CRH’s sales in Europe are hit by the prolonged winter

CRH plc has released its Interim Management Statement detailing performance and results up to end-April 2013, as well as its outlook for 1H13 and 2H13.

Europe

Operations in Europe were affected by a harsh and prolonged winter in addition to the ongoing economic challenges in the region, both of which impacted construction activity. On a like-for-like basis, sales fell by 12% to around €0.3 billion in the first four months of the year. In 1Q13, sales dropped by 13% on a like-for-like basis, with cumulative sales up to the end of April estimated to be 12% lower than the same period last year. Highlights for the first four months of 2013 include:

• Hit by the lingering winter, Poland and Ukraine saw cement volumes decrease by 39% and 17%, respectively.
• There was some progress in Switzerland and Finland for CRH Europe Materials but Spain and Ireland continued to feel the effects of challenging market conditions.
• The Products business was also impacted by the weather and lower construction activity, with sales declining by 13% to €0.1 billion.

Americas

Poor weather conditions in the Americas in January – April 2013 meant that like-for-like sales declined by 2% to €0.05 billion in spite of the gradual recovery of the construction industry. Americas Products saw sales increase by 2% in the first four months of the year. For Americas Materials, poor weather conditions and a quiet season meant that sales volumes of aggregates, asphalt and ready-mix concrete fell by 10%, 23% and 8%, respectively.

Outlook

In 1H13, CRH plc expects growth in the Americas as residential and non-residential construction activity increases. However, sales and profitability in Europe are unlikely to reach the levels achieved in the same period in 2012.

In 2H13, EBITDA should be higher than in 2H12 as continued growth in the Americas, acquisitions and cost saving initiatives help to offset the weakened European market. Additional measures will be taken in Europe to reduce CRH’s cost base and mitigate the poor economic climate in the region.

Adapted from press release by Louise Fordham.

Read the article online at: https://www.worldcement.com/europe-cis/09052013/crh_building_materials_interim_results_976/