the holders of the 5% Cumulative Preference Shares, priority in a winding-up to repayment of capital, but have no further right to participate in profits or assets and are
not entitled to be present or vote at general meetings unless their dividend is in arrears or unless the business of the meeting includes certain matters, which are
specified in the Articles of Association. Dividends on the 7% ‘A’ Cumulative Preference Shares are payable half-yearly on 5 April and 5 October in each year. The 7%
‘A’ Cumulative Preference Shares represent 0.44% of the total issued share capital as at 31 December 2021 (2020: 0.41%).
Treasury Shares/own shares
At 1 January
Own Shares released by the Employee Benefit Trust under the 2014 Performance Share Plan
Shares acquired by CRH plc (Treasury Shares) (i)
Shares acquired by Employee Benefit Trust (own shares)
Treasury Shares/own shares reissued (ii)
Cancellation of Treasury Shares
At 31 December
Notes (i) to (ii) are set out overleaf.
2021
$m
(386)
117
(880)
(16)
19
951
(195)
2020
$m
(360)
65
(220)
(29)
8
150
(386)
204
2021 Annual Report and Form 20-F 205
2021 Annual Report and Form 20-F 205
The movement in the number of Treasury Shares/own shares during the financial year is outlined in the table below (2020: includes Income Shares):
At 1 January
Number of shares
2021
2020
10,320,739 10,236,356
Own Shares released by the Employee Benefit Trust under the 2014 Performance Share Plan
(3,254,236)
(2,180,467)
Shares acquired by CRH plc (Treasury Shares) (i)
Shares acquired by Employee Benefit Trust (own shares)
Treasury Shares/own shares reissued (ii)
Cancellation of Treasury Shares
At 31 December
Split of Treasury Shares/own shares (iii)
Treasury Shares
Own shares
17,829,602
5,951,146
345,981
1,070,225
(521,523)
(256,521)
(21,000,000)
(4,500,000)
3,720,563 10,320,739
3,476,859 10,087,161
243,704
233,578
3,720,563 10,320,739
(i) During 2021, CRH repurchased a total of 17,829,602 Ordinary Shares returning a further $0.9 billion of cash to shareholders. This brings
total cash returned to shareholders under the share buyback programme (‘the Programme’) to $2.9 billion since its commencement in May
2018.
(ii) These reissued Treasury Shares were previously purchased at an average price of $37.15 (2020: $32.45).
(iii) As at the balance sheet date, the nominal value of the Treasury Shares and own shares was €1.1 million and €0.1 million respectively
(2020: €3.4 million and €0.1 million respectively). Dividends have been waived by the Trustees of the own shares.
Ordinary Shares repurchased during the period (Treasury Shares)
Financial liability as at 31 December
Total
2021
2020
Number of
Shares
17,829,602
Number of
Shares
5,951,146
$m
880
281
1,161
$m
220
-
220
At 31 December 2021 a financial liability of $281 million (2020: $nil million) was included in other payables in respect of the latest phase of the
Programme which was entered into with Sociéte Générale. This phase will end no later than 30 March 2022.
Share premium
At 1 January
Reduction of share premium (iv)
At 31 December
2021
$m
7,493
(7,493)
2020
$m
7,493
-
-
7,493
(iv) Pursuant to a special resolution approved by shareholders at the Annual General Meeting of the Company held on 29 April 2021 and the
subsequent order of the High Court of Ireland made on 3 June 2021, the capital of the Company was reduced by the entire amount
standing to the credit of the Company’s share premium account as at 31 December 2020, with the reserve resulting from the reduction
being treated as profits available for distribution as defined by Section 117 of the Companies Act 2014. A copy of the aforementioned
order of the High Court was filed with the Companies Registration Office in Ireland on 3 June 2021.
206
206
2021 Annual Report and Form 20-F 207
30. Business Combinations
The acquisitions completed during the year ended 31 December 2021 by reportable segment, together with the completion dates, are detailed below; these
transactions entailed the acquisition of an effective 100% stake except where indicated to the contrary:
Americas Materials:
Colorado: Asphalt Paving Company (8 July);
Florida: Extreme Concrete Services, Inc. and JODH, Inc. (30 April);
Michigan: RSmith & Sons Trucking, Inc. (15 September);
Mississippi: The Blain Companies (2 December);
Ohio: Central Allied Enterprises (19 February);
Tennessee: Patty Construction, Inc. and Greenback Asphalt Co., Inc. (10 September);
Texas: Century Asphalt, Inc. and Angel Brothers Enterprises (30 July); and
Utah: Towers Sand & Gravel (10 June).
Europe Materials:
France: certain assets of Holcim (1 August);
Poland: certain assets in Northern Poland (30 December);
Romania: certain assets of Top Aggregate (9 August); and
Slovakia: certain assets of TBG Slovensko, a.s. (1 April).
Building Products:
Americas
Arizona: Pebble Technology, Inc. (2 November);
California: Piranha Pipe & Concrete (12 August);
Minnesota: Hancock Concrete Products, LLC (12 March);
New Jersey: EP Henry Corporation (21 June) and South Jersey Agricultural Products, Inc. (29 December);
New York: National Pipe & Plastics, Inc. (30 September); and
Pennsylvania: Graham Architectural Products Company (22 February).
Europe
Belgium: Schelde-Handel NV and PAS NV (5 July).
206
2021 Annual Report and Form 20-F 207
2021 Annual Report and Form 20-F 207
The identifiable net assets acquired, including adjustments to provisional fair values, were as follows:
2021
$m
2020
$m
2019
$m
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Total non-current assets
Current assets
Inventories
Trade and other receivables (i)
Cash and cash equivalents
Total current assets
LIABILITIES
Trade and other payables
Provisions for liabilities
Retirement benefit obligations
Lease liabilities
Interest-bearing loans and borrowings
Current income tax liabilities
Deferred income tax liabilities
Total liabilities
Total identifiable net assets at fair value
Goodwill arising on acquisition (ii)
Non-controlling interests*
Total consideration
Consideration satisfied by:
Cash payments
Deferred consideration (stated at net present cost)
Contingent consideration
Total consideration
Net cash outflow arising on acquisition
Cash consideration
Less: cash and cash equivalents acquired
Total outflow in the Consolidated Statement of Cash Flows
Notes (i) to (ii) are set out overleaf.
609
131
740
157
191
7
355
(143)
(1)
-
(88)
(3)
-
(37)
(272)
823
679
-
1,502
1,501
-
1
1,502
1,501
(7)
1,494
134
31
165
23
47
-
70
(21)
-
-
(12)
-
(1)
-
(34)
201
157
-
358
351
4
3
358
351
-
351
358
103
461
65
73
11
149
(82)
(7)
(1)
(71)
(10)
10
-
(161)
449
310
(1)
758
738
12
8
758
738
(11)
727
* Non-controlling interests are measured at the proportionate share of net assets.
208
208
2021 Annual Report and Form 20-F 209
30. Business Combinations - continued
The acquisition balance sheet presented on the previous page reflects the identifiable net assets acquired in respect of acquisitions completed during 2021, together
with adjustments to provisional fair values in respect of acquisitions completed during 2020. The measurement period for a number of acquisitions completed in 2020,
closed in 2021 with no material adjustments identified.
CRH performs a detailed quantitative and qualitative assessment of each acquisition in order to determine whether it is material for the purposes of separate disclosure
under IFRS 3 Business Combinations. None of the acquisitions completed during the year were considered sufficiently material to warrant separate disclosure of the
attributable fair values. The initial assignment of the fair values to identifiable assets acquired and liabilities assumed as disclosed are provisional (principally in respect
of property, plant and equipment) in respect of certain acquisitions due to timing of close. The fair value assigned to identifiable assets and liabilities acquired is based
on estimates and assumptions made by management at the time of acquisition. CRH may revise its purchase price allocation during the subsequent reporting window
as permitted under IFRS 3.
(i) The gross contractual value of trade and other receivables as at the respective dates of acquisition amounted to $192 million (2020: $47 million; 2019:
$74 million). The fair value of these receivables is $191 million (all of which is expected to be recoverable) (2020: $47 million; 2019: $73 million).
(ii) The principal factor contributing to the recognition of goodwill on acquisitions entered into by the Group is the realisation of cost savings and other synergies with
existing entities in the Group which do not qualify for separate recognition as intangible assets. Due to the asset-intensive nature of operations in the Americas
Materials and Europe Materials business segments, no significant separately identifiable intangible assets are recognised on business combinations in these
segments. $284 million of the goodwill recognised in respect of acquisitions completed in 2021 is expected to be deductible for tax purposes (2020: $148 million;
2019: $184 million).
Acquisition-related costs for continuing operations, which exclude post-acquisition integration costs, amounting to $14 million (2020: $6 million; 2019: $7 million) have
been included in operating costs in the Consolidated Income Statement (note 4).
The following table analyses the 20 acquisitions completed in 2021 (2020: 17 acquisitions; 2019: 58 acquisitions) by reportable segment and provides details of the
goodwill and consideration figures arising in each of those segments:
Reportable segments
Continuing operations
Americas Materials
Europe Materials
Building Products
Total Group from continuing operations
Discontinued operations
Europe Distribution
Total Group
Number of
acquisitions
Goodwill
Consideration
2021 2020 2019
2021 2020 2019
2021 2020 2019
$m
$m
$m
$m
$m
$m
8
4
8
7
4
6
20
17
27
15
15
57
239
1
53
-
35
4
694
163
182
17
7
71
434
90
253
790
182
501
674
143
292
1,501
352
754
-
20
-
17
1
58
-
-
-
-
-
4
674
143
292
1,501
352
758
Adjustments to provisional fair values of prior year acquisitions
Total
5
14
18
1
6
-
679
157
310
1,502
358
758
The post-acquisition impact of acquisitions completed during the year on the Group’s profit for the financial year was as follows:
Continuing operations
Revenue
Profit before tax for the financial year
2021 2020 2019
$m
$m
$m
568
103
228
51
9
2
208
2021 Annual Report and Form 20-F 209
2021 Annual Report and Form 20-F 209
The revenue and profit of the Group for the financial year determined in accordance with IFRS as though the acquisitions effected during the year had been at the
beginning of the year would have been as follows:
Revenue
Profit before tax for the financial year
2021
acquisitions
$m
CRH Group
excluding 2021
acquisitions
$m
Consolidated
Group
including
acquisitions
$m
1,397
94
30,413
31,810
3,291
3,385
There have been no acquisitions completed subsequent to the balance sheet date which would be individually material to the Group, thereby requiring disclosure
under either IFRS 3 or IAS 10 Events after the Balance Sheet Date. Development updates, giving details of acquisitions which do not require separate disclosure on the
grounds of materiality, are published periodically.
31. Non-controlling Interests
The total non-controlling interest at 31 December 2021 is $681 million (2020: $692 million) of which $498 million (2020: $501 million) relates to Republic Cement &
Building Materials (RCBM), Inc. and Republic Cement Land & Resources (RCLR), Inc. The non-controlling interests in respect of the Group’s other subsidiaries are not
considered to be material.
Name
Principal activity
Country of incorporation
Economic ownership interest
held by non-controlling interest
Republic Cement & Building Materials, Inc.
and Republic Cement Land & Resources Inc.
Manufacture, development and
sale of cement and building materials
Philippines
45%
The following is summarised financial information for RCBM and RCLR prepared in accordance with IFRS 12 Disclosure of Interests in Other Entities. This information
is before intragroup eliminations with other Group companies.
Summarised financial information
Profit for the year
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
2021
$m
61
210
1,618
(240)
(737)
851
2020
$m
22
250
1,754
(181)
(984)
839
Cash flows from operating activities
77
38
There were no dividends paid to non-controlling interests of the combined Philippines business during the current or the prior year.
CRH holds 40% of the equity share capital in RCBM and RCLR and has an economic interest of 55% of the combined Philippines business. Non-controlling interest
relates to another party who holds 60% of the equity share capital in RCBM and RCLR and has an economic interest of 45% of the combined Philippines business.
CRH has obtained control (as defined under IFRS 10 Consolidated Financial Statements) by virtue of contractual arrangements which give CRH power to direct the
relevant non-nationalised activities of the business, in compliance with Philippine law.
210
210
2021 Annual Report and Form 20-F 211
32. Related Party Transactions
The principal related party relationships requiring disclosure in the Consolidated Financial Statements of the Group under IAS 24 Related Party Disclosures pertain to:
the existence of subsidiaries, joint ventures and associates; transactions with these entities entered into by the Group; the identification and compensation of key
management personnel; and lease arrangements.
Subsidiaries, joint ventures and associates
The Consolidated Financial Statements include the financial statements of the Company (CRH plc, the ultimate parent) and its subsidiaries as well as its joint ventures
and associates accounted for by applying the equity method as outlined in the accounting policies on pages 145 to 154. The Group’s principal subsidiaries, joint
ventures and associates are disclosed on pages 260 to 264.
Sales to and purchases from joint ventures and associates are as follows:
Continuing operations
Sales
Purchases
Joint ventures
2021
$m
157
29
2020
$m
127
24
2019
$m
132
27
Associates
2020
$m
31
15
2021
$m
42
19
2019
$m
41
18
Loans extended by the Group to joint ventures and associates (see note 15) are included in financial assets. Amounts receivable from and payable to equity accounted
investments (arising from the aforementioned sales and purchases transactions) as at the balance sheet date are included as separate line items in notes 17 and 18 to
the Consolidated Financial Statements.
Terms and conditions of transactions with subsidiaries, joint ventures and associates
In general, the transfer pricing policy implemented by the Group across its subsidiaries is market-based. Sales to and purchases from joint ventures and associates are
conducted in the ordinary course of business and on terms equivalent to those that prevail in arms-length transactions. The outstanding balances included in
receivables and payables as at the balance sheet date in respect of transactions with joint ventures and associates are unsecured and settlement of these arise in
cash. No guarantees have been either requested or provided in relation to related party receivables and payables. Loans to joint ventures and associates (as disclosed
in note 15) are extended on normal commercial terms in the ordinary course of business with interest accruing and, in general, paid to the Group at predetermined
intervals.
Key management personnel
For the purposes of the disclosure requirements of IAS 24, the term “key management personnel” (i.e. those persons having authority and responsibility for planning,
directing and controlling the activities of the Company) comprises of the Board of Directors which manage the business and affairs of the Company.
Key management remuneration amounted to:
Short-term benefits
Post-employment benefits
Share-based payments - calculated in accordance with the
principles disclosed in note 8
Total
2021
$m
2020
$m
2019
$m
10
1
8
19
9
1
6
9
1
6
16
16
Other than these compensation entitlements, there were no other transactions involving key management personnel.
Lease arrangements
CRH has a number of lease arrangements in place with related parties across the Group, which have been negotiated on an arms-length basis at market rates. We do
not consider these arrangements to be material either individually or collectively in the context of the 2021, 2020 and 2019 Consolidated Financial Statements.
33. Board Approval
The Board of Directors approved and authorised for issue the financial statements on pages 140 to 210 in respect of the year ended 31 December 2021 on 2 March
2022.
210
2021 Annual Report and Form 20-F 211
2021 Annual Report and Form 20-F 211
Company Balance Sheet
as at 31 December 2021
Notes
Fixed assets
3
Financial assets
Current assets
4
Debtors
Cash at bank and in hand
Total current assets
Creditors (amounts falling due within one year)
5
Trade and other creditors
Total current liabilities
Net current assets
Net assets
Capital and reserves
Called-up share capital
Preference share capital
Share premium account
Treasury Shares and own shares
Revaluation reserve
Other reserves
Foreign currency translation reserve
8
8
8
8
9
9
Profit and loss account (i)
Total equity
2021
$m
2020
$m
9,221
9,951
822
687
1,509
397
397
786
623
1,409
121
121
1,112
1,288
10,333
11,239
309
1
-
(195)
62
436
(542)
10,262
10,333
333
1
7,499
(386)
62
435
327
2,968
11,239
(i)
In accordance with section 304 of the Companies Act 2014, the profit for the financial year of the Company
amounted to $1,926 million (2020: $651 million).
R. Boucher, A. Manifold, Directors
212
212
2021 Annual Report and Form 20-F 213
Company Statement of Changes in Equity
for the financial year ended 31 December 2021
At 1 January 2021
Profit for the financial year
Total comprehensive income
Share-based payment expense
Shares acquired by CRH plc (Treasury Shares)
Treasury Shares/own shares reissued
Shares acquired by Employee Benefit Trust (own shares)
Shares distributed under the Performance Share Plan Awards
Reduction in Share Premium
Cancellation of Income Shares
Cancellation of Treasury Shares
Share option exercises
Dividends
Translation adjustment
At 31 December 2021
for the financial year ended 31 December 2020
At 1 January 2020
Profit for the financial year
Total comprehensive income
Share-based payment expense
Shares acquired by CRH plc (Treasury Shares)
Treasury Shares/own shares reissued
Shares acquired by Employee Benefit Trust (own shares)
Shares distributed under the Performance Share Plan Awards
Cancellation of Treasury Shares
Share option exercises
Dividends
Translation adjustment
Issued
share
capital
$m
Share
premium
account
$m
Treasury
Shares/
own shares
$m
Revaluation
reserve
$m
Other
reserves
$m
Foreign
currency
translation
reserve
$m
Profit
and loss
account
$m
Total
equity
$m
334
7,499
(386)
62
435
327
2,968 11,239
-
-
-
-
-
-
-
-
(16)
(8)
-
-
-
310
-
-
-
-
-
-
-
(7,499)
-
-
-
-
-
-
-
-
-
(880)
19
(16)
117
-
-
951
-
-
-
(195)
-
-
-
-
-
-
-
-
-
-
-
-
-
62
-
-
110
-
-
-
(117)
-
-
8
-
-
-
436
-
-
1,926
1,926
1,926
1,926
-
-
-
-
-
-
-
-
-
-
(869)
-
(281)
(19)
-
-
7,499
16
(951)
13
(909)
-
110
(1,161)
-
(16)
-
-
-
-
13
(909)
(869)
(542)
10,262 10,333
336
7,499
(360)
62
402
(568)
3,179 10,550
-
-
-
-
-
-
-
(2)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(220)
8
(29)
65
150
-
-
-
(386)
-
-
-
-
-
-
-
-
-
-
-
62
-
-
96
-
-
-
(65)
2
-
-
-
435
-
-
-
-
-
-
-
-
-
-
895
327
651
651
-
-
(8)
-
-
(150)
6
(710)
-
651
651
96
(220)
-
(29)
-
-
6
(710)
895
2,968 11,239
At 31 December 2020
334
7,499
212
2021 Annual Report and Form 20-F 213
2021 Annual Report and Form 20-F 213
Notes to the Company Balance Sheet
1. Basis of Preparation
The financial statements have been prepared on a going concern basis under the historical cost convention in accordance with the Companies Act 2014 and GAAP in
the Republic of Ireland (Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101)). Note 2 below describes the principal accounting policies under
FRS 101, which have been applied consistently.
In these financial statements the Company has applied the exemptions available under FRS 101 in respect of the following disclosures:
• Statement of Cash Flows;
• Disclosures in respect of transactions with wholly-owned subsidiaries;
• Certain requirements of IAS 1 Presentation of Financial Statements;
• Disclosures required by IFRS 7 Financial Instrument Disclosures;
• Disclosures required by IFRS 13 Fair Value Measurement; and
• The effects of new but not yet effective IFRSs
2. Accounting Policies
General information
The Company and its subsidiaries (together the
‘Group’) is the leading building materials business in
the world. It manufactures and supplies a range of
building materials, products and innovative solutions
which can be found throughout the built
environment in a wide range of construction
projects from major public infrastructure to
commercial buildings and homes. The Company is
a public limited company whose shares are publicly
traded. The Company is incorporated and domiciled
in the Republic of Ireland. The Company’s
registered number is 12965 and registered office
address is 42 Fitzwilliam Square, Dublin 2, Ireland.
Key accounting policies which
involve estimates, assumptions
and judgements
Preparation of the financial statements requires
management to make significant judgements and
estimates. The items in the financial statements
where these judgements and estimates have been
made include:
Financial assets
Investments in subsidiaries, are stated at cost less
any accumulated impairment and are reviewed for
impairment if there are indications that the carrying
value may not be recoverable. Impairment
assessment is considered as part of the Group’s
overall impairment assessment.
Other significant
accounting policies
Operating income and expense
Operating income and expense arises from the
Company’s principal activities as a holding and
financing company for the Group and are
accounted for on an accruals basis.
Foreign currencies
The functional currency of the Company is euro.
Transactions in foreign currencies are translated at
the rates of exchange in effect at the transaction
date. Monetary assets and liabilities denominated in
foreign currencies are translated into euro at the
rates of exchange in effect at the balance sheet
date, with a corresponding charge or credit to the
profit and loss account.
The presentation currency of the Company is the
US Dollar.
Share-based payments
The Company has applied the requirements of
Section 8 of FRS 101.
The accounting policy applicable to share-based
payments is addressed in detail on page 149 of the
Consolidated Financial Statements.
Loans receivable and payable
Intercompany loans receivable and payable are
initially recognised at fair value. These are
subsequently measured at amortised cost, less any
loss allowance.
Treasury Shares and own shares
Treasury Shares
Own equity instruments (i.e. Ordinary Shares)
acquired by the Company are deducted from equity
and presented on the face of the Company Balance
Sheet. No gain or loss is recognised in profit or loss
on the purchase, sale, issue or cancellation of the
Company’s Ordinary Shares. A financial liability is
recorded if a contractual obligation to repurchase
shares exists at the balance sheet date.
Own shares
Ordinary Shares purchased by the Employee
Benefit Trust on behalf of the Company under the
terms of the Performance Share Plan are recorded
as a deduction from equity on the face of the
Company Balance Sheet.
Dividends
Dividends on Ordinary Shares are recognised as a
liability in the Company’s Financial Statements in
the period in which they are declared by the
Company and approved by shareholders in respect
of final dividends.
Dividend income
Dividend income is recognised when the right to
receive payment is established.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances
held for the purpose of meeting short-term cash
commitments and investments which are readily
convertible to a known amount of cash and are
subject to an insignificant risk of change in value.
Bank overdrafts are included within creditors falling
due within one year in the Company Balance Sheet.
214
214
2021 Annual Report and Form 20-F 215
Notes to the Company Balance Sheet - continued
3. Financial Assets
The Company’s investment in its subsidiaries is as follows:
At 1 January 2021 at cost
Capital contribution in respect of share-based payments
Translation adjustment
At 31 December 2021 at cost
The equivalent disclosure for the prior year is as follows:
At 1 January 2020 at cost
Capital contribution in respect of share-based payments
Translation adjustment
At 31 December 2020 at cost
Shares
$m
Other
$m
9,439
-
(725)
8,714
8,642
-
797
9,439
512
36
(41)
507
425
45
42
512
Total
$m
9,951
36
(766)
9,221
9,067
45
839
9,951
The Company’s principal subsidiaries, joint ventures and associates are disclosed on pages 260 to 264.
Pursuant to Section 348(4) of the Companies Act 2014, a full list of subsidiaries, joint ventures and associated undertakings will be annexed to
the Company’s annual return to be filed in the Companies Registration Office in Ireland.
4. Debtors
Amounts owed by subsidiary undertakings
Amounts owed by subsidiary undertakings are repayable on demand.
5. Creditors
Amounts falling due within one year
Amounts owed to subsidiary undertakings
Other creditors
Corporation tax liability
Amounts owed to subsidiary undertakings are repayable on demand.
2021
$m
822
2020
$m
786
2021
$m
116
281
-
397
2020
$m
118
-
3
121
214
2021 Annual Report and Form 20-F 215
2021 Annual Report and Form 20-F 215
9. Reserves
Revaluation Reserve
The Company’s revaluation reserve arose on the
revaluation of certain investments prior to the
transition to FRS 101.
Other Reserves
The Company’s other reserves includes $27
million (2020: $19 million) undenominated share
capital that arose on the cancellation of the
Treasury Shares.
In accordance with Section 304 of the Companies
Act 2014, the Company is availing of the
exemption from presenting its individual profit and
loss account to the AGM and from filing it with the
Registrar of Companies.
The reserves of the Company available for
distribution are restricted by the amount of the
consideration paid for the Treasury Shares and
own shares held by the Company, $195 million as
at 31 December 2021 (2020: $386 million) and the
undenominated share capital of $27 million as at
31 December 2021 (2020: $19 million).
10. Share-based Payments
The total expense of $110 million (2020: $96
million) reflected in the Consolidated Financial
Statements attributable to employee share options
and performance share awards has been included
as a capital contribution in financial assets (note 3)
in addition to any payments to/from subsidiaries.
11. Section 357 Guarantees
Any Irish registered wholly-owned subsidiary of the
Company may avail of the exemption from filing its
statutory financial statements for the year ended
31 December 2021 as permitted by Section 357
of the Companies Act 2014 and if an Irish
registered wholly-owned subsidiary of the
Company elects to avail of this exemption, there
will be in force an irrevocable guarantee from the
Company in respect of all commitments entered
into by such wholly-owned subsidiary, including
amounts shown as liabilities (within the meaning of
Section 357 (1)(b) of the Companies Act 2014) in
such wholly-owned subsidiary’s statutory financial
statements for the year ended 31 December
2021.
