Displaying items by tag: CRH
Mark Towe to retire from board of CRH
30 August 2016Ireland: Mark Towe has confirmed his intention to retire from the CRH Board at the end of 2016. Towe, who joined CRH in 1997 and was appointed a CRH Director in July 2008, will continue in his role as Chairman, CRH Americas.
CRH sales revenues rise following acquisitions
25 August 2016Ireland: CRH’s sales revenue has risen by 35% year-on-year to Euro12.7bn in the first half of 2016 from Euro9.38bn in the same period of 2015. On a proforma basis - or adjusted for acquisitions, divestments and currency changes – sales revenue rose by 8%. CRH’s earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 20% to Euro1.12bn on a proforma basis. The company attributed the increases in sales, mainly to the Americas, with rises in Europe and Asia also.
"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,” said chief executive Albert Manifold. “With continued positive momentum in the Americas and the modest impact of early-stage economic recovery in Europe, 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 Euro3bn."
Republic Cement prepares for infrastructure boom
17 August 2016Philippines: Republic Cement is expanding its grinding capacity by over 10% in anticipation of a rise in demand prompted by increased government infrastructure spending. Other planned upgrades include an improved dust collection system at the cement producer’s plant in Bulacan. The company is also considering building new cement plants. Company president Renato C Sunico made the comments to local press at a forum on social housing.
The government of the Philippines has cited public infrastructure as one of its general spending priorities, setting aside US$18.5bn, which is equivalent to 5.4% of gross domestic product, in 2017.
Belgium/US: HeidelbergCement has made a shortlist of potential bidders for assets in Belgium and the US that should be divested as part of its acquisition of Italcementi, according to Bloomberg. Bidders for Italcementi’s Belgian business include Turkey’s Çimsa Çimento and Italy’s Cementir Holding. The business are valued at around US$400m. Bidders for Italcementi’s US assets include Summit Materials and CRH. This business are valued at around US$600m according to sources quoted by Bloomberg. All shortlisted bidders will face a due diligence process.
Irish Competition and Consumer Protection Commission appeals court judgement on accessing CRH files
23 May 2016Ireland: The Competition and Consumer Protection Commission (CCPC) has appealed against a High Court judgment preventing the CCPC from accessing or reviewing certain electronic documents seized by the CCPC during a search conducted in May 2015.
The High Court judgment arose from a court action taken by CRH against the CCPC following the seizure of hard copy and electronic documents by the CCPC during an unannounced search at the premises of CRH’s subsidiary, Irish Cement, on 14 May 2015. The search related to an investigation by the CCPC into alleged anti-competitive conduct in the bagged cement sector. The orders made by the High Court prevent the CCPC from accessing or reviewing material in the mailbox of Seamus Lynch, a director of Irish Cement, unless the CCPC and CRH agree to appoint an independent third party to ‘sift’ the seized documents for material relevant to the investigation.
The CCPC’s investigation into alleged anti-competitive practices by Irish Cement in the supply of bagged cement continues.
Cement company CEO pay
04 May 2016In April 2016 the shareholders of BP voted against a pay package of US$20m for the company's chief executive officer (CEO) Bob Dudley. The vote was non-binding to BP but it clearly sent a message to the management. Subsequently, the chairman Carl-Henric Svanberg acknowledged the mood amongst the company's investors and stated in his speech at the annual general meeting that, "We hear you. We will sit down with our largest shareholders to make sure we understand their concerns and return to seek your support for a renewed policy."
The link to the cement industry here is that many of the world's major cement producers are public companies. Similar to BP they internally set CEO and leading executive pay and remuneration packages. Just like BP, cement companies too could run into similar complaints from their shareholders, for example, should the construction and cement markets have similar jolts that the oil industry has faced since mid-2014.
To be clear: this article is not attempting to pass judgement on how much these CEOs are being compensated. It is merely seeing how compensation compares amongst a selection of leading cement companies. LafargeHolcim's revenue in 2015 was greater than the gross domestic product of over 90 countries. Running companies of this size is a demanding job. What is interesting here is how it compares and what happens when it is perceived to have grown too high, as in the case of BP.
It should also be noted that this is an extremely rough comparison of the way CEO pay and wage bills for large companies are presented. For example, the CEO total salary includes incentives, shares and pension payments. The staff wage bills includes pension payments, social charges and suchlike.
Graph 1: Comparison of CEO total remuneration from selected cement companies in 2015. Source: Company annual reports.
There isn't a great deal to comment here except that compared to the average wage these are high from a rank-and-file worker perspective! The total salary for Eric Olsen, the CEO of LafargeHolcim, is lower than HeidelbergCement and Italcementi, which seems odd given that LafargeHolcim is the bigger company. However, Olsen has only been in-post since mid-2015. By contrast, Bernd Scheifele became the chairman of the managing board of HeidelbergCement in 2005. Carlo Pesenti, CEO of Italcementi and part of the controlling family, took over in 2004. Albert Manifold, CEO of CRH, also sticks out with a relatively (!) low salary given the high revenue of the company.
