CRH Regulatory News (CRH)

2020 Full Year Results

This document contains inside information

Key Highlights

· Robust performance in a challenging environment

· Further EBITDA and margin improvement despite lower activity levels

· Continued strong cash generation underpinning financial strength and flexibility

· Net debt/EBITDA of 1.3x, lowest level in over 10 years

· Strong acquisition pipeline; significant opportunities for future value creation

· Full-year dividend per share up 25% to 115.0c; 37 years of dividend delivery

· Recommencing share buyback programme with further tranche of $0.3bn

Albert Manifold, Chief Executive, said today:

"Our 2020 performance is testament to the commitment of our people and the strength and resilience of our business model. Through the repositioning of our business in recent years and our relentless focus on continuous business improvement, we have delivered record levels of profitability, margins and cash generation. Although the near-term outlook remains uncertain, our unique portfolio of businesses together with the strength of our balance sheet leaves us well positioned to capitalise on the growth opportunities that lie ahead."

Announced Thursday, 4 March 2021 

2020 Full Year Results

Health & Safety

As many of our markets continue to be affected by the spread of COVID-19, the health and safety of our people remains our number one priority. In this regard, our primary focus is to ensure that we provide a safe working environment for our employees, contractors and customers, enabling them to carry out their activities in accordance with the various health and safety protocols currently in place across our markets.

Trading Overview

2020 was a challenging year for CRH due to significant COVID-19 related disruption in the economies and construction markets of North America and Europe. Notwithstanding the difficult backdrop, CRH delivered overall sales of $27.6 billion (2019: $28.1 billion), 2% behind 2019.

· Economic activity in North America was impacted by the global pandemic, partly offset by government stimulus efforts. Like-for-like1 sales in Americas Materials declined by 3% compared to 2019, mainly impacted by COVID-19 restrictions, project delays in some of our key states and unfavourable weather in the first half of the year.

· In Europe Materials, volume recovery in the second half of the year along with good price discipline did not fully mitigate the negative impact of COVID-19 related shutdowns earlier in the year and like-for-like sales finished 5% behind 2019.

· Building Products benefited from strong residential repair, maintenance and improvement (RMI) activity in North America, offsetting lower activity levels in non-residential markets. Together with price progress across most platforms, the Division delivered like-for-like sales 4% ahead of 2019.

EBITDA of $4.6 billion was 3% ahead of 2019 (2019: $4.5 billion) reflecting a strong focus on cost rationalisation and actions taken to mitigate the financial impact of the pandemic. EBITDA was 5% ahead on a like-for-like basis, before one-off costs of $122 million primarily due to COVID-19 related restructuring.

· In Americas Materials, good price progression, focused cost control, lower energy costs and operational efficiencies, delivered like-for-like EBITDA 10% ahead of 2019.

· Like-for-like EBITDA was 7% behind 2019 in Europe Materials, primarily reflecting the significant impact of COVID-19 restrictions in a number of countries across Western Europe, only partly offset by price progress and cost control.

· Good commercial management, profit improvement initiatives and disciplined cost control enabled Building Products to deliver margin expansion on increased sales, resulting in like-for-like EBITDA 8% ahead of 2019.

Excluding non-cash impairment charges of $0.8 billion (2019: $8 million) and the related tax impact, profit after tax of $2.0 billion was 18% ahead of 2019 (2019: $1.7 billion). Including these items, profit after tax of $1.2 billion was behind prior year (2019: $1.6 billion). Note 2 on page 16 analyses the key components of the 2020 performance.

Capital Allocation Summary

After another year of very strong cash generation in 2020 we are recommending a final dividend of 93.0c per share, resulting in a total dividend of 115.0c for 2020 (2019: 92.0c) which represents an increase of 25% on 2019. We also intend to recommence the Group's share buyback programme following a pause in response to high levels of market volatility in 2020, with a further tranche of up to $0.3 billion to be completed by the end of June 2021. In addition, our significant balance sheet capacity offers flexibility to capitalise on our strong acquisition pipeline and deliver further value to shareholders as visibility improves.

Sustainability

In 2020, CRH announced ambitious 2030 sustainability targets for the Group in the areas of greenhouse gas emissions, safety, inclusion and diversity and sustainable products. We remain committed to achieving these targets and continuously improving the sustainability performance of our businesses.

