DAVY VIEW

CRH’s trading update demonstrates continued progress under all of the company’s long-term targets: margins, cash generation, financial strength and disciplined capital allocation. Full year EBITDA is now set to grow by c.7% on an underlying basis, while net debt/EBITDA will be well below 2x (we estimate c.1.7x). This will allow the group to further pursue a range of value-enhancing strategies, including accretive capex, progressive dividends and, where it makes sense, buybacks and/or M&A. As this progress continues, and with solid fundamentals expected across its main markets in 2020, we expect CRH’s valuation to re-rate further versus its peers.