Strong results and significant acquisitions amount to positive news for CRH and its chief executive.
Late August saw global building materials giant CRH release its interim results for 2016. The figures were headlined by a 35% increase in reported sales to €12.7bn and a doubling of EBITDA to €1.12bn. Proforma sales were up 8%: 3% in Europe, 13% in the Americas and 4% in Asia, while the proforma EBITDA was up 20% overall: 20% in Europe, 39% in the Americas and 7% in Asia. Proforma EBITDA rose by nearly one point to 9% compared with H1 2015.
Overall it amounts to growth, and Manifold was pleased with the results. “We have had a very satisfactory first half, with good performance from our heritage businesses and contributions from 2015 acquisitions delivering significant profit growth for CRH,” he said. “As always, we have maintained a strong focus on cash management, and with de-leveraging ahead of plan, I am pleased to report that we expect year-end debt metrics to be at, or below, normalised levels.
“Against this backdrop, the Board has decided to increase the interim dividend by 1.6% to 18.8c per share. With continued positive momentum in the Americas and the modest impact of early-stage economic recovery in Europe, and assuming normal weather conditions for the remainder of the season, we expect further progress in the second half with full year reported EBITDA in excess of €3bn.”
As always, we have maintained a strong focus on cash management, and with de-leveraging ahead of plan, I am pleased to report that we expect year-end debt metrics to be at, or below, normalised levels
The company highlighted its “positive momentum” in the Americas, where there were “favourable weather patterns”, and two major acquisitions from late 2015 showed their influence for the first time. “In Europe, where our key markets are in the early stages of recovery, underlying results were marginally ahead,” CRH said. In the first half of 2016, CRH divested four operations, raising €140m. It spent €150m on a series of acquisitions in Europe, the USA , Canada and Australia.
Overall, the group expects the second half of the year to be broadly in line with the first, though it did point to Brexit as an uncertain factor. It increased its dividend by 1.6% to 18.6c.
ON THE MOVE
The group currently operates in 3,000 locations across 31 countries worldwide. With 89,000 employees, it manufactures 450 million tonnes of materials and is listed in Dublin, London and New York. It is now the largest building materials company in North America.
Manifold, an accountant by trade, joined the group in 1998 after a career in private equity. Appointed finance director for the group’s Europe Materials unit, he drove expansion in eastern Europe before promotions to group development director (2004) and managing director of CRH Europe Materials (2007), when he took the lead in the group’s entry into Asia: its Chinese and Indian operations were built up under his watch. He joined the board in 2009 when he was appointed chief operating officer as the company weathered the construction industry collapse and financial crisis, and rose to the CEO’s office in 2014 following the retirement of Myles Lee.
His biggest deal to date came last year, with the acquisition of a whopping €6.5bn of Lafarge and Holcim’s assets, sold in order to satisfy regulators during their merger process.
The deal saw 15,000 new employees transfer to CRH, which doubled its cement production volumes. With the company’s vital statistics – and its dividend – growing, the indications are that CRH under Albert Manifold is on the move again.
- Manifold joined CRH as finance director of the group’s Europe Materials Division in 1998 after a career in private equity.
- He became group chief operating officer in January 2009 and joined the board, before becoming group CEO in January 2014.
- A qualified accountant, he has an MBA and MBS.