Third quarter trading
Following like-for-like sales growth of +5% in the first half of 2011 (excluding exchange effects and the incremental impact of acquisitions and divestments), like-for-like sales showed growth of approximately +4% in the third quarter. Overall sales for the quarter were +3% ahead of last year (2010: €5.1 billion), with cumulative sales for the nine months to September now +5% ahead (2010: €12.8 billion).
On a constant currency basis, earnings before interest, tax, depreciation and amortisation (EBITDA) in the third quarter registered a -5% decline. This, combined with an adverse impact of exchange rate movements, resulted in overall EBITDA for the quarter of €0.65 billion (2010: €0.7 billion), leaving cumulative EBITDA for the first nine months in line with last year (2010: €1.2 billion).
Third quarter EBITDA in the distribution segments in Europe and the Americas advanced compared with the same period last year. EBITDA in the Americas products business was higher than 2010, but was lower in Europe products, reflecting further restructuring of clay activities and the absence of contributions from operations divested earlier this year.
In the materials businesses, third quarter EBITDA for Europe was in line with 2010; in the Americas, after delivering maintained levels of EBITDA in July/August, the materials operations were impacted by inclement weather in September and EBITDA was lower both for the month and for the quarter.
Full-year 2011 trading outlook
Assuming normal weather patterns for the remainder of the year, the company anticipates EBITDA of approximately €0.4 billion for the final quarter, broadly in line with the same period last year, and as a result it expects to report full-year EBITDA of approximately €1.6 billion (2010: €1.6 billion). This reflects an expected average US$ exchange rate of 1.40 versus the € (2010: 1.3257).
Development activity and full-year forecast debt
In the period since its Interim Results announcement in mid-August, CRH plc has completed a further eight transactions bringing year to date acquisition and investment expenditure to approximately €450 million, split broadly evenly between our Europe and Americas operations.
In the absence of further acquisitions for the remainder of 2011, the company expects year-end debt to be lower than the €3.5 billion at end-2010.
The net finance cost for 2011 based on current projected average exchange rates, and including non-cash adjustments required under International Financial Reporting Standards (mainly relating to pensions and discounting of provisions), is projected to be similar to 2010. EBITDA/net interest cover for the year is also expected to be similar to last year (2010: 6.5 times).
Cost reduction programme
The Interim Results Announcement on 16 August this year indicated that the cost reduction programme was expected to deliver total gross savings of €136 million in 2011. The company has continued to review and extend this programme, and has revised its estimate for 2011 savings to €150 million.
It is expected that these measures, combined with the actions taken across the Group since 2007, will result in significant operational leverage when markets recover. The estimate of the costs to be incurred in 2011 to implement these savings remains at approximately €36 million (2010: €100 million).
Read the article online at: https://www.worldcement.com/europe-cis/10112011/crh_plc_has_released_its_interim_management_statement-/