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News : Irish Last Updated: Feb 26, 2013 - 8:35 AM

CRH reports sales rise in 2012 and profit dip; Myles Lee to retire
By Finfacts Team
Feb 26, 2013 - 7:54 AM

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CRH, the global building materials group, was formed through a merger in 1970 of two leading Irish public companies, Cement Limited (established in 1936) and Roadstone Limited (1949). About 90% of CRH's shares are held outside Ireland. CRH's has a payroll of 79,000 and less than 2,000 are located in Ireland. It moved its primary stock exchange listing to London late last year and is a FTSE 100 company.

CRH plc, which is headquartered in Dublin, Ireland and is the second-biggest building materials supplier in the world, and the market leader in the United States, today reported sales revenue rose by 3% to €18.66bn from €18.08bn in the year to December 31, 2012, as operating profits fell by 3% to €845m from €871m after restructuring and impairment charges of €88m. Profit before tax dipped 5% to €674m. Myles Lee, the chief executive is planning to retire.

Americas sales rose 15% and EBITDA (earnings before interest, tax, depreciation, amortisation and impairment charges and excluding profit on disposals and CRH's share of associates' profit after tax) gained 12% to €0.85bn. Meanwhile, European sales fell 7% and EBITDA dropped 12% at €0.79bn.

Net debt fell €0.5bn to under €3bn; net debt to EBITDA cover was 1.8x.

Myles Lee, chief executive, said today: “Results for 2012 reflect progress from CRH’s Americas operations helped by a strong recovery in residential construction and improving overall economic activity in the United States. In contrast, our European businesses had to contend with weakening consumer and investor confidence within the Eurozone.

Assuming no major financial or energy market dislocations, we expect that ongoing improvements in our businesses in the Americas combined with further profit improvement initiatives throughout our operations will outweigh continuing trading pressures in our European segments, enabling the Group to achieve progress in 2013.”

CRH also announced today that Myles Lee, has confirmed to the board his intention to retire from CRH at the end of 2013 having reached the age of 60, and following completion of a five year term as chief executive and ten years as an executive director. He joined CRH in 1982, joining the board in November 2003 as finance director, later becoming chief executive in January 2009.

Commenting on this, the chairman Nicky Hartery said, “Myles has contributed very significantly over an extended period to the development and progress of CRH and continues to do so. By advising the board of his decision well in advance of retirement, Myles has, in line with long-established CRH practice, facilitated the planning and management of his succession in an ordered and timely fashion. The board has appointed a committee, chaired by myself, to conduct the search for a successor to Myles.”

Results detail [pdf]

Davy full analysis: "While the 2% better profit result from CRH is welcome, the fact that the beat was mostly from its European divisions is more significant. There was also a more positive tone to the outlook statement for both the Americas and Europe. In this context and combined with on-going cost measures, our 2013 EBITDA forecast (€1666m) looks light and a circa 5% upgrade is likely. While this will be offset by higher pension and tax charges, the direction of operating earnings is positive for the first time in a while for CRH. If this momentum continues, the stock will soon grow into its premium multiple."

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