Trading Outlook

Although the near-term outlook for economic and construction activity across our markets remains uncertain, market recovery is expected to continue across North America and Europe as the health situation improves. Our Americas Materials Division benefits from strong market positions and a positive demand backdrop for the infrastructure and residential sectors. Although the outlook for non-residential activity remains mixed our Building Products Division is expected to benefit from positive residential demand. In our Europe Materials Division, we have significant exposure to growing economies in Eastern Europe and strong, stable markets in Western Europe. Overall, with the strength of our balance sheet and our unique portfolio of businesses, we are well positioned to capitalise on the growth opportunities that lie ahead. We remain committed to the execution of our long-term growth strategy and the delivery of further margin expansion, superior cash generation and enhanced returns for shareholders.

1See pages 33 to 38 for glossary of alternative performance measures (including EBITDA, like-for-like (LFL)/organic, Net Debt/EBITDA, EBITDA net interest cover and pre-impairment measures (profit after tax, earnings per share and effective tax rate)) used throughout this report. Operating cash flow is net cash inflow from operating activities as reported in the Consolidated Statement of Cash Flows on page 13. All 2019 income statement comparatives are presented on a continuing operations basis.

Americas Materials

1One-offs primarily due to COVID-19 related restructuring costs

Americas Materials generated EBITDA of $2.4 billion, 10% ahead of prior year and operating profit of $1.6 billion, 15% ahead of prior year despite lower sales which were 3% behind. COVID-19 restrictions negatively impacted sales volumes in the second quarter, particularly in the North division, 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 United States (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.

Building 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 North division 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 North and South divisions.

Asphalt volumes were 6% lower on a like-for-like basis due to the impact of COVID-19 restrictions on the North division and slower project bidding in key states in the South. Volumes in the West division were ahead of prior year with a strong order book of business supported by more favourable weather compared to 2019. Asphalt margins improved, benefiting from good commercial management, lower input costs, operational efficiencies and strong cost control.

Readymixed concrete volumes were 4% behind prior year 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 North 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 prior year on a total and like-for-like basis. COVID-19 impacted the North division 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 prior year.

Regional Performance

Like-for-like sales for the North division were 6% lower than 2019 as COVID-19 restrictions impacted volumes across the business. Favourable prices and lower input costs offset lower volumes and delivered operating profit improvements for the North division across the product range.

The South division's total sales were 7% behind prior year driven by lower asphalt and construction volumes in key states as projects were delayed. Like-for-like readymixed concrete volumes were higher than the prior year 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 prior year 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. In 2020, CRH adopted the Ash Grove brand for all its North American cement businesses, unifying 12 cement plants and 42 cement terminals under one recognised brand. Cement consumption in Southeast Brazil increased in 2020 enabling CRH to achieve volume growth combined with increased prices which resulted in operating profit improvements.

Europe Materials

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 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 United Kingdom (UK) business. A further $0.15 billion impairment charge was recorded on the Group's associate investment in China.

Tarmac (UK)

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 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

In our UK cement and lime business, sales and operating profit were behind 2019 despite positive pricing as COVID-19 restrictions impacted activity levels. Ireland also experienced significant COVID-19 related restrictions in the second quarter of 2020; however, strong cement volumes in the second half of the year, cost savings initiatives and robust pricing across all product lines saw operating profit outperform 2019. Sales in Finland were ahead of prior year, but operating profit was impacted by less favourable product mix.

Europe West

In France, cement volumes recovered in the second half of the year and good pricing was maintained across all products; however, overall volumes were significantly impacted by COVID-19 restrictions in the first half of the year. Sales and operating profit in France were below 2019 levels despite ongoing performance improvement and cost savings initiatives. Like-for-like operating profit in the Benelux finished ahead of 2019, with a positive contribution from our Dutch structural businesses partly offset by lower cement and structural concrete volumes in Belgium.

In Denmark, sales and operating profit finished behind 2019, due to weaker new residential construction partially offset by strong cost control. Sales volumes and operating profit in Spain were affected by COVID-19 restrictions despite focused cost control actions. Challenging cement and readymixed concrete volumes in Switzerland were partially offset by cement price increases, good aggregates volumes and cost savings initiatives but operating profit finished behind 2019 levels. In Germany, sales were broadly in line with 2019 levels, as increases in cement pricing offset slightly lower lime volumes. Operating profit finished behind 2019 due to the impact of higher input costs.

