CRH Stock price
Compare with Peer Group
📊 Peer Group
📈 What is it?
The peer group consists of the companies with the most similar business model. They serve as a benchmark for putting a stock into context.
🧮 How is it selected?
Based on similarity of business model, meaning companies from the same industry with comparable products and a similar customer base. That's the only way to compare apples to apples.
🏛️ Why does it matter?
Whether a stock is cheap or expensive is best judged by comparison. A P/E of 18 or an EV/FCF of 20 can look cheap or expensive depending on the yardstick. The peer group gives you the most accurate one: companies with a similar business model that operate under the same conditions.
🎯 What does it mean for investors?
When a metric sits below the peer average, the stock is valued more cheaply relative to its competitors, and above the average more expensively. A discount to the peer group can be an opportunity, but it can also have a reason (for example lower growth). The comparison is a starting point, not a verdict.
AI Insights on CRH
Insights
Invest better with AI
StocksGuide Unlimited – full access to AI analyses
👉 More detailed insights
👉 Exclusive perspectives on opportunities & risks
👉 Clear answers to your questions
Invest better with AI
StocksGuide Unlimited – full access to AI analyses
👉 More detailed insights
👉 Exclusive perspectives on opportunities & risks
👉 Clear answers to your questions
Invest better with AI
StocksGuide Unlimited – full access to AI analyses
👉 More detailed insights
👉 Exclusive perspectives on opportunities & risks
👉 Clear answers to your questions
Invest better with AI
StocksGuide Unlimited – full access to AI analyses
👉 More detailed insights
👉 Exclusive perspectives on opportunities & risks
👉 Clear answers to your questions
Is CRH a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
As a Free StocksGuide user, you can view scores for all 9,093 stocks worldwide.
StocksGuide Premium
StocksGuide Unlimited
Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $63.07b | Revenue (TTM) = $38.96b
Market Cap = $63.07b | Estimated Revenue = $38.91b
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $78.22b | Revenue (TTM) = $38.96b
Enterprise Value = $78.22b | Forward Revenue = $38.91b
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF) | ex SBC
📈 What is it?
EV/FCF compares a company’s enterprise value with its free cash flow. The metric therefore shows the multiple of current free cash flow at which a company is valued. EV/FCF ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted version.
🧮 How is it calculated?
EV/FCF ex SBC = Enterprise Value ÷ (Free Cash Flow (TTM) − SBC)
🏛️ Why is it important?
EV/FCF provides a valuation based on free cash flow and therefore complements earnings-based valuation metrics such as the P/E ratio. The ex SBC version additionally accounts for the economic impact of stock-based compensation and provides a more conservative view from a shareholder perspective.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF means that enterprise value is low relative to current free cash flow. The reasons should always be considered in the context of the company and its industry.
- A high EV/FCF means that enterprise value is high relative to current free cash flow. This can, for example, reflect high growth expectations or temporarily weak cash generation.
- When SBC is positive and adjusted free cash flow remains positive, EV/FCF ex SBC is generally higher than the standard EV/FCF.
- The metric is particularly useful for companies with relatively stable and predictable cash flows.
- If free cash flow is negative or very low, EV/FCF has limited usefulness and should not be interpreted like a standard valuation multiple.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Dividend per Share (DPS)
📈 What is it?
Dividend per Share shows how much cash a company pays out to shareholders for each share they own – usually on an annual or quarterly basis.
🧮 How is it calculated?
🏛️ Why is it important?
DPS is the absolute value of the payout per share – crucial for income-focused investors and dividend strategies.
🧮 Calculation
🎯 What does this mean for investors?
- A stable or growing DPS often signals a strong, shareholder-friendly business.
- DPS alone doesn’t tell you how attractive the payout is – the stock price also matters (→ see Dividend Yield).
- Long-term dividend growth is often a hallmark of high-quality companies – like the dividend aristocrats.
📘 Dividend Yield
📈 What is it?
Dividend yield shows how large a company’s dividend is in relation to its current share price.
🧮 How is it calculated?
🏛️ Why is it important?
It allows investors to compare dividend payouts across stocks, regardless of price or payout size.
🧮 Calculation
🎯 What does this mean for investors?
- A stable yield can reflect reliable distributions.
- Comparing 1Y and 5Y yield shows whether dividend growth keeps pace with stock price appreciation.
- A low yield isn’t always negative – it can signal strong past performance or growth focus.
📘 Dividend Growth
📈 What is it?
Dividend growth shows how much a company has increased its dividend per share over time.
🧮 How is it calculated?
5Y: Compound Annual Growth Rate (CAGR)
🏛️ Why is it important?
Consistently rising dividends are often a sign of financial strength and shareholder orientation – especially relevant for long-term investors.
🧮 Calculation
🎯 What does this mean for investors?
- Stable dividend growth is a sign of sustainable earning power.
- High dividend growth can significantly boost your total return:
- If a company pays $1 in dividends and increases it by 15% annually over 5 years, you’ll receive $2 per share in year 5 – twice as much as at the start!
📘 Payout Ratio
📈 What is it?
The payout ratio shows what percentage of a company’s earnings (per share) is distributed to shareholders as dividends.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess whether the dividend is sustainable – especially in relation to the company’s profitability.
🧮 Calculation
🎯 What does this mean for investors?
- A low payout ratio means the company retains more earnings for reinvestment – typical for growth companies.
- A moderate payout (e.g. 25–50%) indicates a healthy balance between returns and reinvestment.
- High payout ratios may seem attractive but can carry risk if earnings decline.
📘 Consecutive Dividend Increases
📈 What is it?
This metric shows how many consecutive years a company has raised its dividend per share – without any cuts or pauses.
🧮 How is it calculated?
(Special dividends are not considered.)
🏛️ Why is it important?
A long track record of increases reflects financial strength, consistency, and shareholder commitment.
🎯 What does this mean for investors?
- A long dividend increase streak builds confidence – especially in volatile markets.
- Such companies are seen as reliable and income-friendly investments.
- The longer the streak, the stronger the company’s dividend discipline.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF) | ex SBC
📈 What is it?
Free cash flow shows how much cash remains after a company has covered its operating and capital expenditures. FCF ex SBC additionally deducts stock-based compensation (SBC) to adjust the cash flow for the effect of non-cash SBC.
🧮 How is it calculated?
Free Cash Flow ex SBC = Operating Cash Flow − SBC − Capital Expenditures (CAPEX)
🏛️ Why is it important?
FCF reflects a company’s actual financial strength – independent of reported accounting earnings. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction. FCF ex SBC also deducts stock-based compensation and shows how much cash generation remains after SBC.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow indicates that a company has strong financial strength – independent of reported earnings.
- It is often a solid basis for sustainable dividends and share buybacks.
- Declining FCF can be a warning sign, even if reported earnings remain stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net Margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free Cash Flow Margin | ex SBC
📈 What is it?
The Free Cash Flow Margin shows how much free cash flow a company generates relative to its revenue. In simplified terms, free cash flow is calculated as operating cash flow minus capital expenditures. The Free Cash Flow Margin ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted metric.
🧮 How is it calculated?
Free Cash Flow Margin ex SBC = (Free Cash Flow − SBC) ÷ Revenue × 100
🏛️ Why is it important?
The Free Cash Flow Margin shows how efficiently a company converts its revenue into free cash flow. Strong free cash flow can provide financial flexibility for dividends, share buybacks, debt repayment, or further investments. The ex SBC version additionally accounts for the economic impact of stock-based compensation and therefore provides a more conservative view of cash generation from a shareholder perspective.
🧮 Calculation
🎯 What does this mean for investors?
- A high Free Cash Flow Margin shows that a company converts a high proportion of its revenue into free cash flow.
- This can provide greater financial flexibility for dividends, share buybacks, debt repayment, or investments.
- The Free Cash Flow Margin ex SBC additionally accounts for potential shareholder dilution from stock-based compensation.
- The long-term trend is particularly important. Declining margins can, for example, result from higher investments, changes in working capital, or weaker operating performance.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 SBC | in % Revenue
📈 What is it?
SBC (Stock-Based Compensation) refers to equity-based compensation granted by a company to its employees and executives. The percentage shows SBC relative to revenue.
🧮 How is it calculated?
SBC as % of Revenue = (SBC ÷ Revenue) × 100
🏛️ Why is it important?
Stock-based compensation is a real cost factor for shareholders. It can increase the number of shares outstanding and therefore dilute existing shareholders. The percentage of revenue shows how heavily a company relies on equity-based compensation and how significant this form of compensation is relative to the size of the business.
🧮 Calculation
🎯 What does this mean for investors?
- A lower figure is generally positive: Stock-based compensation is relatively small compared with the company's revenue.
- A high figure can indicate greater reliance on stock-based compensation and a higher potential risk of dilution. However, it is also important to consider whether the company offsets dilution through share buybacks.
- The trend over time should also be considered. A high but declining percentage presents a different picture from a persistently high or increasing percentage.
- A single-digit SBC-to-revenue ratio is not unusual among many growth-oriented and technology companies.
📘 SBC as % of FCF
📈 What is it?
SBC (Stock-Based Compensation) refers to equity-based compensation granted by a company to its employees and executives. The percentage shows SBC relative to free cash flow (FCF).
🧮 How is it calculated?
SBC as % of FCF = (SBC ÷ Free Cash Flow) × 100
🏛️ Why is it important?
Stock-based compensation is a real cost factor for shareholders. It can increase the number of shares outstanding and therefore dilute existing shareholders. The percentage of free cash flow shows how significant SBC is relative to the cash generated by the company. Since SBC is non-cash compensation, it is typically not deducted as a cash outflow when calculating FCF.
🧮 Calculation
🎯 What does this mean for investors?
- A lower value is generally favorable. Stock-based compensation is relatively small compared with the company's cash generation.
- A high value means that SBC represents a significant portion of the company's reported free cash flow, even though SBC itself is non-cash.
- The higher the value, the more significant SBC can be as an economic cost to shareholders, particularly when it results in share dilution.
📘 SBC Growth 1Y
📈 What is it?
SBC Growth 1Y shows how much a company's stock-based compensation has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
SBC Growth shows whether stock-based compensation is becoming more or less significant for shareholders. If SBC increases significantly, it can lead to greater shareholder dilution over time. At the same time, SBC is a non-cash expense that reduces earnings on the income statement but is added back in the cash flow statement.
🧮 Calculation
🎯 What does this mean for investors?
- A high positive value is generally negative, as rising SBC can increase the burden on shareholders, particularly through potential dilution.
- What matters is whether the development of SBC is sustainable over the long term. Some level of SBC is common among many growth and technology companies.
📘 Share Count Growth 1Y
📈 What is it?
Share Count Growth 1Y shows how much the number of shares outstanding has increased or decreased over a one-year period.
🧮 How is it calculated?
🏛️ Why is it important?
The number of shares determines how many shares the company's earnings and assets are distributed across. If the share count decreases, existing shareholders' relative ownership increases. If it increases, existing shareholders are diluted. The metric therefore makes dilution and share buybacks directly visible.
🧮 Calculation
🎯 What does this mean for investors?
- A negative value is generally positive, as the number of shares outstanding is decreasing.
- A positive value indicates dilution of existing shareholders.
- A declining share count is not automatically positive: It also matters at what price the shares are repurchased and how the buybacks are financed.
📘 Shareholder Yield
📈 What is it?
Shareholder Yield measures how much capital a company returns to shareholders through dividends and share buybacks, relative to its market capitalization. It goes beyond dividend yield by also including share buybacks.
🧮 How is it calculated?
🏛️ Why is it important?
Dividend yield only tells part of the story. When a company buys back shares and the share count falls, each existing shareholder owns a larger part of the company. When the share count rises, for example through stock-based compensation or new share issuance, existing shareholders are diluted. Shareholder Yield combines both into one metric.
🧮 Calculation
🎯 What does this mean for investors?
- A higher Shareholder Yield indicates more capital being returned to shareholders.
- A negative value means the company issued more new shares than its dividends and buybacks make up for.
- Share buybacks are most beneficial when shares are repurchased at attractive valuations.
- Investors should also consider whether dividends and buybacks are sustainable over time.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Revenue per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
CRH Stock Analysis
Analyst Opinions
30 Analysts have issued a CRH forecast:
Analyst Opinions
30 Analysts have issued a CRH forecast:
CRH Events
Past Events
|
OCT
29
Q3 2026 Earnings Call
11 days ago
|
|
JUL
30
Q2 2026 Earnings Call
3 months ago
|
|
JUN
22
Arcosa, Inc., CRH plc - M&A Call
5 months ago
|
|
APR
30
Q1 2026 Earnings Call
6 months ago
|
|
FEB
19
Q4 2025 Earnings Call
9 months ago
|
|
NOV
6
Q3 2025 Earnings Call
about one year ago
|
StocksGuide Free
CRH — Q3 2026 Earnings Call
1. Management Discussion
Good day, and welcome to the CRH Third Quarter 2026 Results Presentation. My name is Krista, and I will be your operator today. [Operator Instructions]
At this time, I'd like to turn the conference over to Jim Mintern, CRH Chief Executive Officer, to begin the conference. Please go ahead, sir.
Hello, everyone. Jim Mintern, here, CEO of CRH, and you're all very welcome to our Q3 2026 Results Presentation and Conference Call. Joining me on the call is Aylwyn Bryan, our CFO; Randy Lake, our COO; and Danilo Juvane, our Head of Investor Relations.
Before we get started, I'll hand over to Danilo for some opening brief remarks.
Thanks, Jim, and hello, everyone. I'd like to draw your attention to Slide 2, shown here on the screen. During our presentation, we will be making some forward-looking statements relating to our future plans and expectations. These are subject to certain risks and uncertainties and actual results and outcomes could differ materially due to factors outlined on this slide. For more details, please refer to Slide 2 and to our filings with the SEC, including our annual report on Form 10-K and our quarterly reports on Form 10-Q, which are available on our website.
We will also refer to certain non-GAAP financial measures. Definitions and reconciliations are included in the appendix of the presentation and in our earnings release.
I'll now hand it back to Jim.
Over the next 20 minutes or so, we will take you through a brief presentation of our results for the third quarter of the year, highlighting the key components of our operating performance, our recent capital allocation activities as well as providing you with an update on our expectations for the year as a whole. We will also spend some time discussing the continued execution of our strategy and Velocity, a recently launched transformation initiative that will help us build a better CRH and deliver further value creation for our shareholders. Based on the visibility that we have at this moment in time, we will also share our thoughts on some of the trends we are seeing across our markets as we look ahead to 2027.
So first, on Slide 4, let me take you through some key messages from our results. Overall, we delivered a resilient third quarter performance despite contending with a challenging cost environment and subdued residential activity across many of our markets. Looking ahead to the remainder of the year and based on the current momentum that we see across our business, we are updating our financial guidance and now expect full year adjusted EBITDA to be between $7.8 billion and $8.0 billion, representing another year of growth and value creation for CRH.
The strength of our balance sheet and cash generation capability enables us to invest for future growth while also delivering significant returns to shareholders. Today, we announced a new $6 billion share buyback program to run through the end of 2030, demonstrating our continued focus on disciplined and efficient capital allocation. Our ability to deploy capital in high-growth markets, integrate at scale and deliver unique synergies through our connected portfolio is a key differentiator for our business. We recently announced the completion of our $8.5 billion acquisition of Arcosa, a significant investment, which will reinforce CRH as the leading aggregates and critical infrastructure player in North America.
We have also invested a further $1.9 billion in 27 value-accretive acquisitions in the year-to-date. And we have an attractive pipeline of further growth opportunities in front of us, supported by our unmatched scale, connected portfolio and proven growth capabilities.
During the quarter, we launched Velocity, a focused initiative to deliver an enhanced scalable operating model for CRH. Velocity will underpin our growth objectives and enhance operational efficiency, thereby delivering a structurally higher margin business. We expect Velocity to generate $400 million of annual adjusted EBITDA run rate benefits by the end of 2028, and I will take you through that in more detail later in the presentation. Looking ahead to 2027 and based on the visibility we have across our key markets, the outlook for our business is positive, supported by our strategic alignment to growing infrastructure mega trends.
Turning to Slide 5 and our financial highlights for the third quarter. Overall, we delivered a resilient performance despite subdued residential activity and a challenging cost environment. Total revenues of $11.4 billion were 3% ahead of the prior year, reflecting good underlying demand across our key markets, positive pricing momentum and contributions from acquisitions. We experienced significant cost inflation during the quarter as sustained increases in oil prices flowed through to key inputs, particularly energy, raw materials and haulage. In response, we implemented further commercial and operational actions to mitigate the impact.
This enabled us to deliver an adjusted EBITDA of $2.7 billion, in line with the prior year, representing a margin of approximately 24%. Our third quarter margin was 80 basis points behind the prior year, are in line, excluding the impact of some one-off gains in the prior year, which demonstrates the resiliency of our connected portfolio in an inflationary environment. All of this translated into diluted earnings per share pre impairment of $2.09, which includes the impact of transformation-related costs associated with Velocity.
Now at this point, I will ask Randy to take you through the performance of each of our businesses.
Thanks, Jim, and hello, everyone. Turning to Slide 7 and starting with Americas Materials Solutions, which delivered a resilient performance despite subdued residential activity and input cost pressures. Total revenues and adjusted EBITDA were 6% and 1% ahead of the prior year, reflecting positive pricing momentum, contributions from acquisitions and the benefits of our connected portfolio.
In Essential Materials third quarter revenue were 19% ahead of the prior year. Our aggregates volumes increased by 2%, while pricing was 5% ahead or plus 6% on a mix adjusted basis. Cement volumes were in line with the prior year, while the pricing declined by an average of 2%. Our performance also reflects contributions from acquisitions, particularly Eco Material, which I'm pleased to report continues to perform well with volumes and pricing both up mid-single digits compared to the prior year period.
In Road Solutions, Q3 revenues were 2% ahead of the prior year, supported by growth in asphalt and ready-mixed concrete pricing. As Jim mentioned, we experienced some significant input cost inflation during the quarter, which impacted our margin performance, and we focused on cost recovery through further commercial actions and operational measures.
While housing activity remains muted, overall underlying demand remains supported by our exposure to growing infrastructure megatrends. Transportation continues to be underpinned by federal and state funding while reindustrialization activity is being fueled by large-scale manufacturing and data center investments. So overall, a solid performance for our Americas Materials Solutions business. And looking ahead, I'm encouraged by our backlogs, which are in line with the prior year.
Next to Americas Building Solutions on Slide 8, where our third quarter performance reflects the impact of divestitures, subdued residential activity as well as the non-recurrence of a prior year gain on the sale of certain land assets. We also experienced an inflationary cost backdrop, particularly in relation to elevated haulage rates and have now implemented ongoing operational and commercial initiatives to mitigate those costs.
In our Building & Infrastructure Solutions business, we continue to experience strong growth in data center, water and energy infrastructure markets. For Americas Building Solutions overall total revenues and adjusted EBITDA were 3% and 18% behind the prior year period. Excluding the impact of land sales, third quarter adjusted EBITDA and margin were ahead of the prior year.
Moving to International Solutions on Slide 9, where our business delivered further growth and margin expansion supported by increased activity levels in certain markets, positive pricing momentum and disciplined cost control. Total revenue growth of 1% translated into a 6% increase in adjusted EBITDA and a further 110 basis points of margin expansion. In Europe, demand remains underpinned by good infrastructure and reindustrialization activity. While in Australia, our business continues to benefit from positive underlying demand, operational efficiencies and contributions from acquisitions.
Thanks, Randy. And turning to Slide 10, reflecting our third quarter performance and expectations for the fourth quarter, we are updating our financial guidance for 2026 to reflect a softer residential market, inflationary cost backdrop as well as a partial year contribution from the Arcosa acquisition. Assuming normal weather patterns for the remainder of the year and no further major dislocations in the geopolitical or macroeconomic environment, we expect full year adjusted EBITDA to be between $7.8 billion and $8.0 billion, net income between $3.1 billion and $3.3 billion and adjusted diluted earnings per share between $5.37 and $5.59, representing another year of growth and value creation for CRH.
Now at this point, I would like to discuss the continued execution of our strategy. Since setting out our strategic road map and ambitious 2030 growth targets at our Investor Day last year, we have continued to strengthen our portfolio and increase our exposure to attractive markets aligned with growing infrastructure mega trends, transportation, water and reindustrialization. We have been proactively shaping our portfolio to capture secular growth, recycling capital into higher value strategic opportunities through acquisitions such as Arcosa, Eco Material and Axius Water, as well as completing over 60 value-accretive bolt-on acquisitions and $2.1 billion of divestitures.
Alongside portfolio strengthening, we are now evolving our operating model through Velocity, a focused transformation initiative that will underpin our growth objectives and enhance operational efficiency thereby delivering a structurally higher margin business, all powered by our winning way. Together, these actions will build a better CRH and support the next era of growth and long-term value creation for our shareholders.
First, I will ask Aylwyn to take you through our recent capital allocation activities.
Thanks, Jim, and hello, everybody. Turning to Slide 13 and first to M&A, where year-to-date, we have invested $10.4 billion across our 4 connected growth platforms of aggregates, cementitious, roads and water. We completed our $8.5 billion acquisition of Arcosa ahead of schedule and invested a further $1.9 billion on 27 additional value-accretive acquisitions in the year-to-date.
Now withstanding an active year so far, we have a strong pipeline of further M&A opportunities in front of us, supported by our own match scale, connected portfolio and the fragmented nature of our industry. We have also completed three strategic divestitures of non-core businesses in the year-to-date for a total consideration of $1.9 billion, demonstrating our commitment to active portfolio management and the reallocation of capital into higher-growth connected businesses.
In addition, through our third quarter, we've invested $1.2 billion in growth CapEx, leveraging our size and scale to fully capitalize on high returning, low-risk investment opportunities to expand capacity in high-growth markets, improved operational efficiency, increase automation and optimize our energy use, all of which will deliver long-term shareholder value.
Turning to Slide 14 and to shareholder returns. Following completion of the Arcosa acquisition, we are pleased to announce a new $6 billion share buyback program, which will run to the end of 2030. The share buyback program we're announcing today is in line with the $40 billion capital allocation framework we set out as part of our Investor Day last year. In addition, in line with our policy of consistent long-term dividend growth, the Board has declared a quarterly dividend of $0.39 per share, representing an increase of 5% on prior year.
All of this is underpinned by the strength of our balance sheet and the significant financial capacity we have at our disposal. We remain committed to maintaining our strong investment-grade credit rating which we've held for over 20 years, and we expect our leverage ratio to normalize towards approximately 2x over time. So overall, these actions highlight our continued focus on disciplined capital allocation and delivering long-term value for our shareholders.
Thanks, Aylwyn. A good summary there of our recent capital allocation activities. Turning now to Slide 15 and our recent acquisition of Arcosa.
Arcosa comprises two infrastructure-related businesses, Construction Products and Engineered Structures. Construction Products is a high-quality connected aggregates-led materials business serving 13 of the 50 largest MSAs in the United States with leading positions in Texas, New Jersey, the Southeast and other high-growth regions. And with 35 million tons of annual high-quality aggregates, it will reinforce our position as the leader in U.S. aggregates with over 265 million tons of combined annualized production.
Engineered Structures is a leading U.S. manufacturer of critical infrastructure products in the high-growth energy transmission market. This business is supported by robust long-term demand underpinned by grid modernization, electrification and data center construction. Overall, the acquisition represents a compelling growth and value creation opportunity for CRH, and I will ask Randy to provide a brief overview of the strong synergy opportunities we have identified so far.
For this acquisition, we're uniquely positioned to deliver significant value creation for shareholders, thanks to our proven ability to acquire and integrate at scale. As you can see on Slide 16, we currently expect approximately $175 million of run rate cost synergies to be achieved by year 3, with $60 million anticipated in the first year of ownership. We've identified significant opportunities across operations, integration and procurement, including production efficiencies, network and logistics optimization, increased material self-supply and the streamlining of administrative and support functions. We're delighted to have Arcosa as part of the CRH family and really looking forward to updating you on our progress.
Turning to Slide 17. Let me briefly take you through our combined energy and data portfolio with Arcosa now under our ownership. As you can see on the map, we now have an extensive nationwide manufacturing footprint across the United States, which will enhance our existing connected portfolio and expand our addressable market. It is highly complementary to our existing offering. By combining our leadership positions in energy distribution and data centers with Arcosa's strength and transmission, it will enhance our capabilities in the fast-growing U.S. energy infrastructure market.
It also deepen our relationships with leading utilities, hyperscalers and telecom carriers through our early engagement in the design and specification process, allowing us to deliver more tailored, high-value solutions for their specified needs. Overall, our combined energy and data portfolio represents a scaled, high-growth platform.
Thanks, Randy. I'm turning now to Slide 18. The outlook for this business is robust as reindustrialization continues to drive demand for power, grid and data center infrastructure. For example, as a result of the structural deficit and power supply, U.S. utilities are expected to invest approximately $1.4 trillion in grid infrastructure through 2030, representing the largest grid expansion and modernization in decades.
At the same time, the rapid growth of data centers is creating significant long-term demand for power and utility infrastructure with the North American data center pipeline now exceeding $2 trillion. As a result, transmission has become the fastest-growing segment of the energy market expected to grow at approximately 10% per year through 2030 as grid capacity continues to expand. Together with our leading market positions in nationwide coverage, we are well positioned to capitalize on the strong growth opportunity.
Now at this point, I would like to turn to Velocity on Slide 20. Velocity is a 2-year initiative focused on delivering an enhanced scalable operating model for CRH. At its core, Velocity streamlines our organizational structure, fostering greater agility and entrepreneurship across our business. By delayering decision-making, we will bring management closer to our customers and end markets, enabling faster decisions, more effective execution and greater economies of scale. Overall, Velocity underpins our growth objectives and enhances operational efficiency, thereby delivering a structurally higher margin business.
And moving to Slide 21, we have set out the expected benefits. Through simplifying organizational structures and processes, optimizing core business operations through technology, AI and data and accelerating decision-making, execution and the deployment of best practices, we expect Velocity to deliver annual adjusted EBITDA run rate benefits of approximately $400 million by the end of 2028.
Reflecting, among other factors, the opportunities identified through Velocity we are pleased to update our 2030 adjusted EBITDA margin target to the upper end of our previously guided range at approximately 24%.
With that, I'll ask Randy to take you through some of the key initiatives already underway across the business.
First, simplification. We are restructuring and modernizing our organizational structure to achieve permanent cost efficiencies while also delayering management levels to accelerate decision-making. This will result in a more efficient and agile organization that is closer to the customer. Next, an example of optimization. Across our global asphalt plant network, we're leveraging real-time fuel management, mix analysis and enhanced monitoring capabilities to drive more data-driven decision-making. These initiatives are expected to deliver significant natural gas fuel savings of between 10% and 15%.
