Ladies and gentlemen, welcome to the CRH Plc Trading Update. For the duration of the call, you will be on listen only. The next voice you will hear will be Albert Manifold.
Good afternoon, everyone. Albert Manifold here, CRH Group Chief Executive, And you're all very welcome to our conference call, which accompanies the release of our trading update earlier today. Joining me on the call is Sanon Murphy, our Group Finance Director Jim Menten, our Finance Director designate Frank Heisterkamp, Director of Capital Markets and ESG and Tom Holmes, Head of Investor Relations. Following some short opening remarks, we will be available to take any questions you may have on our announcements. And all told, we aim to finish up in about 30 minutes or so.
Now before I take you through the key points of our announcements, I'd like to take the opportunity to recognize the dedication and resilience of our people across the group as we continue to navigate the challenges and uncertainties arising from the COVID-nineteen pandemic. As always, the safety of our employees, Contractors and customers remains paramount to Seres and is a core focus for us in everything we do. Our announcement today provides details of our trading for the 1st 3 months of 2021 as well as an update on our recent capital allocation activity. We will also provide you with an indication of our EBITDA expectations for the 1st 6 months of the year and our earnings reports on the outlook for the second half. So beginning with our Q1 trading performance, And overall, it's been a positive start to the year for CRH.
Group sales for the Q1 of the year were 3% ahead on a like for like basis, A reflection of good underlying demand across core markets and further progress on pricing and commercial management. Let me briefly take you through the trading trends for the Q1 of 2021 across our individual businesses. Starting with our Americas Materials division, 1st quarter like for like sales were broadly in line with the prior year. Our businesses experienced some extremely cold and disruptive weather conditions in the month of February, impacting our operations in the Northeast, Midwest and Texas in particular. For the division as a whole, 1st quarter aggregates and asphalt volumes were behind strong prior year comparatives.
In contrast, our cement and ready mixed concrete volumes We're 5% and 2% ahead respectively with good demand particularly in the Western region of the United States. Of course, it's worth noting that our materials business is particularly seasonal, and the Q1 typically only accounts for between 10% 20% of our annual volumes. With the continued focus on strong commercial management, we made good progress on pricing in aggregates, cement and ready mixed concrete. Despite lower pricing in our asphalt business, margins expanded due to lower input costs. Although it's still very early in the season, The bidding environment remains broadly stable and there is positive momentum with regard to further infrastructure stimulus measures in the United States.
Infrastructure funding remains a bipartisan issue. And whilst there are some uncertainties regarding the quantum and the timing of any such funding balance, We're confident that a viable multiyear program can and will be put in place. Turning to Europe Materials. Our like for like sales were slightly ahead of the prior year as more seasonal weather patterns during January February were offset by improved trading conditions in March. In Western Europe, our like for like sales were broadly in line.
Volumes across most products in the U. K. And France were ahead of the prior year, which was heavily impacted by COVID-nineteen related shutdowns, whilst Germany, Switzerland and Finland were impacted by adverse weather and more resilient prior year comparators. In Eastern Europe, more normal weather conditions impacted volumes in Poland and Romania, partially offset by resilient demand in Hungary and Serbia. In the Philippines, cement volumes were well ahead in the Q1 in a competitive pricing environment.
With regard to pricing for the division as a whole, We continue to deliver improved pricing during the period with good progress across our major markets. And finally, to our Building Products business, Our like for like sales for the Q1 were 12% ahead of 2020, reflecting strong demand for residential construction, particularly in North America, partially offset by lower activity levels in the nonresidential sector. Like for like sales in Architectural Products We're 27% ahead, reflecting strong underlying demand for outdoor living products and good early season purchasing by home centers in advance of key spring trading period. In our building envelope business, like for like sales were behind As a result of lower nonresidential activity due to the impact of COVID-nineteen related to uncertainty and lower backlogs entering the year. In our infrastructure products business, like for like sales were ahead as a result of good demand in telecom and NHS sectors in both Europe and North America.
