8-K

CRH PUBLIC LTD CO 8-K Report (Aug 23, 2018)

Filed August 23, 2018For Securities:CRH

Summary

CRH Public Limited Company reported its interim results for the six months ended June 30, 2018. The company demonstrated resilience, achieving performance in line with guidance despite facing significant weather disruptions in Q1 and currency headwinds. Sales increased by 1% to €11.9 billion, and EBITDA remained stable at €1.13 billion, with a consistent EBITDA margin of 9.5%. Earnings per share from continuing operations grew by 11% to 45.0c. The company remains actively engaged in portfolio management, with substantial divestments (€2.9 billion) and acquisitions (€3.4 billion) year-to-date, including significant strategic moves like the acquisition of Ash Grove Cement Company. CRH also returned €350 million to shareholders through the completion of the first phase of its share buyback program and increased its interim dividend by 2% to 19.6c per share. The outlook for the second half of the year is cautiously optimistic, with expectations of improving momentum in Europe and continued EBITDA growth in the Americas.

Key Highlights

  • 1First half (H1) 2018 performance was in line with guidance, with sales up 1% to €11.9 billion and EBITDA up 1% to €1.13 billion.
  • 2EBITDA margin remained strong at 9.5%, consistent with the prior year, despite an inflationary cost environment.
  • 3Significant portfolio activity: €2.9 billion in divestments and €3.4 billion in acquisitions year-to-date, including 28 bolt-on transactions.
  • 4The first phase of the share buyback program was completed, returning €350 million to shareholders.
  • 5Interim dividend increased by 2% to 19.6c per share.
  • 6Earnings per share (EPS) from continuing operations increased by 11% to 45.0c.
  • 7Acquisition of Ash Grove Cement Company for €2.85 billion strengthens CRH's position in the North American cement market.

Frequently Asked Questions

CRH's H1 2018 performance was primarily driven by a 2% like-for-like sales increase, which offset adverse weather conditions in the first quarter. While Europe saw a 1% like-for-like sales increase with modest price recovery, the Americas experienced a stronger 3% like-for-like sales growth due to solid volume and price improvements. The company also benefited from active portfolio management and strategic acquisitions, such as Ash Grove Cement.

CRH demonstrated resilience by maintaining its EBITDA margin at 9.5% despite an inflationary cost environment. This was achieved through a continued focus on performance improvement initiatives across its businesses. The company also strategically managed its portfolio, divesting non-core assets and acquiring businesses that enhance its market position and vertical integration.

CRH expects an improvement in momentum for the second half of 2018. The company anticipates further EBITDA growth in the Americas driven by positive economic indicators and infrastructure improvements. In Europe, while facing currency headwinds, an improvement in the momentum experienced in the first half is expected. Challenging market conditions are anticipated to persist in the Philippines.

The acquisition of Ash Grove Cement Company for €2.85 billion is a significant strategic move that establishes CRH as a market leader in the North American cement market. This acquisition enhances vertical integration with CRH's existing aggregates, asphalt, and readymixed concrete businesses, providing a stronger platform for growth in the US.