Details in relation to other guarantees provided by
the Company are provided in the interest-bearing
loans and borrowings note (note 24) on page 193
of the notes to the Consolidated Financial
Statements.
12. Directors’ Emoluments
Directors’ emoluments and interests are
presented in note 32 to the Consolidated Financial
Statements and in the Directors’ Remuneration
Report on pages 80 to 109 of this Annual Report
and Form 20-F.
13. Board Approval
The Board of Directors approved and authorised
for issue the Company Financial Statements on
pages 211 to 215 in respect of the year ended
31 December 2021 on 2 March 2022.
6. Auditor’s Remuneration
(Memorandum Disclosure)
In accordance with Section 322 of the Companies
Act 2014, the fees paid in 2021 to the statutory
auditor Deloitte Ireland LLP (Deloitte) for work
engaged by the Parent Company comprised audit
fees of $22,000 (2020: $22,000) and other
assurance services of $42,000 (2020: $nil).
The statutory auditor has not provided any tax
advisory or other non-audit services to the Parent
Company during the financial year (2020: $nil).
7. Dividends Proposed
(Memorandum Disclosure)
Details in respect of dividends proposed of $751
million (2020: $730 million) and dividends paid
during the year are presented in the dividends
note (note 11) on page 170 of the notes to the
Consolidated Financial Statements.
8. Called-up Share Capital and
Share Premium
Called-up Share Capital
Details in respect of called-up share capital,
preference share capital, Treasury Shares and
own shares are presented in the share capital and
reserves note (note 29) on pages 203 to 205 of
the notes to the Consolidated Financial
Statements.
Share Premium
Pursuant to a special resolution approved by
shareholders at the Annual General Meeting of the
Company held on 29 April 2021 and the
subsequent order of the High Court of Ireland
made on 3 June 2021, the capital of the Company
was reduced by the entire amount standing to the
credit of the Company’s share premium account
as at 31 December 2020, with the reserve
resulting from the reduction being treated as
profits available for distribution as defined by
Section 117 of the Companies Act 2014. A copy
of the aforementioned order of the High Court was
filed with the Companies Registration Office in
Ireland on 3 June 2021.
We are committed to
accountability and transparency
around our sustainability
performance and use detailed
KPIs to demonstrate progress
against a range of ambitious
targets each year.
2021 Annual Report and Form 20-F 217
Supplemental
20-F and Other
Disclosures
216-245
Key Financial Data
Non-GAAP Performance
Measures
Supplemental Guarantor
Information
218
219
224
Property, Plants and Equipment
225
Mineral Reserves and Resources
226
Risk Factors
232
Corporate Governance Practices 240
The Environment and
Government Regulations
EU Taxonomy
Contractual Obligations
Other Disclosures
242
243
244
245
Oldcastle Infrastructure, part of CRH’s Building Products Division installed a stormwater
solution capable of capturing, cleaning and infiltrating 24 million gallons of stormwater
every 24 hours at Los Angeles International Airport (LAX). The StormCapture® detention
system and accompanying products provided an efficient and sustainable on-site
solution to facilitate stormwater drainage and treatment.
218
2021 Annual Report and Form 20-F 219
Key Financial Data
The Consolidated Financial Statements of CRH plc
have been prepared in accordance with IFRS as
issued by the International Accounting Standards
Board.
Key financial data is presented below for the five
years ended on 31 December 2021. As at 31
December 2021 and 2020 and for the three years
ended 31 December 2021, the selected financial
data is qualified in its entirety by reference to, and
should be read in conjunction with, the audited
Consolidated Financial Statements, the related
Notes and the Business Performance section
included elsewhere in this Annual Report and
Form 20‑F.
Year ended 31 December (amounts in millions, except per share data)
Consolidated Income Statement data
Revenue
Group operating profit
Profit attributable to equity holders of the Company
Basic earnings per Ordinary Share
Diluted earnings per Ordinary Share
Dividends paid during the calendar year per Ordinary Share (i)
Average number of Ordinary Shares outstanding (ii)
All data relates to continuing operations
Consolidated Balance Sheet data
Total assets
Net assets (iii)
Ordinary shareholders' equity
Equity share capital
Number of Ordinary Shares (ii)
Number of Treasury Shares and own shares (ii)
Number of Ordinary Shares net of Treasury Shares and own shares (ii)
2021
$m
2020
$m
2019
$m
2018
$m
2017
$m
30,981
27,587
28,132
27,449
24,461
3,585
2,565
328.8c
326.0c
116.0c
780.2
44,670
20,914
20,232
309
774.1
3.7
770.4
2,263
1,122
142.9c
141.8c
92.0c
785.1
44,944
20,348
19,655
333
795.1
10.3
784.8
2,793
1,627
203.0c
201.4c
81.2c
2,446
1,497
179.8c
178.9c
82.8c
2,177
1,838
220.0c
218.6c
72.2c
801.3
832.4
835.6
47,612
19,635
19,027
335
799.6
10.2
789.4
46,777
18,952
18,349
352
843.4
27.8
815.6
42,467
17,962
17,377
350
839.0
0.4
838.6
(i)
Interim and final dividends per share declared previously in euro have been translated to US Dollar using the dividends record date exchange rate.
(ii) All share numbers are shown in millions of shares.
(iii) Net assets is calculated as the sum of the total assets less total liabilities.
218
2021 Annual Report and Form 20-F 219
Non-GAAP Performance Measures
CRH uses a number of non‑GAAP performance
measures to monitor financial performance. These
measures are referred to throughout the discussion
of our reported financial position and operating
performance and are measures which are regularly
reviewed by CRH management.
These performance measures may not be uniformly
defined by all companies and accordingly they may
not be directly comparable with similarly titled
measures and disclosures by other companies.
Certain information presented is derived from
amounts calculated in accordance with IFRS but is
not itself an expressly permitted GAAP measure. The
non‑GAAP performance measures as summarised
below should not be viewed in isolation or as an
alternative to the equivalent GAAP measure.
Reconciliation of Revenue, EBITDA (as defined)* and Operating Profit by segment
Year ended 31 December
Revenue
2020
$m
2021
$m
EBITDA
(as defined)*
2019
$m
2021
$m
2020
$m
2019
$m
Depreciation,
amortisation and
impairment
2020
$m
2021
$m
2019
$m
Group
operating profit (i)
2020
$m
2021
$m
2019
$m
Continuing operations
Americas Materials
Europe Materials
Building Products
12,407 11,273 11,626
2,588 2,405
2,194
10,581 9,141
9,509
1,410 1,055
1,208
7,993 7,173
6,997
1,352 1,170
1,076
800
596
369
774
1,245
348
771
586
328
1,788 1,631
1,423
814
983
(190)
822
622
748
Total Group from continuing operations
30,981 27,587 28,132
5,350 4,630
4,478
1,765
2,367
1,685
3,585
2,263 2,793
Discontinued operations
Europe Distribution
Total Group
-
‑
3,557
-
‑
224
-
‑
111
-
‑
113
30,981 27,587 31,689
5,350 4,630
4,702
1,765
2,367
1,796
3,585
2,263 2,906
Group operating profit from continuing operations
Profit/(loss) on disposals
Finance costs less income
Other financial expense
Share of equity accounted investments' profit/(loss)
Profit before tax from continuing operations
Income tax expense
Group profit for the financial year from continuing operations
Profit after tax for the financial year from discontinued operations
Group profit for the financial year
3,585
2,263 2,793
119
(311)
(106)
55
9
(389)
(101)
(118)
(189)
(365)
(125)
67
3,342
1,664 2,181
(721)
(499)
(534)
2,621
1,165 1,647
-
‑
91
2,621
1,165 1,738
(i) Throughout this document, Group operating profit is reported as shown in the Consolidated Income Statement and excludes profit on disposals.
*
EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
220
2021 Annual Report and Form 20-F 221
Non-GAAP Performance Measures - continued
Return on Net Assets
Group operating profit from continuing operations
Group operating profit from discontinued operations
Group operating profit
Adjusted for impairment charges (i)
Group operating profit excluding impairment charges (numerator for RONA computation)
Current year
Segment assets (ii)
Segment liabilities (ii)
Group segment net assets
Lease liabilities (iii)
Group segment net assets excluding lease liabilities
Prior year
Segment assets (ii)
Segment liabilities (ii)
Group segment net assets
Lease liabilities (iii)
Group segment net assets excluding lease liabilities
Average net assets (denominator for RONA computation)
RONA
2021
$m
3,585
-
3,585
-
3,585
37,935
(9,971)
27,964
1,671
29,635
36,218
9,136
27,082
1,635
28,717
29,176
12.3%
2020
$m
2,263
‑
2,263
673
2,936
36,218
(9,136)
27,082
1,635
28,717
36,716
(8,940)
27,776
1,697
29,473
29,095
10.1%
2019
$m
2,793
113
2,906
8
2,914
36,716
(8,940)
27,776
1,697
29,473
36,079
(7,547)
28,532
‑
28,532
29,003
10.0%
Reconciliation of Segment Assets and Liabilities to Group Assets and Liabilities
Assets
Segment assets (ii)
Reconciliation to total assets as reported in the Consolidated Balance Sheet:
Investments accounted for using the equity method
Other financial assets
Derivative financial instruments (current and non‑current)
Income tax assets (current and deferred)
Cash and cash equivalents
Total assets as reported in the Consolidated Balance Sheet
Liabilities
Segment liabilities (ii)
Reconciliation to total liabilities as reported in the Consolidated Balance Sheet:
Interest‑bearing loans and borrowings (current and non‑current)
Derivative financial instruments (current and non‑current)
Income tax liabilities (current and deferred)
Total liabilities as reported in the Consolidated Balance Sheet
2021
$m
2020
$m
2019
$m
2018
$m
37,935
36,218
36,716
36,079
653
12
136
151
5,783
44,670
626
13
201
165
7,721
44,944
775
13
92
98
9,918
47,612
1,332
26
51
98
9,191
46,777
9,971
9,136
8,940
7,547
10,487
14
3,284
23,756
12,215
13
3,232
24,596
15,827
18
3,192
27,977
17,172
68
3,038
27,825
(i)
Operating profit is adjusted for non‑cash impairment charges. Please see note 4 to the Consolidated Financial Statements for further detail on
such impairment charges.
(ii) Segment assets and liabilities as disclosed in note 2 to the Consolidated Financial Statements.
(iii) Segment liabilities include lease liabilities which are debt in nature and are therefore adjusted for in arriving at the calculation of Group segment net
assets for the calculation of RONA. Segment lease liabilities at 31 December 2021 amounted to: Americas Materials $381 million (2020: $345 million;
2019: $408 million), Europe Materials $517 million (2020: $547 million; 2019: $554 million) and Building Products $773 million (2020: $743 million;
2019: $735 million).
.
220
2021 Annual Report and Form 20-F 221
Calculation of EBITDA (as defined)* Net Interest Cover
Interest
Finance costs (i)
Finance income (i)
Net interest
2021
$m
311
-
311
2020
$m
389
‑
389
2019
$m
387
(22)
365
EBITDA (as defined)* from continuing operations
5,350
4,630
4,478
EBITDA (as defined)* Net Interest Cover (EBITDA (as defined)* divided by net interest)
17.2
11.9
12.3
Times
(i) These items appear on the Consolidated Income Statement on page 140 and in note 9 to the Consolidated Financial Statements.
Calculation of Net Debt/EBITDA (as defined)*
Net debt
Cash and cash equivalents (i)
Interest‑bearing loans and borrowings (i)
Lease liabilities
Derivative financial instruments (net) (i)
Group net debt (i)
2021
$m
5,783
(10,487)
(1,671)
122
(6,253)
2020
$m
7,721
(12,215)
(1,635)
188
(5,941)
EBITDA (as defined)* from continuing operations
5,350
4,630
Net Debt divided by EBITDA (as defined)* from continuing operations
1.2
1.3
(i) These items appear in notes 21 to 25 to the Consolidated Financial Statements.
Times
Total Shareholder Return (TSR)
Total shareholder return represents the total accumulated value delivered to shareholders (via gross dividends reinvested
and share appreciation) if €100 was invested in CRH plc shares in 1970.
Investment in CRH plc shares (1970)
Accumulated CRH plc shares (31 December) ‑ based on reinvestment of dividends
Share price (31 December) ‑ Euronext Dublin
Shareholder value (31 December) ‑ '000
Total shareholder return (i)
(i) Calculated using Compound Average Growth Rate (CAGR) methodology.
2021
€100
3,548
€46.52
€165
15.5%
2020
€100
3,465
€34.02
€118
15.1%
*
EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
222
2021 Annual Report and Form 20-F 223
Non-GAAP Performance Measures - continued
Profit after Tax (Pre-impairment)
Group profit for the financial year from continuing operations (i)
Adjusted for:
Impairment of property, plant and equipment and intangible assets (ii)
Impairment of equity accounted investments (iii)
Tax related to impairment charges
Group profit pre‑impairment for the financial year from continuing operations
Earnings per Share (Pre-impairment)
Profit attributable to ordinary equity holders of the Company from continuing operations (i) (iv)
Impairment of property, plant and equipment and intangible assets (ii)
Impairment of equity accounted investments (iii)
Tax related to impairment charges
Profit attributable to ordinary equity holders of the Company from continuing operations – pre‑impairment
Weighted average number of Ordinary Shares (millions) outstanding for the year (iv)
Basic earnings per Ordinary Share pre‑impairment from continuing operations
(i) These items appear on the Consolidated Income Statement on page 140.
(ii) See further details in note 4 to the Consolidated Financial Statements on page 161.
(iii) See further details in note 15 to the Consolidated Financial Statements on page 177.
(iv) These items appear in note 12 to the Consolidated Financial Statements on page 171.
2021
$m
2020
$m
2019
$m
2,621
1,165
1,647
-
-
-
673
154
(39)
8
‑
(2)
2,621
1,953
1,653
2021
$m
2,565
-
-
-
2,565
780.2
328.8
2020
$m
1,122
673
154
(39)
1,910
785.1
243.3
2019
$m
1,627
8
‑
(2)
1,633
801.3
203.8
EBITDA (as defined). EBITDA is defined as earnings
before interest, taxes, depreciation, amortisation,
asset impairment charges, profit on disposals and the
Group’s share of equity accounted investments’ profit
after tax and is quoted by management in conjunction
with other GAAP and non‑GAAP financial measures,
to aid investors in their analysis of the performance of
the Group and to assist investors in the comparison of
the Group’s performance with that of other
companies. EBITDA (as defined)* by segment is
monitored by management in order to allocate
resources between segments and to assess
performance. Given that net finance costs and
income tax are managed on a centralised basis, these
items are not allocated between operating segments
for the purpose of the information presented to the
Chief Operating Decision Maker. EBITDA (as defined)*
margin is calculated by expressing EBITDA (as
defined)* as a percentage of sales.
Net Debt. Net debt is used by management as it
gives a more complete picture of the Group’s current
debt situation than total interest‑bearing loans and
borrowings. Net debt is provided to enable investors
to see the economic effect of gross debt, related
hedges and cash and cash equivalents in total. Net
debt is a non‑GAAP measure and comprises current
and non‑current interest‑bearing loans and
borrowings, lease liabilities, cash and cash
equivalents and current and non‑current derivative
financial instruments (net).
Net Debt/EBITDA (as defined)* is monitored by
management and is useful to investors in assessing
the Company’s level of indebtedness relative to its
profitability. It is the ratio of Net Debt to EBITDA (as
defined)* and is calculated on page 221.
EBITDA (as defined)* Net Interest Cover. EBITDA (as
defined)* Net Interest Cover is used by management
as a measure which matches the earnings and cash
generated by the business to the underlying funding
costs. EBITDA (as defined)* Net Interest Cover is
presented to provide investors with a greater
understanding of the impact of CRH’s debt and
financing arrangements. It is the ratio of EBITDA (as
defined)* to Net Interest and is calculated on page
221.
RONA. Return on Net Assets is a key internal
pre‑tax and pre‑non‑cash impairment measure of
operating performance throughout the CRH Group
and can be used by management and investors to
measure the relative use of assets between CRH’s
business segments and to compare to other
businesses. The metric measures management’s
ability to generate profits from the net assets
required to support that business, focusing on both
profit maximisation and the maintenance of an
efficient asset base; it encourages effective fixed
asset maintenance programmes, good decisions
regarding expenditure on property, plant and
equipment and the timely disposal of surplus assets,
and also supports the effective management of the
Group’s working capital base. RONA is calculated
by expressing total Group operating profit excluding
non‑cash impairment charges1 as a percentage of
average net assets. Net assets comprise total
assets by segment (including assets held for sale)
less total liabilities by segment (excluding lease
liabilities and including liabilities associated with
assets classified as held for sale) as shown on page
220 and detailed in note 2 to the Consolidated
Financial Statements, and excludes equity
accounted investments and other financial assets,
net debt (as previously defined) and tax assets &
liabilities. The average net assets for the year is the
simple average of the opening and closing balance
sheet figures.
Organic Revenue, Organic Operating Profit
and Organic EBITDA (as defined)*. CRH pursues
a strategy of growth through acquisitions and
investments, with $1.5 billion spent on acquisitions
and investments in 2021 (2020: $0.4 billion).
Acquisitions completed in 2020 and 2021
contributed incremental sales revenue of
$856 million, operating profit of $52 million and
EBITDA (as defined)* of $101 million in 2021. Cash
proceeds from divestments and non‑current asset
disposals amounted to $507 million (net of cash
disposed and including deferred consideration
proceeds in respect of prior year divestments (2020:
$307 million). The sales impact of divested activities
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
1. To better align to the measure used internally by management we adjusted our RONA definition in our 2020 Annual Report and Form 20‑F to exclude any non‑cash impairment charges. We accordingly
presented our prior period RONA disclosures on page 220 on a consistent basis; excluding non‑cash impairment charges of $8 million in 2019.
222
2021 Annual Report and Form 20-F 223
Earnings per Share (Pre-impairment). Earnings per
Share (EPS) pre‑impairment is a measure of the
Group's profitability per share from continuing
operations excluding any non‑cash impairment
charges and the related tax impact of such
impairments. It is used by management to evaluate
the Group's underlying profitability performance
relative to that of other companies and its own past
performance. EPS information presented on a
pre‑impairment basis is useful to investors as it (i)
provides an insight into the Group's underlying
performance and profitability and (ii) assists investors
in the comparison of the Group's performance with
that of other companies. EPS pre‑impairment is
calculated on page 222 as profit attributable to the
ordinary equity holders of the Company from
continuing operations excluding any non‑cash
impairment charges (and the related tax impact of
such impairments) divided by the weighted average
number of ordinary shares outstanding for the year.
in 2021 was a negative $182 million and the impact
at an operating profit and EBITDA (as defined)* level
was a negative $51 million and $58 million
respectively.
The US Dollar strengthened against most major
currencies by the end of 2021. However, during
2021 the US Dollar weakened against most major
currencies resulting in the average US Dollar/Euro
rate weakening from 0.8771 in 2020 to 0.8460 in
2021, and likewise for US Dollar/Pound Sterling
weakening from an average 0.7798 in 2020 to
0.7270 in 2021. Overall currency movements
resulted in a favourable net foreign currency
translation impact on our results as shown in the
table on page 39. The average and year‑end 2021
exchange rates of the major currencies impacting
on the Group are set out on page 154.
Because of the impact of acquisitions, divestments,
exchange translation and other non‑recurring items
on reported results each year, the Group uses
organic revenue, organic operating profit and
organic EBITDA (as defined)* as additional
performance indicators to assess performance of
pre‑existing (also referred to as underlying, heritage,
like‑for‑like or ongoing) operations each year.
Organic revenue, organic operating profit and
organic EBITDA (as defined)* are arrived at by
excluding the incremental revenue, operating profit
and EBITDA (as defined)* contributions from current
and prior year acquisitions and divestments, the
impact of exchange translation and the impact of any
non‑recurring items. In the Business Performance
section on pages 36 to 53, changes in organic
revenue, organic operating profit and organic
EBITDA (as defined)* are presented as additional
measures of revenue, operating profit and EBITDA
(as defined)* to provide a greater understanding of
the performance of the Group. Organic change % is
calculated by expressing the organic movement as
a percentage of the prior year (adjusted for exchange
effects). A reconciliation of the changes in organic
revenue, organic operating profit and organic
EBITDA (as defined)* to the changes in total
revenue, operating profit and EBITDA (as defined)*
for the Group and by segment, is presented with the
discussion of each segment’s performance in tables
contained in the segment discussion commencing
on page 36.
Revenue from continuing and discontinued
operations, EBITDA (as defined)* from continuing and
discontinued operations and Operating Profit from
continuing and discontinued operations. As detailed
in note 3 to the Consolidated Financial Statements,
our Europe Distribution business has been classified
as a discontinued operation in accordance with
IFRS 5. In certain instances throughout the Annual
Report and Form 20‑F we refer to revenue, EBITDA
(as defined)* and operating profit from continuing
and discontinued operations. Information presented
on this basis is useful to investors as (i) it provides
further understanding of the Group’s performance
and (ii) assists investors in the comparison of the
Group’s performance with that of other companies.
A reconciliation of each of these measures is
detailed on page 219.
Cash paid to Shareholders. Cash paid to
shareholders is a measure of cash returned to
shareholders representing dividends of $0.9 billion
(2020: $0.7 billion) paid during the year and excess
cash of $0.9 billion (2020: $0.2 billion) returned
through the share buyback programme. The metric
provides information on dividend growth for
shareholders and is reflective of CRH’s continued
commitment to return excess cash to shareholders.
CRH monitors the cash paid to shareholders as part
of its overall capital allocation strategy.
Total Shareholder Return (TSR). TSR is a measure of
shareholder returns delivery through the cycle. It
represents the total accumulated value delivered to
shareholders since the formation of the Group in
1970 (via gross dividends reinvested and share
appreciation) and is calculated on page 221. The
metric provides information on total returns for
shareholders and is provided to assist investors in the
comparison of the Group's performance with that of
other companies.
Profit after Tax (Pre-impairment). Profit after Tax
pre‑impairment as calculated on page 222 is a
measure of the Group's profitability from continuing
operations excluding any non‑cash impairment
charges and the related tax impact of such
impairments. Profit after Tax presented on a
pre‑impairment basis is used by management to
evaluate the Group's profitability in a given year and
is useful to investors as it (i) provides an
understanding of the Group's underlying
performance and (ii) assists investors in the
comparison of the Group's performance with that of
other companies.
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
224
2021 Annual Report and Form 20-F 225
Intercompany balances and transactions within the
Obligor Group have been eliminated in the
summarised financial information below. Amounts
attributable to the Obligor Group’s investment in
non‑obligor subsidiaries have also been excluded.
Intercompany receivables/payables and transactions
with non‑obligor subsidiaries are separately
disclosed as applicable.
This summarised financial information has been
prepared and presented pursuant to the Securities
and Exchange Commission Regulation S‑X Rule
13‑01 and is not intended to present the financial
position and results of operations of the Obligor
Group in accordance with IFRS.
Supplemental Guarantor Information
Guarantor Financial Information
As of 31 December 2021, CRH plc (the ‘Guarantor’)
has fully and unconditionally guaranteed certain
debt securities issued by CRH America, Inc. (the
‘Issuer’), including:
• US$300 million 6.40% Notes due 2033 – listed
on Euronext Dublin (i) (the 'Notes')
(i) Originally issued as a US$300 million bond in
September 2003. Subsequently in August 2009
and December 2010, US$87 million of the
issued Notes were acquired by CRH plc as part
of liability management exercises undertaken.
CRH America, Inc. is 100% owned by the Company
(CRH plc). The Notes are fully and unconditionally
guaranteed by CRH plc as defined in the indentures
governing the Notes.
The Notes are unsecured and rank equally with all
other present and future unsecured and
unsubordinated obligations of CRH America, Inc
and CRH plc, subject to exceptions for obligations
preferred by law.
The guarantee is a full, irrevocable and unconditional
guarantee of the principal, interest, premium, if any,
and any other amounts payable in respect of the
Notes given by CRH plc.
CRH plc also fully and unconditionally guarantees
securities issued by CRH America Finance, Inc., which
is a 100% owned finance subsidiary of CRH plc.
Basis of Presentation
The following summarised financial information
reflects, on a combined basis, the Balance Sheet as
at 31 December 2021 and the Income Statement for
the year ended 31 December 2021 of CRH America,
Inc and CRH plc, which guarantees the registered
debt; collectively the ‘Obligor Group’.
The summarised Income Statement information for the year ended 31 December 2021 is as follows:
Profit before tax from continuing operations (i)
-
of which relates to transactions with non-obligor subsidiaries
Profit for the financial year – all of which is attributable to equity holders of the Company
- of which relates to transactions with non-obligor subsidiaries
For the year ended
31 December 2021
$m
1,935
2,016
1,933
2,016
(i)
Revenue and Gross Profit for the Obligor Group for the year ended 31 December 2021 amounted to $nil million.
