CRH EBITDA up 25% in 2019
CRH plc posted a six per cent advance, or three per cent like-for-like (LfL), in sales to EUR28.3bn in 2019 when compared with 2018. The company’s EBITDA increased 25 per cent (+3 per cent LfL) YoY to EUR4.2bn while it saw an EBITDA margin increase of 230 basis points.
“CRH delivered good profit growth in 2019 supported by positive momentum in our heritage businesses and strong contributions from recent acquisitions. With a continuing focus on margin expansion, cash generation and enhanced returns for shareholders, we believe that 2020 will be a year of further progress for the Group,” said Albert Manifold, CEO.
Regional and business breakdown
Economic growth continued in the USA in 2019, with improvements in the infrastructure sector and solid fundamentals in key residential and non-residential markets. Headwinds driven by flooding and wet weather in the 1H19 were offset by a stronger 2H19 and LfL sales in Americas Materials for the full year were up four per cent YoY.
In its Europe Materials business, there was a five per cent YoY rise in organic sales due to good activity in key markets and pricing progress across all product lines. “Performance was positive for our businesses in eastern and western Europe, which offset challenging trading conditions in the UK as construction activity declined amidst Brexit-related uncertainty,” reported the company.
Its Building Products business saw continued improvements in 2019 reflecting a positive demand and pricing backdrop and LfL sales advanced two per cent when compared with 2018. Underlying trends in residential and non-residential activity were positive in the West Coast and Southern regions of the US and the company’s main markets in Europe also experienced good demand.
Divestments and acquisitions
During the year CRH divested assets of a total value of EUR2.1bn in 11 transactions, mostly in the Europe Distribution business (EUR1.6bn in total) but also including the company’s Indian cement joint venture My Home Industries Ltd.
In addition, it carried out EUR0.7bn in acquisitions, including EUR460m in 16 bolt-on acquisitions for its Building Products Division. The Americas Materials Division completed 27 bolt-on acquisition and two investments at a cost of around EUR210m to bolster the company’s operational footprint. A further 15 acquisitions and two investments were made by the Europe Materials Division with a total value of around EUR55m.
Outlook
In its forecast, the company expects its Americas Materials Division to perform well, supported by continuing favourable economic conditions. We expect growth in the US residential and non-residential market sectors with positive momentum in infrastructure activity, underpinned by state and federal funding,” says the company.
In its Europe Materials Division, its anticipates positive construction demand in key markets with steady progress in western Europe and good growth in eastern Europe. While Brexit has created uncertainty in the UK construction market, CRH expects some stabilisation in 2020.
“Against a positive backdrop in North America and Europe, we expect further growth in Building Products aided by ongoing commercial and operational performance initiatives. For the Group overall, with a continued focus on portfolio refinement, margin expansion, cash generation and enhanced returns for shareholders, we believe that 2020 will be a year of further progress,” concludes the company in its results statement.
