Ladies and gentlemen, thank you for standing by and welcome to the CRH Plc Trading Update. During the call, all participants will be on a listen only mode. I must advise you that the call is being recorded today, on Tuesday, 24th November 2020. And I shall now hand over to your speaker for today, Albert Mannafold, Chief Executive Officer. Please go ahead.
Good morning, everyone. Albert Manafot here, CRH Group Chief Executive and you're all very welcome to our conference call and webcast presentations, which complete the release of our trading update this morning. I'm joined on the call with our Group Finance Director, Senan Murphy Frank Heistkamp, Director of our Capital Markets And ASG, and Tom Holmes, Head of Investor Relations. Over the next 15 minutes or so, Senan and I will take you through some of the main points of this morning's enhancements, highlighting the key drivers of our trading performance for the 1st 9 months of the year as well as providing you with an indication of our expectations for the year as a whole. Afterwards, we'd be available to take any questions you may have and all told, which should be done in about 45 minutes.
Turning to Slide 1. And before we begin, I would like to take a moment to acknowledge that our strong financial performance is the result of the extraordinary efforts and commitment of our teams on the ground right across the group. The underlying strength of our business model and the decisive actions we have taken to adapt to the evolving demand environment across our markets. As we continue to navigate these challenging and uncertain times, the health and safety of our people remains our number one priority and is a core focus for us in each and every day. With regards to our trading performance, I'm pleased to report that the good delivery in the first half has continued into the third quarter.
And for the 1st 9 months of the year, our businesses delivered profit and margin improvement despite lower overall activity levels across our markets. Group's 9 month EBITDA of $3,400,000,000, 2 percent ahead on a like for like basis with a further 100 basis points improvement in our underlying margin all delivered against a 3% decline in sales. Turning to Slide 2 and notwithstanding the uncertainties that persist in relation to the impact of the COVID-nineteen pandemic across our markets going forward, I would like to update you on our thoughts regarding the overall market backlog and the trading environment as we sit here today. In North America And Central And Eastern Europe, underlying construction demand remains resilient. While in Western Europe, activity levels have improved despite continuing health crisis across our markets.
Infrastructure and residential demand remains positive, but certain non residential sectors, particularly office, retail and hospitality, have continued to experience lower levels of activity. Despite these lower overall activity levels, and notwithstanding the relatively benign energy cost environment, good commercial practices and pricing discipline are continuing across our businesses. Turning now to our divisional trading performance and first to Americas Materials on Slide 3. During the third quarter, weather disruption in part of the south and west of the United States and a strong prior year comparative results in volume declines across all product areas. Despite these lower activity levels, disciplined commercial management across our businesses, continues to underpin positive pricing momentum in aggregates, cement and ready mix concrete, while our asphaltists have delivered further margin expansion.
Our strong focus on cost control helped us to deliver improved profitability across our business. Against a 4% decline in like for like sales 1st 9 months of the year, our business delivered a 9% increase in EBITDA and a further improvement in margin. Next to the performance of our Europe Materials business on Slide 4, where we delivered a significant improvement compared to our first half performance, reflecting the continued recovery on activity levels across a number of our key markets and strong cost management across our businesses. In the absence of nationwide restrictions on construction across much of Central And Eastern Europe, demand remained resilient with our businesses in Switzerland, Germany, Poland and Romania continued to perform well. In Western Europe, Actility loads have recovered to approximately 90% of normal, with improving trends in cement volumes across France and Ireland, during the third quarter of the year.
In the United Kingdom, and today are operating at approximately 75 percent of normalized levels. Despite these lower levels of activity, I'm pleased to see good pricing discipline continuing across our markets. Overall, cement pricing here in Europe is 3% ahead for the 1st 9 months of the year, with improvements across all our major markets. Putting this all together, our overall 3rd quarter like for like EBITDA was 2% ahead of prior year period, representing good margin improvement of slightly lower sales. Turning to Slide 5 on our Building Products division, which experienced a continuation of the strong delivery we saw during the first half of the year.
The performance of this business reflected significant exposure to residential and nonresidential markets and the contrasting trends we've seen in the early stage. Our Architectural Products business, for example, continued to benefit from strong residential repair and maintenance demand, in both North America and Europe through the third quarter. Our infrastructure products business continued to deliver a resilience performance for the 1st 9 months of the year, despite pandemic related restrictions impacting activity levels. And finally, our Building envelope business primarily exposed to U. S.
Nonresidential construction continue to be impacted by lower levels of activity in that particular market. Overall, 9 month like for like sales were 3% ahead while EBITDA increased by 9%, a robust performance reflecting strong operating leverage through our continued focus on cost control and pricing discipline. At this point, I'd like to hand you over to Tim to take you through our cash performance and year end balance sheet expectations.