The summarised Balance Sheet information as at the 31 December 2021 is as follows:
Current assets
Current assets – of which is due from non-obligor subsidiaries
Non‑current assets
Non‑current assets – of which is due from non-obligor subsidiaries
Current liabilities
Current liabilities – of which is due to non-obligor subsidiaries
Non‑current liabilities
Non‑current liabilities – of which is due to non-obligor subsidiaries
As at
31 December 2021
$m
1,979
822
3,343
3,311
408
116
2,040
nil
224
2021 Annual Report and Form 20-F 225
Property, Plants and Equipment
At 18 February 2022, CRH had a total of 3,233
building materials production locations. 1,180
locations are leased, with the remaining 2,053
locations held on a freehold basis.
The significant subsidiary locations as at 31
December 2021 are the cement facilities in the US,
Philippines, Poland, Ukraine, the UK, Romania,
Slovakia, Canada, Ireland, Germany and France.
The clinker (the key intermediate product in the
manufacture of cement) capacity for these locations
is set out in the table below. Further details on
locations and products manufactured are provided
on pages 266 and 267. None of CRH’s individual
properties is of material significance to the Group.
CRH believes that all the facilities are in good
condition, adequate for their purpose and suitably
utilised according to the individual nature and
requirements of the relevant operations. CRH has a
Significant Locations – Clinker Capacity
continuing programme of improvements and
replacements to properties when considered
appropriate to meet the needs of the individual
operations. Further information in relation to the
Group’s accounting policy and process governing
any impairment of property, plant and equipment is
given on page 146 and in note 13 to the
Consolidated Financial Statements on page 172.
consequently have an adverse impact on CRH’s
business. CRH is not generally dependent on any
one source for the supply of these materials or
resources, other than in certain jurisdictions with
regard to the supply of gas and electricity.
Competitive markets generally exist in the
jurisdictions in which CRH operates for the supply of
cement, bitumen, steel and fuel.
Sources and Availability
of Raw Materials
CRH generally owns or leases the real estate on
which its main raw materials, namely aggregates,
are found. CRH is a significant purchaser of certain
important materials or resources such as cement,
bitumen, steel, gas, fuel and other energy supplies,
the cost of which can fluctuate significantly and
Mine Safety Disclosures
The information concerning mine safety violations
and other regulatory matters required by Section
1503(a) of the Dodd‑Frank Wall Street Reform and
Consumer Protection Act is included in Exhibit 16 to
CRH’s Annual Report on Form 20‑F, as filed with the
Securities and Exchange Commission (SEC).
Subsidiary
Ash Grove
Republic Cement
Podilsky Cement PJSC
Tarmac
ROMCIM
Danucem
Ash Grove
Irish Cement
Opterra
Eqiom
Country
Number of plants
Clinker capacity
(tonnes per hour)
United States
Philippines
Poland
Ukraine
United Kingdom
Romania
Slovakia
Canada
Ireland
Germany
France
10
1,148
5
1
1
3
2
2
2
2
2
3
628
342
325
306
305
290
288
288
268
243
226
2021 Annual Report and Form 20-F 227
Mineral Reserves and Resources
Mineral Reserves and Resources
Background
The Group’s mineral reserves (reserves) and mineral
resources (resources) for the production of primary
building materials (which encompasses aggregates
(stone, sand and gravel), cement and lime, asphalt,
readymixed concrete and concrete products) fall
into a variety of categories spanning a wide number
of rock types and geological classifications. These
reserves and resources are found within our
extensive network of quarry locations in attractive
local markets globally. This disclosure of the Group’s
mining properties has been prepared in accordance
with the requirements of subpart 1300 of Regulation
S‑K (“Subpart 1300”). The Group has 1,230
properties with 91,721 hectares of owned and
37,079 hectares of leased land, respectively, as
disclosed in the table on page 229, the locations of
which are presented by geographic location in the
maps on pages 230 to 231.
None of CRH’s mineral‑bearing properties are
individually material to the Group as at 31 December
2021. A summary disclosure of CRH’s mining
operations is provided on pages 227 to 231.
As at 31 December 2021, the Group’s reserves and
resources estimations of 22.8 billion tonnes and 9.7
billion tonnes, respectively, as disclosed on pages
227 to 228, are calculated in accordance with
Subpart 1300. The Group’s reserves and resources
disclosures may not be comparable to similar
disclosures disclosed in accordance with the
requirements of other countries and should be read
in conjunction with the disclosures that follow on
pages 227 to 231.
CRH operates predominantly production stage
properties, with a limited number of development
and exploration stage properties, as such terms are
defined in Subpart 1300. Predominantly, CRH’s
production stage properties provide raw materials
for on‑site modern cement, lime and aggregates
producing facilities. Almost exclusively, CRH utilises
surface mining and, with a very limited number of
exceptions, CRH and its subsidiaries are the only
operators of the properties.
Reserves
Reserves are defined in Subpart 1300 as “an
estimate of tonnage and grade or quality of
indicated and measured mineral resources that, in
the opinion of the qualified person, can be the basis
of an economically viable project. More specifically,
it is the economically mineable part of a measured
or indicated mineral resource, which includes
diluting materials and allowances for losses that
may occur when the material is mined or extracted”.
Reserves are classified into two categories,
probable and proven reserves, in order of increasing
geological confidence.
The Group’s estimate of 22.8 billion tonnes of
reserves, as disclosed on page 227 analysed by
rock type (Hard rock, Sand & Gravel and Other), are
of recoverable stone, sand, and gravel of suitable
quality for economic extraction, based on drilling
and studies by the Group’s geologists and
engineers. These estimates also consider
reasonable economic and operating constraints as
to maximum depth of overburden and stone
excavation and are subject to permitting or other
restrictions.
The disclosed reserves and resources estimations
which include diluting materials and allowances for
losses that may occur when the mineral is mined,
extracted or processed have been estimated by
qualified persons, as such term is defined within
Subpart 1300.
Not all minerals that may be on CRH’s mineral‑
bearing properties have been assessed and such
properties may be assessed for mineral reserves or
resources in future years, as required by
operational needs.
CRH’s properties are subject to a wide variety of
permitting procedures and conditions, which vary
between jurisdictions. Many of CRH’s properties
require separate permits from multiple authorities,
including but not limited to environmental, mining,
regional and national administrative authorities. The
periods of validity and the conditions of these
permits may be different.
Resources
A mineral resource is defined in Subpart 1300 as "a
concentration or occurrence of material of economic
interest in or on the Earth's crust in such form,
grade or quality, and quantity that there are
reasonable prospects for economic extraction. A
mineral resource is a reasonable estimate of
mineralisation, taking into account relevant factors
such as cut‑off grade, likely mining dimensions,
location or continuity, that, with the assumed and
justifiable technical and economic conditions, is
likely to, in whole or in part, become economically
extractable".
Resources are classified into three categories,
inferred, indicated or measured resources, in order
of increasing geological confidence. Indicated or
measured resources can be converted to reserves
by the application of certain modifying factors which
include, but are not limited to, consideration of
mining, processing, metallurgical, infrastructure,
economic, marketing, legal, environmental
compliance, plans, negotiations, or agreements with
local individuals or groups, and governmental
factors. There is no certainty that any of the
resources disclosed on page 228 will be converted
into reserves. Resources have not been fully
assessed using modifying factors, however, an initial
assessment has been completed in accordance
with Subpart 1300.
Internal Controls
CRH has established appropriate governance
processes to support the publication of our 2021
reserves and resources disclosures and as outlined
on page 66, the Audit Committee, as one of its key
areas of focus for 2021, has reviewed and
considered the new mining property disclosures.
Reserve and resource estimates are subject to
annual review by each of the relevant operating
companies across the Group in conjunction with the
relevant qualified persons. CRH has established and
maintains a number of internal controls to address
the risks inherent in the mineral reserves and
resources reporting process. These internal controls
have been embedded into the local control
environments and operate across the business,
including controls at an Operating Company,
Divisional and Group level.
As CRH’s reserves and resources are predominantly
in production stage properties, features of the
internal controls relating to quality assurance and
quality control (QA/QC) include:
• Databases and data repositories for exploration
and/or production data that contain accurate
and precise data from which reserves and
resources can be evaluated, and operational
plans can be developed;
• Verification sampling and testing of known
mineralisation. This is generally required to
establish compliance with regulation on product
qualities. Verification testing confirms geological
maps prepared during earlier exploration
programmes; and
•
In the case of cement raw materials, facility
laboratories participate in an externally managed
annual review process with ISO 17025
accredited independent laboratories
When exploration programmes are conducted, QA/
QC measures include:
• Ensuring that surface or drill sampling results in
the highest quality sample possible. This would
include down‑hole surveying of drill holes as
necessary;
• Obtain pictures of drill sample (e.g. core) for
future reference;
• Geological core logging prior to laboratory
analysis. Description of sample at various
intervals;
• Ensuring the integrity of samples from point of
origin to analytical laboratory; and
• Using nationally or regionally accredited
laboratories for all analyses and tests for
exploration programmes in properties containing
aggregates
In addition, to provide further assurance over the
Group’s mineral reserves and resources reporting
process, the Group’s Internal Audit function
completed a limited scope review across a sample
of material reporting entities on the operation of
these internal controls as at 31 December 2021.
226
2021 Annual Report and Form 20-F 227
The table below presents, by segment and geographic location, the tonnes of proven and probable aggregates, cement and lime mineral reserves as at 31 December
2021 and the related percentages by rock type.
Country
Tonnes (iii) Grade: % by rock type Tonnes (iii) Grade: % by rock type Tonnes (iii) Grade: % by rock type
Proven
Reserves
Probable
Total Reserves (i) (ii)
Hard
Rock
Sand
&
Gravel
Other
Hard
Rock
Sand
&
Gravel
Other
Hard
Rock
Sand
&
Gravel
Other
Aggregates
Europe Materials
Americas Materials
Subtotal
Cement
Europe Materials
Americas Materials
Subtotal
Lime
Europe Materials
Subtotal
Total
Finland
France
Ireland
Philippines
Poland
Romania
Spain
UK
Other (iv)
Canada
US
France
Germany
Ireland
Philippines
Poland
Romania
Serbia
Slovakia
Spain
Switzerland
Ukraine
UK
Canada
US
Germany
Ireland, Poland, UK, Czech
Republic
149
202
703
77% 23%
59% 41%
90% 10%
49 100%
123 100%
‑
‑
88% 12%
11
68
606
70
97%
2%
1%
77% 23%
43% 57%
526
76% 24%
6,868
9,375
76% 16%
77% 17%
55 100%
112 100%
166
298
136
40
92%
93%
93%
96%
104 100%
79
98%
12 100%
85 100%
69 100%
186
98%
212 100%
529 100%
2,083
98%
189 100%
83 100%
272 100%
‑
‑
‑
‑
6%
1%
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
8%
6%
‑
‑
8%
7%
1%
3%
‑
2%
‑
‑
‑
2%
‑
‑
82% 18%
52
‑
‑
38
26
833
154
‑
217
93%
5 100%
‑
94%
95%
93%
‑
7%
‑
‑
6%
5%
7%
51% 49%
195
81% 19%
8,403
9,923
88%
88%
7%
8%
15 100%
‑
13
‑
71%
194 100%
48
206
‑
93%
90%
‑
234
92%
87 100%
‑
‑
25 100%
76
90%
22 100%
97 100%
‑
‑
‑
‑
6%
8%
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
201
202
920
78% 22%
59% 41%
91%
9%
54 100%
123 100%
49
94
93%
96%
‑
‑
7%
3%
1,439
86% 14%
224
49% 51%
721
78% 22%
5%
4%
15,271
83% 11%
19,298
83% 12%
‑
‑
29%
‑
1%
2%
‑
8%
‑
‑
‑
70 100%
112 100%
179
492
184
246
91%
96%
93%
91%
104 100%
313
94%
99 100%
85 100%
94 100%
10%
262
96%
‑
‑
234 100%
626 100%
‑
‑
‑
‑
6%
7%
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
1%
‑
‑
‑
6%
5%
‑
‑
9%
4%
1%
2%
‑
6%
‑
‑
‑
4%
‑
‑
2%
1,017
95%
2%
3%
3,100
97%
1%
2%
‑
‑
‑
63 100%
26 100%
89 100%
‑
‑
‑
‑
‑
‑
252 100%
109 100%
361 100%
‑
‑
‑
‑
‑
‑
11,730
81% 14%
5%
11,029
88%
8%
4%
22,759
85% 10%
5%
(i) CRH has no individually material mineral‑bearing properties requiring individual property disclosure under Subpart 1300.
(ii) CRH’s point of reference for the estimation of the Group’s mineral reserves is “in‑situ” reserves.
(iii) All reserves quantities are quoted in millions of tonnes.
(iv) Other includes Slovakia and Switzerland.
CRH’s mineral reserves and resources are used predominantly for the production and sale of aggregates, cement and lime. The average sales price for the year ended
31 December 2021 for aggregates and cement was $11.0 and $92.5 per tonne, respectively, for our Europe Materials businesses and $13.3 and $111.4 per tonne,
respectively, for our Americas Materials businesses. The average sales price for lime within our Europe Materials businesses was $113.9 per tonne. These prices,
which are used for estimation of both mineral reserves and resources, are impacted by product mix, geographic location and foreign currency.
228
2021 Annual Report and Form 20-F 229
Mineral Reserves and Resources - continued
The table below presents, by segment and geographic location, the tonnes of measured, indicated, and inferred aggregates, cement and lime resources as at 31
December 2021 and the related percentage of these resources by rock type. CRH’s mineral resources in the table below are disclosed exclusive of mineral reserves.
Measured
Indicated
Total Measured & Indicated
Inferred
Country
Tonnes
(iii)
Grade: % by rock type
Tonnes
(iii)
Grade: % by rock type
Tonnes
(iii)
Grade: % by rock type
Tonnes
(iii)
Grade: % by rock type
Hard
Rock
Sand
&
Gravel
Other
Hard
Rock
Sand
&
Gravel
Other
Hard
Rock
Sand
&
Gravel
Other
Hard
Rock
Sand
&
Gravel
Other
Total
Resources
(i) (ii)
Resources
Aggregates
Europe
Materials
Finland
France
Ireland
Philippines
Romania
UK
Other (iv)
‑
‑
50%
43
13%
90
26 100%
97%
66
34%
58
65%
174
Canada
US
Americas
Materials
Subtotal
255
613
1,325
90%
88%
77%
Cement
Europe
Materials
France
Germany
Ireland
Romania
Slovakia
Switzerland
Ukraine
UK
25 100%
4 100%
102 100%
93%
86
98%
131
20
96%
68 100%
4 100%
Americas
Materials
Subtotal
Canada
54
91%
US
9 100%
503
97%
Lime
Europe
Materials
Subtotal
Total
Germany
470
100%
Ireland,
Poland,
UK, Czech
Republic
15
100%
‑
50%
87%
‑
3%
66%
35%
10%
12%
23%
‑
‑
‑
‑
‑
4%
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
7%
2%
‑
‑
‑
9%
‑
3%
‑
‑
264
1 100%
3 100%
95%
2 100%
87%
46%
‑
53
412
‑
46
1,401
2,182
93%
86%
80%
‑
‑
5%
‑
13%
53%
‑
7%
12%
19%
‑
‑
‑
‑
‑
46
354
1 100%
53%
75%
28 100%
92%
44%
65%
119
1% 470
174
‑
‑
301
2% 2,014
1% 3,507
90%
85%
77%
‑
‑
21
87
19
‑
‑
45
1
27
100%
‑
100%
92%
‑
‑
‑
86%
100%
100%
‑
‑
‑
8%
‑
‑
‑
‑
‑ 100%
‑
‑
‑
‑
14%
‑
25
4
123
173
150
20
68
49
100%
100%
100%
92%
86%
96%
100%
87%
‑
‑
‑
‑
55
36
91%
100%
‑
47%
25%
‑
8%
55%
35%
10%
14%
22%
‑
‑
‑
4%
‑
4%
‑
‑
‑
‑
200
83%
4% 13%
703
93%
1%
‑
‑
‑
‑
130
‑
32
1% 206
8
‑
‑
‑
‑
‑
94%
‑
88%
85%
‑
‑
273 100%
1% 3,660
1% 4,309
70%
74%
‑
‑
‑
4%
14%
‑
‑
13%
9%
‑
6%
1
‑
28
16
43
‑
45
45
100%
‑
92%
99%
100%
‑
100%
100%
2
100%
132
312
100%
99%
201
100%
‑
‑
‑
‑
‑
‑
671
100%
15
100%
‑
‑
‑
‑
137
100%
18
100%
‑
‑
6%
‑
12%
15%
100%
‑
24%
21%
‑
‑
8%
‑
‑
‑
‑
‑
‑
‑
1%
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
6%
5%
‑
‑
‑
1%
‑
‑
‑
‑
‑
‑
‑
‑
‑
1
46
484
28
151
676
182
574
5,674
7,816
26
4
151
189
193
20
113
94
57
168
1,015
808
33
485
2,313
100%
‑
85% 14%
‑
201
1% 2,583
100%
‑
82% 16%
‑
686
2% 4,896
100%
‑
84% 15%
‑
155
1% 4,776
100%
‑
76% 19%
‑
5%
841
9,672
(i) CRH has no individually material mineral‑bearing properties requiring individual property disclosure under Subpart 1300.
(ii) CRH’s point of reference for the estimation of the Group’s mineral resources is “in‑situ” resources.
(iii) All resource quantities are quoted in millions of tonnes.
(iv) Other includes Slovakia and Switzerland.
228
2021 Annual Report and Form 20-F 229
The table below outlines the number of facilities by segment and geographic location along with the annualised extraction (in millions of tonnes) for each of the three
years ending 31 December 2021.
Country
Finland
France
Ireland
Philippines
Poland
Romania
Spain
UK
Other (iv)
Canada
US
France
Germany
Ireland
Philippines
Poland
Romania
Serbia
Slovakia
Spain
Switzerland
Ukraine
UK
Canada
US
Germany
Ireland, Poland, UK, Czech
Republic
No. of
Quarries/
pits
Surface acreage
(hectares) (i) (ii)
Annualised extraction
(millions of tonnes)
Years to
Depletion
(iii)
Owned
Leased
2019
2020
2021
84
41
86
1
2
15
9
181
20
38
678
1,155
3
2
3
5
1
6
2
5
2
3
9
10
3
9
63
8
4
12
1,230
1,235
773
5,268
‑
211
425
76
8,572
427
6,067
54,016
77,070
706
323
1,128
999
414
301
119
66
78
183
‑
901
766
7,415
13,399
780
472
1,252
91,721
844
1,174
451
178
9
197
110
6,258
303
703
24,582
34,809
31
‑
‑
213
‑
135
41
309
‑
26
975
185
7
325
2,247
10
13
23
12.5
8.2
18.3
‑
3.9
1.4
1.5
39.0
6.5
20.9
173.0
285.2
3.0
2.7
2.9
6.7
4.2
4.3
1.0
2.3
0.4
1.1
3.1
4.5
2.9
9.8
48.9
5.9
3.2
9.1
10.8
5.5
13.7
‑
3.3
1.9
0.9
32.4
4.4
18.9
133.9
225.7
2.5
2.3
3.1
6.7
4.0
4.2
1.2
2.4
0.8
0.9
3.2
4.4
2.4
8.9
47.0
6.1
3.1
9.2
10.0
7.0
19.4
‑
3.4
2.1
1.2
42.0
4.8
17.4
177.2
284.5
3.8
2.6
3.3
8.4
4.3
4.8
1.2
2.8
1.0
1.0
3.8
6.0
2.3
9.8
55.1
5.6
3.5
9.1
37,079
343.2
281.9
348.7
20
29
48
‑
36
26
77
34
47
41
87
18
43
54
59
43
51
87
113
101
83
25
44
103
64
45
35
Aggregates
Europe Materials
Americas Materials
Subtotal
Cement
Europe Materials
Americas Materials
Subtotal
Lime
Europe Materials
Subtotal
Total
(i)
The disclosures in the table above include the surface area of infrastructure, process plants, waste piles, water storage, water treatment plants and boundary areas
of CRH’s mineral‑bearing properties. Remote properties such as offices, distribution facilities and readymixed concrete plants are not included.
(ii) 1 hectare equals approximately 2.47 acres.
(iii) Years to depletion is based on the average of the three years' 2019 to 2021 annualised extraction.
(iv) Other includes Slovakia and Switzerland.
230
2021 Annual Report and Form 20-F 231
CRH Mineral Locations
Represents the location of CRH's
mineral-bearing properties.
North America
230
2021 Annual Report and Form 20-F 231
The Philippines
Europe
2021 Annual Report and Form 20-F 233
232
Risk Factors
This section describes the key risk factors that
could affect the Group’s business. If any of these
risks occur, the Group’s business, financial
condition, results of operations and prospects
could be materially adversely affected.
The risk factors listed below should be considered
in connection with any forward‑looking statements
in this Annual Report and Form 20‑F and the
cautionary statements contained in Corporate
Governance ‑ Disclaimer/Forward‑Looking
Statements on page 111.
attributable to changes in markets, regulatory
environments and other factors and existing risk
factors may become less relevant.
The risk factors presented below are reviewed on an
annual basis and represent the key risk factors
faced by the Group at the time of compilation of the
2021 Annual Report and Form 20‑F. During the
course of 2022, new risk factors may materialise
The Risk Factors have been grouped to focus on
key strategic, operational, compliance and financial
and reporting risks.
Key Strategic Risk Factors
Industry Cyclicality and Economic Conditions
Risk
Discussion
Description:
Construction activity, and therefore demand for
the Group’s products, is inherently cyclical as it
is influenced by global and national economic
circumstances, monetary policies, consumer
sentiment and weather conditions. The Group may
also be negatively impacted by unfavourable swings
in fuel and other input costs.
Impact:
Failure to predict and plan for cyclical events or
adverse economic conditions could negatively impact
financial performance.
The Group’s operating and financial performance is influenced by general economic conditions and the
state of infrastructure, residential and non‑residential sectors in the countries in which it operates. In general,
economic uncertainty exacerbates negative trends in construction activity leading to postponement of orders.
Construction markets are inherently cyclical and are affected by many factors that are beyond the Group’s
control, including:
• The performance of the national economies in the countries in which the Group operates, across Europe,
the Americas and Asia;
• Monetary policies in the countries in which the Group operates — for example, an increase in interest
rates typically reduces the volume of mortgage borrowings thus adversely impacting residential
construction activity;
• The level of demand for building materials and services, with sustained adverse weather conditions
leading to potential disruptions or curtailments in outdoor construction activity;
• The price of fuel and principal energy‑related raw materials such as bitumen and steel (which accounted
for approximately 10% of annual Group sales revenues in 2021 (9% in 2020)); and
•
Inflationary pressures leading to higher input costs, such as the cost of labour and transportation
The adequacy and timeliness of the actions taken by the Group’s management team are of critical importance
in maintaining financial performance at appropriate levels. There is no guarantee that any future actions taken
by Group management will be effective in managing these risks. Each of the above factors could have a
material adverse effect on the Group’s operating results and the market price of CRH plc’s Ordinary Shares.
People Management
Risk
Discussion
Description:
Existing processes around people management,
such as attracting, retaining and developing people,
leadership succession planning, developing a diverse
and inclusive workforce as well as dealing with
collective representation groups, may not deliver,
inhibiting the Group achieving its strategy.
Impact:
Failure to effectively manage talent and plan for
leadership succession could impede the realisation
of strategic objectives.
The identification and subsequent assessment, management, development and deployment of talented
individuals is of major importance in continuing to deliver on the Group’s strategy and in ensuring that
succession planning objectives for key executive roles throughout its international operations are satisfied.
As well as ensuring the Group identifies, hires, integrates, develops and promotes talent, the Group must
attract and retain a diverse workforce and maintain an inclusive working environment. The Group operates in
a labour‑intensive industry and must navigate the challenges posed by front‑line labour shortages which may
impact the Group's ability to produce goods, operate facilities and install products.
The maintenance of positive employee and trade/labour union relations is key to the successful operation of
the Group. Some of the Group’s employees are represented by trade/labour unions under various collective
agreements. For unionised employees, the Group may not be able to renegotiate satisfactorily the relevant
collective agreements upon expiration and may face tougher negotiations and higher wage demands. In
addition, existing labour agreements may not prevent a strike or work stoppage, with any such activity creating
reputational risk and potentially having a material adverse effect on the results of operations and financial
condition of the Group.
232
2021 Annual Report and Form 20-F 233
Commodity Products and Substitution
Risk
Discussion
Description:
Many of the Group’s products are commodities,
which face strong volume and price competition, and
may be replaced by substitute products which the
Group does not produce. Further, the Group must
maintain strong customer relationships to ensure
changing consumer preferences and approaches to
construction are addressed.
Impact:
Failure to differentiate and innovate could lead to
market share decline, thus adversely impacting
financial performance.
The competitive environment in which the Group operates can be significantly impacted by general economic
conditions in combination with local factors including the number of competitors, the degree of utilisation of
production capacity and the specifics of product demand. Many of the Group’s products are commodities
and competition in such circumstances is driven largely by price. Across the multitude of largely local markets
in which the Group conducts business, downward pricing pressure is experienced from time to time, and the
Group may not always be in a position to recover increased operating expenses (caused by factors such as
increased fuel and raw material prices) through higher sale prices.
