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CRH 2017 20-F Annual Report

CRH · CIK 849395 · Form 20-F · Fiscal year ended December 31, 2017 · Filed March 9, 2018

18 sections, 1041K characters. Original on sec.gov · Markdown · JSON

BusinessMD&AFinancial Statements

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20-F 1 d353734d20f.htm 20-F

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

(Mark One)WASHINGTON, D.C. 20549

FORM 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2017

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

Commission file number: 001-32846

CRH public limited company

(Exact name of Registrant as specified in its charter)

Republic of Ireland

(Jurisdiction of incorporation or organisation)

Belgard Castle, Clondalkin, Dublin 22, Ireland

(Address of principal executive offices)

Senan Murphy

Tel: +353 1 404 1000

Fax: +353 1 404 1007

Belgard Castle, Clondalkin, Dublin 22, Ireland

(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of Each ClassName of Each Exchange On Which Registered
CRH plc
Ordinary Shares/Income Shares of €0.34 eachThe New York Stock Exchange*
American Depositary Shares, each representing the right to receive oneThe New York Stock Exchange
Ordinary Share
CRH America Inc.
8.125% Notes due 2018 guaranteed by CRH plcThe New York Stock Exchange
5.750% Notes due 2021 guaranteed by CRH plcThe New York Stock Exchange

–

*Not for trading but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act. None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act. None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

Ordinary Shares/Income Shares of €0.34 each **838,958,469
5% Cumulative Preference Shares of €1.27 each50,000
7% ‘A’ Cumulative Preference Shares of €1.27 each872,000

–

**Each Income Share is tied to an Ordinary Share and may only be transferred or otherwise dealt with in conjunction with such Ordinary Share.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes X No ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No X

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes X No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer X Accelerated filer ☐ Non-accelerated filer ☐ Emerging Growth Company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act Yes ☐ No X

†The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☐International Financial Reporting Standards as issued by theOther ☐
International Accounting Standards Board X

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No X

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LOGO

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LOGO

Contents
1.Overview
Our Global Business in 20172
Our Balanced Portfolio4
Chairman’s Introduction5
2.Strategy Review
Chief Executive’s Review8
Strategy10
Business Model12
Measuring Performance14
Sustainability16
Risk Governance20
3.Business Performance
Business Overview24
Finance Director’s Review25
Segmental Reviews30
4.Governance
Board of Directors59
Corporate Governance Report62
Directors’ Remuneration Report72
Directors’ Report96
5.Financial Statements
Independent Auditor’s Reports118
Consolidated Financial Statements120
Accounting Policies125
Notes on Consolidated Financial Statements135
6.Additional Information

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Item 1. Identity of Directors, Senior Management and Advisors n/a

Item 2. Offer Statistics and Expected Timetable n/a

Item 3. Key Information

| | | | | | | | | | | A | | - Selected Financial Data | | 208 | | | | | | | | | | | | B | | - Capitalisation and Indebtedness | | n/a | | | | | | | | | | | | C | | - Reasons for the Offer and Use of Proceeds | | n/a | | | | | | | | | | | | D | | - Risk Factors | | 218 |

Item 4. Information on the Company

| | | | | | | | | | | A | | - History and Development of the Company | | 2, 3, 27, 29, 231 | | | | | | | | | | | | B | | - Business Overview | | 24, 30 | | | | | | | | | | | | C | | - Organisational Structure | | 231 | | | | | | | | | | | | D | | - Property, Plants and Equipment | | 215 |

Item 5. Operating and Financial Review and Prospects

| | | | | | | | | | | A | | - Operating Results | | 8, 22, 210 | | | | | | | | | | | | B | | - Liquidity and Capital Resources | | 26, 27, 29, 214 | | | | | | | | | | | | C | | - Research and Development, Patents and Licences, etc. | | 231 | | | | | | | | | | | | D | | - Trend Information | | 9, 25 | | | | | | | | | | | | E | | - Off-Balance Sheet Arrangements | | 214 | | | | | | | | | | | | F | | - Tabular Disclosure of Contractual Obligations | | 214 | | | | | | | | | | | | G | | - Safe Harbor | | 97 |

Item 6. Directors, Senior Management and Employees

| | | | | | | | | | | A | | - Directors and Senior Management | | 59 | | | | | | | | | | | | B | | - Compensation | | 72 | | | | | | | | | | | | C | | - Board Practices | | 62 | | | | | | | | | | | | D | | - Employees | | 231 | | | | | | | | | | | | E | | - Share Ownership | | 90, 235 |