So for the group as a whole, it's been a good start to the year, notwithstanding the impact of more normal seasonal weather patterns across many of our markets compared to the relatively milder conditions we experienced in 2020. Before I go into our outlook in further detail, Let me touch briefly on a few other items from today's announcements. First, for our development activities and in the year to date, We have completed 4 bolt on acquisitions with total consideration of $180,000,000 the largest of which was a precast concrete business, which expands our infrastructure products footprint in the U. S. Midwest.
Our acquisition pipeline remains robust, And the strength of our balance sheet, combined with our continued focus on financial discipline, will enable us to capitalize on these opportunities to create further value for our shareholders. We We've also completed the divestment of our Brazil cement business with total proceeds of over $200,000,000 representing a good outcome for our shareholders and further progress in becoming a simpler and more focused business going forward. In light of our robust balance sheet and continued strong cash generation, In March, we announced our intention to recommence our share buyback program with further tranche of up to $300,000,000 Our current tranche is now well underway and will be completed before the end of June. So now turning to our outlook. And following a positive start to the year, We expect first half profitability to be well ahead of the prior year period, which experienced a heavily disrupted second quarter due to the pandemic related restrictions across many of our key markets.
Sitting here on the 20th April with our most important trading period ahead of us, It's very difficult to be more specific at this stage, but we will, of course, update you on our expectations as the year unfolds. As we look into the second half, we expect further normalization in our markets as the health situation continues to improve. There remain, however, significant near term uncertainties that we need to be mindful of, particularly the complex unwind of COVID-nineteen across our markets. You must be patient and you must be careful. We will advise at the end of the tunnel that it will take time.
Looking beyond the near term uncertainties, however, We expect significant public and private support for construction activity going forward. And given the resilience of our business model and the strength of our balance sheet, We remain well positioned to benefit from the growth opportunities that lie ahead. As always, we remain on the continued execution of our long term strategy to deliver higher margins, returns and cash for our shareholders. Now before we return to over to Q and A, let me take a moment to update you on a few items that have been on our minds since we last spoke to you in early March. First, with regard to U.
S. Infrastructure. We have seen further developments in recent weeks with a number of proposals being put forth for consideration and discussion. As I mentioned earlier, although there are uncertainties around the scale and timing of these plans, we believe we are headed in the right direction and that a solution can and will be sound. Clearly, there are politics involved, so it's very hard to predict how it will play out.
We believe there's broad based bipartisan support for increased infrastructure investment, which will be very beneficial for Sea Ranch as the largest building materials business in North America. Another important development arises from last week's Climate Summit, with the United States committing to an over 50% reduction in carbon emissions by 2,030. These are critically important commitments and are to be welcomed. We are all citizens of this world and delivering on these commitments is essential for the future of society. Not only is it the right thing to do, but from a business perspective, we also think these commitments should be embraced.
And As North America's largest recycler and as a leading provider of integrated billing solutions with global technical expertise in these areas, we believe this climate commitment represents significant opportunities for CRH. As you know, in our industry, there's a lot of focus on carbon emissions, particularly in cement. The cement is only part of the story. And as such, I, as President of the GCCA, the Global Cement and Concrete Association, Representing not only COH, but the largest cement companies in the world, including LafargeHolcim, Heidelberg, CEMEX and almost half of the cement and concrete industry around the world, let me just lay out a few simple facts. Cement is used for only one purpose, That is to make concrete.
And cement is a significant emitter of CO2. However, the product that it makes, Concrete is a carbon sink. It actually absorbs CO2 like trees absorb CO2. In fact, over its life cycle, approximately 25% of all the CO2 emitted during the manufacturing process is actually reabsorbed back From the atmosphere by concrete. Of course, reducing the carbon footprint of cement is crucial for our world and significant progress has already been made by the industry to date.
All across our industry, there are specific plans in place for further reductions out to 2,030. And as an industry, through the GCCA, we are committed to further reducing emissions to ensure we will all be producing carbon neutral concrete by 2,050, in line with commitments made to the panel support. This is an industry effort. Nobody is ahead of the end. But let me assure you that as an industry, we take this matter very seriously, and we are all working together in collaboration to address this specific challenge.