The cement business, in particular, is capital‑intensive resulting in significant fixed and semi‑fixed costs. The
Group’s profits are therefore sensitive to changes in volume, which is driven by highly competitive markets, and
impacted by ongoing capital expenditure needs.
A number of the products sold by the Group compete with other building products that do not feature in the
Group’s existing product range. Any significant shift in demand preference from the Group's existing products
to substitute products, which the Group does not produce, could adversely impact market share and results of
operations.
Portfolio Management
Risk
Discussion
Description:
The Group may engage in acquisition and divestment
activity during the year as part of active portfolio
management which presents risks around due
diligence, execution and integration of assets.
Additionally, the Group may be liable for liabilities of
companies it has acquired or divested.
Impact:
Failure to identify and execute deals in an efficient
manner may limit the Group’s growth potential and
impact financial performance.
The Group’s acquisition strategy focuses on value‑enhancing small to mid‑sized acquisitions, largely in existing
markets, supplemented from time to time by larger strategic acquisitions into new markets or new building
products. In addition, as part of its ongoing commitment to active portfolio management, the Group may, from
time to time, divest businesses which are evaluated to be non‑core or underperforming.
The realisation of the Group’s acquisition strategy is dependent on the ability to identify and acquire suitable
assets at appropriate prices thus satisfying the stringent cash flow and return on investment criteria
underpinning such activities. The Group may not be able to identify such companies, and, even if identified,
may not be able to acquire them because of a variety of factors including the outcome of due diligence
processes, the ability to raise funds (as required) on acceptable terms, the need for competition authority
approval in certain instances and competition for transactions from peers and other entities exploring
acquisition opportunities in the building materials sector. In addition, situations may arise where the Group
may be liable for the past acts, omissions or liabilities of companies acquired, or may remain liable in cases of
divestment; for example, the potential environmental liabilities addressed under the Sustainability and Corporate
Social Responsibility Risk Factor on page 237.
The Group’s ability to realise the expected benefits from acquisition activity depends, in large part, on its ability
to integrate newly‑acquired businesses in a timely and effective manner. Even if the Group is able to acquire
suitable companies, it still may not achieve the growth synergies or other financial and operating benefits it
expected to achieve, and the Group may incur write‑downs, impairment charges or unforeseen liabilities that
could negatively affect its operating results or financial position or could otherwise harm the Group’s business.
Further, integrating an acquired business, product or technology could divert management time and resources
from other matters.
234
2021 Annual Report and Form 20-F 235
Key Strategic Risk Factors - continued
Public Policy and Geopolitics
Risk
Discussion
Description:
Adverse public policy, economic, social and political
situations in any country in which the Group operates
could lead to a fall in demand for the Group’s
products, business interruption, restrictions on
repatriation of earnings or a loss of plant access.
The ongoing geopolitical conflict in Ukraine has
contributed to heightened uncertainty.
Impact:
Changes in these conditions may adversely affect
the Group's people, business, results of operations,
financial condition or prospects.
Our markets and demand for the Group’s products are influenced by public policy and the fiscal ability and
investment strategy of local and national governments in the jurisdictions in which we operate. The allocation
of government funding for public infrastructure programmes is a key driver for our markets, such as the
infrastructure and utilities elements of the Build Back America bill in the US. COVID‑19 restrictions and
lockdowns increase the demand for government social expenditure, while having a dampening effect on the
receipt of taxes. Any significant local and national government budget deficits, exacerbated by the effects of the
COVID‑19 pandemic, might result in a reduction in the investment made by local and national governments in
infrastructure spending, thus reducing the demand for the Group’s products. Similarly, any significant change
in investment strategy by policy makers in any of the Group’s key markets could reduce addressable market
demand, adversely impacting financial performance.
The Group currently operates mainly in Western Europe and North America as well as, to a lesser degree, in
developing countries/emerging markets in Eastern Europe, the Philippines and China. The economies of these
countries are at varying stages of socioeconomic and macroeconomic development which could give rise to a
number of risks, uncertainties and challenges that could include the following:
• Changes in political, social or economic conditions;
• Trade protection measures and import or export licensing requirements;
• Political unrest and currency disintegration;
• Activism and civil disturbance, triggered by natural disasters, terrorist events, outbreak of armed conflict, etc.;
• Labour and procurement practices which contravene ethical considerations;
• Unexpected changes in regulatory and tax requirements;
• State‑imposed restrictions on repatriation of funds; and
• Outbreak of public health emergencies/epidemics/pandemics
The ongoing geopolitical conflict in Ukraine has contributed to heightened uncertainty. The Board is actively
monitoring the very recent developments in Ukraine with the priority on the safety and security of our people.
The economic and financial consequences will be assessed as the situation evolves.
Strategic Mineral Reserves
Risk
Discussion
Description:
Appropriate reserves are an increasingly scarce
commodity and licences and/or permits required to
enable operation are becoming harder to secure.
There are numerous uncertainties inherent in
reserves estimation and in projecting future rates of
production.
Impact:
Failure by the Group to plan for reserve depletion, or
to secure permits, may result in operation stoppages,
adversely impacting financial performance.
The Group’s reserves for the production of primary building materials (which encompasses cement, lime,
aggregates (stone, sand and gravel), asphalt, readymixed concrete and concrete products) fall into a variety
of categories spanning a wide number of rock types and geological classifications found within our extensive
network of quarry locations in attractive local markets globally. Continuity of the cash flows derived from the
production and sale of building materials is dependent on satisfactory reserves planning and on the presence
of appropriate long‑term arrangements for their replacement. There can be no assurance that the required
licences and permits will be forthcoming at the appropriate juncture or that relevant operating entities will
continue to satisfy the many terms and conditions under which such licences and permits are granted.
The failure to plan adequately for current and future extraction and utilisation or to ensure ongoing compliance
with the requirements of issuing authorities could lead to withdrawal of the related licence or permit and
consequential disruption to operations. For additional information on the Group’s reserve position, see page
226 of this Supplemental 20‑F and Other Disclosures section.
234
2021 Annual Report and Form 20-F 235
Key Operational Risk Factors
Climate Change and Policy
Risk
Description:
The impact of climate change may over time affect
the operations and cost base of the Group and the
markets in which the Group operates. This could
include physical risks, such as acute and chronic
changes in weather and/or transitional risks such
as technological development, policy and regulation
change and market and economic responses.
Impact:
Should the Group not reduce its greenhouse gases
(GHGs) emissions by its identified targets, the Group
may be subject to increased costs, adverse financial
performance and reputational damage.
Discussion
Physical Risks including:
• Acute & Chronic: Acute weather events such as hurricanes or flooding and chronic weather events
such as sea level rise or higher temperatures may have an adverse effect on the Group’s business and
operations. Operational productivity and demand for the Group’s products may be reduced during these
weather events leading to reduced financial performance
Transition Risks including:
• Technology: The failure to leverage innovation arising from technological advances related to carbon
efficiencies in products and processes may increase operational costs, shorten product life cycles or give
rise to early product obsolescence, thus impairing financial performance and/or future value creation
• Legal & Regulatory: Efforts to address climate change through laws and regulations, for example by
requiring reductions in emissions of GHGs such as CO2, can create economic risks and uncertainties for
the Group’s businesses. Such risks could include the cost of purchasing allowances or credits to meet
GHG emissions caps, the cost of installing equipment to reduce emissions to comply with GHG limits
or required technological standards, decreased profits or losses arising from decreased demand for the
Group’s goods and higher production costs resulting directly or indirectly from the imposition of legislative
or regulatory controls. Manifestation of these increased costs may increase the underlying cost of
production of the Group’s products which may adversely impact the financial performance of the Group
• Market & Reputation: Stakeholder expectations in relation to climate change continue to increase. The
Group is subject to a broad range of additional environmental product information requests by customers
in certain regions and increasing levels of disclosure regarding climate‑related environmental performance
from financial institutions, investors and other interested stakeholders. The Group includes within its
product portfolio products aimed at climate adaptation, including sustainable drainage systems, flood
defences and more resilient structures, as well as products that lower the operational carbon footprint
of buildings, including high performance glass and glazing products that incorporate innovative thermal
break technologies for superior thermal performance, precast concrete flooring and walling elements
delivering energy savings, and balcony connector products that reduce thermal bridging, delivering
energy savings. If customers’ and other stakeholders’ sustainability expectations are not satisfied, the
Group’s product portfolio may be of reduced relevance due to weakened customer demand, the Group’s
reputation may be harmed through not meeting investor expectations, and the Group could experience a
deterioration in financial performance, such as increased cost of capital
The Group continues to be exposed to costs related to carbon emissions trading schemes. While these
costs do not currently have a material financial impact, there can be no assurances that more extensive
carbon cost mechanisms may be introduced that could potentially impact the Group’s financial performance.
Further, the Group continues to engage with stakeholders to fully understand their expectations in relation to
climate change. However, it is recognised that expectations continue to evolve rapidly, and the Group cannot
guarantee that all stakeholders’ expectations will continue to be met.
Please refer to page 242 of this Annual Report and Form 20‑F for further details. In addition, the Group
publishes an annual independently‑assured Sustainability Report, which is available on www.crh.com.
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2021 Annual Report and Form 20-F 237
Key Operational Risk Factors - continued
Information Technology and/or Cyber Security
Risk
Discussion
Description:
The Group is dependent on information and
operational technology systems to support its
business activities. Any significant operational event,
whether caused by external attack, insider threat or
error, could lead to loss of access to systems or data,
adversely impacting business operations.
Impact:
Security breaches, IT interruptions or data loss
could result in significant business disruption, loss of
production, reputational damage and/or regulatory
penalties. Significant financial costs in remediation are
also likely in a major cyber security incident.
The Group employs numerous operational technology and information technology systems, networks and
services, many of which are managed, hosted, provided and/or used by third parties, to assist in conducting
our business. The proper functioning of our technology and systems is critical to the efficient operation and
management of our business. The Group’s systems for protecting our assets against cyber security risks may
not always be sufficient.
As part of our business, the Group collects, processes, and retains potentially sensitive and confidential
information about our customers, suppliers, employees and business performance. Despite the security
measures we have in place, and those of third‑party suppliers and vendors with which we do business, the
Group may be subject to cyber security attacks. Such attacks may result in interference with production
software, corruption or theft of sensitive data, manipulation of financial data accessible through digital
infrastructure, or reputational losses as a result of misrepresentation via social media and other websites.
Security and cyber incidents are becoming increasingly sophisticated and are continually evolving. As this
threat continues to evolve, the Group may be required to expend additional resources to continue to modify or
enhance protection measures or to investigate and remediate any vulnerability to cyber incidents. There can be
no assurance that future attacks will not be successful due to their increasing sophistication and the difficulties
in detecting and defending against them in a timely fashion.
While the Group has experienced, and expects to continue to experience, these types of threats and incidents,
the Group has not detected any material cyber security events.
Health and Safety Performance
Risk
Discussion
Description:
The Group’s businesses operate in an industry where
health and safety risks are inherently prominent.
Further, the Group is subject to stringent regulations
from a health and safety perspective in the various
jurisdictions in which it operates.
Impact:
A serious health and safety incident could have
a significant impact on the Group’s operational
and financial performance, as well as the Group’s
reputation.
The Group’s industry involves dangerous work and a failure to maintain the focus on making its workplaces safe
for our people could result in a deterioration in the Group’s safety performance and ultimately fatalities. Building
materials production can be hazardous and particular hazards are associated with heavy vehicles, working at
height and using mechanised processes. Additionally, the Group’s safety risks are not limited to facility sites but
extend to paving and construction sites and regular encounters with stakeholder sites. This presents a complex
challenge which requires safe behaviours and engagement from employees that match the Group’s robust policies
and procedures.
The Group is subject to a broad and stringent range of existing and evolving laws, regulations, standards and
best practices with respect to health and safety in each of the jurisdictions in which it operates. Should the health
and safety frameworks, processes and controls implemented throughout the Group to protect our people fail, the
Group would be exposed to significant potential legal liabilities and penalties. Further, high numbers of accidents
could pose additional challenges in recruiting new employees, ensuring operational continuity and maintaining
licences and permits.
The COVID‑19 pandemic has presented and continues to present additional health and safety challenges due to
potential transmission of the virus and changes to traditional operating norms. There is no guarantee that efforts to
mitigate the risk of transmission will be effective in preventing the spread of COVID‑19 at our sites and locations.
For additional information on the Group’s health and safety performance, see page 18 of this Annual Report
and Form 20‑F or refer to the Group’s independently‑assured Sustainability Report, which is available on
www.crh.com.
236
2021 Annual Report and Form 20-F 237
Sustainability and Corporate Social Responsibility
Risk
Discussion
Description:
The nature of the Group’s activities poses inherent
environmental, social and governance (ESG) risks,
which are also subject to an evolving regulatory
framework and changing societal expectations.
Impact:
Failure to embed sustainability principles within
the Group's businesses and strategy may result in
non‑compliance with relevant regulations, standards
and best practices and lead to adverse stakeholder
sentiment and reduced financial performance.
The Group recognises that the demand for sustainable products is undoubtedly increasing and seeks opportunities
to deliver sustainable products, buildings and infrastructure at reduced environmental cost throughout their lifetime.
Customers, from architects and construction companies to public bodies, have an immediate need for sustainable
solutions which respond to climate change. In order to be involved in the green agenda, the Group needs to work
with customers and vendors to innovate around design, delivery and application of products. If the Group fails to
identify and execute on areas for improved sustainable performance, the demand for the Group’s products may
fall. If customers’ and other stakeholders’ sustainability expectations are not satisfied, the Group’s product portfolio
will be of reduced relevance and the Group will experience a deterioration in financial performance.
The Group is subject to a broad and increasingly stringent range of existing and evolving laws, regulations,
standards and best practices with respect to governance, the environment and social performance in each of the
jurisdictions in which it operates giving rise to significant compliance costs, potential legal liability exposure and
potential obligations for the development of its operations. These laws, regulations, standards and best practices
relate to, amongst other things, climate change, noise, emissions to air, water and soil, the use and handling of
hazardous materials and waste disposal practices.
Please refer to pages 20 to 27 of this Annual Report and Form 20‑F for further details or refer to the Group's
independently‑assured Sustainability Report, which is available on www.crh.com.
COVID-19 Pandemic
Risk
Discussion
Description:
Public health emergencies, epidemics or pandemics,
such as the emergence and spread of the COVID‑19
pandemic, have the potential to significantly impact
the Group's operations through a fall in demand for
the Group's products, a reduction in staff availability
and business interruption.
Impact:
The emergence and spread of the COVID‑19
pandemic has had a material impact across the
construction markets in which the Group operates.
The continued uncertainty around the global
pandemic could have an adverse effect on the
Group's operating results, cash flows, financial
condition and/or prospects.
The global spread of COVID‑19 and the mitigations and practices implemented by governments, such as
restrictions on movement of people, temporary closure of businesses or public works stoppages has led to
and may continue to lead to delays or stoppage of key infrastructure or commercial projects resulting in a fall in
demand for the Group’s products. While governments in the Group's major markets have not extensively used
significant site closures and stay at home orders to quell the spread of COVID‑19 during 2021, there can be no
guarantee that such tools will not be used in the future.
The global economy and many of the economies in which the Group operates have been significantly impacted
by the COVID‑19 pandemic. Any significant fall in economic performance can lead to the postponement of
orders and a fall in demand for the Group’s products. Further, funding allocated for infrastructure projects may be
re‑directed to deal with the fallout of the public health emergency.
The Group operates in a labour‑intensive industry where employees’, contractors’ and customers’ activities
can be adversely impacted by the availability of human resources to design, manufacture or install the Group’s
products. Any significant loss of employee resources for a sustained period of time due to quarantine,
self‑isolation or sickness as a result of a public health emergency could impact the Group’s ability to produce,
manufacture and deliver goods. Similarly, the Group’s customers’ activities, and hence the demand for the
Group’s products, could be adversely impacted by similar employee availability issues.
Responsibility for business continuity planning is vested in operating company management to ensure that the
circumstances likely to give rise to material operational disruption are addressed. While business continuity plans
exist across the Group’s businesses, there can be no guarantees that the implementation of these plans will be
successful and that the plans will have the desired effect in minimising the effects of a public health emergency.
As the COVID‑19 pandemic continues, at this time it is not possible to predict the full extent and duration of any
further impacts, including those listed above, and whether the actions taken by our leadership and people in the
future will be successful in managing the risks posed by COVID‑19.
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2021 Annual Report and Form 20-F 239
Key Compliance Risk Factors
Laws, Regulations and Business Conduct
Risk
Discussion
Description:
The Group is subject to a wide variety of local and
international laws and regulations (to include those
applicable to it as a listed company) across the
many jurisdictions in which it operates, which vary in
complexity, application and frequency of change.
Impact:
Potential breaches of local and international laws and
regulations could result in litigation or investigations,
the imposition of significant fines, sanctions, adverse
operational impact and reputational damage.
As an Irish incorporated company, with a premium listing on the London Stock Exchange, a secondary listing
on Euronext Dublin and an ADR listing on the New York Stock Exchange, CRH must comply with various laws
and regulations including the Irish Companies Acts, the UK Listing Rules, the Euronext Dublin Listing Rules, the
Market Abuse Regulation, the Irish Transparency Regulation, and reporting obligations under US securities laws.
The Group is also subject to various statutes, regulations, and laws applicable to businesses generally in the
countries and markets in which it operates. These include statutes, regulations and laws affecting land usage,
zoning, labour and employment practices, competition/anti‑trust, financial reporting, taxation, anti‑fraud and theft,
anti‑bribery, anti‑corruption, international trade compliance, governance, data protection and data privacy and
security, environmental, health and safety, and international trade and sanctions laws and other matters. The Group
mandates that its employees comply with its Code of Business Conduct which stipulates best practices in relation
to legal, compliance and ethical matters amongst other issues. The Code of Business Conduct is available in
multiple languages on www.crh.com.
The Group cannot guarantee that its employees will at all times successfully comply with all demands of regulatory
agencies, and there can be no assurance that the Group’s policies and procedures will afford adequate protection
against breaches of these demands, fraudulent and/or corrupt activities. Any such activities or breaches of external
regulations or internal policies could have a material adverse effect on the Group’s business, results of operations,
financial condition, or prospects.
Key Financial and Reporting Risk Factors
Taxation Charge and Balance Sheet Provisioning
Risk
Discussion
Description:
The Group is exposed to uncertainties stemming
from governmental actions in respect of taxes paid or
payable in the future in all jurisdictions of operation.
In addition, various assumptions are made in the
computation of the overall tax charge and in balance
sheet provisions which may need to be adjusted over
time.
Impact:
Changes in tax regimes or assessment of additional
tax liabilities in future tax audits could result in
incremental tax liabilities which could have a material
adverse effect on cash flows and the financial results
of operations.
The Group’s income tax charge is based on reported profits and statutory tax rates, which reflect various
allowances and reliefs and tax efficiencies available to the Group in the multiple tax jurisdictions in which it
operates. The determination of the Group’s provision for income tax requires certain judgements and estimates
in relation to matters where the ultimate tax outcome may not be certain. The recognition of deferred tax
assets also requires judgement as it involves an assessment of the future recoverability of those assets. In
addition, the Group is subject to tax audits which can involve complex issues that could require extended
periods to conclude, the resolution of which is often not within its control. Although management believes
that the estimates included in the Consolidated Financial Statements and the Group’s tax return positions are
reasonable, there can be no assurance that the final outcome of these matters will equal the estimates reflected
in the Group’s historical income tax provisions and accruals.
As a multinational corporation, the Group is subject to various taxes in all jurisdictions of operation. Due to
economic and political conditions, tax rates and the interpretation of tax rules in these jurisdictions may be
subject to significant change, heightened during administration changes or periods of fiscal deficit in these
economies. For example, there are potential tax rate increases in the US under the Biden administration
tax policy proposals. In addition, the Group’s future effective income tax rate could be affected (positively or
negatively) by changes in the mix of earnings in countries with differing statutory tax rates, changes in the
valuation of deferred tax assets or changes in tax laws or their interpretation.
Finally, changes to international tax principles, for example at an EU level, could adversely affect the Group’s
effective tax rate or result in higher cash tax liabilities. If the Group’s effective income tax rate was to increase, its
cash flows and the financial results of operations could be adversely affected.
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2021 Annual Report and Form 20-F 239
Financial Instruments
Risk
Discussion
Description:
The Group uses financial instruments throughout its
businesses giving rise to interest rate and leverage,
foreign currency, counterparty, credit rating and
liquidity risks.
•
Impact:
A downgrade of the Group’s credit ratings may give
rise to increases in future funding costs and may
impair the Group’s ability to raise funds on acceptable
terms. In addition, insolvency of the financial
institutions with which the Group conducts business
may adversely impact the Group’s financial position.
Interest rate and leverage risks: As at 31 December 2021, the Group had outstanding gross indebtedness,
including leases, of approximately $12.0 billion (2020: $13.7 billion) and cash and cash equivalents of
approximately $5.8 billion (2020: $7.7 billion). The Group uses interest rate swaps to convert a portion of its
fixed rate debt to floating rate. While current leverage is low, acquisition activity could adversely impact its
operating and financial flexibility as well as financial position. There can be no assurance that the Group will
not be adversely impacted by increases in borrowing costs in the future. Over the course of 2021, the Group
transitioned from some IBOR‑backed rates linked to its main banking facilities to alternative benchmark rates.
These alternative benchmark rates are backward‑looking meaning the related interest charges will not be fully
known until close to the end of the interest period. At this time, it is not possible to say whether the alternative
reference rates will be more or less volatile than IBOR and whether the transition to alternative reference rate
linked contracts will impact CRH’s borrowing costs and cash flows. Such changes may or may not adversely
affect CRH’s financial position
• Foreign currency risks: If the Group’s reporting currency weakens relative to the basket of foreign currencies
in which net debt is denominated (including the euro, Canadian Dollar, Swiss Franc, Polish Zloty, Philippine
Peso and Pound Sterling), the net debt balance would increase; the converse would apply if the Group’s
reporting currency was to strengthen. Where economically feasible, net debt is maintained in the same relative
ratio as capital employed to act as an economic hedge of the underlying currency assets
• Counterparty risks: Insolvency of the financial institutions with which the Group conducts business or a
downgrade in their credit ratings may lead to losses in the cash balances that the Group holds with such
financial institutions or losses in derivative transactions that the Group has entered into with these parties
and may render it more difficult for the Group to utilise existing debt capacity or otherwise obtain financing
for operations. The Group holds significant cash and cash equivalents on deposit and derivative transactions
with a variety of highly rated financial institutions which at 31 December 2021, totalled $5.8 billion (2020: $7.7
billion) and $122 million (2020: $188 million) respectively. In addition, certain of the Group’s activities give rise
to significant amounts receivable from counterparties at the balance sheet date; at 31 December 2021, this
balance was $4.0 billion (2020: $3.6 billion)
• Credit rating risks: A downgrade of the Group’s credit ratings may give rise to increases in funding costs in
respect of future debt and may, among other concerns, impair its ability to access debt markets or otherwise
raise funds or enter into lines of credit, for example, on acceptable terms. Such a downgrade may result from
factors specific to the Group, including increased indebtedness stemming from acquisition activity, or from
other factors such as general economic or sector specific weakness or sovereign credit rating ceilings
• Liquidity risks: The principal liquidity risks stem from the maturation of debt obligations and derivative
transactions. The Group aims to achieve flexibility in funding sources through a variety of means including (i)
maintaining cash and cash equivalents with a number of highly rated counterparties; (ii) meeting the bulk of
debt requirements through debt capital markets or other term financing; (iii) limiting the annual maturity of such
balances; and (iv) having surplus committed bank lines of credit. However, market or economic conditions
may make it difficult at times to realise this objective
For additional information on the above risks see note 22 to the Consolidated Financial Statements on pages 189
to 192.
Goodwill Impairment
Risk
Discussion
Description:
Significant under‑performance in any of the Group’s
major cash‑generating units or the divestment of
businesses in the future may give rise to a material
write‑down of goodwill.
Impact:
While a non‑cash item, a material write‑down of
goodwill could have a substantial impact on the
Group’s income and equity.
An acquisition generates goodwill to the extent that the price paid exceeds the fair value of the net assets
acquired. Under IFRS, goodwill and indefinite‑lived intangible assets are not amortised but are subject to annual
impairment testing. Other intangible assets deemed separable from goodwill arising on acquisitions are amortised.
A detailed discussion of the impairment testing process, the key assumptions used, the results of that testing and
the related sensitivity analysis is contained in note 14 to the Consolidated Financial Statements on pages 174 to
176.
While a goodwill impairment charge does not impact cash flow, a full write‑down at 31 December 2021 would
have resulted in a charge to income and a reduction in equity of $9.5 billion (2020: $9.0 billion).
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2021 Annual Report and Form 20-F 241
Key Financial and Reporting Risk Factors - continued
Foreign Currency Translation
Risk
Discussion
Description:
The principal foreign exchange risks to which the
Consolidated Financial Statements are exposed
pertain to (i) adverse movements in reported results
when translated into the reporting currency; and
(ii) declines in the reporting currency value of net
investments which are denominated in a wide basket
of currencies other than the reporting currency.
