CRH PLC (CRH) 2020 Q2 法說會逐字稿

Ladies and gentlemen, welcome to the CRH plc 2020 Interim Results Announcement.

(Operator Instructions)

The next voice you hear will be Albert Manifold.

Good morning, everyone.

Albert Manifold here, CRH Group Chief Executive.

And you're all very welcome to our conference call and webcast presentation, which accompanies the release of our 2020 interim results this morning.

Joining on this call is Senan Murphy, our Group Finance Director; Randy Lake, President of Americas Materials; and Keith Haas, President of Building Products.

Also on the call this morning is Frank Heisterkamp, Director of Capital Markets and ESG; and Tom Holmes, Head of Investor Relations.

Before we take you through a brief presentation of the results we've published this morning, I would like to take this opportunity to recognize the extraordinary dedication and resilience of our people across the group in light of the challenges presented by the COVID-19 pandemic.

The last 6 months have been very difficult in an unprecedented time as we've all had to adapt to this global health emergency.

As always, the health and safety of our employees, contractors and customers is paramount at CRH, and every effort is being made to ensure we continue to provide a safe working environment for them to carry out their activities.

Now over the next 30 minutes or so, Senan and I will take through a brief presentation on the results we have published this morning, highlighting the key drivers of our trading performance for the first 6 months as well as providing you with our expectations for the remainder of the year.

As always, we will take any questions you may have.

And all told, we should be done in about an hour or so.

So at the outset, on Slide 2, let me take you through some of the key highlights of our first half performance.

The impact of COVID-19 restrictions varied significantly across our markets during the first half of the year.

In Western Europe, our operations were heavily impacted by nationwide shutdowns across a number of key markets, while construction demand in Eastern Europe and North America remained more resilient.

Against the backdrop of these varying restrictions, we acted swiftly and comprehensively to protect our business, particularly during the second quarter.

And overall, I'm pleased to report a robust first half performance for CRH.

EBITDA of $1.6 billion, 2% ahead of last year, and 70 basis points of underlying margin improvement, all delivered against the 3% decline in sales.

As ever, cash generation remains a key focus across our businesses.

During the first 6 months of the year, we generated $1 billion of operating cash flow, a record performance, which further underpins our strong balance sheet and liquidity position.

And Senan will take you through more of that in detail later on.

All of this supports continued dividend delivery to our shareholders, a track record that now spans 50 years.

In light of the group's resilient first half performance and despite all the uncertainties that persist across our markets, I'm pleased to report that we're declaring an interim dividend of $0.22 per share, in line with last year and reflecting the financial strength of the group and also reflecting what you've come to expect from CRH over many years: continued delivery in ever-changing and uncertain world.

Now before I take you through our divisional trading performance, I'd like to give you a brief overview of how our individual markets evolved during the first half of the year.

Slide 4 sets out our quarterly sales trends so far this year.

After a positive start for -- with the first quarter sales, like-for-like sales 3% ahead, we experienced unprecedented level of business disruption in quarter 2 as COVID-19 restrictions were implemented across many of our key markets.

As a result, second quarter like-for-like sales declined by 8%.

But the chart of our monthly like-for-like sales performance on the right-hand side tells the story of the first half in more detail.

Here, you can clearly see the scale of the declines we experienced, particularly in April, as government restrictions significantly impacted our operations.

However, it's encouraging to see some improving trends towards the end of the second quarter as these restrictions were eased, with like-for-like sales in June 3% ahead of prior year.

The impact of the pandemic was far from uniform across our businesses, not only by geography, but also in terms of the timing and scale of the impacts across our sector and end-use markets.

Turning to Slide 5. Here, you can see some examples of the varying impacts that pandemic restrictions had across our core markets during the first half of the year.

Our operations in Western Europe and the U.K., in particular, were significantly impacted by nationwide shutdowns during the second quarter, resulting in unprecedented declines for our businesses.

In the United States, while construction was deemed essential in most markets, restrictions on certain types of activities resulted in lower levels of nonresidential demand.

Putting all this together, as you can see here on the slide, the adverse impact of the restrictions felt in these markets were offset by more encouraging trends in less affected markets.

Generally speaking, U.S. infrastructure works continued.

And in some cases, we even saw state DOTs taking advantage of lower traffic volumes to accelerate projects.

U.S. residential repair, maintenance and improvement activity experienced significant growth in demand as shelter-in-place orders were implemented across most states and people were confined to their homes.

And in the absence of nationwide restrictions on construction activity in Central and Eastern Europe, our businesses there held up quite well.

So here, you can really see the benefits of our balanced and vertically integrated portfolio coming through on regional, sectoral and end-use spaces, helping us to weather the volatility across our markets and mitigate the financial impact of this unprecedented situation.

Moving to Slide 6. And as the impact of the restrictions varied significantly across our markets, there was no one-size-fits-all approach.

Each of our businesses faced a unique set of challenges at different times, and this required a very specific case-by-case response.

Our agile business model enabled us to react decisively to the rapidly changing environment, making decisions at the local level to take immediate and comprehensive steps to flex our cost base and preserve our cash.

But it wasn't all about cutting back.

In some of our less-impacted markets, we actually accelerated investment to increase capacity and support growth in our businesses.

On Slide 7, you can see some examples of the measures we have taken in these areas.

In the markets most impacted by restrictions, we took decisive action to flex our cost base to reflect lower levels of activity.

We reduced our fixed cost by approximately $200 million, lowering our labor cost through salary reductions across all levels of the organization and furlough arrangements in our most affected markets.

We also carefully managed our repair and maintenance expenditure and restructured our operating footprint to adapt to lower levels of production.

Another of our key priorities during this time was the protection of our cash.

We reduced our capital expenditure by $200 million and implemented strict measures to manage our working capital across all our businesses, which delivered $800 million improvement compared to prior year.

But we must also continue to support the growth of our business.

And on the right-hand side, you can see some of the actions that we've taken in this regard.

In the United States, we accelerated investments in our Architectural Products business.

As that experienced record levels of demand, this allowed us to increase capacity and maintain service levels to customers, which played a crucial role in delivering a very strong performance for that business in the first half.

In our Americas Materials business, with the number of key markets, including Florida and New York -- New Jersey taking the opportunity to accelerate infrastructure projects, we were able to quickly reorganize and adapt our operational capabilities to service those increased levels of demand.

We also saw growth in Eastern Europe.

And here, too, we invested in operational improvements in our plants to support demand in markets such as Poland and Romania.

So as you can see, different approaches for different markets at different times, all executed swiftly across the group.