Europe East

Cement sales in Poland were slightly ahead of 2019 as positive cement pricing more than offset lower volumes, and overall operating profit was ahead due to good cost control and lower fuel costs. Operating profit was also ahead of 2019 in Ukraine despite a challenging pricing environment as cost savings initiatives and lower fuel and logistics costs resulted in improved performance. In Romania, sales and operating profit both strongly exceeded prior year, 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.

Positive pricing in both Slovakia and Hungary coupled with good cost control contributed to operating profit ahead of 2019 despite both economies being impacted by COVID-19 and an overall decline in construction output. In Serbia, sales and operating profit were ahead of 2019 with higher cement volumes, positive pricing and business improvement initiatives.

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.

Building Products

1One-offs primarily due to COVID-19 related restructuring costs

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 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.

Architectural Products

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.

Infrastructure Products

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 prior year 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. In 2020, we united all our Construction Accessories businesses across four continents under one global brand, Leviat.

Other Financial Items

Depreciation and amortisation charges of $1.7 billion were in line with prior year (2019: $1.7 billion).

As previously announced, arising from the Group's impairment testing process and as a result of the combined economic impacts of COVID-19 and Brexit, non-cash impairment charges of $0.8 billion were recognised in 2020 (2019: $8 million); $0.7 billion was reported in operating profit, primarily related to our UK business, and a further $0.15 billion recognised on the Group's associate investment in China which is reflected in the Group's share of losses from equity accounted investments.

Divestments and asset disposals during the year generated total profit on disposals of $9 million (2019 loss: $189 million) which primarily related to the divestment of precast concrete production assets in our Building Products Division.

Net finance costs were in line with 2019 at $490 million (2019: $490 million) as lower borrowing costs were offset by lower returns earned on deposits.

The Group's $118 million share of losses from equity accounted investments was behind 2019 (2019: $67 million profit) mainly due to the impairment charge ($150 million) recognised on the Group's associate investment in China along with the divestment of the Indian cement joint venture in 2019.

Profit before tax was $1.7 billion (2019: $2.2 billion) and the tax charge was $499 million (2019: $534 million), which represents an effective tax rate of 30.0% (2019: 24.5%) of profit before tax. Excluding the impact of the 2020 non-cash impairment, the effective tax rate would be 21.6% for the year.

Excluding non-cash impairment charges of $0.8 billion (2019: $8 million) and the related tax impact, earnings per share of 243.3c were 19% higher than prior year (2019: 203.8c). Reflecting the non-cash impairment charges, earnings per share were 30% lower than last year at 142.9c (2019: 203.0c).

Dividend and Share Buyback

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. The Board is therefore recommending a final dividend of 93.0c per share, resulting in a total dividend of 115.0c for the year (2019: 92.0c), an increase of 25% over 2019.

The earnings per share pre-impairment for the year was 243.3c (2019: 203.8c), representing a cover of 2.1 times the proposed dividend for 2020. It is proposed to pay the final dividend on 5 May 2021 to shareholders registered at the close of business on 19 March 2021. The ex-dividend date will be 18 March 2021. The final dividend will be paid wholly in cash.

During 2020, the Group returned a further $220 million of cash to shareholders under its share buyback programme but due to high levels of market volatility, the Board paused the programme in March 2020. However, given the Group's strong financial position and its commitment to returning excess cash to shareholders, we intend to recommence the programme and complete a further $0.3 billion tranche by the end of June 2021.

Balance Sheet and Liquidity

2020 marked another year of strong cash management for the Group, generating a net cash inflow from operating activities of $3.9 billion for the year (2019: $3.9 billion). Year-end net debt of $5.9 billion (2019: $7.5 billion) also benefited from disciplined capital expenditure and acquisition spend. Net debt to EBITDA was 1.3x (2019: 1.7x) and, based on net debt-related interest costs, EBITDA net interest cover for 2020 was 11.9x (2019: 12.3x).