Impact:
Adverse changes in the exchange rates will continue
to negatively affect retained earnings. The annual
impact is reported in the Consolidated Statement of
Comprehensive Income.
Given the geographic diversity of the Group, a significant proportion of its revenues, expenses, assets and
liabilities are denominated in currencies other than the Group’s reporting currency, including the euro, Canadian
Dollar, Swiss Franc, Polish Zloty, Philippine Peso and Pound Sterling. From year to year, adverse changes in the
exchange rates used to translate these and other foreign currencies into the reporting currency have impacted
and will continue to impact consolidated results and net worth.
For additional information on the impact of foreign exchange movements on the Consolidated Financial
Statements for the Group for the year ended 31 December 2021, see the Business Performance and
Segmental Reviews section commencing on page 36 and note 22 to the Consolidated Financial Statements on
pages 189 to 192.
Corporate Governance Practices
Compliance Statement
Non‑US companies such as CRH are exempt from
most of the corporate governance rules of the
NYSE. In common with companies listed on the
LSE and Euronext Dublin, CRH’s corporate
governance practices reflect, inter alia, compliance
with (a) domestic company law; (b) the Listing Rules
of the UK Listing Authority and Euronext Dublin; and
(c) the 2018 UK Corporate Governance Code,
which is appended to the listing rules of the LSE
and Euronext Dublin.
The Board of CRH has adopted a robust set of
governance principles, which reflect the 2018 Code
and its principles‑based approach to corporate
governance. Accordingly, the way in which CRH
makes determinations of Directors’ independence
differs from the NYSE rules. The Board has
determined that, in its judgement, all of the
non‑executive Directors are independent. In doing
so the Board did not explicitly take into
consideration the independence requirements
outlined in the NYSE’s listing standards.
However, the Board has determined that all of the
non‑executive Directors on the Audit Committee are
independent according to the requirements of Rule
10A‑3 of the US Securities Exchange Act of 1934.
Further, CRH considers that the Terms of Reference
for its Audit Committee, Remuneration Committee,
Nomination and Corporate Governance Committee
are generally responsive to the relevant NYSE rules,
but may not address all aspects of such rules.
Shareholder Approval of
Equity Compensation Plans
The NYSE rules require that shareholders
must be given the opportunity to vote on all
equity‑compensation plans and material revisions to
those plans with certain limited exceptions. CRH
complies with Irish requirements, which are similar to
the NYSE rules. The Board, however, does not
explicitly take into consideration the NYSE’s detailed
definition on what are considered “material revisions”.
Risk Management
and Internal Control
The Board has delegated responsibility for
monitoring the effectiveness of the Group’s risk
management and internal control systems to the
Audit Committee1. Such systems are designed to
manage rather than eliminate the risk of failure to
achieve business objectives and, in the case of
internal control systems, can provide only
reasonable and not absolute assurance against
material misstatement or loss.
The Consolidated Financial Statements are
prepared subject to oversight and control of the
Finance Director, who seeks to ensure that data is
captured from Group locations and all required
information for disclosure in the Consolidated
Financial Statements is provided. An appropriate
control framework has been put in place around the
recording of appropriate consolidation journals and
other adjustments. The Consolidated Financial
Statements are reviewed by the internal CRH
Financial Reporting and Disclosure Group prior to
being reviewed by the Finance Director and Audit
Committee and approved by the Board of Directors.
Group management has responsibility for major
strategic development and financing decisions.
Responsibility for operational issues is devolved,
subject to limits of authority, to product group and
operating company management. Management at
all levels is responsible for internal control over the
business functions that have been delegated.
This embedding of the system of internal control
throughout the Group’s operations is designed
to enable the organisation to respond quickly
to evolving business risks, and to ensure that
significant internal control issues, should they arise,
are reported promptly to appropriate levels
of management.
Management’s Report on Internal
Control over Financial Reporting
In accordance with the requirements of Rule 13a‑15
of the US Securities Exchange Act, the following
report is provided by management in respect of the
Company’s internal control over financial reporting.
As defined by the SEC, internal control over financial
reporting is a process designed by, or under the
supervision of, the Company’s principal executive
and principal financial officers, or persons
performing similar functions, and effected by the
Company’s Board of Directors, management and
other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of the Consolidated Financial
Statements for external purposes in accordance
with generally accepted accounting principles and
includes those policies and procedures that:
1. In accordance with Section 167(7) of the Companies Act 2014.
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2021 Annual Report and Form 20-F 241
• pertain to the maintenance of records that in
reasonable detail accurately and fairly reflect the
transactions and dispositions of the assets of the
Company;
• provide reasonable assurance that transactions
are recorded as necessary to permit preparation
of the Consolidated Financial Statements in
accordance with generally accepted accounting
principles, and that receipts and expenditures of
the Company are being made only in accordance
with authorisations of management and Directors
of the Company; and
• provide reasonable assurance regarding
prevention or timely detection of unauthorised
acquisition, use or disposition of the Company’s
assets that could have a material effect on the
Consolidated Financial Statements
Our management is responsible for establishing and
maintaining adequate internal control over financial
reporting as defined in Rules 13a‑15(f) and 15d‑15(f)
under the US Securities Exchange Act. Our internal
control system was designed to provide reasonable
assurance regarding the reliability of financial
reporting and the preparation of our Company’s
published Consolidated Financial Statements for
external purposes under generally accepted
accounting principles.
In connection with the preparation of the Company’s
annual Consolidated Financial Statements,
management has undertaken an assessment of the
effectiveness of the Company’s internal control over
financial reporting as of 31 December 2021, based
on criteria established in Internal Control ‑
Integrated Framework (2013), issued by the
Committee of Sponsoring Organisations of the
Treadway Commission.
Management’s assessment included an evaluation
of the design of the Company’s internal control over
financial reporting and testing of the operational
effectiveness of those controls. Based on this
assessment, management has concluded and
hereby reports that as of 31 December 2021, the
Company’s internal control over financial reporting
is effective.
Our auditors, Deloitte, a registered public accounting
firm, who have audited the Consolidated Financial
Statements for the year ended 31 December 2021,
have audited the effectiveness of the Company’s
internal controls over financial reporting. Their
report, on which an unqualified opinion is expressed
thereon, is included on page 138.
Changes in Internal Control
over Financial Reporting
During 2021, there has been no change in our
internal control over financial reporting identified in
connection with the evaluation required by Rules
13a‑15 that occurred during the period covered by
this Annual Report and Form 20‑F that has materially
affected, or is reasonably likely to materially affect,
our internal control over financial reporting.
Acquisitions excluded from the 2020 assessment of
internal control over financial reporting were all
successfully integrated into the CRH internal control
systems in 2021.
Evaluation of Disclosure
Controls and Procedures
Management has evaluated the effectiveness of the
design and operation of the disclosure controls and
procedures as defined in Exchange Act Rule
13a‑15(e) as of 31 December 2021. Based on that
evaluation, the Chief Executive and the Finance
Director have concluded that these disclosure
controls and procedures were effective as of such
date at the level of providing reasonable assurance.
In designing and evaluating our disclosure controls
and procedures, management, including the Chief
Executive and the Finance Director, recognised that
any controls and procedures, no matter how well
designed and operated, can provide only
reasonable assurance of achieving the desired
control objectives, and management necessarily
was required to apply its judgement in evaluating
the cost‑benefit relationship of possible controls and
procedures. Because of the inherent limitations in all
control systems, no evaluation of controls can
provide absolute assurance that all control issues
and instances of fraud, if any, within the Company
have been detected.
In 2021 Oldcastle APG, part of CRH’s Building Products Division, opened a new dualbagging-line, dry-mix facility located at Cowpens, South Carolina, United States. The plant’s high
throughput capability and strategic geographic location between Charlotte and Atlanta, the fastest growing population centers in the southern United States, bolsters APG’s end-to-end
solutions offerings for customers in the region.
242
2021 Annual Report and Form 20-F 243
The Environment and Government Regulations
As a building materials company, environmental
laws and regulations relevant to extractive and
production processes are significant to CRH.
In Europe, operations are subject to national
environmental laws and regulations, most of which
now emanate from European Union Directives and
Regulations. In North America, operations may be
subject to federal, state, provincial and local
environmental laws and regulations. In other
jurisdictions, including the United Kingdom, national
environmental and local laws apply.
Environmental Compliance Policy
In order to comply with environmental regulations
and address environmental risks and opportunities,
CRH has developed an environmental policy. The
statement of policy, applied across all Group
companies, is to:
• address proactively the challenges of climate
change, reduce emissions and waste as well as
optimise our use of energy, water, land and other
resources;
• promote sustainable product and process
innovation and new business opportunities;
• support and enhance biodiversity, ensuring
responsible land use and biodiversity
management;
• comply with or exceed all applicable
environmental legislation and continually
implement and improve our environmental
management systems, always striving to meet
or exceed industry best practice standards,
monitoring and reporting performance;
• maintain open communications and ensure that
our employees and contractors are aware of and
adhere to their environmental responsibilities; and
• maintain positive relationships with stakeholders
through engagement and consultation, always
striving to be good neighbours in every
community in which we operate
Environmental Management
and Governance
Achieving the Group’s environmental policy
objectives at all locations is a management
imperative. At Board level there is a dedicated
Safety, Environment & Social Responsibility (SESR)
Committee.
Overseen by the Board, the Chief Executive has
overall responsibility for CRH’s sustainability
performance and for ensuring sustainability policies
are implemented in all business lines.
Daily responsibility for ensuring that the Group’s
environmental policy is effectively implemented lies
with individual location managers, assisted by a
network of Group environmental specialists.
At each year end, the Group Sustainability function
carries out a detailed assessment of Group
environmental performance, which is reviewed by
the SESR Committee and the Board.
Addressing Climate Change
CRH continues to be a member of the World
Business Council for Sustainable Development
(WBCSD) and is a founding member of the Global
Cement and Concrete Association (GCCA), which is
dedicated to developing and strengthening the
sector’s contribution to sustainable construction.
Through its membership of the GCCA, WBCSD and
various regional industry associations, CRH is
actively involved in global and regional discussions
on the climate change agenda.
European Union leaders in 2021 launched the 'Fit
for 55' package of legislative proposals and policy
initiatives that aim for an emissions reduction target
of at least 55% by 2030, compared to 1990. CRH is
monitoring forthcoming legislative requirements and
planning for continued compliance.
CRH's operations in the US are subject to a number
of federal and state laws and regulations addressing
climate change. Ultimately more comprehensive
“cap and trade” schemes or other emission
reduction legislation may be implemented in the US
and Canada; depending on the scope of the
legislation, this could significantly impact certain
operations in North America. CRH continuously
monitors developments in regulations and
greenhouse gas initiatives involving local, provincial,
state or federal governments. As of 18 February
2022, the Group is not aware of any such schemes
that would materially affect its US operations.
CRH is committed to proactively addressing the
challenges of climate change, which may have a
multi‑faceted impact on our business strategy. As a
provider of building materials and integrated
solutions that address the needs of a climate‑resilient
built environment, there are likely to be strong growth
opportunities for CRH. Ongoing public investment
will need to create more resilient infrastructure and
cities, which require higher safety characteristics and
are better suited to extreme weather events like
rising water levels and high wind events. CRH
includes within its offerings multiple products aimed
at climate adaptation and mitigation, including
sustainable drainage systems, concrete products
used in flood defence systems, products
contributing to more resilient structures as well as
products with high levels of recycled content, such
as recycled asphalt pavement. From a physical risk
perspective climate change may have implications
on business continuity and mitigating against supply
chain disruption.
A management strategy has been put in place to
address these risks and opportunities. In 2020, CRH
appointed a dedicated member of our executive
leadership team with responsibility for Enterprise
Strategy, Sustainability & Innovation, to drive the
innovation agenda and enterprise strategy around
providing sustainable solutions for customers. In
2021, a specific Climate Change committee was
established at executive leadership level, to further
drive our climate strategy. In delivering this
management strategy, CRH seeks to reduce carbon
emissions and energy usage, achieve financial
efficiencies, and, in addition, help to address the
global challenges of climate change.
CRH has developed an ambition to achieve carbon
neutrality along the cement and concrete value
chain by 2050. As evidence of progress in relation
to its decarbonisation efforts, in 2021 CRH
announced the expectation to achieve its 2030
carbon emissions reduction target of 520kg
CO2/tonne of cementitious product by 2025. This
target represents a 33% reduction in specific net
cement CO2 compared with 1990 levels. In early
2022, the Group adopted a new SBTi approved
target for a 25% reduction in group‑wide absolute
Scope 1 and Scope 2 CO2 emissions by 2030 (from
a 2020 baseline).
In order to meet its target, CRH has implemented
capital expenditure programmes in its cement
operations to reduce carbon emissions in the
context of international and national commitments
to reduce greenhouse gas emissions as well as
CRH’s own emission reduction programme and
targets discussed above. In regions and countries
where trading schemes are in operation, facilities
that fall within the scope of this legislation comply
with CO2 “cap and trade” schemes, including the
European Union Emissions Trading Scheme and
other regional schemes.
Possible Environmental Liabilities
At 18 February 2022, there were no pending legal
proceedings relating to site remediation which are
anticipated to have a material adverse effect on the
financial position or results of operations or liquidity
of the Group, nor have internal reviews revealed any
situations of likely material environmental liability to
the Group.
Governmental Policies
The overall level of government capital expenditures
and the allocation by state entities of available funds
to different projects, as well as interest rate and tax
policies, directly affect the overall levels of
construction activity. The terms and general
availability of government permits required to conduct
Group business also has an impact on the scope of
Group operations. As a result such governmental
decisions and policies can have a significant impact
on the operating results of the Group.
242
2021 Annual Report and Form 20-F 243
EU Taxonomy
Compliance Statement
Share of Taxonomy‑eligible and Taxonomy non‑eligible economic activities
The EU Taxonomy regulation (Regulation (EU)
2020/852) is part of the EU's overall efforts to
implement the European Green Deal. It is intended
to serve as a standardised and mandatory
classification system to determine which economic
activities are considered as ‘environmentally
sustainable’ by the EU.
In June 2021, the European Commission formally
adopted the Climate Delegated Act with its
Annexes, establishing the Technical Screening
Criteria that define which activities substantially
contribute to the first two, out of six, environmental
objectives of the EU Taxonomy regulation, namely
climate change mitigation (Annex I), and climate
change adaptation (Annex II).
The Technical Screening Criteria for the remaining
four environmental objectives are expected to be
published in 2022.
An economic activity which is described in Annex I
or Annex II of the Climate Delegated Act is
Taxonomy‑eligible, irrespective of whether it meets
the respective Technical Screening Criteria or not.
For the year ended 31 December 2021, the share of
Taxonomy‑eligible and Taxonomy non‑eligible
economic activities in turnover, capital expenditure
(CapEx) and operating expenditure (OpEx) are
required to be disclosed in line with the published
EU Taxonomy regulation.
CRH’s assessment of
Taxonomy-eligible economic
activities
Based on the descriptions of economic activities
included in Annex I and Annex II of the Climate
Delegated Act, we assessed our activities and
identified those which are Taxonomy‑eligible.
The Climate Delegated Act prioritised specific sectors
responsible for 94% of direct greenhouse gas
emissions in the EU. A high proportion of CRH’s
activities do not fall into these prioritised sectors and
are not in scope of the EU Taxonomy regulation.
While the Climate Delegated Act does not cover a
high proportion of our economic activities, we have
identified the economic activity “3.7 Manufacture of
cement” as a Taxonomy‑eligible economic activity.
Our turnover, CapEx and OpEx exclusively refer to
turnover, assets or processes associated with this
economic activity.
Turnover
Capital Expenditure (CapEx)
Operating Expenditure (OpEx)
The total turnover represents the consolidated
revenue, and amounts to $31.0 billion for the financial
year ended 31 December 2021 (as disclosed in our
Consolidated Income Statement on page 140). The
accounting policy applicable for revenue recognition
is addressed in detail on page 148 of the
Consolidated Financial Statements.
CRH’s share of turnover associated with Taxonomy‑
eligible economic activities for the year ended 31
December 2021 was 14%.
Taxonomy-eligible Capital
Expenditure
The share of Taxonomy‑eligible CapEx is calculated
by the proportion of CapEx associated with
economic activities that are Taxonomy‑eligible
(numerator) over total CapEx (denominator).
Total CapEx includes additions to tangible and
intangible assets, considered before depreciation,
amortisation and any re‑measurements, and
excluding fair value changes. It also includes
additions as a result of business combinations. Total
CapEx involves all additions to Property, Plant and
Equipment, Right‑of‑Use Assets and Intangible
Assets. Any acquired goodwill is not considered for
this purpose.
For the reconciliation of total CapEx please see note
13, note 14 and note 20 to the Consolidated
Financial Statements.
CRH’s share of CapEx associated with
Taxonomy‑eligible economic activities for the year
ended 31 December 2021 was 14%.
CRH continuously invests in technology and
efficiency projects across our operating companies to
enhance environmental performance, as well as
investing in the environmental element of major
capital investment projects to ensure we reach our
CO2 reduction targets.
Total
$bn
31.0
2.5
1.5
Share of
Taxonomy-eligible
economic activities
Share of
Taxonomy non-eligible
economic activities
14%
14%
23%
86%
86%
77%
development (R&D), building renovation
measures, short‑term leases, maintenance and
repair and any other direct expenditures relating to
the day‑to‑day servicing of assets of property,
plant and equipment.
As the EU Taxonomy regulation has its own
definition of OpEx, the reported OpEx only
represents a proportion of the total Group cost of
sales and operating costs, and mainly includes R&D
costs, repairs and maintenance and
short‑term leases.
CRH’s share of OpEx associated with
Taxonomy‑eligible economic activities for the year
ended 31 December 2021 was 23%.
Future Regulatory Developments
From the year ending 31 December 2022 onwards,
Taxonomy‑alignment will also become part of EU
Taxonomy reporting. An economic activity is
Taxonomy‑aligned if it fulfils all the
following requirements:
• Contributes substantially to at least one
environmental objective by meeting the defined
Technical Screening Criteria;
• Doing no significant harm to any of the other
environmental objectives; and
• Is carried out in compliance with ‘Minimum
Social Safeguards’
In accordance with the published Delegated Acts,
CRH will carry out an assessment of
Taxonomy‑alignment and report on
Taxonomy‑alignment in the next financial year.
Furthermore, EU taxonomy reporting is expected be
expanded to include the four further environmental
objectives, namely:
• Sustainable use and protection of water and
marine resources;
Taxonomy-eligible Operating
Expenditure
• Transition to a circular economy;
• Pollution prevention and control; and
Taxonomy-eligible Turnover
The share of Taxonomy‑eligible turnover is
calculated by the proportion of turnover derived
from economic activities that are Taxonomy‑eligible
(numerator) over total turnover (denominator).
The share of Taxonomy‑eligible OpEx is calculated
by the proportion of OpEx associated with
economic activities that are Taxonomy‑eligible
(numerator) over total OpEx (denominator).
EU Taxonomy regulations define total OpEx as the
direct non‑capitalised costs of research and
• Protection and restoration of biodiversity and
ecosystems
244
2021 Annual Report and Form 20-F 245
Contractual Obligations
An analysis of the maturity profile of debt, leases capitalised, purchase obligations, deferred and contingent acquisition consideration and pension scheme contribution
commitments at 31 December 2021 is as follows:
Payments due by period
Interest‑bearing loans and borrowings (i)
Lease liabilities (ii)
Estimated interest payments on
contractually‑committed debt (iii)
Deferred and contingent acquisition consideration
Purchase obligations (iv)
Retirement benefit obligation commitments (v)
Total (vi)
Total
$m
10,435
2,188
3,032
361
2,200
17
18,233
Less than
1 year
$m
559
302
315
33
1,305
2
2,516
1-3 years
$m
2,103
3-5 years
$m
2,107
462
550
190
351
4
325
452
134
194
4
3,660
3,216
More than
5 years
$m
5,666
1,099
1,715
4
350
7
8,841
(i)
Of the $10.4 billion total gross debt, $0.2 billion is drawn on revolving facilities which may be repaid and redrawn up to the date of maturity. The interest payments
are estimated assuming these loans are repaid on facility maturity dates.
(ii) Lease liabilities are presented on an undiscounted basis as detailed in note 20 and note 22 to the Consolidated Financial Statements.
(iii) These interest payments have been estimated on the basis of the following assumptions: (a) no change in variable interest rates; (b) no change in exchange rates;
(c) that all debt is repaid as if it falls due from future cash generation; and (d) none is refinanced by future debt issuance.
(iv) Purchase obligations include contracted for capital expenditure. A summary of the Group’s future purchase commitments as at 31 December 2021 for capital
expenditure is set out in note 13 to the Consolidated Financial Statements. These expenditures for replacement and new projects are in the ordinary course of
business and will be financed from internal resources.
(v) These retirement benefit commitments comprise the contracted payments related to our pension schemes in the UK. See further details in note 28 to the
Consolidated Financial Statements.
(vi) Over the long term, the Group believes that our available cash and cash equivalents, cash from operating activities, along with the access to borrowing facilities will
be sufficient to fund our long‑term contractual obligations, maturing debt obligations and capital expenditures.
Quantitative and Qualitative
Information about Market Risk
CRH addresses the sensitivity of the Group’s interest
rate swaps and debt obligations to changes in
interest rates in a sensitivity analysis technique that
measures the estimated impacts on the income
statement and on equity of either an increase or
decrease in market interest rates or a strengthening
or weakening in the euro against all other currencies,
from the rates applicable at 31 December 2021, for
each class of financial instrument with all other
variables remaining constant. The technique used
measures the estimated impact on profit before tax
and on total equity arising on net year‑end floating
rate debt and on year‑end equity, based on either
an increase/decrease of 1% in floating interest
rates or a 5% strengthening/weakening in the US
Dollar/euro exchange rate. The US Dollar/euro rate
has been selected for this sensitivity analysis given
the materiality of the Group’s activities in euro. This
analysis, set out in note 22 to the Consolidated
Financial Statements, is for illustrative purposes
only as in practice interest and foreign exchange
rates rarely change in isolation.
Quantitative and qualitative information and sensitivity
analysis of market risk is contained in notes 21 to 25
to the Consolidated Financial Statements.
Off-Balance Sheet Arrangements
CRH does not have any off‑balance sheet
arrangements that have, or are reasonably likely to
have a current or future effect on CRH’s financial
condition, changes in financial condition, revenues
or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to
investors.
244
2021 Annual Report and Form 20-F 245
Other Disclosures
History, Development and
Organisational Structure
of the Company
CRH is the leading building materials business in the
world. Our footprint spans 28 countries, employing
c. 77,400 people at over 3,200 operating locations.
CRH is the largest building materials business in
North America and in Europe and also has regional
positions in Asia.
CRH manufactures and supplies a range of
integrated building materials, products and
innovative solutions for the construction industry.
From primary materials, to products that are highly
engineered and high‑value‑added, to integrated
building solutions that enable faster, more
sustainable construction, CRH is uniquely
positioned to address evolving trends in global
construction markets. Our products can be found
throughout the built environment in a wide range of
construction projects from major public
infrastructure to commercial buildings and
residential homes.
The Group resulted from the merger in 1970
of two leading Irish public companies, Cement
Limited (established in 1936) and Roadstone
Limited (incorporated in 1949). Cement Limited
manufactured and supplied cement while
Roadstone Limited was primarily involved in
the manufacture and supply of aggregates,
readymixed concrete, mortar, coated macadam,
asphalt and contract surfacing to the Irish
construction industry.
As a result of planned geographic diversification
since the mid‑1970s, the Group has expanded by
acquisition and organic growth into a leading
manufacturer and supplier of building materials,
products and integrated solutions with, operations
in 28 countries around the world.
The Company is incorporated and domiciled in
Ireland. CRH is a public limited company operating
under the Companies Act of Ireland 2014. The
Group’s worldwide headquarters is located in Dublin,
Ireland. Our principal executive offices are located at
Stonemason’s Way, Rathfarnham, Dublin 16, Ireland
(telephone: +353 1 404 1000). The Company’s
registered office is located at 42 Fitzwilliam Square,
Dublin 2, Ireland and our US agent is CRH
Americas, Inc., 900 Ashwood Parkway, Suite 600,
Atlanta, Georgia 30338.
The Company is the holding company of the Group,
with direct and indirect share and loan interests
in subsidiaries, joint ventures and associates.
From Group headquarters, a small team of
executives exercise strategic control over our
decentralised operations.
In the detailed description of CRH’s business on
pages 36 to 53, estimates of the Group’s various
aggregates and stone reserves and resources have
been provided by engineers employed by the
individual operating companies. Further details are
included on pages 226 to 231. Details of product
end‑use by sector for each reporting segment are
based on management estimates.
A listing of the principal subsidiary undertakings and
equity accounted investments is contained on
pages 260 to 264.
Statements Regarding
Competitive Position and
Construction Activity
Statements made in the Business Performance
section and elsewhere in this document referring to
the Group’s competitive position are based on the
Group’s belief, and in some cases rely on a range of
sources, including investment analysts’ reports,
independent market studies and the Group’s
internal assessment of market share based on
publicly available information about the financial
results and performance of market participants.
