8-K

CRH PUBLIC LTD CO 8-K Report (Nov 13, 2013)

Filed November 13, 2013For Securities:CRH

Summary

CRH Public Ltd Co announced its Interim Management Statement for the third quarter of 2013, revealing a positive shift in sales performance. After a challenging first half impacted by adverse weather, the Group achieved a 2% like-for-like sales growth in the third quarter. This improvement was driven by a recovery in Europe and continued strength in the Americas. Despite currency headwinds, EBITDA for the third quarter was 3% higher than the previous year, leading CRH to reiterate its guidance for second-half EBITDA to be in line with 2012. The company is actively managing its portfolio, with cumulative acquisition/development spend of €660 million and disposal proceeds of €215 million year-to-date. A strategic review is underway to focus on businesses offering the most attractive future returns, likely leading to further non-core disposals. Additionally, CRH has identified further cost savings, now expecting its program to deliver €195 million in savings for 2013, with additional savings planned for 2014-2015. The company is focused on working capital management and capital expenditure control.

Key Highlights

  • 1Third quarter Group like-for-like sales grew by 2%, a significant improvement from the first half.
  • 2Third quarter EBITDA was 3% higher than in 2012, despite negative currency translation effects.
  • 3CRH reiterated its full-year EBITDA guidance, expecting the second half to be in line with the prior year.
  • 4The company has identified additional cost savings, now projecting €195 million in savings for 2013.
  • 5Cumulative acquisition and development spending reached €660 million by the end of September 2013.
  • 6A detailed portfolio review is in progress to focus on high-return businesses and potentially lead to further non-core disposals.
  • 7Working capital management and capital expenditure remain key focus areas for the company.

Frequently Asked Questions

The improvement in third-quarter sales was driven by a moderation in the rate of decline in European operations and a 4% sales increase in the Americas. Favorable weather conditions in the Americas from mid-August through September also played a significant role after a weather-impacted first half.

CRH reiterated its guidance that second-half EBITDA is expected to be in line with last year. The company anticipates normal weather patterns for the remainder of the year and expects full-year depreciation and amortization to be slightly lower than 2012. Net finance costs are also projected to be lower.

The detailed portfolio review is aimed at identifying businesses that offer the most attractive future returns for shareholders. This strategic assessment is expected to lead to further disposals of non-core businesses, allowing CRH to prioritize capital allocation towards profitable growth areas.

CRH is accelerating its cost reduction program. The company now expects to achieve incremental savings of €195 million across the Group for 2013, bringing cumulative savings to almost €2.4 billion since 2007. Further savings totaling €175 million have been identified for 2014 and 2015.