Ireland: Cement Roadstone Holdings plc (CRH) has released details of its trading in the first quarter of 2012. It reported that operations in the Americas had benefited from favourable early weather conditions and a firmer tone in construction markets in the US. In contrast, trading in its European operations in the first four months was affected by severe weather conditions in February 2012 and by the ongoing impact of volatility in Eurozone financial markets. Overall, cumulative like-for-like group sales to the end of April 2012 were 2% ahead of the same period of 2011, although earnings before interest, tax, depreciation and amortisation lagged behind 2011 due to the tough start in its European operations.
In Europe, poor weather conditions in February 2012, 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 and February 2012. The rate of decline moderated in subsequent months as weather improved to leave cumulative like-for-like sales at the end of April 2012 4% behind those of 2011.
Operations in Poland, Switzerland, Benelux, and Turkey were particularly impacted by the harsh conditions. Volumes in Poland have since recovered and were in line with 2011 by the end of April 2012, but volumes elsewhere have remained behind those a year earlier. In Ukraine volumes for the first four months were well ahead of 2011, while January-April 2012 volumes in Finland were somewhat behind 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 the Europe Materials division were slightly ahead of the first four months of 2011.
CRH's Europe Products division, which benefited to a substantial extent from the very mild winter in 2011, was in turn affected by conditions in 2012 with like-for-like sales down by 8% for the first two months. The subsequent recovery in March and April 2012 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.
CRH's 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 US, the group's operations delivered a like-for-like increase of 11% in terms of sales for the first four months of 2012.
In the Americas Materials business division, favourable weather contributed to very strong like-for-like volume increases for the first four months. The Americas Products business operations also benefited from the good early weather with like-for-like sales some 12% ahead of the first four months of 2011. Within its portfolio, those businesses serving the repair, maintenance and improvement (RMI) sectors have shown the most strength to date in 2012.
CRH predicts that given normal seasonal weather in May and June 2012 it expects its overall EBITDA in the (less significant) first half of the year to be close to 2011, when EBITDA was Euro574m. With more positive US economic and construction prospects for 2012 mitigating a more cautious view on the outlook in Europe, CRH reports that, subject to no major financial or energy market dislocations, it expects overall like-for-like sales growth in 2012 and a year of progress for CRH.