RNS Number : 1175H
22 November 2022
Trading Update - November 2022
-- Further growth in sales, EBITDA & margin
-- Resilient performance in an inflationary cost environment
-- Delivery supported by strength & resilience of integrated solutions strategy
Nine months ended 30 September (1) 2022 Change
Sales $24.4bn +13%
EBITDA $4.2bn +14%
EBITDA Margin 17.1% +10bps
-- Active & disciplined portfolio management; $3.0bn invested in solutions-focused acquisitions
-- Ongoing share buyback programme to return $1.2bn to shareholders in 2022
-- Strong & flexible balance sheet; net debt/EBITDA to be 1x at year-end
-- Guidance confirmed; full-year EBITDA to be c.$5.5bn (2021: $5.0bn), well ahead of prior year
Albert Manifold, Chief Executive, said today:
"Notwithstanding a challenging and volatile cost environment, I
am pleased to report further growth in sales, EBITDA and margin
during the first nine months of the year. This performance reflects
the resilience of our business and the benefits of our integrated
and sustainable solutions strategy. The strength of our balance
sheet combined with our relentless focus on disciplined capital
allocation provides further opportunities to create value for all
our stakeholders. Looking ahead to the remainder of the year we
expect to deliver full-year EBITDA of approximately $5.5 billion
representing another year of progress for the Group."
Announced Tuesday, 22 November 2022
(1) Current and prior year trading information is presented on a
continuing operations basis, excluding the results of the Building
Envelope business which was divested in April 2022 and has been
classified as a discontinued operation.
Cumulative nine-month sales to the end of September amounted to
$24.4 billion, an increase of 13% compared with the corresponding
period in 2021. The positive momentum experienced in the first half
of the year continued into the third quarter, driven by resilient
demand, strong pricing and continued delivery from our integrated
Third quarter sales in Americas Materials were underpinned by
positive pricing initiatives across all lines of business,
offsetting lower activity levels which were impacted by
unfavourable weather in certain markets. Europe Materials
experienced softer activity levels in Q3 amid a challenging energy
cost backdrop. While adverse currency headwinds impacted overall
sales, like-for-like(2) sales were well ahead of 2021 driven by
strong commercial management. Building Products delivered strong
growth in Q3 led by good demand in utility infrastructure and
outdoor living solutions, as well as strong contributions from
Sales change versus 2021 Americas Materials Building Products Europe Materials Group
First half (H1) +17% +23% +5% +14%
Quarter 3 (Q3) +19% +36% -9% +13%
Nine months to September (9M) +18% +27% 0% +13%
------------------------------- ------------------- ------------------ ----------------- ------
EBITDA for the cumulative nine-month period was $4.2 billion,
14% ahead of prior year reflecting strong commercial management and
disciplined cost control. Nine-month EBITDA margin was ahead of
2021 despite significant cost headwinds.
EBITDA change versus 2021 Americas Materials Building Products Europe Materials Group
First half (H1) +12% +54% +4% +21%
Quarter 3 (Q3) +5% +62% -19% +7%
Nine months to September (9M) +8% +57% -6% +14%
------------------------------- ------------------- ------------------ ----------------- ------
Sustainability is deeply embedded in all aspects of our
business. Earlier this year, the Group announced an industry
leading 25% reduction target in absolute CO(2) emissions by 2030
which is certified by the SBTi(3) and is aligned with our ambition
to be a net-zero business by 2050. We have recently submitted an
updated 2030 carbon reduction roadmap to SBTi for validation in
line with the new 1.5degC framework. In addition, we continue to
expand our offering of integrated sustainable solutions to address
the needs of our customers, advancing circularity and innovating to
create a more sustainable built environment.
Notwithstanding a challenging cost backdrop, based on current
trading conditions and the momentum that we see across our
businesses, we expect full-year EBITDA to be approximately $5.5
billion (2021: $5.0 billion). Looking ahead to 2023, despite the
uncertain economic environment, we are well positioned in our core
markets of North America and Europe to continue to deliver
shareholder value through our integrated solutions strategy and our
relentless focus on margin expansion, cash generation and returns
(2) Like-for-like movements exclude the impact of currency
exchange, acquisitions and divestments.
(3) Scope 1 & 2 emissions reduction target approved by the
Science Based Targets initiative (SBTi).
Nine-month sales for our Americas Materials Division were 18%
ahead of the equivalent period in 2021 due to higher volumes in
aggregates and asphalt, along with improved pricing across all
lines of business. Nine-month EBITDA was 8% ahead of 2021 as a
result of strong commercial management and disciplined cost control
underpinned by our integrated solutions strategy.
Q3 sales were 19% ahead of 2021 and EBITDA was 5% ahead, a good
performance amid a challenging cost environment and some weather
disruption in certain regions.