Graph 2: Comparison of CEO remuneration to average staff cost and total company revenue in 2015. Source: Company annual reports.
This starts to become more interesting. HeidelbergCement's higher CEO/staff and CEO/revenue ratios might be explained by Scheifele's longer tenure. Yet Italcementi definitely sticks out with a much higher CEO wage compared to both the average staff wage and the company's revenue. Again, CRH stands out with a much lower CEO/staff ratio. Dangote's CEO/staff ratio is low but its CEO/revenue ratio is in line with the other companies' figures.
Consider the figures for China Resources and this suggests that CEO/revenue ratio may be more important than the CEO/staff ratio. The implication being that the market will only tolerate a ratio of up to about 0.05%. Any higher and the CEO's family has to own the company. Which, of course, is the case with Carlo Pesenti and Italcementi. Until HeidelbergCement takes over later in 2016 that is.
That’s as far as this rough little study of CEO remuneration at cement companies will go. So, next time anybody reading this article from a cement company asks for a pay rise, consider how much your CEO is receiving.
Ireland: Even as it adjusts to its mammoth Euro6.5bn 2015 acquisition of LafargeHolcim’s divestments, Irish group CRH is reported to be mulling the purchase of US and Belgian cement assets, which HeidelbergCement may have to sell as a consequence of its acquisition of Italcementi. In Belgium HeidelbergCement and Italcementi have 4.5Mt/yr out of a total of 6.2Mt/yr of integrated cement capacity. In the US they share around 16.4Mt/yr out of 115Mt/yr.
Chief executive Albert Manifold told analysts that the group is focused on cutting back on its debt levels and is likely to look at assets should HeidelbergCement be forced to sell. "US cement is of interest to us and we're fully aware of the asset that may spin out of the potential acquisition," he said. "With regards to Belgium, it's a prime asset and certainly it would make a good fit with our businesses, providing the value is right."
CRH is also currently linked with a possible US$1.5bn acquisition of LafargeHolcim’s Indian cement businesses. The apparent enthusiasm CRH has with respect to expand is at odds with the majority of major players in the cement sector, many of which are going through periods of transition or are struggling with debt. "I'm always interested to open the paper and see what businesses we're bidding on,” added Manifold. “People are trying to talk up competition on deals. We're probably in 10% of the stuff we're associated with."
CRH’s earnings before interest, tax, depreciation and amortisation (EBITDA) grew to almost Euro1bn following a ‘positive trading backdrop’ in its main markets in the first three months of the 2016.
CRH reports 9% rise in sales in first quarter of 2016
27 April 2016Ireland: CRH has reported in a trading update that its overall sales rose by 9% year-on-year in the first quarter of 2016. By region it saw a 22% increase in the Americas, a 12% increase in Asia and no increase in Europe. No specific figures were released in the statement issued ahead of the company annual general meeting.
The Ireland-based construction materials producer’s Europe Heavyside division noted that cement sales volumes grew in the UK and Finland. Cement sales volumes were ‘broadly in line with 2015’ in Poland. In the Philippines CRH reported that cement demand was supported by strong foreign direct investment in the business process outsourcing sector, overseas workers' remittances and increasing government infrastructure spending.
CRH expects demand for its products to grow in the US and the Philippines in its outlook for the second half of 2016. In the US funding for infrastructure is expected to increase moderately with improving state finances and the passing in 2015 of the Fixing America's Surface Transportation (FAST) Act. It also expects residential and non-residential construction to grow.
Ireland: Irish Cement is planning to cut the amount alternative fuels it intends to co-process at its Limerick cement plant to 90,000t/yr. The cement producer withdrew its initial planning application in March 2016 but has resubmitted a new application with a lower amount of alternative fuels, according to the Limerick Leader newspaper. It now aims to burn half of the original amount that was originally requested.
It originally announced its Euro10m plan to co-process alternative fuels including tyres at the plant in December 2015. The investment is intended to create 40 jobs. However, local citizens have opposed the plans with over 450 people signing a petition against the development.
Nine companies bid for Lafarge India assets
13 April 2016India: LafargeHolcim has received nine non-binding offers for its subsidiary Lafarge India. The bidders include multinational cement producers CRH, HeidelbergCement and China Resources. Local companies which have made bids include JSW Infrastructure, Piramal Enterprises and Ramky Infrastructure, which have deals with private equity firms CVC Capital, Goldman Sachs Private Equity and Carlyle respectively. Blackstone, Baring Asia and CPPIB have also submitted a bid as part of a consortium. Bain Capital and Advent International have also submitted their bids individually, according to Business Standard.
Following a shortlisting and due diligence process a final bid will be selected. A final bidder is expected to be announced by the end of June 2016.