CRH PLC CRH Interim Management Statement

  CRH PLC (CRH) - Interim Management Statement

RNS Number : 9449Q
13 November 2012

   N E W S R E L E A
                                   S E




13 November 2012



                         INTERIM MANAGEMENT STATEMENT

CRH plc,  the international  building materials  group, issues  the  following 
Interim Management Statement in accordance with the reporting requirements  of 
the EU Transparency Directive.

Third Quarter Trading

While like-for-like*  sales for  the Group  in  the first  half of  2012  were 
broadly in line with 2011 (an 8% increase  in the Americas was offset by a  5% 
decline in Europe),  the third quarter,  as indicated in  our Interim  Results 
announcement on 14 August,  saw much lower growth  in our Americas  operations 
and a  higher  rate of  decline  in Europe.  This  resulted in  a  decline  in 
like-for-like Group sales of 3% for the quarter and of 1% for the nine  months 
to end-September.

Including the  net  impact  of acquisitions,  divestments  and  exchange  rate 
movements, overall sales  revenue for the  quarter was 1%  ahead of last  year 
(2011: €5.3 billion), with cumulative Group revenue to end-September 4%  ahead 
(2011: €13.5 billion).

Overall EBITDA  for  the  quarter  amounted  to  €0.65  billion  (2011:  €0.65 
billion), leaving cumulative EBITDA for the first nine months at €1.2  billion 
(2011: €1.2 billion).

Cost Reduction Programme

Our Interim Results Announcement  in August indicated  that we were  extending 
our ongoing  programme  of  adjustments  to our  cost  base,  particularly  in 
response to  the challenges  facing our  European markets.  To date  we  have 
identified incremental savings of €450 million  for the period 2012 to  2015. 
Of this total, approximately €150 million is reflected in our trading  outlook 
for 2012, with additional savings of €300 million expected to be delivered  in 
the three years to 2015. 

The additional  measures, which  arise primarily  in Europe,  fall into  three 
major categories: structural changes (including administration and  production 
efficiencies), process  changes  (including  increased  usage  of  alternative 
fuels,  operational  throughput  and   yield  improvements)  and   procurement 
benefits. Combined with the actions taken  across the Group since 2007,  these 
additional savings will bring the total cumulative figure in our ongoing  cost 
reduction programme to €2.5 billion by 2015. Our focus on optimising our  cost 
base and improving our effectiveness remains a key priority for CRH.

The estimate of the implementation costs to be incurred in 2012 has also  been 
increased to approximately  €60 million  (2011: €61  million), bringing  total 
cumulative costs-to-implement to almost €500 million since 2007. We expect to
incur  further  costs  of  approximately  €120  million  in  implementing  the 
additional savings measures in 2013 to 2015.

Development Activity

Since the end of June we have completed a further eight transactions  bringing 
year to date  acquisition and  investment expenditure to  €390 million,  split 
broadly evenly between our Europe and Americas operations. 

Full Year 2012 Outlook

Mild weather  in  November/December 2011  in  both Europe  and  North  America 
contributed to a strong fourth quarter  EBITDA outcome. For 2012, the  recent 
major storm activity in the eastern  United States, which is likely to  result 
in significant  reconstruction  work  that should  benefit  2013,  has  caused 
significant disruption to our Materials operations in the region over the past
two weeks. With this negative short-term  impact, and the ongoing weakness  in 
certain major European markets, we anticipate that EBITDA for the last  three 
months of the year will be below 2011.

Against this backdrop, we  expect to report full-year  EBITDA in the order  of 
€1.6 billion (2011: €1.65 billion). This estimate is based on an average  2012 
US$/euro exchange  rate of  1.28** (2011:  1.3922); the  guidance provided  in 
August, for full  year EBITDA  to be  similar to last  year, was  based on  an 
expected rate of 1.26; this exchange  rate revision has had an adverse  impact 
of €15 million on our full year indication.

     CRH plc, Belgard Castle, Clondalkin, Dublin 22, Ireland TELEPHONE
                     +353.1.404.1000 FAX +353.1.404.1007

E-MAIL WEBSITE Registered Office, 42 Fitzwilliam
                          Square, Dublin 2, Ireland

                                           Page 2 of 3

                                    Interim Management Statement - 13 Nov 2012

Full Year 2012 Outlook - continued

We expect full year depreciation  and amortisation expense, before  impairment 
charges, to be similar to last year (2011: €764 million).

Following the significant business divestments which generated disposal  gains 
of €183 million in the  first half, we expect  overall profit on disposals  to 
exceed €200 million (2011: €55 million). 

The Group's  share  of  associates'  profits before  impairment  for  2012  is 
expected to be lower (2011: €53 million).

