Executive Summary / Key Takeaways

• CRH's differentiated customer-connected solutions strategy, integrating materials, products, and services, drives resilience and consistent performance across economic and weather cycles.
• The company delivered a good start to 2025, with Q1 Adjusted EBITDA increasing 11% year-over-year to $495 million, demonstrating operational efficiency and pricing power despite adverse weather impacts.
• CRH reaffirmed its full-year 2025 guidance, projecting Adjusted EBITDA between $7.3 billion and $7.7 billion, underpinned by positive demand outlook in infrastructure and key non-residential segments, and resilient repair and remodel activity.
• Disciplined capital allocation, including $0.6 billion invested in eight value-accretive bolt-on acquisitions in Q1 2025 and continued share buybacks ($0.3 billion in Q1), supports strategic growth in higher-growth markets and enhances shareholder returns.
• CRH's unmatched scale, market leadership in North America and Europe, and focus on innovation and technology provide significant competitive advantages and position the company to capitalize on secular growth tailwinds like infrastructure investment and re-industrialization.

Building a Foundation of Resilience: The CRH Story

CRH public limited company, founded in 1970, has evolved significantly from its origins as a supplier of base materials. Over the past decade, the company has strategically transformed into a leading provider of integrated building material solutions, focused on solving complex construction challenges for its customers. This evolution is encapsulated in its differentiated customer-connected solutions strategy, which weaves together essential materials, value-added products, and construction services across the entire construction value chain. This approach aims to simplify, enhance safety, and improve sustainability in construction projects, driving repeat business and delivering a more consistent performance profile.

Operating across 28 countries with market leadership positions in North America, Europe, and Australia, CRH leverages its unmatched scale and breadth – described by management as "simply unmatched and impossible to replicate" – to serve a diverse range of customers, from large infrastructure developers to residential builders. This broad geographic and end-market exposure, coupled with its integrated model, provides a degree of resilience that mitigates the impact of localized economic cycles and adverse weather events, a key challenge in the construction industry.

A core element of CRH's differentiation lies in its ability to integrate design skills, technical expertise, and materials technology into its offerings. This goes beyond merely supplying products; it involves providing bespoke solutions that meet the increasingly complex needs of modern construction. For instance, in its Road Solutions business, CRH leverages its extensive asphalt storage network (capable of storing approximately half of its annual consumption) and technical capabilities to blend materials to specific state DOT specifications, creating a competitive advantage. While specific quantifiable performance metrics for all technological differentiators are not detailed, the strategic intent is clear: to enhance product performance, improve installation efficiency, and contribute to more sustainable outcomes. This focus on innovation and technology, including investments in increased automation and optimizing energy usage, is aimed at driving operational efficiencies, reducing costs, and enhancing the company's sustainability performance, further solidifying its competitive moat against more traditional materials suppliers.

The competitive landscape is characterized by large global players like CEMEX (CX) and Holcim (HOLN), alongside regional leaders such as Vulcan Materials (VMC) and Martin Marietta Materials (MLM) in the U.S. While competitors may hold advantages in specific areas like cost leadership in certain emerging markets (CEMEX) or operational efficiency from extensive U.S. quarry networks (Vulcan), CRH's strategic differentiation lies in its integrated solutions model and unmatched scale across key developed markets. This allows CRH to capture higher-margin projects and provides multiple avenues for growth, including bolt-on acquisitions that enhance its existing platforms. The company's active portfolio management, involving significant acquisitions and divestitures over the past decade, underscores its commitment to reallocating capital to higher-growth, higher-return opportunities, structurally reshaping the business to be less cyclical and capital intensive.

Performance and Strategic Execution

CRH's strategy of integration and disciplined capital allocation has translated into a strong track record of financial delivery. The company achieved its 11th consecutive year of margin improvement in 2024, a testament to its relentless focus on continuous business improvement, operational excellence, and disciplined cost control, even amidst inflationary pressures.

The first quarter of 2025 provided a clear illustration of the resilience inherent in CRH's model. Despite unfavorable weather impacting activity levels across many regions, total revenues increased 3% year-over-year to $6.8 billion. While total cost of revenues increased at a slightly faster pace (4%), leading to a modest decrease in gross profit margin, the company's ability to manage costs and leverage pricing power resulted in a significant 11% increase in Adjusted EBITDA, reaching $495 million. This performance drove a 50 basis point expansion in the Adjusted EBITDA margin to 7.3% compared to the prior year period. The reported net loss of $98 million in Q1 2025, compared to net income in Q1 2024, was primarily attributed to the non-recurrence of gains from prior year divestitures and unrealized investment gains, rather than a deterioration in underlying operating performance.