Thanks, Albert. Good morning, everyone. On Slide 6, you can see the key components underpinning our expectations for our year end net debt position. And I'm pleased to say that despite the significant volatility our business has experienced over the course of the year so far. We expect the year end with a very healthy balance sheet position as a result of our continued focus on financial discipline and strong cash generation.
Let me briefly take you through some of the key components working left to right on the slide. We ended 2019 was net debt position of $7,500,000,000 and a net debt to EBITDA of 1.7 times. We expect 2020 to be another year of strong cash generation and indeed strong cash conversion across the group, resulting in a significant reduction in over $260,000,000 of proceeds from divestments and reinvested approximately $180,000,000 on 14 value accretive bolt on acquisitions across the group. And that results in a net proceeds of over $80,000,000. And notwithstanding disciplined management of our capital expenditure over the course of the year, we expect to invest a total of $1,000,000,000 to support growth in our business in 2020.
In addition, we've also returned approximately $1,000,000,000 to shareholders in the form of dividends and share buybacks earlier in the year. Taking all of this into account, we expect our net debt position to finish the year at close to $6,000,000,000, or approximately 1.4 times net debt to EBITDA, a very strong results and provides us with significant optionality for future value creation as visibility improves.
Thanks, Alan. Another strong cash performance really highlighting the strength and resilience of our business model. You say, providing us with significant optionality going forward. Now before I turn to outlook, on Slide 7, I'd like to briefly update you on the progress we have made on our strategic objectives. During our interim results in August, we presented you with a slide that reflected on the strength of our business through the continued execution of our long term strategy, enabling us to deliver even in challenging and uncertain times.
We've highlighted that through the active management of our portfolio in recent years, we've become a simpler and more focused business. And we said that we will continue to reshape and refine our portfolio to deliver superior growth margins, returns, and cash generation for our shareholders. As an example, in October, we reached an agreement to divest our Cement business in Brazil for over $200,000,000, providing us with the opportunity to reallocate those proceeds into higher growth areas with more sustainable returns. We've also continued to adjust our asset base in light of the changing market environment and as a result of the combined economic effects of COVID-nineteen and the uncertainty surrounding Brexit, we expect to recognize a non cash impairment charge of approximately $800,000,000 in the fourth quarter of the year, primarily in relation to our operations in the United Kingdom and our associated investment in China. As you heard us say many times, are relentlessly focused on continuous business improvements, a deeply embedded practice of making our business better through incremental improvement initiatives, to structurally improve our margins, cash and returns year after year.
Against a very challenging trading environment, we've made further progress in this regard during the 1st 9 months of the year, delivering an underlying margin improvement of 100 basis points. And as Senin mentioned, expect 2020 to be another year of strong cash generation and improved cash conversion for the group. And now, before we turn it over to questions and answers, let me finish with the word on outlook and slide 8. In Americas Materials, we expect solid underlying demand to continue for the remainder of the year and for pricing to remain supportive despite lower energy costs across our business. In Europe Materials, we're expecting improved levels of activity despite the continuing health quest across our markets.
In building products, we expect good demand in residential and repair our maintenance and improvement activity to continue for the remainder of the year. Partially offset by a more mixed environment in non residential construction. Taking all of this into account for the group as a whole, we expect full year EBITDA to be in excess of $4,400,000,000 ahead of the prior year on a like for like basis representing further margin improvement and another year of progress for CRH. As we look ahead to 2021, While the pace and shape of recovery across our markets remains uncertain, we are confident that the strength of our business leaves us well positioned the challenges and opportunities that lie ahead. So that concludes our presentation this morning, and we're now happy to take questions.
May I ask that you please state your name and the institution that you represented before posing your questions. In consideration of others on the line and to make the best use of the time we have available, May I ask you to please limit your questions, Swillman Mackenzie. I'll now hand you back to the moderator to coordinate the question and answer session of our call.
Thank Our first for today is from Robert Gardiner from Daley. Please go ahead.
Good morning. Robert Gardner from Davy here. Hope all well. 2 for me. So one, obviously, balance sheet is in fine shape.
So how should we think about capital allocation in 2021? Do you see there'd be a resumption of the buyback and the bolt on strategy or would you be prepared step into bigger deals as sales activity improves? And then 2, I'm just wondering if you could expand on your outlook comments especially for the different end markets that you serve. And I'm kind of thinking in terms of the different businesses where you have a pipeline of backlogs such as Americas Materials. Thanks.
Hi, Bob. Good morning. Two questions there. First question on capital allocation, which I'll ask Senan to talk about in a moment. And the second one is just to give us perhaps you asked indeed a bit more granularity about the outlook for the markets that we're servicing and what we're seeing in front of us.
