CRH plc

The stable outlook reflects our view that CRH's FFO to debt will remain comfortably above 30% on a sustainable basis. We believe that the group's financial policy and capital allocation strategy are both consistent with a 'BBB+' rating. In our base-case scenario for 2021-2022, we anticipate that CRH's credit metrics offer some headroom to absorb discretionary spending related to both external growth and shareholder remuneration. 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 aggressive shareholder remuneration or made a significant debt-funded acquisition well above our assumptions. At the same time, we believe that the group's solid balance sheet should

...CRH plc's performance during 2020 has been resilient, with margins improving despite modestly declining sales. CRH delivered a solid operating performance in 2020. The results reflect the company's resilient position in countries where it operates, helped by the designation of the construction industry as essential by many governments, and therefore less affected by lockdowns. Revenue declined 1.9% to $27.6 billion, and pandemic-related challenges moderately hampered levels of activity only during the second quarter. Despite the challenges, adjusted EBITDA margin strengthened to 17.3%, from 16.3% in 2019. Overall, efficiency improvements, cost rationalization, and lower energy, transportation, and personnel costs, led to improving profitability. At the same time, CRH reported a solid cash conversion, with adjusted EBITDA of $4.7 billion translating into about $3 billion of free operating cash flow, an improvement in comparison with an already strong 2019. CRH's credit metrics have strengthened...

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