TIDMCRH
RNS Number : 2237G
CRH PLC
24 November 2020
Trading Update - November 2020
Key Highlights
-- Robust performance in a challenging trading environment
-- Further improvement in EBITDA and margin despite lower sales
Nine months ended 30 September 2020 LFL
Sales $20.6bn -3%
EBITDA $3.4bn +2%
EBITDA Margin 16.6% +100bps
-- Continued strong cash generation; expect year-end net debt/EBITDA of c. 1.4x
-- Non-cash impairment of c. $0.8bn expected in Q4
-- Agreement reached to divest of Brazil cement business for $0.2bn
-- Expect full-year EBITDA to be in excess of $4.4bn; ahead of 2019 on a LFL basis
Albert Manifold, Chief Executive, said today:
"As we continue to navigate these challenging times, the health
and safety of our people remains our number one priority and is a
core focus in our business each and every day. Markets continue to
be impacted by the global pandemic and while we have seen some
lower activity levels, I am pleased to report further improvement
in trading performance, with an advance in both profitability and
margins. The outlook for the coming months remains uncertain and
visibility is limited, however, I am confident that we are well
positioned for the challenges and opportunities that lie
ahead."
Announced Tuesday, 24 November 2020
Health & Safety
As new waves of COVID-19 infections emerge across many of our
markets, the health and safety of our people remains our number one
priority. Our approach to workplace safety is uncompromising and
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 Summary
Cumulative nine-month sales to the end of September amounted to
$20.6 billion, a decrease of 3% compared with the corresponding
period in 2019, maintaining the level of sales decline reported at
the half year stage.
Third quarter trading in our Building Products Division was
ahead, benefiting from strong residential repair, maintenance &
improvement (RMI) demand in North America. While activity began to
recover in Europe Materials in Q3, year-to-date sales remained
behind prior year. In Americas Materials, Q3 sales performance was
impacted by unfavourable weather conditions and a strong prior year
comparative.
Sales (like-for-like(1) ) change versus 2019 Americas Materials Europe Building Group
Materials Products
First half (H1) -1% -11% +2% -3%
Quarter 3 (Q3) -7% -2% +4% -3%
Nine months to September (9M) -4% -7% +3% -3%
---------------------------------------------- ------------------- ----------- ---------- ------
Despite the lower sales, EBITDA for the period was $3.4 billion,
up 1% on prior year and up 2% on a like-for-like basis reflecting a
continued strong focus on cost rationalisation and mitigating
actions to minimise the financial impacts of lower sales caused by
the pandemic. The Group reported $65 million of non-recurring
COVID-19 related restructuring items in the first six months of the
year and we expect to incur similar costs in the second half.
EBITDA (like-for-like) change Americas Europe Building Group
versus 2019 Materials Materials Products
First half (H1) +20% -28% +11% +2%
Quarter 3 (Q3) +3% +2% +5% +3%
Nine months to September (9M) +9% -14% +9% +2%
------------------------------- ----------- ----------- ---------- ------
Trading Outlook
Based on the underlying trends in our businesses and recognising
continued uncertainty across our markets, we expect full-year
EBITDA to be in excess of $4.4 billion for 2020. For now, there is
limited visibility into 2021, however the longer-term prospects for
CRH remain positive, given our significant financial strength and
operational resilience together with a portfolio of high-quality
assets in attractive markets.
1 Like-for-like movements exclude the impact of currency
exchange, acquisitions, divestments and non-recurring items.
Americas Materials
Nine-month like-for-like sales for our Americas Materials
operations were 4% behind the equivalent period in 2019. Our North
region was particularly impacted by COVID-19 restrictions earlier
in the year while volumes in South were also impacted by delayed
state lettings and unfavourable weather conditions. This was partly
offset by healthy market fundamentals and solid backlogs in our
West region along with pricing progress in most product lines.
