TIDMCRH
RNS Number : 8651W
CRH PLC
24 April 2019
Press Release
Trading Update - April 2019
CRH plc, the global building materials group, issues the
following Trading Update for the period 1 January 2019 to 31 March
2019 in advance of its Annual General Meeting (AGM) which takes
place tomorrow at 11.00am in Dublin.
As previously announced, the Group was reorganised into three
Divisions effective 1 January 2019: Americas Materials, Europe
Materials and Building Products.
Key Highlights
-- A positive start to the year with first quarter like-for-like*
Group sales 7% ahead of the same period last year. Sales
volumes benefited from mild weather conditions and good
momentum across most of our major markets. Sales growth
was also supported by pricing progress across all major
product lines.
-- Our Ash Grove acquisition, completed in June 2018, traded
in line with expectations with synergy delivery progressing
as planned.
-- Year-to-date the Group spent c. EUR0.2 billion on 16 bolt-on
acquisitions / investments.
-- The Group has reached agreement to divest of its European
Shutters & Awnings business to StellaGroup for a total
consideration in excess of EUR0.3 billion.
-- The strategic review of the Europe Distribution business
is ongoing as we consider all options to maximise shareholder
value.
-- With a continued focus on business improvement, our Group-wide
profit improvement programme is advancing well in all
business areas.
-- In light of our strong balance sheet and cash generation,
the Board is proposing to continue our share buyback programme
with a further tranche of up to EUR350 million to be completed
before the Group's interim results announcement in August.
-- Group EBITDA, for the seasonally less significant first
half of the year, is expected to be in excess of EUR1.5
billion (H1 2018: EUR1.13 billion) reflecting a mid-single
digit percentage increase on a like-for-like basis with
a good contribution from acquisition activity. This also
includes the benefit of currency exchange movements and
the impact of IFRS 16 Leases.
-- With normal weather patterns and in the absence of any
major market dislocations, like-for-like EBITDA in the
second half of the year is also anticipated to be ahead
of the second half of 2018.
*Like-for-like movements exclude the impact of currency
exchange, acquisitions, divestments and the impact of IFRS 16 on
lease accounting effective 1 January 2019
Trading Backdrop
Americas Materials Update
Like-for-like sales for our Americas Materials operations were
4% ahead of the first quarter in 2018, benefiting from good
underlying demand, continued strong market fundamentals and pricing
progress across all product lines. Volumes of aggregates and
asphalt were ahead of 2018 due to milder weather in our North and
South regions while severe winter weather conditions in the West
and in Canada impacted readymixed concrete and cement volumes
respectively. Ash Grove performed in line with expectations with
synergy delivery progressing as planned.
This notably seasonal business typically sells less than 10% of
annual asphalt volumes and less than 20% of aggregates, readymixed
concrete and cement volumes in the first quarter of the year.
Key Markets in Brief
-- US Infrastructure: Moderate underlying growth with state
and local funding improvements in key markets; federal
funding reflects increased FAST Act allocation
-- Residential: Modest growth in residential construction
activity, both new and RMI
-- Non-Residential: Year-on-year growth with positive trends
in most segments; leading indicators consistently positive
Europe Materials Update
Like-for-like sales were 12% ahead in the first quarter aided by
continued positive trends in a number of key markets, good pricing
momentum and milder weather conditions compared to the very
unfavourable early-season weather experienced last year.
Key Markets in Brief
-- UK: Increased readymixed concrete, asphalt and cement
volumes against significantly weather-impacted comparatives;
favourable cement, asphalt and aggregates pricing
-- France: Good market demand resulted in higher volumes;
prices ahead
-- Switzerland: Increased cement volumes; prices slightly
ahead of 2018
-- Germany: Strong cement market demand; prices ahead in
all products
-- Ireland: Volumes ahead with good demand; cement and readymixed
concrete prices ahead
-- Finland: Cement volumes and prices slightly ahead of 2018
-- Poland: Cement volumes well ahead aided by good weather
conditions; price increases across all products
-- South East Europe: Strong cement volumes, particularly
in Romania; prices ahead
-- Philippines: Cement volumes strongly ahead of 2018 following
the release of Government infrastructure funding; prices
also ahead
Building Products Update
Building Products had a very satisfactory start to the year with
like-for-like sales for the first quarter 5% ahead of 2018. A
positive demand and pricing backdrop in our main markets was
supported by mild weather conditions.
