RNS Number : 1805T
23 November 2021
Trading Update - November 2021
-- Positive nine-month performance; sales +11% ahead of prior year
-- Good underlying demand & continued pricing progress across key markets
-- Strong growth in profitability and further margin expansion
Nine months ended 30 September 2021 Change
Sales $22.8bn +11%
EBITDA $3.9bn +15%
EBITDA Margin 17.1% +50bps
-- Performance supported by integrated solutions model
-- Robust cash generation & financial discipline; expect year-end net debt/EBITDA of c.1.2x
-- Year-to-date acquisition spend $1.4bn; strong pipeline of opportunities
-- Share buyback programme ongoing; $0.8bn completed year-to-date
-- Expect full-year EBITDA to be in excess of $5.25bn; well ahead of prior year
Albert Manifold, Chief Executive, said today:
CRH continues to perform well with good underlying demand and
pricing progress across our key markets. Our uniquely integrated
and solutions-focused business model has supported further margin
expansion across our businesses, while our strong cash generation
and disciplined approach to capital allocation provides further
opportunities to create value for all of our stakeholders. Looking
ahead to the remainder of the year, we expect to deliver another
record performance for the Group, with full-year EBITDA in excess
of $5.25 billion.
Announced Tuesday, 23 November 2021
Health & Safety
The health and safety of our people remains our top priority as
many of our markets continue to be affected by COVID-19. Our focus
is to ensure that we continue to 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.
Cumulative nine-month sales to the end of September amounted to
$22.8 billion, an increase of 11% compared with the corresponding
period in 2020 and 7% ahead on a like-for-like basis. First-half
growth moderated in the third quarter as easing pandemic related
restrictions in the third quarter of 2020 resulted in a strong
prior year comparative.
Third quarter sales remained ahead of prior year across all
divisions, with good demand in key markets. Americas Materials was
primarily driven by improved pricing as volume growth was impacted
by inclement weather, while Europe Materials continued to benefit
from improved activity levels in Eastern Europe and the United
Kingdom (UK). Building Products delivered further growth in the
third quarter against a strong prior year comparative.
Sales (like-for-like(1) ) change versus 2020 Americas Materials Europe Materials Building Products Group
First half (H1) +3% +17% +8% +10%
Quarter 3 (Q3) +4% +6% +1% +4%
Nine months to September (9M) +3% +13% +6% +7%
---------------------------------------------- ------------------- ----------------- ------------------ ------
1 Like-for-like movements exclude the impact of currency exchange, acquisitions and divestments
EBITDA for the period was $3.9 billion, 15% ahead of the prior
year and 11% ahead on a like-for-like basis reflecting strong
volume growth and a continued focus on price improvements and cost
rationalisation to offset input cost inflation. Third quarter and
nine month EBITDA margins were ahead in all Divisions.
EBITDA (like-for-like) change versus 2020 Americas Materials Europe Materials Building Products Group
First half (H1) +6% +52% +12% +19%
Quarter 3 (Q3) +4% +7% +2% +4%
Nine months to September (9M) +5% +28% +9% +11%
------------------------------------------- ------------------- ----------------- ------------------ ------
Sustainability is deeply embedded in all aspects of our business
and we recognise the importance of our role in the delivery of a
lower carbon and more resilient built environment. Our 2025 carbon
reduction targets are industry leading and we remain fully
committed to achieving our ambition of carbon neutrality by 2050.
Further details on our carbon reduction strategy will be
communicated in the first half of 2022.
Based on current trading conditions and the positive momentum
that we see across our markets, we expect to deliver another record
performance in 2021, with full-year EBITDA in excess of $5.25
billion and further margin expansion. Looking ahead to 2022, we
expect the positive underlying demand and pricing backdrop to
continue albeit against an inflationary input cost environment. We
are encouraged by the passing of the $1.2 trillion infrastructure
package by the United States (US) Congress, which significantly
increases the commitment to future infrastructure investment in the
US. We believe that this positive demand backdrop, together with
the strength and resilience of our business model, leaves us well
positioned to deliver further growth and value creation for all of
Nine-month like-for-like sales for our Americas Materials
operations were 3% ahead of the equivalent period in 2020, driven
by higher volumes in aggregates, cement and readymixed concrete,
along with pricing progression across all lines of business.
