Commenting on the Irish building materials giant’s first-quarter performance, CRH chief executive Albert Manifold said: “We had a positive start to the year in a seasonally quiet trading period. While some adverse weather conditions were experienced in Q1, sales and EBITDA were ahead, underpinned by the continued execution of our integrated solutions strategy and further commercial progress across our markets. Despite some ongoing macroeconomic uncertainties and an inflationary cost environment, we expect first-half sales, EBITDA and margin to be ahead of the prior year period.”
Americas Materials Solutions sales were 10% ahead of the same period in 2022, driven by robust pricing, which more than offset the impact of unfavourable weather on activity levels in certain markets during this seasonally less significant quarter.
Essential Materials Q1 sales were 15% ahead, driven by good activity levels in the Northeast and Great Lakes, which, together with double-digit price growth in aggregates and cement, more than offset lower activity levels due to inclement weather in the West and South.
Road Solutions saw strong price progression and good underlying demand in the Northeast and Great Lakes, resulting in sales 7% ahead of Q1 2022, more than offsetting the negative impact of adverse weather in the West and South. Backlogs and bidding activity are strong, underpinned by significant increases in US infrastructure funding at the federal and state levels.
Outdoor Living Solutions saw a good start to the year with resilient demand, pricing progress and the contribution from Barrette Outdoor Living, resulting in sales 30% ahead of the first quarter of 2022.
Building & Infrastructure Solutions’ Q1 sales were 9% ahead of a strong prior year comparative as good commercial management and contributions from 2022 acquisitions offset a slower start to the construction season due to adverse weather in certain regions.
Europe Materials Solutions
Like-for-like sales were 6% ahead of the same period in 2022 due to strong pricing momentum across all products and regions. Less favourable weather conditions impacted activity levels compared to the same period in 2022. Unfavourable currency translation effects resulted in total sales 1% behind 2022.
Key Solutions Lines in Brief
Essential Materials: Strong pricing actions across all markets resulted in sales 5% ahead of the first quarter of 2022. Activity levels were impacted by colder winter conditions across Europe, lower demand in Ukraine and the Philippines and subdued residential activity across several key markets.
Road Solutions: Like-for-like sales for the first quarter aligned with 2022 as pricing progress in the UK, Ireland, and Poland offset lower activity levels due to adverse weather conditions.
Europe Building Solutions
First-quarter sales were 1% behind the same period in 2022, reflecting a slower start to the year due to unfavourable weather and a strong prior year comparison.
Key Solutions Lines in Brief
Outdoor Living Solutions: Sales were 6% behind 2022 as prolonged winter weather impacted demand in key markets, partly offset by higher pricing.
Building & Infrastructure Solutions: Good underlying demand across our markets resulted in first-quarter sales in line with a strong prior-year comparative.
Development Activity
CRH Group has spent $0.2 billion on four acquisitions in the year to date, the largest of which was the acquisition of Ulricehamns Betong AB in Sweden by Europe Building Solutions, expanding our precast concrete solutions offering in an attractive market.
Sustainability
CRH says it remains committed to continuously improving its sustainability performance by providing integrated solutions for its customers, advancing circularity and innovating to create a more sustainable built environment. “We recently announced that the Science Based Targets initiative (SBTi) validated our decarbonisation targets in line with its 1.5°C science-based framework, which equates to a 30% reduction in absolute carbon emissions by 2030 (from a 2021 base year). This is aligned with our ambition to be a net-zero business by 2050,” a company statement read.
Growth Driver
North America currently represents approximately 75% of Group EBITDA and is expected to be a key driver of future growth for CRH.
Future Outlook
The company statement continued on CRH’s future outlook: “Looking ahead to our first-half trading performance, in our Americas segments, we expect robust infrastructure demand, good activity in key non-residential segments, continued pricing progress and positive contributions from acquisitions. We anticipate a more challenging backdrop in Europe driven by continued inflationary pressures and some slowdown in the new-build residential sector. Overall, assuming normal seasonal weather patterns and absent any major dislocations in the macroeconomic environment, we expect Group sales, EBITDA and margin for the first half of the year to be ahead of 2022 (H1 2022 EBITDA: $2.2 billion), reflecting the continuing strength and resilience of our integrated solutions strategy.”