In summary and as outlined on Slide 8, a robust first half performance with EBITDA, margin and operating cash ahead of prior year despite lower sales and unprecedented level of volatility across our markets.

All of this is as a result of the extraordinary effort of our teams on the ground across the group, the decisive actions we took to respond to a rapidly changing environment and the strength and resilience of our business and management teams.

I'll take you now through the trading performance of each of our businesses during the first 6 months of the year, and first to our Americas Materials division on Slide 9. In North America, the regional impact of the pandemic restrictions varied significantly with the U.S. Northeast, Northwest and parts of Canada being most impacted, while the Central, Southern and Western regions of the United States were less affected.

After a strong start to the year, good volume growth in our Western markets during the second quarter was offset by pandemic restrictions in the North and somewhat a disruption in the South.

So for the first half as a whole, our aggregates and cement volumes were broadly stable, while volumes of asphalt and readymixed were behind the prior year.

Despite the challenging and uncertain trading environment, disciplined commercial management across our businesses supported progress on pricing in aggregates, cement and readymixed during the first half of the year.

And while asphalt pricing was in line with prior year, we delivered good margin expansion in that business.

But what really comes through in our first half performance is our operational agility, leveraging our scale and vertically integrated business model to manage our cost base and restructure our operations, enabling us to adapt to volatile demand patterns across our markets.

As a result, against a slight decline in like-for-like sales, our business delivered a strong first half performance with EBITDA 20% ahead and underlying margin improvement of 260 basis points as well.

Turning to the performance of our Europe Materials business on Slide 10.

A very different picture where we faced a challenging environment in the first half with contrasting regional trends impacting our performance.

In the United Kingdom, we experienced unprecedented disruption across operations from a nationwide shutdown, resulting in significant declines in all product areas.

In Western Europe, the impact on construction activity was more mixed and varied, with government restrictions impacting on our volumes in France and Ireland, while our operations in Germany and Switzerland were less affected.

In Eastern Europe, in the absence of nationwide restrictions on construction, we delivered a good first half performance, with our businesses in Poland, Romania and Ukraine performing particularly well.

Notwithstanding the volatile trading environment, it was encouraging to see good pricing discipline continuing during the first half, building on the progress we've made in recent years.

Our overall cement pricing was 3% ahead in Europe with improvements in all major markets.

Here in Europe, we also took swift action on our cost base to protect our businesses from the worst effects of the crisis.

The nature of our response varied from country to country and depending on the pace of recovery within each of our markets.

These actions helped to mitigate some of the financial impact in the first half of the year and will continue to benefit our business going forward.

So overall, a very challenging trading environment in Europe in the first half, with our performance particularly impacted by the significant declines we experienced in the United Kingdom.

For example, excluding the U.K. performance, the 28% decline in like-for-like EBITDA would have been reduced to minus 9%, whilst the 220 basis point decline in margin would have been a minus 30 basis points.

This just highlights the significant impact that the U.K. had on our otherwise relatively resilient performance by our European businesses.

Turning to Building Products on Slide 11.

And here is another example of varying demand levels across our various sectors and end-use exposures.

Our Architectural Products business, with its significant exposure to residential RMI, delivered a strong first half performance across our businesses in both North America and Europe, benefiting from increased demand in the outdoor living segment as many people were confined to their homes due to the pandemic.

Our Infrastructure Products business, primarily serving newbuild construction in North America and Europe, delivered a resilient first half performance despite pandemic restrictions impacting activity levels in some of its markets.

And finally, our Building Envelope business, which is primarily exposed to U.S. nonresidential construction and was therefore more heavily impacted by the restrictions, experienced lower levels of demand during the first half of the year.

But the real standout for me on this slide is that against this 2% improvement in like-for-like sales, we were able to deliver an 11% increase in like-for-like EBITDA and a 130 basis point improvement in margins, a very strong performance reflecting a good cost discipline and positive pricing momentum right across the businesses.

So a very varied trading environment across the group with good delivery from all of our teams in the first half of the year.

At this point, I'll hand you over to Senan to take you through our financial performance in further detail.

Thank you, Albert, and good morning, everyone.

So turning to Slide 13.

So Albert has given you a good overview of the trading trends across our markets during the first half of the year as well as an outline of some of the actions taken to protect our profitability and preserve our cash during a very difficult time.

But let me now take a moment to guide you through some of the key drivers of that profit and cash performance.

As you've heard us talk about the benefits of our financial strength and flexibility many times before, and this year is no different, we came into 2020 with a very healthy balance sheet and a net debt-to-EBITDA ratio of 1.7x.

As the global health crisis unfolded and with the financial markets in turmoil, we took steps to bolster our liquidity position and further underpin our investment-grade rating.

We took the precautionary decision to draw down on our EUR 3.5 billion revolving credit facility, and we successfully issued EUR 2 billion of bonds at very attractive rates and duration.

We also delivered a very strong cash performance.

And despite all the challenges we faced during the first half, we generated $1 billion of operating cash inflow.

That's a record first half performance for the group, and it further underpins our financial strength.

We ended the first half of the year with available cash balances of just over $10 billion, which is sufficient to cover all our maturing debt obligations over the next 5 years.

This also provides us with significant optionality for future value creation, whether that's through capital investments or that's through value-accretive acquisitions or cash returns to our shareholders.

Turning now to Slide 14.

And here, we've set out the key components of our financial performance for the first 6 months of the year.

So working from left to right on this slide, and starting with our organic performance, 2% ahead of the prior year.

That's a good result in the context of the unprecedented disruption we experienced across parts of our business.

Of course, this performance was delivered against a 3% decline in like-for-like sales, and that overall reflects a 70 basis points improvement in our underlying margin.

So as you can see on this slide, acquisitions net of divestments contributed $18 million of EBITDA in the first 6 months of the year.

And that comprises obviously a small number of bolt-on acquisitions as well as the impact of some divestments which were completed in the second half of 2019.

With regards to currency translation, this year, it's a small headwind of $11 million, reflecting significant reduced volatility in our earnings following the group's change in reporting currency from euros into U.S. dollars, which is effective from the 1st of January this year.

And finally, as you can see in our accounts this morning, the group recognized $65 million of one-off restructuring charges.

They are as a result of mitigating actions taken in response to the impacts of the COVID-19 pandemic on our business in the first half of the year.

Turning to Slide 15.

And here, you can see the strong cash performance I mentioned earlier, $1 billion of operating cash inflow in the first half, representing an improvement of over $700 million compared to the prior year.