Item 7. Major Shareholders and Related Party Transactions

| | | | | | | | | | | A | | - Major Shareholders | | 70, 235 | | | | | | | | | | | | B | | - Related Party Transactions | | 190 | | | | | | | | | | | | C | | - Interests of Experts and Counsel | | n/a |

Item 8. Financial Information

| | | | | | | | | | | A | | - Consolidated Statements and Other | | | | | | | | | | | | | | | | Financial Information | | 120-199 | | | | | | | | | | | | | | - Legal Proceedings | | 231 | | | | | | | | | | | | | | - Dividends | | 236 | | | | | | | | | | | | B | | - Significant Changes | | 231 |

Item 9. The Offer and Listing

| | | | | | | | | | | A | | - Offer and Listing Details | | 234 | | | | | | | | | | | | B | | - Plan of Distribution | | n/a | | | | | | | | | | | | C | | - Markets | | 234 | | | | | | | | | | | | D | | - Selling Shareholders | | n/a | | | | | | | | | | | | E | | - Dilution | | n/a | | | | | | | | | | | | F | | - Expenses of the Issue | | n/a |

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Item 10. Additional Information

| | | | | | | | | | | A | | - Share Capital | | n/a | | | | | | | | | | | | B | | - Memorandum and Articles of Association | | 241 | | | | | | | | | | | | C | | - Material Contracts | | None | | | | | | | | | | | | D | | - Exchange Controls | | 243 | | | | | | | | | | | | E | | - Taxation | | 239 | | | | | | | | | | | | F | | - Dividends and Paying Agents | | n/a | | | | | | | | | | | | G | | - Statements by Experts | | n/a | | | | | | | | | | | | H | | - Documents on Display | | 243 | | | | | | | | | | | | I | | - Subsidiary Information | | 246 |

Item 11. Quantitative and Qualitative Disclosures about Market Risk 214

Item 12. Description of Securities Other than Equity Securities

| | | | | | | | | | | A | | - Debt Securities | | n/a | | | | | | | | | | | | B | | - Warrants and Rights | | n/a | | | | | | | | | | | | C | | - Other Securities | | n/a | | | | | | | | | | | | D | | - American Depositary Shares | | 238 | | | | | | | | | | PART II | | | | | | | | | | | | | | |

Item 13. Defaults, Dividend Arrearages and Delinquencies None

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds None

Item 15. Controls and Procedures 228

Item 16C. Principal Accountant Fees and Services 64, 71, 243

| Item 16D. | | Exemptions from the Listing Standards for Audit Committees | | | | n/a | | Item 16E. | | Purchases of Equity Securities by the Issuer and Affiliated Purchasers | | | | 235 | | Item 16F. | | Change in Registrant’s Certifying Accountant | | | | None | | Item 16G. | | Corporate Governance | | | | 228 | | Item 16H. | | Mine Safety Disclosures | | | | 215 | | | | | | | | | | PART III | | | | | | | | | | | | | | |

Item 19. Exhibits 252

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CRH Annual Report and Form 20-F | 2017

Index

A
Accounting Policies125
Acquisitions Committee68
American Depositary Shares238
Americas Distribution54
Americas Materials44
Americas Products48
Annual General Meeting100
Asia52
Audit Committee64
Auditors (Directors’ Report)99
Auditor’s Remuneration (note 4)64, 141, 204
Auditor’s Report, Independent (Irish)110
Auditor’s Report, Independent (US)118
B
Balance Sheet
- Company200
- Consolidated122
Balanced Portfolio4
Board Approval of Financial Statements (note 34)190
Board Committees68
Board Effectiveness67
Board of Directors59
Board Responsibilities68
Business and Non-Current Asset Disposals (note 5)142
Business Combinations (note 31)131, 185
Business Model12
Business Overview24
Business Performance22
C
Capital and Financial Risk Management (note 22)165
Cash and Cash Equivalents (note 23)132, 168
Cash Flow, Operating15
Cash Flow Statement, Consolidated124
Chairman’s Introduction5
Chief Executive’s Review8
Communications with Shareholders70
Company Secretary70
Compliance and Ethics70
Contractual Obligations214
Corporate Governance Practices - NYSE228
Corporate Governance Report62
Cost Analysis (note 3)140
CREST235
D
Debt, Analysis of Net (note 21)162
Deferred Income Tax
- expense (note 11)128, 148
- assets and liabilities (note 27)128, 174
Depreciation
- cost analysis (note 3)140
- property, plant and equipment (note 14)129, 152
- segment analysis (note 1)135
Derivative Financial Instruments (note 25)132, 170
Directors’ Emoluments and Interests (note 7)143, 205
Directors’ Interests in Share Capital90
Directors’ Remuneration Report72
Directors’ Report96
Directors’ Responsibilities, Statement of100
Directors’ Share Options88
Discontinued Operations (note 2)139
Dividend Payments (Shareholder Information)96, 236
Dividend per Share1
Dividends (note 12)133, 150
E
Earnings per Ordinary Share (note 13)151
Employees, Average Number (note 6)143
Employment Costs (note 6)143
End-use Exposure4
Equity Accounted Investments’ Profit, Share of (note 10)148
Europe Distribution40
Europe Heavyside32
Europe Lightside36
Exchange Rates134
Exhibits252
F
Finance Committee68
Finance Costs and Finance Income (note 9)147
Finance Director’s Review25
Financial Assets (note 16)129, 157
Financial Calendar243
Financial Statements, Consolidated120
Foreign Currency Translations107, 227
Frequently Asked Questions243
G
Gender Diversity14, 68
Global Business2
Going Concern98
Governance56
Greenhouse Gas Emissions14
Guarantees (note 24; note 11 to Company Balance Sheet)169, 205
H
Health & Safety18
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CRH Annual Report and Form 20-F | 2017