Like-for-like EBITDA for Q3 was ahead of 2020, resulting in
nine-month EBITDA 5% ahead on a like-for-like basis, with higher
volumes, positive pricing, and good operating performance
offsetting commodity cost inflation.
Key Products in Brief
-- Aggregates: Like-for-like aggregates volumes for the nine
months were 2% ahead of 2020 driven by good demand in the Northeast
and West divisions; average year-to-date prices increased by 2%. On
a mix-adjusted basis, aggregates pricing increased 4%, with
increases in all regions, resulting in good margin expansion.
-- Asphalt: Unfavourable weather in the South and lower volumes
in the Northeast and Great Lakes divisions offset strong backlog
execution in the West division, resulting in nine-month
like-for-like volumes 1% behind 2020; average prices were 2%
-- Readymixed Concrete: Volumes for the nine months were 4%
ahead on a like-for-like basis, driven by strong demand; average
prices were 4% ahead with increases in all regions.
-- Paving and Construction Services: Nine-month like-for-like
sales in our paving and construction services business were 4%
behind 2020 primarily driven by inclement weather in the South and
a slower start to the season in the Northeast and Great Lakes
divisions. The West division saw increased activity driven by good
underlying demand. Construction margins were ahead of prior
-- Cement: Strong market demand across all regions resulted in
nine-month volumes 6% ahead of 2020; prices were 5% ahead with good
momentum in both the US and Canada.
Nine-month like-for-like sales were 13% ahead of 2020,
reflecting volume growth and price progress against a prior year
comparative which was heavily impacted by the COVID-19 pandemic. In
particular, Eastern Europe and the UK were strong contributors,
with improved performance across all product domains.
Like-for-like EBITDA for Q3 was ahead of prior year driven by
price increases across all products and strong fixed cost control;
nine-month like-for-like EBITDA was 28% ahead, reflective of the
very strong first half performance.
Key Markets in Brief
-- Western Europe: Demand increased following the easing of
COVID-19 restrictions resulting in overall nine-month like-for-like
sales well ahead of 2020. Sales in the UK were ahead with good
volumes and improved pricing across all lines of business, with
EBITDA well ahead supported by cost control initiatives. France and
Ireland benefited from increased demand against a prior year
comparative which was impacted by COVID-19 related shutdowns. Sales
in Germany increased supported by good volumes, while adverse
weather as well as the non-recurrence of a major project impacted
activity levels in Finland.
-- Eastern Europe: Nine-month like-for-like sales were ahead of
prior year as robust market demand resulted in higher cement
volumes; prices increased across most regions, with cost savings
initiatives also contributing to EBITDA growth.
-- Asia: Strong cement volumes in the Philippines were partly
offset by lower prices, resulting in increased sales for the nine
months compared to 2020. EBITDA was also strongly ahead, driven by
increased volumes coupled with benefits from operational and
procurement savings initiatives.
Nine-month like-for-like sales were 6% ahead of 2020, reflecting
improved pricing and strong demand for residential construction,
particularly in North America, partly offset by slower recovery in
the non-residential sector. Increased sales and ongoing cost
savings initiatives resulted in like-for-like EBITDA 9% ahead of
the prior year period.
Key Products in Brief
-- Architectural Products: Nine-month like-for-like sales and
EBITDA were ahead of prior year as the North America business
experienced strong volume growth in the early months of the year.
The pace of growth moderated in the third quarter against a very
strong comparative, but demand remained resilient. Like-for-like
sales and EBITDA in Europe were also ahead.
