CRH - February 2019

CRH's turnover improved by 6.2 per cent in 2018 to EUR26,790m and EBITDA was ahead by seven per cent to EUR3365m. The trading profit rose by 3.9 per cent to EUR2177m. The net interest charge was 5.5 per cent higher at EUR305m and the pretax profit was a marginal 0.07 per cent lower at EUR1862m. The tax charge jumped from EUR55m to EUR426m but remains relatively modest at 22.9 per cent. After a jump in profits from discontinued activities from EUR107m to EUR1085m, the net attributable profit rose by 31.4 per cent to EUR2521m. Net debt at the end of December was 12 per cent higher at EUR6984m and the gearing level rose from 40.4 per cent to 43.6 per cent, while shareholder's funds improved by 10.6 per cent to EUR16,029m. 

European turnover was 3.9 per cent higher at EUR12,975m but adjusting for the sale of the DIY activities in the Benelux, there was a 9.3 per cent increase. EBITDA edged ahead by 0.6 per cent to EUR1251m. Turnover in the Americas improved by 2.6 per cent to EUR11,384m ant the underlying level, but in absolute terms there was a 20.3 per cent reduction, while EBITDA showed an underlying 13.7 per cent advance, while in absolute terms there improvement was a more modest 4.4 per cent. Asian sales came off by 1.1 per cent to EUR431m. The European contribution accounted for 48.4 per cent of the group turnover, compared with 42.5 per cent for the Americas, 1.6 per cent for Asia and 7.5 per cent in respect of discontinued activities, mainly in distribution.

The European heavy building materials turnover improved by 10.3 per cent to EUR7611m and EBITDA advanced by 8.6 per cent to EUR911m and the trading profit was 4.8 per cent higher at EUR501m. Cement volumes advanced in Poland, France, Germany, Slovakia, Hungary, Ireland, Switzerland and Serbia. Cement shipments were a bit lower in Finland, Spain, Great Britain and Ukraine. British aggregates, asphalt and ready-mixed concrete profits were lower in a challenging environment. In Ireland volumes and prices were ahead in most products, as was the case in France and Belgium. Helped by EU-funded infrastructure investment Polish materials volumes advanced, and Hungary, Slovakia and Serbia were also ahead.

European lightside building products saw turnover improve by 4.7 per cent to EUR1508m and EBITDA advanced by 6.3 per cent to EUR152m with the trading profit showing an 7.8 per cent gain to EUR110m. Construction accessories, which is the largest profit contributor, saw turnover volume growth in most of western Europe though Germany suffered from labour shortages. Shutters and awnings saw turnover improving by one per cent, while profitability was flat. Architectural products showed improved profitability, notably in Poland where demand was strong.

The European distribution operations saw turnover ease by seven per cent to EUR3856m and EBITDA declined by 32.7 per cent to EUR181m with the trading profit showing a 45.9 per cent drop to EUR112m. General builders merchants improved profits in The Netherlands and Germany, but the results from France and Austria was weaker as was Switzerland. In sanitary, plumbing and heating, Germany performed better, but Belgium and Switzerland did less well. 

The American heavy building materials turnover improved by 12.3 per cent to EUR8951m and EBITDA was up by 17.6 per cent to EUR1493m, while the trading profit also advanced by 17.6 per cent to EUR1009m. The acquisition of Ash Grove in June gave CRH a leading position in the cement market and further synergy benefits have been identified. Including the acquisitions made during the year, volumes increased by eight per cent in aggregates and prices were on average three per cent higher. Excluding the acquisitions made during the year, volumes were little changed. Volumes declined by three per cent in asphalt and margins came under increased pressure as increased bitumen prices could not be fully passed on. In ready-mixed concrete, volumes rose by 29 per cent as a result of acquisitions and prices were increased by some three per cent.  Paving and construction services saw an increase of six per cent.

Turnover in building products was ahead by 2.4 per cent to EUR4,433m and EBITDA improved by 5.2 per cent to EUR603m and the trading profit advanced by 5.5 per cent to EUR459m. Six acquisitions were completed during the year, for a cost of some EUR160m. Architectural products saw some increase in activity but a solid advance in trading profit. Precast products achieved an improved sales growth in 2018.

In Asia turnover declined by 1.1 per cent to EUR431m and EBITDA fell by 52.1 per cent EUR25m and a trading loss of EUR14m was incurred, compared with a EUR15m profit. In the Philippines, volumes and prices continued to advance, but the profit contribution declined further as a result of higher fuel and power costs. The associates in China saw improved prices, but the profit contribution was down on the back of lower volumes and increased coal prices. In India profits declined again because of price pressures and adverse exchange rate movements, though volumes were ahead.