But as I mentioned earlier, it's not just about carbon emissions. It's about reducing the impact of construction on our environment and our world. It's about improving the quality of construction, building safer, cleaner and better, improving the thermal efficiency of buildings, prolonging their life cycles, Increasing the use of recycled materials and becoming a greater contributor to the circular economy. This is where the world is going. And over the last number of years, we at CRH have significantly shaped, repositioned and adapted our business in line with these trends.
We have been working in partnership with our customers to better understand their individual needs. And over time, we have developed a much more integrated offering, Uniquely combining base materials, value added products and innovative solutions to better serve our customers' needs while capturing more value in the process. Our integrated offering makes us more deeply embedded with our customers, creating long term partnerships and building buyers to switching. This changed strategy has been fundamental to delivering increased profitability, improved returns and higher cash generation. It is less capital intensive, requiring less capital expenditure and brings both reduced sick accounting and higher growth opportunities.
The world of construction is changing and by providing more integrated and innovative solutions to our customers, we are playing our part So with that, I will now hand you over to Q and A. I believe we have some questions on the line. May I ask you to state your name and the institution you represent when posing your questions. In consideration of others on the line and to make the best use of the time we have I'll now hand you back to the moderator to coordinate the question and answer session of our call.
Our first for today is from Robert Gardner from Davy. Please go ahead.
Good morning all. Thanks very much for taking my questions. I'll be quick. 1, I was just wondering, could you give us a sense of the momentum in the business after the weather cleared up? So how you kind of traded through March And in April in both Europe and North America.
And 2, I was wondering, could you talk about your acquisition pipeline, what kind of And how perhaps we should think about your comments just there around Integrated Billing Solutions, how should we think about that in terms of Acquisition or growth CapEx, how does that fit into the capital allocation strategy? Thank you. Hi, Bob. Two questions there. I'll take both of them.
Look, we've set out this morning how the Q1 has done, and you've seen the numbers there. With regards to the current run rate and how business is trading, actually, we've had a good April. And if I just start in the United States and look at the overall market there, With the improving health situation in the United States, the economy is starting to move over and the three sectors that we serve, the residential, the non residential, the infrastructure Moving ahead quite well, I'd have to say the residential sector is going from strength to strength, Good demand, lower interest rates and housing stocks are probably as low as I've seen, and that is underpinning good strength into the residential markets and that's been seen by coming through parts of our business that are mostly exposed to that, primarily at this time of the year with the APG business. Non res actually is turning it to be a better story than we had anticipated. We felt that last year was The decline will continue into this year and we've sort of bottomed out this year, which I think it will do.
But it seems to us at this stage now that it's probably A shallower and shorter depth this year than we would have envisaged. And I think that we will be returning back to growth in non res at the back end of this year at the latest. So a nice surprise there, a positive surprise. With regards to infrastructure, early season, yes, and It was slow during January February, but of course, it's very, very quiet time of the year. I have to say activity levels are to build in the order books.
It's still quite early in the season in the U. S, but activity levels are beginning to build, And we're quite pleased with the pace of the take up and quite pleased with the margins in that. So the U. S. Seems to be in fairly good and robust shape.
Switching back to Europe. And with regard to Europe, again, there was some significant weather impacts both in Eastern and Western Europe in February, in particular. But again, good momentum once the weather shifted. And April, again, we've had a good month across pretty much all markets. And again, as the situation As far as the recovery, the shutdowns are being lifted, people are getting back to work and you're getting that catch up effect, but also underlying activity is good And pricing is good and Europe continues on ahead.
So quite pleased with the performance as we sit here today on the 28th April for the month of April and the momentum looks fairly good In Europe as well. With regards to the M and A pipeline, I mean, 4 bolt on deals that are done in the Q1 of the year, dollars 200,000,000 As I said to you, we have before, the pipeline is quite strong. We're just keeping our discipline. We're looking at a number of deals. Most importantly, it is to do deals that not only bring value to our shareholders, but fit with our overall long term strategy.
