CRH plc

The outlook is stable because we think CRH is well positioned to withstand the current difficult economy. In our base-case scenario, we expect FFO to debt to be at around 40% in 2020 and to remain comfortably above 30% in 2021, which is commensurate with the 'BBB+' rating. We could lower the rating if CRH's FFO to debt declined below 30% with no prospects of a swift recovery. This would most likely happen if the group adopted an aggressive shareholder remuneration or significant debt-funded acquisition before the environment has fully recovered. At the same time, we believe that the group's solid balance sheet should protect the company's credit metrics if the current recession extends through 2021. While we expect CRH

...CRH plc's performance during the first half of 2020 has been resilient, with margins improving despite modestly declining sales. The company's like-for-like sales were 3% lower over the period than in 2019, with a quick recovery in June 2020 following significant disruptions in April-May. On a like-for-like basis, EBITDA increased by 2% from the level in 2019, while like-for-like EBITDA margin increased 70 basis points (bps). Overall, efficiency improvements, cost rationalization, and lower energy, transportation, and personnel costs, led to improving profitability despite lower sales volumes. CRH's credit metrics have strengthened in 2019 because of solid cash flow and asset disposals and should offer room to withstand the protracted effects of the pandemic. In our view, the company is well positioned to withstand the difficult environment, despite its significant presence in Europe and the U.S. This is because the group delivered a solid operating performance in 2019 and, thanks to the...

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