10-K/A: CRH plc Files Amendment No. 1 to Annual Report on Form 10-K/A

CRH plc has filed an amendment to its annual report on Form 10-K to include Part III information, which was not previously included in the original filing.

Summary

• CRH plc, a foreign private issuer, has filed Amendment No. 1 to its annual report on Form 10-K/A to include Part III information.
• This amendment includes details on directors, executive officers, corporate governance, executive compensation, security ownership, related transactions, and principal accountant fees.
• The company voluntarily files annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K with the SEC.
• The original Annual Report on Form 10-K was filed on February 29, 2024, and this amendment does not reflect events occurring after that date.
• The company has included the information in this Form 10-K Amendment as part of its Notice and Proxy Statement, which the Company is furnishing on a Form 8-K on the date hereof.
• The company is transitioning to a primary listing on the NYSE and is moving towards U.S. domestic issuer status.
• The company's share buyback program repurchased 54.9 million ordinary shares in 2023 for a total consideration of $3.0 billion.
• The total dividend per share for 2023 was increased by 5%, with the final dividend being accelerated and paid as a second interim dividend on January 17, 2024.
• The company is committed to a 30% reduction in absolute carbon emissions by 2030 and aims to be a net-zero business by 2050.

Sentiment

Score: 8

Explanation: The document reflects strong financial performance and strategic progress, particularly the transition to a primary listing on the NYSE. The company's commitment to sustainability and shareholder returns is also positive. However, the capping of the annual bonus payout and the uncertain economic climate temper the overall sentiment slightly.

Positives

• CRH achieved record results in 2023, with a 15% increase in adjusted EBITDA.
• The company's EPS pre-impairment increased by 30%, indicating strong profitability.
• The share buyback program demonstrates confidence in the company's outlook and cash generation.
• The company is making progress on its sustainability goals, including a 30% reduction in carbon emissions by 2030.
• The 2021 PSP awards vested at 100%, reflecting strong performance against set targets.
• The company is proactively transitioning to a primary listing on the NYSE, which is expected to improve brand awareness and index inclusion.

Negatives

• The annual bonus payout was capped at 90% of maximum despite achieving 100% of financial targets, due to the uncertain economic climate.
• The company is facing challenges related to high inflation and high interest costs.

Risks

• The company faces risks related to economic and financial conditions, including changes in interest rates, inflation, and price volatility.
• Demand for infrastructure, residential, and non-residential construction can impact the company's performance.
• Increased competition and rising energy, labor, and raw material costs pose challenges.
• Adverse changes to laws and regulations, including those related to climate change, could affect the company.
• Political uncertainty and geopolitical conflicts could impact the company's operations.
• Cyber-attacks and health and safety risks are ongoing concerns.
• Failure to complete or successfully integrate acquisitions or make timely divestments could negatively impact the company.

Future Outlook

The company will continue to assess its share buyback program throughout 2024, with further updates on a quarterly basis. The company anticipates transitioning from being a Foreign Private Issuer to U.S. domestic issuer status, and its compensation structures will evolve to more closely align with U.S. practices.

Management Comments

• The Committee is satisfied that there is a very strong alignment between the incentive outcomes outlined above for 2023 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, progress in relation to strategic objectives not captured by the financial measures used for compensation 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.

Industry Context

This announcement reflects CRH's ongoing efforts to align with global best practices in corporate governance and financial reporting, particularly as it transitions to a primary listing on the NYSE. The company's focus on sustainability and decarbonization aligns with broader industry trends towards environmentally responsible practices.

Comparison to Industry Standards

• CRH's compensation practices are benchmarked against the 50 largest companies listed on the LSE (excluding financial services), as well as a defined group of U.S. listed companies of comparable scale.
• The company's performance metrics, such as cash flow, RONA, and TSR, are common in the building materials industry and are used to incentivize management to create shareholder value.
• The company's commitment to a 30% reduction in carbon emissions by 2030 is an industry-leading target, demonstrating a strong focus on sustainability.
• The company's transition to a primary listing on the NYSE is a significant step, aligning it with U.S. corporate governance standards and potentially increasing its visibility to U.S. investors.
• The company's share buyback program is a common practice among large public companies to return capital to shareholders.

Related Party Transactions

• Extech Building Materials made building materials purchases from CRH subsidiaries for approximately $5,474,000.
• CRH invested an approximate daily average of $460,000,000 in a money market fund managed by BlackRock, for which BlackRock received fees of approximately $332,000.

Stakeholder Impact

• Shareholders will benefit from the increased dividend and share buyback program.
• Employees will benefit from the company's focus on culture and people, as well as the company's commitment to diversity and inclusion.
• Customers will benefit from the company's focus on innovative and sustainable solutions.
• The company's commitment to sustainability will benefit the environment and society as a whole.

Next Steps

• The company will continue to assess its share buyback program throughout 2024.
• The company will transition to a quarterly dividend cadence in 2024.
• The company will review its compensation practices and policies with the intention of developing a Board-approved compensation framework for implementation in 2025.
• The company will continue to engage with shareholders on compensation matters.
• The company will continue to work towards its sustainability targets, including a 30% reduction in carbon emissions by 2030.

Key Dates

Keywords

CRH, Form 10-K/A, Annual Report, Executive Compensation, Corporate Governance, Financial Performance, Sustainability, Share Buyback, NYSE Listing, Carbon Emissions