DAVY VIEW

It is almost a year to the day since CRH’s medium-term strategic update. That revealed ambitious margin and cash targets, a new divisional structure and a review of the Distribution business in Europe. We believe that significant progress has been made towards these targets in the past year. To date, the group has revealed €200m of structural and procurement savings, while synergy targets have increased. The DIY business in the Benelux has been sold and a new Building Products division created. The group’s cash potential is already evident with a fresh €350m share buyback following the completion of the €1bn programme. Now end-markets are helping with better pricing momentum and easing cost pressure. Little of this is reflected in the share price, which at €28, is down year-on-year (yoy). Our 2021 scenario points to significant upside and we recommend buying the shares.