Ireland-based building materials company CRH plc has released its interim management statement, which includes its results for January – April 2014 and forecasts for 1H14 and 2H14.
Thus far in 2014, the group has carried out seven acquisition and investment transactions worth a total of €60 million. The majority of these relate to bolt-on transactions in the Products business in the US.
- Like-for-like sales grew by 10% in the first four months of 2014. This has been attributed to increased construction activity, good weather conditions and a more stable economic backdrop.
- Cement sales volumes were up by 70% like-for-like in Poland and 30% in the Ukraine, as mild weather helped drive infrastructure work.
- Increased demand boosted cement sales in Switzerland and Benelux.
- A more positive performance from the construction industry helped cement volumes in Ireland to grow by around 10%.
- Following the acquisition of the Lemona cement plant in Spain in February 2013, volumes improved despite the ongoing challenges facing the Spanish cement industry.
- Cement sales volumes fell by approximately 5% in Finland where the residential sector is under pressure.
- Cumulative sales for Europe Materials were up 8% on the same period in 2013 on a like-for-like basis. The Distribution businesses saw sales increase by 8% in January – April 2014, while CRH’s Products businesses in Europe reported a 16% rise in sales.
- Like-for-like sales increased by around 2% in the Americas in January – April 2014. Sales were hit by harsh weather conditions, particularly in the eastern parts of the US.
- For the group’s Materials business, ready-mixed concrete volumes grew by 6%, while asphalt and aggregates sales volumes remained in line with the same period in 2014.
- The Americas Products business benefited from greater housing activity and improvements in the non-residential sector, leading like-for-like sales to increase by 3%.
- Sales declined by 2% like-for-like in the Distribution segment, as poor weather led to a decrease in exterior products sales.
CRH plc expects EBITDA to reach €0.5 billion in 1H14, compared to €0.4 billion in 1H13. EBITDA in 2H14 is forecast to be slightly more than the €1.08 billion recorded in the corresponding period in 2013. Although comparisons will be affected by the favourable weather conditions in 2H13, contributions from acquisitions and cost saving initiatives will aid the increase in EBITDA.
In Europe, greater economic stability in the main European markets in which the group operates is likely to lead to a continuing positive performance in the remainder of 1H14. Growth is expected to continue in the second half of the year but at a more moderate pace.
In the Americas, construction season will lead to improvements in the rest of 1H14 and this will continue into 2H14 as activity in the housing and non-residential sectors increases.
CRH plc’s cost reduction programme is on target to generate incremental savings of €100 million this year. The initiative aims to deliver €535 million in savings between 2012 and 2015.
Adapted from press release by Louise Fordham
Read the article online at: https://www.worldcement.com/europe-cis/07052014/crh_plc_interim_results_2014_150/