The Group ended 2020 with total liquidity of $12.1 billion, comprising $7.7 billion of cash and cash equivalents on hand and $4.4 billion of undrawn committed facilities which are available until 2025. At year end, the Group had sufficient cash balances to meet all maturing debt obligations for the next 6.4 years and the weighted average maturity of the remaining term debt was 12.9 years.

In April 2020, the Group successfully issued a total of €2.0 billion in euro denominated bonds at a weighted average maturity of seven years and with a weighted average interest rate of 1.35%. A €0.75 billion euro denominated bond due to mature in October was repaid early using a 3-month par-call option. The Group also has a US$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 Group continues to maintain its robust balance sheet and a strong investment grade credit rating of BBB+ or equivalent with each of the three main rating agencies.

Acquisitions and Divestments

The Group spent $405 million on 17 acquisitions in 2020 (including deferred and contingent consideration in respect of prior year acquisitions).

On the divestment front, the Group completed 12 transactions and realised total business and asset disposal proceeds of c. $307 million, inclusive of $123 million relating to the receipt of deferred proceeds from prior year divestments.

2020 Acquisitions and Investments

The most significant acquisition in 2020 was the December acquisition of Barriere Construction, a vertically integrated asphalt and paving operation in southern Louisiana for a total consideration of c. $120 million. In addition, the Americas Materials Division completed a further six bolt-on acquisitions across the US and Canada for a total spend of $43 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 for c. $80 million. This acquisition strengthens CRH's exposure to the communications enclosures market across the US.

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 relating to prior year acquisitions.

2020 Divestments and Disposals

The sale of precast concrete production assets located in Spokane, Washington for $24 million represented the largest divestment in 2020 and was completed by our Building Products Division. The second largest divestment was completed by our Europe Materials Division, with $17 million received for the building materials business in La Réunion, and 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 My Home Industries (MHIL) in India.

The agreement to sell our Brazil operations for consideration of $0.2 billion is currently subject to competition authority review and the divestment is expected to close in the first half of 2021.

Primary Financial Statements

and

Summarised Notes

Year ended 31 December 2020Consolidated Income Statement

for the financial year ended 31 December 2020

(i) Restated throughout for presentation in US Dollar. See note 1 for further details.

 Consolidated Statement of Comprehensive Income

for the financial year ended 31 December 2020

(i) Restated throughout for presentation in US Dollar. See note 1 for further details.

Consolidated Balance Sheet

as at 31 December 2020

(i) Restated throughout for presentation in US Dollar and to reflect a change in the presentation of cash and cash equivalents and bank overdrafts. See note 1 for further details.

Consolidated Statement of Changes in Equity

for the financial year ended 31 December 2020

(i) Restated throughout for presentation in US Dollar. See note 1 for further details.

Consolidated Statement of Cash Flows

for the financial year ended 31 December 2020

(i) Restated throughout for presentation in US Dollar. See note 1 for further details.

(ii) Repayment of lease liabilities capitalised under IFRS 16 Leases amounted to $326 million (2019: $433 million), of which $68 million (2019: $77 million) related to interest paid which is presented in cash flows from operating activities.

(iii) See note 12 for reconciliation to cash and cash equivalents as per the Consolidated Balance Sheet.

Supplementary Information

Selected Explanatory Notes to the Consolidated Financial Statements

1. Basis of Preparation and Accounting Policies

Basis of Preparation

The financial information presented in this report has been prepared in accordance with the Group's accounting policies under International Financial Reporting Standards (IFRS) as adopted by the European Union and as issued by the International Accounting Standards Board (IASB).

Change in presentation currency

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.

Accordingly, to satisfy the requirements of IAS 21 The Effects of Changes in Foreign Exchange Rates, the reported results for the year ended 31 December 2019 have been translated from euro to US Dollar using the following procedures:

· Assets and liabilities denominated in non-US Dollar currencies were translated into US Dollar at the relevant closing rates of exchange;

· The trading results of subsidiaries whose functional currency was other than US Dollar were translated into US Dollar at the relevant average rates of exchange;

· Movements in other reserves were translated into US Dollar at the relevant average rates of exchange;

· Significant business divestments were translated at the spot rates prevailing on the date of divestment;

· Share capital, share premium, Treasury Shares/own shares and dividends were translated at the historic rates prevailing on the date of each transaction; and

· The cumulative translation reserve was set to nil at 1 January 2004, the date of transition to IFRS, and has been restated on the basis that the Group has reported in US Dollar since that date

A change in presentation currency represents a change in accounting policy under IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors which is accounted for retrospectively. An opening balance sheet has been presented showing the impact of the change in presentation currency on 31 December 2018. The average and closing rates used for this exercise are provided on page 15.