Key Products in Brief
-- Aggregates: Volumes for the nine months were 1% ahead of
2021, with improved Q3 activity in our Great Lakes division and
strong demand in South offsetting lower activity levels in West and
Northeast. Average prices for the nine months were 10% ahead of
prior year, with increases in all regions.
-- Asphalt: Nine-month volumes finished 6% ahead of 2021
bolstered by large projects. Commercial initiatives delivered
pricing for the nine months 20% ahead of prior year, with increases
across all regions .
-- Readymixed Concrete: Volumes for the nine months were 4%
behind 2021, despite a strong performance in South supported by
good residential demand and improved Q3 activity levels in
Northeast and Great Lakes. Our West division experienced lower
activity as a result of inclement weather. Pricing progress was
achieved in all regions in the nine months; average prices were 14%
ahead of prior year.
-- Paving and Construction Services: Nine-month sales in our
paving and construction services business were 27% ahead of 2021
due to good commercial progress, strong execution of backlogs and
-- Cement: Nine-month sales were 12% ahead of 2021 with prices
also 12% ahead offsetting slightly lower demand due to inclement
weather in certain regions and lower activity levels in Canada.
Nine-month sales were 27% ahead of 2021 (+12% on a like-for-like
basis), reflecting good activity levels as demand for utility
infrastructure and outdoor living solutions remained positive in
addition to strong commercial management.
The strong momentum experienced in the first half of the year
continued into Q3 with EBITDA 62% ahead of the same period in 2021
(+21% like-for-like). Nine-month EBITDA finished 57% ahead (+17%
like-for-like), bolstered by the strong contribution of recent
acquisitions and a continued focus on delivering value-added
solutions to customers.
Key Products in Brief
-- Architectural Products: Nine-month sales and EBITDA were
ahead, supported by the performance of recent acquisitions and
pricing progress, partly offset by significant inflation in labour,
materials and freight costs. The integration of Barrette is
progressing well and trading is in line with expectations.
-- Infrastructure Products: Nine-month sales and EBITDA were
well ahead of prior year in both North America and Europe, driven
by continued strong demand for utility infrastructure solutions,
pricing discipline and contribution from acquisitions.
-- Construction Accessories: Proactive pricing actions resulted
in sales ahead of prior year in all regions as strong momentum from
2021 continued into 2022. EBITDA finished well ahead as good
activity and commercial progress mitigated the impact of cost
On a like-for-like basis, nine-month sales in Europe Materials
were 13% ahead reflecting continued pricing progress across the
business underpinned by our integrated solutions strategy.
Like-for-like EBITDA was 6% ahead with commercial excellence and
cost saving actions partially mitigating the significant impact of
energy cost inflation. Overall results were impacted by currency
exchange headwinds, resulting in nine-month sales in line with 2021
and EBITDA 6% behind.
Lower activity levels were experienced in Q3 amid softer
residential demand and a difficult cost backdrop, which led to a
decrease in Q3 EBITDA compared to prior year.
Key Markets in Brief
-- United Kingdom (UK) & Ireland: Nine-month sales in the UK
finished ahead of 2021 with pricing improvements across all lines
of business. When combined with performance improvement
initiatives, EBITDA was also ahead. Ireland delivered improved
sales and EBITDA in the first nine months of the year, due to
strong pricing and improved activity levels.
-- Europe East (Poland, Ukraine, Romania, Hungary, Slovakia,
Serbia and Croatia): Nine-month sales were ahead of prior year with
strong activity levels, particularly in Poland, following mild
weather earlier in the year and a continued focus on commercial
excellence. Activity levels in Ukraine were impacted by the ongoing
conflict and we continue to prioritise the assistance of our people
during this challenging time. Overall, EBITDA finished ahead of
prior year as good demand and pricing offset significant energy
-- Europe North (Finland, Germany and Switzerland): Nine-month
sales were ahead in all countries as a result of higher pricing.
Demand was impacted by competitive markets and higher energy costs
resulted in EBITDA in line with 2021.
-- Europe West (France, Benelux, Denmark and Spain): Price
increases across all products resulted in sales ahead of 2021,
however EBITDA declined due to significant cost inflation in energy
and raw materials.
-- Asia: Lower activity levels in the Philippines, following a
pre-election ban on construction earlier in the year, resulted in
sales slightly behind 2021 despite robust pricing. EBITDA declined
due to lower activity levels and higher raw materials and energy
Profit Before Tax Outlook
We expect full-year depreciation and amortisation expense to be
broadly in line with prior year (2021: $1.7 billion).
The impact of divestments and non-current asset disposals from
continuing operations in 2022 is expected to be behind 2021 (2021:
$116 million gain).
The Group's share of profits from equity accounted entities is
expected to be behind prior year (2021: $55 million) primarily due
to the performance of the Group's associate in China where activity
levels were impacted by ongoing COVID-19 restrictions.
Net finance costs are expected to be broadly in line with prior
year (2021: $399 million) primarily due to higher average borrowing
costs on debt offset by improved returns on deposits.
