8-K

CRH PUBLIC LTD CO 8-K Report (May 7, 2010)

Filed May 7, 2010For Securities:CRH

Summary

CRH plc, a global building materials group, released an Interim Management Statement on May 5, 2010, providing an update on its trading performance for the first four months of the year. The company experienced a significant decline in like-for-like sales in January and February due to exceptionally harsh winter weather across Northern Europe and North America. This led to a cumulative like-for-like sales decline of 14% for the first four months of 2010 compared to the same period in 2009. Despite the challenging start, CRH noted a moderation in sales declines in March and April as weather conditions normalized. The company anticipates this trend to continue, projecting a like-for-like sales decline of approximately 10% for the first half of 2010, with an expected high-teen percentage decline at the EBITDA level. While European economic news remains mixed, the United States, a key market for CRH's EBITDA, shows more positive growth indicators. CRH expects a stronger second half of the year, with EBITDA likely to exceed the prior year, driven by improving sales trends, cost-reduction benefits, and lower restructuring costs.

Key Highlights

  • 1Group like-for-like sales declined by 23.5% in January and February 2010 due to harsh winter weather, but moderated to a 7% decline in March and April.
  • 2Cumulative like-for-like sales for the first four months of 2010 were down approximately 14% compared to the same period in 2009.
  • 3CRH expects a like-for-like sales decline of approximately 10% for the first half of 2010, with an anticipated high-teen percentage EBITDA decline.
  • 4The company anticipates EBITDA for the second half of 2010 to be ahead of the prior year, supported by improving sales trends and cost-saving measures.
  • 5Performance varied by region, with Europe Materials showing recovery in Poland and Finland, while Americas Materials benefited from improved infrastructure activity and federal highway funding.
  • 6Europe Products faced significant declines, particularly in Concrete Products, though Clay Products in the UK showed strength.
  • 7Americas Distribution saw mixed results, with Exterior Products recovering while Interior Products, reliant on new commercial construction, continued to decline.

Frequently Asked Questions

The primary reason for the significant sales decline in January and February 2010 was exceptionally harsh winter weather conditions experienced in Northern Europe and North America, which severely impacted construction and material activities.

CRH anticipates a continued moderation of sales declines. They expect the full first-half 2010 like-for-like sales to be approximately 10% below the first half of 2009, with EBITDA declining in the high-teen percentage range. However, the company expects EBITDA in the second half of 2010 to be ahead of the prior year, driven by positive economic indicators in the US, ongoing cost reduction, and lower restructuring costs.

In Europe, Materials operations in Poland and Finland showed recovery, while Products faced declines, particularly in concrete, though UK clay brick demand was strong. Distribution business in Europe proved more robust. In the Americas, Materials benefited from infrastructure projects and highway funding, while Products experienced declines in non-residential construction but saw strength in patio products. Americas Distribution's Exterior Products recovered, but Interior Products, tied to new commercial construction, continued to struggle.

CRH will issue a trading statement and development update for the six months ending June 30, 2010, on Wednesday, July 7, 2010.