And given the seasonal nature of our business, we would typically expect an operating cash outflow in the first half, which really just goes to highlight the strength of this performance.

This was primarily driven by an $800 million reduction in our working capital investment as we implemented strict measures and tight controls around inventory, receivables and payables.

We also took significant steps to curtail our capital expenditure.

That resulted in a reduction of $200 million compared to the prior year, while we continue to support growth in our business.

In addition, we continued to deliver further cash returns to our shareholders.

We returned approximately $800 million through dividends and buybacks during the first 6 months of the year.

As Albert mentioned earlier, the Board has decided to declare an interim dividend of $0.22 per share, reflecting the resilience of our first half performance and our financial position.

And in light of the recent market volatility, and as announced earlier this year, we decided to pause our share buyback program until further notice.

So overall, a strong cash performance, a strong cash -- operating cash inflow during the first 6 months of the year, partly reflecting an element of timing, but nonetheless, a good performance in a challenging environment.

Our relentless focus on cash generation and the financial discipline underpins our strong balance sheet position.

And on Slide 16, you can see how this was delivered.

And you can see how we delivered an almost $4 billion reduction in our net debt position over the last 12 months.

We ended the first half of 2019 with net debt of $11.6 million.

And over the last year, our business generated a total of $4.6 billion of operating cash.

That includes the $1 billion in the first half of 2020.

We also generated significant proceeds from divestments, close to $2 billion, which primarily reflects the sale of our European distribution business which completed in October of last year.

And notwithstanding the curtailment of our capital expenditure in the first half of this year, we've invested a total of $1.2 billion to support growth in our business over the last 12 months.

In addition, we've also returned $1.4 billion to shareholders in the form of dividends and share buybacks.

So taking all of this into account, our net debt position at the half year stage is $7.8 billion, representing a net debt-to-EBITDA ratio of 1.7x on a trailing 12-month basis.

And that's in line with what we reported at the end of 2019 and reflecting the strong financial position of the group.

Thanks, Senan.

Another great cash performance there and a real reflection of the financial strength and discipline of the group.

Now before I turn to outlook, I'd like to take a moment to reflect on the strength of our business and how it has enabled us to deliver, even in difficult times, something that was clearly demonstrated by our first half performance.

As you can see on Slide 18, we have a wealth of experience across our group.

Our management teams have been through periods of uncertainty and business disruption many times before, and we have proven track record performance and delivery through the cycle.

We have a clear strategy with a robust and resilient business model, benefiting from a balanced portfolio of businesses across geographies, sectors and end-use markets.

Through the active management of our portfolio in recent years, we've become a simpler and more focused business.

And we will continue to refine and reshape our business to deliver superior growth, returns and cash generation for our shareholders.

We are relentlessly focused on continuous business improvement, a deeply embedded practice of making our businesses better through incremental improvement initiatives to structurally improve our margins, cash and returns year-after-year.

Another core focus for us is the area of sustainability, which is deeply rooted in all aspects of our strategy.

We're committed to reducing the impact of construction and construction materials on our environment, and we are proud to be recognized as an industry leader by the major ESG rating agencies.

We are also a highly cash-generative business.

And our strong and flexible balance sheet provides significant optionality for further value creation, whether that's through CapEx, investments, acquisitions or cash returns to shareholders.

Turning to Slide 19 and our expectations for the remainder of the year.

Given the uncertain economic backdrop, we have significantly less visibility than we would normally have at this point of the season.

As a result, we're not in the position to provide full year guidance at this time.

However, based on trading trends during July and August to date, I give you an indication of our expectations for each of our businesses for the third quarter.

In Americas Materials, with regional variances across our markets and despite positive pricing momentum in our businesses, we expect third quarter like-for-like sales to be slightly down against strong prior year comparatives.

In Europe Materials, we're seeing improving trends in our Western European markets in quarter 3. While there are also some signs of improvements in the U.K., we expect the recovery in that market to continue at a slower pace.

Our Eastern European businesses continue to hold up well, and there's good pricing discipline across all our markets.

Overall, we expect third quarter sales for our Europe Materials businesses to be behind prior year.

In our Building Products businesses, we expect continued strong residential RMI demand to be offset by ongoing weaknesses in certain nonresidential segments.

As a result, and notwithstanding an element of pull-forward of demand into the first half of the year, we expect third quarter like-for-like sales to be broadly in line with 2019.

Taking all of this into account, for the group as a whole, we expect third quarter like-for-like sales to be slightly down on prior year.

However, through strong cost actions, we will continue to adapt our businesses to evolving demand.

And as a result, we expect third quarter like-for-like group EBITDA to be line with the prior year.

Turning to Slide 20.

And as we look further ahead to the fourth quarter of the year and indeed into 2021, visibility is extremely limited.

The outlook for our market is ultimately dependent on an improving health situation.

And the reality is that society's success in reducing the spread and transmission rate of the virus will be more stimulating for the global economy than any fiscal or monetary policy could ever be.

We expect this high level of uncertainty to continue for some time across our markets.

And as we saw during the first half of the year, we expect the pace and shape of the recovery to vary significantly across our geographic and end-use markets.

Never before have we had such limited visibility looking forward.

And it has to be said that as we sit here today, most of the risks are on the downside.

There are concerns about the pace at which new projects are coming onstream.

And although our current pipeline of work remains reasonably healthy, we are cautious regarding the pace at which these projects have been replaced as current ones finish out.

But regardless, and as you saw in the first half of the year, however the market evolves, we will take all necessary steps to protect our people, our profitability, our margins and our cash.

We are well positioned to meet the challenges and the opportunities that lie ahead.

And looking beyond this global health crisis, we believe the long-term fundamentals of our business remain positive.

Our financial strength and resilience, combined with our balanced portfolio of high-quality assets in attractive markets, leaves us well positioned for future recovery.

So that concludes our presentation this morning.

And we're now happy to take your questions.

(Operator Instructions) And I'm now going to hand you back to the moderator to coordinate the Q&A session of our call.

(Operator Instructions) Our first is from Robert Gardiner from Davy.

Well done on the numbers.

I'll keep it to 2 and keep it brief.

So one, I was wondering if you could give us a little bit more color on the performance of the Americas Materials and Building Products businesses, which appear to have a very strong half despite everything you had to face.

And second then, I was wondering, could you give us some indication of sales rates across the business, specifically in July?

Highlighting, clearly, the 2 parts of our business that had very strong performance in the first half of the year and, indeed, continuing on during quarter 3, we've both got -- I've got Randy and Keith on the line this morning as well.

