CRH frontman steps down as sales miss forecasts

Irish building materials group CRH said on Tuesday that its Chief Executive Officer (CEO) is to retire from the board at the end of the year, as it announced lower-than-expected sales for 2012.

CEO Myles Lee has worked at CRH since 1982 and joined the board 10 years as an Executive Director.

The company said that he intends to step down at the end of 2013 having reached the age of 60 and completed a five-year term as CEO.

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"Myles has contributed very significantly over an extended period to the development and progress of CRH and continues to do so," said Chairman Nicky Hartery.

"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."

Results narrowly miss forecastsThe news came alongside CRH's full-year results, in which it revealed a 3.0% rise in sales revenue in 2012 from €18.08bn to €18.66bn, as 15% growth in the Americas region offset a 7.0% slump in Europe. However, the top-line figure was slightly under the consensus estimate of €18.72bn.

"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," Lee said.

Profit before tax meanwhile, slipped 5.0% from €711m to €674m, but was well above of the €641m forecast as earnings before interest, tax, depreciation and amortisation (EBITDA) came in ahead of earlier guidance - EBITDA fell 1.0% year-on-year to €1.64bn but was better than the €1.6bn estimated.

As well as supplying products for home repair, maintenance and improvement, the company is also heavily involved in the infrastructure markets, providing aggregates, cement and ready-mix concrete.

Lee said that ongoing improvements in the Americas should lead to profit growth in 2013, outweighing the continuing trading pressures in Europe.

The company, which is heavily exposed to the US with over half of group revenues coming from the Americas region, gave an upbeat outlook for the economy saying it expects "continued positive momentum" in 2013. However, it did highlight that fiscal tightening from payroll tax increases could weigh on economic growth in the first half.

CRH maintained its full-year dividend at 62.5 cents per share. Meanwhile, net debt fell over the period by €0.5bn to under €3.0bn.

Asset swap

In a separate statement, CRH said that it has reached an agreement with Spanish peer Cementos Portland Valderrivas on an asset swap in Spain.

CRH will transfer its 26% stake in Corporacion Uniland SA to CPV for a 99% stake in Cementos Lemona SA. CRH will also get its hands on Ipswich-based cement importation business Southern Cement Ltd as part of the transaction.