And finally, acceleration, rolling out a next-generation connected quarry platform across 42 of our largest quarries, each of which produced more than 1 million tons of aggregates annually. Supported by a data-led digital performance hub, the platform enables real-time optimization across the production process from mine planning and blasting through to crushing and low down, and is expected to deliver a 7% to 10% reduction in variable cost. These are just a few examples of the initiatives underway so far, demonstrating our ability to leverage technology, data and best practices at scale, to deliver improved performance. And we look forward to updating you on our progress as Velocity is fully deployed across our business.
Thanks, Randy. Now before I hand over to Q&A, I would like to take a moment to share our thoughts on some of the trends we are seeing across our markets as we look ahead to 2027. First, to the Americas and Transportation, where we continue to see a supportive backdrop underpinned by state and federal funding with approximately 40% of the AAJ funds yet to be deployed, highlighting the significant runway we still have ahead of us. While a multiyear reauthorization of highway funding remains outstanding, we believe we are headed in the right direction, supported by continued bipartisan momentum for increased infrastructure investment in the years ahead.
In reindustrialization, we expect continued strong demand for large-scale manufacturing and data centers. With a $2 trillion pipeline of data center projects either announced or under construction in North America and the benefits of our unmatched scale and connected customer offering, we are very well positioned to benefit in this area going forward.
We also expect to see continued investment in critical infrastructure, including water, energy and data investment. As for the residential sector, we expect activity to remain subdued in the near term as a result of the ongoing affordability challenges. And as we've said in the past, this is not a demand issue, and we believe the long-term fundamentals in this market remain very attractive, supported by favorable demographics and significant levels of underbuilt. In our international business, we expect positive momentum to continue across Western Europe, driven by good growth in Ireland, the Nordics and Spain, stability in the U.K. and France and some early signs of residential improvement in certain markets.
In Eastern Europe, our businesses are well positioned to benefit from a significant pipeline of infrastructure investments supported by EU funding programs. In Australia, the outlook also remains favorable, underpinned by the ongoing infrastructure activity and major project work. Regarding the pricing environment, we expect positive momentum to continue across our markets. So in summary, notwithstanding a subdued residential market, the overall trend is positive for our business heading into next year.
And turning now to Slide 25. CRH will enter 2027 from a position of strength. We are taking decisive actions to recover the impact of cost inflation that we have seen in the second half of the year, and expect the benefits of further commercial and operational initiatives to deliver positive price/cost spread in 2027.
We will also benefit from the full year contribution from Arcosa and the associated synergies. Through Velocity, we are focused on building a better CRH, evolving our operating model and raising our margin ambitions. We have announced a new $6 billion share buyback program to 2030, underpinned by our superior financial capacity and cash generation, and we continue to see a healthy pipeline of acquisition opportunities alongside continued portfolio optimization initiatives. Together, all of this supports delivering further growth and value creation for our shareholders and reinforcing our position as the leading compounder of capital in our industry.
So that concludes our presentation today. I will now hand you back to the moderator to coordinate the Q&A session of our call.
[Operator Instructions] Our first question comes from Angel Castillo with Morgan Stanley.
2. Question Answer
Jim, I was just hoping you could maybe talk a little bit more about the reasons for the kind of fiscal year '26 guidance cut. And maybe just kind of unpack a little bit more kind of the drivers, particularly maybe with the weakness in Americas Material Solutions. And as you think about kind of the range that you provided, just what would get you to the low end versus the high end of the guide.
Angel, yes, maybe I might ask Aylwyn to come back at the end, maybe just to comment on some of the puts and takes in the guidance we've reissued. The revised guidance this morning, Angel, really reflects the Q3 performance that we reported and also our estimates for the last quarter of the year. It's built in on what was a very strong first half, right, which -- I think showed the benefits and the resilience of the connected portfolio, and we actually delivered margin expansion through the Q2 and H1. However, since we entered July, we've seen a sharp and sustained increase in energy costs, particularly diesel. But also other costs, including haulage distribution.
We've also noticed and seen a residential demand has softened further across the U.S., and that's really, again, the backdrop of rising interest rates. So in broad terms, this guidance reflects the impacts from diesel, haulage, other related raw material costs and assumes in the Q forecast that we remain at these elevated levels of energy for the fourth quarter.
Now specifically on the question on American Materials, obviously, these impacts were most pronounced in the U.S. material business throughout Q3. Notwithstanding that, we delivered a solid underlying performance against what was a very challenging cost backdrop, from actually the low point of energy prices in kind of early mid to July, we've seen a sharp increase with diesel up 40% in a short period of time. And that has had a knock-on impact into other areas such as haulage.
Now for us, at this time of the year, it's difficult to recover that kind of cost inflation late in the year and also in what are some of our busiest activity months. I mentioned it also residential weakness was also a factor. Activity softened throughout the summer and impacted volumes across many of our markets. And we felt really the combined cost invasion and residential impact across all our products. We felt that across the AMS business in the quarter.
Now despite that, right, when you look at it, encouraged by the activity we see on the key infrastructure and non-res markets, our roads business is busy, and continues to perform really well, and we see good momentum in reindustrialization, particularly in the data center space.
Now what will be done to, I guess, address that inflationary cost backdrop. We're taking decisive actions, adding fuel surcharges and pushing pricing late in the season. And we see that in terms of our mix adjusted aggregates price was 6% up in the quarter.
I'm confident when we look across the business and across the group, our teams are executing well and get in the top of what is, in effect, a temporary timing issue. So we're well positioned heading into '27. Our backlogs are in good shape, and we expect a positive price/cost spread and a return to margin expansion in '27.
Maybe Aylwyn, do you want to comment on the...
Angel, so maybe just a couple of comments on scope. As you'll be aware, it has been an active year in terms of M&A and investments for us. So with $10.4 billion of acquisitions year-to-date and $1.9 billion of divestments. So lots of puts and takes there, but we expect the overall net incremental contribution from acquisitions for the full year 2026 to be in the region of $300 million. Obviously, that includes the contribution from Arcosa for the final 2 months of the year in what is a seasonally quiet quarter for the business.
Other than that, as Jim mentioned, we are assuming energy constant at the current levels. And then, I guess, finally, in terms of the quarter in general, as you'll be aware, quarter 4 is a smaller quarter for us, and so it can be impacted by weather. If we get an early winter or vice versa, if we get a mild benign winter. So guidance assumes normal weather patterns.
Very helpful. And I know it's a little bit early here maybe into fiscal year '27, but just I wanted to touch on the comments you made about commercial actions or initiatives towards the end of the year to maybe try to recover some of this cost inflation into next year. So if you could comment maybe just -- as we think about the price that is required to ultimately recover this and return back to kind of price cost growth into next year? What kind of pricing actions should we be expecting across the aggregates and cement or realized price into next year?
Yes. Sure, angel. I'll maybe give a kind of bigger macro picture backdrop, and I might ask Randy, maybe just to comment specifically on some of the kind of assumptions and what we're thinking on volume and prices as we enter '27. Overall, if you look at it, the underlying demand backdrop is positive, right? And we got good pricing momentum as we're exiting 2026. So if you look at the building blocks, U.S. infrastructure remains positive, right? We have a continued resolution which is going to be in place in mid-December.
We've got good visibility on our backlogs and they're solid. And actually, the state and federal funding remains favorable. Actually, state tax receipts are up kind of mid-single digits in the first half of '26, right? And already, the kind of highway reauthorization conversations are underway, and we're exiting this year but about 40% of the AAJ still unspent. I touched on it. We're busy in the reindustrialization space and demand remains robust. We've got good backlogs, good visibility across a large multiyear projects, not just data centers, but complex manufacturing, chip plants, energy and LNG plants that gives us really good visibility, and I think we'll see continued growth in that space into 2027.
U.S. residential remains subdued. And we think that's going to be continued softening through '26. It's not a demand issue. It's an affordability issue. But the 30 year fixed now at 7.4%, we don't really see any res recovery probably until mid-2028 at best.
Maybe moving across the international business, there's a number of drivers for growth in 2027 across the international business. We've got very similar end to end market dynamics across all our international footprint. We got strong infrastructure demand across Western and Eastern Europe and Australia. Positive reindustrialization demand across our footprint, strong data center build-out across that footprint, but also particularly in Central and Eastern Europe, defense spending is notable, right, in terms of the activity levels across the eastern part of our portfolio. And we're seeing some signs of residential recovery in some of our key markets.
Now we're operating in an inflationary backdrop. And as we enter '27, we kind of think that we're looking at mid-single digits in terms of overall cost inflation. But maybe on volumes and prices, specifically, Randy, would you like to give color?
Yes. I guess, just building on that. So I think you did a good job kind of laying out the overall demand environment, which continues to be pretty positive. Coming out of Q3, I think Jim mentioned it good pricing progression in aggregate 5%, total 6% on a mix-adjusted basis. As I look into next year and we get pretty good visibility, obviously, because of the backlog of our work. 2027 is going to be an exceptionally strong year in the aggregate side of the equation. Obviously, with a full year contribution of Arcosa that's going to bring about really a positive momentum there. I'd say more broadly, the market is probably flat to slightly positive in regards to demand.
But from a pricing standpoint, the expectation we have is for high single-digit pricing as we get into 2027. That work is already underway and beginning to make its way through the marketplace. I think just building on that, when you look at our cementitious portfolio, again, the demand drivers are in place. The visibility is good. We're looking at volumes up low single digits in the U.S. and pricing to follow in low single digits for the cementitious, which would be inclusive our Escrow business and the Eco Material business. So again, a strong contribution as we look into next year.
The international, Jim called that out as well. They're building off another strong year. You saw the performance in Q3. The demand environment is such that I think the volume expectations there for cement would be low single-digit volume growth and mid-single-digit pricing into '27 for our international cement business. So all in all, when you factor that in, the expectations for us to have margin expansion as we get into '27.
Your next question comes from the line of Trey Grooms with Stephens.
So I guess shifting gears a little bit to capital allocation with the recent closing of Arcosa, now the announcement of the new $6 billion share buyback program. Can you talk about your capital allocation priorities looking into '27? And on the buyback specifically, could you help us understand the expected cadence and timing of the buyback? How you expect to balance M&A with the buyback? And why now?
Trey, and I might ask Aylwyn maybe to come back to the specifics around the new $6 billion buyback that we announced this morning. But overall heading into '27, there's no real change in our capital allocation framework, right? We remain disciplined and value-focused and as we say, every capital allocation decision we make is look through that lens of maximizing shareholder value. This year has been a busy year, right, at $10.3 billion in terms of acquisition, 27 value-accretive deals, but also almost $2 billion of divestments, right? So a good year in terms of optimizing the portfolio.
Our M&A pipeline remains strong. We've got attractive opportunities across all our connected growth platforms, but we're going to remain disciplined in terms of valuations and returns. That healthy pipeline brings optionality, and with optionality comes disciplined, and that's very important for us. Our balance sheet level gives us flexibility. And just to put it in context, Trey, every $1 billion of kind of bolt-on deals is about 0.1x on our leverage as we enter '27. And maybe just to remind, we set out in our Capital Markets Day in 2025, we highlighted a $40 billion financial capacity through 2030, and we're allocating about 70% of that to the growth side of the equation and 30% in terms of shareholder returns.
Trey, just following on from the completion of Arcosa, I guess we're also pleased to announce the multi near $6 billion share buyback, which will run through to the end of 2030. And as Jim outlined, that's fully aligned with the $40 billion capital allocation framework that we announced as part of last year's Capital Markets Day.
As well shareholder returns, obviously continues to be a really important part of the overall capital allocation priorities. And one commodity is the progressive dividend policy with over 40 years of growing dividend that we're very proud of. And in addition, to date, we've had a very successful share buyback program. We've retired close to 25% of our stock at an average price of just over $50. So a very, very successful program to date.
And buyback remains an efficient way for us to deploy capital. We believe our stock represents a clear value at these multiples, and does not represent the true potential of CRH. And so I guess in that context, we expect to be active in the market in the immediate future, and we'll update you as progress in terms of how we're doing as part of the Q4 results.
And then maybe just finally, if we step back, we remain committed to our investment-grade credit rating, which we've retained for over 20 years, and this is a really important part of our balance sheet strength. And saying that, CRH is a cash generation platform of scale. And so we continue to have capital available. And as Jim mentioned, we will continue to use that optionality to drive maximum value for our shareholders.
Your next question comes from the line of Adrian Huerta with JPMorgan.
Jim, can you elaborate a bit more on this new Velocity program, I'm probably giving you additional details for examples, why now? And any additional color on implementing these cost initiatives and the phasing of the benefits?
Yes. Sure, Adrian. Good to hear you. Again, I might ask Aylwyn at the end just to come back in terms of size and velocity, the kind of run rate we're seeing and the cost implementation in '27 and into '28. But -- yes, it's been something that we've been working on for some time, Adrian. And it's underway and it's really something that's been enabled by the CRH winning way that we set out at last year's Capital Markets Day. .
Now on that day, I clearly set out our updated strategy and our vision and indeed our capital allocation priorities for CRH. And I think we've been really successful executing on that strategy over the last 12 months, right? We continue to work on optimizing our portfolio. As I mentioned, $2 billion of divestments and also recycling that capital into the likes of Arcosa, into Axius and Eco Material of last year. And I think you should expect us to continue to work on optimizing our portfolio as we enter into 2027.
Velocity is the next step, right? It was kind of a natural evolution of our making model. And what's it about? It's about building a better CRH, right? CRH is the leading and largest company in our space. And size matters, but it's actually it's scale that ultimately drives shareholder value, not size and it's that focus on scale. And Velocity maybe as well, just to clarify, is incremental to our 2030 targets we gave last September, and we're raising our ambition for the company across the entire group.
You kind of said why now, it's really the coming together of a number of factors, right? We've had a very active period of M&A over the last 2 years. We've also had the acquisition of Eco Material, Axius and now Arcosa. And as we planned and integrated those businesses, it really gave us, I guess, food for thought and acted as a catalyst for us to rethink our organization structure and also our operating model.
Those kind of events, together with really leveraging the latest technology is really what's enabled us to deliver the scale benefits. And the benefits are coming across a number of headings. Randy mentioned it earlier on the call, he just gave an overview of some of the projects that are already underway. But they're mainly coming from a combination of labor savings and efficiency and cost savings, right?
What we're doing is that we're simplifying delayering the organization, whilst critically retaining our unique entrepreneurial customer-focused mindset. By simplifying and delayering, we're actually -- we're bringing our senior managers closer to the frontline operators and crucially closer to the customer, and that's going to deliver quicker and more efficient decision-making. It's a group-wide initiative, one that's going to bring us, as we said, to the top end of our guidance in terms of margin for 2030, which is around 24%, and one that's really going to underpin the next era of growth for CRH.
Yes. And then just in terms of the benefits and costs. So we're confident of delivering at least $400 million in terms of the annual run rate benefits by the end of 2028. And maybe just on phasing of that, we expect approximately 40% to be delivered in 2027 and then the balance by the end of 2028.
In order to deliver those $400 million of run rate benefits, as you'd expect, we will incur some onetime transformation costs in the region of $400 million as well, and approximately 2/3 of those costs will be incurred in H2 '26 and 2027, and then the final 1/3 across 2028.
Your next question comes from the line of Kathryn Thompson with Thompson Research Group.
Certainly, a lot of focus on higher energy cost and you outlined the impact with diesel. But looking forward, when you are planning forward, particularly heading into the winter months and given current elevated oil prices, how does this impact your winter fill program as you enter the purchasing season? How does that compare this year versus prior seasons? And strategically, how do you think about managing or expanding this program or your winter fill programs going forward?
Yes. Maybe I'll take that. Good to hear from you. Maybe just taking a quick step back. The reason behind kind of this broad network of terminals across the U.S. is really around the surety of supply. We have the capacity to house about half of our yearly demand in our winter fill program. Critical element gives us a competitive advantage. Obviously, I mean, we're the -- as you know, the largest road paper in the U.S. north of 5x the #2 player. So it really offers a compelling competitive advantage, not just from the procurement side, but the ability to customize mixes in the marketplace.
So it's a critical element that we want to make sure we leverage that size and scale. When we came out of -- coming out of '26, it was a very successful business. We were able to secure product at good pricing and that made its way through the system.
When I look at the winter fill program in general, it begins typically in November runs through April. And as we saw coming, certainly you're well aware, in the summer, as we saw liquid costs kind of rising with the movement of oil, actually, something unique has happened as of late, right? The underlying demand and increase of output from the refiners to deal with the demand for diesel has created really a supply-demand imbalance, which is creating an opportunity for us.
So as I look going into the balance of this year, one, we'll get the product quantity that we need. And because of that scale and national reach of our terminaling network, we're going to be able to get a cost advantage. So when I look into 2027, it's going to be another year of margin progression. We're going to see profit improvement in that line of business as well as our asphalt line of business.
And then just building on your comment, I think that's something when you look at, and Aylwyn called it out in terms of the capital available to deploy at scale. The continuation of the expansion of our asphalt footprint in the U.S. will follow the expansion of our build-out of our asphalt network. So it's a critical enabler and one we continue to invest in. But fundamentally, as we look into '27, our margins will expand.
Your next question comes from the line of Colin Sheridan with Davy.
My question is around Arcosa. I'm just wondering how your thinking has evolved around the company's Engineered Structures business and how you see it fitting in with the existing group businesses? And also whether or not there's been any divestitures or at point of note on the closure of that?
Colin, yes, listen, delighted to see Arcosa close at the end of last week. We're just getting our feet under the table at this point. Day 1 was just actually Monday of this week across all of the Arcosa operations. We obtained the regulatory approval kind of ahead of our expectations, timing-wise, with some very minor conditions, right, to divest a few asphalt plants, which were not material to the transaction, right?
What has done, Arcosa overall, when you look at it, has really strengthened our exposure to critical infrastructure and has significantly enhanced the quality of the portfolio.
You mentioned the Engineered Structures, right? It's actually the fastest-growing part of the Arcosa portfolio. And it's also going to be the fastest growing platform within CRH, and we expect kind of top line growth of double digits for the next 3 to 4 years, right? Right now, because of the demand and the build-out of the transmission network, we're looking at strong order backlogs with lead times out to 12 months across the engineered structured business in Arcosa.
And when combined with our existing activities that we have in this space, it significantly expands our energy and data offering, right? It's deepening our relationships with the utility customers that we're already working with and serving. It's creating a leading nationwide platform serving attractive growth markets linked to energy infra electrification and grid investment, right?
And it's also interesting in that 90% of the funding into this space is privately funded, right? More broadly, when you stand back and look at Arcosa in total, what it's done, it's strengthened our aggregates position and reaffirmed our leading aggregate position in the U.S. and it's expanding our critical infrastructure exposure. And it really, as we get into it and kind of early week 1, it gives really significant opportunities for us as we integrate the business into the wider CRH connected portfolio.
We have time for one more question, and that question comes from the line of David MacGregor with Longbow Research.
This is Joe Nolan on for David. I just wanted to dig in a little bit more on the infrastructure outlook. With the U.S. midterm elections around the corner, can you provide an update on Highway Bill reauthorization and infrastructure funding backdrop as we head into 2027?
Yes. Maybe I'll just kick off with that in terms of what we're seeing. I think first and Jim did a good job outlining what we see today, right? The current IIJ, 40% of that funding is yet to be deployed. So there's a tail as we called out in regards to that funding. I think probably an important element is the role, obviously, that states have played, they continue to play. They account for 60% of the underlying investment in the infrastructure. That's really been a flip over the last 10 years. I think the way that they focus on that, the way that they apply the resources to project has given them comfort in terms of outlook, and it's given us comfort as well.
If you -- for us, when we look at underlying activity, we look obviously at bidding on a weekly basis, and we see that on par with last year. So a continuation of the deployment of not only federal but state funding, we're winning our fair share. So our backlogs are a very similar position to where we were last year, which is encouraging.
There is a -- we're under a continuing resolution. I'd say that's more the norm than the exception. We've seen that with every piece of multiyear highway legislation dating back into the early '90s. So it's not an unusual position for us to be in. I think what's encouraging, though, is to continue bipartisan support in and around the need for investment in infrastructure.
And what we've seen come out of the house with the BA250 is encouraging, right? It's a return to kind of core infrastructure. It's a real focus on kind of permitting delays. It's creating better efficiency from the deployment of the capital in regards to the investments, and it's beginning to address a funding mechanism. So there's a lot to like in the BA250. We'll see what comes out of the Senate at the end of November. But overall, when we talk to people on Capitol Hill, there's alignment around the need for underlying investments. So when we look at the outlook for the year going into next year, we're very positive just based upon our backlogs and the underlying bidding activity.
Yes. Thanks, Randy. And maybe just to build on that, right? So if we step back for a moment, I think as we enter into '27, the broader outlook remains positive, right? Infrastructure is strong, and our backlogs are supportive. Our reindustrialization, we called it out continues to drive significant project activity, and we see good momentum carrying into 2027.
Residential is expected to remain subdued, particularly in the U.S. And the pricing backdrop heading into 2027 is supportive, right?
When you stem back overall, looking into '27, CRH is in good shape, right? Our Arcosa deal is closed. So we have a full 12 months clean contribution from Arcosa. Velocity is underway and is already delivering benefits, which is going to underpin our future growth. We're building a better CRH, one that's going to have structurally higher margins. We're pleased today to announce the recommencement of our new $6 billion share buyback program. Now but as we enter 2027, our focus is really about execution on our strategy, execution and Velocity, integrating Arcosa and delivering on the synergies, right? So putting it all together, I'm confident that the building blocks are in place to deliver another year of growth as we enter into 2027.
Well, that's all we have time for today. Thank you for all your attention. And as always, if you have any follow-up questions, please feel free to contact our Investor Relations team. We look forward to talking to you again in February next year when we will report our full year results for 2026. Thank you. Have a good day, and stay safe.
Thank you. Your conference call has now ended, and you may now disconnect.
CRH — Q3 2026 Earnings Call
CRH — Q2 2026 Earnings Call
1. Management Discussion
Good day, and welcome to the CRH Second Quarter 2026 Results Presentation. My name is Krista, and I will be your conference operator today. [Operator Instructions] At this time, I'd like to turn the conference over to Jim Mintern, CRH Chief Executive Officer, to begin the conference. Please go ahead, sir.
Hello, everyone. Jim Mintern here, CEO of CRH, and you're all very welcome to our Q2 2026 results presentation and conference call. Joining me on the call is Aylwyn Bryan, our CFO; Randy Lake, our COO; and Danilo Juvane, Head of Investor Relations. Before we get started, I'll hand over to Danilo for some brief opening remarks.
Thanks, Jim, and hello, everyone. I'd like to draw your attention to Slide 2 shown here on the screen. During our presentation, we will be making some forward-looking statements relating to our future plans and expectations. These are subject to certain risks and uncertainties, and actual results and outcomes could differ materially due to factors outlined on this slide. For more details, please refer to our annual report and other SEC filings, which are available on our website. I'll now hand it back to you, Jim.
Over the next 20 minutes or so, we will take you through a brief presentation of our results for the second quarter of the year, highlighting the key components of our operating performance, our recent capital allocation activities as well as providing you with an update on our expectations for the year. We will also outline how we are strategically positioning our business to deliver further growth and value creation for our shareholders.
First, on Slide 4, let me take you through some key messages from our results. We are pleased to report a record second quarter with further growth in revenues, adjusted EBITDA and margin compared to the prior year period, reflecting favorable underlying demand, disciplined commercial execution and contributions from acquisitions. All of this is underpinned by the benefits of our superior strategy and the continued execution of our winning way. We remain focused on active portfolio management and the disciplined allocation of capital as we continue to build a higher growth connected portfolio to maximize shareholder value. In the year-to-date, we completed 3 strategic divestitures of noncore businesses for a total consideration of $1.9 billion and invested $1.4 billion in 17 value-accretive acquisitions across our 4 strategic growth platforms in aggregates, cementities, roads and mortar.
We also recently announced an agreement to acquire Arcosa, a leading provider of building materials and critical infrastructure products in the United States. This is a significant investment, which will reinforce CRH as the leading aggregates and critical infrastructure player in North America, and I will take you through that in further detail later in the presentation.
Turning to outlook. We are encouraged by the underlying demand environment across our key markets. Notwithstanding the current geopolitical and macroeconomic uncertainties we are pleased to reaffirm our adjusted EBITDA guidance range for 2026, representing another strong year of growth and value creation for CRH.
Turning now to Slide 5 and our financial highlights for the second quarter. Overall, a robust performance with revenues, adjusted EBITDA, margin and diluted EPS all ahead of the prior year period. Total revenues of $10.8 billion were 6% ahead. This translated into adjusted EBITDA of over $2.6 billion in the quarter, a 7% increase over the prior year. Despite contending with an inflationary cost environment, I am pleased to report a further 30 basis points of margin expansion, demonstrating our relentless focus on commercial excellence and strong cost discipline across our business. All of this translated into further growth in our diluted earnings per share, a 14% increase, reflecting a strong operating performance and including a $0.16 net gain on divestitures in the period.
Now at this point, I will ask Randy to take you through the performance of each of our businesses.
Thanks, Jim, and hello, everyone. Turning to Slide 7 and starting with Americas Materials Solutions, which delivered a strong performance in the quarter, supported by good underlying demand, positive pricing and contributions from acquisitions. Total revenues and adjusted EBITDA were 10% and 12% ahead of the prior year benefiting from our national scale and connected portfolio of businesses.
In Essential Materials, second quarter revenues were 20% ahead of the prior year. Our aggregates volume increased by 2%, while pricing was 5% ahead. Cement volumes were 2% behind the prior year, reflecting some adverse weather conditions, which impacted activity levels in certain markets. Cement pricing declined by 1%, reflecting regional variances across our operating footprint. Our performance also reflects contributions from acquisitions, particularly Eco material, which I'm pleased to report is performing well.
In Road Solutions, Q2 revenues were 6% ahead of the prior year, supported by growth in asphalt volumes and pricing as well as increased paving activity. reflecting strong project execution and backlog conversion. From a demand standpoint, the underlying backdrop remains positive, supported by our strategic alignment to growing infrastructure mega trends. Transportation and water infrastructure continues to be supported by strong state and federal funding, while reindustrialization activity remains underpinned by large-scale manufacturing and data center projects. Despite an inflationary cost environment, I'm pleased with how our teams demonstrated strong cost and commercial discipline across our business, delivering a further 40 basis points of margin expansion compared to the prior year.
So overall, robust delivery from our Americas Materials Solutions business. And looking ahead for the remainder of the year, I'm encouraged by the positive momentum we're seeing in our bidding activity and our backlogs.