So maybe what I will do is if I go to Randy first just to talk of the Materials business and what was behind the delivery of those numbers for the first half of the year.

And perhaps, Randy, what you might also do is just take us through what you're seeing so far through sort of July and August, indeed, what your estimates in quarter 3 in terms of using your marketplace.

And then maybe we might pass over to Keith to just take us through the delivery, what was behind the Building Products delivery.

So maybe if I go first to you, Randy, just take us through your Materials numbers in the first half of the year, please?

Yes, absolutely.

Thank you, Albert.

First half of the year, you'll give complete credit to the teams.

They took, with really unforeseen circumstances, primarily in the Northeast, the West, a lot of work done in terms of consolidating operating facilities, trying to maximize production at given facilities and, really, from that standpoint, driving a very nice cost position.

I think the underlying business that we have going into the first half of the year was really based upon the bidding activity that we had in the end of '19 and the beginning of 2020.

We saw those levels roughly similar to what we saw in 2019, but it was really about the execution in the field and that margin management.

As you know, our positions, we have good positions commercially across the U.S. Construction activity was deemed essential by the states, in particular, the DOTs.

And so we saw states throughout the country take advantage of lower traffic flows to give us access to projects and allow us to do paving work in relatively free zones there.

So efficiencies were relatively high during the first half of the year.

Good pricing discipline across the business, whether that has to do with our cement business and aggregate and asphalt business.

So we saw the teams really focus hard on delivering good value and maximizing the positions that we have.

As we look into Q3, as you know, the backlog is really our lens into the future.

And that tends to be, call it, 6 to 9 months of future work.

Our typical project runs anywhere between 30 and 90 days.

It's primarily maintenance-type activities.

And we have a good visibility at least through the end of Q3 that not only is the bidding activity very similar to what we saw last year at this time, but our backlogs are very similar as well.

What is important in an integrated model is really the use of our construction teams, and so bidding activity in states has been pulling through aggregate, asphalt and cement.

As we look at Q3, we would see relatively confident in terms of the underlying volumes that we have and the margins associated with that.

Thanks, Randy.

So good performance in the first half of the year.

I say a lot of the stuff that had done internally within our business, as Randy was saying.

And building upon the improving efficiency we see in our businesses, we continue to develop upon some of the projects where we're doing to improve the margins in our business and great performance in the first half of the year and delivery with regard to that.

Maybe, Keith, you might just take us through the products in the first half of the year, and again, also the quarter 3 run rate and what the outlook is for this quarter, please.

Yes.

Sure, Albert.

If you look at Building Products, I think as you alluded to earlier in the presentation, it was really not a one-size-fits-all direction there.

In terms of our business, the positives would have been in the residential and primarily in the residential RMI, both in North America and in Europe, where people were sheltered in place or otherwise looking to improve their homes as it became more of a center of their lives.

And we have very strong relationships with major retailers and DIY retailers in North America, which really fueled our growth there.

In Architectural Products division, they had a very robust Q2.

We had a very robust Q2 in Architectural Products as well.

And in Europe, in the economies that remained open that you alluded to, we had strong performance in Poland and Germany especially, which fueled our Architectural Products business in Europe.

On the flip side, as you've talked about nonresidential construction in the U.S. and indeed in Europe is under more pressure.

I think we saw a very tough set of circumstances when construction was locked down in many of the major metros in North America, New York, Boston, Seattle, San Francisco.

So it adversely affected our non-residentially focused businesses.

So when you add it all together in the first half, we saw some like-for-like growth, but it was strong growth in some parts of the business and offset by strong challenges in other parts of the business.

But I think what the real story of the first half for us was not so much on the top line, but what we delivered for the bottom line, both in terms of cash and in margin improvement.

And I would just chalk that up to years of work on the Building Products portfolio of simplifying the portfolio, simplifying the structure of our businesses, concentrating on businesses where we have leading market positions and consolidating those positions and really putting together a set of products and services to serve our major customers well.

And that continues to deliver for us in terms of improvements in our operating performance sort of this year, building on a track record over the last several years.

If I look at Q3 and July, in particular, again, very similar trends to the overall outturn that we had for the first half.

So again, very modest like-for-like growth, again, stronger in residential, offset by some weakness in the nonresidential sector, very much in line with the guidance that you gave earlier for Q3.

Thanks, Keith.

I mean just to round that up, Bob, we highlight both of those areas because, clearly, they are areas that are perhaps the more resilient parts of the business this year, but they are relatively flat top line.

But what stands out is that against that top line, they've managed to both grow bottom line and significantly grow margin.

And that's not as a result of anything that we dreamt of or plotted during the last 6 months.

As Keith and Randy both said, it is as a result of the ongoing work that has been part and parcel of the reshaping and repositioning of our businesses and their businesses and also the plans to execute against those -- that strategy, which came to fruition during the first half of this year and will continue on in the periods ahead.

Our next question is from Gregor Kuglitsch from UBS.

A couple of questions, please.

So the first one is just on cash.

So I don't think we've seen a cash inflow -- operating cash inflow in the first half.

I think looking at my model, I think '09 was the only year where you've kind of managed that.

And obviously, top line was down much, much more materially than now.

So I guess the question is, how was it achieved?

How sustainable do you think some of the gains that you've made, particularly working capital, CapEx, were -- are basically going forward when we think about not only the next 6 months, but also sort of beyond that?

And then the second question is a question on costs.

So I suppose -- maybe it's a cheeky 2-part question.

But if you could give us a little bit of color on the sustainability of the $200 million cost savings that you realized in the half.

And then if you could just maybe also put some numbers around the energy cost deflationary impact that we've seen in the various categories, please, that would be helpful.

So Gregor, I'll take those questions just in terms of kicking through them.

I think, first of all, in terms of the cash position, I think you're right.

First half of the year, we had $1 billion -- just over $1 billion of cash inflow from our operating activities.

And yes, typically, in the first half of the year, we would have an outflow.

So obviously, we've turned the tide very much there in terms of the performance of the first half of the year.

Rather than having a working capital outflow, we've obviously improved our working capital by $800 million year-on-year.

And I think you heard a little bit of that from both Randy and Keith, which is it's across all of our operations.

Everybody is really focused and really doubles down the effort certainly from -- throughout the second quarter around making sure we manage the inventory levels we carried, but also making sure we stayed on top of our receivables and collected our monies.

I think that showed up in all parts of our business in terms of inventory and working capital management.