I
Income Statement, Consolidated120
Income Tax Expense (note 11)148
Intangible Assets (note 15)131, 153
Inventories (note 17)132, 158
Investor Relations Activities71
K
Key Components of 2017 Performance26
KPIs, Financial15
KPIs, Non-Financial14
L
Leases, Commitments Under Operating and Finance (note 29)126, 132, 181
Listing Rule 9.8.4C96
Loans and Borrowings, Interest- Bearing (note 24)132, 168
M
Measuring Performance14
Memorandum and Articles of Association71, 241
N
Nomination and Corporate Governance Committee67
Non-controlling Interests (note 32)189
Non-GAAP Performance Measures210
Notes on Consolidated Financial Statements135
Notes to the Company Balance Sheet202
O
Operating Costs (note 3)140
Operating Leases (note 29)132, 181
Operating Profit Disclosures (note 4)141
P
Pensions, Retirement Benefit Obligations (note 28)127, 175
Principal Equity Accounted Investments251
Principal Risks and Uncertainties102
Principal Subsidiary Undertakings246
Profit on Disposals (note 5)142
Property, Plant and Equipment (note 14)129, 152
Property, Plants and Equipment215
Provisions for Liabilities (note 26)128, 172
Proxy Voting, Electronic243
R
Registrars243
Regulatory Information97
Related Party Transactions (note 33)190
Remuneration Committee76
Reserves216
Retirement Benefit Obligations (note 28)127, 175
Return on Net Assets (RONA)15, 211, 213
Risk Governance20
Risk Management and Internal Control98, 228
Risk Factors218
S
Sector Exposure and End-Use
- Americas Distribution54
- Americas Materials44
- Americas Products48
- Asia52
- Europe Distribution40
- Europe Heavyside32
- Europe Lightside36
Segment Information (note 1)130, 135
Selected Financial Data208
Senior Independent Director60
Share-based Payments (note 8)131, 144
Share Capital and Reserves (note 30)133, 182
Share Options
- Directors88
- Employees (note 8)144
Share Price Data234
Shareholder Communication70
Shareholdings as at 31 December 201770, 235
Statement of Changes in Equity, Consolidated123
Statement of Changes in Equity, Company201
Statement of Comprehensive Income, Consolidated121
Statement of Directors’ Responsibilities100
Stock Exchange Listings70, 234
Strategy10
Substantial Holdings70
Supplemental Guarantor Information (note 35)191
Sustainability16
T
Total Shareholder Return (TSR)12, 15
Trade and Other Payables (note 19)160
Trade and Other Receivables (note 18)158
V
Volumes, Annualised
- Americas Materials45
- Americas Products49
- Europe Heavyside33
- Asia52
W
Website71, 243
Working Capital and Provisions for Liabilities, Movement in (note 20)161
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CRH Annual Report and Form 20-F | 2017

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/ S. Murphy
Senan Murphy
Finance Director

Dated: 9 March 2018

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CRH Annual Report and Form 20-F | 2017

LOGO

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LOGO
CRH plc Belgard Castle Clondalkin Dublin 22 D22 AV61 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 Fax: +353 1 676 5013 E-mail: crh42@crh.com CRH® is a registered trade mark of CRH plc.Cover image: Fels’ Elbingerode Quarry in Saxony-Anhalt, Germany. CRH acquired Fels, a leading German lime and aggregates business, with nine production locations in Germany and one each in the Czech Republic and in the Moscow region of Russia, for €0.6 billion in 2017.