Unless otherwise specified, references to
construction activity or other market activity relate to
the relevant market as a whole and are based on
publicly available information from a range of
sources, including independent market studies,
construction industry data and economic forecasts
for individual jurisdictions.
Exchange Rates
In this Annual Report and Form 20‑F, references
to “US Dollar”, “US$”, “$”, “US cents”, “cent” or “c”
are, unless otherwise stated, to the United States
currency, references to “euro”, “euro cent” or “€” are
to the euro currency and “Stg£” or “Pound Sterling”
are to the currency of the United Kingdom of Great
Britain and Northern Ireland (UK). Other currencies
referred to in this Annual Report and Form 20‑F
include Polish Zloty (PLN), Swiss Franc (CHF),
Canadian Dollar (CAD), Chinese Renminbi (RMB),
Indian Rupee (INR), Ukrainian Hryvnia (UAH),
Philippine Peso (PHP), Romanian Leu (RON) and
Serbian Dinar (RSD).
For a discussion on the effects of exchange rate
fluctuations on the financial condition and results of
the operations of the Group, see the Business
Performance section beginning on page 36.
Legal Proceedings
Group companies are parties to various legal
proceedings, including some in which claims
for damages have been asserted against the
companies. Having taken appropriate advice,
we believe that the aggregate outcome of such
proceedings will not have a material effect on the
Group’s financial condition, results of operations or
liquidity.
Research and Development
CRH is engaged in ongoing initiatives that advance
its business as part of its relentless focus on
continuous improvement. One of these areas is
research and development, where such costs are
not material in the context of the Consolidated
Income Statement. CRH’s policy is to expense such
costs as they occur.
Employees
The average number of employees for the past
three financial years is disclosed in note 7 to the
Consolidated Financial Statements on page 163.
The Group believes that relations with its employees
and labour unions are satisfactory.
Seasonality
Activity in the construction industry is characterised
by cyclicality and is dependent to a considerable
extent on the seasonal impact of weather in CRH’s
operating locations, with activity in some markets
reduced significantly in winter due to inclement
weather. First‑half sales accounted for 45% of
full‑year 2021 (2020: 44%), while EBITDA (as
defined)* for the first six months of 2021
represented 37% of the full‑year out‑turn
(2020: 34%).
Significant Changes
Other than as disclosed in note 3 to the Consolidated
Financial Statements on page 159 with respect to
the divestment of the Group’s Building Envelope
business, no significant changes have occurred
since the balance sheet date.
Latest Practical Information
Where referenced in the Supplemental 20‑F and
Other Disclosures and Shareholder Information
sections, information is provided at the latest
practicable date, 18 February 2022.
* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group’s share of equity accounted investments’ profit after tax.
As the leading building business
in the world, we want to make
a positive difference for people,
society and the environment. By
engaging with our stakeholders we
ensure that we can successfully
work together to meet the
challenges facing society.
2021 Annual Report and Form 20-F 247
Shareholder
Information
246-257
Stock Exchange Listings
248
Ownership of Ordinary Shares
248
Dividends
Share Plans
American Depositary Shares
Taxation
Memorandum and Articles
of Association
General Information
250
251
252
253
255
257
This Bird observation hide at a gravel pit in Rouvres-en-Plaine, France has been
developed in cooperation with nature conservation organisations and highlights
the important habitats that many of our locations incorporate. The site is owned by
Eqiom, part of our Europe Materials Division.
248
2021 Annual Report and Form 20-F 249
Stock Exchange Listings
CRH has a premium listing on the LSE and a
secondary listing on Euronext Dublin represented by
the ticker symbols CRH and CRG respectively.
American Depositary Shares (ADSs), each
representing one Ordinary Share, are listed on the
NYSE. The ADSs are evidenced by ADRs issued by
The Bank of New York Mellon (the ‘Depositary’) as
Depositary under an Amended and Restated
Deposit Agreement dated 28 November 2006. The
ticker symbol for the ADSs on the NYSE is CRH.
Share price data
Share price at 31 December
Market capitalisation
Share price movement during year:
-high
-low
2021
LSE
Euronext Dublin
£39.00
£30.1bn
£39.32
£30.22
€46.52
€35.9bn
€46.96
€34.38
NYSE
$52.80
$40.7bn
$53.76
$41.14
2020
LSE
Euronext Dublin
£30.58
£24.0bn
£31.67
£15.74
€34.02
€26.7bn
€36.50
€17.43
NYSE
$42.58
$33.4bn
$42.82
$18.64
For further information on CRH shares see note 29 to the Consolidated Financial Statements.
Ownership of Ordinary Shares
Shareholdings as at 31 December 2021
Geographic location (i)
United Kingdom
North America
Europe/Other
Retail
Ireland
Treasury (ii)
Number of shares
held ‘000s
% of total
229,920
229,806
155,123
132,818
22,996
3,477
774,140
29.7
29.7
20.0
17.2
3.0
0.4
100.0
(i)
This represents a best estimate of the number of shares controlled by fund managers resident in the
geographic regions indicated. Private shareholders are classified as retail above.
(ii) As detailed in note 29 to the Consolidated Financial Statements.
The Company is not owned or controlled directly or
indirectly by any government or by any corporation
or by any other natural or legal person severally or
jointly. The major shareholders do not have any
special voting rights.
As at 2 March 2022, the Company had received
notification of certain interests in its Ordinary Share
capital that were equal to, or in excess of, 3%.
These interests are presented in Corporate
Governance – Substantial Holdings on page 74.
248
2021 Annual Report and Form 20-F 249
Ownership of Ordinary Shares - continued
See note 29 to the Consolidated Financial
Statements for further details.
Purchases of Equity Securities by
the Issuer and Affiliated Persons
In April 2018, CRH announced its intention to
introduce a share repurchase programme to
repurchase Ordinary Shares (the ‘Programme’).
During 2020, CRH repurchased a total of 5,951,146
Ordinary Shares and returned a further $0.2 billion
to shareholders. In 2021, CRH repurchased a total
of 17,829,602 Ordinary Shares returning a further
$0.9 billion of cash to shareholders. This brings the
total cash returned to shareholders under the share
buyback programme to $2.9 billion since its
commencement in May 2018.
The tables below sets forth the Ordinary Shares
repurchased under this programme together with
details of the Ordinary Shares purchased by the
Employee Benefit Trust (EBT) during 2020 and 2021.
Month
March
April
May
June
July
August
September
October
November
December
Total number of share
buyback purchases
1,642,000
Total number of
EBT purchases
307,410
Total number of
shares purchased
1,949,410
Average price paid per
share - share buyback (i) (ii)
€38.89
2021
1,658,731
1,042,547
1,502,661
2,095,200
1,535,632
2,358,058
2,267,621
2,366,929
1,360,223
38,571
-
-
-
-
-
-
-
-
1,697,302
1,042,547
1,502,661
2,095,200
1,535,632
2,358,058
2,267,621
2,366,929
1,360,223
17,829,602
345,981
18,175,583
€39.81
€41.25
€42.77
€41.66
€43.65
€42.87
€40.46
€43.64
€44.98
Month
January
February
March
Total number of share
buyback purchases
1,850,167
3,210,214
890,765
5,951,146
2020
Total number of
EBT purchases
-
265,820
804,405
1,070,225
Total number of
shares purchased
1,850,167
Average price paid per
share - share buyback (i) (ii)
€34.72
3,476,034
1,695,170
7,021,371
€33.78
€30.67
(i)
Average price paid per share in respect of 2021 EBT purchases; March €38.99 and April €39.84
(2020: February €30.68, March €21.94).
(ii) The average price paid per share in 2021 in respect of the share buyback programme was equal to $49.30
(2020: $36.96).
Other than the above, there were no purchases of equity securities by the issuer and/or affiliated persons
during the course of 2021.
CREST and Migration to
Euroclear Bank
Since 1996, CREST has been the depository for the
settlement of Irish issuers’ equity securities trading in
Dublin and/or London. As a result of Brexit, CREST
was no longer available to any Irish incorporated
issuers, irrespective of whether they are listed in
Ireland, London or both, and all Irish issuers had to
migrate from CREST to the market’s chosen
replacement system, Euroclear Bank Belgium.
An Extraordinary General Meeting was held on 9
February 2021 to seek shareholder approval to the
migration of the Company’s securities to Euroclear
Bank’s central securities depository and to approve
associated changes to the Articles of Association.
All resolutions were passed and the migration took
effect on 15 March 2021.
2021 Annual Report and Form 20-F 251
250
Dividends
The Company has paid dividends on its Ordinary
Shares in respect of each fiscal year since the
formation of the Group in 1970. Dividends are paid
to shareholders on the Register of Members on the
record date for the dividend. Record dates are set in
accordance with the rules of the LSE and Euronext
Dublin. An interim dividend is normally declared by
the Board of Directors in August of each year and is
generally paid in September/October. A final
dividend is normally recommended by the Board of
Directors following the end of the fiscal year to which
it relates and, if approved by the shareholders at an
AGM, is generally paid in April/May of that year.
The payment of future cash dividends will be
dependent upon future earnings, the financial
condition of the Group and other factors.
The below table sets forth the amounts of interim,
final and total dividends declared in US cents (2020
- 2021) and euro cent (2017-2019) per Ordinary
Share in respect of each fiscal year indicated. Solely
for the convenience of the reader, dividends declared
in the years 2017-2019 have been translated into US
cents per Ordinary Share at the dividend record date
exchange rate. An interim dividend of 23.00 US
cents was paid in respect of Ordinary Shares on 8
October 2021. The final dividend, if approved at the
forthcoming AGM of shareholders to be held on 28
April 2022, will be paid on 5 May 2022 to
shareholders on the Register of Members as at the
close of business on 11 March 2022 and will bring
the full-year dividend for 2021 to 121.0 US cents.
Dividend Withholding Tax (DWT) must be deducted
from dividends paid by an Irish resident company,
unless a shareholder is entitled to an exemption and
has submitted a properly completed exemption form
to the Company’s Registrars, Link Registrars Limited
(the ‘Registrars’). DWT applies to dividends paid by
way of cash or by way of shares under a scrip
dividend scheme and is deducted at the standard
rate of Income Tax (25%). Non-resident shareholders
located in countries with a double tax treaty with
Ireland and certain Irish companies, trusts, pension
schemes, investment undertakings and charities
may be entitled to claim exemption from DWT.
Copies of the exemption form may be obtained from
the Registrars. Shareholders should note that DWT
will be deducted from dividends in cases where a
properly completed form has not been received by
the specified deadline notified when a dividend is
announced. Individuals who are resident in the
Republic of Ireland for tax purposes are not entitled
to an exemption. If shares are held via Euroclear
Bank or CREST, the owners of the shares will need
to contact the intermediary through whom the
shares are held in order to arrange for their dividends
to be exempted.
Shareholders holding Ordinary Shares in certificated
form who wish to have their dividend paid direct to
their bank account, by electronic funds transfer, can
do so by logging on to www.signalshares.com,
selecting CRH plc and registering for the share portal
(the ‘Share Portal’). Shareholders should note that
they will need to have their Investor Code (found on
their share certificate), and follow the instructions
online to register.
Alternatively such shareholders can complete a
paper dividend mandate form and submit it to the
Registrars. A copy of the form can be obtained on
the Registrars's Share Portal or can be requested
directly from the Registrars. Tax vouchers will
continue to be sent to the shareholder’s registered
address under this arrangement.
If shares are held via Euroclear Bank or CREST, the
dividend will be paid by the Company in accordance
with the instructions received from Euroclear Bank.
Section 5 of the Euroclear Terms and Conditions
governing use of the Euroclear system provides that
income/dividends received by Euroclear Bank will be
distributed pro-rata to the holders of the relevant
securities (i.e. the relevant EB Participants). Further
details on the process of collection, distribution and
payment of dividends are provided for in section 5.3
of the EB Operating Procedures, with reference to
the Online Market Guides for market specific
operational elements (currently the EB Service
Description). All material information regarding the
manner in which receipt of dividends and
participation in corporate actions is processed is
described in section 5 of the EB Services
Description- (Version 4) – Custody - Income and
Corporate Actions. The owners of the shares held
via Euroclear Bank or CREST will need to contact
the intermediary through whom the shares are held
in order to arrange for the onward payment of the
dividend to them.
Following the change in reporting currency from euro
to US Dollar with effect from 1 January 2020, all
dividends are declared in US Dollar. However, they
are generally paid in euro. In order to avoid costs to
shareholders, dividends are paid in Pound Sterling
and US Dollar to shareholders whose shares are
held in certificated form and whose address,
according to the Share Register, is in the UK and the
US respectively, unless they require otherwise. In
respect of the 2021 final dividend, the latest date for
receipt of currency elections is 25 March 2022.
Where shares are held in the Euroclear Bank system,
dividends are automatically paid in euro unless a
currency election is made.
Investors holding CREST Depositary Interests
(“CDI”s) should refer to the CREST International
Service Description for information on currency
elections in respect of CDIs.
Dividends in respect of 7% ‘A’ Cumulative
Preference Shares are paid half-yearly on
5 April and 5 October. Dividends in respect of 5%
Cumulative Preference Shares are paid half-yearly on
15 April and 15 October.
Year ended 31 December
2021
2020
Years ended 31 December
2019
2018
2017
(i) Proposed.
US cents per Ordinary Share
Interim
23.00
22.00
Final
98.00(i)
93.00
euro cent per Ordinary Share
US cents per Ordinary Share(ii)
Interim
20.00
19.60
19.20
Final
63.00
52.40
48.80
Total
83.00
72.00
68.00
Interim
22.00
22.80
23.20
Final
70.00
59.20
60.00
Total
121.00
115.00
Total
92.00
82.00
83.20
(ii) Interim and final dividends per Ordinary Share declared previously in euro have been translated to US Dollar using the dividend record date exchange rate.
250
2021 Annual Report and Form 20-F 251
Share Plans
The Group operates share option schemes,
performance share plans, share participation
schemes and savings-related share option schemes
(the ‘Schemes’) for eligible employees in all regions
where the regulations permit the operation of such
schemes. A brief description of the Schemes is
outlined below. Shares issued (whether by way of
the allotment of new shares or the reissue of
Treasury Shares) in connection with the Schemes
rank pari passu in all respects with the existing
shares in the Company.
2010 Share Option Schemes
At the AGM held on 5 May 2010, shareholders
approved the adoption of new share option
schemes to replace the schemes which were
approved in May 2000 (2000 share option
schemes). Following the approval by shareholders
of the 2014 Performance Share Plan (see below), no
further awards will be granted under the 2010 Share
Option Schemes. Consequently, the last award
under the 2010 Share Option Schemes was made
in 2013.
The 2010 Share Option Schemes were based on
one tier of options with a single vesting test. The
performance criteria for the 2010 Share Option
Schemes was EPS-based. Vesting only occurred
once an initial performance target had been reached
and, thereafter, exercise was dependent on
continued employment in the Group. In considering
the level of vesting based on EPS performance, the
Remuneration Committee also considered the
overall results of the Group.
Subject to the achievement of the EPS performance
criteria, options may be exercised not later than ten
years from the date of grant of the option, and not
earlier than the expiration of three years from the
date of grant. Benefits under the schemes are not
pensionable.
2014 Performance Share Plan
The 2014 Performance Share Plan was approved
by shareholders at the AGM on 7 May 2014. It
replaces the 2010 Share Option Scheme. See page
99 of the 2021 Directors' Remuneration Report for
more details.
Restricted Share Plan
In 2013, the Board approved the adoption of
the 2013 Restricted Share Plan. Under the rules
of the 2013 Restricted Share Plan, certain senior
executives (excluding executive Board Directors)
can receive conditional awards of shares. As
(i) executive Directors are excluded from awards and
(ii) no shares are allotted or reissued to satisfy the
awards, the listing rules of the LSE and Euronext
Dublin do not require shareholder approval for the
2013 Restricted Share Plan.
2010 Savings-related
Share Option Schemes
At the AGM held on 5 May 2010, shareholders
approved the adoption of savings-related share
option schemes for the UK and Ireland (the ‘2010
Savings-related Share Option Schemes’) to replace
the 2000 Savings-related Share Option Schemes.
These schemes expired in May 2020.
Prior to the expiry of these schemes, all employees of
a participating subsidiary in the Republic of Ireland or
the UK, who had satisfied a required qualifying
period, would be invited to participate in this scheme.
Eligible employees who wished to participate in
the scheme would enter into a savings contract with
a nominated savings institution, for a three or a
five-year period, to save a maximum of €500 or
Stg£500, as appropriate, per month.
At the commencement of each contract period
employees would have been granted an option to
acquire Ordinary Shares in the Company at an
option price which is equal to the amount proposed
to be saved plus the bonus payable by the
nominated savings institution at the end of the
savings period. The price payable for each Ordinary
Share under an option could not be less than the
higher of par or 75% (or in the case of the UK
scheme 80%) of the market value of a share on the
day the invitation to apply for the option is issued.
On completion of the savings contract, employees
may use the amount saved, together with the bonus
earned, to exercise the option.
At 2 March 2022, 2,118,642 Ordinary Shares have
been issued1 pursuant to the 2010 Savings-related
Share Option Schemes to date.
2021 Savings-related Share
Option Schemes
At the AGM held on 29 April 2021, shareholders
approved the adoption of savings-related share
options schemes for the UK and Ireland (the '2021
Savings-related Share Option Schemes') to replace
the 2010 Savings-related Share Option Schemes.
These schemes expired in May 2020.
All employees of a participating subsidiary in the
Republic of Ireland or the UK, who have satisfied a
required qualifying period, are invited to participate
in this scheme, although at present there is currently
no financial services provider supporting new
awards under Irish SAYE schemes following the exit
from the market of the current provider in 2021.
Eligible employees who wish to participate in the
scheme enter into a savings contract with a
nominated savings institution, for a three or a
five-year period, to save a maximum of €500 or
Stg£500, as appropriate, per month.
At the commencement of each contract period
employees are granted an option to acquire
Ordinary Shares in the Company at an option price
which is equal to the amount proposed to be saved
plus the bonus payable by the nominated savings
institution at the end of the savings period. The price
payable for each Ordinary Share under an option will
not be less than the higher of par or 85% of the
market value of a share on the day the invitation to
apply for the option is issued.
On completion of the savings contract, employees
may use the amount saved, together with the bonus
earned, to exercise the option.
At 2 March 2022, no Ordinary Shares have been
issued1 pursuant to the 2021 Savings-related Share
Option Scheme to date.
Share Participation Schemes
At the AGM on 13 May 1987, shareholders
approved the establishment of Share Participation
Schemes for the Company, its subsidiaries and
companies under its control. Directors and
employees of the companies who are tax resident in
Ireland and have at least one year’s service may
elect to participate in these Share Participation
Schemes.
At 2 March 2022, 8,444,240 Ordinary Shares have
been issued1 pursuant to the Share Participation
Schemes.
1. Whether by way of the allotment of new shares, the reissue of Treasury Shares or the purchase of Ordinary Shares.
252
2021 Annual Report and Form 20-F 253
American Depositary Shares
Fees and charges payable by a
holder of ADSs
The Depositary collects fees for delivery and
surrender of ADSs directly from investors or from
intermediaries acting for them depositing shares or
surrendering ADSs for the purpose of withdrawal.
The Depositary collects fees for making distributions
to investors by deducting those fees from the
amounts distributed or by selling a portion of
distributable property to pay the fees. The Depositary
may generally refuse to provide fee-attracting
services until its fees for those services are paid.
Persons depositing or withdrawing shares must pay:
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)
(A fee equivalent to the fee that would be payable if securities distributed had been shares and the
shares had been deposited for issuance of ADSs)
Applicable Registration or Transfer fees
Applicable Expenses of the Depositary
Applicable Taxes and other governmental charges the Depositary or the custodian have to pay on any
ADS or share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes
Fees and direct/indirect payments made by the Depositary to
the Company
Category of expense reimbursed to the Company
New York Stock Exchange listing fees
Investor relations expenses
Total
Amount reimbursed for the year ended
31 December 2021
$
74,000
326,000
400,000
The table below sets forth the types of expenses that the Depositary has paid to third parties and the
amounts reimbursed for the year ended 31 December 2021:
Category of expense waived or paid
directly to third parties
Printing, distribution and administration costs paid
directly to third parties in connection with US
shareholder communications and Annual General
Meeting related expenses in connection
with the American Depositary Share programme
Total
Amount reimbursed for the year ended
31 December 2021
$
999
999
For:
•
Issuance of ADSs, including issuances resulting
from a distribution of shares or rights or other
property
• Cancellation of ADSs for the purpose of withdrawal,
including if the deposit agreement terminates
• Distribution of deposited securities by the
Depositary to ADS registered holders
• Transfer and registration of shares on our share
register to or from the name of the Depositary or its
agent when the holder deposits or withdraws shares
• Cable, telex and facsimile transmissions
• Currency conversion
• As necessary
The Depositary has agreed to reimburse certain
Company expenses related to the Company’s ADS
programme and incurred by the Company in
connection with the ADS programme. For the year
ended 31 December 2021 the Depositary
reimbursed to the Company, or paid amounts on its
behalf to third parties, a total sum of $400,999. This
table sets forth the category of expense that the
Depositary has agreed to reimburse to the
Company and the amounts reimbursed for the year
ended 31 December 2021.
The Depositary has also agreed to waive fees for
standard costs associated with the administration of
the ADS programme and has paid certain expenses
directly to third parties on behalf of the Company.
Under certain circumstances, including removal
of the Depositary or termination of the ADS
programme by the Company, the Company is
required to repay the Depositary, up to a maximum
of $250,000, the amounts waived, reimbursed and/
or expenses paid by the Depositary to or on behalf
of the Company.
252
2021 Annual Report and Form 20-F 253
Taxation
The following summary outlines the material aspects
of US federal income and Republic of Ireland tax law
regarding the ownership and disposition of Ordinary
Shares or ADSs. Because it is a summary, holders
of Ordinary Shares or ADSs are advised to consult
their tax advisors with respect to the tax
consequences of their ownership or disposition. The
discussion regarding US federal income tax only
applies to you if you hold your shares or ADSs as
capital assets for US federal income tax purposes.
This discussion addresses only US federal income
and Republic of Ireland taxation and does not
discuss all of the tax consequences that may be
relevant to you in light of your individual
circumstances, including foreign, state or local tax
consequences, estate and gift tax consequences,
and tax consequences arising under the Medicare
contribution tax on net investment income or the
alternative minimum tax. This summary does not
take into account the specific circumstances of any
particular holders (such as tax-exempt entities,
certain insurance companies, broker-dealers,
traders in securities that elect to mark-to-market,
investors liable for alternative minimum tax, investors
that actually or constructively own 10% or more of
the stock of the Company (by vote or value),
investors that hold Ordinary Shares or ADSs as part
of a straddle or a hedging or conversion transaction,
investors that hold Ordinary Shares or ADSs as part
of a wash sale for tax purposes or investors whose
functional currency is not the US Dollar), some of
which may be subject to special rules. In addition, if
a partnership holds the Ordinary Shares or ADSs,
the US federal income tax treatment of a partner will
generally depend on the status of the partner and
the tax treatment of the partnership and may not be
described fully below. Holders of Ordinary Shares or
ADSs are advised to consult their tax advisors with
respect to US federal, state and local, Republic of
Ireland and other tax consequences of owning and
disposing of Ordinary Shares and ADSs in their
particular circumstances, and in particular whether
they are eligible for the benefits of the Income Tax
Treaty (as defined below) in respect of their
investment in the Ordinary Shares or ADSs.
The statements regarding US and Irish laws set
forth below are based, in part, on representations of
the Depositary and assume that each obligation in
the Deposit Agreement and any related agreement
will be performed in accordance with their terms.
This section is based on the Internal Revenue Code
of 1986, as amended, its legislative history, existing
and proposed US Treasury regulations, published
rulings and court decisions, and the laws of the
Republic of Ireland all as currently in effect, as well
as the Convention between the Government of the
United States of America and the Government of
Ireland for the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with Respect to Taxes
on Income and Capital Gains (the ‘Income Tax
Treaty’). These laws are subject to change, possibly
on a retroactive basis.
In general, holders of ADSs will be treated as the
owners of Ordinary Shares represented thereby for
the purposes of the Income Tax Treaty and for US
federal income tax purposes. Exchanges of Ordinary
Shares for ADSs, and ADSs for Ordinary Shares,
generally will not be subject to US federal income or
Irish tax.
As used herein, the term “US holder” means a
beneficial owner of an Ordinary Share or ADS who,
for US federal income tax purposes: (i) is a US citizen
or resident, a US corporation, an estate whose
income is subject to US federal income tax
regardless of its source, or a trust if a US court can
exercise primary supervision over the trust’s
administration and one or more US persons are
authorised to control all substantial decisions of the
trust, and (ii) is not a resident of, or ordinarily resident
in, the Republic of Ireland for purposes of Irish taxes.
Taxation of Dividends Paid to
US Holders
Under general Irish tax law, US holders are not liable
for Irish tax on dividends received from the
Company. On the payment of dividends, the
Company is obliged to withhold DWT. The statutory
rate during 2021 was 25% of the dividend payable.