And I'll take the second one as I say, and then I'll pass over capital allocation to Sam. And in our main markets in North America, specifically in the United States, I suppose, And the 3 subsectors that are the market that make up the construction market is, obviously, infrastructure is the biggest area. And coming off the back of reasonably robust quarter 3 and continuing on through quarter 4, actually, I have to say, we think that demand levels are pretty solid actually. We have a clarity now with regards the fact that we have a continuing resolution of the fast act, which gives the federal support for the funding going forward into 2021. And in the election, on November 3rd, about there were about 3.44 different initiatives across the United States, across different states and localities to support increased state funding of which about 95% of the more passed commissioning another $14,000,000,000 of state funding to infrastructure going forward.
And against that backdrop, and also from our own sense and our own network talking to our customers, I think there are mechanisms to currently be put in place not only at a federal level we've seen, but also on a state level to ensure that funding will be there to support activity levels going forward into 2021. So I think we feel fairly about 2021. It's going to continue on at the pace of growth that we've been seeing over the last couple of years. Residential markets have actually been quite robust hardly surprising that in quarter 2, it was a slowdown, but it rebounded well in quarter 3, and we're looking now on a rolling sort of an annualized basis We're looking at our housing completions close to 1,500,000 new homes in the United States. And significantly for that, we're seeing a quite a shift in mix towards a single family home, therefore almost 10% on last year as compared to multi family homes.
And that, again, is a better mix for us because they're more materially intensive. And the nonresidential markets are clearly more mixed. Retail and commercial would make up about 50% of that. And it tends to be hurt most in the north and the northeast and the Midwest stronger down south and definitely stronger out west. Stronger in areas such as education and medical clearly and warehousing and, adding to do with technology, technology centers as well.
So bit of a mixed bag overall down in non res this year. I don't expect it to continue down, but maybe perhaps at a slower pace for next year. So overall, I think the U. S. Markets next year broadly speak, I think we continue to see a flat to slightly ahead next year with regard to activity levels and we'll see where pricing goes on top of that.
If I switch to Canada, by the way, of a particularly challenging quarter 2, again, very significant impact of the pandemic but actually performing reasonably well in quarter 3. And again, if we return to more normalized environments, significant pent up demand, particularly in and around Ontario, which is the core of our business in Canada. Coming across to Europe and without going through it in too much data broadly speaking, excuse me, a recovering situation across Europe. The core of our businesses are mainly in Central And Eastern Europe and they've been relatively unaffected during the course of this year with the pandemic, keeping our credit levels pretty much at normalized levels. And we see that continuing forward.
There's a bit of a patchwork quilts that made different countries and centrals in the Eastern Europe. Broadly speaking, continuing the progress that we saw the first half of the year during quarter 3 quarter 4 and we expect that to continue into next year. Western Europe is recovering and getting back to normalized levels and we think there will be specific support going through that next year 2022, for instance, is the year of the French presidential elections. The moment expect to see as we always do significant support for social initiatives and social housing in particular in France in 2021 to support our market. Arlingen doing well, finished fairly, fairly solid as well.
And UK, probably the one area which is perhaps slower than anywhere else, and we'll talk about that later on. I'm sure recovering, but at a slower pace than everywhere else. But broadly speaking, solid steady as we go as far as we can see out. And I think we're looking forward to continuing progress in 2021 going forward.
And then, Bob, just in terms of capital allocation, as you point out, obviously, we intend to end 2020 with a very strong balance sheet. That gives us plenty of options as we go into 2021. And I guess if we look at the usual checklist starting with CapEx, Obviously, we'll continue to invest in our business, but it will continue to be a disciplined approach. As you saw from us in 2020, we did reduce the CapEx spend in response to lower activity levels in some parts of our business. And then in other parts of our business where we had very strong activity levels, we continue invest.
So we should expect to see a continuation of that approach from us into 2021. In terms of dividends, obviously, we have 30 years, 36 years of a very proud track record in terms of a stable or increasing dividend. We continue to have a progressive approach to dividends and you should expect see a continuation of that as we look forward. I think in terms of the next lever, it's obviously M and A looking at that M and A, it's a very and remains a very key part and important part of our growth strategy as we look forward. Typically, in any year, as you know, we would do somewhere between 500,000,000 dollars, $600,000,000 $1,000,000,000 of bolt on deals.
That number, obviously, is much lower in the current year as we pointed out to date. We've done about $200,000,000 of bolt on deals, so it's quite unusual. And I guess that's a reflection of the uncertain environment we've been operating in. But the pipeline looks good and looks healthy today as you look into 2021. And as some of that uncertainty starts to recede, then you should expect to see an uptick in activity levels in terms of allocation of capital towards the M and A side.
