OREANDA-NEWS. CRH plc, the international building materials group, issues the following Interim Management Statement in accordance with the reporting requirements of the EU Transparency Directive.

Good Performance from Continuing Operations

  • As expected, third quarter trading benefited from continued positive momentum in the Americas where overall economic recovery is driving construction demand. The backdrop in Europe continues to be mixed but stable.
  • Cumulative sales from continuing operations1 amounted to €15.5 billion for the nine months to the end of September, an increase of 16% compared with the corresponding period in 2014.
2015 sales change versus 2014 Europe  Americas  Group 
First half (H1)  +3%  +32%  +17%
Quarter 3 (Q3)  +1%  +23%  +14%
9 months to September  +2%  +28%  +16%
  • 9M EBITDA from continuing operations was €1.5 billion, an increase of 34%; Europe up 3%; Americas up 55%.
  • A relentless focus on performance in all our businesses, coupled with our vertically integrated business model for heavyside materials, delivered the strong operational leverage underpinning improved margins and returns.

Acquisition Integration

  • Integration of the businesses acquired from Lafarge/Holcim (LH) is progressing well. These businesses, which are performing in line with our expectations, are expected to contribute EBITDA of c.€0.34 billion to CRH’s 2015 results, before taking into account one-off transaction costs and accounting adjustments totalling €0.2 billion.

Portfolio Management

  • Continued progress with multi-year divestment programme; 9M divestment/disposal proceeds of €0.74 billion.

Financial Discipline 

  • We continue to maintain a strong focus on prudent financial management, and we remain committed to restoring our debt metrics to normalised levels in 2016.

Full Year Outlook

    • With momentum continuing to be positive in the Americas, we reiterate our guidance that 2015 will be a year of growth.
    • Assuming normal weather conditions for the remainder of the year, we expect Q4 EBITDA from CRH’s continuing operations to be ahead of Q4 2014 which benefited from a strong close to that year. As a result we expect the full year 2015 EBITDA contribution from continuing operations, which includes the benefit of positive currency translation impacts, to be approximately 25% ahead of 2014 (2014: €1.58 billion).
Continuing operations EBITDA change versus 2014 Europe  Americas  Group 
H1  +4%  +57%  +29%
9M to end September  +3%  +55%  +34%
Expected full year increase - continuing operations  c.+3%  c.+40%  c.+25%
  • Overall EBITDA outturn for the year, with the inclusion of post-acquisition contribution from the LH assets, and after taking into account the impact of divestments and one-off items, is estimated to be c.€2.08 billion, well ahead (> 25%) of last year (2014: €1.64 billion).

 

Finance and Development Update

Net debt of €8.0 billion at the end of September was €4.5 billion higher than at end-September 2014 reflecting the significant acquisition spend in 2015, partly offset by net inflows as a result of the higher trading levels this year and our continued focus on working capital management and capital expenditure control. Assuming no further material acquisitions or divestments for the remainder of 2015, and based on current exchange rates, we expect year-end net debt to be less than €7.5 billion (2014: €2.5 billion), implying a net debt/EBITDA ratio of approximately 3.6 times at end-2015. Given the level of proceeds already realised to date this year under our divestment programme, and the Group’s strong track record in converting a significant proportion of its EBITDA into operating cash flow, we are on track to deliver on our commitment to restore our debt metrics to normalised levels in 2016.

In addition to the acquisition of the LH assets and C.R. Laurence, development spend for the first nine months of 2015 amounted to €130 million (including deferred payments on prior year acquisitions) on 9 acquisitions and 4 investments. Disposal proceeds for the first nine months amount to c.€738 million which, combined with the 2014 proceeds of €345 million, brings cumulative proceeds generated since the announcement in August 2014 of our divestment programme to €1.1 billion.