Next to America's Building Solutions on Slide 8, where our second quarter performance reflects the impact of recently completed divestitures and a new build residential market. We also experienced an inflationary cost backdrop, particularly in relation to elevated haulage rates in the quarter, and we've implemented operational and commercial initiatives to mitigate these costs. In our outdoor living business, demand for residential repair and remodel continues to be resilient.
In our Building and Infrastructure Solutions business, we're seeing good growth in data center, water and energy markets. For Americas Building Solutions overall, total revenues and adjusted EBITDA were 2% and 8% behind prior year.
Moving to International Solutions on Slide 9, where our business delivered further growth and margin expansion supported by higher activity levels in certain markets, positive pricing momentum and fixed cost control in an inflationary environment. Total revenue growth of $0.05 translated into an 8% increase in adjusted EBITDA and a further 70 basis points of margin expansion, reflecting ongoing performance optimization initiatives as well as contributions from acquisitions.
In Europe, our businesses continue to benefit from favorable infrastructure and reindustrialization activity. While in Australia, our business also continues to perform well, benefiting from positive underlying demand operational improvements and synergy delivery from recent acquisitions.
Thanks, Randy. Overall, a strong second quarter performance from our business. Now at this point, I would like to discuss the continued execution of our strategy. and how that leaves us well positioned for continued growth and valuation. We continue to focus on increasing our exposure to 3 large and growing infrastructure megatrends, which we believe will support significant long-term growth and value creation for our business. Through disciplined capital allocation, we are strengthening our leading market positions in attractive markets to fully capitalize on these compelling growth opportunities.
We are continuing to advance our aggregates-led connected portfolio strategy, as demonstrated by our recent agreement to acquire Arcosa. We produce over 380 million tons of aggregates on an annual basis. And by leveraging the benefits of our connected portfolio across our cementitious roads and water platforms, we are able to maximize our profits, cash and returns. With over 1,200 acquisitions completed throughout our history, we have a proven ability to acquire and integrate businesses at scale and our financial strength and cash generation capabilities provides us with strong optionality for further capital deployment.
Turning to Slide 12. Through the continued execution of our strategy, we are increasing our exposure to growing infrastructure megatrends, transportation, water and reindustrialization and strengthening our leadership positions across our 4 connected growth platforms of aggregate cementitious roads and water. All of this reinforces our position as the #1 infrastructure player in North America and our ability to deliver further growth and value creation for our shareholders.
I will now ask Aylwyn to take you through our recent capital allocation activities.
Thanks, Jim. Hello, everybody. Turning to Slide 13 and first to M&A. For year-to-date, we've invested $1.4 billion on 17 value-accretive acquisitions across our connected growth platforms. The largest acquisition was Axius Water for approximately $700 million, further strengthening our position as a leading U.S. water infrastructure player. As Jim mentioned earlier, in June, we also reached an agreement to acquire Arcosa for a cash consideration of $150 per share, reflecting a total enterprise value of approximately $8.5 billion. .
The transaction is subject to Arcosa stockholder approval, regulatory approvals and customary closing conditions, and we expect to close during the first quarter of 2027. Looking ahead and notwithstanding what has been an active year so far, we have a strong pipeline of further M&A opportunities in front of us, supported by our unmatched scale, connected portfolio and fragmented nature of our industry. We also completed 3 strategic divestitures of noncore businesses for a total consideration of $1.9 billion demonstrating our commitment to active portfolio management and the reallocation of capital into higher-growth connected businesses.
Through the second quarter, we've invested approximately $800 million in growth CapEx and leveraging our size and scale to fully capitalize on high returning low-risk investment opportunities to expand capacity in high-growth markets, improve operational efficiency, increase automation and optimize our energy usage, all of which will drive long-term shareholder value. We have also returned $1.2 billion to shareholders through dividends and share buybacks year-to-date. And in line with our strong financial position and policy of consistent long-term dividend growth, the Board has declared a quarterly dividend of $0.39 per share representing an increase of 5% on the prior year.
Since the inception of our buyback program in 2018, we've returned approximately $10 billion to shareholders through the repurchase of 24% of our shares. As previously announced in June, in connection with our agreement to acquire Arcosa, we have taken the decision to pause our share buyback program following the completion of the latest tranche and we'll reevaluate the program at a later date. So overall, an active year so far demonstrating our focus on efficient allocation of capital to maximize value for our shareholders.
Thanks, Aylwyn. A good summary there of our recent capital allocation activities. Turning now to Slide 14 and our agreement to acquire Arcosa, which is fully aligned with our strategy. Arcosa is a leading provider of building materials and critical infrastructure products in the United States. Under our ownership, it will enhance our connected customer offering and with 35 million tonnes of annual high-quality aggregates, it will reinforce our position as the leader in U.S. aggregates with over 265 million tonnes of combined annualized production.
Overall, the acquisition represents a compelling growth and value creation opportunity for CRH and I will ask Randy to provide a brief overview of the strong synergy opportunities we have identified so far.
For this acquisition, we're uniquely positioned to deliver significant value creation for our shareholders. leveraging our unmatched scale, connected portfolio and leading performance capabilities. And as you can see on Slide 15, we currently expect approximately $175 million of run rate cost synergies to be achieved by year 3 with $60 million anticipated in the first year of ownership. We've identified significant opportunities across operational improvements, materials, self-supply, global procurement benefits as well as optimizing our administrative and support functions. So overall, the transaction represents strong synergy and value creation potential, and we look forward to updating you further post completion.
Turning to Slide 16 and just to take a step back for a moment to highlight our strong track record of synergy delivery from acquisitions. Our ability to identify, acquire and integrate businesses at scale is a well-developed muscle in CRH. Origination starts at the local level, local teams with strong community ties and long-term relationships, sourcing strategic growth opportunities across thousands of locations. These empowered local teams leverage the benefits of our global scale and leading performance capabilities, be it through best practice programs, global procurement benefits or operational and commercial excellence initiatives.
We have a disciplined and value-focused approach, applying a rigorous appraisal process as well as strict strategic and financial performance criteria to every investment we make. Since 2018, we've delivered on average approximately 600 basis points of margin improvement within the first 3 years post acquisition. A more recent example of this is Ecomaterial, the leading supplier of SCMs which we acquired last year. The integration is progressing well, and I'm pleased to report that synergy delivery is ahead of our original expectations. All of this reflects a deeply embedded culture of performance and a relentless focus on continuous business improvement, which really strikes at the core of our winning way.
Thanks, Randy. Turning to Slide 17. And as we previously communicated, over the next 5 years, we expect to have at our disposal financial capacity of approximately $40 billion, reflecting our strong growth profile, the level of cash we are generating and the strength of our balance sheet. We expect to allocate approximately 70% of this to growth investments with the remaining 30% returned to shareholders through dividends and share buybacks.
The proposed acquisition of Arcosa accelerates our progress in this regard while also being fully aligned with the delivery of our 2030 financial targets. Annual revenue growth of between 7% and 9% and adjusted EBITDA margin of 22% to 24% by 2030 and an average adjusted free cash flow conversion of over 100%.
On Slide 18, you can really get a sense of the size and scale of our business with the adjusted EBITDA of CRH together with Arcosa on a forecast 2026 basis being larger than the next 4 U.S. peers combined. Scale matters in our industry. It creates significant commercial, operational and strategic benefits that set us apart and enable us to deliver leading performance year after year. Our unrivaled cash generation capabilities, combined with our uniquely connected portfolio provides us with superior optionality to invest for further growth and value creation all supported by our strong balance sheet and investment-grade credit rating. All of this together demonstrates why CRH is the leading compounder of capital in our industry.
Finally, now turning to outlook on Slide 20. And we are pleased to reaffirm our adjusted EBITDA, net income and diluted earnings per share guidance for 2026. Assuming normal seasonal weather patterns for the remainder of the year and no further major dislocations in the geopolitical or macroeconomic environment, we expect full year adjusted EBITDA to be between $8.1 billion and $8.5 billion. Net income between $3.9 billion and $4.1 billion, and diluted earnings per share between $5.60 and $6.05, representing another strong year of growth and value creation for CRH.
So that concludes our presentation for today. I will now hand you back to the moderator to coordinate the Q&A session of our call.
[Operator Instructions] Your first question comes from Angel Castillo with Morgan Stanley.
2. Question Answer
Jim, Aylwyn, congrats on the strong quarter here. Just you kept your outlook unchanged despite still a volatile and uncertain kind of macro backdrop. So just was hoping you could give us a little bit more color on just your 2026 guidance and just the underlying assumptions. .
Angel, yes, listen, I'll give a bit of background first, and then I might ask Randy just to jump in maybe on the building blocks, the kind of volume and prices underpinning that reaffirmation of the guidance and then Aylwyn just in terms of the financial puts and takes at the end of it.
Yes, listen, this morning, very pleased to have announcing a really strong Q2 and a strong H1 despite it has been a very challenging macro environment. As you know, kind of very much a weather interrupted kind of May and June and some of our southern and southeastern parts of the U.S. business. And in that context, very pleased to reaffirming the adjusted EBITDA guidance for the year. What gives us confidence of that is really the positive demand across the business. Infrastructure is strong, Angel, across the business, particularly, and that's both U.S. and an international comment.
We're forecasting this year to be still have 40% of the double IJA unspent. So we had good momentum coming into '26. That's continued and looking at good momentum exiting into '27 too. I'd say one thing that we did note, certainly in the first half of '26, we saw a notable pickup in the whole area of reindustrialization. That's kind of also in data centers, but also advanced manufacturing facilities, semiconductor facilities, LNG plants. So these are large multiyear construction projects typically can run kind of 2 to 3 years.
Residential, pretty much subdued, particularly on the new build side in the U.S. but seen good resilience actually on the repair and remodel side. Now we switch to the international business and seen similar trends, strong infrastructure across the whole international business again, seen a pickup in the whole kind of reindustrialization space across data centers and advanced manufacturing, particularly in Central and Eastern Europe and maybe slightly different to the U.S. in pockets of recovery and residential certainly in parts of Western Europe and up into the Nordics as well we are seeing. So good underlying backdrop across the business.
We've had a good start to the year in terms of pricing or good early season pricing, and that was followed up by midyear pricing also and very good commercial execution. Annd looking forward to that guidance to another year of margin expansion. But maybe, Randy, do you want to get into the specifics, maybe volumes and prices?
Yes. I guess when you look at our business, and we've talked about this before, kind of the Americas Materials business specifically, the window of the future is our backlog kind of gives us that 6- to 9-month view in terms of underlying activities and that remains positive. So when we talk about kind of the quantum that we're bidding as well as what we secured in terms of volumes, they're both up year-over-year. Jim called it out, certainly infrastructure and the private reindustrialization playing a significant role in that. Jim mentioned it as well, these are multiyear projects. I think what it does do is actually play to the strength of the connected portfolio. So it's -- it's not just the ability to provide the aggregates everything from the very beginning of the project in terms of the underground water energy components with our products business as well as cementitious and all the way into delivering aggregate ready-mix and then ultimately, asphalt.
So that connected portfolio has been a strength in adds to the volume backdrop that we're seeing. Good to see ag movement in the Q2 volumes up 2%, pricing up 5%. That's really in line with what our full year expectations have been. If you remember back in Q1, we had a mixed adjusted pricing of 5%. So it's great to see it actually coming through in regards to demand in the business.
Cement volumes, some weather impact in Q2, but for the first half, up 3%. So encouraging to see that. And I think that really gives us the confidence in terms of what our outlook is on cement kind of low single digit in terms of volume improvement and broadly flat on pricing. I would call out specifically in and around our cementitious strategy. I mentioned it in the opening remarks, ECO material performing really well. Volume and pricing up mid-single digits. So when you look at kind of the strength of that business, what we anticipated in terms of commercial opportunities, the internalizing of that volume is coming through and when you look at a mix adjusted basis on cementitious pricing, we're ahead, which was really positive.
Jim mentioned as well just to wrap up on international, good performance, continue to see good volume growth. The expectations for the year, a low single-digit volume and mid-single-digit pricing for the full year, and that will be the ninth year of positive pricing in our international business. So -- the combination of good backlog, good commercial execution gives us a lot of confidence for the year.
One from a scope perspective, you'll have seen it's been an active year from a portfolio perspective. So $1.4 billion on 17 value-accretive acquisitions and $1.9 billion of divestments and so overall scope impact, I guess, lots of puts and takes feeding in to this, but the net incremental EBITDA contribution to be expected in the region of $200 million for the year. And then finally, just on FX. Based on current FX rates, the FX impact is expected to be negligible.
Super helpful. That was a lot of great detail. Maybe just one quick one. Just you touched on prices and how you're seeing some improvements in certain pockets. I guess just your view as we go into the second half and then to kind of exit rate into 2027. I would be curious if you could talk about just the overall market's ability to absorb potentially higher prices. across kind of your Americas Materials products, particularly in Essentials, just given continued cost inflation lasting longer than we thought.
Yes. I think, Angel, as you said, we've had a good start to the pricing. We've good early season pricing across the whole business, and we called it out in Q1 with mix adjusted in 5%. We're good to see that coming through strongly, then the 5% reported in Q2 mid-year pricing, we called it out, I think, on the Q1 earnings, is in place, right? And that's what has given us that confidence in looking at mid-single digits for the full year, which is going to give us good momentum into '27 as well from a pricing perspective. Obviously, a fair bit to play. We're only getting into the kind of crux of the season right now in terms of construction season. But very happy with where pricing is and really looking forward to another year of margin expansion for the full year.
Your next question comes from the line of Anthony Pettinari with Citi.
Jim, could you talk about the drivers of margin weakness at Americas Building Solutions and maybe kind of timing and levers for recovery there? .
Yes. Sure, Anthony. Yes, I think overall, it was kind of a mixed quarter overall for the American Building Solutions business, right? On the one hand, we kind of saw good growth across data centers and the whole reindustrialization space, which kind of fed in strongly to our water and energy infrastructure business. But clearly, the performance in the quarter had been impacted by the divestitures in the first half of the year and kind of continued subdued residential demand, primarily from a newbuild perspective, right?
The repair and maintenance is actually a remodel at has remained reasonably resilient to now. We saw a very significant pickup as know, during the pandemic. And since then, it's actually held up reasonably well. So it's really the softness in the subdued nature on the new build residential from that perspective. Specifically in the quarter, I think we called it out, we were impacted by cost inflation in the American Building Solutions business, and that is particularly in the area of haulage, where we saw increased haulage rates on certain of the delivered products in the American Building Solutions.
However, we've taken steps to mitigate us. We've come back what kind of additional price surcharges and cost reductions. But as you know, this will take time to recover, right? There can be a lag, but we expect the impact of this cost inflation to moderate as we head into kind of quarter 3 and further into quarter 4 as well.
Your next question comes from the line of Trey Grooms with Stephens.
Yes.So I want to ask about on the public side, about Build America 250, I'd love to get your updated thoughts on how it stacks up to IGA, the puts and takes there. And it looks like we're heading for a continuing resolution here. Curious to see how you think that plays out? And what all that could mean for your business and the public demand outlook. And if we were heading for a bit of a funding gap, how do you navigate that?
Thanks, Trey. Yes, I might ask Randy to comment in just on the very specifics of where we believe it is right now from a DC perspective. But Overall, as I said, we exited last year with good momentum, and we've seen that continue in terms of very strong federal and indeed state funding in the current year, right? And we see it in our bidding activity and our backlogs and as I said, kind of in the opening remarks on the full year guidance, we're expecting at the end of the year to have still 40% of the double IGA yet to be deployed. That's not unusual, right? I said there's a number of times in kind of multiyear interstate highway program funding program to exit with kind of 1 to 18 months kind of tail in terms of funding is quite common. But maybe, Randy, you might just give an update of what we understand where we are exactly in terms of BA250 for MDC?
Yes. So I guess if you take a step back, I think, broadly, infrastructure spend has been a bipartisan issue. So I think it's been constructive conversations, both coming out of the house and early conversations within the Senate. As you know, the Build America Act, at least the way it is written today is authorizing $580 billion for highway transit and safety programs. I think, obviously, early days in terms of the Senate. So they're preparing their own version. But certainly, our conversations with those people engaged in those discussions. It is a very supportive environment. I think there's obviously a general and broad understanding of the need for continued investment, not only just to maintain what we have, but also to improve and expand I think if you took a step back, at least for us, there's kind of 3 things that stand out in terms of the positive language within the Build American Act. One, there's increased funding for core infrastructure. So bridges, highways, streets and things along those lines, which is critically important.
Secondly, there's certainly the conversation in and around permitting reform. So the ability and obviously, the recognition, the need to accelerate project delivery. So good to see some of the legislation addressing that area. And then finally, the new revenue stream. As you know, the federal gas tax is the primary mechanism for fundraising within the Highway Trust Fund. That's been in place or certainly hasn't been changed since the early '90s. And so there's a recognition of the need to kind of bridge that gap. This won't go the whole way, but it's an important first step.
I think you called it out, maybe we are heading towards a continuing resolution, but we've been there before. So even if we don't reach a multiyear bill in the fall, our starting point for that extension is coming off record levels. And so you combine that with the remaining funds of the IIJA it's a significant level of investment that is yet to come. I think for us, we certainly don't see any pullback or hesitation at the state level in regards to whether it's maintenance or new builds. So that's encouraging. I think also what we've seen in times of continuing resolutions has been an increase on states to reallocate money into increased repair and maintenance certainly a benefit to us as the largest road paper in the U.S. But fundamentally, we don't see any disruptions or expect any disruptions for the balance of the year or as we look into 2027.
Your next question comes from the line of Kathryn Thompson with Thompson Research Group.
I wanted to see a couple of balance and update on the M&A pipeline and the Arcosa transaction approval, and then [indiscernible] with that, you've been good about divesting assets. Where are you with that journey and maybe give a little bit more color in the type of assets that you would be more focused in divesting.
Kathryn, yes, listen, in terms of acquisitions to date on pipeline, very strong first half to the year, right? Very pleased with it, $1.4 billion on 17 acquisitions. And they've been really across all our kind of connected growth platforms and really aligned with the kind of growing infrastructure megatrends. The largest, of course, was the Axius water deal, which closed just before the end of the quarter at $700 million. Super excited in that particular deal. And so far, so good, early days, but as integration has started well. You're right. During it was just announced about a month ago that we had reached agreement to acquire Arcosa for $8.5 billion total EV value.
What that Arcosa does is that it brings us in, as you know, it's primarily aggregates, but also plays in the engineered structures, particularly the energy transmission space. From an aggregates perspective, it adds about 35 million tonnes to our total 230 million tonnes that we produced in North America. So brings us up reaffirms our position is #1. But particularly exciting for our perspective, and that brings us into 2 new high-growth markets in terms of the Dallas and Phoenix, which are kind of geographic white spaces for us from an aggregate perspective. And in particular, there are regions and fast-growing areas where we had existing parts of the connected portfolio to be able to drop in the aggregates position in those particular fast-growing areas is particularly good from that perspective.
Also in terms of the whole engineered structure space, very -- that's going to be one of the fastest going parts of U.S. construction for the next 5 years. So very pleased from that perspective. Now the deal itself is going to be subject to both Arcosa shareholder approval and normal regulatory approvals. However, we expected to kind of complete in early 2027.
Now I'm going to go to the outlook. We have a strong and active pipeline of opportunities in attractive high-growth markets, where the balance sheet remains robust, right? And we go back to the Investor Day, we called out that we had $40 billion of financial capacity, right? And I think what you get in terms of our portfolio, the connected nature of the portfolio, that brings optionality [indiscernible] in terms of allocating capital across whether it's our aggregates, whether it's across our cementitious or roads or water. And you can see that in the recent deals we've been doing over the last number of years.
But without optionality, I think crucial for myself and the team is that it brings discipline right? Having that optionality means that we can really have that laser focus on assessing all the potential M&A pipeline and picking the ones that are going to add the most significance in terms of shareholder value accretion. I think ultimately kind of few companies have the scale, the financial power or the capabilities to execute at the kind of rate we're doing and really why we see ourselves as the leading compounder of capital.
And what remains still a quite fragmented industry in our particular growth platforms in the U.S. Now in terms of divestments, yes, a good start to the year, I would say, $1.9 billion across 3 divestments. Again, it's something that we regularly challenge ourselves, looking at opportunities to recycle capital into faster growing, more connected parts of the portfolio. You should expect us to continue to do that, Kathryn. I mean that's what we do. It's not an event. It's really just a process that we continuously challenge ourselves to look for those opportunities. And as we go forward, there will be other opportunities, too, and you should expect it. And kind of the faster-growing geographies, the kind of South and the West of the U.S., Central and Eastern Europe and to Australia, but across the 4 areas of the growth platforms that we've called out.
Your next question comes from the line of Keith Hughes with Truist. Keith, your line is open.
Your next question comes from the line of Will Jones with Rothschild & Co Redburn.
A couple from me, please, if I could. First, just looking at the asphalt business in North America. I think the pricing went from flat to plus 6% in Q2, and we can all see what's happening with bitumen. But perhaps you could just give us an indication of where spot prices might be year-on-year wise over the key Q3 season and how your costs are shaping up against that and any general remark about the absorption of that into the paving business would be great.
And then the second, if you could just perhaps give us a quick tour of any important numbers then you might make by country in your international business around volume or price?
Yes. I'll -- well, good to hear from you. I might ask Randy just to come back in terms of the asphalt pricing and the outlook for the full year in terms of pricing and margin on the asphalt business, a good start to the year there. But of international business, I think a good -- again, a strong performance across the -- very briefly. Starting first, maybe in Central Eastern Europe, was kind of very much challenged Q1 from a weather perspective once we put that weather behind us, we began to see a good recovery across all that Eastern Europe footprint, primarily led by infrastructure.
And also I called it out in the opening remarks in terms of the whole reindustrialization space in terms of data centers and advanced manufacturing. In addition to kind of the normal, I guess, regular multiyear EU kind of funding on an infrastructure basis beginning to see reasonable activity in terms of defense infrastructure as well in that particular region and some nice projects across that kind of Eastern Europe flying for us. Western Europe, parts of it, I would say, a strong performance in the quarter and the half. I called out Ireland, Spain, recovering in the Nordics.
We've seen some early shoots on the French side of it, particularly on the residential in terms of permits. From that perspective, so pleased to see that. U.K. for us has actually had a solid and a good year, building off kind of 4, 5 strong years. Again, more than half the Tarmac business in the U.K. is infrastructure. And there's still obviously, high-speed tube, we're still delivering some volume into that, but there's some good start-up in other significant infrastructure projects, which is supporting that U.K. business for us. So we're looking forward to another year of growth in terms of profits and margins again in the U.K. Randy, maybe in terms of asphalt in the U.S., what we're seeing?
Yes. So maybe I'll break it into 2 pieces: the demand environment and then kind of the cost and pricing opportunities there. Maybe go back to our visibility in the demand in terms of our backlog. So we're seeing good improvement again in the bidding activity and also the work that we've secured. So the volumes are ahead which is then obviously a positive as we go in to execute in the second half of the year. That's a supportive environment. I think on -- in terms of liquid asphalt, we've called it out before, certainly a competitive advantage, the opportunity for us to house and our tank storage half of our yearly consumption. It's about having that product available during the paving season, which is critically important. So happy with the progress we made this year in terms of what we have in the tank and what from a cost profile standpoint, again, we use that in a couple of different ways.
One, for supply to the technical capabilities to design mixes specific to any kind of road project we have across the U.S. again, gives us a competitive advantage. And we manage that business on a margin basis. So when we look for the full year, our expectation. When you look at the demand environment, the cost profile and what we've done with liquid asphalt so far, we expect another year of margin progression as we look for the balance of the year.
Your next question comes from the line of Keith Hughes with Truist.
Anyway, to my question. As you get the explanation of asphalt, a lot of positives there. I guess my question is on ready-mix in Americas. Volumes were flat, pricing up slightly. Could you give -- what do you think is going on in that business and the outlook for the second half of the year is going to be?
Yes, absolutely, Keith. I think a solid performance, I'd say, year-to-date in the U.S. I think what you're seeing is probably 1 of the areas in the business, which is probably most directly impacted by the new build red situation across the U.S. That kind of prolonged, subdued kind of softness in new build res. I think, obviously, a big user of ready mix from that perspective. So I think as we're not certainly expecting any recovery on new build res into '26 and at this stage, you've got to say it's probably going to be in the back end of '27 at best before we see any recovery from that perspective. But I think when you do see that, it will be very meaningful, both from a volume and particularly a price perspective on the ready-mix side of the business. So I think that's the main driver, and that's pretty consistent across the whole footprint we have across the whole of the U.S.
Okay. One other question related to that on cement. You've had good volumes in the first half. It sounds like you're going to have some decent volumes in the second half, but pricing still seems to be a little stagnant. What do you think it would take to get cement pricing moving up stronger than what we're seeing today across the industry? .
Yes, Keith, I think, again, in terms of cement, very happy with the volume performance, right, and up 3%, I think, in a market which is probably more flat from that perspective. And that what's seeing there is just really increasing some of our own self-supply from maybe some of the more recent acquisitions over the last number of years exercising the kind of executing rather on the kind of synergy targets and pulling that volume through. So a really good volume performance.
We're stepping off 2 good years of pricing, up 8%, I think, in '24, positive in '25, slightly down this year, but overall, over the kind of 2-year period, good price progression. Interest [indiscernible] the H1, it's kind of slightly down minus 1%, but yet good margin expansion in that business, right, in the Cement business in H1, right? So a good really good performance coming through in terms of volume and efficiency.
I think going back to the first question, I think what will certainly help it is going to be a recovery on the res side as well. Obviously, concrete starts to move up, and that will certainly support cement pricing too. Again, from our perspective, what we're really pleased with if you look at kind of a mix adjusted, including the ECO business, we had good positive pricing in the quarter and in the half. So really good strong performance on our costs for U.S. sematic business in total for the first half and the second quarter of the year.
Your next question comes from the line of Shane Carberry with Goodbody.
And well done again on a strong second quarter. My question is just really on the kind of data center team. Jim, you've given us some good statistics on this before with regards to kind of CRH proximities to data centers under construction. Could we get a bit of an update on that, please? And just to help us kind of exposure to that segment. And then maybe just more broadly on the data center team, obviously, the hyperscalers have been pretty positive in terms of their CapEx plan. How do we think about CRH plugging into that from a future growth point of view?
Yes, I kind of called out in the opening remarks. We have seen a notable step-up in activity in the space in '26 kind of stepping off '25. And certainly think we're in the early phase of a generation of capital investment across the whole of the U.S., right? Now that's not just sales centers, right? That's advanced manufacturing into Microchip plants into LNG plants. And we're seeing that. And maybe not too surprising. Obviously, '25 with the new administration, I'm very much promoting the kind of onshore and reshoring. It takes time for permitting and planning to come through, and we're seeing that. Randy touched on this in terms of the increased share of that kind of private reindustrialization in our overall backlog.
