Business Overview and History

CRH plc (CRH) is a multinational building materials company that has established itself as a global leader in providing essential products and services for construction projects worldwide. With a diverse portfolio of products ranging from aggregates and cement to readymixed concrete and asphalt, CRH has built a strong reputation for delivering innovative solutions that address the evolving needs of its customers across infrastructure, non-residential, and residential markets.

Headquartered in Dublin, Ireland, CRH has a rich history that spans over 50 years. The company was formed in 1970 through the merger of Irish Cement Limited and Roadstone Limited, two prominent building materials companies in Ireland. CRH began as a supplier of basic building materials like cement and aggregates but has since evolved into a leading global provider of integrated building materials solutions.

In the 1970s and 1980s, CRH expanded its operations across Europe through a series of strategic acquisitions, establishing a strong foothold in markets outside of its home base in Ireland. The company's growth continued in the 1990s as it entered the United States market, further diversifying its geographic reach and product portfolio.

A key milestone for CRH came in 2000 when it acquired Britain's Ibstock Brick, making it the largest brick manufacturer in Europe. This deal significantly strengthened CRH's position in the building materials industry. The company faced a challenge in the late 2000s during the global financial crisis, which impacted construction activity and demand for its products. However, CRH navigated this period successfully by focusing on operational efficiency and prudent financial management.

In 2015, CRH made a major move by acquiring cement giant Lafarge's assets in the Philippines, expanding its footprint in the Asia-Pacific region. Today, CRH has grown into a truly global enterprise, with a presence in 28 countries and a workforce of approximately 80,000 employees.

CRH's strategic focus has been on building a diversified and vertically integrated business model that allows it to capitalize on the increasing demand for construction materials and services. The company's acquisition strategy has played a crucial role in its growth, with CRH completing over 1,200 acquisitions since its inception, including 800 in the United States alone. This inorganic expansion has enabled CRH to establish market-leading positions in North America, Europe, and Australia, solidifying its position as a global industry powerhouse.

Financial Snapshot

CRH's financial performance has been consistently strong, delivering industry-leading growth and profitability. In 2024, the company reported total revenues of $35.6 billion, a 2% increase from the previous year. This revenue growth was driven by resilient underlying demand across the company's key end-use markets, further commercial progress, and contributions from strategic acquisitions, partially offset by lower activity levels due to adverse weather and divestitures.

The company's adjusted EBITDA, a key profitability metric, increased by 12% to $6.9 billion in 2024, with a corresponding margin expansion of 180 basis points to 19.5%. This impressive financial performance was underpinned by CRH's relentless focus on operational excellence, disciplined cost control, and the successful integration of acquired businesses.

For the full year 2024, CRH reported net income of $3.5 billion, operating cash flow of $5.0 billion, and free cash flow of $2.41 billion. In the most recent quarter (Q4 2024), the company generated revenue of $8.87 billion and net income of $699 million.

Liquidity

CRH's balance sheet remains robust, with a net debt to adjusted EBITDA ratio of 1.5x as of the end of 2024. The company's strong cash flow generation, which amounted to $5.0 billion in operating cash flow during the year, has provided the financial flexibility to fund strategic growth initiatives, including $5 billion in acquisitions, while also returning significant capital to shareholders through dividends and share buybacks.

As of December 31, 2024, CRH had total debt of $15.31 billion and total equity of $22.85 billion, resulting in a Debt/Equity ratio of 0.71. The company's liquidity position was strong, with cash and cash equivalents of $3.72 billion, restricted cash of $39 million, and $3.64 billion of undrawn committed credit facilities available. CRH's current ratio stood at 1.37, while its quick ratio was 0.91, indicating a solid ability to meet short-term obligations.

Diversified End-Market Exposure and Secular Growth Tailwinds

CRH's business model is designed to capitalize on the strong demand drivers across its three primary end-markets: infrastructure, non-residential, and residential construction. In 2024, infrastructure accounted for approximately 35% of the company's revenues, non-residential contributed 30%, and residential construction made up the remaining 35%.

The infrastructure segment, which includes highways, streets, roads, and bridges, has been bolstered by significant public investment programs, such as the Infrastructure Investment and Jobs Act (IIJA) in the United States. The IIJA is expected to provide $350 billion in federal highway funding over the next five years, with only one-third of these funds deployed so far, indicating a substantial runway for continued growth.

In the non-residential segment, CRH is well-positioned to benefit from the ongoing trend of onshoring and reindustrialization, as well as the increasing demand for critical infrastructure projects in the areas of water, energy, and telecommunications. These secular growth tailwinds are expected to drive robust activity in the commercial and industrial construction markets.

