CRH benefitting from growth in Americas trading: Third quarter results 2017

CRH has announced the following Trading Update for the period 1 January 2017 to 30 September 2017.


Trading Performance


·     Third quarter trading benefited from continued underlying growth in the Americas, although some operations were impacted by adverse weather and hurricane activity. Momentum remained positive in Europe, while in Asia, very competitive market conditions continued.

·   Cumulative sales amounted to €20.7 billion for the nine months to the end of September, an increase of 2% compared with the corresponding period in 2016. On a like-for-like1 basis, sales were also 2% higher than 2016.

EBITDA for the nine months to the end of September 2017 was €2.43 billion, an increase of 2% compared with 2016 (€2.38 billion), also reflecting a like-for-like increase of 2%.


Full Year Outlook

 We continue to expect another year of progress for the Group; with the current momentum continuing for the remainder of the year, EBITDA including discontinued operations2 is estimated to be in excess of €3.2 billion (2016 reported: €3.13 billion).


We expect full-year depreciation and amortisation expense to be broadly in line with last year (2016 reported: €1.1 billion).


2017 profits on the sale of property, plant and equipment are expected to be broadly similar to last year (2016 reported: €51 million). The net gain/loss on business disposals in 2017, which is dependent on the timing of divestment transactions still to be completed, is unlikely to be material (2016 reported: €4 million). 


The Group’s share of profits from equity-accounted entities is expected to be approximately €65 million (2016 reported: €42 million), reflecting improved financial results in our associate investment in China.


Net finance costs are expected to be broadly similar to last year (2016 reported: €383 million), as the €19 million cost for early redemption of a portion of the US$ bonds maturing in 2018 will be offset by the lower costs resulting from reduced debt.


Development Activity


To date in 2017, the Group spent c.€1.34 billion on 27 acquisition/investment transactions (including deferred and contingent consideration in respect of prior year acquisitions). On the divestment front, the Group realised business and asset disposal proceeds of €165 million.


In the Americas, c.€690 million was spent on 18 acquisitions and one investment. Our Materials Division completed 11 bolt-on acquisitions, including two in Canada adding a further c.2 billion tonnes of aggregates reserves. The Products Division completed seven acquisitions and one investment at a cost of c.€165 million.


In Europe, c.€650 million has been spent on eight transactions; five acquisitions and one investment in Europe Heavyside and two acquisitions in Europe Distribution. The largest acquisition to date in 2017 was Fels, a leading lime and aggregates business in Germany with 1 billion tonnes of  high-quality limestone reserves, which was acquired at the end of October 2017. Fels has 11 production locations, nine in Germany and one in both the Czech Republic and Russia, with the majority of its production capacity situated in the Harz region of Eastern-Germany. CRH believes that this acquisition provides a strong platform for future growth.


Other Pending Transactions

As previously announced, CRH has entered agreements to sell its Americas Distribution business and acquire Ash Grove Cement Company, with both transactions expected to close in early 2018. CRH has also entered into an agreement to acquire certain assets in Florida of Votorantim Cimentos North America, Inc. and Anderson Columbia Co., comprising of a 1.0m tonne cement plant, 18 readymixed concrete plants, an aggregates quarry, two block plants and nine gunite facilities. This transaction is expected to close in late 2017.


Financial Discipline


Based on forecast exchange rates and with a year-to-date development net spend of €1.2 billion, excluding the acquisition of assets from Votorantim Cimentos North America, Inc. and Anderson Columbia Co. and assuming no further material acquisitions or divestments for the remainder of 2017, we expect year-end net debt to be in line with last year (2016: €5.3 billion).


Europe Update


Reflective of stabilising trends experienced in certain key markets and in light of solid underlying market activity, like-for-like sales for the first nine months of 2017 were 2% ahead of 2016 and like-for-like EBITDA 3% ahead of the same period last year. We expect similar momentum in the final quarter and full-year EBITDA for Europe to be approximately 4% ahead (2016 reported: €1.1 billion).


Europe Heavyside: Cumulative nine month like-for-like sales were 3% ahead of 2016 and cumulative like-for-like EBITDA was 4% above the same period in 2016 reflecting modest growth in volumes and price progress in certain countries.



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