Now we're active on right now on 200 data centers across the U.S. Now these are multiyear projects. For us that kind of run from typically 2 to 3 years. And with 2,000 locations across the whole of the U.S. things called it out here, but in 25 miles of 85% of all the data centers that have been announced in the U.S. are within 25 miles of one of our CRH facilities. Now this is something we recognized, I would say, a couple of years ago, and we put dedicated sales teams in place, right, to hold specific knowledge in this space and are not just dealing with the kind of GC, but we're actually dealing directly with the actual data safety users, the hyperscalers, working with them right, in terms of designing, in terms of helping them specify the products and materials because they -- each of them have different requests and in terms of the kind of materials they're looking to use in these particular facilities.
So working with them at an early stage. And if you're building a data center as a user in GC, what matters is clearly speed and quality. And that's what you're going to get with CRH given the 2,000 occasions given the connected nature of the portfolio.
Now kind of on that, we're not just delivering a single product, right? If you think about it, we are often the very first person on the site. It's a good example, actually. We just secured a big one in East Texas, right? To put it in context, right, this particular facility, the data side, the footprint about alone, not the total site is 85 acres we're going to deliver 3 million tons of aggregates into 1 particular job just to give you a sense of the scale. But in terms of that project, we'll be first in, in terms of the lot of the subterranean energy and water infrastructure critical for an investment to that scale, you have to stabilize the site. So you're coming in with our cementitious product offering to stabilize the site.
And it's only then that we're coming with our aggregates and after that, with our concrete and then we come at our asphalt and paving in terms of paving all the access roads and indeed the car parks at the end. So these are huge projects that can extend for 2, 3 years, and we're beginning to see that come true in terms of activity levels and backlogs in 2026.
And I think from our perspective, it's the beauty of the connected portfolio. And really, it's difficult for anyone to match what we can do in terms of that complete product offering and kind of increasing share of wallet with the hyperscalers and the data center users. And put it all together, it's kind of a really meaningful driver of the long-term growth of the business as we look forward.
We have time for one more question, and that question is going to come from the line of Adrian Huerta with JPMorgan.
Jim, looking the results and my question has to do with margins, especially in the American Material Solutions. There was a very good expansion and I wanted to understand the reasons for that and the companies that you have on sustaining that type of margins in the [indiscernible].
Adrian, it was a bit difficult to hear you, but I think it was around the margin performance around the AMS in Q2 and H1, right? But yes, listen, yes. Really pleased, right, in terms of the performance of the AMS business. I mean, I think if we were to call it a standout in the quarter and the half, which is really the American Materials is a really strong performance and a really strong relative performance. I think if you look across the sector with another quarter of margin expansion despite what I said was very significant weather disruption in kind of second half of May into June in some of our bigger states and that inflationary backdrop.
And I think, again, that actually reminds me of some of the conversations we had back in '23, right? It strikes the heart of the strategy. And that connected portfolio, which brings the consistency, the predictability and the reliability to that kind of core American Materials business. When you look at it , I guess, 2,000 locations, right, and not just locations, but leading market positions to over 200 leading brands and at a regional level across the U.S. the connected nature of the portfolio, right? And then the relentless focus on performance, whether that's operational excellence, commercial excellence, back into procurement excellence month after month, which feeds into the quarter and the high share performance. It's all of that coming to way are coming together rather and that's what the CRH winning way is, right?
We set it out in the Investor Day. It's really kind of an affirmation of that and what sets the business apart. And ultimately, what drives our growth. and the consistency of performance in what was a challenging first 6 months of the year. We exit 25. It was -- I think it was our 12th consecutive year of margin expansion and we expect this year to be our 13th consecutive year of margin expansion. I think there's very few companies in any industry can deliver that kind of performance and consistency and predictability over time, right?
I think in the context of that, I mean, I called it out, it is the kind of CRH winning way. It's that coming together across the connected portfolio. But a key part of that is kind of a go-to-market strategy and Randy, would you maybe give us a bit of flavor as to how we think about that and how we, I guess, present ourselves at the customer-facing level.
Yes, maybe 2 ways in particular. When you think about -- certainly, we're going to be best-in-class in each of our operating businesses and engage with our customers in a very targeted way. But what we've done over the last several years is build out what we call market team. So in 30-plus markets across the U.S., the critical MSAs in which we participate in Salt Lake City, Dallas, Tampa, Austin, markets like that, where we're bringing the full capabilities of CRH to engage with the customers that Jim called out.
Those who have national presence or regional presence where they value from an early onset in terms of project design to execution kind of the consistency and high-level performance we bring. And so we've done something unique in terms of each one of those markets, bringing our teams and capabilities together. I think also when you look at it, kind of verticals that are important in terms of supported by megatrends. So in and around data centers, airports, nuclear energy or the whole energy transition building teams with specific levels of expertise in each one of those areas. So they get in early, talk with the hyperscalers of the world from a design and specification standpoint to allow us to bring the full armament of CRH to those projects early and then all the way through execution.
So we've uniquely changed kind of how we go to market in these critical areas. And I think it's making a meaningful difference in our performance but also the outlook for the business.
Thanks, everyone. That's all we have time for today, and thank you for your attention. And as always, if you have any follow-up questions, please feel free to contact our Investor Relations team. We look forward to updating you again in October when we will report our results for the third quarter of 2026. Thank you. Have a good day, and stay safe.
Thank you. Your conference call has now ended, and you may now disconnect.
CRH — Q2 2026 Earnings Call
CRH — Arcosa, Inc., CRH plc - M&A Call
1. Management Discussion
Good day, and welcome to the CRH conference call. My name is Krista, and I will be your operator today. [Operator Instructions]
At this time, I'd like to turn the conference over to Jim Mintern, CRH Chief Executive Officer, to begin the conference. Please go ahead, sir.
Hello, everyone. Jim Mintern here, CEO of CRH, and you're all very welcome to our presentation and conference call following our announced agreement to acquire Arcosa this morning, a significant investment for CRH and an acceleration of our growth strategy.
Joining me on the call is Aylwyn Bryan, our CFO; Randy Lake, our COO; and Danilo Juvane, Head of Investor Relations.
Over the next 15 minutes or so, we will provide you with an overview of the proposed transaction. And afterwards, we will be available to take any questions that you may have.
Before we get started, I'll hand over to Danilo for some brief opening remarks.
Thanks, Jim, and hello, everyone. I'd like to draw your attention to Slide 2 shown here on the screen. During our presentation, we'll be making some forward-looking statements related to our future plans and expectations. These are subject to certain risks and uncertainties, and actual results and outcomes could differ materially due to factors outlined on this slide. For more details, please refer to our annual report and other SEC filings, which are available on our website. We will also present projected financial information, which is based on management's current estimates and assumptions and has been prepared for illustrative purposes.
I will now hand you back to Jim, Aylwyn and Randy.
Thanks, Danilo. First, on Slide 3, a high-level overview of the proposed acquisition, which represents a compelling growth and value creation opportunity for CRH and will reinforce our position as the #1 infrastructure player in North America.
Arcosa is a leading provider of building materials and critical infrastructure products in the United States. With 35 million tons of annual high-quality aggregates, it will strengthen our position as the leader in U.S. aggregates with over 265 million tons of combined annualized production. Under our ownership, it will enhance our connected customer offering in attractive markets aligned with growing infrastructure megatrends.
It is highly complementary and an excellent strategic fit with CRH advancing our aggregates-led connected portfolio strategy. Arcosa has high-quality assets and an experienced management team with a proven track record of execution and a strong cultural alignment with CRH. We expect the acquisition to deliver strong growth and compelling value to CRH shareholders. It is consistent with our disciplined approach to capital deployment, fully aligned with our strategic ambitions and reinforces our position as a leading compounder of capital.
I will now ask Aylwyn to take you through the transaction in further detail.
Thanks, Jim, and hello, everybody. Turning to Slide 4. Our proposed acquisition of Arcosa for a cash consideration of $150 per share reflects a total enterprise value of $8.5 billion. This represents an EV-to-EBITDA multiple of 11.5x based on the midpoint of Arcosa's 2026 adjusted EBITDA guidance and including currently expected run rate cost synergies of approximately $175 million.
We intend to fund the transaction with available cash and committed debt financing. It is expected to be accretive to earnings, margins and cash flow in the first 12 months post completion excluding one-off transaction costs. On a pro forma 2026 basis, the transaction is expected to result in a net debt to adjusted EBITDA ratio of approximately 2.4x. We expect this to normalize towards our long-term average of approximately 2x in the 12 months post-completion, and we remain committed to maintaining our strong investment-grade credit rating, which we've held for over 20 years. The transaction is subject to Arcosa's stockholder approval, regulatory approvals and customary closing conditions, and we expect it to close in the first quarter of 2027.
Thanks, Aylwyn. On Slide 5, you can see a high-level overview of Arcosa. At the midpoint of its 2026 guidance, it is expected to generate $2.65 billion of revenue and $565 million of adjusted EBITDA, representing a margin of over 21%. Arcosa comprises 2 infrastructure-related businesses. Construction Products representing approximately 60% of the adjusted EBITDA, and Engineered Structures representing the remaining 40%.
Construction Products is a high-quality connected aggregates-led materials business serving 13 of the 50 largest MSAs in the United States with leading positions in Texas, the Southeast and other high-growth regions.
Engineered Structures is a leading U.S. manufacturer of critical infrastructure products in the high-growth energy transmission market. The business is supported by robust long-term demand underpinned by grid modernization, electrification and data center construction.
I will now ask Randy to provide some further color on each of the businesses.
Thanks, Jim, and hello, everyone. First, to Construction Products on Slide 6, a scaled aggregates platform in high-growth markets. With approximately 1.3 billion tons of aggregate reserves, it's fully aligned with our core strategy of strengthening our aggregates and cementitious businesses, 2 of our key growth platforms, which we highlighted during our Investor Day last year.
As you can see on the map, it has an attractive footprint of aggregates, asphalt and specialty materials, concentrated in Texas, the Southeast and other high-growth markets in the United States. It will also provide us with increased aggregates exposure in some of the fastest-growing MSAs in the United States, including Dallas-Fort Worth and Phoenix.
Combined with our existing business, there are significant opportunities to self-supply and create value through our connected portfolio. It will also complement and expand our capabilities in engineered concrete. Additionally, it's a leading U.S. provider of recycled aggregates and stabilized sand, representing 2 attractive growth platforms for CRH. Overall, it will reinforce our position as the leading aggregates producer with over 265 million tons of annualized production in the United States and over 400 million tons globally.
Turning to Slide 7, and Engineered Structures, which will strengthen our capabilities in the fast-growing U.S. energy infrastructure market. It's highly complementary to our connected customer offering across our aggregates, cementitious and critical infrastructure businesses and increases our exposure to growing infrastructure megatrends, supported by essential nondiscretionary investment. For example, as a result of the structural deficit and power supply, U.S. utilities are expected to invest approximately $1.4 trillion in grid infrastructure through 2030.
It further extends and complements our existing participation in energy transmission, one of the fastest-growing and most in-demand segments of the utility value chain. It will also deepen relationships with our shared customer base through a combination of long-term alliances with utility customers in a high-quality backlog, approximating its 2026 forecasted revenue, the business benefits from long-term demand visibility.
And as you can see on the map, it has an extensive manufacturing footprint with 18 manufacturing facilities across the United States and Mexico and benefits from a top 3 market position with leading brands, including Meyer Utility Structures.
Turning to Slide 8, and the synergy and value creation opportunities we've identified so far. With over 1,200 acquisitions completed throughout our history, we have a proven ability to acquire and integrate businesses at scale. And for this acquisition, we're uniquely positioned to deliver significant value creation for shareholders, leveraging on our unmatched scale, connected portfolio and leading performance capabilities.
We currently expect approximately $175 million of run-rate cost synergies to be achieved by year 3. And here, we've outlined the expected phasing with $60 million anticipated in the first year of ownership. We've identified significant opportunities for operational improvements, leveraging our expertise and technical capabilities from across our business to optimize plant performance and improve production efficiencies. It will also be very beneficial from a logistics and network optimization perspective, enabling us to be more efficient in how we service our customers.
There are also opportunities across our global procurement network, leveraging our scale, purchasing power and supply arrangements for materials, equipment and services. And from an integration standpoint, there are opportunities to self-supply our existing road and critical infrastructure businesses as well as optimizing our administrative and support function.
So in summary, the transaction represents strong synergy and value creation potential, and we're excited about the opportunity.
Thanks, Randy. Turning to Slide 9. I'd like to take a moment to highlight how the proposed acquisition of Arcosa aligns with our growth algorithm, which we outlined during last year's Investor Day. As the leading infrastructure player in North America, we are uniquely positioned to capitalize on 3 large and growing megatrends, transportation, water and reindustrialization, which we believe will support significant growth and value creation for our business going forward. The acquisition of Arcosa will enhance our exposure and capabilities in each of these areas.
Next, the CRH Winning Way, the force multiplier that enables us to fully capitalize on these growing infrastructure megatrends. Through our winning way, we execute our superior strategy with discipline and focus, driving leading performance across 4,000 locations through a culture of continuous improvement. As responsible stewards of our shareholder capital, we leverage our proven growth capabilities to build leadership positions of scale in attractive high-growth markets. All of this is supported by 4 key enablers: customer centricity, empowered teams, unmatched scale and our connected portfolio of businesses.
In summary, the acquisition of Arcosa together with the benefits of our winning way will reinforce our position as the leading compounder of capital in our industry.
Turning now to Slide 10. And as we previously communicated, over the next 5 years, we expect to have at our disposal financial capacity of approximately $40 billion, reflecting our strong growth profile, the level of cash we are generating and the strength of our balance sheet. We expect to allocate approximately 70% of this to growth investments, and the acquisition of Arcosa accelerates our progress in this regard while also demonstrating our disciplined approach to capital allocation.
The acquisition of Arcosa is fully aligned with the delivery of our 2030 financial targets: annual revenue growth of between 7% and 9% and adjusted EBITDA margin of 22% to 24% by 2030 and average adjusted free cash flow conversion of over 100%.
Before I turn over to Q&A, I will leave you with a few key takeaways from our presentation this morning. Arcosa is a leading U.S. provider of building materials and critical infrastructure products. With 35 million tons of annual high-quality aggregates production, it will strengthen our position as the leading aggregates producer with over 265 million tons of annualized production in the United States. The proposed acquisition of Arcosa will enhance our connected customer offering in attractive high-growth markets aligned with growing infrastructure megatrends.
In summary, this represents a compelling growth and value creation opportunity for CRH. It is enabled by our unmatched scale and cash generation capabilities, which provides us with the opportunity to deploy capital at scale and to further strengthen our leading positions across 4 connected growth platforms. Overall, the acquisition is a strong endorsement of our superior strategy, connected portfolio and the optionality we have for capital deployment.
So that concludes our presentation today. I will now hand you back to the moderator to coordinate the Q&A session of our call.
[Operator Instructions] Your first question comes from Adrian Huerta with JPMorgan.
2. Question Answer
Congrats on the transaction, and thank you for all the details provided in the presentation. Just 2 questions -- 2 quick questions. The first one is within all this that you explained, what is it exactly that excites you the most from this transaction?
And the second question is, how do you see this strategic fit of the Engineered Structures business of Arcosa within CRH?
Yes, listen, what excites us, Arcosa is a high-quality business, Adrian. Firstly, it's got a really attractive growth profile, and it's highly complementary to our existing business. And it's reinforcing our position as the #1 infrastructure player in North America.
Now, when you look into it, this is one of the largest U.S. aggregates acquisitions in the last 20 years, and it's really further strengthening our position as the leading U.S. and indeed a global aggregates producer. It takes us to about 265 million tons in North America and over 400 million tons globally. And particularly on this transaction, what's kind of exciting is that it is bringing us from an ags perspective into kind of 2 new high-growth MSAs in the Dallas-Fort Worth and Phoenix. We already have existing footprints there, but now going in there with ags is really super complementary to our connected portfolio.
I think the deal is kind of fully aligned with our strategy we set out in last year's Investor Day, which is kind of the focus on markets and regions with strong growing infrastructure megatrends and acquiring leading regional positions in high-growth markets all in all the time kind of focusing on enhancing our connected portfolio.
The deal this morning is going to give us strong growth and value creation potential, but attractive synergy opportunities. And we expect the transaction will be earnings margin and cash flow accretive 12 months post-completion. When we look at it from a multiple perspective, post the year 3 synergy rate of about $175 million, it's about 11.5x our synergized multiple, which is pretty much in line with our current trading multiple.
Now, I think the second question was around the Engineered Structures maybe and how it fits. I might ask Randy maybe to come back in on the second part of this, just to talk about some of the underlying drivers in that particular business, but it's highly complementary to our connected customer offering across both our cementitious and our critical infrastructure businesses, and it's increasing our exposure to those growing infrastructure megatrends.
We've actually been deploying capital in this space for the last 2 to 3 years. What it actually does is increases our connected product offering to actually the same customer base, the large utility companies. If you think about it, our existing U.S. IPG infrastructure business, the energy and water business is already supplying into this customer base. And last year's biggest acquisition, Eco Material, is on all these utility sites also. So it's really pulling together our kind of connected product offering to that same customer base.
But maybe, Randy, you might just talk about some of the underlying drivers we see in this space.
Yes. I mean, when we step back and look at Arcosa, first of all, in this space, they're a top 3 player in what we called out as obviously a very fast and growing transmission market. I think as Jim highlighted, it really does complement the capabilities that we currently have in that space. And if you think about not just the grid modernizations, the electrification that's taken place, the data center construction, all 3 of those things are really supporting the underlying drive for long-term growth in that sector.
And I think I mentioned in the opening remarks, the U.S. is expected -- the utilities in the U.S. are expected to invest $1.4 trillion through 2030 in terms of the underlying modernization in transmission and distribution. And I think another interesting point is over 70% of the U.S. grid is greater than 25 years old. So it's not just the additional capacity expansion. It's also modernization of the existing network.
And I think Jim -- lastly, Jim called it out, which is very important in terms of that relationship that we currently already have with the utilities, the work that Arcosa has done in terms of long-term customer alliances. And if you look at their backlog, the high quality level of that backlog gives you a lot of confidence in the mid- to long-term in terms of the need and the underlying investment.
Your next question comes from the line of Anthony Pettinari with Citi.
Jim, given you have a bit of geographical overlap in Texas and maybe kind of New York, New Jersey. I'm just wondering how you'd compare CRH's existing business with Arcosa's in maybe those 2 regions? And do you anticipate there could be any kind of divestitures or any kind of changes to make the deal go through?
Anthony, yes, listen, Texas, as we would have said, is the biggest state in CRH, right? We have a tremendous connected footprint there already. As I said, what's particularly interesting on the Arcosa deal is that it's bringing us ags, which we didn't have into the DFW MSA, so that's -- and really connecting what is a very strong footprint there already for us. So that's particularly exciting about it. The transaction itself is going to be subject to kind of customer closing conditions, including, firstly, Arcosa's shareholder and then regulatory approvals. And we expected to close in Q1 2027, but we don't anticipate any issues.
Your next question comes from the line of Michael Feniger with Bank of America.
Gentlemen, just -- I know you touched on it. I realize with Engineered Structures, it's exposed to megatrends with utility and grid CapEx. Can you just explain to us -- I mean, there's -- I think there's wind in there as well at 10% of Arcosa, 10% to 12%. Is that something you intend to keep? Do you have to invest more in this business? Is it higher capital intensity than the material side? And is the synergies -- is it complementary just because of the customer base? Or is it also just certain products you can cross-sell? Just help us understand a little bit more how the overall portfolio of Engineered Structures kind of fits in with CRH today.
Sure, Michael. Maybe a couple of questions there. Firstly, maybe I'll take the first one in terms of the wind side of it. Yes, you're right, the wind is a little less than 10% of Arcosa's business today. I think we can all agree on the kind of the opportunity and the need to continue to invest in the power generation network across the U.S. And in fact, wind today is still the cheapest and the quickest and fastest form to deploy in terms of power generation from that perspective.
It also has -- if you're familiar with Arcosa, the plants themselves are incredibly flexible in terms of the options you give, right? And when we see the demand that we have on the power generation side, we have the optionality also to pivot into that to meet the -- what we have today, a very significant kind of market dislocation between the demand side and the supply side.
In terms of the synergy side of it, maybe I'll kick it off, maybe ask Randy to comment on some of the details side of it, but -- we have a long history of acquisitions in CRH, right? And I think we've a proven ability to acquire and to integrate businesses at scale, 38 acquisitions last year in 2025. We're continuously able to leverage our unmatched scale, the connected portfolio and our kind of performance capabilities. Clearly, Arcosa is a public company acquisition. But in addition, there's very strong kind of operational synergies also.
But maybe, Randy, do you want to give a bit more color on those?
Yes. I mean, just to build on that, obviously, there's a history there in terms of our ability to integrate at scale. And I look at this deal as really kind of right down the middle in terms of what we're very, very good at and what we deliver in terms of synergies. And you would expect it to be in the areas that Jim called out. So certainly, we see kind of underlying opportunities and performance and production efficiencies. I think that the maximizing the logistics network will be a critical element of that. We called out Texas. It's our largest state. It's kind of plug and play in terms of self-supply. A lot of opportunity in and around just making sure that we're optimizing the logistical components of the deal there.
Our scale is going to certainly bring advantages from a procurement standpoint, and so we would anticipate significant opportunity there. And I think we laid it out in such a way that makes sense, $60 million in terms of the first 12 months and then $175 million by the end of year 3. I think also what we've learned over time, and I think we've done very well, is kind of dedicating resources and teams working side by side with the operating folks to drive the implementation of some of these practices as well as making sure that we're tracking and delivering on what we've laid out today in terms of synergies.
Your next question comes from the line of Angel Castillo with Morgan Stanley.
You've already touched on a number of these points, but just wanted to maybe unpack the Engineered Structures, maybe the strategic significance a little bit more -- in a little bit more detail. Just maybe any way to kind of quantify the potential for revenue synergies here given some of the overlap and perhaps customers?
And then also just on the backlog visibility, one of, I think, the notable aspects of -- for instance, some of the work that you do in data centers is how you can go kind of work with the customer a little bit earlier on than the traditional kind of aggregates model. So can you just talk about the connectivity of the portfolio? And how maybe having more backlog visibility maybe impact the rest of your business broadly?
Yes, sure, Angel. Good to hear from you. Yes. I think in terms of the Engineered Structures business, as we said today, it's kind of building on where we've been deploying capital recently in the last number of years and really tapping into that megatrend of infrastructure build-out, right, across the kind of faster-growing regions of the U.S. So we're already supplying into that customer base through our IPG energy infrastructure work, but also to the Eco Material, who is actually physically on all the utility company sites as well and providing services. So it's a very interesting connection from that perspective to increase, I guess, a kind of share of wallet with a high-quality, fast-growing customer base -- utility customer base.
And when you look at the demand projections that are out there, you're looking at kind of very high single-digit top line growth rates in terms of underlying volume demand over the next kind of 5 to 7 years in this particular space. So very good revenue kind of synergies abilities.
You are absolutely right in terms of data centers, we are now active, I think, at this stage, over nearly 150 data centers across the U.S., right? We really kind of punch above our weight in terms of our share because of that connected product solution. It's not just about providing kind of one particular product like aggregates or concrete, but you're absolutely right, we're often in the very first with this exact kind of energy and water infrastructure on the subterranean services that are going into these sites.
Then, particularly as well in terms of soil stabilization, a very interesting aspect of this Arcosa acquisition. They have a very nice kind of niche high-growth area in soil stabilization, which is going to be super complementary to the whole build-out of data centers. And then, you bring in the rest of the connected portfolio in terms aggregates, concrete, asphalt, paving, et cetera. So again, it is acquiring high-quality connected infrastructure assets in fast-growing states, right? And that's what's particularly attractive for us and why we're excited about the transaction this morning.
Thanks, Angel.
Your next question comes from the line of Trey Grooms with Stephens.
So you guys talked quite a bit about clearly the Engineered Structures and utility, et cetera. You touched for a second on wind. But you mentioned, Jim, plant optionality, and Arcosa is currently increasing capacity within their utility structures business, converting a wind facility to utility structures. This is -- and clearly, utility has been a high-growth area for Arcosa. And I think once this plant conversion takes place, wind contribution to EBITDA for Arcosa is pretty insignificant. So my question is with some of the changes on the horizon that we're seeing in wind, do you expect to kind of continue to deemphasize wind overall? Or do you think as we kind of get into -- through '27 and into '28, as maybe the landscape becomes a little more clear, that there would be more stability in that part of the business where you could see maybe putting a little bit of growth capital into that? Just how you're thinking about the wind business once some of this plant optionality is already taking place?
Yes, absolutely, Trey. Good to hear from you. Yes, you're right, right? I mean, post the conversion of the ongoing Tulsa facility in Oklahoma, wind is going to be a pretty small part of even the Arcosa footprint, right, from that perspective. As I said, kind of in the introduction question as well, it is an area that right now today is the fastest and the cheapest way to deploy power generation onshore from a U.S. perspective. So that will be interesting to see that how that plays out over the next number of years. What gives us comfort around it is that optionality and the speed at which you're able to convert those facilities. And obviously, the excellent in-house technical expertise within Arcosa, but they've done this time and time before as well. So it's kind of a very small piece of the Arcosa footprint as we go forward, but there's optionality around us.
Okay. That's good. And one other one. We've touched on the cost synergies and some of the other things, but specifically around the -- on the construction business for -- Construction Products business for Arcosa, you mentioned there is a little bit of overlap and some things like this. But do you see more as you think about revenue synergy opportunities? Do you think that would be more kind of on the Engineered Structures, utility side of the house? Or do you see some opportunity on construction as well?
Yes. It's a good question. I'd say, yes, on Engineered Structures for sure, but you actually see significant opportunities in the material space as well. If you look at just the commonality of customers who actually consume and use our product and the way that we go to market in terms of the connected portfolio, we see opportunities to increase share and growth in those particular customers. So we see as much, probably even more opportunity in that traditional material space as we do with the engineering products.
And we have time for one more question, and that question comes from Kathryn Thompson with Thompson Research Group.
And really kind of a 2-part question. First, this is the -- one of the largest deals in the industry in recent years, certainly transformative. The only prior thing that was as big as you switching your primary listing. So what does this say about the scale of the M&A opportunities in the market? And then just a follow-up on that, and we had a great opportunity last week to see your largest quarry in the system in -- just outside of Austin. And I do note that Arcosa's assets has a quarry on the other side, so it nicely complements that market. But could you break out true blue aggregates versus recycled and other materials? How much of your heavy materials is true hard rock versus your recycled? But first, focusing primarily on the M&A opportunities out there.
Kathryn, good to hear from you. Yes, listen, just the deal this morning, just to put it in context for us, it's a little over 10% of the market cap of CRH, right? But -- and we have a strong tradition in -- from an M&A perspective. In fact, we've done over 1,200 acquisitions in our history. I think when you look at the kind of structure of the business today in the United States, firstly, really due to the kind of fragmented nature of it, most of the deals we do are kind of primarily bolt-ons. If you look at the 38 deals last year, the majority of them, I think, over 30, came from kind of local bolt-ons across the businesses. But for us, it's not really about the size of any particular transaction. It's more about the scale and the value creation opportunity that we have.
Now, we called out in the Investor Day last year, given that scale, we have up to $40 billion of financial capacity out to 2030, but that leaves us uniquely positioned to capitalize on opportunities like Arcosa. We have a strong pipeline still in terms of M&A, right? And we've got good opportunities where to deploy capital at scale and really to build on our leading positions across our connected portfolios. We called it out in terms of the platforms of growth, whether its aggregates, cementitious, roads or kind of water infrastructure and energy infrastructure. We've got very good optionality in terms of where we deploy capital. And I kind of always said, what comes with optionality is discipline, right, isn't that, where you allocate that capital. And that's a very important point of it as well. I think it all comes together in terms of reinforcing our position as kind of the leading compounder of capital in this space in the U.S.
In terms of the second one, and I think if I understood it properly, Kathryn, just in terms of the Arcosa, over 90% of the aggregate number we gave this morning is coming from virgin aggregates and the remainder is coming from recycled ags.
Excellent. Best of luck.
Thank you very much, Kathryn.
Well, that's all we have time for today, and thank you all for your attention. And as always, if you have any follow-up questions, please feel free to contact our Investor Relations team. We look forward to updating you again in July when we will report our results for the second quarter of 2026.
Thank you. Have a good day and stay safe.
Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.
CRH — Q1 2026 Earnings Call
1. Management Discussion
Good day, and welcome to the CRH First Quarter 2026 Results Presentation. My name is Krista, and I will be your operator today. [Operator Instructions]
At this time, I'd like to turn the conference over to Jim Mintern, CRH Chief Executive Officer, to begin the conference. Please go ahead, sir.
Hello, everyone. Jim Mintern here, CEO of CRH, and you're all very welcome to our Q1 2026 results presentation and conference call. Joining me on the call is Nancy Buese, our CFO; Randy Lake, our COO; and Tom Holmes, our Head of Investor Relations.
Before we get started, I'll hand over to Tom for some brief opening remarks.
Thanks, Jim. Hello, everyone. I'd like to draw your attention to Slide 2, shown here on screen. During our presentation, we'll be making some forward-looking statements relating to our future plans and expectations. These are subject to certain risks and uncertainties, and actual results and outcomes could differ materially due to the factors outlined on this slide. For more details, please refer to our annual report and other SEC filings, which are available on our website.
I'll now hand you back to Jim, Nancy and Randy.
Thanks, Tom. Over the next 20 minutes or so, we will take you through a brief presentation of our first quarter results, highlighting the key components of our performance for the first 3 months of the year as well as providing you with an update on our expectations for the year as a whole. We are also going to discuss our recent portfolio management and capital allocation activities and why we believe our superior strategy will continue to deliver industry-leading growth and value creation for our shareholders.
First, on Slide 4, some key messages from our results announcement. I am pleased to report a strong first quarter performance backed by our superior strategy, unmatched scale and connected portfolio of businesses. Overall, we delivered further growth in revenues, adjusted EBITDA and margin compared to the prior year period, reflecting good momentum from early season project activity, disciplined commercial execution and positive contributions from acquisitions.
We remain focused on allocating and reallocating capital for higher growth as we continue to build a connected portfolio. In the year-to-date, we have agreed to divest of 3 noncore businesses for a total consideration of $1.9 billion, reflecting our relentless focus on the active management of our portfolio to maximize shareholder value. We have also announced that we are investing approximately $900 million in 9 value-accretive acquisitions. The largest of these is an agreement to acquire Axius Water, further strengthening our position as a leading U.S. water infrastructure player, and I will take you through that in further detail later in the presentation.
We also continue to return significant amounts of cash to our shareholders. Our ongoing share buyback program has returned approximately $400 million so far this year. And today, we are commencing a further quarterly tranche of $300 million to be completed no later than the 28th of July. I am also pleased to report that the Board has declared a quarterly dividend of $0.39 per share, representing an increase of 5% on the prior year, in line with our strong financial position and policy of consistent long-term dividend growth.
Notwithstanding the current macroeconomic uncertainty, the underlying demand environment across our key markets remains positive, and we are pleased to reaffirm our financial guidance for 2026, reflecting a strong start to the year as well as the net impact of divestitures and acquisitions agreed in the year-to-date. Assuming normal seasonal weather patterns for the remainder of the year and no further major dislocations in the geopolitical or macroeconomic environment, we expect full year adjusted EBITDA to be between $8.1 billion and $8.5 billion, representing another strong year of growth and value creation for CRH.
Turning now to Slide 5 and our financial highlights for the first 3 months of the year. Overall, a robust performance and a good start to the season with revenues, adjusted EBITDA and margin all well ahead of the prior year period. Total revenues of $7.4 billion were 9% ahead, supported by good underlying demand, disciplined commercial execution and contributions from acquisitions. This translated into adjusted EBITDA of $586 million, 18% ahead and a further 70 basis points of margin expansion, reflecting continued operational improvements and strong cost discipline across our businesses.
Turning now to Slide 6. And here, you can see our growth algorithm, which drives our performance year after year. As the leading infrastructure player in North America, we are uniquely positioned to capitalize on 3 large and growing megatrends: transportation, water and reindustrialization, which we believe will support significant growth and value creation for our business going forward.
Next, the CRH Winning Way, the force multiplier that enables us to capitalize on these growing infrastructure megatrends. This is what really sets CRH apart. Through our Winning Way, we execute our superior strategy with discipline and focus, driving leading performance across 4,000 locations through a culture of continuous improvement. As responsible stewards of our shareholders' capital, we leverage our proven growth capabilities to build leadership positions of scale in attractive high-growth markets. All of this is supported by 4 key enablers: customer centricity, empowered teams, unmatched scale and our connected portfolio of businesses.
Overall, our growth algorithm underpins our proven track record of consistent long-term delivery and our position as the leading compounder of capital in our industry.
Now at this point, I will ask Randy to take you through the performance of each of our businesses.
Thanks, Jim. Hello, everyone. Turning to Slide 8 and starting with Americas Materials Solutions, which is supported by our strategic alignment with growing infrastructure megatrends. Overall, our business had a strong start to the year. Total revenues were 21% ahead of the prior year period, with robust volumes across all product lines, reflecting good early season project activity, strong commercial execution and contributions from acquisitions.
In Essential Materials, first quarter revenues were 31% ahead. Our aggregates volumes increased by 14%, while pricing was 1% behind, reflecting geographic and project-related mix effects. On a mix-adjusted basis, our aggregate pricing was 5% ahead. Cement volumes were 10% ahead, while pricing declined by 1%, reflecting regional variances across our operating footprint.
In Road Solutions, growth in both asphalt and ready-mixed concrete volumes, along with increased paving activity, resulted in Q1 revenues 16% ahead of the prior year period.
Now let me take you through some examples of the projects that have been really driving good early season activity across our business, leveraging our scale, capabilities and connected portfolio. In our Road Solutions business, we're involved in the widening and reconstruction of I-95 in South Carolina, supplying over 0.5 million tons of asphalt and 250,000 tons of aggregates. In the reindustrialization space, we're active in the construction of a large chip plant in Boise, Idaho, where we're supplying over 0.5 million tons of aggregates and cementitious materials through our fully connected offering.
We're also participating in the construction of a large data center facility in Michigan, delivering over 1.2 million tons of aggregates in the first quarter alone. Of course, it's worth noting that this is the seasonally less significant quarter for our Americas Materials Solutions business. But looking ahead and as the construction season gets fully underway across many of our markets, I'm encouraged by the positive momentum we're seeing in our bidding activity and our backlogs.
Next to Americas Building Solutions on Slide 9, where our business delivered a solid performance in the first quarter despite contending with adverse weather conditions in many regions and subdued new-build residential activity. Revenues in our Building & Infrastructure Solutions business were 4% ahead of the prior year, supported by positive data center and utility infrastructure demand. In Outdoor Living Solutions, while the underlying demand environment for residential repair and remodel activity remains resilient, a delayed start to the season due to adverse weather resulted in Q1 revenues 3% behind the prior year.
Moving to International Solutions now on Slide 10, where our business delivered a strong first quarter performance, supported by good pricing momentum and disciplined cost control. Total revenue growth of 5% translated into 32% increase in adjusted EBITDA and a further 130 basis points of margin expansion, reflecting improved operational efficiencies and contributions from acquisitions. In Western Europe, activity levels were supported by infrastructure and reindustrialization demand, while in Central and Eastern Europe, activity levels are recovering following adverse winter weather across the region.
In Australia, our business continues to perform very well, benefiting from positive underlying demand, operational improvements and synergy delivery from recent acquisitions. So overall, a strong start to the year for our business.
And at this point, I'll hand you over to Jim to take you through our recent capital allocation activities in further detail.
Thanks, Randy. Active portfolio management is a continuous process in CRH. We are constantly allocating and reallocating our capital to maximize value for our shareholders. As you can see here on Slide 12, in the year-to-date, we have agreed 3 strategic divestitures of noncore businesses for a total consideration of $1.9 billion.
In addition to the previously announced divestiture of Construction Accessories, we have reached agreements to divest of our Lawn & Garden business, a manufacturer and supplier of mulch, soil and decorative stone, for $1.1 billion and also MoistureShield, a manufacturer of composite decking. The divestiture of MoistureShield closed in early April, while the Construction Accessories and Lawn & Garden transactions are expected to close in the second quarter of 2026, subject to customary closing conditions and regulatory approvals. Together, these transactions demonstrate our commitment to the active management of our portfolio and the reallocation of capital into higher growth, more connected businesses to maximize value for our shareholders.
At this point, on Slide 13, I would like to provide an overview of our U.S. water infrastructure platform, 1 of our 4 key growth platforms, which we highlighted during last year's Investor Day. We are a leading player in this attractive high-growth market, benefiting from resilient public funding and nondiscretionary investment. Reindustrialization and an aging water infrastructure network with significant investment needs are the key drivers of demand. And with approximately 1/3 of the U.S. water infrastructure more than 50 years old, the need to upgrade the systems that collect, transport and treat water is critical.
Our national reach and expertise give us a significant advantage as investment in this area accelerates. And as you can see on the slide, we have strategically focused on 2 key areas: water transmission and water quality, the fastest-growing segments of the over $100 billion U.S. water ecosystem.
In addition to a robust funding backdrop, the market also remains very fragmented with significant runway for further growth through value-accretive acquisitions, enabling us to leverage our unmatched scale, connected portfolio and proven growth capabilities. Our water infrastructure platform is also closely connected to our leading aggregates, cementitious and road platforms. Over 80% of the products we produce in our water business consume aggregates and cementitious materials. And since over 85% of roads require water management systems, the strength of our water platform reinforces the benefits of our connected portfolio and shared customer base.
Turning now to Slide 14. In the water quality space, we are pleased to announce the expansion of our existing water infrastructure offering with an agreement to acquire Axius Water, a leading provider of water quality and nutrient removal solutions in North America for approximately $700 million. This acquisition will further strengthen our existing position as a leading water infrastructure player in the United States. With a strong, experienced management team and best-in-class customer-centric design and engineering capabilities, it is an excellent fit and highly complementary to our existing water platform.
Integrating Axius into our connected portfolio will enhance our customer offering and drive significant commercial, operational and self-supply synergies. It will also strengthen our IP portfolio across the water value chain through its extensive R&D capabilities. Subject to customary closing conditions and regulatory approvals, the transaction is expected to complete in the second quarter of the year, and we will keep you updated as that progresses.
Overall, our agreement to acquire Axius, along with a further 8 value-accretive acquisitions completed in the year-to-date, demonstrates the continued build-out of our connected portfolio and our commitment to allocating capital into attractive high-growth markets.
I will now ask Nancy to take you through why we believe our superior strategy will continue to deliver industry-leading growth and value creation for our shareholders.
Thanks, Jim. Hello, everyone. As you can see here on Slide 16, we believe our unmatched scale and connected portfolio delivers higher and more consistent long-term growth. As the #1 infrastructure play in North America, we benefit from increased exposure to publicly funded construction, which is less volatile and more predictable compared to other areas of construction. We've built leading positions in attractive high-growth markets aligned with 3 secular megatrends: transportation, water and reindustrialization, which together represent one of the most compelling growth opportunities in decades.
We drive performance excellence through a culture of continuous improvement, replicated at scale across each of our 4,000 locations. You can see this in our first quarter performance with further margin expansion driven by the operational improvements and strategic growth CapEx investments we've made across our business. Supported by our strong balance sheet and cash generation capabilities, we expect to have approximately $40 billion of financial capacity over the next 5 years to invest for future growth and deliver further returns to our shareholders.
Our fully connected offering across aggregates, cementitious, roads and water also enables us to become more deeply embedded with our customers, driving higher pull-through demand for our Essential Materials and capturing a greater share of wallet on construction projects. It also results in lower capital intensity and a more variable cost base, enabling us to adapt quickly to any challenges that come our way while maximizing growth, cash generation and return on capital.
Combined with our unmatched scale, the connected nature of our portfolio provides us with superior growth opportunities, multiple avenues to grow both organically and through acquisitions. We have a strong recurring M&A pipeline and the ability to deliver enhanced synergies supported by our proven growth capabilities. In fact, when we look at our track record of synergy delivery in recent years, we typically achieve a 2 to 2.5x reduction in our entry multiple, which really highlights the value we can create for our shareholders.
A recent example of this is our 2024 acquisition of the Hunter cement plant in Texas, which has delivered synergies well ahead of our original expectations and our typical run rate. This was driven by operational improvements, increased self-supply and logistics optimization. Similarly, although earlier in the integration process, our 2025 acquisition of Eco Material is also performing strongly with some good early wins on synergy delivery.
Overall, our unmatched scale and connected portfolio enables us to deliver higher and more consistent long-term growth.
On Slide 17, you can see the consistency of our performance over the last decade. In addition to growing our top line, we have delivered 15% compound annual growth in adjusted EBITDA, approximately 110 basis points of average annual margin expansion and 18% compound annual growth in diluted earnings per share. Our track record across each of these financial metrics demonstrates our ability to deliver consistent long-term growth and performance. And as you can see, from a total shareholder return perspective, the story is just as compelling. Over the same time frame, we've generated a compound annual total shareholder return of 19%, highlighting our position as a leading compounder of capital and a powerful platform for shareholder value creation.
Thanks, Nancy. Now before I provide an update on our financial expectations for the full year, let me share our latest thoughts on the outlook across our markets. On to Slide 19 and first to transportation, where the demand backdrop is robust, supported by the continued rollout of federal funding through the IIJA, where approximately 50% of highway funds are yet to be deployed. State-level funding is also strong with 2026 DOT budgets up 6% on the prior year. In fact, 2026 is expected to be a record year for investment in transportation infrastructure, which bodes well for our business given our unmatched scale and market-leading position.
We remain encouraged by the progress being made in Congress regarding a multiyear reauthorization of highway funding with continued bipartisan support for increased infrastructure investment in the years ahead. In our International business, we expect robust demand in infrastructure to continue, supported by significant investment from government and EU funding programs. We also expect to see continued demand for water infrastructure with strong growth projected in the areas of transmission and water quality.
In reindustrialization, we expect continued strong demand for our large-scale manufacturing and data center investment in both the U.S. and our international markets. And with the benefits of our unmatched scale and connected customer offering, we are well positioned for growth in this area going forward. In the residential sector, we expect repair and remodel demand in the U.S. to remain resilient, while new-build activity remains subdued as a result of ongoing affordability challenges. As we have said in the past, this is not a demand issue, and we believe the long-term fundamentals in this market remain very attractive, supported by favorable demographics and significant levels of underbuild.
In summary, the overall trend is positive for our business with our strategic focus on growing infrastructure megatrends and the benefits of the CRH Winning Way, leaving us uniquely positioned to capitalize on the strong growth opportunities that lie ahead.
Turning now to Slide 20. And against that backdrop, we have reaffirmed our financial guidance for 2026, reflecting a strong start to the year as well as the net impact of divestitures and acquisitions agreed in the year-to-date. Assuming normal seasonal weather patterns for the remainder of the year and no further major dislocations in the geopolitical or macroeconomic environment, we expect full year adjusted EBITDA to be between $8.1 billion and $8.5 billion, net income between $3.9 billion and $4.1 billion and diluted earnings per share between $5.60 and $6.05, representing another strong year of growth and value creation for CRH. It's still very early in the construction season, but we will update you on our expectations as the year unfolds and as the season gets fully underway across our markets.
So that concludes our presentation today. I will now hand you back to the moderator to coordinate the Q&A session of our call.
[Operator Instructions] We'll take our first question from Adrian Huerta with JPMorgan.
2. Question Answer
Congrats on the results. My question is just if you can provide further color on your guidance for this year, especially after these transactions that you did and the underlying assumptions that you have.
Good to hear you. I might ask Nancy maybe to come back at the end just on some of the detail, the puts and takes in terms of the full year guidance, but very pleased this morning to be reaffirming our full year guidance, which is really reflecting the strong start we've had to the year in Q1. And at this stage of the year, what we look for is that all the key building blocks are really in place early in the season to deliver on the guidance.
And what we're actually seeing across our markets right now is a positive demand backdrop. We've seen it in the Q1 performance and into March and April with strong early season project activity. And we're seeing good growth across areas such as our roads and reindustrialization, which are performing well. I think, again, the guidance is supported by the continued rollout of the IIJA and very strong local state funding. And that's providing us with really good backlogs at this point of the year, which are nicely up year-on-year.
In addition, we've had a really good start from a pricing perspective. Pricing momentum across all our businesses has been good in the first quarter with really strong execution across our commercial teams. And we've had a very good winter maintenance program as well this season. And that kind of gives us the confidence in terms of giving the guidance today and for another year of margin expansion.
So putting all that together, pleased to reiterate the guidance for the year with adjusted EBITDA between $8.1 billion and $8.5 billion.
Nancy?
As Jim said, it's been a really busy start from a portfolio perspective. We've had $1.9 billion of divestments announced and about $900 million of acquisitions. So when you think about the scope impact for 2026, we would expect about $200 million of net incremental EBITDA contribution. And just as a reminder, that's unchanged from our previous guidance. So with all the ins and outs, the previous guidance had already included the divestment of the Construction Accessories business. So now that's also reflecting the impact of the further acquisitions and divestments that we announced today.
Your next question comes from the line of David MacGregor with Longbow Research.
I wanted to ask you about just what we're seeing in energy costs. And with the energy price spike, how are you thinking about the impact on your vertically integrated business model and the extent to which your hedging programs allow you to mitigate that impact?
David, yes, clearly, we've seen a lot of volatility and spikes in energy in recent months. But maybe first to kind of contextualize it and kind of size it, for us, energy is approximately about 5% of our total annual revenues. And as we would have said on kind of previous earnings calls, we have a very well managed, well -- kind of, very mature hedging policy in place, and we typically cover out on a kind of rolling 9-month basis. And that -- what that gives us is really good visibility for our energy costs for the year ahead. And right now, we're kind of focusing on our guidance, that we just reaffirmed this morning, and really looking for another year of margin expansion.
I might ask Randy, though, maybe just to give a bit of a flavor as to how the teams -- the commercial teams are responding in the field to this recent energy spike.
Yes. I'd say the team, certainly, we do this on a market-by-market basis, but really experienced commercial teams who focus certainly on value delivery, and we've dealt with periods of volatility before where we've seen significant spikes and shocks. But our focus really is on a market-by-market basis, making sure that we recover the increases, any increase we would experience in input costs, and fundamentally protecting margins. It's about advancing those to our expectations that we're calling out even today in terms of growing margins.
Additionally, I'd say we have already started kind of midyear price increases in a very targeted way. If that uncertainty continues, we'll continue to evolve that strategy. But we're playing off the front foot, being very proactive in the area, and the teams have done a terrific job, again, about protecting those margins.
Your next question comes from the line of Anthony Pettinari with Citi.
Jim, just circling back to your full year guidance, could you talk a little bit more about sort of the underlying assumptions for aggs and cement volume and price assumptions for the year?
Sure. Absolutely, Anthony. Good to hear from you. Listen, I'll ask Randy maybe to give you the specifics by market and volume and prices. But as I said kind of in the opening question, a really good start to the year, with overall strong underlying demand. We see it in our backlogs and a really good start to the year across all the businesses from a pricing perspective. But maybe, Randy?
Yes. I think we called it out in the presentation. Certainly, Q1 is off to a really good start. So volumes up on agg, 14%; cement, 10%. I think Jim mentioned it, the volume within the context of our backlog, that really gives us that 6- to 9-month window in terms of underlying activity levels. And we continue to see both bidding activity, importantly, what we're winning, both on a revenue and then volume standpoint, improve year-over-year. So it really reaffirms kind of what we called out at the beginning of the year, which we anticipated from an agg standpoint, low single-digit improvement in volume and supported by mid-single digit in pricing.
And maybe just calling out the price on the agg side. I think for me and our commercial teams, the most important metric in Q1, because you can get some volatility, is really around the adjusted -- mix-adjusted pricing, and we see that at 5%. That's indicative of what we should expect to see for the full year. So that -- the teams have done a terrific job. It's a metric we lean heavily on at this time of year. So good to see the progress there and really supports our midyear single-digit price expectations for the full year.
Looking at cement in the Americas, in particular, again, good momentum, good backlog, good early start to the season. Certainly, you saw the pricing move back a bit in totality. You're going to see regional differences. We're coming off 3 exceptional years, strong years in terms of pricing. But when we look at the backlogs, again, I'd say we would expect low single-digit improvement in volumes and low single-digit improvement in pricing as well. So teams are doing a nice job there.
On an international basis, Europe and Australia, the weather certainly impacted our business in Europe, in particular, in January and February, but it's recovered very nicely in March and April, reflecting good project backlog and underlying demand that really gives us visibility in terms of the full year, again, low single-digit volume improvement in our International platform and mid-single-digit improvement in pricing. And you can see that coming through in Q1, a 3% improvement from last year.
So all the signals are strong and really does iterate -- and reiterate kind of our focus and the guidance we gave in terms of the demand picture.
Your next question comes from the line of Trey Grooms with Stephens.
As typical, you guys continue to be very active in portfolio optimization. Jim, maybe you could give us maybe a little additional color on the year-to-date divestments? And then also, how should we be thinking about divestitures or divestments going forward?
Sure, Trey. Good to hear you. Yes. Listen, a very good first quarter in terms of portfolio activity, right? We're very pleased with it. And when we look at portfolio activity in CRH, it's a continuous process. It's not a one-off event. It's something we continuously do. And we announced this morning that 3 strategic divestitures of noncore businesses for a total consideration of $1.9 billion. Now every capital allocation decision, whether it's on the investment side or the divestment side or growth CapEx, in CRH is always looked at through the lens of trying to maximize shareholder value.
Now these were good businesses that we're divesting of, but we really had the opportunity, we took the opportunity, to recycle the proceeds into faster-growing and connected platforms. And in this case, taking the opportunity to increase our exposure to the kind of faster-growing water infrastructure sector. And I think going forward, it should be more of the same, Trey. You should expect us to continue to look for opportunities to optimize our portfolio.
Your next question comes from the line of Michael Dudas with Vertical Research Partners.
You mentioned -- Jim, I think as you mentioned in your prepared remarks, a positive outlook on the next reauthorization of IIJA. Maybe you could share -- you or Randy can share a little bit of view on what you're hearing from your contacts, size of what will be provided, maybe timing? Would there be any issues you think that would disrupt later this year into early next, any project bidding if there's a continuing resolution, or Congress doesn't get its act together before September 30?
Yes. Good question. I guess maybe take a step back first. Jim called it out in the opening remarks in terms of the underlying funding with IIJA yet to be deployed, almost 50% has yet to hit the street. And you combine that with really the proactive measures that the states have taken over the last number of years, and you have a really strong view in terms of not only short-term but long-term funding and the demand environment. I mentioned on the pricing side, what gives us the optimism around the ability to deliver is certainly our backlogs. We are seeing, and we track this every week, kind of the quantum that we're bidding continue to grow. We're winning our fair share. Revenues and overall volumes are improving year-over-year. So you're seeing the benefits of both IIJA and the states coming through nicely.
I think what we're hearing is, there's positive conversations, both from the administration and from Congress, both in the House and the Senate. I think fundamentally, there's this understanding and appreciation of the need for the investment. It's historically been bipartisan. There's no change in terms of the conversations that are happening today in and around that. I think there's also an understanding that there needs to be a meaningful step-up in the investment in core infrastructure, which is great for us when we talk about roads and bridges and highways, that's core infrastructure. And so there's alignment both in the administration and Congress around that. So I think we're optimistic that a bill will get passed in the second half of the year.
In terms of the quantum, I mean, there's numbers all over the place. I think fundamentally, what we believe and what we hear is that it will be a step-up, certainly a meaningful step-up from what we have today. And I think more importantly is the underlying understanding that we need to have that kind of level of investment.
I guess, to your question, if they can't reach a new piece of legislation? We've been here before, we call -- go into what they call continuing resolution. I think what would be interesting about that is that we're coming off peak levels of investment in terms of the IIJA, a significant step-up in '26 from '25. So you're coming from record levels that will continue into '27. That gives us a lot of surety -- and more importantly, our customers, the states, a lot of surety in terms of not only volume and demand in '26, but into '27 as well.
So again, I think there's great support, good momentum and conversations. All those things will lead one way or the other to higher level of investment and good outlook for our business.
Your next question comes from the line of Colin Sheridan with Davy.
You had covered off the energy side pretty well on the cost front. I was just wondering if you could maybe give us an update on the more general cost environment and maybe an update on the winter-fill program as well.
Yes. Sure, Colin. Listen, as we said in February and really seen us continue to see it, we're seeing inflation in other cost items beyond energy also. And it's mainly in the same areas, again, in terms of labor, raw materials, maintenance and subcontractors. And again, overall, we're continuing to expect kind of mid-single-digit inflation in 2026 across those categories. Now that really highlights the importance of the continued price momentum that we've been touching on earlier in the call as well. And that together gives us that outlook of margin expansion for the year.
Now in terms of the winter-fill program this year, in 2026, yes, if you take a step back first, it is one of our key competitive advantages that we have as part of our Roads business. And it is unique to CRH, our off-season storage capability at scale. We have the ability and we do -- we store about half our annual liquid requirement we accumulated off-season. And we've built up that capacity over several decades at this point in time. And it really is one of the benefits of having that scale in our Road business and our connected portfolio.
