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CRH Trading Update 1Q16: Part 2

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World Cement,


Europe Update

The stabilising market backdrop and good weather in the first few months of this year contributed to solid demand, albeit with competitive pricing in some regions, resulting in sales for the first quarter in line with proforma 2015.

Europe Heavyside is a vertically integrated manufacturer and supplier of aggregates, cement, readymixed and precast concrete, concrete landscaping and asphalt paving products for road surfacing. Despite improvement in demand drivers in some of the main markets, regional variations translated into sales for the first quarter in line with proforma 2015.

Q1 Markets in Brief

  • UK: Demand environment mixed but overall stable; aggregates slightly down, cement volumes ahead of 2015. 
  • Switzerland: Improved volumes but pricing environment remains competitive. 
  • Netherlands: Continued market recovery driven by increased residential construction. 
  • Poland: Cement volumes broadly in line with 2015; prices remain competitive; downstream volumes ahead. 
  • Finland: Increased cement volumes and resilient downstream volumes driven by non-residential construction.
  • France: Good start to the year, volumes marginally ahead • South East Europe: Good underlying demand with increased volumes, particularly Romania.

Europe Lightside provides a range of engineered product solutions to the construction industry by designing, manufacturing and supplying high value-add products with a strong focus on innovation and product development. Our main Lightside markets, primarily Germany, the UK, Netherlands, Switzerland and Belgium, are generally stable with activity in France starting to recover. Sales for the first quarter were 6% ahead of proforma 2015.

Q1 Markets in Brief

  • Construction Accessories: Increased demand in the UK, Benelux and France; exports outside of Europe mixed. 
  • Shutters and Awnings: Increased volumes in Germany and the UK. 
  • Perimeter Protection & Network Access Products: Weaker project-related start in 2016 for Perimeter Protection partially offset in the Network Access.
  • Products business by strong activity in the UK market and good volumes to the railway sector in France. 

Europe Distribution
is a leading Builders Merchants in the Netherlands, Switzerland, Northern Germany, Austria and regional France, servicing the growing repair, maintenance and improvement construction sector. Sales were in line with proforma first quarter 2015.

Q1 Markets in Brief

  • Netherlands: Increased sales with continued recovery in new residential construction boosting General Merchants volumes. 
  • Belgium: Sales growth continues, particularly from the Sanitary Heating and Plumbing (SHAP) business. 
  • Switzerland and Austria: Competitive markets continue. 
  • Germany: Stable market backdrop with a small increase in underlying RMI demand. 
  • France: Volumes resilient in a competitive market; some positive forward looking indicators in the new residential sector. 

Americas Update

Against the backdrop of improving construction activity in the United States during the first quarter, our Americas operations benefited from stronger demand combined with mild winter weather patterns. Sales in the first quarter were 22% higher than proforma 2015. In Canada, our more significant operations are in the eastern provinces of Ontario and Quebec where activity is stable; the market backdrop further west remains mixed.

Americas Materials operates in 44 US states and 9 Canadian provinces. It is the leading supplier of product to the highway repair and maintenance sector in the US as well as supplying aggregates, readymixed concrete and asphalt for industrial and residential development. It is also a vertically integrated supplier of cement, aggregates, readymixed concrete and asphalt in Canada. The continued positive economic momentum in the US this year has resulted in improved demand for aggregates and readymixed concrete together with positive pricing trends compared with the first quarter of 2015. Asphalt volumes were also strongly ahead in the US although prices reduced due to the continued low input cost environment. This markedly seasonal business typically sells less than 10% of annual asphalt volumes and approximately 20% of aggregates and readymixed concrete volumes in the first quarter of the year. Sales for the first quarter were 27% ahead of proforma 2015.

Q1 Markets in Brief

US Infrastructure: Federal funding moderately increasing; State funding improving. 
US Non-Residential: Improving activity supporting positive volume and price trends. 
US Aggregates and Readymixed concrete: Volumes up 25% in the first quarter. 
US Asphalt: Volumes well ahead in the first quarter.
Canada: Demand remains mixed but stable.

Americas Products is the leading supplier of both concrete products and architectural glass and glazing systems in North America. Against a backdrop of improving demand and favourable weather, the first quarter saw 22% growth in sales compared with proforma 2015. Shipments at our Architectural Products business were particularly strong with volume growth of 35% while sales at our Precast business were up 5%. Architectural glass volumes and project activity at our BuildingEnvelope® business were strongly ahead of the prior year and, in addition, the results from CRL were in line with expectations.

Q1 Markets in Brief

  • Non-Residential: Continued year-on-year growth with positive trends in most regions and segments.
  • Residential: Continued growth in new residential construction activity; homecenter and RMI segments up.

Americas Distribution is a leading supplier of building materials to the professional Exterior Products (roofing/siding) contractor and to the Interior Products (ceilings/walls) demand segment. Sales increased by 17% in the first quarter of the year as a result of better weather in key regional markets and a particularly strong performance in our Exterior Products business.

Q1 Markets in Brief

  • Non-Residential: Continued improvement in new construction; wallboard prices broadly stable.
  • Residential: Favourable early-season weather allowed for increased RMI activity.

Asia

First quarter cement demand in the Philippines was supported by strong Foreign Direct Investment in the business process outsourcing sector, overseas workers' remittances and increasing government infrastructure spend.

Adapted from press release by

Read the article online at: https://www.worldcement.com/europe-cis/27042016/crh-trading-update-1q16-part-2-986/


 

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