-- Building Envelope: Nine-month like-for-like sales and EBITDA
were ahead, as good pricing discipline and cost mitigation efforts
offset significant input cost inflation.
-- Infrastructure Products: Nine-month like-for-like sales were
ahead of prior year driven by growth in Europe and the Enclosures
business in North America. Strong cost management helped to offset
inflationary pressures resulting in like-for-like EBITDA
-- Construction Accessories: Recovery of activity levels post
COVID-19 restrictions drove nine-month like-for-like sales growth
against the same period in 2020, particularly in our businesses in
the US and UK. Strong volume growth and lower fixed overhead costs
offset input cost inflation, resulting in like-for-like EBITDA
ahead of prior year.
Profit Before Tax Outlook
We expect full-year depreciation and amortisation expense to be
broadly in line with prior year (2020: $1.7 billion).
The net gain on divestments and non-current asset disposals in
2021 is expected to be $0.1 billion (2020: $9 million).
The Group's share of profits from equity accounted entities is
expected to be ahead of prior year (2020: $32 million profit
Net finance costs are expected to be approximately $50 million
lower than prior year (2020: $490 million) primarily due to lower
average gross debt levels and borrowing costs.
Taking each of these elements into account together with our
EBITDA outlook, we expect full-year profit before
tax to be well ahead of 2020 (2020: $2.5 billion
Balance Sheet Expectations
Reflecting our year-to-date acquisition spend, increased capital
expenditure and the continuation of the Group's share buyback
programme, and assuming no further material development activity
for the remainder of the year, year-end net debt is expected to be
approximately $6.1 billion (2020: $5.9 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 1.2x (2020: 1.3x).
Capital Allocation Update
Share Buyback Programme
As announced on 30 September 2021, reflecting our strong
financial position and commitment to returning cash to
shareholders, the Group continued its share buyback programme with
a further tranche of $0.3 billion to be completed no later than 23
December 2021. Year-to-date, the Group has returned $0.8 billion of
cash to shareholders through our ongoing share buyback
The Group has spent c. $1.4 billion on 17 acquisitions in the
year-to-date (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. $0.4
billion, inclusive of $0.1 billion of deferred proceeds from prior
2021 Acquisitions and Investments
The Building Products Division completed seven bolt-on
acquisitions year-to-date amounting to a total spend of c. $0.8
billion. The acquisition in Q3 of National Pipe & Plastics, a
water, energy and infrastructure solutions business, represents the
largest acquisition year-to-date for this Division. The Americas
Materials Division completed seven bolt-on acquisitions across the
US for a total spend of c. $0.6 billion year-to-date. The
acquisition in Q3 of Angel Brothers, a vertically-integrated
asphalt paving business in Texas, represents the largest
acquisition by the Group in the year-to-date. The Europe Materials
Division completed three acquisitions year-to-date for a total
spend of $13 million.
2021 Divestments and Disposals
The divestment of the Brazilian operations by the Americas
Materials Division represented the largest divestment year-to-date.
Together with a further six other divestments, the Group realised
total proceeds of c. $0.4 billion, including proceeds from the
disposal of surplus property, plant and equipment and other
CRH will report its preliminary results for the full-year 2021 on Thursday, 3 March 2022.
CRH plc will host an analysts' conference call at 08:30 GMT on
Tuesday, 23 November 2021 to discuss the Trading Update. To join
this call please dial: +353 (0) 1 506 0650, confirmation code
4973308 (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
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.77,000 people at
c.3,100 operating locations in 29 countries. It is the largest
building materials business in North America and Europe and also
has regional positions in Asia. 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
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
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By their nature, forward-looking statements involve risk and
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the Company's current expectations and assumptions as to such
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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 2020 Annual Report on Form 20-F as filed with the US Securities
and Exchange Commission.
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disclaims any obligation or undertaking to publicly update or
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(END) Dow Jones Newswires
November 23, 2021 01:59 ET (06:59 GMT)
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