And that Strategy, as you know, is focused very much on North America and in Europe. So that's the areas we're looking at. Clearly, we're not looking at the developing growth. And also, as you rightly indicate, the build out of the building products and the extension of the product solutions, which has been a key driver of Not only pull through of our materials, but also the continued success, as you see again, of the Building Products business and following that trend where we can Effectively extend our base materials into the manufacture of products and the delivery of the services with those products as well. That full extension It's where construction is going and we will tap into those areas that again, a lot of deals there.
I'd expect to see a ramp up in our M and A during the course of this year. And also, I think we're getting to the point whereby we're looking at the opportunities where we're seeing growth of Of development CapEx, effectively, CapEx expenditure, which we're actually rolling out rather than going and buying business with expansion of CapEx, Particularly in some of our growth markets in Eastern Europe and across the U. S, which will be higher than normal and probably will lead to us having a higher CapEx, and you would normally expect by a couple of 100,000,000 at least in this year. And it's just a question, we can either do M and A or we can do internal CapEx and Expanding our existing capacity in existing locations is cheaper for us to do this. It's higher returning.
It's more reliable. And We've always said that the best returning investments we'll make are in terms of CapEx. So there's increased expansion in CapEx. M and A pipeline is good and strong. We just need to hold our system and roll it out over the next few years.
This is a multiyear program. We're not looking to flip any light switches in quarters here, just taking a strong progress to view. But the performance of the Q1, pleased about the run rate. M and A pipeline is good and we've been disciplined, but I would expect it to move on and accelerate during the course of this year.
Our next question is from Gregor Kuglitsch from UBS. Please go ahead.
Hi, guys. Thanks for taking my question. I'll limit myself to the one I think I'm supposed to ask. So I'm going to ask your sort of final comment there on sort of sustainability carbon. And I guess I'm interested specifically what you think will happen in the U.
S, Which obviously has been lagging behind compared to Europe. So do you think there will be changes to regulation in the building code, perhaps to lower clinker ratios? What are your plans, If any, for carbon capture, I think the U. S. Is relatively suitable for that.
So I would be interested to sort of your strategy on sort of decarbonizing the American business, please. Thanks, Gregory. Yes, I told you, first of all, as I said to you, as individuals, as a corporately, we welcome the announcement of the United States by President Biden to obviously cut emissions by 50% to 2,030. The tribunals, of course, that's Already the reduction from the 2,005 base year has already been 21%, so there's a further 29% to go in that. I think it will bring significant changes in the way of life in the United States and in particular with regard to building materials, not just on CO2, which we talked about.
But specifically to the question, I think it will use a different type regulations will come into it to permit different types of cement. Yes. Largely speaking, in the United States, they use one type of cement, the cement that uses the most clinker. And of course, in Europe, we have sometimes 2, 3 and even 4 different types of cement, but we use lower clinker ratios, Which lowers the CO2 footprint. And I expect that they will be brought in progressively over time.
I think the other thing that will happen is there will be greater focus On using alternative fuels, we tend not to use alternative fuels in the United States because the customer practice is not to use them. There's no advantage in using them. But by putting targets in place that the regulators and the cement companies and associations have agreed to in Europe by doing something similar in the United That also will reduce down the CO2 footprint. I think that's very important with regard to that. And thirdly, I think actually the way we are actually Using and constructing buildings, I think that also further regulations, which is coming in Europe, which is where our product solutions are going.
I think that too will also reduce the CO2 footprint. So As part of the PCA is part of the Global Cement Company Association. We're right in the middle of the mix working with regulators to help shape the next stage of increased regulation or increased Modernization of the industry here, we're a very large cement business across not only Canada and the United States as well as Europe. And I think the experience that we have in Europe really stands to us as we roll out these plans across the U. S.
Because effectively what we will be doing Much as we did when we bought the Ash Grove business, we've taken the expertise and experience that we have for the last 15, 20 years in Europe I'm bringing us on to into North America, and I think that will bode well, both for the company, but also in terms of precisely over here as well. Thank you. Thanks, Pedro.
Our next question is from Paul Roger from Exane BNP Paribas. Please go ahead.
And then focus on the Building Products division. I mean, obviously, you've had a really strong Q1. I'm just trying to understand really the sustainability of that growth momentum. I guess the extent to which it's benefiting from things like People doing up their gardens when they're working from home and whether that type of tailwinds could sort of fade as we go through 2021?
