In a management statement issued by
“In contrast, trading in our European operations in the first four months has been affected by severe weather conditions in February and by the ongoing impact on sentiment of volatility in Eurozone financial markets,” says CRH.
“Overall, cumulative like-for-like group sales to end-April were +2% ahead of 2011, although EBITDA for the period lagged 2011 due to the tough start in our European operations.
“Against this backdrop, and given normal seasonal May/June weather patterns in the United States as our materials operations gear up for the construction season, we expect overall EBITDA in the less significant first half of the year to be close to last year’s level (2011: €574 million).
“With incrementally more positive US economic and construction prospects for 2012 mitigating a more cautious view on the outlook in Europe, we continue, subject to no major financial or energy market dislocations, to expect overall like-for-like sales growth in 2012 and a year of progress for CRH.”
However, in Europe weather conditions in February, which saw an extended period of extremely low temperatures across continental Europe in contrast to a very mild 2011, impacted trading. This resulted in a like-for-like sales decline of approximately -6% for January/February; the rate of decline moderated in subsequent months as weather improved to leave cumulative like-for-like sales to end April -4% behind 2011.
“In Europe Materials, operations in Poland, Switzerland, Benelux, and Turkey were particularly impacted by the harsh February conditions, while volumes in Poland have since recovered and by end-April were in line with last year. Volumes elsewhere have remained behind 2011.
“In Ukraine, volumes for the first four months were well ahead of last year, while January-April volumes in Finland were somewhat behind the same period in 2011.
Operations in those countries experiencing austerity measures (Ireland, Portugal and Spain) continued to face challenging market conditions. Overall, cumulative like-for-like sales for Europe Materials were slightly ahead of the first four months of 2011.”
Europe Products, which benefited to a substantial extent from the very mild winter in 2011, was in turn affected by conditions in the current year with like-for-like sales down -8% for the first two months. The subsequent recovery in March/April has been strong in Germany and Denmark but more muted in Benelux, France and Switzerland where weaker government expenditure and consumer confidence has dampened demand. Overall, underlying sales for the first four months of 2012 were -5% behind 2011.
“Businesses in the Americas benefited from unusually benign weather conditions in the early months of the year. Helped by this, and by a firmer tone in overall economic activity in the United States, our operations delivered a like-for-like increase of +11% in sales for the first four months of 2012.
“In Americas Materials, favourable weather contributed to very strong like-for-like volume increases for the first four months with aggregates up +18%, asphalt up +16% and ready-mixed concrete volumes +13% ahead of the same period in 2011.
“We look to May, June and July for a more accurate indication of full-year demand trends in this markedly seasonal business which typically sells less than 10% of annual asphalt volumes, and approximately 20% of aggregates and ready-mixed concrete volumes, in the first four months of each year.
“Americas Products operations also benefited from the good early weather with like-for-like sales some +12% ahead of the first four months of 2011.”
CRH says that a total of 13 acquisitions and investments have been completed to date in 2012 at a total cost of approximately €230 million.
It will report interim results for the six months ending 30 June, 2012 on 14 August, 2012.