Segment-wise, Americas Materials Solutions saw revenues increase 2%, with Adjusted EBITDA well ahead of the prior year, driven by pricing improvements (aggregates +8%, cement +4%) and operational efficiencies, despite weather-impacted volumes. Americas Building Solutions experienced a 1% revenue decrease, with Adjusted EBITDA down 7%, as adverse weather and subdued residential activity weighed on results, although Building Infrastructure Solutions remained strong, supported by water and energy markets. International Solutions delivered a robust 7% revenue increase and a 22% jump in Adjusted EBITDA, benefiting from pricing progress, operational efficiencies, and contributions from recent acquisitions like Adbri (ABC) in Australia, offsetting weather impacts in some regions.

Financially, CRH maintains a strong and flexible balance sheet. While Net Debt increased to $12.7 billion at March 31, 2025, from $10.5 billion at December 31, 2024, this primarily reflects the seasonal net cash outflow typical for the first quarter, coupled with investments in acquisitions and share buybacks.

The company's primary sources of liquidity – operating cash flows, existing cash balances ($3.4 billion at March 31, 2025), commercial paper programs, and committed credit lines ($3.9 billion undrawn facilities, extended to May 2030) – are expected to be sufficient to meet its obligations and fund future growth. CRH's disciplined capital allocation continued in Q1 2025 with $0.6 billion invested in eight bolt-on acquisitions, strategically expanding its footprint and enhancing its solutions offering in areas like asphalt, paving, and critical infrastructure. The company also returned $0.3 billion to shareholders through its ongoing share buyback program and declared a quarterly dividend of $0.37 per share, a 6% increase year-over-year, reflecting confidence in its financial position and future prospects.

Outlook and Risks

Looking ahead, CRH reaffirmed its financial guidance for 2025, projecting full-year Adjusted EBITDA between $7.3 billion and $7.7 billion, Net Income between $3.7 billion and $4.1 billion, and diluted earnings per share between $5.34 and $5.80. This outlook assumes normal seasonal weather patterns and no major dislocations in the political or macroeconomic environment.

The positive outlook is underpinned by expected positive underlying demand across CRH's key end markets. Infrastructure is anticipated to remain robust, supported by the continued rollout of significant public investment programs in both the U.S. (where only one-third of IIJA highway funding has been deployed) and internationally (backed by government and EU funding). Key non-residential segments are also expected to benefit from continued re-industrialization and onshoring activity, particularly in manufacturing and data centers. While the residential new-build segment in the U.S. is expected to remain subdued, the repair and remodel market is anticipated to stay resilient. International residential activity is expected to stabilize, with structural fundamentals supporting a gradual recovery. Management expects positive pricing momentum to continue across markets, supported by disciplined commercial management and the value proposition of its differentiated solutions.

Despite the positive outlook, CRH faces inherent risks. Macroeconomic uncertainty remains fluid, potentially impacting demand and foreign exchange rates. The construction industry is cyclical and sensitive to interest rates and economic conditions. Inflationary pressures on labor, raw materials, and energy costs persist, requiring continued focus on pricing and operational efficiency. Adverse weather conditions can disrupt operations, as seen in Q1 2025. Political uncertainty and geopolitical conflicts also pose potential risks. However, CRH's diversified portfolio, strong balance sheet, experienced management team, and focus on operational excellence are key mitigants against these challenges. The company's strategic positioning in attractive, higher-growth markets with secular tailwinds provides a strong foundation for navigating potential headwinds and capitalizing on opportunities.

Conclusion

CRH's investment thesis is compelling, centered on its transformation into a resilient, high-performing leader in the global building materials sector. The company's differentiated customer-connected solutions strategy, built over decades, provides a significant competitive advantage, enabling it to deliver consistent growth and margin expansion even in challenging market conditions. Supported by unmatched scale, market leadership in key regions, and a disciplined approach to capital allocation focused on value-accretive M&A and high-return organic investments, CRH is well-positioned to capitalize on robust infrastructure spending, re-industrialization trends, and the long-term fundamentals of residential construction. While macroeconomic uncertainty and cost inflation present ongoing challenges, CRH's integrated model, operational excellence, and strong financial position provide a solid foundation for continued value creation for shareholders, as reflected in its reaffirmed 2025 guidance and commitment to returning capital.