Paul, good question. And I might be worried if I look at the facts, it doesn't bears Because the billing products has been growing, it would sustain growth maybe for the last 6 or 7 years at this stage, and it's not only been top line, it's been bottom line, it's been margin, and it's been cash. And it's been led by the 3 legs of the stool, all of them with different markets. But actually, the principle by which they are delivering that value is in this way of providing a broader solution and services to our customers. So the APG business, you're absolutely right, has been focused on the outdoor living, but outdoor living has been a growing space in the United States maybe for the last 6 to 7 years.
And our role and our parts Not only providing the products, but also working with our customers to broaden out the offering to our customers with the full product range and then working with The professional installers as to how they should put that in, what are the best solutions for them. And that didn't just start when COVID hit last year. That's been going on since 20 and it continues to go on. The footprint expands. Likewise, with our infrastructure products, again, that's how it's it's nothing to do with COVID at all.
It's to do with the idea Of the transportation of vital utilities, particularly stormwater and water management. And again, that's the problem in all of the developed world because we have Not invested as we have, as we built up our urban environments and water is a vital scarce resource. So the protection and transportation of it is hugely important. So that's been a strong growth is hugely important. So that's been a strong growth rate.
That's not a COVID item. That's a strong trend that will continue on for decades. And likewise, the OBE business where again Looks very similar to strategy whereby we started out with just basically being a glass business that now there's a much more integrated offering to the glazing customer, Providing all the products they need, not only the hardware, the glass, but also the aluminum, the home frame, the windows and all the associated products go with it. So you become the one stop shop. I'm looking at further plans as to how to expand and build out that platform.
So it's more the success of the business model, the integrated solution rather than anything to do with COVID because All of those trends have been evident, if you go back to the numbers, Paul, since 2013, 2014 when we started out on this road.
That's great. Thank you very much.
Thanks, Paul.
Our next question is from Elodie Woll from JPMorgan. Please go ahead.
Hi, Albert. Thanks for taking my question. So I'll limit 1 as well. Maybe on pricing, since we haven't discussed that yet. So you've had a good start of the year in the U.
S. With pricing up 3%, 4%, I think you said on aggregates and cement. And you mentioned good pricing development in Europe pretty much everywhere except I think Asia in Q1. So how do we think about pricing for the rest of the year? Do you see more increase to come in any region?
And how do we think about that in light of cost inflation, which is ramping up as we all know? Thanks.
Thanks, Eleni. Nice to talk to you. Olivier, I'll take the talk on behalf of the U. S. And Jim mentioned, our Finance Director designate on the call, and Jim would have worked closely within our European business over the last number of years, and he's got a good hand on the European pricing environment.
So I'll ask him to come in after I do on European pricing. Look, the market in the U. S. Is well seasoned to having normal regular and necessary price increases to offset cost increases as they come through. We manage our business very much on a margin basis.
And underpinning the strong demand and the sustained strong demand over the last number of years Has underpinned good pricing. I don't see that dynamic changing in the current year. Again, I think it has to be moderate and sensible. I see that across all businesses. The cement and concrete is well flagged, and I think that will be solid and steady along the lines that we've spoken about there that you've mentioned, 4% to 5%.
Aggregate is probably in at the 2% to 3%. And of course, pricing is not the correct measure in asphalt. It's about how you manage our margin. We're very pleased to see an expansion in the margin in the Q1 of the year, although it's only at very early days yet. So we will do that.
So the U. S. Perspective looks fairly solid. With regard to Europe, Jim, you might give us your thoughts on that?
Yes. Hi, Lundy. Europe, as we said in the past, Europe really in a catch up phase when we compare it to our business in North America. And building on a couple of good years in 2019 2020, We've had a good pricing season in Europe, and we actually seen positive direction in 13 out of the 15 countries that we're operating in. Specifically asked about recovering the cost side of it too, Elodi.
Yes, the pricing, we'll be confident. We are seeing some cost inflation. It's small, but we're certainly confident in terms of pushing on and expanding margins and getting the pricing to offset that cost side of it also. So a good pricing discipline in Europe, good start to the season.
