UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, DC
20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A - 16 OR 15D - 16 OF
THE SECURITIES EXCHANGE ACT OF 1934
24 November 2020
Commission
File No. 001-32846
____________________________
CRH
public limited company
(Translation of registrant's name into English)
____________________________
Belgard Castle, Clondalkin,
Dublin 22, Ireland.
(Address of principal executive offices)
____________________________
Indicate
by check mark whether the registrant files or will file annual
reports
under
cover of Form 20-F or Form 40-F:
Form
20-F X Form
40-F___
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by
Regulation
S-T Rule 101(b)(1):_________
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by
Regulation
S-T Rule 101(b)(7):________
Enclosure:
Trading Update - November 2020
Trading
Update - November 2020
Key
Highlights
● Robust performance in a challenging trading
environment
● Further improvement in EBITDA and margin despite
lower sales
Nine
months ended 30 September
2020
LFL
Sales
$20.6bn
-3%
EBITDA
$3.4bn
+2%
EBITDA Margin
16.6%
+100bps
● Continued strong cash generation; expect year-end
net debt/EBITDA of c. 1.4x
● Non-cash impairment of c. $0.8bn expected in
Q4
● Agreement reached to divest of Brazil cement
business for $0.2bn
● Expect full-year EBITDA to be in excess of $4.4bn;
ahead of 2019 on a LFL basis
Albert Manifold, Chief Executive, said
today:
"As we continue to navigate these challenging times, the health and
safety of our people remains our number one priority and is a core
focus in our business each and every day. Markets continue to be
impacted by the global pandemic and while we have seen some lower
activity levels, I am pleased to report further improvement in
trading performance, with an advance in both profitability and
margins. The outlook for the coming months remains uncertain and
visibility is limited, however, I am confident that we are well
positioned for the challenges and opportunities that lie
ahead."
Announced Tuesday, 24 November 2020
Health & Safety
As new waves of COVID-19 infections emerge across many of our
markets, the health and safety of our people remains our number one
priority. Our approach to workplace safety is uncompromising and
our primary focus is to ensure that we provide a safe working
environment for our employees, contractors and customers, enabling
them to carry out their activities in accordance with the various
health and safety protocols currently in place across our
markets.
Trading Summary
Cumulative nine-month sales to the end of September amounted to
$20.6 billion, a decrease of 3% compared with the corresponding
period in 2019, maintaining the level of sales decline reported at
the half year stage.
Third quarter trading in our Building Products Division was ahead,
benefiting from strong residential repair, maintenance &
improvement (RMI) demand in North America. While activity began to
recover in Europe Materials in Q3, year-to-date sales remained
behind prior year. In Americas Materials, Q3 sales performance was
impacted by unfavourable weather conditions and a strong prior year
comparative.
Sales
(like-for-like1)
change versus 2019
|
Americas Materials
|
Europe Materials
|
Building Products
|
Group
|
First
half (H1)
|
-1%
|
-11%
|
+2%
|
-3%
|
Quarter
3 (Q3)
|
-7%
|
-2%
|
+4%
|
-3%
|
Nine months to September (9M)
|
-4%
|
-7%
|
+3%
|
-3%
|
|
|
|
|
|
|
|
|
|
|
Despite the lower sales, EBITDA for the period was $3.4 billion, up
1% on prior year and up 2% on a like-for-like basis reflecting a
continued strong focus on cost rationalisation and mitigating
actions to minimise the financial impacts of lower sales
caused by the pandemic. The Group reported $65 million of
non-recurring COVID-19 related restructuring items in the first six
months of the year and we expect to incur similar costs in the
second half.
EBITDA (like-for-like) change versus 2019
|
Americas Materials
|
Europe Materials
|
Building Products
|
Group
|
First
half (H1)
|
+20%
|
-28%
|
+11%
|
+2%
|
Quarter
3 (Q3)
|
+3%
|
+2%
|
+5%
|
+3%
|
Nine months to September (9M)
|
+9%
|
-14%
|
+9%
|
+2%
|
Trading Outlook
Based on the underlying trends in our businesses and recognising
continued uncertainty across our markets, we expect full-year
EBITDA to be in excess of $4.4 billion for 2020. For now, there is
limited visibility into 2021, however the longer-term prospects for
CRH remain positive, given our significant financial strength and
operational resilience together with a portfolio of high-quality
assets in attractive markets.
1 Like-for-like movements exclude
the impact of currency exchange, acquisitions, divestments and
non-recurring items.
Americas
Materials
Nine-month like-for-like sales for our Americas Materials
operations were 4% behind the equivalent period in 2019. Our North
region was particularly impacted by COVID-19 restrictions earlier
in the year while volumes in South were also impacted by delayed
state lettings and unfavourable weather conditions. This was partly
offset by healthy market fundamentals and solid backlogs in our
West region along with pricing progress in most product
lines. However, Q3 sales in the West region were impacted by
unfavourable weather and wildfires in August and
September. Our Cement business in North America experienced
lower volumes in the first nine months of the year, however these
were offset by pricing gains.