And that has led to an improvement year-on-year in terms of our working capital position of $800 million.

I think some of that is timing, but there's -- I think we also believe some of that is permanent in terms of -- it's part of the ongoing focus in terms of year-on-year improving our working capital positions and reducing our outstandings.

And as you look to the second half of the year, you'd expect, obviously, the second half of the year typically is a very strong cash inflow.

We will still have a cash inflow in the second half of the year, but probably reduced somewhat in the sense that we've pulled some of that forward into the first half.

I think on the CapEx side, we obviously -- again, Albert talked about the kind of 2 paces of growth within the business.

In some parts of our business, we've invested in heavily where we've had the opportunity.

And some of the businesses where there's been growth and a demand increase, we've obviously invested to support that.

And in other parts of our business where activity levels have reduced, we scaled back.

And you've seen that in the first half.

We spent $500 million on CapEx in the first half of the year.

That's down $200 million over last year, so it's a reduction.

And I would see that pace continuing on into the second half.

So we'd be guiding somewhere in the region of about $1 billion of CapEx this year, which will run at about 75% depreciation for the year.

I think coming back then maybe to your cost question, just in terms of picking that up for a second, there's -- the big standout for me in terms of the way I would describe our cost in the first half of this year is you're seeing really the fact that we've been working for decades now on variabilizing our cost.

So as you've seen some declines in activity, we've been pushing our cost out of the business, and more and more of our cost has become variable.

But you've also seen, in some of our fixed cost base, unprecedented actions taken around value reductions across the board, where, at senior levels of the organization and right down through the organization, you've seen people volunteer to take salary reductions.

Albert mentioned it earlier in terms of maintenance areas where we've cut back on unnecessary maintenance.

Any discretionary cost has come out.

Obviously, less travel and things like that going on around the business.

So we've been looking at taking that out.

I think the way I would look at it is that the first half, we've taken all the necessary actions we've had to do to protect our margins.

And therefore, we will continue to do that as required.

But as you see activity levels coming back, you would see that some of the costs will come back with that as well going forward.

I think lastly then, your energy question.

Energy last year as a percentage of sales across the group was about 10% of sales.

In the first half of this year, we've seen a 16%, 17% reduction in energy costs across the group.

Half of that, I would ascribe to less volume and less activity, and the other half is price.

Our next question for today is from Arnaud Lehmann from Bank of America.

Arnaud Lehmann from Bank of America.

So my first question, if I may come back on the U.K. If my calculations are correct, U.K. sales were down about 20% in H1, and I think the EBITDA was down maybe around $100 million.

So the bulk of the decline in Europe Materials comes from the U.K. Would you mind coming back on this market, give us a bit of color, especially as you seem to highlight also that the recovery there is a bit slower.

So what are your plans for the U.K.?

That's my first question.

And my second question is on your balance sheet, which, as you highlighted, is very strong and give you optionality.

Could you give us a bit of color on the M&A market?

Is everything still frozen in terms of potential disposals and potential acquisitions?

And do you start to see a potential to continue with the asset rotation?

I'll take both of those questions.

Just with regards to the U.K. market, your figures are broadly correct.

You can backsolve them through the numbers that we've come this morning.

So they're broadly correct.

Across Europe, 3 countries which were most significantly impacted by the virus were Spain, Italy and, indeed, the United Kingdom.

We have no exposure to Italy.

We have very little exposure to Spain.

But of course, United Kingdom is a very important market for us.

In fact, at the worst point in the cycle, the nadir of the cycle in mid-April, we effectively had closed down 70% to 80% of all operations in the United Kingdom due to restrictions put in place by the government.

As a result of that, clearly, we saw very significant declines in activity and, indeed, in sales.

At the same time, in consultation with employer bodies and, indeed, the government, the government asked us to continue to support our employees by keeping them employed.

Actually, they also asked us to keep many of our operations open because we have -- we supplied materials to essential services, not only for medical and for hospitals, but also for security, military and essential infrastructure.

Operations, we would probably more -- in a more normal occasion, have actually closed down because it wasn't quite commercially viable to keep them open.

But given the extraordinary set of circumstances that were there, we decided to maintain and keep people employed within our company and pay their full wages.

Of course, we received some subsidy, but it's only a small part from the government.

And we maintained essential operations as we were asked to do by the government because we felt it's the right thing to do as good corporate citizens.

And of course, there were cost implications of doing that.

I have to say that we've seen activity levels start to recover in the United Kingdom.

Europe versus -- Continental Europe has recovered quicker and sooner.

U.K. is recovering at a slower place and probably about 4 to 6 weeks behind everywhere else.

So as we come from a situation where we have 70%, 80% of operations closed or shut down at the United Kingdom, it's probably trading back to about -- but only about 20% still remain closed at this stage.

But with each passing week, more and more activity levels return to normal.

Within the businesses and within the industry, we're seeing good strong demand coming through our residentially exposed business.

You would have seen that -- I mean you cover the U.K. housebuilders, so you would have covered the companies around, we will be supporting and be in line with that.

And happily, infrastructure, which is over 50% of our business of the United Kingdom, is starting to now pick up back again.

We're seeing some large take-up in some of the big key projects, particularly High Speed 2, where we got some very significant awards starting to deliver against those projects.

So we're in the recovery phase from the very deep shutdown in the United Kingdom, hence, the performance in the first half and, in particular, the second quarter.

We're seeing an improvement trend during the course of quarter 3, and we'll just see exactly how that pans out as we go through the remainder of the year.

With regards to the M&A market, you're right, it's quiet at the moment there because, actually, it's very difficult to travel.

As you well know, there are significant restrictions.

And although we've all become used to virtual working and virtual communications, it's not quite the same, particularly where M&A is quite a highly personalized process.

In saying that, we believe that a key part of the whole M&A process is ensuring that you have capacity to do deals, not just for the people, but also in terms of your balance sheet.

And I know that given where we are at this moment in time, our job is to ensure that we build and maintain and preserve the cash strength within our balance sheet because I look at our balance sheet, I see future value creation potential for our shareholders.

I also know that at this moment in time, there is very limited visibility about the next 6 to 9 to 12 months.

We just don't know where it's going.

And in that environment, that does, of course, stay your hand with regards to M&A.

But in saying that, I also know, having been around a long time, is that when you do see a market recover from recessions, opportunities will emerge because that is the time of greater stress for -- with regards to cash and balance sheets of companies because as they rebuild back their working capital and rebuild back their business, that's when they're in most strain.