Dividends paid by the Company to a US tax resident
individual will be exempt from DWT provided the
following conditions are met:
1. the individual (who must be the beneficial owner)
is resident for tax purposes in the US (or any
country with which Ireland has a double tax
treaty) and neither resident nor ordinarily resident
in Ireland; and
2. the individual signs a declaration to the
Company, which states that he/she is a US
tax resident individual at the time of making
the declaration and that he/she will notify the
Company in writing when he/she no longer
meets the condition in (1) above; or
3. the individual provides the Company with a
certificate of tax residency from the US tax
authorities
Dividends paid by the Company to a US tax resident
company (which must be the beneficial owner) will
be exempt from DWT, provided the following
conditions are met:
1. the recipient company is resident for tax
purposes in the US (or any country with which
Ireland has a double tax treaty) and not under
the control, either directly or indirectly, of Irish
resident persons;
2. the recipient company is not tax resident in
Ireland; and
3. the recipient company provides a declaration
to the Company, which states that it is entitled
to an exemption from DWT, on the basis that it
meets the condition in (1) above at the time of
making the declaration, and that it will notify the
Company when it no longer meets the condition
in (1) above
For US federal income tax purposes, and subject to
the passive foreign investment company (PFIC) rules
discussed below, US holders will include in gross
income the gross amount of any dividend paid by
the Company out of its current or accumulated
earnings and profits (as determined for US federal
income tax purposes) as ordinary income when the
dividend is actually or constructively received by the
US holder, in the case of Ordinary Shares, or by the
Depositary, in the case of ADSs. Any Irish tax
withheld from this dividend payment must be
included in this gross amount even though the
amount withheld is not in fact received. Dividends
paid to non-corporate US holders that constitute
qualified dividend income will be taxed at the
preferential rates applicable to long-term capital
gains provided certain holding period requirements
are met. Dividends the Company pays with respect
to Ordinary Shares or ADSs generally will be
qualified dividend income.
Dividends paid by CRH will not be eligible for the
dividends received deduction generally allowed to
US corporations in respect of dividends received
from other US corporations.
The amount of the dividend distribution includable in
income of a US holder will be the US Dollar value of
the dividends on the date they are distributed,
regardless of whether the US holder elects to
receive the payment in a currency other than US
Dollars. If the US holder elects to receive the
payment in a currency other than US Dollars,
generally any gain or loss resulting from currency
exchange fluctuations during the period from the
date the dividend payment is distributed to the date
such payment is received will be treated as ordinary
income or loss and will not be eligible for the special
tax rate applicable to qualified dividend income.
Such gain or loss will generally be income or loss
from sources within the US for foreign tax credit
limitation purposes.
254
2021 Annual Report and Form 20-F 255
gain or excess distribution for the prior years. With
certain exceptions, Ordinary Shares or ADSs will be
treated as stock in a PFIC if the company was a
PFIC at any time during the investor’s holding period
in the Ordinary Shares or ADSs. In addition,
dividends that you receive from the Company will
not constitute qualified dividend income to you if the
Company is deemed to be a PFIC either in the
taxable year of the distribution or the preceding
taxable year, but instead will be taxable at rates
applicable to ordinary income.
Stamp Duty
Section 90 Stamp Duties Consolidation Act 1999
exempts from Irish stamp duty transfers of ADSs
where the ADSs are dealt in and quoted on a
recognised stock exchange in the US and the
underlying deposited securities are dealt in and
quoted on a recognised stock exchange. The Irish
tax authorities regard NASDAQ and the NYSE as
recognised stock exchanges. Irish stamp duty will
be charged at the rate of 1% of the amount or value
of the consideration on any conveyance or transfer
on sale of Ordinary Shares (exemption generally
available in the case of single transfers with a value
of less than €1,000). Exchanges of Ordinary Shares
for ADSs, and ADSs for Ordinary Shares may be
subject to Irish stamp duty in certain circumstances.
Taxation - continued
Distributions in excess of current and accumulated
earnings and profits, as determined for US federal
income tax purposes, will be treated as a non-
taxable return of capital to the extent of the US
holder’s basis in the Ordinary Shares or ADSs and
thereafter as capital gain. However, the Company
does not calculate earnings and profits in
accordance with US federal income tax principles.
Accordingly, US holders should expect to generally
treat distributions the Company makes as
dividends.
For foreign tax credit limitation purposes, dividends
the Company pays with respect to Ordinary Shares
or ADSs will generally be income from sources
outside the US, and will, depending on your
circumstances, generally be “passive” income for
purposes of computing the foreign tax credit
allowable to a US holder.
Subject to certain limitations, the Irish tax withheld in
accordance with the Income Tax Treaty and paid
over to the Republic of Ireland will be creditable or
deductible against your US federal income tax
liability. Special rules apply in determining the foreign
tax credit limitation with respect to dividends that
are subject to the preferential tax rates. Any Irish tax
withheld from distributions will not be eligible for a
foreign tax credit to the extent an exemption from
the tax withheld is available to the US holder.
Capital Gains Tax
A US holder will not be liable for Irish tax on
gains realised on the sale or other disposition
of Ordinary Shares or ADSs unless the Ordinary
Shares or ADSs are held in connection with a trade
or business carried on by such holder in the
Republic of Ireland through a branch or agency. A
US holder will be liable for US federal income tax on
such gains in the same manner as gains from a sale
or other disposition of any other shares in a
company.
Subject to the PFIC rules below, US holders who
sell or otherwise dispose of Ordinary Shares or
ADSs will recognise a capital gain or loss for US
federal income tax purposes equal to the difference
between the US Dollar value of the amount realised
on the sale or disposition and the tax basis,
determined in US Dollars, in the Ordinary Shares or
ADSs.
Capital gains of a non-corporate US holder are
generally taxed at a preferential rate where the
holder has a holding period greater than one year,
and the capital gain or loss will generally be US
source for foreign tax credit limitation purposes.
Capital Acquisitions Tax
(Estate/Gift Tax)
Although non-residents may hold Ordinary Shares,
the shares are deemed to be situated in the
Republic of Ireland, because the Company is
required to maintain its Share Register in the
Republic of Ireland for Irish Capital Gains Tax
purposes.
Accordingly, holders of Ordinary Shares may
be subject to Irish gift or inheritance tax,
notwithstanding that the parties involved are
domiciled and resident outside the Republic of
Ireland. Certain exemption thresholds apply to gifts
and inheritances depending on the relationship
between the donor and donee.
Under the Ireland-US Estate Tax Treaty with respect
to taxes on the estates of deceased persons, credit
against US federal estate tax is available in respect
of any Irish inheritance tax payable in respect of
transfers of Ordinary Shares.
Additional US Federal Income
Tax Considerations
The Company believes that Ordinary Shares and
ADSs should not currently be treated as stock of a
PFIC for US federal income tax purposes and does
not expect them to become stock of a PFIC in the
foreseeable future. However, this conclusion is a
factual determination that is made annually and thus
may be subject to change. If the Company is
treated as a PFIC and you are a US holder that did
not make a mark-to-market election, you will be
subject to special rules with respect to any gain you
realise on the sale or other disposition of your
Ordinary Shares or ADSs and any excess
distribution that the Company makes to you.
Generally, any such gain or excess distribution will
be allocated ratably over your holding period for the
Ordinary Shares or ADSs, the amount allocated to
the taxable year in which you realised the gain or
received the excess distribution, or to prior years
before the first year in which we were a PFIC with
respect to you, will be taxed as ordinary income, the
amount allocated to each prior year will be generally
taxed as ordinary income at the highest tax rate in
effect for each other such year, and an interest
charge will be applied to any tax attributable to such
254
2021 Annual Report and Form 20-F 255
Memorandum and Articles of Association
The Company’s Memorandum of Association sets
out the objects and powers of the Company. The
Articles of Association detail the rights attaching to
each share class; the method by which the
Company’s shares can be purchased or reissued;
the provisions which apply to the holding of and
voting at general meetings; and the rules relating to
the Directors, including their appointment,
retirement, re-election, duties and powers.
A copy of the current Memorandum and Articles of
Association can be obtained from the Group’s
website, www.crh.com.
The following summarises certain provisions of
CRH’s Memorandum and Articles of Association
and applicable Irish law.
Objects and Purposes
CRH is incorporated under the name CRH public
limited company and is registered in Ireland with
registered number 12965. Clause 4 of CRH’s
Memorandum of Association provides that its
objects include the business of an investment
holding company. Clause 4 also sets out other
objects including the business of quarry masters and
proprietors and lessees and workers of quarries,
sand and gravel pits, mines and the like generally;
the business of road-makers and contractors,
building contractors, builders merchants and
providers and dealers in road making and building
materials, timber merchants; and the carrying on of
any other business calculated to benefit CRH. The
memorandum grants CRH a range of corporate
capabilities to effect these objects.
Directors
The Directors manage the business and affairs
of CRH.
Directors who are in any way, whether directly or
indirectly, interested in contracts or other
arrangements with CRH must declare the nature of
their interest at a meeting of the Directors, and,
subject to certain exemptions, may not vote in
respect of any contract or arrangement or other
proposal whatsoever in which they have any material
interest other than by virtue of their interest in shares
or debentures in the Company. However, in the
absence of some other material interest not indicated
below, a Director is entitled to vote and to be counted
in a quorum for the purpose of any vote relating to a
resolution concerning the following matters:
•
•
the giving of security or indemnity with respect to
money lent or obligations taken by the Director at
the request or for the benefit of the Company;
the giving of security or indemnity to a third
party with respect to a debt or obligation of
the Company which the Director has assumed
responsibility for under a guarantee, indemnity or
the giving of security;
J.H. Rudolph & Co., Inc, part of CRH’s America’s Materials Division, delivered this runway extension project at Huntingburg
Regional Airport in Indiana, United States. The project included increasing the length of the runway by over 500 feet and the
construction of Indiana’s first traffic tunnel under an airport runway.
256
2021 Annual Report and Form 20-F 257
Memorandum and Articles of Association - continued
•
•
•
any proposal in which the Director is interested
concerning the underwriting of Company shares,
debentures or other securities;
any other proposal concerning any other company
in which the Director is interested, directly or
indirectly (whether as an officer, shareholder or
otherwise) provided that the Director is not the
holder of 1% or more of the voting interest in the
shares of such company; and
proposals concerning the modification of certain
retirement benefits under which the Director
may benefit and which have been approved or
are subject to approval by the Irish Revenue
Commissioners
The Directors may exercise all the powers of the
Company to borrow money, except that such general
power is restricted to the aggregate amount of
principal borrowed less cash balances of the
Company and its subsidiaries not exceeding an
amount twice the aggregate of (i) the share capital of
the Company; and (ii) the amount standing to the
credit of retained income, foreign currency translation
reserve and other reserves, capital grants, deferred
taxation and non-controlling interest; less any
repayable government grants; less (iii) the aggregate
amount of Treasury Shares and own shares held by
the Company.
The Company in general meeting from time to time
determines the fees payable to the Directors. The
Board may grant special remuneration to any of its
number who being called upon, shall render any
special or extra services to the Company or go or
reside abroad in connection with the conduct of any
of the affairs of the Company.
The qualification of a Director is the holding alone
and not jointly with any other person of 1,000
Ordinary Shares in the capital of the Company.
Voting Rights
The Articles provide that, at shareholders’ meetings,
holders of Ordinary Shares, either in person or by
proxy, are entitled to one vote on a show of hands
and one vote per share on a poll. No member is
entitled to vote at any general meeting unless all
calls or other sums immediately payable in respect
of shares in the Company have been paid.
Laws, Decrees or Other
Regulations
There are no restrictions under the Memorandum
and Articles of Association of the Company or under
Irish law that limit the right of non-Irish residents or
foreign owners freely to hold their Ordinary Shares
or to vote their Ordinary Shares.
Liquidation Rights/Return
of Capital
In the event of the Company being wound up, the
liquidator may, with the sanction of a shareholders’
special resolution, divide among the holders of the
Ordinary Shares the whole or any part of the net
assets of the Company (after the return of capital
and payment of accrued dividends on the
preference shares) in cash or in kind, and may set
such values as he deems fair upon any property to
be so divided and determine how such division will
be carried out. The liquidator may, with a like
sanction, vest such assets in trust as he thinks fit,
but no shareholders will be compelled to accept any
shares or other assets upon which there is any
liability.
Variation of Rights
Subject to the provisions of the Companies Act
2014, the rights attached to any class of shares
may be varied with the consent in writing of the
holders of not less than three fourths in nominal
value of the issued shares of that class, or with the
sanction of a special resolution passed at a
separate general meeting of the holders of those
shares.
Issue of Shares
Subject to the provisions of the Companies Act
2014 and the Articles of Association, the issue of
shares is at the discretion of the Directors.
Dividends
Shareholders may by ordinary resolution declare
final dividends and the Directors may declare interim
dividends but no final dividend may be declared in
excess of the amount recommended by the
Directors and no dividend may be paid otherwise
than out of income available for that purpose in
accordance with the Companies Act 2014. There is
provision to offer scrip dividends in lieu of cash. The
preference shares rank for fixed rate dividends in
priority to the Ordinary and Income Shares for the
time being of the Company. Any dividend which has
remained unclaimed for 12 years from the date of its
declaration shall, if the Directors so decide, be
forfeited and cease to remain owing by the
Company.
Meetings
Shareholder meetings may be convened by majority
vote of the Directors or requisitioned by
shareholders holding not less than 5% of the voting
rights of the Company. A quorum for a general
meeting of the Company is constituted by two or
more shareholders present in person and entitled to
vote. The passing of resolutions at a meeting of the
Company, other than special resolutions, requires a
simple majority. A special resolution, in respect of
which not less than 21 clear days’ notice in writing
must be given, requires the affirmative vote of at
least 75% of the votes cast.
Disclosure of Shareholders’
Interests
A shareholder may lose the right to vote by not
complying with any statutory notice or notice
pursuant to Article 14 of the Articles of Association
given by the Company requiring an indication in
writing of: (i) the capacity in which the shares are
held or any interest therein; (ii) the persons who
have an interest in the shares and the nature of their
interest; or (iii) whether any of the voting rights
carried by such shares are the subject of any
agreement or arrangement under which another
person is entitled to control the shareholder’s
exercise of these rights.
Preference Shares
Details of the 5% and 7% ‘A’ Cumulative Preference
Shares are disclosed in note 29 to the Consolidated
Financial Statements.
Use of Electronic Communication
Whenever the Company, a Director, the Secretary, a
member or any officer or person is required or
permitted by the Articles of Association to give
information in writing, such information may be
given by electronic means or in electronic form,
whether as electronic communication or otherwise,
provided that the electronic means or electronic
form has been approved by the Directors.
256
2021 Annual Report and Form 20-F 257
General Information
Electronic Communications
Following the introduction of the 2007 Transparency
Regulations, and in order to adopt a more
environmentally friendly and cost effective approach,
the Company provides shareholders with hard copy
notifications that the Annual Report and Form 20-F
and other shareholder communications are available
electronically via the CRH website, www.crh.com,
and only sends a printed copy to those shareholders
who specifically request a copy. Shareholders who
choose to do so can elect to receive email
notifications that the Annual Reports and other
Shareholder communications are available
electronically. However, shareholders will continue to
receive printed proxy forms, dividend documentation
and, if the Company deems it appropriate, other
documentation by post. Shareholders can alter the
method by which they receive communications by
contacting the Registrars.
CRH Website
Information on, or accessible through our website,
www.crh.com, other than the item identified as the
Annual Report and Form 20-F, does not form part of
and is not incorporated into the Company’s Annual
Report on Form 20-F as filed with the SEC (the
‘Form 20-F’). References in this document to other
documents on the CRH website, such as the CRH
Sustainability Report, are included only as an aid to
their location and are not incorporated by reference
into the Form 20-F. The Group’s website provides
the full text of the Form 20-F, which is filed annually
with the SEC, interim reports, trading updates,
copies of presentations to analysts and investors
and circulars to shareholders. News releases are
made available in the News section of the website,
immediately after release to the Stock Exchanges.
Electronic Proxy Voting
Shareholders holding shares in certificated form
may lodge a proxy form for the 2022 AGM
electronically by accessing the Registrars’ website
Financial Calendar
Announcement of final results for 2021
Ex-dividend date
Record date for dividend
Latest date for receipt of completed bank mandates
Latest date for receipt of currency elections
Latest date for revocation of existing bank mandates
Annual General Meeting
Dividend payment date
www.signalshares.com and entering CRH plc in the
company name field. Shareholders will need to
register for Signal Shares by clicking on "registration
section" (if you have not registered previously) and
following the registration instructions.
Investors who hold their interests in the Company's
shares through either the Euroclear Bank system or
as CREST Depository Interests ("CDI"s) should refer
to the Euroclear Bank Service Description or the
CREST International Manual respectively or to the
broker or custodian through whom they hold their
shares to give their voting instructions.
Further details on how shareholders holding shares
in uncertificated form can vote electronically at the
2022 AGM are available in the notes to the Notice of
the AGM.
Registrars
Enquiries concerning shareholdings should be
addressed to the Registrars:
Link Asset Services,
P.O. Box 1110
Maynooth,
Co. Kildare,
Ireland.
Telephone: +353 1 553 0050
Fax: +353 1 224 0700
Website: www.linkassetservices.com
Shareholders with access to the internet may
check their accounts by logging onto
www.signalshares.com, selecting CRH plc and
registering for the share portal. Shareholders should
note that they will need to have their Investor Code
(found on their share certificate) and follow the
instructions online to register. This facility allows
shareholders to check their shareholdings and
dividend payments, register e-mail addresses,
appoint proxies electronically and download
standard forms required to initiate changes in details
held by the Registrars. Shareholders will need to
register for a User ID before using some of the
services.
3 March 2022
10 March 2022
11 March 2022
25 March 2022
25 March 2022
25 March 2022
28 April 2022
5 May 2022
Further updates to the calendar can be found on www.crh.com.
American Depositary Receipts
The ADR programme is administered by the Bank
of New York Mellon and enquiries regarding ADRs
should be addressed to:
BNY Mellon Shareowner Services,
P.O. Box 505000, Louisville,
KY 40233-5000, U.S.A.
Telephone: Toll Free Number
US residents: 1-888-269-2377
International: +1 201-680-6825
E-mail: shrrelations@cpushareownerservices.com
Website: www.mybnymdr.com
Frequently Asked Questions
(FAQs)
The Group’s website contains answers to questions
frequently asked by shareholders, including questions
regarding shareholdings, dividend payments,
electronic communications and shareholder rights.
The FAQs can be accessed in the Investors section
of the website under Shareholder Centre.
Exchange Controls
Certain aspects of CRH’s international monetary
operations outside the European Union were, prior
to 31 December 1992, subject to regulation by the
Central Bank of Ireland. These controls have now
ceased. There are currently no Irish foreign
exchange controls, or other statute or regulations
that restrict the export or import of capital, that
affect the remittance of dividends, other than
dividend withholding tax on the Ordinary Shares, or
that affect the conduct of the Company’s
operations.
Principal Accountant Fees
and Services
Details of auditors’ fees for Deloitte Ireland LLP,
Dublin Ireland, PCAOB ID No. 1193 (in respect of
the years ended 31 December 2021 and 31
December 2020) and Ernst & Young, Dublin Ireland,
PCAOB ID No. 1411 (in respect of the year ended
31 December 2019) are set out in note 5 to the
Consolidated Financial Statements. For details on
the audit and non-audit services pre-approval policy
see Corporate Governance – External Auditors on
page 65.
Documents on Display
The SEC maintains an internet site at
http://www.sec.gov that contains reports filed
electronically with the SEC, including this Form 20-F
and documents referred to herein. SEC filings are
also available to the public from commercial
document retrieval services. This Form 20-F is also
available at CRH's website, www.crh.com.
Across our businesses an
uncompromising approach to
workplace safety ensures that our
people are protected from potential
hazards as they go about their jobs.
We continue to invest in initiatives
to strengthen our culture of health,
safety and wellbeing.
2021 Annual Report and Form 20-F 259
Other
Information
258-272
Principal Subsidiary
Undertakings
Principal Equity Accounted
Investments
Executive Leadership
Biographies
Our Products and
Services Locations
Exhibits
Cross Reference to
Form 20-F Requirements
Index
Signatures
260
264
265
266
268
269
270
272
Dycore and Heembeton both part of CRH’s Europe Materials Division based in the
Netherlands collaborated on a solution involving the on-site assembly of hollow core
floors, ribbed floors, prefab concrete walls and the facades for 95 homes in this
housing project in Groningen, Netherlands.
260
2021 Annual Report and Form 20-F 261
Principal Subsidiary Undertakings
as at 31 December 2021
Europe Materials
Incorporated
and operating in
Belgium
Ergon N.V.
Oeterbeton N.V.
Prefaco N.V.
Schelfhout N.V.
VVM N.V.*
Northstone (NI) Limited (including Farrans
Construction, Materials and Cubis divisions)
Britain &
Northern Ireland
Premier Cement Limited
Southern Cement Limited
Tarmac Aggregates Limited
Tarmac Building Products Limited
Tarmac Cement and Lime Limited
Tarmac Trading Limited
Czech Republic Vapenka Vitosov s.r.o*
Betongruppen RBR A/S
Denmark
CRH Concrete A/S
Finland
RC Beton A/S
Finnsementti Oy
Rudus Oy
Eqiom
France
L’industrielle du Béton S.A.
Stradal*
Fels Holding GmbH
Fels Netz GmbH
Germany
Fels Vertriebs und Service GmbH & Co. KG.
Hungary
Fels-Werke GmbH
Opterra GmbH
Danucem Magyarország Kft.
Ferrobeton Dunaújvárosi Beton- és
Vasbetonelem-gyártó Zrt
Clogrennane Lime Limited
Ireland
Irish Cement Limited
Roadstone Limited
Netherlands
Calduran B.V.
Cementbouw B.V.
Heembeton B.V.
Dycore B.V.
Philippines (i)
Republic Cement & Building Materials, Inc.
Republic Cement Land & Resources Inc.
% held
Products and services
100
100
100
100
100
100
100
100
100
100
100
100
75
100
100
Precast concrete and structural elements
Precast concrete
Precast concrete structural elements
Precast concrete wall elements
Clinker grinding and cement production
Aggregates, readymixed concrete, mortar, coated macadam,
rooftiles, building and civil engineering contracting
Marketing and distribution of cement
Sale and distribution of cement
Aggregates, asphalt, readymixed concrete and contracting
Building products
Cement and lime
Aggregates, asphalt, cement, readymixed concrete and contracting
Production of lime and lime products
Concrete paving manufacturer
Structural concrete products
100 Manufacturer of concrete paving, concrete blocks and underground products
100
100
99.99
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
40
40
Aggregates, readymixed concrete and concrete products
Cement
Aggregates, cement and readymixed concrete
Structural concrete products
Utility and infrastructural concrete products
Holding company
Logistics and owned railway infrastructure operator
Lime and limestone, development of new products
Production and sale of lime and limestone
Cement and readymixed concrete
Cement and readymixed concrete
Precast concrete structural elements
Burnt and hydrated lime
Cement
Aggregates, readymixed concrete, mortar, coated macadam, concrete
blocks and pipes, asphalt, agricultural and chemical limestone and
contract surfacing
Cement transport and trading, readymixed concrete and aggregates
Sand-lime bricks and building elements
Precast concrete structural elements
Concrete flooring elements
Cement and Building Materials
Cement
(i) 55% economic interest in the combined Philippines business (see note 31 to the Consolidated Financial Statements).
260
2021 Annual Report and Form 20-F 261
Europe Materials - continued
Incorporated
and operating in
Poland
Przedsiebiorstwo Produkcji Mas Betonowych
Bosta Beton Sp. z o.o.
Drogomex Sp. z o.o.*
Cement Ozarów S.A.
Masfalt Sp. z o.o.*
Trzuskawica S.A.
ROMCIM S.A.
Romania
Elpreco S.A.
Ferrobeton Romania SRL
Serbia
Moravacem d.o.o. Popovac
Slovakia
Spain
Danucem (Slovensko) a.s.
Ferrobeton Slovensko s.r.o.
Beton Catalan, S.A.
Cementos Lemona, S.A.
Switzerland
JURA-Holding AG
LLC Cement*
Ukraine
PJSC Mykolaivcement*
Podilsky Cement PJSC*
% held
Products and services
90.30
100
100
100
100
98.61
100
100
100
99.78
100
100
98.75
100
100
100
100
Readymixed concrete
Asphalt and contract surfacing
Cement
Asphalt and contract surfacing
Production of lime and lime products
Cement
Architectural concrete products
Structural concrete products
Cement
Cement and readymixed concrete
Precast concrete structural elements
Readymixed concrete
Cement
Cement, aggregates and readymixed concrete
Cement and clinker grinding
Cement
Cement
262
2021 Annual Report and Form 20-F 263
Principal Subsidiary Undertakings - continued
as at 31 December 2021
Americas Materials
Incorporated
and operating in
Canada
CRH Canada Group Inc.
Ash Grove Cement Company
Callanan Industries, Inc.
CPM Development Corporation
Dolomite Products Company, Inc.
Michigan Paving and Materials Company
Mountain Enterprises, Inc.