And I would say finally then looking at buybacks, I mean buybacks we know are an important part of our capital allocation strategy. And we we paused our current program back in March due to the on unprecedented volatility we saw in the markets at that point in time. As I said, thankfully, the worst of that seems to be behind us at this point in time with regard to volatility. Given our strong balance sheet, obviously, we're very aware of the attraction of share buybacks to our shareholders. Obviously, we'll update you further on that during the first quarter of next year.
That's great. Thanks very much.
Thanks Bob. Have a good day.
Our next question is from Gregor Kuglitsch from UBS.
Hi, good morning. Thanks for taking my questions. I'm going to approach the 2 questions similarly. Maybe if I can explore your outlook on pricing into next year. I guess we're quite late in the year, so perhaps some of that has gone out.
So if you can give us a sense of what you think the likely price increases are? And maybe put it into context for us in what you expect into costs? In other words, do you think pricing could be net net accretive, or is it going to be basically inflationary? And then coming back on M and A, can you just maybe, explore a little bit more there. You talked about bolt ons.
I guess the question is what appetite, if any, is there for Landa a larger transaction. So I think previously you kind of suggested you're less keen on the big transaction. So if
you could just give us
a sense of what you're seeing in your pipeline and whether you're prepared to do bigger? Thank you.
Hi, Gregor. Good morning to you, and hope you're well. Two questions there. First one on outlook on pricing and just sense of where we are with regard to costs next year, give at least some sense of that to early in the season. And the second one with regard to M and A and just a bit more granularity about our appetite and where we are And with regards to our pricing, we haven't started the pricing season yet.
We're finishing out this year, so it gives us a chance to do would come off the backup of what I would consider to be a solid pricing environment for both the North America and Europe. I mean, our costs go up and our costs have gone up over the last number of years. And in particular in Europe, we are playing catch up for quite a number of years, and we will continue to play catch up for a number of years. So I would expect across Europe to see progressive pricing continuing on during the course of 2021. And not because we shouldn't, we need it.
The assets we invest in are expensive assets. They need to be maintained and we need to get paid for the product that we sell. We sell high quality product that means very tight specifications that we continue to invest time, people and resources to do so. And of course, we've got increasing costs with labor and logistics and fuel costs as well. So from my point of view across Europe, I expect to see a fairly continuation of a positive pricing environment in 2021.
With regard to the United States, I think it's well embedded now at this stage for a number of years. And that pricing is something that we should expect to cause our businesses. And I would expect it to continue there. In both markets, I would expect it to be in or at the same level as we saw in this current year, Gregor. With regard to costs and cost input costs, obviously, our main input costs are labor and logistics and fuel costs I would expect labor costs during the course of next year, labor is still tight, quite frankly, even though unemployment has risen both in the European Union and indeed in the United States, of course, it's specific labor we need, it works to quite tighten that.
So I'd expect labor costs to be able to make it 2% to 3% depending on your specific regional focus. And logistics costs and energy costs, I think that would be broadly stable from where they are now at this point in time, looking at that, we would cover forward a lot of our costs and energy in particular. So we're always rolling forward. So we have probably about a third of our cost covered rolling as we go into next year, but that's a thing we've done for quite some time. It's a starting process of what we do.
So That would be the pricing and cost environment as I would see it here today. Obviously, it would be much better informed as we move into quarter 1 next year. With regard to M and A, I think Senator said it very well. We with the pandemic that hit us in the first half of this year, clearly everybody just took a pause and we did hit the pause button. I mean, I've been in CHF for 20 plus years now at this stage.
I don't ever recall spending $180,000,000 in M and A at November at any year, but has been an extraordinary year. But we deliberately held our hand. It's not because we lack appetite. It's not because we lack lack the capital because we just had relaxed the visibility. And when you've got no visibility, it's very difficult to, to plots away forward in terms of looking at forecast.
And also this year, challenges of actually physically meeting people, what we've seen over several months in terms of the restrictions of travel and and that goes with that. However, in saying that, I have to say that certainly over the last 2 to 3 months that has started to ease somewhat in terms of trouble within Europe, Continental Europe, and within the United States made it easier. Also, I think the fact that they visited the fog of of uncertainty is lifting somewhat in terms of what next year looks like. I've just given you our thoughts in terms of how we think next year is going to play out and that's just not a CRH view that the industry view. And with that in mind, we can start to see a bit more credit clarity where opportunities may abound We have capital, as Senator said, M and A has been a significant part of the value creation story for series going forward.
We want to do M and A. We want to do disciplined M and A And I think we would expect to see a progressive increase in our activity levels there during the course of the next couple of quarters. Don't think we're going to hockey stick up from where we are now at the moment, but I would expect it to progressively improve as we return to that particular game. And with regard to large M and A, there's nothing specifically planned with regard to large M and A. If we take a progressive careful approach, as you know, CRH will do, it's highly unlikely we're going to be doing a sort of multibillion dollar deal tomorrow.