So our job at the moment now is to build capacity, to keep on top of the opportunities that are out there, to continue to follow them, and when the time is right, to continue on with that game.

Time is working with us.

This is a marathon, it's not a sprint.

And our key job at the moment is to maintain performance and delivery within our business, continue to deliver profitability, continue to improve our performance and continue to preserve and build our cash position and prepare for what would be inevitably the increased inorganic activity in the periods ahead.

Our next question is from Elodie Rall from JPMorgan.

So I'll come back to guidance, if I may.

Sorry about that.

But just to understand guidance for Q3 to start with, we've seen a pickup in sales in June, but basically, your guidance for Q3 implies softer sales.

So are you actually seeing softer sales already in July and August?

And if not, why are you so conservative?

And my -- as a follow-up to that, in your Q3 guidance, do you already forecast some additional restructuring costs for Q3 and H2 following the $65 million of restructuring costs you took in H1?

And then midterm, would you think that you will potentially reconsider your 300 basis points margin improvement target following this pandemic?

Thanks, Elodie.

I'll take those 3 questions just in the order you asked them.

With regards to quarter 3 and the run rate in terms of what June was, what July and August was, largely speaking, what you would have seen, and we showed it there this morning in the 6-month breakdown, the monthly breakdown, you saw a recovering position in May and June.

And really what happened in June, in most markets, that was a period of time where you saw a reaction and a rebound.

When the market started to normalize, people had flattened the curve and, therefore, had effectively started to see a pickup in activity.

So I think that we saw a uplift in sales in June for sure.

The comment that we have with regard to quarter 3 is really a comment that's guided by the performance we're seeing in July and August where it settled back down to more normalized sustainable levels.

And as Randy alluded to earlier on, like we have visibility into September with our order books in a lot of our businesses as well.

So with regard to that, the comment we got to quarter 3 is reflected what we're seeing in July and August, which has been a steady state across the last 7 or 8 weeks.

And we think that's going to continue on for the next 5 weeks of where we go.

With regards to the -- so with regard -- that's how we would see the particular guidance with regard to that.

With regards to the ones-off cost that we had embedded in quarter 3 numbers, actually, we're more focused on supplying our markets, supplying our customers.

These are busy times.

This is the busiest quarter we have in CRH, July over September.

We're quite busy across most of our markets.

And we are looking and watching to see if there are more permanent trends evolving, in which case, we will be taking further cost action, of course.

But at this moment in time, in the guidance that we've given, we don't have any major significant restructuring costs in our business because actually, we're out supplying our customers and pretty much in most markets close to where normalized capacity would be.

And the final question with regard to the 300 basis points.

As I said last year, look, we have a target for our 300 basis points improvement within our businesses.

And of course, we are hugely dependent upon the external environment in which we operate in because volumes and pricing and costs are hugely impacted upon that.

But what I can confirm to you is what I said last year, what we had said the year before that, is that you should expect from CRH that year-on-year, you should see continued margin improvement in our business.

And that continues on again in this year.

The extent of that delivery, any 1 year, any 1-year period of time, will be dictated and influenced by external factors.

So I'm very pleased in the first half of the year, we have a 70 basis points increase, but that's only the first half of the year.

Let's see how the full year comes.

We continue to work on projects that are multiyear projects.

Whether they fall into 2019, 2020 or 2021, depends on when we can execute or deliver on projects.

We happen to accelerate some into the first half of the year because we have time and ability to do so.

We're working on today.

We'll continue working on margin improvement in the second half of the year.

So it's something we look in the rearview mirror and comment on why we've given any prospect.

But you can expect that year-on-year, CRH should be delivering continued margin improvement and cash performance in its businesses.

Our next question for today is from Yassine Touahri from On Field.

I would have just one question.

It seems that Congress in the U.S. has not yet managed to agree on any short-term help for state highways.

Could you give us an update on your discussion with Department of Transportation in the U.S.?

Do you see projects for Q4 or next year being canceled or postponed because of cash flow constraints?

Or is everything okay?

Yassine, yes, so a specific question with regards to ongoing funding with regard to U.S. infrastructure and, indeed, also outlooks for the remainder of this year.

Any change to our outlook, given the challenges that all economies have been faced with, in the United States, so over there, and also perhaps maybe I might ask Randy as well to comment on the fact.

I'll ask him to do with this question is to maybe give a sense because the FAST Act, the current funding program finishes during September this year.

And obviously, it will have to be renewed and reviewed into any funding program.

But I'll ask Randy also to comment on what his views and thoughts are or his discussions on Capitol Hill are with regard to where that is.

So Randy, maybe you might just comment on those 2 specific areas, please?

Yes.

So as you say, Albert, the FAST Act runs its course at the end of [September].

I guess if you draw a positive is, historically, infrastructure investment is a bipartisan issue.

So no matter what side of the aisle you're on, you understand the economic impact of investing and improving underlying infrastructure.

The other kind of curveball in today's environment is the election, so in terms of what may happen in November.

But I think what we're hearing would be, at a minimum, a continuing type resolution on the existing FAST Act, so the current funding levels will be intact from a federal standpoint.

But as you know, states, I would say, over the last 5 to 7 years, have played a much more active role as well as the municipalities and local governments in terms of raising funds.

Certainly, those budgets have come under stress just due to the pandemic and reduced traffic flows, although we are starting to see a return to people, at least in the U.S., back on the road, so roughly about 85% of miles driven compared to pre-pandemic levels.

So we're seeing improvements there.

That's translated into, I'd call it, a consistent or relatively flat outlook in terms of bidding.

Typically, our type of work, as I said earlier, is executed within 30 to 90 days, so the bid lead time tends to be just a couple of months.

And what we're seeing right now is -- depending on geography, and it does vary based upon where you are in North America, but overall, we're seeing bidding activity roughly in line with where we saw last year.

States will have to make decisions, and states are taking a variety of means to address potential gaps.

If the federal government doesn't step in, in some sort of backstop, you're seeing states take advantage of low interest rate environments and issuing bonds to ensure that they have a consistent flow of money to support investment.

And that's just translating now into a relatively stable bidding environment.

But that really just takes us through the end of the year.

I think it becomes a little more cloudy as we look into 2021.

But at least what we're hearing currently is, at a minimum, kind of a continuing resolution of the existing FAST Act.

Thanks, Randy.

And again, just to put some numbers, I know you've seen that the last 3 years, the funding has been at around $330 billion for U.S. infrastructure.

And that's been about 55-45 funded by the states, 45 funded by the federal government.