Mulzer Crushed Stone, Inc
CRH Americas Materials, Inc. and subsidiaries
Oldcastle SW Group, Inc.
OMG Midwest, Inc.
United States
Pennsy Supply, Inc.
Pike Industries, Inc.
P.J. Keating Company
Preferred Materials, Inc.
Staker & Parson Companies
Suwannee American Cement Company, LLC
Tilcon Connecticut Inc.
Tilcon New York Inc.
The Shelly Company
Trap Rock Industries, LLC*
West Virginia Paving, Inc.
% held
Products and services
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
80
100
100
100
60
100
Aggregates, asphalt, cement and readymixed concrete
and provider of construction services
Aggregates, readymixed concrete and cement
Aggregates, asphalt, readymixed concrete
and related construction activities
Aggregates, asphalt, readymixed concrete, prestressed
concrete and related construction activities
Aggregates, asphalt, readymixed concrete
and related construction activities
Aggregates, asphalt and related construction activities
Aggregates, asphalt and related construction activities
Aggregates, asphalt, readymixed concrete, aggregates
distribution and related construction activities
Holding company
Aggregates, asphalt, readymixed concrete
and related construction activities
Aggregates, asphalt, readymixed concrete
and related construction activities
Aggregates, asphalt, readymixed concrete
and related construction activities
Aggregates, asphalt, readymixed concrete
and related construction activities
Aggregates, asphalt and related construction activities
Aggregates, asphalt, readymixed concrete, aggregates
distribution and related construction activities
Aggregates, asphalt, readymixed concrete
and related construction activities
Cement
Aggregates, asphalt, readymixed concrete
and related construction activities
Aggregates, asphalt and related construction activities
Aggregates, asphalt, readymixed concrete
and related construction activities
Aggregates, asphalt and related construction activities
Aggregates, asphalt and related construction activities
262
2021 Annual Report and Form 20-F 263
Building Products
Incorporated
and operating in
Australia
Belgium
Britain &
Northern Ireland
Canada
Ancon Building Products Pty Ltd
Cubis Systems Australia Pty Ltd*
Plakabeton N.V.
Marlux N.V.
Stradus N.V.
Ancon Limited
Oldcastle Building Products Canada, Inc. (trading as Groupe
Permacon, Expocrete Concrete Products, Techniseal,
Oldcastle BuildingEnvelope, C.R. Laurence of Canada,
Oldcastle Enclosure Solutions)
France
Plaka Group France S.A.S.
Germany
EHL AG
Leviat GmbH
Ireland
Cubis Systems Limited
Netherlands
Struyk Verwo Groep B.V.
Poland
Slovakia
Polbruk S.A.
Premac, spol. s.r.o.*
Switzerland
Leviat AG*
MoistureShield, Inc.
CRH Americas Products, Inc.
CRH America, Inc.
CRH America Finance, Inc.
C.R. Laurence Co., Inc.
Meadow Burke, LLC
CRH Americas, Inc.
United States
Oldcastle APG Northeast, Inc. (trading principally as Anchor
Concrete Products)
Oldcastle APG South, Inc. (trading principally as Adams
Products, Georgia Masonry Supply, Northfield Block Company,
Anchor Block, Oldcastle Mid-Atlantic, EP Henry and Oldcastle
Coastal)
Oldcastle APG West, Inc. (trading principally as Amcor Masonry
Products, Central Pre-Mix Concrete Products, Jewell Concrete,
Ash Grove Products, Sierra Building Products, US Mix and
Superlite Block)
Oldcastle APG, Inc.
APG Mid-Atlantic, Inc.
Oldcastle BuildingEnvelope™, Inc.
Oldcastle Building Products, Inc.
Oldcastle Lawn & Garden, Inc.
Oldcastle Infrastructure, Inc.
Pebble Technology International
National Pipe & Plastics, Inc.
% held
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Products and services
Construction accessories
Supplier of access chambers and ducting products
Construction accessories
Concrete paving and landscaping products
Concrete paving and landscaping products
Construction accessories
Specialty masonry, hardscape and patio products, custom
fabricated glass, architectural glazing systems and hardware
for glass industry, utility boxes and trench systems
Concrete paving and landscape walling products
Construction accessories
Construction accessories
Supplier of access chambers and ducting products
Concrete paving products
Concrete paving products
Concrete paving and floor elements
Construction accessories
Composite building products
Holding company
Holding company
Holding company
Fabrication and distribution of custom
hardware products for the glass industry
Concrete accessories
Holding company
Specialty masonry, hardscape and patio products
Specialty masonry, hardscape and patio products
Specialty masonry and stone products,
hardscape and patio products
Holding company
Specialty masonry, hardscape and patio products
Custom fabricated architectural glass and
architectural glazing systems
Holding company
Patio products, bagged stone, mulch and stone
Precast concrete products, concrete pipe,
prestressed plank and structural elements
Aggregate pool finishes
Pipe Products
264
2021 Annual Report and Form 20-F 265
Principal Equity Accounted Investments
as at 31 December 2021
Europe Materials
Incorporated
and operating in
China
Ireland
Yatai Building Materials Group Company Limited*
Kemek Limited*
Americas Materials
Canada
Airlinx Transit Partners Inc.*
Blackbird Infrastructure 407 General Partnership*
Blackbird Maintenance 407 General Partnership*
Blackbird Constructors 407 General Partnership*
Blackbird Infrastructure 407 CRH GP Inc*
DAD (Finch West LRT Inc.)*
Kiewit-Dufferin Midtown Partnership*
Mosaic Transit Partners General Partnership*
Mosaic Transit Constructors General Partnership*
United States
Buckeye Ready-Mix, LLC*
Cadillac Asphalt, LLC*
Piedmont Asphalt, LLC*
Southside Materials, LLC*
* Audited by firms other than Deloitte
% held
Products and services
26
50
50
50
50
50
50
33
35
33
33
45
50
50
50
Cement
Commercial explosives
Special-purpose entity on Ontario infrastructure construction
Special-purpose entity on highway infrastructure construction
Construction
Construction
Special-purpose entity on highway infrastructure construction
Special-purpose entity on Ontario infrastructure construction
Special-purpose entity on Ontario infrastructure construction
Construction
Construction
Readymixed concrete
Asphalt
Asphalt
Aggregates
Pursuant to Sections 314-316 of the Companies Act 2014, a full list of subsidiaries, joint ventures and associated undertakings will be annexed to the
Company’s Annual Return to be filed in the Companies Registration Office in Ireland.
264
2021 Annual Report and Form 20-F 265
Executive Leadership Biographies
Albert Manifold
Group Chief Executive
Appointed to the Board January 2009
Albert joined CRH in 1998. Prior to joining CRH, he
was Chief Operating Officer with a private equity
group. While at CRH he has held a variety of senior
positions, including Finance Director of the Europe
Materials Division, Group Development Director and
Managing Director of Europe Materials. He became
Chief Operating Officer in January 2009 and was
appointed Group Chief Executive with effect from
1 January 2014.
Qualifications: FCPA, MBA, MBS.
Jim Mintern
Group Finance Director
Appointed to the Board June 2021
Jim has over 30 years' experience in the building
materials industry, nearly 20 years of which have
been with CRH. Jim joined CRH as Finance Director
for Roadstone and since then has held a number
of positions across the Group, including Country
Manager for Ireland, Managing Director of each
of the Western and Eastern regions of our Europe
Materials Division and most recently Chief of Staff
to the Chief Executive, where he worked closely
with divisional and operational leadership and had
oversight of the Group’s Performance, Safety and
Special Projects activities and led a number of
Performance Improvement initiatives in recent years.
He was appointed Finance Director Designate in
March 2021 and became Group Finance Director
with effect from 1 June 2021.
Qualifications: BComm, FCA.
Dan Stover
President, Americas Materials
Isabel Foley
Group General Counsel
Before joining CRH in the Americas in 1999, Dan
held various operating positions in the construction
materials sector. At CRH, he has served in a
number of roles including President of our Michigan
business, President of Americas Materials northeast
division and most recently, President of Americas
Materials north division. Dan was appointed
President of Americas Materials in 2021.
Qualifications: BS (Civil Engineering), MBA.
Isabel joined CRH in 2020 in the newly created role of
Group General Counsel. Isabel was previously a partner
at Arthur Cox, one of Ireland's top-tier law firms, and
is recognised globally as a leader in her field. She has
advised State entities, multinationals and domestic
corporations, and their boards, on business-critical
risk, exposure and litigation arising from transactions
and disputes as well as regulatory compliance and
competition issues. Isabel is also an accredited
mediator and an experienced and active mentor.
Qualifications: BCL, Law Society of Ireland, CEDR
Accredited Mediator.
Onne van der Weijde
President, Europe Materials
David Dillon
Executive Vice President, Chief of Staff
Onne joined CRH in January 2018 as Chief
Operating Officer for our Europe Materials Division
and was appointed Divisional President in July 2018
with responsibility for our cement, lime, asphalt,
aggregates and concrete operations in mainland
Europe and in Asia. Onne has extensive cement
industry experience, having worked across four
continents, including roles as the CEO of Dangote
Cement in Nigeria and CEO of Ambuja Cements
Ltd. in India, prior to joining CRH.
Qualifications: Bachelor of Economics and
Accounting, MBA.
David joined CRH in 1998 in the United States,
where he was Controller for the Americas Materials
Division. He returned to Europe in 2003, initially as
Development Manager for the Europe Materials
Division. He has since held a number of senior
operational and leadership roles across the Group
including Country Manager Finland in the Europe
Materials Division, Managing Director of Europe
Lightside, Divisional President of Europe Lightside
& Distribution, and President Global Strategy &
Business Development. Prior to joining CRH he held
various financial roles in the airline industry.
Qualifications: BComm, FCA.
Randy Lake
Chief Operating Officer
Gina Jardine
Chief Human Resources Officer
Randy joined CRH in the Americas in 1996 and
has held several senior operating positions across
multiple CRH businesses, initially in Architectural
Products, then in Materials. In 2008, he was
appointed President of our Americas Materials
Performance group and subsequently led the
launch of our Building Solutions business. Prior to
his current appointment, Randy served as President
of Americas Materials from 2016 to 2020 and Group
Executive, Strategic Operations from 2020 to 2021.
Randy is actively involved in the Materials industry
in North America and served as Chairman of the US
National Stone, Sand & Gravel Association in 2018.
Qualifications: BS (Business Administration), MBA.
Nathan Creech
President, Building Products
Nathan joined CRH in the Americas in 2011. Prior to
joining CRH, he held various operating and strategy
roles in the building materials industry. At CRH, he
has served in a number of business development
and executive leadership roles, including Vice
President US Strategy & Development, Senior Vice
President, Central Division of Americas Materials
and most recently as President of CRH’s Building
Envelope business. Nathan was appointed
President of Building Products in 2021.
Qualifications: BS (Business), MBA.
Executive Leadership team at 2 March 2022.
Gina joined CRH in July 2019 as Senior Vice
President, HR for our Building Products division,
before being appointed Chief Human Resources
Officer (CRHO) in January 2021. Gina has over
25 years’ experience in Global Human Resource
roles spanning large scale industries including
Building Products, Mining, Logistics & Warehousing,
Telecommunications and Automotive. Immediately
prior to CRH, she served as CHRO at Toronto-
based Kinross Gold Corporation.
Qualifications: BA (Social Science), MBA.
Juan Pablo San Agustín
Group Executive, Strategy, Sustainability & Innovation
Juan Pablo joined CRH in October 2020 to take
up the newly created role of Chief Innovation
& Sustainability Officer. He has over 25 years'
experience working in the building materials
industry across the Americas and Europe. His
areas of expertise cover strategic planning, M&A,
venture capital, digital innovation, and marketing.
Immediately prior to CRH, he served as EVP of
Strategic Planning and New Business Development
at CEMEX.
Qualifications: BS, MBA.
266
2021 Annual Report and Form 20-F 267
Our Products and Services Locations
Cement
Aggregates
Lime
Readymixed
Concrete
Asphalt
Our
Locations
Australia
Austria
Belgium
Canada
China1
Czech Republic
Denmark
Estonia
Finland
France
Germany
Hungary
Ireland
Italy
Malaysia
Netherlands
Norway
Philippines
Poland
Romania
Serbia
Slovakia
Spain
Sweden
Switzerland
Ukraine
United Kingdom
United States
Includes Infrastructure Products, Architecture Products and Network Access Products
*
1. Includes the Group's equity accounted investment
266
2021 Annual Report and Form 20-F 267
Paving &
Construction
Concrete
Products*
Glass & Glazing
Systems
Custom Glazing
Hardware
Construction
Accessories
2021 Annual Report and Form 20-F 269
268
Exhibits
The following documents are filed in the SEC’s EDGAR system, as part of this Annual Report on Form 20-F, and can be viewed on the SEC’s website.
1.
2.1
2.2
8.
12.
13.
Memorandum and Articles of Association.*
Amended and Restated Deposit Agreement dated 28 November 2006, between CRH plc and The Bank of New York Mellon.**
Description of securities registered under Section 12 of the Exchange Act.
Listing of principal subsidiary undertakings and equity accounted investments (included on pages 260 to 264 of this Annual Report and Form 20-F).
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Public Company Accounting Reform and Investor
Protection Act of 2002.
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Public Company Accounting Reform and Investor
Protection Act of 2002.***
15.1
Consent of Independent Registered Public Accounting Firm - Deloitte.
15.2
Consent of Independent Registered Public Accounting Firm - EY.
15.3
Governance Appendix.
16.
17.
Disclosure of Mine Safety and Health Administration (MSHA) Safety Data.
List of Issuers and Guarantors.
101.
Inline eXtensible Business Reporting Language (XBRL).
Incorporated by reference to Annual Report on Form 20-F for the year ended 31 December 2020 that was filed by the company on 12 March 2021.
*
** Incorporated by reference to Annual Report on Form 20-F for the year ended 31 December 2006 that was filed by the Company on 3 May 2007.
*** Furnished but not filed.
The total amount of long-term debt of the Registrant and its subsidiaries authorised under any one instrument does not exceed 10% of the total assets of CRH plc and its subsidiaries
on a consolidated basis.
The Company agrees to furnish copies of any such instrument to the SEC upon request.
268
2021 Annual Report and Form 20-F 269
Cross Reference to Form 20-F Requirements
This table has been provided as a cross reference from the information included in this Annual Report and Form 20-F to the requirements of this 20-F.
PART I
Item 1.
Item 2.
Item 3.
Item 4.
Item 4A.
Item 5.
Item 6.
Item 7.
Item 8.
Item 9.
Page
n/a
n/a
n/a
n/a
n/a
232-240
Identity of Directors, Senior
Management and Advisors
Offer Statistics and Expected
Timetable
Key Information
A - [Reserved]
B - Capitalisation and Indebtedness
C - Reasons for the Offer and Use of
Proceeds
D - Risk Factors
Information on the Company
A - History and Development
of the Company
B - Business Overview
C - Organisational Structure
D - Property, Plants and Equipment
Unresolved Staff Comments
Operating and Financial Review and
Prospects
A - Operating Results
B - Liquidity and Capital
Resources
C - Research and Development,
Patents and Licences, etc.
D - Trend Information
E - Critical Accounting Estimates
Supplemental Guarantor Information
Directors, Senior Management and
Employees
A - Directors and Senior Management
2-4, 12-14, 38-40,
159-160, 172-173,
206-208, 245, 257
2, 12-13, 42-53, 111,
155-159, 225, 232-240,
242, 245
245, 260-264
146, 172-173,
225-231
None
10-12, 18-19, 25, 38-40,
42-53, 76-77, 242
38-40, 144-153, 167,
172-173, 178-179,
180-196, 198-202, 244
245
12, 38-40, 42-53
n/a
224
8-9, 56-59,
61, 265
81-109, 198-202
56-59, 64-68, 70-75, 95
163, 245
108, 251
B - Compensation
C - Board Practices
D - Employees
E - Share Ownership
Major Shareholders and Related Party Transactions
A - Major Shareholders
B - Related Party Transactions
C - Interests of Experts and Counsel
Financial Information
A - Consolidated Statements and Other
74, 248-249
210
n/a
140-210
Financial Information
- Legal Proceedings
- Dividends
B - Significant Changes
The Offer and Listing
A - Offer and Listing Details
B - Plan of Distribution
242, 245
110, 250
245
248
n/a
C - Markets
D - Selling Shareholders
E - Dilution
F
- Expenses of the Issue
Item 10.
Additional Information
A - Share Capital
B - Memorandum and Articles of
Association
C - Material Contracts
D - Exchange Controls
E - Taxation
F
- Dividends and Paying Agents
G - Statements by Experts
H - Documents on Display
I
- Subsidiary Information
Page
248
n/a
n/a
n/a
n/a
255-256
None
257
253-254
n/a
n/a
257
260-264
Item 11.
Item 12.
Quantitative and Qualitative
Disclosures about Market Risk
Description of Securities Other than Equity Securities
244
A - Debt Securities
B - Warrants and Rights
C - Other Securities
D - American Depositary Shares
PART II
Item 13.
Item 14.
Item 15.
Defaults, Dividend Arrearages and
Delinquencies
Material Modifications to the Rights of
Security Holders and Use of Proceeds
Controls and Procedures
Item 16A. Audit Committee Financial Expert
Item 16B. Code of Ethics
Item 16C. Principal Accountant Fees and Services
Item 16D. Exemptions from the Listing
Item 16E.
Standards for Audit Committees
Purchases of Equity Securities by the
Issuer and Affiliated Purchasers
Change in Registrant’s Certifying
Accountant
Item 16G. Corporate Governance
Item 16F.
Item 16H. Mine Safety Disclosures
Item 16I.
Disclosure Regarding Foreign
Jurisdictions that Prevent Inspections
PART III
Item 17.
Item 18.
Item 19.
Financial Statements
Financial Statements
Exhibits
n/a
n/a
n/a
252
None
None
138, 240-241
57-59, 64
74-75
65, 68, 75,
161, 257
n/a
249
None
240-241
225
n/a
n/a
140-210
268
270
Index
A
Accounting Policies
Acquisitions, Divestments
& Finance Committee
American Depositary Shares
Americas Materials
Annual General Meeting
Audit Committee
Auditors (Directors’ Report)
145
74
252
42
108
64
112
Auditor’s Remuneration
65, 161, 215
Auditor’s Report, Independent (Irish)
Auditor’s Report, Independent (US)
B
Balance Sheet
- Company
- Consolidated
Board Approval of Financial
Statements (note 33)
Board Committees
Board Effectiveness
Board of Directors
Board Responsibilities
Building Products
Business and Non-Current Asset
Disposals (note 6)
C
Capital and Financial Risk
Management (note 22)
Carbon
Cash and Cash Equivalents
(note 23)
Cash Flow, Operating
Cash Flow Statement, Consolidated
Chairman’s Introduction
Chief Executive’s Review
Business Combinations (note 30)
151, 206
Business Model
Business Performance
16
36
2021 Annual Report and Form 20-F 271
Climate
- Strategy
- Targets
- TCFD
Communications with Shareholders
Company Secretary
Compliance and Ethics
Contractual Obligations
Corporate Governance Practices
Corporate Governance Report
Cost Analysis (note 4)
Credit Ratings
CREST and Migration to
Euroclear Bank
29
31
28
75
75
74
244
240
60
160
190
249
D
Debt, Analysis of Net (note 21)
185
Deferred Income Tax
- expense (note 10)
- assets and liabilities (note 27)
Depreciation
150, 168
150, 197
E
Earnings per Ordinary Share (note 12)
Employees, Average Number (note 7)
Employment Costs (note 7)
Environment
Equity Accounted Investments’ Profit,
Share of
ESG Ratings
Europe Materials
EU Taxonomy
Exchange Rates
Exhibits
F
Finance Costs and Finance Income
(note 9)
Finance Director’s Review
Financial Assets (note 15)
Financial Calendar
Financial Statements, Consolidated
171
163
163
23, 242
157
20
46
243
154
268
167
38
177
257
140
Foreign Currency Translation
Frequently Asked Questions
121, 240
257
- cost analysis (note 4)
160
- property, plant and equipment
146, 150, 172
G
124
135
211
142
210
74
61
56
73
50
157
152, 194
Global Business
Going Concern
Governance
Greenhouse Gas Emissions
Guarantees (note 24; note 11
to Company Balance Sheet)
2
112
54
18
193, 215
H
Health and Safety
18
162
(note 13)
- segment analysis (note 2)
Derivative Financial Instruments
(note 25)
Directors’ Emoluments and Interests
(note 32)
Directors’ Interests in Share Capital
Directors’ Remuneration Report
189
Directors’ Report
23, 25
152, 193
Directors’ Responsibilities,
Statement of
Directors’ Share Options
19
144
4
10
Discontinued Operations (note 3)
Dividend Payments
(Shareholder Information)
Dividend per Share
Dividends (note 11)
210
108
80
110
113
102
149, 159
110, 250
1
170
270
2021 Annual Report and Form 20-F 271
I
Inclusion and Diversity
Income Statement, Consolidated
Income Tax Expense (note 10)
Intangible Assets (note 14)
Inventories (note 16)
Investor Relations Activities
K
Key Components of 2021 Performance
Key Financial Data
KPIs, Financial
KPIs, Non-Financial
L
Leases (note 20)
Listing Rule 9.8.4C
Loans and Borrowings,
Interest-Bearing (note 24)
M
Measuring Performance
Memorandum and Articles of
Association
N
Nomination & Corporate Governance
Committee
Non-controlling Interests (note 31)
Non-GAAP Performance Measures
Notes on Consolidated Financial
Statements
Notes to the Company Balance Sheet
O
Operating Costs (note 4)
18, 77
140
168
151, 174
152, 177
75
39
218
19
18
151, 182
111
152, 193
18
75, 255
70
209
219
155
213
160
153, 203
102
164
205, 215
248
75
P
Pensions, Retirement Benefit
Obligations (note 28)
146, 198
Share Capital and Reserves
(note 29)
People
Principal Equity Accounted
Investments
Principal Risks and Uncertainties
Principal Subsidiary Undertakings
Profit on Disposals (note 6)
Property, Plant and Equipment
(note 13)
116, 232
Share Options
264
- Directors
116
260
162
- Employees (note 8)
Share Premium
Share Price Data
Shareholder Communication
146, 150,172
Shareholdings as at 31 December 2021
74, 248
Property, Plants and Equipment
225
Provisions for Liabilities (note 26)
147, 196
Proxy Voting, Electronic
R
Registrars
Regulatory Information
Related Party Transactions (note 32)
Remuneration Committee
Reserves, Mineral
Resources, Mineral
257
257
111
210
98
226
226
Retirement Benefit Obligations
(note 28)
146, 198
T
Solutions
Statement of Changes in Equity,
Consolidated
Statement of Changes in Equity,
Company
Statement of Comprehensive
Income, Consolidated
Statement of Directors’ Responsibilities
13
143
212
141
113
Stock Exchange Listings
74, 248
Strategy
Substantial Holdings
Sustainability
Return on Net Assets (RONA)
19, 220, 222
Revenue (note 1)
Risk Governance
148, 155
33
Task Force on Climate-related Financial
Disclosures (TCFD)
Total Shareholder Return (TSR)
11, 19, 221
Risk Management and Internal Control
112, 240
Trade and Other Payables (note 18)
180
Risk Factors
232
Trade and Other Receivables (note 17)
152, 178
S
Safety
Safety, Environment & Social
Responsibility Committee
Sector Exposure and End-Use
- Americas Materials
- Europe Materials
- Building Products
Segment Information (note 2)
Senior Independent Director
V
22
Viability Statement
20, 76, 242
Volumes, Annualised
- Americas Materials
- Europe Materials
43
47
51
149, 157
57
W
Website
Working Capital and Provisions for
Liabilities, Movement in (note 19)
35, 112
43
47
74, 257
181
Share-based Payments (note 8)
149, 164
14
74
20
28
272
Signatures
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly
caused and authorised the undersigned to sign this Annual Report on its behalf.
CRH public limited company
(Registrant)
By:
/s/ J. Mintern
Jim Mintern
Group Finance Director
Dated: 11 March 2022
2021 Annual Report and Form 20-F PB
CRH plc
Stonemason’s Way
Rathfarnham
Dublin 16
D16 KH51
Ireland
Telephone: +353 1 404 1000
E-mail: mail@crh.com
Website: www.crh.com
Registered Office
42 Fitzwilliam Square
Dublin 2
D02 R279
Ireland
Telephone: +353 1 634 4340
E-mail: crh42@crh.com
CRH® is a registered trade mark
of CRH plc.
Cover image: Oldcastle Infrastructure, part of CRH’s Building
Products Division installed a new proprietary stormwater
management solution MaxCapture™ in Chandler, Arizona,
United States. Due to the dry climate, when it rains stormwater
runoff cannot infiltrate back into the soil and recharge the
aquafers, resulting in surface flooding and a depleted water supply.
MaxCapture is a customisable, modular system which integrates
two existing Oldcastle Infrastructure systems, StormCapture®
and MaxWell® to detain and infiltrate large volumes of stormwater
runoff, maximising effectiveness while reducing both the overall
footprint and installation cost of the solution.