TIDMCRH
RNS Number : 4002P
CRH PLC
17 November 2016
N E W S R E L E A S E
17 November 2016
TRADING UPDATE
CRH plc, the international building materials group, issues the
following Trading Update for the period 1 January 2016 to 30
September 2016.
Trading Performance
-- As expected, third quarter trading benefited from continued
growth in the Americas, albeit at a more modest pace than in the
first half which benefited from favourable early season weather; in
Europe the momentum remained positive.
-- Cumulative sales amounted to EUR20.4 billion for the nine
months to the end of September, an increase of 22% compared with
the corresponding period in 2015. On a proforma(1) basis, sales
were 6% higher than 2015.
Proforma 2016 sales Europe Americas Asia Group
change versus 2015
======================= ======= ========= ===== ======
First half (H1) +3% +13% +4% +8%
======================= ======= ========= ===== ======
Quarter 3 (Q3) +4% +1% +3% +2%
======================= ======= ========= ===== ======
9 months to September
(9M) +4% +8% +4% +6%
======================= ======= ========= ===== ======
-- EBITDA for the nine months to the end of September was EUR2.4
billion, an increase of 14% on proforma 2015.
Proforma 2016 EBITDA Europe Americas Asia Group
change versus 2015
======================= ======= ========= ===== ======
First half (H1) +5% +39% +7% +20%
======================= ======= ========= ===== ======
Quarter 3 (Q3) +5% +11% +8% +9%
======================= ======= ========= ===== ======
9 months to September
(9M) +5% +21% +7% +14%
======================= ======= ========= ===== ======
-- A relentless focus on performance in all our businesses,
coupled with our vertically integrated business model for heavyside
materials, delivered good operational leverage underpinning
improved margins and returns.
Full Year Outlook
-- As previously stated and despite significant currency
headwinds, overall EBITDA outturn for the year is estimated to be
in excess of EUR3 billion, well ahead (> 35%) of last year (2015
reported: EUR2.22 billion); the expected outturn includes a full
year contribution from 2015 acquisitions and is after taking into
account the impact of divestments and one-off items.
-- We continue to maintain a strong focus on prudent financial
management, and we remain on track to deliver year-end net debt of
less than 2 times EBITDA.
(1) Proforma comparisons are at constant currency; include the
2015 pre-acquisition trading of the LH and CRL acquisitions; and
exclude all divested entities and certain one-off items.
Full Year Outlook, continued
We expect full year depreciation and amortisation expense to be
circa EUR1.1 billion (2015 reported: EUR0.9 billion).
Profits on sale of property, plant and equipment for 2016 are
expected to be broadly similar to last year (2015 reported: EUR39
million). The net gain/loss on business disposals in 2016, which is
dependent on the timing of divestment transactions still to be
completed, is unlikely to be material (2015 reported: EUR62
million).
The Group's share of profits from equity-accounted entities is
expected to be approximately EUR30 million (2015 reported: EUR44
million), reflecting the sale of certain investments in 2015 and
reduced performance in some markets.
Net finance costs are expected to be broadly similar to last
year (2015 reported: EUR389 million) as the non-recurrence of a
cost of EUR38 million charged in 2015 for the early redemption of a
portion of the US$ bonds is expected to be offset by the cost of
increased debt in 2016.
Finance and Development Update
Assuming no further material acquisitions or divestments for the
remainder of 2016, and based on forecast exchange rates, we expect
year-end net debt to be less than EUR6 billion (2015: EUR6.6
billion); this implies a net debt/EBITDA ratio of less than 2 times
at end-2016, delivering on our commitment to restore our debt
metrics to normalised levels in 2016.
Development spend for the first nine months of 2016 amounted to
EUR172 million (including deferred payments on prior year
acquisitions) on 17 acquisitions and investments. Disposal proceeds
for the first nine months amounted to EUR163 million.
Europe Update
Proforma results in the first half of this year were ahead of
the strong first half of 2015 and, on the back of continued
recovery in some key markets, proforma sales and EBITDA were also
ahead of Q3 2015. Assuming normal weather patterns for the
remainder of the year, we expect Europe EBITDA for 2016 as a whole
to be in excess of EUR1 billion.
Europe Heavyside: Following growth of 4% in the first half of
2016, proforma sales in the third quarter were 8% ahead of Q3 2015,
bringing cumulative 9M proforma sales 5% ahead of 2015. Proforma
EBITDA in the third quarter was 5% ahead of 2015 and cumulative
proforma EBITDA was 4% above the same period in 2015.