In the next 3 years, if we even just continue with the existing funding commitments, which is what Randy is saying, unlikely, and that's probably the baseline.

That should increase by [about] 10% to about $360 billion.

So it bodes well for spend on U.S. infrastructure going forward.

I should say as well as that -- looking back at the last global financial crisis, when there appeared to be a little bit of uncertainty with regard to the term of funding and where it's coming through, we found more and more -- while the money was there, people were unwilling to commit to longer-term projects.

Actually, believe it or not, that's actually an advantage to us.

About 80% of the work that we do is repair and maintenance improvement work actually.

So it pushes more dollars down the RMI work because that's short-term work.

Rather than building a new road, it's easier to commit repaving an old road, which is more or less, as Randy said earlier in the presentation, a 1- to 3-month type project.

And lastly, of course, the U.S. -- unemployment levels in the U.S. are north of 10% at this moment in time.

And given the need to address that issue, construction and contracting is a very labor-intensive enterprise.

And we would have found, certainly, again, at the last global financial crisis and we expect it again that states will want to deal with that issue.

And one way to deal with that issue is to spend the dollars in areas that are employment intensive.

And again, we think that would push certainly more business our way.

So look, we feel reasonably optimistic and robust about the next 3 years as a baseline.

And as Randy says, hopefully, when the new administration gets in place, there seems to be good bipartisan support across the floor, that we will get some sort of increase in funding.

But at the moment, it seems solid enough that they're increasing from about $330 billion to $360 billion over the next 3 years, which underpins our businesses.

Our next question for today is from Will Jones from Redburn.

A couple for me, please, as well.

First is just around pricing.

Relative to the charts and the figures you gave us in the appendices in the presentation, is there anything different thus far in Q3 that you pointed to, either by country or by products?

Just to, I guess, clear that up.

And looking forward, probably more interesting, is there anything you're seeing amongst competitors in capacity, whatever it might be that might make you worry about any elements of pricing as you look into potentially next year?

And then the second was more of a technical point.

Is there anything we need to bear in mind around the profit effect from either furlough benefits in the first half in places like the U.K.?

Is there a number that you can help us with?

And then probably thinking more about the full year, is there any notable change in carbon costs that you expect in Europe given obviously the likely lower volumes?

Thanks, Will.

Two specific questions there, one on pricing.

Maybe I'll take the European part of the pricing in terms of European's demand.

And I'll ask maybe Randy and Keith to talk about their business in North America, just what their views are on pricing, any risks to us also, just aspiration of pricing for this year as it goes forward.

And then specifically with regard to profitability and furlough, of course, I'll ask Senan to come back at the end of that.

Actually, I think there's an interesting dynamic happening in Europe with regard to pricing.

I mean pricing is ahead across all European markets.

14 of our 15 markets are ahead this year, Spain [being one], which is not a big market for us actually.

And I think that to me attests to the commitment that's there to try and recover pricing back across Europe in heavyside materials by all the players that are there.

I mean this has been an extraordinarily stressful period of time with regard to volumes collapsing, and yet pricing didn't shift.

Pricing held solid and held firm.

And Will, you've been around a long time.

And if I can ask you to cast your mind back to 2010, 2011 of U.S. materials, when the U.S. business started to recover just after the global financial crisis, we saw some very, very small price increases creeping back into a very weak market.

But they held firm at that time, and that really was the precursor to a period of time of strong pricing across all Materials businesses in North America, from cement, aggregates, asphalts and concrete.

And I think that if we can hold the pricing increases at the level we have in this current year, I think it bodes well for when volumes start to recover back and we see more normalized activity levels.

So I'm very pleased.

It's the third or fourth year where we've seen the majority of countries continue to deliver good pricing across Europe.

I've said it before and I'll say it again, European cement markets have dislocated from U.S. cement markets with regard to pricing and margins because of the fact that prices went -- they had negative repricing for about 5 years.

And that needs to be rebuilt back over the next 5 or 6 years.

So I actually do think, from a European cement point of view, a European Materials point of view, it actually bodes very well with regard to pricing, not only for this year, but also for the coming years.

Maybe I might pass to the U.S. Maybe, Keith, you might just talk about pricing in the Products business, what you're seeing across your Products business in North America.

And then maybe, Randy, you might just come in on what you're seeing in pricing.

And Senan, on the cost issue with regard to furlough, et cetera.

Yes.

Sure, Albert.

I think in our Products business in North America, I would kind of characterize the environment as stable and supportive of pricing.

Demand levels have remained relatively solid and robust in most of our businesses, and that's a good backdrop for pricing.

I think as well, when we think about it internally, we've put a lot of work in terms of improving our business into investments in our capabilities to understand the pricing environment in what I would kind of call price to value, such that we get paid fairly for the services and the products that we deliver, and how to drive that sort of discipline through our teams over time and that's -- it's reflected in our results.

So overall, we're making progress and continuing to make progress in that endeavor.

And when you put that against the backdrop of relatively good and stable markets, I feel very confident about our ability to maintain the pricing discipline and the effects of that on our business going forward in the medium term.

Yes.

Just building on that, Albert, in terms of the materials space here in North America, I'll talk really about aggregate and cement.

I won't really refer to pricing in our readymixed line of business.

More about margin management there, the input cost of liquid asphalt and cement.

And you can see margins expanding nicely in those spaces.

But in terms of aggregate, what we saw during the financial crisis was stability and pricing.

Actually, prices increased 1% to 2% during that period of time.

There's a recognition of kind of the nonrenewable nature of aggregate and an appreciation for the value that it has.

And so markets, as Keith indicated, really support a stable pricing environment.

And so the expectation going forward is that we would see a continuation of what we see to this point in the first half of the year and see that carrying through the second half of the year.

When you look at cement, and again, that probably, in today's environment, varies a little bit by [trend], but broadly underpinning strong support for prices to move forward in the markets that we serve.

The pace of those might be a little different based upon underlying activity, but there's a supportive environment.

And certainly, the teams are focused on commercial excellence and making sure that our products are top quality.

We're logistically servicing our customer base, and that relates then to our ability to achieve advancement in pricing.

And we would expect to see that continuing with cement for the balance of the year.

Thanks, Randy.

And Senan?

Yes.

Will, just in terms of your cost questions there, taking the carbon cost question first.

I think, as you know, the carbon cost for us is a relatively small cost or a relatively small exposure in CRH.

In last year, for example, it was just over $30 million, and that represents about 1% of our total energy bill.

While it's still early days in 2020, I don't expect the number to be materially different in 2020.