Like-for-like EBITDA for Q3 was ahead of 2019, resulting in
nine-month EBITDA 9% ahead with solid price progression, good cost
control and lower energy costs.
Key Products in Brief
● Aggregates: Like-for-like aggregates volumes for the nine
months were 3% behind 2019; average year-to-date prices increased
by 3% with increases in all regions.
● Asphalt: Delays in state lettings in the South region along
with pandemic restrictions resulted in nine-month volumes 9% behind
on a like-for-like basis; average prices were 2% behind impacted by
lower bitumen input costs, however margins
increased.
● Readymixed Concrete: Volumes for the nine months were 5% behind 2019 on
a like-for-like basis impacted by current year project delays along
with the non-recurrence of large projects; average prices were 6%
ahead.
● Paving and Construction
Services: Nine-month
like-for-like sales in our paving and construction services
business were 8% behind 2019 as solid activity in West was offset
by pandemic restrictions and project delays in certain
states.
● Cement: COVID-19 restrictions, adverse weather conditions
and lower demand from key sectors offset robust residential
activity in western regions; nine-month like-for-like volumes were
1% behind 2019 while prices were 4% ahead with progress achieved in
all markets.
Europe Materials
Nine-month like-for-like sales were 7% behind 2019, an improvement
on the half year as trading activity recovered during Q3; however
this was not sufficient to offset the impact of significant
COVID-19 related government interventions and shutdowns in the
second quarter. The United Kingdom (UK) which was one of the most
significantly impacted markets saw some improvement in Q3 although
activity levels are still below pre-COVID levels. Western European
markets experienced improved activity levels in key markets as
restrictions eased. Eastern European markets continued to trade
well in Q3.
Like-for-like EBITDA for Q3 was ahead of prior year as improved
pricing and the benefit of cost saving measures and lower energy
costs offset the impact of lower volumes. Nine-month like-for-like
EBITDA was 14% behind.
Key Markets in Brief
● Western Europe: Despite some recovery in Q3 activity levels and
continued pricing progress, nine-month sales were behind the prior
year due to lower volumes which were impacted by strict COVID-19
restrictions in Q2, across a number of key markets such as the UK,
Ireland and France. EBITDA was behind impacted by the lower sales,
partly offset by cost rationalisation and improved cement
pricing.
● Eastern Europe: Nine-month sales were ahead of prior year as
construction sites remained open throughout the pandemic. Higher
cement volumes and improved pricing along with cost saving measures
resulted in EBITDA ahead of the same period in
2019.
● Asia: Despite record Q3 volumes, government shutdowns in
the first half of the year resulted in lower nine-month volumes
than prior year. Prices were also behind, impacted by product mix
which resulted in lower sales compared to 2019. Lower energy costs
along with operational and procurement initiatives resulted in
EBITDA ahead for the nine months.
Building Products
Nine-month like-for-like sales were 3% ahead of 2019 reflecting
strong volumes in Architectural Products, improved pricing in most
platforms, benefits arising from commercial excellence, ongoing
profit improvement and cost rationalisation initiatives. This
resulted in strong operating leverage and like-for-like EBITDA for
the nine months was 9% ahead of prior year.
Key Products in Brief
● Architectural Products: Nine-month like-for-like sales and EBITDA were
ahead of 2019 reflecting volume improvements in all key markets and
product lines as well as selling price increases. In North America
the significant increase in residential RMI demand experienced in
the second quarter continued into Q3 while sales also remained
robust in Europe, particularly in Germany and Poland. The
businesses delivered strong operating leverage on the increased
sales as price increases, disciplined cost control and the benefits
of profit improvement initiatives were
delivered.
● Building Envelope: COVID-19 restrictions and "shelter in place"
orders in key markets impacted volumes at both C.R. Laurence and
our architectural glass operations, although the Q3 rate of decline
softened with reduced restrictions. Nine-month like-for-like sales
and EBITDA were behind 2019 as a result of lower volumes, partly
offset by cost management initiatives to align costs with the lower
activity levels.
● Infrastructure Products: Nine-month like-for-like sales were behind prior
year, driven by Q3 volume declines in North America due to slower
demand in key product lines, COVID-19 restrictions in Europe
earlier in the year and a downturn in the telecoms market in
Australia. Despite the lower volumes, good pricing and stringent
cost control resulted in nine-month like-for-like EBITDA ahead of
2019.
● Construction Accessories: Nine-month like-for-like sales were behind the
same period in 2019, mainly impacted by COVID-19 related business
disruption in both Europe and North America. Some recovery has been
experienced in recent months, particularly in Europe, while
challenging market conditions continued to impact our businesses in
North America. Like-for-like EBITDA was behind 2019, impacted by
lower volumes and partly offset by cost reduction
measures.
Profit Before Tax Outlook
We expect full-year depreciation and amortisation expense to be in
line with last year (2019: $1.7 billion).