While the residential sector has faced some near-term headwinds due to affordability constraints, CRH remains optimistic about the long-term fundamentals of this market. The company's diverse geographic footprint, with a strong presence in high-growth regions like the southern and western United States, as well as Central and Eastern Europe, positions it to capitalize on the structural demand for new housing and repair and remodel activity.

Disciplined Capital Allocation and Synergistic Acquisitions

CRH's strategic approach to capital allocation has been a key driver of its consistent financial performance and industry-leading returns. The company has a proven track record of identifying and integrating value-accretive acquisitions, with a focus on synergistic opportunities that strengthen its geographic and product portfolios.

In 2024, CRH invested $5 billion in 40 strategic acquisitions, including the $2.1 billion acquisition of a portfolio of cement and readymixed concrete operations in Texas, as well as the $787 million acquisition of a majority stake in Adbri, a leading building materials business in Australia. These transactions have expanded CRH's footprint in high-growth markets and enhanced its ability to provide integrated, customer-centric solutions.

The company's disciplined approach to capital allocation is further reflected in its robust cash flow generation and strong balance sheet, which provide the financial flexibility to fund both organic growth initiatives and strategic M&A, while also returning capital to shareholders through a consistent dividend policy and an ongoing share buyback program.

Business Segments and Geographic Performance

CRH's business is organized into three main reportable segments: Americas Materials Solutions, Americas Building Solutions, and International Solutions.

The Americas Materials Solutions segment, which accounted for approximately 45% of CRH's total revenues and 54% of its Adjusted EBITDA in 2024, is a leading provider of building materials for the construction and maintenance of public infrastructure and commercial and residential buildings in North America. This segment's revenue sources were evenly split between infrastructure (50%), non-residential construction (30%), and residential construction (20%), with new-build construction making up about 60% of segment revenues and the remaining 40% coming from repair and remodel activity.

The Americas Building Solutions segment, contributing 20% of CRH's total revenues and 20% of its Adjusted EBITDA in 2024, manufactures, supplies, and delivers high-quality, value-added, innovative solutions for the built environment in communities across North America. Approximately 65% of segment revenues came from residential, 25% from non-residential, and 10% from infrastructure markets, with repair and remodel activity making up around 60% of segment revenues.

The International Solutions segment, accounting for 35% of CRH's total revenues and 26% of its Adjusted EBITDA in 2024, is a leading provider of integrated building solutions primarily across Europe and Australia. The segment's revenue sources were split fairly evenly between infrastructure (35%), residential (35%), and non-residential (30%) construction, with new-build construction making up around 70% of segment revenues and the remaining 30% coming from repair and remodel activity.

In terms of geographic performance, approximately 72% of net income and 74% of Adjusted EBITDA was generated in North America in 2024. The United States is expected to be a key driver of future growth due to continued economic expansion, a growing population, and significant public investment in construction. The remaining 28% of net income and 26% of Adjusted EBITDA was generated by the International Division, which benefits from strong economic and construction growth prospects as well as recurring repair and remodel demand.

Positioning for Continued Growth and Value Creation

As CRH navigates the evolving construction market landscape, the company is well-positioned to capitalize on the numerous growth opportunities ahead. The company's unmatched scale, diversified business model, and customer-centric solutions strategy have been the key drivers of its consistent outperformance, and management remains confident in the company's ability to deliver another year of strong financial results in 2025.

CRH's financial guidance for 2025 reflects this optimism, with the company projecting adjusted EBITDA in the range of $7.3 billion to $7.7 billion, net income between $3.7 billion and $4.1 billion, and diluted earnings per share of $5.34 to $5.80. These targets underscore the company's confidence in its ability to navigate the evolving market conditions and continue its track record of delivering industry-leading growth and value creation for its shareholders.

The 2025 guidance assumes normal weather patterns for the remainder of the year and no major dislocations in the political or macroeconomic environment. It includes a positive net scope contribution of around $280 million from acquisitions and divestitures, as well as a $50 million currency exchange rate headwind compared to current exchange rates. The guidance also assumes a more normal level of land/asset sales compared to the elevated levels seen in 2024.

Conclusion

CRH's status as a global leader in the building materials industry is a testament to its strategic vision, disciplined execution, and unwavering commitment to innovation. With a diversified portfolio of essential products and services, a strong balance sheet, and a proven track record of value-accretive acquisitions, the company is poised to capitalize on the robust demand across its end-markets and deliver sustained growth and profitability for its shareholders in the years to come.

The company's strong performance in 2024, with revenues of $35.6 billion and adjusted EBITDA of $6.9 billion, along with its positive outlook for 2025, demonstrates CRH's ability to navigate challenging market conditions and deliver consistent results. As CRH continues to focus on its core strengths and pursue strategic growth opportunities, it is well-positioned to maintain its leadership position in the global building materials industry and create long-term value for its stakeholders.