CRH Plc Q1 FY2025 earnings call

Management Statement and Operational Highlights

• Key Results: Good start to the year despite seasonal weather, with revenues, adjusted EBITDA, and margin all ahead of prior year. Completed 8 value accretive bolt-on acquisitions for approximately $600 million across various segments.
• Capital Allocation: Invested $600 million in CapEx, returned $300 million via share buyback, and declared a 6% increase in quarterly dividend to $0.37 per share.

Segment Performance

• Americas Material Solutions: Total revenues 2% ahead of prior year. Essential materials revenues 3% behind prior year due to weather, with aggregates pricing up 8% and cement pricing up 4%. Road solutions revenues 5% ahead due to increased paving activity. Typically, this segment is seasonally least significant, representing 10%-15% of annual volumes.
• Americas Building Solutions: Revenues 4% ahead of prior year supported by manufacturing demand and infrastructure funding, but outdoor living solutions 3% below prior year due to weather-delayed season start.
• International Solutions: Total revenue growth 7%, adjusted EBITDA up 22%, margin improvement 70 basis points. Central and Eastern Europe has positive demand despite weather, while Western Europe activity improves due to infrastructure and non-residential demand.

Guidance

• Reaffirmed 2025 financial guidance: adjusted EBITDA expected between $7.3 billion and $7.7 billion, net income between $3.7 billion and $4.1 billion, and diluted earnings per share between $5.34 and $5.80. Expect M&A contribution of ~$320 million adjusted EBITDA (up from prior $280 million), normalized land sales of ~$75 million, and monitoring of foreign exchange volatility.

Risks

• Macroeconomic uncertainty and fluid political/economic environment.
• Weather impacts on activity levels across segments.
• Foreign exchange volatility affecting financial results.

Question and Answer

• Q: Elaborate on 2025 guidance in light of macro uncertainty A: Jim and Alan discussed the positive start to the year, M&A contribution, monitoring of foreign exchange volatility, and normalized land sales expectations.
• Q: Volume trends in March and April, pricing expectations A: Randy mentioned backlogs indicate future work, volumes up across product lines, margins improving, and aggregates pricing expected to be mid to high single digits for the year.
• Q: Cost improvement in International Solutions A: Alan talked about a trough in western European markets, good activity in key markets, Adbri integration progress, and mid-single digit cost inflation expectations.
• Q: Project delays/cancellations, infrastructure outlook A: Jim stated no project cancellations or delays, backlogs are positive, and infrastructure demand in the US is underpinned by IIJA funding with significant runway ahead.
• Q: M&A pipeline, capital allocation, infrastructure A: Jim and Randy discussed a strong M&A pipeline, disciplined capital allocation, and infrastructure backlogs benefiting from IIJA funding with ongoing deployment.
• Q: American Building Solutions outlook, land sales A: Jim discussed Outdoor Living recovery as weather normalizes, building/infrastructure backlogs, and land sales expected at $75 million in 2025 vs $237 million in 2024.
• Q: Asphalt winter fill, Canada tariffs A: Randy discussed asphalt winter fill and margin progression, while Jim mentioned Canada's integrated business with positive pricing trends and similar trends to the US.