Net finance costs are expected to  be approximately 10% higher than last  year 
(2011: €257 million).

Based on the indications above, we expect to report a low to mid-single  digit 
percentage increase  in full  year profit  before tax  and impairment  charges 
(2011: €743 million).

Taking into account  the impairment of  €130 million recognised  in the  first 
half in respect  of our 26%  associate Uniland  in Spain, and  subject to  the 
completion of the detailed year-end review,  we expect the full year  non-cash 
impairment charge  to  be  significantly  higher than  last  year  (2011:  €32 

Accordingly, both pre-tax  profit and earnings  per share for  the year  after 
impairment charges will be below last  year's levels (2011: PBT €711  million, 
EPS 82.6c).

Net debt  of €3.6  billion at  the  end of  September was  approximately  €0.4 
billion  lower  than  at  end-September  2011;  in  the  absence  of   further 
acquisitions for the remainder of 2012,  and based on current exchange  rates, 
we expect  year-end  debt  to be  in  the  order of  €3  billion  (2011:  €3.5 
billion), with net debt/EBITDA below 2 times. 


After a first half like-for-like sales fall of 5%, the pace of decline in  the 
third quarter  was  higher  at  7%,  resulting  in  a  cumulative  decline  to 
end-September of 6%. Reported EBITDA for our Europe operations fell 13% in the
first half  of 2012,  and we  expect EBITDA  for the  year as  a whole  to  be 
approximately 15% lower than last year (2011: €0.9 billion).

After an increase of 1% in  the first six months, third quarter  like-for-like 
sales for  our Europe  Materials operations  were 11%  lower than  last  year, 
resulting  in  a  cumulative   decline  of  4%   in  like-for-like  sales   to 
end-September. This was  primarily as a  result of the  contraction in  Polish 
construction activity which  saw much  steeper third  quarter volume  declines 
than had  been our  experience in  the first  half of  the year.  Year-to-date 
national cement  volumes  in Poland  are  down  by c.14%.  In  Ukraine,  while 
activity has moderated as  expected in the third  quarter, our volumes  remain 
well ahead of last  year, and we  continue to benefit  from the lower  running 
costs at the new kiln. In  Switzerland, third quarter volumes were broadly  in 
line with 2011, while  in Finland volumes declined  modestly. Weakness in  the 
Benelux was partly offset by the incremental benefits from acquisitions. While
market conditions  remain very  challenging  in both  Ireland and  Spain,  the 
impact of lower volumes and prices is being partly offset by the benefits from
ongoing restructuring. Our  joint venture operations  in India benefited  from 
good volumes and prices.  Our wholly-owned and  associate businesses in  China 
continued to  suffer from  weak demand  in the  third quarter.  Third  quarter 
Europe Materials EBITDA was  lower than 2011  and for the year  as a whole  we 
expect EBITDA  to  be  approximately  10% lower  (2011:  €436  million).  This 
estimate includes an EBITDA contribution of  €17 million from our Secil  joint 
venture up to the date of disposal of  our stake in this business in May  2012 
(full year  2011  EBITDA:  €51  million). Proceeds  from  CO[2]  trading  are 
expected to be lower than last year (2011: €38 million).

For Europe  Products, weak  confidence and  the economic  difficulties in  the 
Eurozone continued to affect activity, with like-for-like sales down 4% in the
third quarter. Our  Concrete Products  businesses were impacted  by very  weak 
activity levels  in the  Netherlands,  and also  by  more modest  declines  in 
Germany and  France.  While third  quarter  trading  for the  Clay  group  was 
adversely affected by intense competition in Poland, this was more than offset
by the impact  of good  volumes in the  UK. Our  Building Products  businesses 
benefited from lower costs as a result of the major restructuring  initiatives 
in recent years and  the incremental impact  from 2012 acquisitions.  Overall, 
the third quarter  saw a slight  improvement in EBITDA  for Europe  Products. 
After a difficult first half with adverse early weather conditions, which  saw 
EBITDA fall by 28%, we expect the second-half outturn to be less negative with
EBITDA for the full year expected to be up to 25% lower than last year  (2011: 
€194 million).


The significant declines in market activity in the Netherlands, which accounts
for approximately 30%  of Europe  Distribution's sales, continued  to have  an 
impact on this business. Like-for-like sales in the third quarter fell by  6%, 
compared with a first half fall of 7%.  With the benefit of a strong focus  on 
pricing and margins, and the  incremental impact of acquisitions completed  in 
late 2011, the third quarter has seen  a moderation in the rate of decline  in 
both sales and  EBITDA. We  expect full year  EBITDA to  be approximately  15% 
behind the 2011 outcome of €267 million.



