CRH, the largest building materials producer in the US and Europe, has today announced a $2.1 billion acquisition of building materials assets in the high-growth Texas market and upgraded its full year core profit guidance.
The Dublin-based group, which makes about 75% of its profits in the US, said in a trading update that it expects full-year earnings before interest, tax, depreciation and amortisation (EBITDA) of $6.3 billion compared to the $6.2 billion forecast in August.
That would amount to a 13% rise on the record $5.6 billion reported last year and follows a 14% year-on-year increase both in the third quarter and so far this year.
CRH said its sales for the nine month period rose by 8% to $26.3 billion with EBITDA increased by 14% to $4.8 billion on the back of positive underlying demand across its key markets and further commercial progress.
The company said its third quarter sales in Americas Materials Solutions were ahead of the same time last year, driven by strong pricing progress across all lines of business, which offset lower activity levels as a result of "unfavourable weather" in certain regions.
Third quarter sales in its Americas Building Solutions were also ahead of last year year, on the back of increased pricing and contribution from acquisitions while like-for-like sales were in line with the prior year.
Meanwhile, CRH's Europe Materials Solutions delivered positive sales growth in the third quarter due to good commercial management and a currency tailwind which more than offset the impact of lower activity levels.
But third quarter sales in its Europe Building Solutions division continued to be impacted by subdued new-build residential activity and like-for-like sales were behind last year.
While the Dublin-based group said new-build residential construction is set to remain subdued in 2024, it expects positive pricing momentum to continue.
"Significant" public investment in infrastructure and increased "reshoring" of critical supply chain manufacturing should also ensure resilient underlying demand across key end-use markets in North America and Europe, it added.
Albert Manifold, CRH's chief executive, said the company's integrated solutions strategy continues to deliver superior growth, while its strong cash generation and disciplined approach to capital allocation enables it to create additional value for shareholders.
"Looking ahead to the remainder of the year, we are raising our guidance and expect to deliver full-year EBITDA of approximately $6.3 billion, representing another record year for CRH," the CEO added.
CRH also said today it had agreed a deal to buy an "attractive portfolio" of cement and readymixed concrete assets in Texas from Martin Marietta Materials for a total consideration of $2.1 billion.
The assets comprise a 2.1mt capacity cement plant located between San Antonio and Austin, a network of terminals along the eastern gulf coast of Texas and a portfolio of 20 readymixed concrete plants serving the Austin and San Antonio markets.
CRH said the proposed transaction is subject to regulatory approval and is expected to complete in the first half of next year.
CEO Albert Manifold said the deal further strengthens CRH's market leading position in Texas and increases its exposure to attractive, high growth markets.
"Our ability to leverage our cement expertise and technical capabilities will enable us to enhance and optimise our existing footprint in Texas, resulting in significant synergies and selfsupply opportunities," he said.
HE said the deal reflects CRH's disciplined approach to capital allocation as well as its commitment to deliver further growth and value creation for shareholders.
"We also believe there is significant potential to unlock additional growth opportunities across an expanded footprint in this attractive growth market," he added.