However, Q3 sales in the West region were impacted by unfavourable
weather and wildfires in August and September. Our Cement business
in North America experienced lower volumes in the first nine months
of the year, however these were offset by pricing gains.
Like-for-like EBITDA for Q3 was ahead of 2019, resulting in
nine-month EBITDA 9% ahead with solid price progression, good cost
control and lower energy costs.
Key Products in Brief
-- Aggregates: Like-for-like aggregates volumes for the nine
months were 3% behind 2019; average year-to-date prices increased
by 3% with increases in all regions.
-- Asphalt: Delays in state lettings in the South region along
with pandemic restrictions resulted in nine-month volumes 9% behind
on a like-for-like basis; average prices were 2% behind impacted by
lower bitumen input costs, however margins increased.
-- Readymixed Concrete: Volumes for the nine months were 5%
behind 2019 on a like-for-like basis impacted by current year
project delays along with the non-recurrence of large projects;
average prices were 6% ahead.
-- Paving and Construction Services: Nine-month like-for-like
sales in our paving and construction services business were 8%
behind 2019 as solid activity in West was offset by pandemic
restrictions and project delays in certain states.
-- Cement: COVID-19 restrictions, adverse weather conditions and
lower demand from key sectors offset robust residential activity in
western regions; nine-month like-for-like volumes were 1% behind
2019 while prices were 4% ahead with progress achieved in all
markets.
Europe Materials
Nine-month like-for-like sales were 7% behind 2019, an
improvement on the half year as trading activity recovered during
Q3; however this was not sufficient to offset the impact of
significant COVID-19 related government interventions and shutdowns
in the second quarter. The United Kingdom (UK) which was one of the
most significantly impacted markets saw some improvement in Q3
although activity levels are still below pre-COVID levels. Western
European markets experienced improved activity levels in key
markets as restrictions eased. Eastern European markets continued
to trade well in Q3.
Like-for-like EBITDA for Q3 was ahead of prior year as improved
pricing and the benefit of cost saving measures and lower energy
costs offset the impact of lower volumes. Nine-month like-for-like
EBITDA was 14% behind.
Key Markets in Brief
-- Western Europe: Despite some recovery in Q3 activity levels
and continued pricing progress, nine-month sales were behind the
prior year due to lower volumes which were impacted by strict
COVID-19 restrictions in Q2, across a number of key markets such as
the UK, Ireland and France. EBITDA was behind impacted by the lower
sales, partly offset by cost rationalisation and improved cement
pricing.
-- Eastern Europe: Nine-month sales were ahead of prior year as
construction sites remained open throughout the pandemic. Higher
cement volumes and improved pricing along with cost saving measures
resulted in EBITDA ahead of the same period in 2019.
-- Asia: Despite record Q3 volumes, government shutdowns in the
first half of the year resulted in lower nine-month volumes than
prior year. Prices were also behind, impacted by product mix which
resulted in lower sales compared to 2019. Lower energy costs along
with operational and procurement initiatives resulted in EBITDA
ahead for the nine months.
Building Products
Nine-month like-for-like sales were 3% ahead of 2019 reflecting
strong volumes in Architectural Products, improved pricing in most
platforms, benefits arising from commercial excellence, ongoing
profit improvement and cost rationalisation initiatives. This
resulted in strong operating leverage and like-for-like EBITDA for
the nine months was 9% ahead of prior year.
Key Products in Brief
-- Architectural Products: Nine-month like-for-like sales and
EBITDA were ahead of 2019 reflecting volume improvements in all key
markets and product lines as well as selling price increases. In
North America the significant increase in residential RMI demand
experienced in the second quarter continued into Q3 while sales
also remained robust in Europe, particularly in Germany and Poland.
The businesses delivered strong operating leverage on the increased
sales as price increases, disciplined cost control and the benefits
of profit improvement initiatives were delivered.