Okay. Thanks a lot.
The next question is from Cedar Ekblom from Morgan Stanley.
Observing and then if there are any parts of your portfolio or business areas that you feel you may be underrepresented in, in terms of going into that changing market environment and if you'd need to fill those gaps with M and A. Thank you.
Thank you. Good question. First of all, like the changes that we're seeing are being forced on our customers, contractors by the changing needs of the world. With increased urbanization, we're starting to see the fact that people want less impact in terms of how construction impacts upon their day to day life. So people want construction to be quicker, number 1.
Number 2, we're saying they want people want to see less construction done actually on-site, and they want to see more of the materials used in construction 3 fabrication in designated safer and specific environments, so manufacturing environments that are built to deal with noise, waste, fumes, And then brought to the construction site, so much more modular type assembly. So not only quicker, but off-site modular type construction. And underpinning that is that they want to see less dirt, less impact on the environment. So they want to see less noise on the environment that's actually there being built in the housing. Also the type of material being used, more and more the specification is to have materials that are less intrusive on the environment as they are being constructed.
Hence, Of course, the push to obviously reduce CO2 is in cement and also to increase the use of concrete, which has lower levels of CO2 cement within us and such. And that deals with some of the questions I dealt with earlier on with regards to the changes that will come in the United States. And then I think the last thing is the ability for you to provide more of an integrated service and solution. So you're not just a provider of materials, You're involved in helping to design and engineer the materials to specific circumstances and then to deliver and put in place with partners on how you do that. So we find ourselves more and more, although not in actual commercial partnership, In a business type partnership with some of the major contractors, whereby we are working hand in hand with them on major projects of delivery of specified type materials, specified type products.
Now we tend to focus more on large horizontal Our heavy construction projects, so most of our materials actually go underground or once you go 1 meter above the ground, that's primarily where we do most of our work. It's only specified. It's only really when we get into some very high rise that we use concrete in the high rise. So most of the stuff we do is you don't necessarily see the specification required in it, It's quite highly specified. So what I would say to you very quickly is the changes are people want us we have to work hand in hand with architects and engineers and customers To help find a solution, an engineering solution to their problem, and we're part of that solution, not the only part of it, but we are part of They want construction that has to be done quicker.
It has to be done cleaner. It has to be done safer and more and more of this has been done on-site. What that means for us is that it more and more pushes us down the route of turning our base materials into an interim value added product. And the service we provide with us is in helping to design that product for the specific application. And of course, we have the advantage in that, Whilst we may give in one customer, one specific application, we may have seen that application 25 times in the previous year and can bring our expertise and others to them.
So we're not only manufacturing, we bring our engineering skills and expertise to provide those services to them. And that's the direction where we're building out our business. Look, there are many new trends that are opening and are evident to us as well where we think it's attractive. And in 20 years' time, CRH may be a different shaped business. But for this moment in time, I think the business that we are in are known technology to us.
We see strong growth in these areas and with a longer term within our and I don't anticipate any huge build out into new platforms in new areas. I think the extension of what we do offers us ample opportunities in strong growth markets, And the focus is to follow that growth, but also to maximize performance in terms of profitability, high returns and cash.
Great. Thank you very much.
Our next question is from Arnold Lehmann from Bank of America. Please go ahead.
Thank you. Armand Liman from Bank of America. My question is on, I guess, cement as a product. As I'm sure you've seen, it's not the most popular product anymore with investors due to its high CO2 emissions. And I appreciate you're doing Already quite a lot to improve that, but how does this kind of investor perception influence your Capital allocation strategy, do you still consider buying more cement plants?
Is there were some opportunities to Consolidate or some of your markets are in core vertical integration? Or on the other hand, would you consider some capacity closure or even Some disposals in the Cement business to reduce the share of its sales or profit in the overall group.
Good question, Arnaud. First of all, cement in itself is nothing. You can't build anything from cement. Cement is only an entry material that is used to produce concrete. And one must look at the entirety of the complete product cycles, not just liquid cement, Because actually, as I said in my introduction, that concrete itself, as people don't know, is actually a carbon sink.