Prior year restatement

The Group has changed the prior years' net presentation of cash and cash equivalents and current interest-bearing loans and borrowings for the Group's notional cash pooling arrangements. While the Group had the legal right to offset under the arrangements in these periods, it was determined that the presentation of cash and cash equivalents and interest-bearing loans and borrowings on a gross basis was appropriate in line with the requirements of IAS 32 Financial Instruments: Presentation and therefore prior year comparatives have been restated accordingly to correct for this misstatement. The impact of this change is to increase both cash and cash equivalents and current interest-bearing loans and borrowings as at 31 December 2019 by $5.7 billion (2018: $6.5 billion) on the Consolidated Balance Sheet. This has no impact on net assets, net debt or the Group's profit for the year ended 31 December 2019.

At 31 December 2020, the Group's notional cash pool balances were net settled and accordingly net presentation of the balances at 31 December 2020 is appropriate.

1. Basis of Preparation and Accounting Policies - continued

Adoption of IFRS and International Financial Reporting Interpretations Committee (IFRIC) interpretations

The following new standards, interpretations and standard amendments became effective for the Group as of 1 January 2020 and did not result in a material impact on the Group's results:

· IFRS 3 Business Combinations - Definition of a business

· Amendments to IAS 1 Presentation of Financial Statements- and IAS 8 - Definition of material

· Amendments to References to the Conceptual Framework in IFRS Standards

· Amendments to IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures - Interest Rate Benchmark Reform

The following standard amendment was issued in May 2020 effective for annual reporting periods beginning on or after 1 June 2020 with earlier application permitted:

· Amendments to IFRS 16 Leases - COVID-19-Related Rent Concessions. The amendment was adopted effective 1 January 2020 and did not result in a material impact on the Group's results.

Translation of Foreign Currencies

The financial information is presented in US Dollar. Results and cash flows of operations 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 ruling at the balance sheet date. The principal rates used for the translation of results, cash flows and balance sheets into US Dollar were:

2. Key Components of 2020 Performance

Continuing operations

(i) CRH's share of after-tax results of joint ventures and associated undertakings.

(ii) One-offs primarily due to COVID-19 related restructuring costs.

3. Seasonality

Activity in the construction industry is characterised by cyclicality and is dependent to a considerable extent on the seasonal impact of weather in the Group's operating locations, with activity in some markets reduced significantly in winter due to inclement weather. First‑half sales from continuing operations accounted for 44% of full-year 2020 (2019: 46%), while EBITDA from continuing operations for the first six months of 2020 represented 34% of the full-year out-turn (2019: 36%).

4. Revenue

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 Operating Segments) 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 5.

Footnotes (i) and (ii) appear on page 18.

4. Revenue - continued

* Revenue principally recognised over time. Construction contracts are generally completed within the same financial reporting year.

Footnotes to revenue disaggregation on pages 17 & 18

(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.

(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 review and evaluate this business line.

B. 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 $2,604 million at 31 December 2020 (2019: $2,097 million). The Group has applied the practical expedient of IFRS 15 Revenue from Contracts with Customers 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 2020 will close and revenue will be recognised within 12 months of the balance sheet date.

5. Segment Information

5. Segment Information - continued

 6. Share of Equity Accounted Investments' (Loss)/Profit

Continuing operations

The Group's share of joint ventures' and associates' result after tax is equity accounted and is presented as a single line item in the Consolidated Income Statement; it is analysed as follows between the principal Consolidated Income Statement captions:

(i) The impairment charge of $154 million (2019: $nil million), 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, are the primary drivers of the impairment charge. The recoverable amount of this financial asset is its value-in-use calculated using a real pre-tax discount rate of 9.2%.

(ii) Share of profit after tax in 2019, including discontinued operations, amounted to $81 million.

7. Earnings per Ordinary Share

The computation of basic and diluted earnings per Ordinary Share is set out below: