CRH Plc Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Record third quarter performance with revenues, adjusted EBITDA margin, and diluted EPS all ahead of prior year. Total revenues $11.1B, up 5% y-o-y; adjusted EBITDA $2.7B, a record, up 10% y-o-y; margin expanded 100 basis points.
• Utilizes growth algorithm and CRH Winning Way: capitalizes on megatrends (transportation, water, reindustrialization), drives performance across 4,000 locations, and is responsible stewards of capital.
• Capital allocation: $3.5B invested in 27 value-accretive acquisitions, $1.2B in growth CapEx, over $700M in dividends, and $1.1B in share buybacks year-to-date.
• Recent investments: Acquisitions like American Industries and Terracon Precast, and growth CapEx in water infrastructure and cement plants to support future growth.

Segment Performance

• Americas Materials Solutions: Delivered robust performance in Q3 with total revenues and adjusted EBITDA 6% and 5% ahead, respectively. Aggregates pricing increased by 4% mix-adjusted, and cement pricing by 1%.
• Americas Building Solutions: Q3 revenues 2% ahead, adjusted EBITDA up 22%, with 380 basis points of margin expansion driven by underlying demand, commercial management, and asset optimization.
• International Solutions: Q3 revenues up 5%, adjusted EBITDA up 15%, and margin expansion of 170 basis points, supported by pricing momentum, performance improvement, and acquisitions.

Guidance

• Raised midpoint of adjusted EBITDA guidance for 2025 to between $7.6B and $7.7B, representing 10% growth at midpoint.
• Full year net income expected between $3.8B and $3.9B, diluted EPS between $5.49 and $5.72.
• Expect 12th consecutive year of margin expansion in 2025, driven by continued execution of strategy and growth CapEx benefits.

Risks

• Political and macroeconomic dislocations could impact performance.
• Ongoing cost inflation in labor, raw materials, etc., poses challenges.
• Uncertainties in infrastructure funding, though current trends are positive.

Question and Answer

Q: Anthony Pettinari with Citi asked about expectations for 2026, volume, price, and M&A contribution.

A: Jim Mintern, Randy Lake, and Nancy Buese responded discussing positive trends in transportation, water, reindustrialization; volume and price expectations for aggs and cement; and M&A contributing ~$200M EBITDA net incremental in 2026.

Q: Adrian Huerta with JPMorgan inquired about margin evolution and price-cost spread.

A: Jim Mintern and Randy Lake discussed CRH Winning Way, growth CapEx benefits, and ongoing inflationary environment but expected continued margin expansion.

Q: Trey Grooms with Stephens asked about updated 2025 guidance drivers.

A: Jim Mintern and Nancy Buese explained strong Q3 performance, contributions from acquisitions like Eco Materials, and impact of land sales on guidance.

Q: Michael Feniger with Bank of America questioned Americas Building Solutions performance.

A: Jim Mintern and Randy Lake talked about strong Q3 performance driven by reindustrialization, data centers, and Outdoor Living resilience.

Q: Kathryn Thompson with Thompson Research Group asked about infrastructure funding visibility and highway bill reauthorization.

A: Jim Mintern and Randy Lake discussed remaining IIJA funds, bidding activity, and positive early conversations on new highway legislation.

Q: Michael Dudas with Vertical Research Partners asked about M&A pipeline.

A: Jim Mintern and Randy Lake spoke about successful M&A execution, 27 acquisitions year-to-date, integration of Eco Material, and future M&A potential.

Q: Colin Sheridan with Davy asked about International Solutions upside in 2026.

A: Jim Mintern responded on positive trends in International Solutions, including infrastructure demand, residential recovery, and continued price momentum.