It actually reabsorbs back in 25% of the CO2 that's in this is under the current production process. And if there was an alternative out there to cement, We will go and look at that. And at this moment, there are no alternatives to cement. So it might be tomorrow, the regulators were to say, okay, I'm going to make the production of cement illegal because it emits CO2. What would we do?
So another product we can use to pull off the shelf, but listen. And unfortunately, we need cement, we need concrete in our walls to live because we have to build We have to do modes of transportation to our modern life to exist. The plan that is in place, which has been agreed with the regulators, and there is a plan in place to take us to 2,050, where we want Carbon neutral concrete, which is in line with the power cord and in line with the 2 degree scenario takes us there. So the key plan is to ensure that we work to reduce the CO2 The amount of CO2 Thank you. That is 8.
Sorry, the line is different. The second answer is going to be the amount of CO2 that is reabsorbed by the concrete will be greater than the actual CO2 that is emitted So the real focus has to be on reducing the CO2 that is emitted during the manufacturing process of clinker and or cement. And in the timeframe that we have got there, we believe we will get there. There are specific plans in place to continue to reduce it to 2,030, specifically in place we will All the cement companies will get there. And over time, we believe that ultimately, you will turn it into a scenario whereby the whole cycle, cement to concrete, will be carbon neutral, which will take away and remove the risks associated with this.
Thank you very much.
You got to ask, Yes, but honestly, is it a core product for us or is it something we would sell? But cement is very important to us as is concrete. We are it's a key material that we use in our manufacturing process, and we think we are far better off embracing the challenge and looking for the opportunities in that than running away from us. This is an issue which is involved at the moment. It's an issue which the industry is dealing with and the industry will solve.
That's very clear. Thanks, Randall.
And our final question for today is from Will Jones from Redburn. Please go ahead.
Thank you. Good afternoon. Perhaps I
could just ask for a general update on your margin improvement savings program, please. I appreciate it's now Rolling programs, I suppose, anything for the fixed time line, but are there any areas you might highlight to us that are a particular focus in 2021? Any initiatives you've got on thinking the process procurement buckets from a couple of years ago? Anything to help us understand that would be great. Thank you.
I will. Look, clearly, workers continues on. We put targets in place A few years ago, of course, the business shape and size was the business shape and size for those targets. And we're not entirely dependent upon ourselves to deliver those margin increases. We've shown good margin improvement over the last couple of years, and I'm very pleased with that.
And there are a number of things impacting upon that, of course. It's not only in terms of producing More efficiently lowering our unit costs, working on pricing and reshaping the business. The macro environment is very important to us as well. Last year, we hadn't anticipated COVID. We had not anticipated taking a step back in revenues, and that impacts upon things, and that's for sure in terms of our growth rate.
The one thing I would say is that, well, just continue to think about CRH as a business that year on year improves the margin in This business and becomes more efficient and more effective. But we also have to be sensible about the conversation and say, look, the strength of the Health and the business is not just Measured by margin. It's measured by growth in the top line. It's measured by improved profitability, the conversion of profitability into cash, The increase in the margins and crucially, the improvement in returns and also being transparent with shareholders about Here's our plan. Here's our strategy.
Here's what we're doing. So shareholders can understand exactly what you're doing through the years, and we communicate that in a Transparent, open and managed way. So all of those things we think are important in delivering the overall value to shareholders. Margin is one component and a very important component part of that. It will continue to increase as I would expect our cash, our top line, our bottom line and our returns to increase.
And I hope the transparency and the clarity with which we communicate our plans as we go forward, hence we talk so openly and often about the product solutions offering us the greatest growth opportunities going forward for BAGI for our shareholders.
Thank you.
Okay. Listen, I think we've run over time there at Mon for quite a few minutes here. So that's all we have time for this morning. I'd like to thank you for your attention. And as always, if you have any follow-up questions.
Just please feel free to get in touch with our Investor Relations team, and we look forward to talking to you again on the 26th August when we report our interim results for the 1st 6 months of 2021. Thank you very much, and have a good day.
Thank you. That does conclude the conference for today. Thank you everyone for taking part. You may now disconnect.