CRH Plc Q2 FY2025 earnings call

• Record second quarter performance underpinned by proven strategy and connected portfolio, with $1.7 billion invested in 19 bolt-on acquisitions and growth CapEx year-to-date.
• Announced acquisition of Eco Material Technologies for $2.1 billion to accelerate cementitious growth strategy.
• Americas Materials Solutions, Americas Building Solutions, and International Solutions all delivered strong second quarter performances with revenue and margin growth.
• Capital allocation included $1 billion on 19 value-accretive acquisitions, $700 million in growth CapEx, a $0.37 per share quarterly dividend (6% increase), and $800 million in share buybacks with a further $300 million planned.
• Unique connected portfolio provides scale, resilience through cycles, and focus on infrastructure, nonresidential, and resilient residential sectors.

Americas Materials Solutions: In the second quarter, total revenues and adjusted EBITDA were 2% and 4% ahead of the prior year, with Essential Materials seeing 4% revenue growth supported by increased volumes and positive pricing momentum in aggregates and cement (aggregates pricing up 4% year-over-year, mix-adjusted up 7%; cement pricing up 2% due to regional variances). Road Solutions had 2% revenue growth despite weather-impacted activity levels. Americas Building Solutions: Building & Infrastructure Solutions had 3% revenue growth driven by robust demand in data centers, water, and energy infrastructure; Outdoor Living Solutions had 2% revenue growth due to resilient residential repair and remodel activity. Overall, Americas Building Solutions had 2% total revenue growth, 5% adjusted EBITDA increase, and 70 basis points of margin expansion. International Solutions: 13% revenue increase, 23% adjusted EBITDA increase, and 170 basis points of margin expansion, supported by an improving demand environment, pricing momentum, and operational efficiencies. Central and Eastern Europe had positive underlying demand, while Western Europe was supported by infrastructure and nonresidential demand.

• Raised full-year adjusted EBITDA guidance to between $7.5 billion and $7.7 billion (10% midpoint growth), net income between $3.8 billion and $3.9 billion, and diluted earnings per share between $5.49 and $5.72.
• Driven by strong second quarter performance, positive market trends, and backlogs ahead of prior year.
• Assumes normal seasonal weather patterns and no major political/macroeconomic dislocations.

• Macro uncertainties including political and economic dislocations.
• Weather impacts on activity levels affecting certain segments.

Q: Regarding the full year guidance raise, could you talk more about the drivers and underlying assumptions?

A: Jim Mintern mentioned strong Q2 performance with EBITDA up 9% and margins up 70 basis points despite challenging weather, strong infrastructure demand with less than 40% of IIJA highway funds spent, and backlogs ahead. Nancy Buese added M&A contributions now expected to be about $340 million vs previous $320 million, excluding the Eco transaction.

Q: Dig deeper on guidance and expanding on the last question, update on U.S. cement and aggregates volume and pricing?

A: Randy Lake said Q2 underlying ag volumes up 5% and pricing up 4% (mix-adjusted up 7%), full year volumes expected low single digits for cement and aggregates, pricing low single digits.

Q: Focusing on next highway bill and federal infrastructure funding, trends and prospects?

A: Randy Lake noted less than 40% of IIJA highway funds spent, supportive legislative environment, and need for sustainable funding mechanism, with state and federal funding providing long-term demand support.

Q: Ask about M&A, Eco Material deal rationale, and Investor Day?

A: Jim Mintern said Eco deal is in high-growth SCM market, doubling in size by 2050, complementary to existing business, with strong synergies. Investor Day in September will detail strategy, capital deployment, and midterm growth ambitions.

Q: Update on Adbri performance and key drivers of margin expansion?

A: Jim Mintern said Adbri is trading ahead of expectations, with good tailwinds in Australia. Randy Lake noted performance initiatives like operational and commercial excellence, production planning, and targeted CapEx driving margin expansion.

Q: Greenshoots in outdoor living and aggregate pricing mix?

A: Jim Mintern said outdoor living is resilient, with premix products growing. Randy Lake noted ag pricing mix was due to weather impact, with premium products increasing as activity levels pick up.