Arising from the Group's impairment testing process and as a result
of the combined economic impacts of COVID-19 and Brexit, we expect
to recognise non-cash impairment charges of c. $0.8 billion in our
full-year results for 2020. These charges primarily relate to our
UK business and our associate investment in China.
The net gain on divestments and non-current asset disposals in 2020
is expected to be c. $20 million (2019: $189 million
loss).
The Group's share of profits from equity accounted entities
(pre-impairment) is expected to be lower than prior year (2019: $67
million) mainly due to the divestment of the Indian joint
venture along with the impact of COVID-19 restrictions on a number
of operations.
Net finance costs are expected to be broadly in line with last year
(2019: $490 million).
Taking each of these elements into account together with our EBITDA
outlook, we expect full-year profit before tax (pre-impairment) to
be ahead of 2019 (2019: $2.2 billion).
Balance Sheet
Expectations
In
line with our previous guidance, year-end net debt is expected to
show a significant improvement on prior year (2019: $7.5 billion),
to c. $6 billion resulting in net debt to EBITDA of approximately
1.4x based on robust EBITDA performance, continued strong working
capital management, lower acquisition spend, lower capital
expenditure in response to lower activity levels and a pause in the
Group's share buyback programme.
Acquisitions and
Divestments
The Group has spent c. $181 million on 14 acquisitions to date in
2020 (including deferred and contingent consideration in respect of
prior year acquisitions).
On the divestment front, the Group completed seven transactions and
realised total business and asset disposal proceeds of c. $263
million, inclusive of $122 million relating to the receipt of
deferred proceeds from prior year divestments.
The agreement to divest our Brazil cement business for
consideration of $0.2 billion is currently subject to competition
authority review and the transaction is expected to close in
2021.
CRH will report its preliminary results for the full-year 2020 on
Thursday, 4th March
2021.
CRH plc will host an analysts' conference call at 08:30 GMT on
Tuesday, 24 November 2020 to discuss the Trading Update. To join
this call please dial: +353 (0) 1 506 0650, confirmation code
1578116 (further international numbers are
available here).
A recording of the conference call will be available on
the Results
& Presentations page of the CRH
website.
Contact CRH at +353 1 404 1000
Albert Manifold Chief
Executive
Senan
Murphy Finance
Director
Frank
Heisterkamp Director of
Capital Markets & ESG
Tom
Holmes
Head of Investor Relations
About CRH
CRH (LSE: CRH, ISE: CRG, NYSE: CRH) is the leading building
materials business in the world, employing c.79,000 people at
c.3,100 operating locations in 30 countries. It is the largest
building materials business in North America, a leading heavyside
materials business in Europe and has positions in both Asia and
South America. CRH manufactures and supplies a range of integrated
building materials, products and innovative solutions which can be
found throughout the built environment, from major public
infrastructure projects to commercial buildings and residential
structures. A Fortune 500 company, CRH is a constituent member of
the FTSE 100 Index, the EURO STOXX 50 Index, the ISEQ 20 and the
Dow Jones Sustainability Index (DJSI) Europe. CRH's American
Depositary Shares are listed on the NYSE.
For more information visit www.crh.com
Disclaimer
In order to utilise the "Safe Harbor" provisions of the United
States Private Securities Litigation Reform Act of 1995, CRH public
limited company (the "Company"), and its subsidiaries
(collectively, "CRH" or the "Group") is providing the following
cautionary statement.
This document contains statements that are or may be deemed to be
forward-looking statements with respect to the financial condition,
results of operations, business, viability and future performance
of CRH and certain of the plans and objectives of CRH. These
forward-looking statements may generally, but not always, be
identified by the use of words such as "will", "anticipates",
"should", "could", "would", "targets", "aims", "may", "continues",
"expects", "is expected to", "estimates", "believes", "intends" or
similar expressions. These forward-looking statements include all
matters that are not historical facts or matters of fact at the
date of this document.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that may or may not occur in the future and reflect
the Company's current expectations and assumptions as to such
future events and circumstances that may not prove
accurate.
A number of material factors could cause actual results and
developments to differ materially from those expressed or implied
by these forward-looking statements, certain of which are beyond
our control, as detailed in the section entitled "Risk Factors" in
our 2019 Annual Report on Form 20-F as filed with the US Securities
and Exchange Commission.
You are cautioned not to place undue reliance on any
forward-looking statements. These forward-looking statements are
made as of the date of this document. The Company expressly
disclaims any obligation or undertaking to publicly update or
revise these forward-looking statements other than as required by
applicable law.
The forward-looking statements in this document do not constitute
reports or statements published in compliance with any of
Regulations 6 to 8 of the Transparency (Directive 2004/109/EC)
Regulations 2007.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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CRH public limited company
|
|
(Registrant)
|
|
|
Date 24
November 2020
|
|
|
By:___/s/Neil
Colgan___
|
|
N.Colgan
|
|
Company Secretary
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