Taking each of these items into account together with our EBITDA
expectations, we expect full-year profit before tax to be ahead of
2021 (2021: $3.1 billion).
Balance Sheet Expectations
Reflecting our year-to-date acquisition spend, increased capital
expenditure and the continuation of the Group's share buyback
programme, year-end net debt is expected to be approximately $5.2
billion (2021: $6.3 billion). Taking into account our full-year
EBITDA guidance and our continued strong cash generation, our
year-end net debt to EBITDA ratio is expected to be approximately
1x (2021: 1.2x).
Capital Allocation Update
Share Buyback Programme
As announced on 20 September 2022, reflecting our strong
financial position and commitment to returning cash to
shareholders, the Group continued its share buyback programme with
a further tranche of a maximum consideration of $0.3 billion to be
completed no later than 16 December 2022. In total, we expect to
return c.$1.2 billion to shareholders in 2022 through our ongoing
share buyback programme.
Investments and Divestments
Year-to-date the Group invested $3.0 billion on 21 acquisitions
(including deferred and contingent consideration in respect of
prior year acquisitions) and a further $0.3 billion on expansionary
capital expenditure projects. On the divestment front, the Group
completed seven transactions and realised total business and asset
disposal proceeds of $3.7 billion, primarily relating to the
proceeds from the Building Envelope divestment.
The Building Products Division completed six acquisitions in the
United States (US) and one in Poland amounting to a total
year-to-date spend of $2.5 billion. The largest acquisition was in
our Architectural Products business where the Group completed its
acquisition of Barrette, North America's leading provider of
residential fencing and railing solutions. The Americas Materials
Division also completed six bolt-on acquisitions in the US for a
total spend of $0.4 billion, while the Europe Materials Division
completed eight bolt-on acquisitions totaling $0.1 billion.
2022 Divestments and Disposals
The largest divestment in the period was the divestment of the
Building Envelope business for cash proceeds of $3.5 billion
(enterprise value of $3.8 billion including lease liabilities
transferred), with a further six divestments completed across the
Group realising total proceeds of $53 million. In addition to these
business divestments, the Group realised proceeds of $66 million
from the disposal of surplus property, plant and equipment and
other non-current assets.
CRH will report its preliminary results for the full-year 2022
on Thursday, 2 March 2023.
CRH plc will host an analysts' conference call at 08:30 GMT on
Tuesday, 22 November 2022 to discuss the Trading Update.
Registration for this call can be made here . A recording of the
conference call will be available on the Results &
Presentations page of the CRH website.
Contact CRH at +353 1 404 1000
Albert Manifold Chief Executive
Jim Mintern Finance Director
Frank Heisterkamp Director of Capital Markets & ESG
Tom Holmes Head of Investor Relations
CRH (LSE: CRH, ISE: CRG, NYSE: CRH) is the leading building
materials business in the world, employing c.73,000 people at
c.3,200 operating locations in 29 countries. It is the largest
building materials business in North America and in Europe and also
has regional positions in Asia. CRH manufactures and supplies a
range of integrated building materials, products and innovative
end-to-end solutions which can be found throughout the built
environment in a wide range of construction projects from major
public infrastructure to homes and commercial buildings. 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 is ranked among sector leaders by
Environmental, Social and Governance (ESG) rating agencies. CRH's
American Depositary Shares are listed on the NYSE. For more
information visit www.crh.com
Disclaimer / Forward-Looking Statements
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
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.
In particular, the following statements, among others, are all
forward looking in nature: plans and expectations regarding margin
expansion, cash generation, demand, trading conditions, economic
environment, and costs; plans and expectations regarding enhancing
returns for shareholders, including expectations regarding share
buybacks; plans and expectations regarding CRH's pre-tax profit,
balance sheet, EBITDA, leverage, capital expenditure, depreciation
and amortisation expense, net debt, finance costs, the effect of
acquisitions on CRH's results, divestments and non-current asset
disposals; and plans and expectations regarding CRH's
decarbonisation target and delivery of sustainable solutions and
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, and which include, among other factors: economic and
financial conditions generally in various countries and regions
where we operate, including macroeconomic volatility; the pace of
growth in the overall construction and building materials sector;
demand for infrastructure, residential and non-residential
construction in our geographic markets; increased competition and
its impact on prices; increases in energy and/or raw materials
costs, including due to supply chain disruptions and constraints;
adverse changes to laws and regulations; approval or allocation of
funding for infrastructure programmes; adverse political
developments in various countries and regions, including the
ongoing geopolitical conflict in Ukraine; failure to complete or
successfully integrate acquisitions; the duration of the COVID-19
pandemic; weather conditions; and other factors discussed elsewhere
in this report, as well those factors discussed under "Risk
factors" in the Company's 2021 Annual Report and 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
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)
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(END) Dow Jones Newswires
November 22, 2022 02:00 ET (07:00 GMT)
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