Key Markets in Brief
-- Products:
o In Europe, improved volumes and pricing delivered
like-for-like sales growth across all platforms, with
particularly strong performances from our Architectural
Products and Construction Accessories businesses
o In the United States (US), Architectural Products
sales were ahead as good underlying demand was supported
by favourable weather and early seasonal purchasing
by homecenters
o BuildingEnvelope(R) like-for-like sales improved driven
by increased demand at C.R. Laurence as well as volume
and price increases at its architectural glass and
metal products business
o Oldcastle Infrastructure sales growth was driven by
stronger volumes and price improvements across most
geographies and end-use segments
-- Distribution: Good like-for-like sales growth in the first
quarter, driven primarily by our General Builders Merchants
businesses in Germany, the Netherlands and France
First Half Outlook
Group EBITDA, for the seasonally less significant first half of
the year, is expected to be in excess of EUR1.5 billion (H1 2018:
EUR1.13 billion) reflecting a mid-single digit percentage increase
on a like-for-like basis with a good contribution from acquisition
activity. This also includes the benefit of currency exchange
movements and the impact of IFRS 16 Leases. In Americas Materials,
with a continued positive demand environment, like-for-like EBITDA
is expected to be ahead of H1 2018. Like-for-like H1 EBITDA is also
expected to be ahead in Europe Materials, despite challenges in the
UK due to ongoing Brexit related uncertainty. With continued
momentum, like-for-like EBITDA in Building Products is expected to
show good improvement compared with the same period last year.
Second Half Outlook
We expect growth in Americas Materials in the second half of the
year supported by continued advancement in both residential and
non-residential construction markets in the US along with increased
federal, state and local infrastructure funding measures. In Europe
Materials, while the good start to the year with more favourable
weather conditions is encouraging and we expect the second half
performance to be ahead of last year, we anticipate that the strong
rate of organic sales growth experienced in the first quarter is
likely to moderate. In Building Products, we expect growth in the
second half across all business segments in Europe and the US.
Against this backdrop and while maintaining a relentless focus on
progressing our profit improvement programme, we expect
like-for-like EBITDA in the second half of 2019 to be ahead of the
second half of 2018 (H2 2018: EUR2.24 billion).
Capital Allocation Update
Development Activity
As part of our continued focus on active portfolio management
and our previously announced EUR1.5 to EUR2 billion divestment
programme, the Group has reached agreement to divest of its
European Shutters & Awnings business to StellaGroup for a total
consideration in excess of EUR0.3 billion.
Year-to-date in 2019, the Group spent c. EUR0.2 billion on 16
bolt-on acquisitions / investments. Americas Materials completed 11
bolt-on acquisitions and one investment for a consideration of c.
EUR120 million and our Building Products Division completed four
acquisitions for c. EUR80 million.
The largest transaction to date in 2019 was the acquisition of
certain assets of Allied Concrete in Virginia by our Architectural
Products Group (APG). This strategic bolt-on serves as a geographic
in-fill for APG along the eastern seaboard of the US, connecting
APG's positions in the Washington DC area to those in the Carolinas
and enhances the platform's ability to serve mid-Atlantic hardscape
and masonry installers. The Building Products Division also
completed the acquisition of a paving plant in Poland and two other
acquisitions by Oldcastle Infrastructure in Washington and
Florida.