Key Markets in Brief
-- U.K.: improved volumes and prices of cement, aggregates and
readymixed concrete partly offset by lower asphalt volumes due to
project delays; limited Brexit impact on trading to date
-- France: improving private demand supporting increased volumes
but pricing remains competitive
-- Switzerland:volumes remain robust but prices challenging in
competitive markets impacted by strong Swiss franc
-- Benelux: improving economic backdrop in the Netherlands
positively impacting residential demand
-- Germany: improving volumes of main products but price pressure persists
-- Denmark: positive economic backdrop supporting strong demand and improved pricing
-- Ireland: strong momentum in construction demand continues
-- Poland: despite solid macro-economic backdrop volumes below
2015; significant price pressure
-- Finland: recovery of construction market continues, improved
volumes in all products, pricing still competitive
-- Ukraine: markets continue to be resilient; cement volumes
ahead of 2015 with prices improving
-- South East Europe: good progress in residential and
non-residential demand offset by poor weather and moderating
infrastructure spend
Europe Lightside: Following a strong start to the year, proforma
sales in the third quarter were up 4% compared with 2015,
reflecting good demand for key products in major markets; proforma
EBITDA for the period was 10% ahead of Q3 2015 bringing cumulative
proforma EBITDA 12% above the same period in 2015.
Europe Update, continued
Key Markets in Brief
-- Construction Accessories: improved performance due to
positive momentum in some key markets and exports
-- Shutters & Awnings: good progress resulting from internal
cost control focus and stable market backdrop
-- Network Access Products: strong demand and favourable product mix in some key markets
-- Perimeter Protection: increased demand for mobile fencing and
internal cost control partly offset by weaker permanent fencing
Europe Distribution: Reflecting the mixed economic backdrop in
some key markets, proforma sales reduced by 2% in the third
quarter, compared with a first half increase of 1%. Proforma EBITDA
for the period was 5% ahead of Q3 2015 as cost and commercial focus
resulted in improved margins.
Key Markets in Brief
-- Belgium: increased demand particularly for SHAP partly offset
by reduced new residential construction
-- Netherlands: ongoing signs of improving overall sentiment; increasing residential demand
-- Switzerland: activity impacted by slowing demand in our key markets
-- Germany: RMI sector broadly in line; DIY remains resilient
Americas Update
Against the backdrop of increased construction activity in the
United States, our Americas operations benefited in the third
quarter from good underlying demand following the strong first half
which benefited from favourable weather. Proforma sales for the
quarter were up 1% compared to Q3 2015 while proforma EBITDA
improved by 11% reflecting a strong margin improvement. For the
full year we expect EBITDA to be in excess of EUR1.9 billion based
on a projected average full year 2016 US dollar/euro exchange rate
of 1.11.
Americas Materials: Following a very strong first half, which
benefited from favourable weather that facilitated project
acceleration, the third quarter experienced more normalised demand
patterns with proforma sales in line with Q3 2015. Year to date
September proforma sales were 6% ahead of the same period last
year. The improving first half margin trends continued and proforma
EBITDA for the quarter was 14% ahead of last year.
Key Markets in Brief
-- Infrastructure: stable Federal funding underpinned by the
FAST Act; State funding increasing
-- Non-Residential: improving activity supporting positive volume and price trends
-- Aggregates: proforma volumes in line with Q3 2015; up 7% in
the nine months to end September
-- Asphalt: proforma volumes down 2% in Q3; up 6% in the nine months to end September
-- Readymixed concrete: proforma volumes in line with Q3 2015;
up 7% in the nine months to end September
-- Cement: proforma volumes (principally Canada) down 2% in Q3;
up 1% for the nine months to end September
Americas Products: With strong market conditions in all major
end use segments for both new construction and RMI continuing, the
third quarter experienced ongoing sales growth albeit at a more
moderate pace than the favourably weather impacted first half.
Third quarter proforma sales were 5% ahead of Q3 2015, with year to
date September 12% ahead of the same period last year. Proforma
EBITDA in the third quarter was 9% ahead of Q3 2015, reflecting
better volumes and a continued focus on commercial and cost
initiatives.