At the same time, we keep our eyes and ears sharpens and open for value opportunities. And you would have seen that in the past. Just the cash flow came along, that was a $3,500,000,000 deal. Was a big deal, but it was a very fine deal. It was a good deal for CRH.
It was a good deal for Ash Grove. And I think we've always keep our eyes at the ears open for that. Our industry has been very fragmented both in Europe and in the United States. As you would well know, there are a number of deals of the $1,000,000,000 plus that people have even heard of private businesses, making $100,000,000 to $150,000,000 of EBITDA every year all of a sudden, there are succession issues or there are issues with regard to expansion or they want to move all the business on. And it's our job as part of what we do is keeping in touch with these people This is our strategy.
This is our job. And I know we keep a very careful eye on those. So I wouldn't rule out anything extraordinarily large wouldn't say there's any probably in the coming quarters. Quite frankly, I think we'll slowly build up back from where we are at the moment, but we always keep an eye on value. And we know that if we do execute disciplined and M and A that usually ends up delivering value for our shareholders.
And that's what we're here for.
You too. Thank you.
Our next question is from the line of Paul Roger from Exane. Please go ahead.
Yes, good morning guys. Hope you both will hope everyone's well. So just two questions then. Going back to the CapEx point, Sennan, you've obviously given guidance for this year. You mentioned a bit about next year as well.
Some of your competitors have talked about the need to start hiking sustainable investment, potentially on things like carbon capture, but just general CO2 reduction, is that a view you share And maybe also if you can give us some indication of how much of that 1,000,000,000 CapEx is going into reducing CO2 this year? And then the second question, also on CO2, clearly a few of your large cap peers gone quite aggressive on targets for 2013. You're at 5 20 for 2030. Any plans to revisit that? And then finally on also on sustainability, are you thinking about tapping any green sources of finance?
I'll start with the CapEx and then Albert, do you want to say a few words on sustainability targets? Paul, just in terms of the CapEx point, I think as you pointed out, first thing I would remind you of is that, 85% of our business is not cement set another way, 15% of our business is cement. So when you're comparing our CapEx numbers to some of our peers, you should bear that in mind. This year, obviously, our CapEx spend is $1,000,000,000. It's down to about 75% of depreciation.
But as I said earlier, in some of that spend, Obviously, we've obviously spent more than previous years where we've had parts of our business, particularly on the repair and maintenance side, some of our products businesses, where we've actually expanded our capacity. To be able to cope with growing activity this year. And then there are other areas we've obviously caught back. When I look at the sustainability spend, I mean, it's the sustainability spend is embedded within that number. And as you look to 2021 and beyond, there's a portion that is related to, obviously, driving our sustainability agenda.
I would say it's a it's an affordable part of that as opposed to calling out a specific number. I would expect that when you go into 'twenty one that with activity levels, as you see activity levels improving again, the CapEx spend would increase across in the parts of our business that need it. And, I think that's probably what I would say really about us in terms of ESG. Albert, do you want to add something
there with regard the ASV, I would say, 1st of all, I think, Paul, I know where your question is coming from because a lot of our peers that you're talking to are 90% plus cement players. And a seminar said to you, I mean, concrete, aggregates, asphalt, building solutions, concrete products, infrastructure products, they make up 85 percent of our revenue cement is only 15% of what we do. And uniquely, amongst that as well, almost all are cemented in the developed world. So we have been operating and manufacturing to the most stringent standards that have been around the world for the last decade as such. And as Senator said, most of our of our targets are with the CapEx numbers that are there.
But actually in terms of improving CO2 targets, most of the time, actually, the work is done on within the process itself. So it's changing process technology rather than buying in new equipment. If it was easy to buy new equipment, we'd all do it. But it's actually crate changing process technology, which is due with the chemistry of the raw materials and modernizing raw materials, types of fuels that you use, all of those types of cement that you produce and indeed the type of cement you use in type of concrete. So it's all interlinked and it's all circular.
It's more to do with how you work well than what you spend. That's the first thing, except in some businesses where there are particularly in the emerging markets where you haven't had those standards embedded in your business. And you will find those of our peers who have greater exposure to developing markets have not had those standards embedded in their business for the last 10 years, and hence, they've got to dispense to do that. We don't have that situation. Also, I'd have to say that within the targets you talk about, people move these targets around the place.
We're not ones who bring Target that every 3 months. And if you compare apples to apples, Paul, none of us smarter than anybody else. We all went to the same universities. We all have the same engineers. Broadly speaking, all the targets are in line for the industry to 2030 within CRH, what we do actually, we give targets to 2025, and we're very happy that our targets are absolutely at the very leading edge of what our industry is doing.