                                           Page 3 of 3

                                    Interim Management Statement - 13 Nov 2012


With favourable  early weather  and a  generally firmer  tone in  construction 
markets in the  United States, our  operations reported an  8% improvement  in 
like-for-like  sales  in  the  first  half  of  2012.  This  reflected   some 
pull-forward of construction demand  into the first half,  and as expected  we 
witnessed a  much weaker  trend during  the third  quarter with  like-for-like 
sales just 1%  ahead of 2011.  For the full  year we expect  US$ EBITDA to  be 
broadly in  line  with last  year  (2011:  $1.06 billion).  With  a  projected 
full-year 2012  US$/euro exchange  rate  of 1.28  (2011: 1.3922),  this  would 
result in an increase of approximately 10% in EBITDA in euro for the  Americas 
(2011: €759 million).

In our Americas Materials business, like-for-like volumes in the third quarter
were, as anticipated, lower than last year; aggregates and readymixed concrete
volumes were approximately 7% lower, while like-for-like asphalt volumes  fell 
by 3%. The  trend in pricing  however remained positive,  with higher  average 
prices for all products offsetting the effect of lower volumes to leave EBITDA
for the quarter in line  with last year. Cumulative like-for-like  aggregates, 
asphalt  and  readymixed  concrete  volumes   were  up  approximately  1%   by 
end-September. In  2011, Americas  Materials  benefited from  very  favourable 
weather conditions in  the closing weeks  of the year  which contributed to  a 
stronger than  anticipated  fourth quarter  outturn.  We anticipate  that  the 
adverse impact of the recent storm activity which has significantly  disrupted 
activities in the eastern United States over the past two weeks will lead to a
lower final quarter outcome for 2012, and we therefore expect full year  2012 
EBITDA for the Materials Division to be slightly lower than last year's  level 
of $738 million.

While confidence  is  returning to  the  new residential  and  non-residential 
markets in the  United States, the  third quarter  saw the rate  of growth  in 
like-for-like sales for our Americas Products operations moderate to 4%.  This 
follows like-for-like growth of 9% in  the first half, and again reflects  the 
distorting effects  of the  very  mild start  to the  year  on the  timing  of 
activity. EBITDA was higher in the quarter than in the same period last year,
reflecting better volumes, our continued  focus on commercial initiatives  and 
the relative strength of the RMI sector.  We expect full year EBITDA in  2012 
to be between 10% and 15% higher than last year (2011: US$228 million).

In Americas Distribution,  our interior products  (wallboard, steel studs  and 
acoustical  ceiling  systems)  operations,  which  account  for  approximately 
one-third of Distribution  revenues, continued to  report higher  year-on-year 
sales in the third quarter,  benefitting from increasing wallboard prices  and 
improved new  construction activity.  Our more  significant exterior  products 
(roofing/siding) business  however  has  experienced  weaker  markets  in  the 
quarter for most  regions (with lower  activity reflecting the  impact of  the 
early  year   benign  weather).   The  cumulative   growth  in   like-for-like 
Distribution sales fell to 3% at the  end of the third quarter, compared  with 
the 5% rate at the end of  June. With the incremental impact of  acquisitions, 
third quarter US$ EBITDA  was higher than  2011 and we  expect EBITDA for  the 
full year to be approximately 5% ahead of last year (2011: US$90 million).

* Like-for-like movements exclude exchange effects and the incremental
impact of acquisitions and divestments

** Forecast  average US$  exchange rate  based on  year to  date  US$/euro 
average of 1.28 and a projected rate of 1.27 for the remainder of 2012.

*** 2011 impairment charges comprised €21 million relating to subsidiaries
and joint ventures and €11 million re associates.

This Statement contains certain forward-looking statements as defined under US
legislation. By  their  nature,  such statements  involve  uncertainty;  as  a 
consequence, actual results and developments  may differ from those  expressed 
in or implied by such statements  depending on a variety of factors  including 
the specific factors identified in this Statement and other factors  discussed 
on pages 56 and 57 of our 2011 Annual Report and in our Annual Report on  Form 
20-F filed with the SEC.

CRH will host an  analysts' conference call  at 8.00 a.m.  GMT on 13  November 
2012 to discuss this  Statement. To register in  advance for the  conference 
call please log on to:

where you will be  allocated a conference call  number, participant user  pin, 
conference pin and instructions on how  to join the call. Alternatively  dial 
+353 1 436 4265 on the day and enter passcode 6724 190#. A presentation  to 
accompany this call is available on CRH's website at

Contact CRH at Dublin 404 1000 (+353 1 404 1000)

Myles Lee    Chief Executive
Maeve Carton Finance Director
Rossa McCann Head of Group Finance

                     This information is provided by RNS
           The company news service from the London Stock Exchange


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