Now what does it give us? It gives us kind of 2 key strategic advantages, right? First is on the procurement side, right? We have the ability to acquire at scale, off-season with good procurement advantages, and we will get certainty of cost before we head into the season. And it also gives us security of supply, right? In certain parts of our business, you have a kind of limited enough paving season that runs from about now to Thanksgiving. So it's important that we have the product available to meet the kind of backlogs and demand we have.
So this year, we've had a very well-executed winter-fill program. We are exactly where we want to be right now as the season kind of shifts into top gear, and we're well positioned for another strong year of growth in our Roads business in 2026.
We have time for one more question, and that question comes from Kathryn Thompson with Thompson Research Group.
As we close today's call, just one follow-up really more on getting further clarification and color, more importantly, on your acquisitions year-to-date. And as you think about the divestitures, which were, as you said, noncore and then the addition of Axius, how does the current pipeline of acquisitions look? And maybe give a little bit more color of how that fits into the broad strategy that you outlined in your Investor Day last September.
Sure, Kathryn, absolutely. Yes, listen, we've had a good start to the year in Q1, right, from an M&A perspective with 9 acquisitions announced for a total consideration of $900 million. And really, they're spread across the 4 connected platforms, across aggregates, cementitious, roads and water. And all of these platforms, they're beneficiaries of large and growing infrastructure megatrends that we called out on our Investor Day.
Now maybe first, just before we talk about Axius, just briefly to give an overview of our kind of water infrastructure platform. For us, it's a highly attractive and a core growth platform. And it operates in high-growth markets, which are supported by very strong secular tailwinds. It's also a sector with very significant investment needs, particularly in the U.S. after decades of underinvestment in this particular space. And it's a sector which has robust public funding backdrop.
Now over the last 50 years, we've been building out a leading position in the water infrastructure place, primarily for us, focusing on 2 key areas around transmission and water quality. Now this morning, we announced the acquisition of Axius, so maybe looking at that. It's an excellent fit for existing water infrastructure business, and it's really consistent with our connected water strategy and kind of strengthens our customer offering in the water quality area in particular. What it does is making us more deeply embedded with our customers. It's increasing our share of wallet on water infrastructure projects and particularly on Axius, from a synergy perspective, Kathryn, there's really good opportunity primarily from the commercial side, but also on the operational and in terms of self-supply synergies across our connected portfolio by being able to supply across some of the other platforms into Axius as well.
Now maybe the last part of the question. I think the pipeline right now. It's strong, Kathryn, right? I think, again, with our unmatched scale and the connected portfolio, we have significant optionality for where we deploy capital. And you've seen that over the last 12 months, right, where we've continued to invest across each of the 4 platforms. In the U.S., in terms of aggregates, we announced a deal of North American Aggregates last year. The deal last year was Eco Material, cementitious deal towards that in September 2025. Talley Construction in the Roads business last year. And in terms of the water platform, we did the investment in VODA.ai and now the Axius deal.
So the pipeline is strong right now. What we're doing consistently is that we're continuing to build backlogs of optionality across each of those 4 platforms. But again, every capital allocation decision will be looked at through the lens of maximizing shareholder value. And over the next 5 years, with an estimated $40 billion of the financial capacity, we're really well positioned to continue to deliver growth and value creation by continuing to deploy that capital across those 4 growth platforms and regions.
Well, that is all we have time for today. Thank you for all your attention. And as always, if you have any follow-up questions, please feel free to contact our Investor Relations team.
We look forward to updating you again in July when we will report our results for the second quarter of 2026.
Thank you, and have a good day and stay safe. Thank you.
Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.
CRH — Q4 2025 Earnings Call
1. Management Discussion
Good day, and welcome to the CRH Fourth Quarter and Full Year 2025 Results Presentation. My name is Christa, and I will be your operator today. [Operator Instructions]
At this time, I'd like to turn the conference over to Jim Mintern, CRH Chief Executive Officer, to begin the conference. Please go ahead, sir.
Hello, everyone. Jim Mintern here, CEO, CRH, and you're all very welcome to our fourth quarter and full year 2025 results presentation and conference call. Joining me on the call is Nancy Buese, our CFO; Randy Lake, our COO; and Tom Holmes, Head of Investor Relations. Before we get started, I'll hand over to Tom for some brief opening remarks.
Thanks, Jim. Hello, everyone. I'd like to draw your attention to Slide 2, shown here on the screen. During our presentation, we'll be making some forward-looking statements relating to our future plans and expectations. These are subject to certain risks and uncertainties, and actual results and outcomes could differ materially due to the factors outlined on this slide. For more details, please refer to our annual report and our other SEC filings, which are available on our website.
I'll now hand you back to Jim, Nancy and Randy.
Thanks, Tom. Over the next 30 minutes or so, we will take you through a brief presentation of our fourth quarter and full year results, highlighting the key drivers of our performance over the course of 2025 as well as providing you with an early indication of our expectations for the year ahead. For us at CRH, the efficient allocation of capital is a core competency. Through our disciplined and value-focused approach, every dollar we deploy is rigorously assessed to maximize shareholder value.
This morning, we are going to discuss our capital allocation activities during 2025 and how we believe our superior strategy will continue to deliver industry-leading growth for our shareholders. Turning to Slide 4. We are pleased to announce a record financial performance for 2025 with another year of double-digit growth in adjusted EBITDA and our 12th consecutive year of margin expansion. All of this is delivered through the dedication and commitment of 83,000 people across our business. And I am proud of how our teams executed against the strategic priorities we outlined during our Investor Day last September.
Our performance was further supported by our growth algorithm and the CRH winning way, which is deeply embedded in our culture and the engine behind everything we do. 2025 was also a busy year investing for future growth and value creation. Our ability to deploy capital in high-growth markets integrate at scale and deliver unique synergies through our connected portfolio is a key differentiator for our business. We invested approximately $4.1 billion in 38 value-accretive acquisitions across our 4 connected growth platforms of aggregates, cementitious, roads and water. And we have an attractive pipeline of further growth opportunities in front of us, supported by our unmatched scale, connected portfolio and proven growth capabilities.
We also invested $1.7 billion in growth CapEx projects, leveraging our size and scale to fully capitalize on high returning, low-risk investment opportunities that will drive organic growth, support margin expansion and create long-term shareholder value. The strength of our balance sheet also enables us to deliver significant accretive returns to shareholders through dividends and share buybacks.
In line with our strong financial position and policy of consistent long-term dividend growth, I am pleased to report that the Board has declared a further quarterly dividend of $0.39 per share, representing an increase of 5% compared to the prior year. In relation to our ongoing share buyback program, today, we are commencing a further quarterly tranche of up to $300 million, demonstrating our focus on the efficient allocation of our capital.
Turning now to the year ahead. The outlook for our business is positive, supported by favorable end market dynamics and the benefits of our superior strategy. Assuming normal seasonal weather patterns and no major dislocations in the political or macroeconomic environment, we expect full year adjusted EBITDA to be between $8.1 billion and $8.5 billion, representing another strong year of delivery for CRH.
Turning to Slide 5, where you can see some of our key financial highlights for the fourth quarter and the full year. And I think this slide really speaks to the strength of our performance. We had a strong finish to 2025, but quarter 4 revenues, adjusted EBITDA and margin growth ahead of the full year outturn. Total full year revenues of $37.4 billion were 5% ahead of the prior year, supported by favorable end market demand, disciplined commercial execution and contributions from acquisitions. This enabled us to deliver $7.7 billion of adjusted EBITDA, 11% ahead and a further 100 basis points of margin expansion, demonstrating our relentless focus on continuous performance improvement across our business.
All of this translated into further growth in our diluted earnings per share, up 3% compared to 2024 or 8% ahead when excluding one-off gains on divestitures in the prior year. I am pleased to report another year of strong cash generation, delivering $5 billion of adjusted free cash flow, 18% ahead of the prior year and demonstrating the quality of our earnings and continued focus on cash conversion.
Next to Slide 6, where you can see the consistency of our financial delivery over time. As I mentioned earlier, 2025 represented our 12th consecutive year of margin expansion, representing an average annual increase of approximately 100 basis points since 2013. You can also see that in addition to growing our top line, we have delivered 14% compound annual growth in adjusted EBITDA and 18% in diluted earnings per share. Overall, our track record across each of these financial metrics really demonstrates the strength of our connected portfolio of businesses and our ability to deliver consistent long-term performance improvement.
When you look at our performance through the lens of total shareholder return, the story is just as compelling. As you can see here on Slide 7, we have significantly outperformed the S&P 500 Index over the last 1, 10 and 55 years with compound annual TSOs of 36.8% to 18.8% and 16.3%, respectively. Our consistent outperformance compared to the broader market highlights our position as a leading compounder of capital and demonstrates why CRH continues to be such a powerful platform for long-term growth and shareholder value creation.
Turning now to Slide 8. And here, you can see the growth algorithm, which we presented during our Investor Day last September, cultivated and refined over 50 years. This is what drives our performance year after year. As the leading infrastructure play in North America, we are uniquely positioned to capitalize on 3 large and growing megatrends, transportation, water and reindustrialization, which we believe will support significant growth and value creation for our business going forward.
Next, the CRH winning way, core to who we are deeply embedded in our culture and the engine behind everything we do. Through our winning way, we execute our superior strategy with discipline and focus. We drive the leading performance across 4,000 locations through a culture of continuous improvement. We are responsible stewards for our shareholder capital, and we leverage our proven growth capabilities to build leadership positions in high-growth markets.
All of this is supported by 4 key enablers: customer centricity, empower teams, unmatched scale and our connected portfolio of businesses. Our winning way is what really sets CRH apart. It is the force multiplier that enables us to fully capitalize on growing infrastructure mega trends.
In summary, our growth algorithm represents a powerful combination, which has delivered over the last decade. And as you can see on Slide 9, it underpins our medium-term financial targets, which we presented during our recent Investor Day. We expect to deliver average annual revenue growth of between 7% and 9%, supported by our leading positions in high-growth markets, alignment with growing megatrends as well as contributions from growth CapEx investments and further M&A.
Building on our strong track record of 12 consecutive years of margin expansion, we are targeting further margin improvement across our business, with an adjusted EBITDA margin target of 22% to 24% by 2030. We also continue to focus on strong cash generation. And over the next 5 years, we expect to deliver average annual adjusted free cash flow conversion of over 100%, underpinning approximately $40 billion of financial capacity to invest for future growth and deliver further returns to our shareholders.
Overall, these targets reflect the scale of our ambition to 2030 and our 2025 performance provides us with good momentum as we embark on that journey. Now at this point, I will ask Randy to take you through the performance for each of our businesses.
Thanks, Jim. Hello, everyone. Turning to Slide 11 and beginning with Americas Materials Solutions, which delivered a strong Q4 and full year performance against record prior year comparatives. Total full year revenues and adjusted EBITDA were 5% and 7% ahead, driven by good pricing momentum, operational efficiencies and contributions from acquisitions. Aggregates pricing increased by 4% or 6% on a mix-adjusted basis. Cement pricing increased by 1%, reflecting regional variances across our operating footprint and supporting another year of margin expansion.
Despite some challenging weather conditions impacting activity levels, revenues in our Roads business were 4% ahead, driven by improved pricing and contributions from acquisitions. In terms of the demand environment, I'm pleased to report that the underlying backdrop remains positive, supported by our strategic alignment with 3 growing infrastructure megatrends. Transportation infrastructure continues to be supported by strong state and federal funding.
Approximately half of highway funds in the IIJA have been deployed to date, highlighting the significant runway we still have ahead of us. We also continue to benefit from investment in the whole area of water infrastructure. Over 85% of roads require water management systems, and our connected portfolio enables us to self-supply our own aggregates and cement to meet growing demand for our water infrastructure products as well as provide more value to our customers.
Reindustrialization activity also continues to be strong, particularly in large-scale manufacturing and data center projects. I'm also pleased to see further margin expansion, up 30 basis points on the prior year to 23.5%, demonstrating strong cost discipline and operational efficiency across our business. So overall, a robust performance for our Americas Materials Solutions business. And as we look ahead, I'm encouraged by the positive momentum and our bidding activity and backlogs, which are ahead of the prior year.
Next to Americas Building Solutions on Slide 12, where our business delivered further profit growth and margin expansion in the fourth quarter and for the year as a whole, driven by good underlying demand, strong commercial management, operational efficiencies and contributions from acquisitions. Our Building and Infrastructure Solutions business continues to perform well, supported by strong data center demand and continued investment in water, energy and communications infrastructure.
In our Outdoor Living business, we continue to experience resilient underlying demand in residential repair and remodel activity. Revenues were in line with the prior year, a good performance in the context of subdued activity in the new-build residential segment and unfavorable weather in certain markets.
For Americas Building Solutions overall, total revenue growth of 1% translated into a 6% increase in adjusted EBITDA and a further 100 basis points of margin expansion, supported by ongoing business improvement and asset optimization initiatives.
Moving to International Solutions on Slide 13, where our business delivered strong profit growth and further margin expansion in both the fourth quarter and the full year, driven by good pricing momentum, contributions from acquisitions and disciplined cost control. On top of an 8% increase in revenue, we delivered a 23% increase in adjusted EBITDA and a further 200 basis points of margin expansion.
In Western Europe, solid infrastructure and reindustrialization demand offset subdued residential activity levels. While in Central and Eastern Europe, we experienced positive demand across our key end markets and some early signs of recovery in new-build residential activity. In Australia, our business continues to perform very well, benefiting from good underlying demand operational improvements and synergy delivery from recent acquisitions.
Overall, we're pleased with our performance in 2025 with record revenue, adjusted EBITDA and margin across each of our businesses, reflecting our leading performance mindset and culture of continuous improvement.
At this point, I'll hand you over to Nancy to take you through our financial performance and capital allocation activities in further detail.
Thank you, Randy. Turning to Slide 15 and our financial strength and optionality. We have a robust balance sheet with a net debt to adjusted EBITDA ratio of 1.8x at year-end, reflecting strong cash generation and a relentless focus on maintaining our financial discipline. We generated $5 billion of adjusted free cash flow in 2025, a strong performance representing a conversion ratio of 130% of net income and consistent with our 2030 financial targets.
The strength of our balance sheet and cash generation capabilities underpins a significant financial capacity we expect to have at our disposal over the next 5 years, approximately $40 billion to invest for future growth and deliver shareholder returns, consistent with our long track record of value creation and reinforcing our position as the leading compounder of capital in our industry.
Turning to Slide 16. You can see a summary of our capital allocation activities in 2025. First, to M&A, where we invested $4.1 billion on 38 value-accretive acquisitions, further strengthening our connected portfolio and leading positions in high-growth markets. We're pleased to report that the integration of Eco Material, our largest acquisition in 2025 and is progressing well with some good early wins on commercial, operational and logistical synergies to enhance performance and create long-term value for our shareholders.
In fact, over the last 3 years, we have completed 100 acquisitions, demonstrating the benefits of our unmatched scale and connected portfolio, and we have a strong pipeline of further opportunities in front of us, supported by our proven growth capabilities and the fragmented nature of our industry. We also invested $1.7 billion in growth CapEx, leveraging our size and scale to fully capitalize on high returning low-risk investment opportunities to expand capacity in high-growth markets, improve operational efficiency and optimize our energy usage, all of which will drive long-term shareholder value.
We continue to deliver significant accretive returns to shareholders through dividends and share buybacks. In 2025, we returned $1 billion in dividends, 6% ahead of the prior year on a per share basis and representing an increase of over 60% since 2019. We have a proud track record of delivering 42 consecutive years of dividend growth and stability and are committed to our policy of consistent long-term dividend growth. Through our ongoing share buyback program, we also repurchased $1.2 billion of shares in 2025. And today, we are commencing a further quarterly tranche of $300 million to be completed no later than April 28.
Since the inception of our buyback program in 2018, we have returned approximately $10 billion to shareholders, representing 23% of our shares in issue at an average price of $50 per share. Overall, we deployed $8 billion to growth investments and shareholder returns in 2025, demonstrating our focus on the efficient allocation of capital to maximize shareholder value.
Randy and I will take you through our growth investments in further detail. First, to M&A on Slide 17, where we have a proven track record of value creation over many years enabled by our unmatched scale, connected portfolio and empowered teams. 2025 was an active year from an M&A perspective with $4.1 billion invested in a total of 38 acquisitions across our 4 strategic growth platforms of aggregates, cementitious, roads and water.
From a materials perspective, we added 1 billion tons of high-quality aggregate reserves to our business, further strengthening our market-leading minerals reserve position. From an annual production standpoint, we added 8 million tons of aggregates, 2 million tons of asphalt and 10 million tons of cementitious materials.
On Slide 18, you can see some of the acquisitions we completed, combining strong local brands with our global scale to build out our connected portfolio across our 4 growth platforms. For example, in December, we acquired North American Aggregates, a leading supplier of aggregate serving New York and New Jersey. This strategic acquisition secures valuable aggregate reserves and enhances our ability to meet the long-term needs of our customers in the region.
In addition to our acquisition of Eco Material, which Nancy mentioned, is progressing well, we continue to develop our cementitious platform with the acquisition of Rock Solid Materials in Louisiana and Independent Cement in Australia. In our Roads business, we acquired Tally Construction, a connected provider of asphalt paving and construction services in greater Chattanooga, Tennessee as well as parts of Georgia, Alabama and North Carolina. This acquisition is a strong strategic fit with our existing offering and will enhance our ability to serve our customers in these markets.
In Water, our strategic investment in VODA AI expands our capabilities in water asset management with AI technology. This platform helps utilities manage aging water infrastructure by providing AI-driven predictive analytics to assess pipe condition and risk across transmission, distribution and collection systems. So a busy year on the acquisition front as we continue to develop our connected portfolio in attractive high-growth markets.
Turning to Slide 19. We're also continuing to invest in our existing business. As you can see on the left-hand side of this slide, we have deliberately stepped up investment in growth CapEx in recent years, leveraging our footprint, scale and connected portfolio to fully capture the high-returning low-risk opportunities that we've identified across our markets. In 2025, we invested $1.7 billion in growth CapEx. These investments are carefully targeted to expand production capacity in high-growth markets while also driving greater operational efficiency through automation and advanced technologies that reduce cost and enhance performance.
We're also making investments that reduce our reliance on fossil fuels to optimize our energy consumption as well as increasing our circularity and sustainability performance. On Slide 20, you can see some examples of growth CapEx investments that we're making. At our Roseville Quarry in Ohio, we're investing approximately $75 million in a new quarry and processing plant to access over 100 million tons of premium aggregate reserves. The investment will strengthen our connected portfolio in the region, reduce production costs and enhance our ability to serve customers in the high-growth Columbus market.
In Marisa, Illinois, we're building a new grinding and blending facility, which will increase production capacity for supplemental cementitious materials and enable us to serve customers in new markets. We also recently completed the construction of a $100 million precast pipe and box culvert plant just outside Austin, Texas, which will enable us to meet growing demand for our water infrastructure products. The location is very attractive from a market growth perspective and will also enable us to self-supply our own aggregates and cement from our existing operations in the area.
These are just a few examples of how we're deploying capital efficiently, high-returning, low-risk investments that expand our production capabilities, support margin growth and enhance long-term shareholder value.
Thanks, Randy, another active year on the investment front, and I'm encouraged by the strong pipeline of opportunities we see in front of us. Let me now take a moment to outline how we are strategically positioned for the future. On Slide 22, you can really get a sense of the unmatched scale and connected portfolio of our business across North America, our largest market. Scale matters in our industry and when combined with the connected nature of our local networks, it provides us with commercial, operational and strategic advantages that set us apart and enable us to deliver superior performance year after year.
Carefully developed over 5 decades of entrepreneurial leadership, we have strategically and deliberately built out 4 key growth platforms: aggregates, cementitious, roads and water to become the #1 infrastructure play in the region, a position that is almost impossible to replicate today. Aggregates are the foundation of our business. They feed into everything we do from our cementitious business to our roads business to our water infrastructure platform. Approximately 95% of our revenue is connected back to this product.
And with 230 million tonnes of annualized volumes and 20 billion tons of reserves in the ground, our aggregates position in North America is unrivaled.
Turning now to Slide 23. As the #1 infrastructure play in North America or strategic positioning and capabilities across 3 of the most powerful megatrends shaping our future are unmatched. We play a critical role building and maintaining U.S. transportation infrastructure, the largest and most extensive network in the world. Through our connected portfolio, we are the largest payer in the U.S., equal to the next 5 largest players combined.
We have a fully connected customer offering, enabling us not just to provide the aggregates but the mix designs, the asphalt and the paving capabilities, value-added products and the services that are essential to a finished road. This enables us to capture profit in each step of the chain and maximize value for our shareholders. Transportation infrastructure remains one of the most recurring and predictable revenue streams for our business, underpinned by a robust and sustained public funding backdrop at both the state and federal level.
One of the most urgent challenges we face today is the whole area of water. Across the U.S., much of the existing motor infrastructure is outdated and no longer fit for purpose, with roughly 1/3 of the U.S. water infrastructure network more than 50 years old, the need to update the systems that collect, transport and treat water is critical. As a leading provider of water infrastructure in the U.S., our national footprint and deep expertise gives us a significant advantage as investment in this area accelerates.
Over 80% of the products we produce in our water business consume aggregates and cementitious materials. And since over 85% of roads require water management systems, the strength of our water platform reinforces the benefits of our connected portfolio and shared customer base. We also continue to benefit from a powerful wave of reindustrialization activity. AI is fueling rapid expansion of data centers. And with 85% of all U.S. data centers within 25 miles in one of our locations, we are well positioned to benefit.
In addition to being very materials intensive, these highly specified facilities require state-of-the-art water, energy and communications infrastructure. which fits very well with how we have strategically positioned our business and our customer offering. Taken together, these 3 megatrends represent one of the most compelling growth opportunities in decades, with our unmatched scale and connected portfolio across aggregates, cementitious, roads and water, we are uniquely positioned to capitalize.
I will now ask Randy to briefly take you through some examples of how we are driving value at scale and leveraging the power of our connected portfolio.
First, an example from our Roads business on Slide 24, the Mountain View corridor in Northern Utah, where we participated in the most recent phase of this 35-mile infrastructure project. Through our fully connected offering, we were able to supply 1 million tons of aggregates tons of asphalt as well as the paving services and the water infrastructure systems that were needed. By leveraging the benefits of our connected portfolio and unmatched scale, we were able to increase asset utilization reduce capital intensity and generate higher profits, cash and returns for our shareholders.
On Slide 25, you can also see how we drive value at scale in reindustrialization. We are currently involved in over 100 data center projects across the U.S. where typically construction accounts for up to 15% of the total project cost. Speed and quality are critical for these customers. And through our unmatched scale and connected portfolio, we're uniquely positioned to capture a higher share of wallet on these projects. We're able to supply not just essential materials, but state-of-the-art water, energy and communications infrastructure for these highly specified facilities as well as helping to develop all the surrounding infrastructure that's required, particularly road infrastructure.
These are just 2 examples of our strategy in action, enabling us to maximize value for our customers while also generating higher growth, profits and cash for shareholders.
Thanks, Randy. Now before I discuss our financial expectations for the year ahead, let me share our thoughts on the outlook across our markets. First, to transportation, where the demand backdrop is robust, supported by the continued rollout of federal funding through the IIJA, where approximately 50% of highway funds are yet to be deployed. State level funding is also strong with 2026 DOT budgets up 6% on the prior year.
In fact, 2026 is expected to be a record year for investment in transportation infrastructure, which bodes well for our business given our net scale and market-leading position. We are also encouraged by the progress being made in Congress regarding a multiyear reauthorization of highway funding with continued bipartisan support for increased infrastructure investment in the years ahead. In our international business, we expect robust demand in infrastructure to continue, supported by significant investments from government and EU funding programs.
We also see robust demand for water infrastructure with high single-digit growth projected in the areas of water quality and flow control for 2026. In reindustrialization, we expect continued strong demand for large-scale manufacturing and data center investment in both the U.S. and our international markets. And with the benefits of our unmatched scale and connected customer offering, we are very well positioned to benefit in this area going forward.
In the residential sector, we expect repair and remodel demand in the U.S. to remain resilient while new build activity remains subdued as a result of ongoing affordability challenges. As we have said in the past, this is not a demand issue, and we believe the long-term fundamentals in this market remain very attractive, supported by favorable demographics and significant levels of under build.
In summary, the overall trend is positive for our business with our strategic focus on growing infrastructure megatrends and the benefits of the CRH winning way, leaving us uniquely positioned to capitalize on the strong growth opportunities that lie ahead.
Turning now to Slide 28. And against that backdrop, here we have set out our financial guidance for 2026. Assuming normal seasonal weather patterns and no major dislocations in the political or macroeconomic environment, we expect full year adjusted EBITDA to be between $8.1 billion and $8.5 billion, net income between $3.9 billion and $4.1 billion and diluted earnings per share between $5.60 and $6.05, representing another strong year of delivery for CRH.
It's still very early in the construction season, but we feel good about 2026, and we will, of course, update you on our expectations as the year unfolds.
So that concludes our prepared remarks today. I will now hand you back to the moderator to coordinate the Q&A session of our call.
[Operator Instructions]
We'll take our first question from Adrian Huerta with JPMorgan.
2. Question Answer
My question is with -- regarding the guidance, if you can give us further color on the guidance and the underlying assumptions that you have in terms of how we should see the top line growth and the EBITDA growth on the different divisions. And if the guidance includes this recent divestment that did as well?
Adrian. Good to hear from you, Jim here. Maybe I'll kick it off and just kind of set out the broad background to the guidance of '26. And I might ask Randy then to comment on the specifics on volume and price and then maybe Nancy might write it off -- just wrap it up in terms of the puts and takes from a financial perspective.
But overall, firstly, listen, after stepping off a really strong 2024, we got good momentum in Q4, a good momentum in 2025, a record year, and that's good momentum into '26. From a U.S. perspective, maybe first, really positive backdrop into 2026. And the key growth areas for us are really around transportation, water and reindustrialization. And when I say transportation, for us, that's really our Road business. And as I said, it's really our most predictable and recurring revenue stream.
We're sitting here at the start of the year. This is the one that we have most visibility on. And it really is, it comes about from our coast-to-coast presence in 43 states. And typically, over a full year, we do over 1,000 jobs per annum, somewhere between 9 to 12 weeks average sized job. And this is a business where scale matters, right? And really, we get the benefit of our connected portfolio, and that what drives the consistent performance on the road business.