And everybody's working very, very on this whole area. With regards to the broader situation, how important it is to us, I'd have to say that when I look at CRH, it's not really fully understood the courses, but we are the largest recyclable building materials in North America. We're the largest producer of concurs in the world that is the world's most sustainable product. A lot of people focus on cement, but we're not a cement company, actually. We're a concrete in that group.
It's an asphalt company. We happen to have some cement as well. And concrete is the most sustainable building material in the world in terms of durability, energy efficiency, strength, safety, It absorbs CO2. It's 100 percent recyclable. And again, it's a neighbor of the stability infrastructure that we need to build the world that we live in.
Is it indispensable part of our modern way of life. And what we have got to do is we've got to look at that and see if we could give it in a more sustainable way, which is exactly what we're doing. We're very proud of having strong ESG credentials. It's a very important part of what we do. And I think it's really about just making sure people understand where CR HR as compared to our more cement focused competitors.
And just Paul, you had a question about Green Finance there at the end. Mean, look, it's something we'll continue to evaluate, but let's look at CRH's position. We issued bonds earlier this year at a very attractive rates Obviously, investment grade rating. There's no plenty of appetite for our paper in the market. So it's not something that we've obviously considered or had to at this point in time to date, but obviously we'll keep it under evaluation.
But I would say, you know, balance sheet is in a very healthy place, raising debt at this point in time is not a significant priority given our healthy cash position. And obviously the term of our outstanding debt looks very healthy when you look at it. So there's no refinancing that's imminent either. So it's something we'll keep on the radar, but bear in mind that our existing funding capability is already in a quite an attractive place.
That's great. Thank you.
Thanks, Paul. Have a good day.
Our next question is from the line of Arnold Lemon from Bank of America. Please go ahead.
Thank you very much. Good morning, Albert. Good morning, Senan. If I could, for my first question, just come back on your Q3 trading update and the minus 7% like for like sales for Americas Materials. Could you please confirm whether this is mostly reflecting the base effect maybe also some hurricane activity rather than a meaningful downturn in the underlying market trends.
That would be my first question or maybe a little bit of both. And secondly, I guess, congratulations to Senan for his planned retirement. Maybe you could give us a little bit of, idea of the timing of the transition next year. That would be helpful. Thank you.
Thanks, Anu. Two questions there. I'll take both of those First of all, with regard to the quarter 3 and the reference you have to the minus 7% volume decline, our top line decline in the Americas Materials. That really is a function of 2 things. First of all, we had a very strong quarter 3 in 2019.
You may remember, Arnold, it was very difficult west quarter 2 in 2019 and it was a strong rebound. So the actual quarter, the 3 month period in 2019 was very strong. So we had a strong comparison number 1. And number 2, we had some very challenging weather in our footprint in North America Fair Materials business. It was very wet across the South Texas and Florida.
We lost more than a week in both of those big states for us. We also was also very west up in the Northeast, New Jersey, Pennsylvania, Ohio, again, very west, and we had some of those travel fires up in the West Coast with the Pacific Northwest schedule. So it was those 2 factors more than anything else the tough comparison, some difficult weather that hasn't been there in the past, but no underlying slip at all whatsoever. And if I look, what's happened in October, November, we returned more normalized pace as we would have seen for the 9 months. And with regards to, Sennan, well, you're congratulating.
He's not gone yet know, and he's still CisionCare with Opposite me and the CisionCare opposite me for many months. Yes, look, as you would expect in any public company, succession planning for any senior executives, parcel we do as a management team and indeed as a board. And with regards to Senate's specifically, there's no immediate rush here. Senate is fully committed to his role here and he's not going anywhere anytime soon. Our priority as a management team and I know Senan's priority is to finish out 2020 and to help pleased our planning for 2021 in terms of how we're going to progress the business.
And that's our focus, and I know that's his focus right now. We have commenced and we'll be considering both internal and external candidates and after what you would expect with CRH typical CRH to be a smooth and carefully managed stage transition exactly as you'd expect. And as soon as we've any update, we'll update the market when we know that. But for the moment, Teddy, she goes focused on delivering this year and planning for next year.
Thanks, Alan. Thank you very much.
Thanks, Arnold. Have a good day.
Our next question is from the line of David O'Brien from Goodbody. Please go ahead.
Good morning guys. Good day for me and thanks for taking my questions. Firstly, just the margin performance in Q3 has been very strong. I just wonder could you give us more color in terms of what has been the help from raw materials versus the actual self help you've put in place yourselves during the period. And maybe you could update us on where do we exactly lie now terms of the margin improvement plan that you outlined in the market a number of years ago and what kind of advancement in an all teams being equal environment in 2021, should we expect?
And if I could tag on one final one, just in terms of Europe, it's been a really impressive recovery, I think, through Q3. Have we exited with like for like turning into positive territory at this stage?