-- Building Envelope: COVID-19 restrictions and "shelter in
place" orders in key markets impacted volumes at both C.R. Laurence
and our architectural glass operations, although the Q3 rate of
decline softened with reduced restrictions. Nine-month
like-for-like sales and EBITDA were behind 2019 as a result of
lower volumes, partly offset by cost management initiatives to
align costs with the lower activity levels.
-- Infrastructure Products: Nine-month like-for-like sales were
behind prior year, driven by Q3 volume declines in North America
due to slower demand in key product lines, COVID-19 restrictions in
Europe earlier in the year and a downturn in the telecoms market in
Australia. Despite the lower volumes, good pricing and stringent
cost control resulted in nine-month like-for-like EBITDA ahead of
2019.
-- Construction Accessories: Nine-month like-for-like sales were
behind the same period in 2019, mainly impacted by COVID-19 related
business disruption in both Europe and North America. Some recovery
has been experienced in recent months, particularly in Europe,
while challenging market conditions continued to impact our
businesses in North America. Like-for-like EBITDA was behind 2019,
impacted by lower volumes and partly offset by cost reduction
measures.
Profit Before Tax Outlook
We expect full-year depreciation and amortisation expense to be
in line with last year (2019: $1.7 billion).
Arising from the Group's impairment testing process and as a
result of the combined economic impacts of COVID-19 and Brexit, we
expect to recognise non-cash impairment charges of c. $0.8 billion
in our full-year results for 2020. These charges primarily relate
to our UK business and our associate investment in China.
The net gain on divestments and non-current asset disposals in
2020 is expected to be c. $20 million (2019: $189 million loss)
.
The Group's share of profits from equity accounted entities
(pre-impairment) is expected to be lower than prior year (2019: $67
million) mainly due to the divestment of the Indian joint venture
along with the impact of COVID-19 restrictions on a number of
operations.
Net finance costs are expected to be broadly in line with last
year (2019: $490 million).
Taking each of these elements into account together with our
EBITDA outlook, we expect full-year profit before tax
(pre-impairment) to be ahead of 2019 (2019: $2.2 billion).
Balance Sheet Expectations
In line with our previous guidance, year-end net debt is
expected to show a significant improvement on prior year (2019:
$7.5 billion), to c. $6 billion resulting in net debt to EBITDA of
approximately 1.4x based on robust EBITDA performance, continued
strong working capital management, lower acquisition spend, lower
capital expenditure in response to lower activity levels and a
pause in the Group's share buyback programme.
Acquisitions and Divestments
The Group has spent c. $181 million on 14 acquisitions to date
in 2020 (including deferred and contingent consideration in respect
of prior year acquisitions).
On the divestment front, the Group completed seven transactions
and realised total business and asset disposal proceeds of c. $263
million, inclusive of $122 million relating to the receipt of
deferred proceeds from prior year divestments.
The agreement to divest our Brazil cement business for
consideration of $0.2 billion is currently subject to competition
authority review and the transaction is expected to close in
2021.
CRH will report its preliminary results for the full-year 2020
on Thursday, 4(th) March 2021.
CRH plc will host an analysts' conference call at 08:30 GMT on
Tuesday, 24 November 2020 to discuss the Trading Update. To join
this call please dial: +353 (0) 1 506 0650, confirmation code
1578116 (further international numbers are available 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
Senan Murphy Finance Director
Frank Heisterkamp Director of Capital Markets & ESG
Tom Holmes Head of Investor Relations
About CRH
CRH (LSE: CRH, ISE: CRG, NYSE: CRH) is the leading building
materials business in the world, employing c.79,000 people at
c.3,100 operating locations in 30 countries. It is the largest
building materials business in North America, a leading heavyside
materials business in Europe and has positions in both 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 2019 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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTPPGCUGUPUGQW
(END) Dow Jones Newswires
November 24, 2020 02:00 ET (07:00 GMT)
Grafico Azioni Crh (LSE:CRH)
Storico
Da Apr 2024 a Mag 2024
Grafico Azioni Crh (LSE:CRH)
Storico
Da Mag 2023 a Mag 2024