Markets in Brief
-- Non-Residential: activity advancing steadily, supported by
low interest rates and increasing employment
-- Residential: expanding in most regions; positive single and multi-family home trends
Americas Update, continued
Americas Distribution: Third quarter proforma sales were
slightly ahead of Q3 2015, bringing cumulative growth to 8% for the
nine months to end September. Proforma EBITDA for the third quarter
was 1% ahead of Q3 2015, bringing the growth in cumulative proforma
EBITDA to 11% compared with the first nine months of 2015.
Markets in Brief
-- Non-Residential: higher Q3 sales on the back of good new construction activity
-- Residential: following a very strong weather impacted first
half residential roofing demand moderated
Asia
The newly formed Asia division reflects the results from the
Philippines operations acquired as part of the LH Assets in the
second half of 2015 together with CRH Asia's divisional costs.
Proforma results in the first half of this year were ahead of the
first half of 2015 and on the back of favourable underlying demand
fundamentals in the Philippines, proforma sales and EBITDA further
advanced in Q3 compared to 2015. With the ongoing demand backdrop
we expect EBITDA for 2016 as a whole to be in excess of EUR100
million.
Separately, the Group's investments in India and China are
equity-accounted and CRH's share of profit after tax from these
businesses is reported in profit before tax along with the Group's
other equity-accounted investments.
Key Markets in Brief
-- Philippines: economic growth supported by strong domestic
consumption, low inflation and a low debt to GDP ratio; cement
market demand continues to grow and prices advanced
-- India: volumes ahead due to favourable economic backdrop but pricing remains challenging
-- China: volumes and prices remain under pressure in the north east of China
_________
CRH will report its Preliminary Results for full year 2016 on
Thursday, 2 March 2017.
This document contains certain forward-looking statements as
defined under US legislation. By their nature, such statements
involve uncertainty; as a consequence, actual results and
developments may differ from those expressed in or implied by such
statements depending on a variety of factors including the specific
factors identified in this document and other factors discussed in
our Annual Report on Form 20-F filed with the SEC.
CRH plc will host an analysts' conference call at 08:30 GMT on
Thursday, 17 November 2016 to discuss the statement. To join this
call please dial: +353 (0)1 2460271 using Conference Code 6886650#,
PIN *0 (further international numbers are available here). A
presentation to accompany this call and audio playback will be
available on the Reports and Presentations page of the CRH
website.
Contact CRH at Dublin 404 1000 (+353 1 404 1000)
Albert Manifold Chief Executive
Senan Murphy Finance Director
Frank Heisterkamp Head of Investor Relations
Mark Cahalane Group Director, Corporate Affairs
CRH plc, Belgard Castle, Clondalkin, Dublin 22, Ireland
TELEPHONE +353.1.404.1000 FAX +353.1.404.1007
E-MAIL mail@crh.com WEBSITE www.crh.com Registered Office, 42
Fitzwilliam Square, Dublin 2, Ireland
Appendix 1: Divisional Proforma Sales and EBITDA 2016 change
versus 2015
For the comparison below 2016 and 2015 figures are adjusted to
exclude the results from businesses which have now been divested
and also to exclude certain one-off cost items. The information for
2015 has also been adjusted to reflect the following:
-- proforma full year 2015 results attributable to the LH Assets
and CRL (both acquired in Q3 2015),
-- a currency translation adjustment in order to provide
comparatives on a constant currency basis with 2016 figures.
Proforma First Third Nine
Sales 2016 Half Quarter Months
change versus
2015
Europe Heavyside +4% +8% +5%
Europe Lightside +8% +4% +7%
Europe Distribution +1% -2% 0%
===================== ====== ========= ========
Total Europe +3% +4% +4%
Americas
Materials +12% 0% +6%
Americas
Products +16% +5% +12%
Americas
Distribution +11% +1% +8%
===================== ====== ========= ========
Total Americas +13% +1% +8%
Total Asia +4% +3% +4%
Total CRH +8% +2% +6%
===================== ====== ========= ========
Proforma EBITDA First Third Nine
2016 change Half Quarter Months
versus 2015
Europe Heavyside +4% +5% +4%
Europe Lightside +14% +10% +12%
Europe Distribution +5% +5% +5%
======================= ====== ========= ========
Total Europe +5% +5% +5%
Americas Materials +69% +14% +26%
Americas Products +21% +9% +16%
Americas Distribution +26% +1% +11%
======================= ====== ========= ========
Total Americas +39% +11% +21%
Total Asia +7% +8% +7%
Total CRH +20% +9% +14%
======================= ====== ========= ========
This information is provided by RNS
The company news service from the London Stock Exchange
END
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