Hi, David. Two questions there and 2 different questions there. Just address the issue with regard to cost and margin improvement of where we are on that particular journey. Look, I think it's been a very difficult year with regard to trying to manage our costs, not just with the volume declines, but the fact that the world just ended almost in mid margin, everything went up the edge a cliff and no one knew whether this was for 3 months, 3 weeks, 3 months, or 3 years. And on top of that, we received a lot of inbound from various governments to hold our hand and not to be cutting jobs, which we didn't.
That's a holdback and hold on cost base. And we kept people on at our own cost through the businesses. So we kept people on during quarter 2 quarter 3 in the hope that business will come back happily business has come back and is starting to come back. And so I think having carried that cost base in the number of years to still deliver 100 basis point improvements this year is a very good delivery because we've actually had to cover a lot of costs. There's been a big drag on costs this year that we wouldn't you were just being really tough about it, you wouldn't have carried, you would have made some decisions, but we didn't do that.
And happily, we didn't because our teams who deliver across year end week valuable asset we actually have. And so in terms of where are we going to deliver with us, actually quite frankly, we don't know because it's very it's contingent upon the binding levels we're gonna see during 2021. I know where we are now currently, and I'm happy that we'll continue to deliver the good improvements in terms of cost takeout this year. It's more to do the process and how we improve our businesses and how we look at our logistics and all of that. With regard to how much of it is self help and how much of it is coming from sort of raw materials costs, I'd say about 2 thirds of it is self help and 1 third comes from from energy, quite frankly.
So about 2 thirds of it is what we're doing within the business ourselves and that will endure into next year. But next year, we'll present new opportunities and new challenges. And we rather than making proud boast about where we deliver in 2020 2021, I'd like to let that situation evolve in Zwares is given what we have seen this year and given what we expect for next year, I answered a question in the very start to Bob, Bob Gartner from Davy. I was talking about the fact that I expect to see price expansion to continue both in North America and in the United States and in Canada and expected a fairly flat environment with regard to energy and some inflation costs with regard to logistics and labor. That should be a scenario.
If we continue to work at the programs we have inside of this, that should lead to continued margin expansion. And I have said to you before, and I'll say it again. I think you should expect CFH to be delivering continued margin improvements year after year as we continue to reshape our businesses. By the way, it is not just down to how we run the businesses. I think you should just go back and reflect that it's down to how we manage the business and manage the portfolio.
And this continues process of the evolving portfolio, which we've been at since 2014. I mean, it's worthwhile reflecting. Since then, we've sold CHF 9,000,000,000 dollars worth of businesses at 11 times EBITDA and we've acquired 16,000,000 of businesses at 8 times EBITDA, but not It's not just the numbers. It's the fact that we've come a narrower, deeper, more focused business focused on our core capabilities, focused on the developed world, And that that use of capital, that direction of capital has allowed us drive operational performance and to improve margins as much as the operational effort itself. So the reshaping has been behind that and of course, it's been behind the improvements in returns and has been behind the improvements in cash.
That's a key part of what we do. And the benefits of that will ensure, endure and will continue. And with regards to your question on Europe in terms of where we are, run rates and where it's going, I think broadly speaking, what we will see in 2021, if that's what your comment on. I can't recall if you were referring to this exit, your actually, your comment was exiting this year, but I'll extend it on into next year. My own view is that we'll see a continuation of a fairly solid and stable position with regard to Central And Eastern Europe.
I think it's fairly okay there in terms of I know what the order books look like. I know it looks like and it looks to be pretty okay. I think we're just going to see a continuation of improvement in Western Europe based on the fact you know, like myself, David, how artists were doing here, I think we'll do okay. I think governments will push money into stimulus package just to lift a cliff economies, hopefully science is going to save us all next year at some point during the course of the year. And there are some specific factors with regard to elections that I referred to early on that should push government government funding into infrastructure to support employment.
And broadly speaking, I expect Western Europe to continue progress during the course of 2021. And the UK, I think we'll continue to lag. Quite frankly, our expectations are lower there. It's clear to me now that this stays we look at the UK, the expectations we had for UK a number of years ago are not coming through. And the long term profitability of that business is below what expectations and long term activities are below what would have been our previous expectations for various reasons.
With regard to Europe, that's the way I would see us. Recent Europe, solid and steady Western Europe continued to advance. UK continues to advance, but perhaps at a slower pace and in a more challenged mac environments.
That's great color. Thanks very much. Take care.
Okay. I think we have time for one more call and I would just say I'm just wondering if an audience is talking core please.
Of course, our last question for today is from Will Jones from Redburn. Please go ahead.