From a funding perspective, 50% of the IIJA funds are yet to hit the street, and the state budgets are up 6% as we head into 2026 as well. So really positive backdrop from our roads business heading into 2026. Next, on reindustrialization. And for us, that's data centers. And again, for us, I think we really see the benefit of our connected portfolio here. If you think about it, a lot of the very first construction of those sites is around the energy, the water and the communications, infrastructure, that critical services infrastructure that goes into those sites.
We then support that with our aggregates, our concrete and finally, our asphalt as well in terms of paving the road access. So we really kind of get above good share of wallet on those jobs, and the outlook is very good. We're active on over 100 data sites. I think if you look at the -- in total across the U.S., there's a CRH facility within 85% of all data sites within 25 miles. So we're busy on data sites.
Maybe turning next to water. Again, a good outlook, strong funding backdrop, still a lot of non-spend funds coming out of the IIJA. And when you look at the aging network of water infrastructure cost to U.S., really a critical investment in terms of going forward. From a res perspective, we're not -- our kind of base case for '26 is that we're not really assuming any help. It remains very subdued, and that's an affordability, not a demand issue with the 30-year fixed mortgage, still a shade over 6%. It's just too high. So as I said, we're not expecting any benefit from new build res in 2026.
Turning now maybe to international. From a Europe perspective, first, a very strong infrastructure base and funding level across our business. And that's both at an EU funding level, but also at an individual state funding level as well. We're seeing positive activity in reindustrialization across Europe, and we continue to see residential recovery. I mean Europe is more advanced on that interest rate cut cycle. They've had a 200 basis point cut in the last 12 months, and we're beginning to see that come to fruition across our European footprint.
And maybe finally, in terms of Australia, a really good performance in 2025. And as we head into 2026, I think the timing is good in terms of a continued recovery of the residential cycle in Australia. Maybe, Randy, will you pick up what that means in terms of volume and prices?
Yes. Maybe just to reflect real quickly on how we finished 2025. So I'd say a really, really solid performance, ag volumes up 4% year-over-year and pricing up 6% on a mix-adjusted basis. So good work by the teams in the markets that we serve and actually within cement as well, volume and price plus 1%. And to get to reflect back on cement, at least look back to 2024, coming off a very strong year where pricing was up 8%.
So the teams have done a nice job, really reflects more so our footprint in terms of our operating locations. But Jim, I think, called out the underlying drivers for 2026. I've said this before, our future is really predicted a lot by our backlogs gives us kind of a 6- to 9-month view and bidding activity is strong. We're winning our share of business, and so it's positive to see and supportive of what our expectations are for this next year.
In the U.S., we're looking at ag volumes up low single digits, supported by mid-single-digit pricing. And then cement as well, low single-digit volumes and pricing in low single digits and again, building off a good 2025, but it's reflective of really the underlying investment that's happening both in the infrastructure space and data centers in particular. A number of the same macro drivers impacting us in our international business again, EU support for underlying investment in infrastructure and nonres activity.
And so our expectations for cement in the international business is volume up low single digits and pricing up low to mid-single digits. We're still operating in an inflationary environment, labor, raw material subcontract all continue to increase. So it really focuses the eye and the attention on our need for pricing momentum. So the expectation as we look at it for the full year is another year of margin progression.
To bring it all together from a financial perspective and what's encompassed in our guidance for 2026 is just reflecting on a very active year of M&A in 2025, where we spent $4.1 billion on 38 deals A reminder, Eco is the largest of those that we completed last September. And as we've said previously, we expect about $200 million of net incremental EBITDA in 2026 from those acquisitions, and that's really unchanged from our previous guidance. The way to think about it is the contribution from those recently closed acquisitions is really offset by the recent -- or the divestment we've announced of our Construction Accessories business, which we expect to close later this year.
Your next question comes from the line of Michael Feniger with Bank of America.
I would just love to get your view on the prospects of a new multiyear highway bill in 2006. And really, the time line of when you're thinking this could get done if we get a CR, a bridge, how do you think that impacts your customers, the DOTs? Do you see any shifts in types of projects and letting activity given your big position, obviously, with roads and your comments that 50% of the funds have not yet been deployed from the prior IIJA.
Mike, yes, maybe first time I give a bit of context, as said at the context and then ask Randy maybe just update where exactly we see it right now in Washington. Overall, as I said, we're in a really positive from an infrastructure perspective. And we see it in the funding levels. And as Randy just mentioned, we see it in our bidding activity, and we see it in our backlogs as we head into 2026 and the season.
Now if you take 2026, an example, right, the federal highway funding for this year is at all-time record levels. And you've probably seen the very recently approved appropriation bills have set aside $75 billion for highways alone in 2026. Now also the IIJA dollars have continued to flow on but over 50% of the highway funds as I said, yet to hit the street. So we're very confident that, that will continue to support continued investment well beyond the current IIJA's expiry later this year. And with that level of funding, again, given the scale of our road business, we really are the biggest beneficiary of that funding.
Yes. I guess, and just in terms of where we think -- see things playing out for a new infrastructure bill, I think early signals are positive. We're encouraged by the conversations that are happening both in the House and the Senate, we have Chairman, Graves, of the House T&I Committee and Chairwoman [indiscernible] from the center -- the Senate EPW committee. They're working on their individual pieces of legislation in and around the surface transportation bill.
I think you couple that with a commitment from Transportation Secretary, Duffy. He's certainly a very strong advocate for a multiyear highway bill that's, I'd say, more focused on core infrastructure. So you have 3, obviously, core constituents aligned and around the underlying need. And by the way, this has always been and continues to be a bipartisan issue. So it's great to see the positive momentum behind those conversations we would expect. We'll see the first insights into those legislation come middle part of this year.
To your question or the comment around what if there's a continuing resolution and we get a 1-year extension. I think as Jim said, we're coming off a record level of funding. In addition to that, you have the tail, the IIJA funding that would yet to be deployed. And so net-net, we would see a positive increase in terms of underlying investment for '26 and '27. Unfortunately, we've been there before. We've experienced that. And what that actually means in practicality is you see more dollars allocated to R&M activities, which actually plays to our sweet spot.
So -- and that's really a focus on the federal piece. You got the states who have been very active, both at the state -- individual state level and the municipality level, 6% increase in funding on the DOTs for 2026. So in totality, we're going to see a continued advancement in the total dollar spend in infrastructure. So good conversations across the aisle, broad support underlying need. I think everybody recognizes that. So we'll stay engaged over the months ahead, but look forward to a positive outcome.
Your next question comes from the line of Shane Carberry with Goodbody.
It's just one really in terms of the International Solutions business. And just how strong the growth was in 2025? And in particular, it would be really helpful if you could go into a little bit more detail around the building blocks to that significant margin increase year-over-year. It would be very helpful.
Yes. Sure, Shane. Yes, really, a very strong performance on the International division in 2025, with revenue up 8%, EBITDA up 23% and margin expansion of 200 basis points. In addition to kind of the core financial performance, there was actually some really good portfolio optimization work undertaken during the year in the International division. When I look at it in terms of international, I always think of the kind of 3 areas for me.
Firstly, we've had another really strong performance in the year from our Eastern European business. And that really reflects our leading position in this region. And it's really what's driving that is a very strong underpin of infrastructural funding, mainly coming from the EU infrastructure fund. Good reindustrialization activity. And as I mentioned earlier, we're beginning to see the signs on the back of the interest rate cuts some early signs of recovery in residential also.
Moving to Western Europe. Again, a very good performance in 2025, and that was underpinned by strong infrastructure generally across Western Europe. I'd call out maybe a strong performance in Ireland, in the Nordics and Spain and maybe more muted in terms of France and the U.K. in 2025. Australia had a really strong year and really reflect in our first full year, our first 12 months of Adbri a great start, right? And what's driving that is really more synergies than we would have originally anticipated and earlier delivery on those synergies.
Also, Australia, as I said earlier, has benefited from a recovery on the residential cycle also. Now looking into '26, really good momentum across the International division heading into 2026. We're expecting another strong year of growth from Eastern Europe. We're seeing signs of recovery in France and in U.K. on the residential market. We see in terms of the permits. We see it in terms of the starts, which is encouraging heading into '26.
And we're looking for another year of continued growth in Australia on the back of that rail cycle improving. Overall, from a pricing perspective, across our aggregates and cement position, we're looking for a good year in terms of pricing across the international business, and that would be our ninth consecutive year of good pricing across the European Cement business. So overall, very positive about the international outlook into '26 and looking forward to another year of progress.
Your next question comes from the line of Angel Castillo with Morgan Stanley.
Jim and Nancy, congrats on the strong quarter here. Just wanted to ask about 2 assets, I guess, in fact in your fiscal year '26 guide. First, on Eco Materials. Can you just give us a little bit more color on the progress of that integration? It seems like from the prepared remarks, it sounds like there's some early wins and strong operational performance here that could be perhaps coming in better than maybe it was expected.
So just curious as you think about that contribution of $200 million from acquisitions, whether there's maybe some upside risk to that? And then just second, just on the cost inflation, if you could kind of outline a little bit more what your cost assumptions are in terms of the key buckets for 2026. And then just as you think about mitigation or cost control initiatives, whether there's something here that might represent kind of upside, downside risks to the debt.
Yes. Thanks, Angel. This is Randy here. I'll take the questions in around Eco. Yes, we're 5 months in, in terms of Eco being part of CRH. I guess I'd first say certainly a very highly complementary business to our existing cement footprint across North America. I think it really strengthens our position as being a leading cementitious player in North America.
If you look at the combined now productive capacity between our cement business and Eco, around 25 million tons. In addition to that, there's a broad network that was very complementary to our existing Ash Grove terminal and rail network. We now have over 125 separate locations, whether source locations, production facilities, terminals, really this national coverage now from a logistical standpoint. And I'd say the other thing that has been -- certainly continues to be impressive is the innovation capabilities that Eco has.
I mean I would call them a market maker of scale in and around the cementitious space, SEMs in particular. They have long-term supply agreements of high-quality SCMs. For us, it was an obvious place to go in terms of accelerating our cementitious strategy. SCMS, in particular, is the fastest-growing segment of cementitious growing at twice the rate by 2050 versus traditional cement. So a great fit overall.
I'd say the early days. The integration is going well, super team, a very strong cultural alignment. I think one of the things that stands out that they've done well and enhanced our position as well as the value of those deep local relationships. And it's something that we value across our network. They certainly have as well. And I think that gives long-term surety in regards to underlying supply and engagement with the customers.
In regards to the opportunities, the synergies, I would bucket them obviously in probably 2 areas from a commercial standpoint, a number of cross-selling opportunities for new and existing customers, whether that's from our traditional Ash Grove Cement business or it is with Eco. So it's opened up new markets, new platforms for us, which is encouraging. That's moving faster than anticipated. And obviously, the ability to self-supply SCM was a critical element across our network.
We consume a significant amount of cementitious products within our Materials Solutions business within our Infrastructure business and Outdoor Living. So we're capitalizing on those opportunities. And then, I guess, from an operational standpoint, 2 things. One, maximizing the logistics capabilities, the railcars, driving efficiency there, the terminal network really being able to lay out a strong network to serve our customers.
And then I say, from an operational standpoint, we have a global technical services team working in conjunction with the Eco team really driving a high level of operational performance and improvement as we would have seen at Ash Grove or with the Hunter acquisition in Texas. So combined, I think we're off to a tremendous start really making good inroads in terms of the underlying market. I think there's a tremendous amount of value yet to go -- get in and around both for the business and for and ultimately for our shareholders.
Yes. And maybe on the second part of it, just in terms of the cost inflation, Angel, we're continuing to see inflation across labor, across raw materials, bolt-on services and maintenance. And is that cost inflation is really driving our pricing for 2026. And that pricing together with continued kind of relentless performance improvement programs that we have across the business is really what's driving our expectation of another year of margin progression in 2026 to be our 13th consecutive year of margin increase.
Our next question comes from the line of Keith Hughes with Truist.
My question is in American Building Solutions. For the year, there was a nice increase in EBITDA, even though we were organically in a weak market [indiscernible] residential. I just could tell me what worked in the year? And what's sort of the outlook within the American Building Solutions for 2026?
Keith, good to hear you. In terms of the -- what's in terms of outlook, first in terms of 2025, the American Building Solutions is made up of our Infrastructure business and also our Outdoor Living business. Obviously, Outdoor Living, more exposed on the residential, primarily, the majority of it is on the repair remodel, I would say it was a resilient performance in 2025.
The strong performance really came from the Infrastructure business. And that Infrastructure business, I mentioned it earlier in terms of where it plays, but particularly if you think in terms of reindustrialization it's all the kind of subterranean concrete products that are going in around energy, around water, around communications into those large data center facilities, but also the big chip plants as well on the complex manufacturing reshoring projects what we're seeing at the moment.
So that activity, a strong performance in 2025, together with, I would say, a very good focus in terms of optimization of both businesses early in the year, right? We took a lot of optimization and performance initiatives in that division in early 2025, and that really came through in terms of the EBITDA and margin expansion for the year. So I think good performance in '25 and a good outlook, again, given the backdrop primarily on the reindustrialization side in 2026.
Your next question comes from the line of David MacGregor with Longbow Research.
I guess if we could start by just talking about M&A and what you're seeing in the way of change in the environment in 2026. And then with such an active acquisition program, as you've been conducting, can you just talk about the synergy realization experience and how that's progressing?
Yes, absolutely, David. Listen, a good year, obviously, in terms of M&A activity, we did 38 deals, $4.1 billion, of which the largest was Eco Material, which closed in September. So and that was on the back active of a very strong year in 2025 as well, '24 rather, when we did 40 deals. So I think we're seeing good levels of activity across the M&A pipeline. As we're into '26 at this stage, we have good optionality in terms of where we deploy capital in 2026.
I think in terms of synergy side of it, again, it comes back to -- a lot of it comes back to the nature of our strategy and our portfolio, that connected portfolio, which enables us to maybe identify synergies that maybe other parties cannot do in terms of transactions. But then crucially, given the kind of competence that we have. I mean there's one thing doing 38 deals. It's nothing being able to integrate them at pace and really secure kind of early delivery on the synergies from that perspective.
And that's just a core competency of what we do. There's a very detailed and playbook to support that, as you can imagine. But I do think what's key to us and strategically is the connected nature of the portfolio.
And we have time for one more question. The last question is going to come from Kathryn Thompson with Thompson Research Group.
In your Investor Day in September, CRH and as you noted in the call earlier today outlined 3 megatrends driving growth, transportation, water infrastructure and U.S. reindustrialization. How much of a -- I guess this backdrop, these megatrends and the things that you've talked about already today, how much of a differentiator is your connected portfolio that you spent a lot of time talking about when it comes to your M&A pipeline and the optionality you have for growth?
Thanks, Kathryn. And maybe building a bit on the last question from David as well on that point. It's a really good question, right? It's not just about the M&A pipeline, but it really is at the core of our performance agenda as well, right, and in terms of our leading performance. And it actually strikes right to the core of who we are, right, and strike right to the core of our strategy. And maybe firstly, from an M&A perspective, right?
If you consider the fact that the scale of our business and the connected nature of the portfolio, over 4,000 locations across the business over 2000 in North America. And it's really that scale and the connected nature of the portfolio really gives us that optionality of where to deploy capital, right? Now we said in the Investor Day, we're deploying it across 4 growth platforms, across aggregates, cementitious, roads and water.
Now if you consider the year just come by 38 deals in 2025, 40, as I said, in 2024. And in fact, over 100 deals in the last 3 years. The vast majority of those deals are getting sourced locally, and they're being sourced through the fostering of local relationships, often built up over decades. And that kind of local relationship in a lot of instances, gives us a really a lot of exclusive looks on deals and often makes us really the acquirer of choice.
Now as I said to David, just on the last question. It's not just about the deals, really, it's about that ability to integrate them at scale. And I think that's a real core competency we have, right? As we look into 2026, the pipeline is good. And we mentioned at the Investor Day that you reference that over the next 5 years, we're going to have $40 billion of financial capacity to deploy and we expect to deploy up to 70% of that on the growth side of the equation. So between M&A and between our growth CapEx.
Now we are really focused on deploying that capital into higher-growth markets and across those 4 connected portfolios. However, we will remain disciplined and really value focused on the deployment of that capital. But I think what's crucial to it is that it's the connected nature of the portfolio gives us the optionality where we deploy that capital across which markets, i.e., growth markets and then across the platforms. And maybe the second part of it, as I said, is not just about M&A, it's really about performance, right?
And it's really core -- that connected portfolio is really core to how we're able to deliver quarter after quarter, year after year in terms of performance. Firstly, it enables us simply to offer a more complete customer offering, which really maximizes the growth and the value creation. And we talked earlier about the range of connected products that we're supplying into the data centers, which ultimately enables us to win a higher share of wallet. Now if you look at the Roads business, and I think we called it out in the Investor Day, the connected portfolio is really essential to that business, and it brings the predictability, the recurring nature of it, the really high cash yielding and high returning aspects of that business.
And put simply, it enables us to turn $1 in terms of supplying a ton of bags into $6 or 6x more profitable by supplying a more connected portfolio. So that connected nature of the portfolio really enables greater visibility and also really helps in terms of the production and planning efficiencies. So a good question. It's at the core of what we do from an M&A perspective, but crucially as well as what drives that quarter-after-quarter consistency resilience and predictability in the performance of the business.
Okay. Well, thank you all for your attention. And as always, if you have any follow-up questions, please feel free to contact our Investor Relations team. We look forward to talking to you all again in April when we will report our first quarter results. Thank you. Have a good and safe day.
Thank you. Your conference call has now ended. You may disconnect.
CRH — Q3 2025 Earnings Call
1. Management Discussion
Good day, and welcome to the CRH Third Quarter 2025 Results Presentation. My name is Christa, and I will be your operator today. [Operator Instructions] At this time, I'd like to turn the conference over to Jim Mintern, CRH Chief Executive Officer, to begin the conference. Please go ahead, sir.
Hello, everyone. Jim Mintern, here, CEO of CRH, and you're all very welcome to our Q3 2025 results presentation and conference call. Joining me on the call is Nancy Buese, our CFO; Randy Lake, our COO; and Tom Holmes, Head of Investor Relations. Before we get started, I'll hand over to Tom for some brief opening remarks.
Thanks, Jim. Hello, everyone. I'd like to draw your attention to Slide 2 shown here on the screen. During our presentation, we'll be making some forward-looking statements relating to our future plans and expectations. These are subject to certain risks and uncertainties, and actual results and outcomes could differ materially due to the factors outlined on this slide. For more details, please refer to our annual report and other SEC filings, which are available on our website. I'll now hand you back to Jim, Nancy and Randy.
Thanks, Tom. We'll now take you through a brief presentation of our results for the third quarter of the year, highlighting the key drivers of our performance, our recent capital allocation activities, as well as our expectations for the year as a whole. We will also share our thoughts on some of the trends we are seeing across our markets as we look ahead to 2026.
So at the outset, on Slide 4, let me take you through some of the key messages from our results. We are pleased to report a record third quarter performance and raised the midpoint of our adjusted EBITDA guidance for 2025, reflecting the continued execution of our strategy, our unmatched scale and connected portfolio of businesses.
Assuming normal seasonal weather patterns and no major dislocations in the political or macroeconomic environment, we expect full year adjusted EBITDA to be between $7.6 billion and $7.7 billion representing 10% growth at the midpoint and another record year for CRH. Supported by our growth algorithm and the CRH Winning way, we delivered double-digit adjusted EBITDA growth in Q3 and reflecting our leading performance mindset. We have also been busy investing for future growth and value creation across our four connected platforms of aggregates, cementitious, roads and water. Our ability to deploy capital in high-growth markets, integrated scale and deliver unique synergies to our connected portfolio is a real differentiator for our business.
In the year-to-date, we have invested $3.5 billion in 27 value-accretive acquisitions. And we have a strong pipeline of further growth opportunities in front of us, supported by our proven growth capabilities. Looking ahead to 2026 and based on the visibility we have across our key markets, the outlook for our business is positive. And I will take you through that in more detail later in the presentation.
Turning now to Slide 5 and our financial highlights for the third quarter. A record performance with revenues, adjusted EBITDA margin and diluted EPS, all well ahead of the prior year period. Total revenues of $11.1 billion represents a 5% increase over the prior year, supported by positive underlying demand, continued pricing momentum and contributions from acquisitions. This enabled us to deliver $2.7 billion of adjusted EBITDA in the quarter, a record for CRH and a 10% increase over the prior year.
I'm also pleased to report a further 100 basis points of margin expansion in the quarter, demonstrating our relentless focus on performance across our business. All of this translated into further growth in our diluted earnings per share, up 12% year-on-year.
So what is driving the consistency of our financial delivery outlined here on Slide 6 is our growth algorithm, which we presented during our Investor Day in September. As the leading infrastructure play in North America, we are uniquely positioned to capitalize on 3 large and growing mega trends. transportation, water and reindustrialization, which we believe will support significant above-market growth and value creation for our business going forward.
Next, the CRH winning way core to who we are deeply embedded in our culture and the engine behind everything we do. Through our winning way, we execute our superior strategy with discipline and focus. We drive leading performance across 4,000 locations through a culture of continuous improvement. We are responsible stewards of our shareholders' capital. Every dollar we deploy is rigorously assessed to ensure that it drives maximum long-term value and we leverage our proven growth capabilities to build leadership positions in high-growth markets.
All of this is supported by four key enablers: customer centricity, empowered teams, unmatched scale and our connected portfolio of businesses. Our winning way is what really sets CRH apart. It is the multiplier that enables us to fully capitalize on growing infrastructure mega trends. It underpins our proven track record of delivering consistent double-digit earnings growth and being the leading compounder of capital in our industry. Now at this point, I will hand you over to Randy to take you through the performance of each of our businesses.
Thanks, Jim. Hello, everyone. Turning to Slide 8 and first to Americas Materials Solutions, which delivered a robust performance in the third quarter against a strong prior year comparative. Total revenues and adjusted EBITDA were 6% and 5% ahead driven by good underlying demand, positive pricing momentum and contributions from acquisitions. Aggregates pricing increased by 4% or 6% on a mix-adjusted basis. Cement pricing increased by 1%, reflecting regional variances across our operating footprint and supporting another year of margin expansion.
In our roads business, Q3 revenues were 5% ahead, supported by good levels of activity in transportation infrastructure, which continues to be underpinned by strong state and federal funding. We also continue to see significant growth in reindustrialization, particularly in large-scale manufacturing and data centers. I'm also pleased to see continued strength in our margin at approximately 28% and reflecting strong cost discipline and operational efficiency across our business. So overall, a strong performance for our Americas Materials Solutions business. And as we look ahead to the remainder of the year, I'm encouraged by the positive momentum in our backlogs.
Next to Americas Building Solutions on Slide 9, where our business delivered strong profit growth and further margin expansion driven by favorable underlying demand and good commercial management. We continue to experience robust data center demand [Audio Gap] including the disposal of certain land assets across our operations.
Moving to international Solutions on Slide our business delivered our business deliver strong pricing on ongoing performance improvement onions from acquisitions. On top of a 5% increase in [indiscernible] and 15% increase in adjusted EBITDA and a further 170 basis points of margin expansion. In Central and Eastern Europe, we experienced positive underlying demand across our key end markets and early signs of recovery in new build residential activity. While in Western Europe, activity levels continue to be supported by infrastructure and nonresidential demand. In Australia, our business is performing well, benefiting from strong demand and synergy realization from recent acquisitions. At this point, I'll hand you over to Nancy to take you through our financial performance and capital allocation activities in further detail.
Thank you, Randy. Turning to Slide 12. And as Jim mentioned earlier, we delivered a record third quarter performance with further growth across our key financial metrics. Q3 adjusted EBITDA of approximately $2.7 billion was 10% above prior year, driven by positive underlying demand, continued pricing momentum and contributions from acquisitions. We also delivered 100 basis points of margin expansion. Keeping us well on track to deliver our 12th consecutive year of margin improvement in 2025, demonstrating our leading performance mindset and the consistency of our financial delivery.
Turning to Slide 13. We and to talk about our capital allocation activities so far in 2025. Starting with M&A, we have invested $3.5 billion on 27 value-accretive acquisitions. Further strengthening our connected portfolio and leading positions in high-growth markets. We've also invested $1.2 billion in growth CapEx through the third quarter. leveraging our size and scale to fully capitalize on low-risk, high-returning investment opportunities that expand our capabilities, support margin growth and enhance long-term shareholder value.
We also continued to deliver significant accretive returns to shareholders through dividends and share buybacks. And Year-to-date, we've returned over $700 million in dividends, and we've also announced that our Board has declared a further quarterly dividend of $0.37 per share, representing an increase of 6% on the prior year. in line with our strong financial position and policy of consistent long-term dividend growth. Through our ongoing share buyback program, we have also repurchased $1.1 billion of shares so far this year. And today, we are commencing a further quarterly tranche of $300 million.
Since the inception of our buyback program in 2018, we have returned over $9 billion to shareholders, representing 23% of our outstanding shares at an average price of $49 per share. Overall, we have deployed $6.5 billion towards growth investments and shareholder returns so far this year. demonstrating our focus on the efficient allocation of capital to maximize shareholder value.
As we communicated during our recent Investor Day, over the next 5 years, we expect to have approximately $40 billion of financial capacity to invest for future growth and deliver further returns to our shareholders. Consistent with our long-term track record of value creation and reinforcing our position as the leading compounder of capital in our industry. I will now hand you back to Jim and Randy to provide some further color on our recent growth investments.
Thanks, Nancy. As you can see here on Slide 15 in North America, our largest market, we have strategically and deliberately built out our 4 key growth platforms to become the #1 infrastructure play in the region. Let me step you through each of these in turn. It all begins at aggregates, a valuable finite resource in the backbone of our business. In fact, approximately 95% of our revenue is connected to aggregates. Aggregates feed into everything we do from our semantics business to our roads business to our water infrastructure platform. Here, our position is unrivaled with 230 million tons of annual production and 20 billion tons of reserves. We own more stone on the ground than anyone else in the industry.
Building on that foundation, we are also a leader in cementitious materials with around 25 million tons of annual production capacity. Together, aggregates and cementitious products are the essential building blocks of modern infrastructure. enabling us to build, maintain and improve the networks that communities and economies rely on every single day.
Through our connected portfolio, we are also the largest road paver in the United States. This is a business supported by recurring revenue and robust public funding. We produced more than 50 million tons of asphalt annually, equivalent to the next 5 largest players combined. And importantly, our paving operations are almost entirely self-supplied by our own high-value aggregates and asphalt.
Finally, we are also the leader in water infrastructure, where we provide customers with engineered systems that collect, protect and transport this vital resource. Our water business has national coverage and over 80% of the products we produce consume aggregates and cementitious materials. And since over 85% of roads require water management systems, the strength of our water platform further reinforces the benefits of our connected portfolio and shared customer base.