The Americas Materials Division completed one investment along
with ten bolt-on acquisitions in the US and one acquisition in
Canada, adding a total of over 70 million tonnes of permitted
aggregates reserves. These transactions involved the strategic
expansion and strengthening of existing aggregate operations,
particularly in Oregon and Florida.
As previously announced, our strategic review of the Europe
Distribution business is ongoing as we consider all options to
maximise shareholder value.
Share Buyback Programme
The total cash returned to shareholders over the last 12 months
under our ongoing share buyback programme was EUR1 billion, of
which EUR200 million was completed year-to-date. In light of our
strong balance sheet and cash generation, the Board is proposing to
continue our share buyback programme with a further tranche of up
to EUR350 million to be completed before the Group's interim
results announcement in August 2019. Any share buybacks are subject
to and shall comply with shareholder approval of CRH's general
authority to repurchase ordinary shares at the Group's AGM
tomorrow. Subsequent tranches will remain under active
consideration.
CRH will report its interim results for the six months ending 30
June 2019 on Thursday, 22 August 2019.
CRH plc will host an analysts' conference call and webcast
presentation at 08:30 BST on Wednesday, 24 April 2019 to discuss
the Trading Update. To join this call please dial: +353 (0)1
2460271, user PIN *0 (further international numbers are available
here). A recording of the conference call will be available on the
Reports and Presentations page of the CRH website.
Contact CRH at +353 1 404 1000
Albert Manifold Chief Executive
Senan Murphy Finance Director
Frank Heisterkamp Head of Investor Relations
About CRH
CRH (LSE: CRH, ISE: CRG, NYSE: CRH) is the leading building
materials business in the world, employing c. 90,000 people at c.
3,700 operating locations in 32 countries. It is the largest
building materials business in North America, the largest heavyside
materials business in Europe and has a number of strategic
positions in the emerging economic regions of Asia and South
America. CRH manufactures and supplies a range of integrated
building materials, products and innovative solutions which can be
found throughout the built environment, from major public
infrastructure projects to commercial buildings and residential
structures. A Fortune 500 company, CRH is a constituent member of
the FTSE 100 index, the EURO STOXX 50 index, the ISEQ 20 and the
Dow Jones Sustainability Index (DJSI) Europe. CRH's American
Depositary Shares are listed on the NYSE.
For more information visit www.crh.com
Disclaimer
In order to utilise the "Safe Harbor" provisions of the United
States Private Securities Litigation Reform Act of 1995, CRH public
limited company (the "Company"), and its subsidiaries
(collectively, "CRH" or the "Group") is providing the following
cautionary statement.
This document contains statements that are, or may be deemed to
be forward-looking statements with respect to the financial
condition, results of operations, business, viability and future
performance of CRH and certain of the plans and objectives of CRH.
These forward-looking statements may generally, but not always, be
identified by the use of words such as "will", "anticipates",
"should", "could", "would", "targets", "aims", "may", "continues",
"expects", "is expected to", "estimates", "believes", "intends" or
similar expressions. These forward-looking statements include all
matters that are not historical facts or matters of fact at the
date of this document.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that may or may not occur in the future and reflect
the Company's current expectations and assumptions as to such
future events and circumstances that may not prove accurate.
A number of material factors could cause actual results and
developments to differ materially from those expressed or implied
by these forward-looking statements, certain of which are beyond
our control, as detailed in the section entitled "Risk Factors" in
our 2018 Annual Report on Form 20-F as filed with the US Securities
and Exchange Commission.
You are cautioned not to place undue reliance on any
forward-looking statements. These forward-looking statements are
made as of the date of this document. The Company expressly
disclaims any obligation or undertaking to publicly update or
revise these forward-looking statements other than as required by
applicable law.
The forward-looking statements in this document do not
constitute reports or statements published in compliance with any
of Regulations 6 to 8 of the Transparency (Directive 2004/109/EC)
Regulations 2007.
Registered Office: No 12965. Registered Office: 42 Fitzwilliam
Square, Dublin 2, R02 R279, Ireland
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END
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