Thank you. And just a couple for me, please, if I could, just coming back to the restructuring charge savings into play, please. Can you just confirm the million that you've thought that for the second half? Is that new versus your plan as it were when you spoke to us back in August? And if so, what areas to be focused on?
And when we then take that forward and think about next year on the whole bucket of savings, I guess you've got some costs going against you like travel maybe absence of furlough, perhaps some new savings kicking in. How do you see the net of those factors, please, as we look into 'twenty one? And then just perhaps you can explore a little bit more around the UK performance, please, either market dynamics or company level. I'm thinking particularly when you refer to market activity at 75% of norm at the moment. Are you happy that the business is holding its market shares?
So just in terms of the restructuring charge, to begin with, Will, obviously what we highlighted in the announcement is that and we saw at the half year is we incurred $65,000,000 that we called out as COVID related restructuring costs across the business. And we're guiding for a similar charge in the second half of the year. So an incremental amount. And really what that relates to is obviously restructuring opportunities across money parts of our business. The you will expect and should expect to see benefits from that next year in the sense that obviously the restructuring costs, you wouldn't expect them to be incurred again, but also you start to see some benefits in terms of some permanent savings coming from particularly given the nature of some of the costs coming or some of the restructuring is coming in the second half of this year, then the timing of savings on that will certainly run into 'twenty two rather than all be achieved in 'twenty one.
And so in terms of timing, I think the other thing to call out, just when you talk broadly about cost base, obviously, that Albert mentioned earlier on, there's been a significant amount of cost taken out the business during 2020, and most of it in response to a significant decline in volume in the second quarter. I think the one big item I would call out is that during 2020, I think one of the big items that we made progress on is to continue to variabilize, if that is a proper word, but to continue to variabilize our cost base. So as we go into 'twenty one, I feel confident the fact that the level of costs we have in the business will fairly reflect the activity levels and we should be able to increase that decrease that, you know, in line with activity levels as they play out in the year ahead.
So I
think that's probably the big feature in terms of the progress made in the past 9 months.
Thanks, Anne. And Will, and just a comment, you threw the word furlough in there in terms of the absence of further next year, wasn't it? The furlough this year, just to be absolutely clear, CRH, but in the early stages of that we did take up some of the furlough, old furlough payments in at all locations around the world were returned. We're not going to see the money for now going forward. We decided that all the extra costs that we've had to cover we will cover that ourselves.
I think business has a role to play in society and that we felt that was the right thing to do. With regards to the United Kingdom, in terms of performance, what that's there. As I said earlier, look, I think that the long term profitability of the business in the UK is below what our previous expectations were. And our previous expectations formed when we effectively stepped up our involvement in the UK in 2016 when we acquired the atomic and the cement assets from the far part of the parcels. And that was at that time that was against a backdrop of what we're looking at significant construction activity in the 5 to 10 years ahead of that.
But I think that the a number of factors clearly Brexit has been a very significant issue with regard to impacting confidence levels in the UK, and that has impacted the construction significantly. And of course, COVID as well. I think the combination of a number of factors there with regard to there's been a deterioration of the overall macro environment going forward. The companies are better than I do in terms of what that looks like. That impacts upon construction in a very significant way.
And your question was do we feel that we're losing market share, well, you know me very well, market share is blood. And you defend your market share. The thing about defending market share costs not only as the activity levels in the UK market below where it should have been profitability is below where it should have been because we defend market share when there's less activity to go around and there's the same amount of supply in the market. Well, the log client demand kicks in at that stage. And we've been we and like everybody else, we've all been hurt significantly by the slowdown in the Southeast the non residential market, the high rise towers that were built in London were high specified, high cost materials, went into those businesses.
And of course, that slowed quite significantly. And that's reduced down the profitability of our business there. Of course, infrastructure around in 2016, we hold our market share, but there was there was GBP 500,000,000,000 of infrastructure programs announced in 2016. As we sit here today 4 years later, only about a third of those are actually working and up and running. And of the those that are actually up and running, there are a lot of them are behind or have been cut back.
So I don't think we've lost market share. I just think that the ambition for the UK market has been reduced. That's not to say it's not an important market for us. We have got significant assets in the UK. We've got very profitable business in the UK.
This is just a realization and reflection of what the reality of activity of Abigard going forward, UK still remains an important market for us when we wish to focus on and concentrate on which we will continue to build a profitable business in going forward. Well, look, ladies and gentlemen, that's all we have time for this morning. I want to thank you for your attention. I hope we've managed to answer some are all of your questions. But as always, if you have any follow-up questions, please feel free to get in touch with our Investor Relations team during the course day or the remainder of the week, and we look forward to talking to you again in the 4th March next year when we report our full year results for 2020.
Thank you very much, and have a good day.
Thank you very much sir. Ladies and gentlemen, that does conclude the call. Thank you all for joining. You may now disconnect.