Taken together, these four platforms, aggregates, cementitious, roads and water form the foundation of our unique position as the #1 infrastructure play in North America, and we are focused on continuing to invest across these platforms to deliver further growth and value for our shareholders.
Let's take a look at some examples of our recent investments, starting with two bolt-on acquisitions on Slide 16. First, American Industries, a provider of aggregates, asphalt and road paving services in Connecticut. This acquisition increases our aggregates reserves and expands our presence in an attractive market in the Northeast region of the United States. We also acquired Terracon Precast, a newly constructed concrete pipeline with 70,000 tons of annual production capacity in North Carolina. This is highly complementary to our existing water infrastructure business and significantly strengthens our ability to serve customers in [ Rolling and Greensboro ] markets. These are just two examples out of the 26 bolt-on acquisitions that we have completed year-to-date, fully aligned with our strategy to invest across our four connected growth platforms with exposure to growing infrastructure megatrends. Now at this point, I will hand you over to Randy to update you on our recent acquisition of Eco Material Technologies and greater CapEx investments.
Thanks, Jim. First, to our $2.1 billion acquisition of Eco Material, which completed in September. This acquisition strengthens our position as a leading cementitious player in North America with approximately 25 million tons of combined annual production. And I'm pleased to report that early integration is progressing well, and we've already identified significant commercial, operational and logistical opportunities to enhance performance and create long-term value for our shareholders. .
As you can see on the map on the right-hand side of the slide, it's an excellent strategic fit and highly complementary to our existing platform. It creates a unique national distribution network enhances our innovation capabilities and positions us to better serve our enlarged customer base. Overall, we expect to unlock strong future growth and synergy realization with Eco Material under our ownership, representing an exciting opportunity to accelerate our cementitious growth strategy and deliver a tremendous amount of value for our shareholders.
Turning to Slide 18 and some examples of the types of growth CapEx investments that we're making to support future growth in our existing business. First, we recently completed the construction of a precast pipe and box culvert plant just outside of Austin, Texas, which will enable us to meet growing demand for our water infrastructure products. The location is not only very attractive from a market growth perspective, it will also enable us to self-supply our own aggregates and cement from our existing operations in the area. And in Utah, we're modernizing our cement plant in Leamington, which will increase annual production capacity by 240,000 tons to meet strong demand throughout the inland West market. These are just two examples of how we're deploying capital efficiently, low-risk, high-returning investments that are an excellent use of our shareholders' capital.
Thanks, Randy, great examples there of how we are deploying capital in high-growth areas. Finally, to outlook on Slide 20, and I'm pleased to say that we are raising the midpoint of our adjusted EBITDA guidance for 2025. Reflecting our continued strong performance and a partial year contribution from the Eco Material acquisition.
Assuming normal seasonal weather patterns for the remainder of the year and no major dislocations in the political or macroeconomic environment, we expect full year adjusted EBITDA to be between $7.6 billion and $7.7 billion, a 10% increase at the midpoint. Net income between $3.8 billion and $3.9 billion and diluted earnings per share between $5.49 and $5.72.
As Nancy mentioned earlier, we also expect to deliver our 12th consecutive year of margin expansion in 2025, demonstrating the consistency of our delivery and relentless focus on continuous performance improvement. Taking all of this into account represents yet another record year of growth and value creation for CRH.
Now before I hand over to Q&A, and as we look ahead to 2026, I'd like to take a moment to share our thoughts on some of the trends we are seeing across our key infrastructure megatrends in North America.
First, to transportation, where the demand backdrop is robust, supported by the continued rollout of federal funding through the IIJA, approximately 60% of the IIJA funds are yet to be deployed, highlighting the significant runway we still have ahead of us. State level funding is also strong with the 2026 DOT budgets up 6% on the prior year. Through our own match scale and uniquely connected portfolio, we are well positioned to benefit. In fact, if you look at the DOT capital spending authority across our top 10 states, it's expected to increase by 13%.
It is also encouraging to see continued support for increased infrastructure investment. For example, we saw Michigan recently approving $1.85 billion in new transportation funding over the next 4 years. Transportation infrastructure remains one of the most recurring and predictable revenue streams of our business. And as the largest road paver in the United States and the #1 infrastructure play in North America, we are well placed to benefit.
We also expect to see continued investment in the whole area of water infrastructure, a large and growing market for our business with high single-digit growth projected in the areas of water quality and flow control for 2026. In reindustrialization, we expect continued strong demand for large-scale manufacturing and data center investment. With approximately $690 billion of data center projects either announced are under construction. And with each of these projects located within 50 miles of a CRH location, we are very well positioned to benefit in this area going forward.
In the residential sector, we expect repair and remodel demand in the U.S. to remain resilient, while new build activity remains subdued as a result of the ongoing affordability challenges. With the benefit of recent interest rate cuts unlikely to be felt until late 2026 at the earliest.
As we said in the past, this is not a demand issue, and we believe the long-term fundamentals in this market remain very attractive. Supported by favorable demographics and significant levels of underbuilt.
In our international business, we expect robust demand and infrastructure to continue, supported by significant investment from government and EU funding programs. Nonresidential activity to remain stable across our key markets and a continued recovery in the residential sector as a result of lower interest rates. Regarding the pricing environment, we expect positive momentum to continue across our markets, supported by disciplined commercial management as well as the benefits of our connected portfolio.
In summary, the overall trend is positive for our business. with our strategic focus on growing infrastructure megatrends and the benefits of the CRH winning way, leaving us uniquely positioned to capitalize on the strong growth opportunities that lie ahead. So that concludes our prepared remarks today. I will now hand you back to the moderator to coordinate the Q&A session of our call.
[Operator Instructions] We'll take our first question from Anthony Pettinari with Citi.
2. Question Answer
Good morning. Thanks for all the detail I'm wondering if you have any further color on expectations for 2026. And maybe specifically, how you're thinking about volume, price and contribution from M&A?
Yes, listen, I might ask Randy to come in a minute just on some of the detail on volume and prices and Nancy maybe just on some of the scope impacts. But overall, the outlook for '26 positive, Anthony, and really the key growth areas we see for ourselves around infrastructure. And for us, that's around transportation and water, but also reindustrialization.
Maybe first on transportation. With roads, still 60% of the IIJA is yet to be spent. And indeed, the local state budgets are also strong into 2026. This kind of strong funding backdrop for us is just really well positioned given our unmatched scale and connected portfolio in our Roads portfolio. And as you know, it's probably our most consistent and recurring revenue streams that we have in CRH, also on the water infrastructure side, right? It's a very strong funding backdrop and that ongoing investment, which is really needed and required to address the aging network aging water network across the U.S.
On reindustrialization into '26, we see data center activity continue to be strong, right? And really for us, given our connected portfolio, it's not just about delivering aggregates on sites. We're often in the very first personal side there, with our energy, our water and our communications subterranean infrastructure going in early, right? So it's a really kind of holistic pull-through of the connected product offering we have.
Maybe just touching on residential for 2026, we think it's going to remain subdued, right? It's not a demand issue, but affordability with a 30-year fixed still at 6.2%. It's still too high, right? And we need continued interest rate cuts before we see any recovery on the U.S. res side. So all kind of assumptions that there's no real benefit for us in 2026. If it is, it's going to be really at the very back end.
And maybe just an international briefly, again, infrastructure is strong, right, both at strong levels of EU and local government funding as well across our state government funding across Europe. Reindustrialization, we kind of see a stable outlook for 2026. And on residential and Europe, slightly different because Europe and the euro are more advanced on interest rate reductions, and we're beginning already to see the benefit of that coming through in terms of a continued recovery in residential. But maybe, Randy, just maybe specific volume and prices.
Yes. Maybe just to build out just a quick comment before I do that, just on maybe an example a couple of projects we're working on. For example, in the northwestern part of the U.S. in and around Boise, working on a chip manufacturing plan and a data center. I think what Jim called out is important. That critical infrastructure that focus on the needs of energy and water management allow us early access on these projects. They're highly specified. Gains us the opportunity then to pull through a variety of other products as part of that connected portfolio, the aggregate, the cement, the readymix and ultimately, the paving around those sites. So in the end, that strategy is certainly delivering higher returns and as we gain larger share of wallet of some of those key customers.
And I guess that is a lead in to say, hey, Q3 was encouraging. Ag and cement volumes up kind of mid- to high single digits coming out of the Q2 that was a little more weather impact. It's so good to see underlying demand coming through. And again, a positive pricing environment. Ag, in particular, up 6% on a mix-adjusted basis. So that's good to see in cement, another year of progress in terms of low single-digit pricing. And as we look forward, we talk about this all the time, the backlog, whether that's for our roads business, the critical infrastructure business. We have good visibility kind of 6 to 9 months out. The bidding environment remains positive. So we're bidding more than we had at this point last year, and our backlogs would reflect an increase in revenues in quantum as we look into next year.
In terms of what that means for an outlook in regards to demand, we were looking at our ag volume in that low single-digit improvement from '25 and mid-single digits in regards to pricing. And cement very similar, again, low single-digit volumes and pricing, another year at advancement there. So it's building off of a good '25, but again, the backlogs would be encouraging in regards to what our expectations are as we get into next year.
Yes. And circling back to the question about the M&A contributions. It has been a really active year for us. 27 deals so far, Eco was the largest, and that was completed in September. So if you think about the contributions from all of these M&As thus far in 2025, I would roughly estimate about $200 million of EBITDA, net incremental in 2026. And we'll talk a lot more about 2026 at our year-end results in February, we'll give you full guidance at that point in time.
Your next question comes from the line of [ Adrianne Warta ] with JPMorgan.
Pretty impressive what the company has done in terms of margins in the last in the prior 2 years and also even on this year where it's heading to be more than another 1 percentage point. Can you share with us more color on how this trend should evolve? How do you see the price to cost spread especially across the three different divisions. I mean, the margin improvement in this quarter, mainly coming from the building solutions in the U.S. and from international solutions. How do you see this evolving and the opportunities for 2026?
[ Adrianne ], Jim here. Yes, listen, really pleased again with the margin improvement in the quarter, up 100 basis points. And based on the guidance we've given this morning for the full year, that's -- this will be our 12th consecutive year, right, which is really reflecting that proven track record and consistency of delivery year in, year out.
As I said, actually recently, I mean the -- we don't see any structural ceiling to where we can take the margins, and it's really as embedded as part of our performance mindset and deeply embedded in the culture of the company. And at the recent Investor Day, fact is we raised our ambition on the margins, and we're forecasting margins and targets out of 22% to 24% by 2030. And there's a number of reasons which have given us confidence that we're going to achieve these margin increases.
Firstly, it's around the CRH winning way. That continued consistent execution of our superior strategy. The relentless quarter-on-quarter, year-after-year focus on driving performance, whether that's a quite operational commercial or even procurement, right?
And secondly, you would have noticed that we did communicate, we did step up our growth CapEx [ mandature ], right, about 18 months ago. And we're beginning to see now the benefits of that coming through in terms of margin expansion, and we've got reasonably good visibility on that as we look forward. Maybe, Randy, do you want to comment specifically on some other aspects, maybe and actually, maybe what's happening on the cost inflation side of things?
Yes, absolutely. Maybe just to build on the growth CapEx, we have a really good backlog of projects, high returning projects that certainly drive underlying improvement in the business, everything from kind of capacity expansion to automation, in a variety of different ways. We look at our critical infrastructure business, kind of enhancing our pipe manufacturing process through the use of automation, just another means by which to drive those efficiencies and meet growing demand in that segment.
When we look at the environment in terms of cost inflation, we certainly are still in an inflationary environment. So labor, raw materials, parts, maintenance, subcontractor those costs continue to move forward. I think it certainly highlights the need for that further pricing momentum that I talked about as we go into next year. But all in all, as Jim called out, in terms of that structural -- no structural ceiling to our margins, I think we should expect another year of margin expansion as we go into next year.
Your next question comes from the line of Trey Grooms with Stephens.
So you guys are raising the midpoint of the EBITDA guide, which you pointed out that it now includes Eco Materials and there's definitely several moving pieces here, but could you dive a little bit more into -- and maybe walk us through some of the key drivers here of the updated 2025 guidance.
Yes, absolutely, Trey. Yes, listen, very firstly, very pleased to be announcing this morning the tightening and the raising of the full year EBITDA guidance by about $50 million at the midpoint. And maybe I'd ask Nancy to come back on maybe some of the puts and takes at the end of this. But with the increase of $50 million, that gives us a midpoint of $7.65 billion, which is 10% growth, which is off a very strong 2024, in fact, a record year for CRH in 2024, which highlights kind of durable growth nature of the connected portfolio of local brands that we have.
The increase in guidance reflects really a strong quarter 3 again with EBITDA up 10%, margins up 100 basis points and contributions from recent acquisitions as well. And again, I guess we should remember that Q3 2024 was a record quarter for us as well. So we're stepping off kind of like-for-like a very strong quarter 3 in 2024. The quarter -- Q3 did benefit from some land sales, but actually year-to-date land sales are down year-on-year, right, over 2024. And maybe ask Randy, maybe a comment on how we think about it and how we manage land sales across CRH.
Yes. I think we look at kind of optimizing that portfolio of assets as we do of any other part of kind of driving underlying performance. So it's about optimizing performance plus the portfolio. You call out the CRH winning way. This is an expectation we would have of our teams on the ground, right? So that relentless focus on operational excellence, maximizing share for holder value, and that includes the management of the assets. We take advantage of the scale that we have, 4,000 locations, the ability for us to recycle and optimize that asset base. That's an important part of how we compound earnings for our shareholders. And as you call out year-to-date, those dollars are lower than prior year.
And then just a follow-on, our updated guide does really reflect our strong year-to-date performance across all of our key metrics. And as we've talked, it has been an active year for M&A and that does include Eco having closed in September.
And just as one reminder, while the adjusted guidance does include our partial year EBITDA contribution from Eco and other M&A. Also remember the size and timing of the Eco transaction in Q4 and also some transaction and financing costs. You can expect that to be EPS dilutive into Q4 of 2025.
Your next question comes from the line of Michael Feniger with Bank of America.
I'm just curious if you could unpack the drivers of the performance and the margin expansion in Americas building solution. There's been a lot more data points, point to weakness in repair remodeling, incremental weakness in residential. And we saw the performance in Americas Building Solutions this quarter. I hope you can kind of unpack what you're seeing there, what you feel is sustainable going forward and into 2026.
Yes. Mike, yes, as you know, firstly, maybe Americas Building Solutions, it comprises both our infrastructure business in the Americas, but also the outdoor living. And maybe I might ask Rob to come back and outdoor living. But firstly, overall, right, a very strong Q3 performance, right? Adjusted EBITDA up 22% and margin well ahead of last year. What's driving that was overall good underlying demand, good commercial management. And as we just mentioned, also the benefit of some asset disposals in the quarter.
But what's really driving on the infrastructure, firstly, is what is really the real strength, the underlying strength across the Americas of the whole reindustrialization activity. Primarily around data centers. And as you know, given our scale, our national footprint, we're very well positioned for most projects, nearly all projects within 50 miles with CRH location. And in fact, right now, we're working on, in total, about 98 different data center projects. They're all at different stages of completion, but it gives you some feel for the kind of scale of activity there.
And really what plays into [indiscernible] sweet spot on this is the connected nature of the portfolio. That's a real advantage, right? That we're often, as I said earlier, first on site with our infrastructure products, then we're supporting that with our aggregates and cement. And if you're a contractor building data centers, what really matters right now, it's around quality and speed of delivery, certainty and speed of delivery. And we have a real advantage, competitive advantage there. And that comes true when we get to talk about margins and pricing as well on those jobs. Maybe Randy in Outdoor Living.
Yes. Outdoor Living, certainly, I think, performing very, very well. When you look at underlying hardscapes, mainstream packaged products, all really moving forward this year. You have to remember coming from a very strong performance and growth over recent years coming out of COVID. The team has done a really terrific job in kind of sustaining that momentum, engaging with our customers the right way.
And again, this is where we play here has been the most resilient in terms of repair and remodel. That's been a very purposeful effort, but the team has delivered well. It takes a lot of areas of focus, in particular, to call out kind of our category-leading brands. That's really what draws kind of the connected nature with our customers and as well as the logistics network that we built to be able to service on time on a consistent basis.
So and I think fundamentally, and Jim has called it out, that business is very deeply connected to the underlying Ag and Cementitious business. So that combination of delivery certainly has been impressive this year, and we look for more positive momentum even as we get into '26.
Your next question comes from the line of Kathryn Thompson with Thompson Research Group.
I know a lot of focus on data centers and reindustrialization, which is certainly driving demand. And after having gone to a data center construction site, it is pretty staggering the demand that is driving wide rate projects. But that said, infrastructure is still a very important part of your business overall. And there's been a little bit of lack of visibility with kind of U.S. in terms of government funding right now with the government shutdown. But it still looks like that infrastructure funding is still chugging along just fine.
But we want to make sure that, that is the correct interpretation. More importantly, what is your level of visibility on your roads business and the process prospects for the Highway Bill reauthorization in 2026.
Kathryn, yes, maybe just you're right, infrastructure for us is our biggest segment, right? It's a segment which really drives CRH across both Americas and International. And maybe just to put it in some context, in particular, our roads business. As you know, we're the largest road paver in the U.S. with in excess of 50 million tons of asphalt per annum across 43 states and as I said earlier. It's actually most predictable and recurring revenue stream that we have, and it's a highly attractive business.
Now there's still very significant runway for growth in the business as we look into '26. With still 60% of the IIJA funds yet to be spent. And as I said earlier, the very healthy local state budgets. It's a key part of our connected portfolio in the Americas, right? In a typical year, to give a bit of scale, we do about 4,000 paving jobs per year. They typically last about 90 to 120 days, right? And with the connected nature of the portfolio, that paving activity really pulls through the highest quality and the highest value and the highest margin aggregates through our connected portfolio.
We called it out recently actually on the Investor Day by actually not just producing Ags. We have that ability to take what is kind of an indicative $10 per cash profit per ton and turn that into $60 by turning it into asphalt -- adding liquid asphalt and indeed paving it. And it's a real multiplier for profits, cash and returns for us. It's also less capital intensive with higher returns. And ultimately, in terms of the growth and the inorganic side gives us real optionality for where we deploy capital.
Now we're kind of what 5, 6 weeks out from the year-end. We've got pretty good visibility into 2026 in terms of our bidding on the activity levels, and that's what gives us that confidence in terms of guiding on infrastructure at '26. But maybe, Randy, on specifically what we're thinking around maybe the new highway bill as well. Can you give some comment on that?
Yes. I guess, first, just -- bill, on Jim's point, the IIJA, as you know, Kathryn, about 60% of that funding has yet to really hit the street. So -- and we called that out. And I think we said early on was a 5-year piece of legislation was going to take 7 years to deploy. It's kind of how it is rolling out currently, which is really no different than any other legislation prior to that, just kind of how things have work from a federal to the state level. So our bidding activity is up. So we're encouraged by that. I think the other thing is it's also encouraging to see the size and the complexity of projects. So to me, that speaks to long-term confidence at the state level about deploying capital in those type of projects.
So I guess -- but to your point about what's next, I guess, early conversations are positive. So it's great to hear from the Chairman of the House T&I Committee from Secretary Duffy from both sides of the aisle in terms of underlying commitment to a new piece of legislation. So the conversations are beginning and so far positive. I think probably the most encouraging thing would be this mindset of moving more dollars to roads, highways and bridges. What that quantum looks like. I'm not sure, but it's encouraging to hear those kind of conversations on both sides of the aisles. And so we're actively participating with those conversations, and we'll see where it ends up. But certainly encouraged by early discussions. Thank you and good luck.
Your next question comes from the line of Michael Dudas with Vertical Research Partners.
Okay. Yes, good. So Jim, I just want to get your thoughts on the M&A pipeline as you're accelerating on your four connected platforms, where now or are you seeing some of the focus on the capital allocation towards M&A over the next 6 to 12 months?
Yes. Sure, Mike. Yes, listen, really pleased with the execution to date, right? $3.5 billion on 27 deals, the largest, which is Eco Material and maybe come back at that at the end, and maybe get Randy to talk about how that's going from an integration perspective and how it started, right? But a great start to the year, 27 deals and really reflects the continued successful execution of our growth strategy and our ability to deploy capital in growth markets across our key platforms.
And you said it in the question actually, we -- at this stage, we've built four growth platforms of scale, coast to coast across the U.S. in aggregates, cementitious, roads and water. It also reflects our ability to integrate. I mean, 27 deals year-to-date to be able to integrate those at pace and get early execution and delivery on synergies as well reflects kind of just that growth capability that we have. The pipeline at this stage into 2026 is good, right? And that, again, is really coming from a lot of the local relationships that we have across the 300 operating businesses across CRH.
And it's really, again, when you layer that kind of scale, the connected nature of the portfolio, it really gives us optionality as to where we choose to deploy capital going forward. And at the recent Investor Day, would have called out that on the medium term out to 2030, we estimate that we're going to generate $40 billion of financial capacity. And we're going to allocate that approximately 70% to the growth side, so growth CapEx and M&A and then 30% in terms of shareholder returns. So the consistent year in, year out ability to deploy capital in value-accretive acquisitions really highlights us as the kind of leading compounder of capital in the industry. But a great start to the year and good activity level across the full business, both the Americas and International into '26. But Randy, maybe on Eco?
On Eco, yes. Early days so far, but the integration is going really well. I think maybe when you stand back, we were excited about the opportunity before and even more so as we've got an opportunity to bring them into the CRH fold. I think I'd call out a couple of things. Obviously, it's a fantastic team, terrific leaders and organization from an operational standpoint, and a great brand, and we're going to continue to build off that brand.
I think from a cultural standpoint, a great deal of alignment, right? They're focused on ensuring their teams are safe. That's our #1 value within CRH, great to see. It's the ownership of those relationships, really deep local relationships, the importance of that, and that's in direct alignment with how we look at our local brands and how we go to market. But as we got inside, certainly, we're seeing things that we would continue to build off of. One, they have a terrific offering with current customers, the ability for us to integrate that to our cementitious business with Ash Grove is going to give us plenty of opportunities from a commercial standpoint. And remember, the FCMs are the fastest segment of the cementitious space. And so it was important for us to play there, and they deliver a lot of optionality for customers.
I think that's that I think I called it out in the opening remarks, the network that they've built. It gives us an additional 55 terminals across the U.S. close to 8,000 railcars to really extend our reach to our customer base, which is very important to provide high-quality product in a timely manner. And I think lastly, what they have done really well is drive innovation in this space. The customers that we're engaged with, whether it's on high-spec manufacturing or data centers, a focus on sustainability. They've done an incredible job of really advancing that in their overall offering. It's going to be a terrific combination with our scale.
So overall, excited as to where we are at this point in time. I think there's a tremendous amount of value for our business and overall shareholders and a great opportunity for us to continue to drive margins forward.
We have time for one last question, and that question comes from the line of Colin Sheridan with Davy.
My question is on the International Solutions business. Clearly, it's had an excellent Q3 in terms of the growth and good margin progress. But looking forward, I just wonder if there's any areas of that business you might think will provide opportunities for some further upside as we go into 2026.
Yes, listen, as you called out a really good quarter. Actually, really good year-to-date and building off a really strong 2024 as well. But year-to-date adjusted EBITDA and margin growth across the International Solutions business. It's an encouraging outlook, Colin, into 2026. And in fact, beyond it, I'd say, for the next 3 to 5 years across the international portfolio. And it's really recovering from what has been a challenging period, right? It has had a numerous headwinds, right? Whatever started out originally with Brexit, then we went into the pandemic, then the energy crisis and the war in Ukraine, right? And -- but what we're seeing is that Europe is more advanced in the kind of interest rate cycle, the cutting of interest rates, and that's coming through in terms of being more supportive of continued residential recovery. That together with good EU level and individual state level funding for infrastructure in our key markets is providing a very significant underpin in terms of base activity levels coming from infrastructure. .
We're also this year in our eighth consecutive year of price increases across the European business, and we're expecting further momentum on that into 2026 also. And in our case also, we would have taken on a lot of portfolio and self-help measures over the last number of years across the -- particularly the European portfolio. And as activity levels are beginning to recover, we're beginning to see really good leverage on the margin drop-through on that business. And you see that coming through on the quarter-on-quarter and year-on-year performance as well. And maybe finally, just in terms of Australia, right? Really, it's a little over 12 months at this stage. Good news, really good delivery on synergies ahead of our expectations and good positive momentum into 2026.
Thanks, Colin. Well, I think that brings us to the end of the questions today. But thank you all for your attention. And as always, if any of you have any follow-up questions, please feel free to contact our Investor Relations team. We look forward to talking to you all again in February next year when we will report our full year results for 2025. Thank you all, and have a good and safe day.
Thank you. Your conference call has now ended. You may now disconnect.
Financial data from CRH
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Sep '26 |
+/-
%
|
||
| Revenue | 38,959 38,959 |
6%
6%
100%
|
|
| - Direct Costs | 24,843 24,843 |
5%
5%
64%
|
|
| Gross Profit | 14,116 14,116 |
6%
6%
36%
|
|
| - Selling and Administrative Expenses | 8,608 8,608 |
5%
5%
22%
|
|
| - Research and Development Expense | - - |
-
-
|
|
| EBITDA | 7,737 7,737 |
6%
6%
20%
|
|
| - Depreciation and Amortization | 2,229 2,229 |
5%
5%
6%
|
|
| EBIT (Operating Income) EBIT | 5,508 5,508 |
7%
7%
14%
|
|
| Net Profit | 3,580 3,580 |
4%
4%
9%
|
|
In millions USD.
Don't miss a Thing! We will send you all news about CRH directly to your mailbox free of charge.
If you wish, we will send you an e-mail every morning with news on stocks of your portfolios.
CRH Stock News
Company Profile
CRH Plc manufactures and distributes building materials and products for the construction industry. It operates business through the following segments: Europe Heavyside, Lightside, and Distribution; Americas Materials and Products and Asia. The Europe Heavyside and Americas Materials segments produce and sell primary materials, including cement, aggregates, ready mixed concrete, asphalt, agricultural and chemical lime. The Europe Lightside segment is involved in the production and sale of architectural, structural concrete products, clay products, insulation products, fabricated & tempered glass products, construction accessories and the provision of inter related products and services to the construction sector. The Europe Distribution segment includes the businesses of builder's merchandising activities. The Americas Products segment manufactures and supplies construction products. The Asia segment is comprised of cement operations in Philippines, Northeast China and Southern India. The company was founded in 1970 and is headquartered in Rathfarnham, Ireland.
StocksGuide Premium
| Head office | Ireland |
| CEO | Mr. Mintern |
| Employees | 83,032 |
| Founded | 1949 |
| Website | www.crh.com |


