CRH plc has issued its financial results for the quarter ended 30 September 2014.
3Q14 financial highlights
- Third quarter like-for-like1sales increased by 3%.
- Third quarter EBITDA improved by 6% (Europe close to 2013; Americas up 10%).
- Strong operational leverage in CRH’s businesses underpinned improved margins and returns.
- The company’s portfolio analysis is complete (the refined portfolio criteria provides focus to its future acquisition strategy to establish leading positions in markets that offer the most attractive future returns and growth in the cycle ahead).
- Strong balance sheet and cash generation capability (CRH is well-positioned to take advantage of value-creating acquisition opportunities).
- CRH’s multi-year €1.5 billion to €2 billion divestment programme is well underway, with proceeds of approximately €0.4 billion expected in 2014. Portfolio management is now embedded as a core component of CRH’s approach to value-creation.
- Guidance reiterated: 2014 a year of profit growth.
As expected, 3Q14 trading saw moderating trends in Europe following the favourable early season weather conditions of 1H14 and continued positive momentum in the US where overall economic recovery is driving construction demand.Cumulative sales (including acquisitions and divestments) to end September amounted to €14 billion (2013: €13.4 billion), with corresponding EBITDA of €1.2 billion (2013: €1.06 billion).
The trends in EBITDA have been mixed in 2014, with Europe leading the performance delivery in 1H14 and the Americas taking the lead in 2H14. Assuming normal weather patterns for the remainder of the year and a US£/€ exchange rate of 1.332(2013: 1.3281), the company expects EBITDA for 4Q14 to be broadly similar to the strong performance in 4Q13. Against this backdrop, CRH forecasts second-half EBITDA to be somewhat ahead of last year (2H13: €1.08 billion), resulting in expected full year EBITDA growth of c.10% in 2014 (2013: €1.475 billion).
The company expects full year depreciation and amortisation expense to be approximately 5% lower than last year (2013: €725 million before impairment charges3). Overall profit on disposals will be dependent on the timing of divestment transactions; however, the profit on sale of non-current assets (mainly property, plant and equipment) for 2014 is expected to be similar to last year (2013: €26 million). The share of profits from equity-accounted entities for 2014 is expected to be c.10% lower (2013: €61 million pre-impairment). Net finance costs are expected to be similar to last year (2013: €297 million).
After the encouraging start to the year helped by favourable early-season weather, trading in 3Q14 was impacted by moderating trends in more recent months. Like-for-like sales for the quarter were 2% lower than in 2013, although very tight cost control enabled CRH to maintain EBITDA close to last year’s level. Assuming normal weather patterns for the remainder of the year, the company expects Europe EBITDA, for the year as a whole, to be approximately 10% ahead of last year (2013: €583 million).
Against the backdrop of improving construction activity in the US, the company’s Americas operations benefited in 3Q14 from stronger underlying demand following the weather-impacted first half. Like-for-like sales for the quarter were 6% ahead of 2013 and overall EBITDA improved by 10% in US$ terms. For the full year CRH expects EBITDA to be approximately 10% ahead of last year (2013: €892 million).
Adapted from press release by Rosalie Starling
Read the article online at: https://www.worldcement.com/europe-cis/13112014/crh-reports-third-quarter-sales-growth-of-3-percent-845/