As you rightly point out, there are some factors at play where production levels will vary, the mix of production will vary.

And we'll see how that plays out in the second half of the year.

But overall, I don't expect it to be significantly different from previous year.

I think in terms of your comment around furlough, is there anything unusual in the first half of the year?

No is the answer.

I think what we've done with our cost base, as we said a couple of times here on the call, is that we flexed our cost base to reflect activity levels.

And obviously, back in April and, to an extent, in May in some parts of our business where activity levels were a way to lower levels, we flexed back our cost base quite a lot to reflect that activity level.

And now, obviously, if activity levels ramp up again, we'll obviously flex that cost base back up again to support the business.

So I wouldn't call anything unusual out in the first half performance that you would -- you should draw attention to.

Our last question for today is from John Fraser-Andrews from HSBC.

My 2 questions.

The first one is that tilt in the U.S. to the West where the Ash Grove acquisition seems to have paid dividends in the first half, could you provide an update, please, on how that's integrated and perhaps a little bit more detail how that performed in the first half?

So that's question one.

And then question two, perhaps I could ask a little bit more granularity of what the U.S. states are doing.

Obviously, there'll be different trends in different states.

But are you seeing any of them actually seeing any weakness already from the impacts of COVID?

And perhaps a little bit more color on that, please?

Okay, John.

Two questions there.

I'll ask Randy to come in.

I'll give my thoughts on both of those, and I'll ask Randy to come in after me in both of them.

If you don't mind, Randy, please.

First question, I'll let Randy talk about the Ash Grove and, indeed, probably, our U.S. cement business rather than just Ash Grove.

Ash Grove was an acquisition, but of course, we had cement businesses in Canada and, indeed, in Florida as well that we developed over that period of time as well.

The delivery of the numbers that we've seen in the first half by CRH is as a result of a well-thought-out plan over the last number of years with regard to the strategic positioning of our businesses.

And of course, moving to into the U.S. cement was a key part of that, but as you crucially say, so was also moving down South and now West in the United States.

And it makes perfect sense when you look back at now because that's where the population of the United States is going.

More people are moving to the South.

More people are moving West.

That's where people are going, and that's where construction is going to be.

And our big, big markets, there weren't big markets versus 10 years ago, such as Florida and Texas and, indeed, the Midwest, which was a good market for us, but now is a much better market because we managed to integrate the Ash Grove business with our existing footprint.

So it's not just the delivery of Ash Grove.

It's the fact that we're moving where the markets are going, positioning ourselves for a longer-term, more sustainable growth and integrating well with our business.

But I'll ask Randy to talk about that in a second.

With regards to the U.S. states, so what we have seen in the first half of the year, I'll ask Randy specifically to talk about sort of the state funding initiatives, but just as we've said it now -- early this morning, largely speaking, in North America, effectively, whilst there were shelter-in-place orders in across the United States, essentially, construction was deemed to be an essential activity.

And the type of work that we do, largely speaking, is open air, largely dispersed construction type activities, which actually, when you put it in safe working practices, allowed you to continue to go to work.

And that's why we were able to continue working in a challenging environment.

We were, of course, impacted in densely [populated kind of nations].

So New York and the Pacific Northwest, specifically on Seattle, were areas that were very badly impacted in the April-May period.

Now happily, they pushed back there, and now we returned back to more normalized levels that are there.

But largely speaking, the dispersed nature of construction that we do, which is large-scale, horizontal-type construction, tends to be done in open space.

It tends to be major infrastructure, and it hasn't really impacted us upon our ability to go to work.

With regard to the funding of some of the initiatives, I'll ask again Randy to talk about that.

So maybe, Randy, you might just develop on the thoughts in terms of how the cement businesses are coming together in the U.S. and how that's been helped delivering and how's it been going.

And also, just talk maybe about specific funding initiatives that you're seeing across states or, indeed, any weakness that you're seeing across the businesses.

Yes.

So on cement, I would say, we don't use the term integrated anymore because the business is fully integrated.

It's a platform within 1 of our 4 divisions in North America in Americas Materials.

I think bottom line, geography mattered in the cement business.

So to Albert's point, the targeted investments, whether that was Ash Grove or Suwannee America, complemented by our Northeast or our Canadian Eastern position, it's about having the right geography where population is growing, where there's an opportunity to coordinate and integrate with our existing downstream consumption.

And we just don't think about the readymixed business, although that's a big consumer of cement.

Keith's business in the Products side, whether that's Oldcastle Infrastructure or the Architectural Products group, the platform that we now have allows us to really optimize that vertical integration, which is important for not only stability in consumption, but also from a commercial standpoint.

The teams, in conjunction with our global technical services team across CRH, I think, are uncovering a lot of opportunities operationally as well, and the teams continue to deliver on those.

And so -- and we've refined the team.

We've consolidated the team and continue to execute at a very high level, delivering, I'd say, a fantastic performance in an uncertain environment where there's a lot of variability in terms of COVID cases and so, therefore, underlying demand.

But from, I guess, a future standpoint, the portfolio is in a point to be able to continue to grow.

And I think we often -- we don't talk a lot about what other parts of Ash Grove came along with that, which was a significant aggregate business in the central part of the U.S. And that's performing very well, everywhere from Nebraska down into Oklahoma.

And so it complemented our existing footprint and really gave us a strategic position in the central part of the United States.

In terms of kind of funding at the state level, you're seeing a variety of different reactions to the pandemic and budget strains, quite frankly, because governors and local officials have to make decisions between health care and education, infrastructure and other parts of investment.

You've seen, as I mentioned earlier, everything from increased use of bonding in Florida and Texas, in particular, where you're seeing an uptick in underlying investment, and then really the movement of funds in other states to address shortfalls in infrastructure spend.

And so I think you'll see, as the year unfolds, as we go into next year, states will continue to use probably innovative approaches to increase underlying investment because, as Albert said before, construction can be, one, be done safely, it's an outside activity; two, it's a substantial employer within those local districts.

And so there's an understanding of the economic value of that investment.

And so whether it's through gas tax increases, whether that's through registration fee increases, historically, no matter what kind of the demand environment is, states and municipalities have figured out a way to, at least at a minimum, have stable investment in infrastructure.

And we would expect, at least talking with boots on the ground to our folks, to see that going into 2021.

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 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.

And we look forward to talking to you again in November when we provide you with the trading update for the first 9 months of the year.

Thank you again for this morning, and stay safe.

Thank you very much, sir.

Ladies and gentlemen, that does conclude the call for today.

Thank you all for joining.

You may now disconnect.