CRH releases Q2 2024 results

Albert Manifold, Chief Executive, said:

"We are pleased to report another period of further profit growth and margin expansion for CRH. The execution of our differentiated solutions strategy continues to deliver robust financial performance, while the strength of our balance sheet and relentless focus on the disciplined allocation of our capital enables us to capitalise on the opportunities we see for further growth and value creation. Reflecting the strength of our financial performance, the positive underlying momentum in our business as well as the positive contribution from recent portfolio activity, we are raising our guidance and remain well positioned to deliver another record year in 2024.”

Performance overview

Total revenues of US$9.7 billion (Q2 2023: US$9.7 billion) in the three months ended 30 June 2024 were 1% behind the prior year, with organic total revenues also 1% behind. Positive pricing and contributions from acquisitions partly offset the impact of lower activity levels due to unfavourable weather in certain regions and divestitures, primarily phases one and two of the European Lime operations. Net income of US$1.3 billion (Q2 2023: US$1.2 billion) was 8% ahead of the prior year reflecting strong operating performance. Adjusted EBITDA of US$2.3 billion (Q2 2023: US$2.0 billion) was 12% ahead as a result of the continued delivery of CRH's integrated solutions strategy, strong commercial progress, ongoing cost control and further operational efficiencies. Organic Adjusted EBITDA was 11% ahead of Q2 2023. CRH’s net income margin of 13.6% (Q2 2023: 12.5%) and Adjusted EBITDA margin of 23.4% (Q2 2023: 20.7%) were both ahead of the comparable prior year period. CRH's basic Earnings Per Share (EPS) for Q2 2024 was US$1.89 (Q2 2023: US$1.63).

• Americas Materials Solutions' total revenues were 6% ahead of Q2 2023, as pricing progress across all lines of business and contributions from recent acquisitions offset the impact of lower activity in certain markets due to unfavourable weather. Adjusted EBITDA was well ahead supported by pricing improvements, operational efficiencies and cost control along with gains on the disposal of certain land assets.
• Americas Building Solutions' total revenues were 1% behind Q2 2023 as challenging weather and subdued new-build residential demand were partially offset by contributions from acquisitions. Adjusted EBITDA was in line with the prior year supported by continued pricing discipline and operational efficiencies along with the positive contribution from acquisitions.
• Europe Materials Solutions' total revenues were 8% behind Q2 2023 as activity levels were impacted by the divestiture of the European Lime operations, poor weather and subdued demand in certain markets. Adjusted EBITDA was 3% behind, with organic Adjusted EBITDA* 2% ahead as a continued focus on cost management and operational efficiencies as well as good commercial management offset lower activity levels.
• Europe Building Solutions' total revenues were 7% behind Q2 2023, impacted by subdued demand in new-build residential markets. Adjusted EBITDA was 3% behind as a result of lower activity levels, partially offset by cost saving actions.

Acquisitions and divestitures

In the three months ended 30 June 2024, CRH completed eight acquisitions for a total consideration of US$0.4 billion, compared with US$nil million in the same period of 2023. Americas Materials Solutions completed five acquisitions, Europe Materials Solutions completed two acquisitions, while Americas Building Solutions completed one acquisition.

Overall, for the six months ended 30 June 2024, CRH completed 16 acquisitions for a total consideration of US$2.6 billion, compared with US$0.2 billion in the first half of the prior year. The largest acquisition, which was completed in the first quarter of 2024, was a portfolio of cement and readymixed concrete assets and operations in Texas by Americas Materials Solutions for a total consideration of US$2.1 billion.

On 1 July 2024, CRH completed the acquisition of a majority stake in Adbri Ltd (Adbri). Adbri is an attractive business with high-quality assets and leading market positions in Australia that complements CRH’s core competencies in cement, concrete and aggregates and creates additional opportunities for growth and development for CRH's existing Australian business.

With respect to divestitures, in the three months ended 30 June 2024, cash proceeds from divestitures and disposals from long-lived assets were US$0.4 billion. The largest divestiture related to Americas Materials Solutions' disposal of certain cement, aggregates and readymixed concrete operations in Quebec, Canada.

For the six months ended 30 June 2024, CRH realised cash proceeds from divestitures and disposals of long-lived assets of US$1.1 billion, primarily related to the divestiture of phases one and two of the European Lime operations which completed in Q1 2024. The remaining phase, consisting of Lime operations in Poland, is expected to complete in the second half of 2024. No divestitures occurred in the first half of the prior year.

Capital allocation

In line with the company's policy of consistent long-term dividend growth, the Board has declared a new quarterly dividend of US$0.35 per share. This represents an annualised increase of 5% on the prior year. The dividend will be paid wholly in cash on 25 September 2024, to shareholders registered at the close of business on 23 August 2024. The ex-dividend date will be 23 August 2024.

As part of its ongoing share buyback programme CRH repurchased approximately four million shares in Q2 2024 for a total consideration of $0.3 billion, which brings the total for the first half of the year to nine million shares repurchased for a total consideration of US$0.7 billion. On 7 August 2024, the latest tranche of the share buyback programme was completed, bringing the year-to-date repurchases to US$0.9 billion. CRH is pleased to announce that it is commencing an additional US$0.3 billion tranche to be completed no later than 6 November 2024. CRH will continue to assess its share buyback programme for the remainder of 2024 with further updates on a quarterly basis.

Innovation and sustainability

CRH believes the transition to a more sustainable built environment represents a significant commercial opportunity for the company. Its strategy transforms essential materials into value-added and innovative solutions to address three global challenges of water, circularity and decarbonisation. It continues to enhance its capabilities through investment in technologies and acquisitions that enable it to capture further value and accelerate growth across CRH. For example, in its water solutions business it continues to build on its recent acquisition of Hydro International, expanding its water infrastructure products, services, and data solutions.

2024 full year outlook

CRH is pleased to announce that it is raising its previous guidance for 2024, reflecting the strength of its financial performance, the positive underlying momentum in its business as well as the positive contribution from recent portfolio activity. Its operations in North America are expected to benefit from significant infrastructure activity and increased investment in key non-residential segments, while in Europe, CRH expects good underlying demand in infrastructure and key non-residential markets, further supported by disciplined cost control. Residential construction, particularly new-build activity, is expected to remain subdued across its markets in the near term. Assuming normal seasonal weather patterns and no major dislocations in the macroeconomic environment, CRH remains well positioned to deliver another record year in 2024.

Americas Materials Solutions’ total revenues, including the acquisition of cement and readymixed concrete assets in Texas which closed in February 2024, were 6% ahead of the second quarter of 2023. Organic total revenues* were 4% ahead driven by price increases across all lines of business.

In Essential Materials, total revenues increased by 5% supported by pricing growth in both aggregates and cement, ahead by 12% and 8% respectively. Aggregates and cement volumes declined by 3% and 2%, respectively, impacted by adverse weather conditions and subdued new-build residential demand.

In Road Solutions, total revenues increased by 6% driven by improved pricing in all lines of business and continued funding support relating to the Infrastructure Investment and Jobs Act (IIJA). Paving and construction revenue increased by 8% with good growth in the South and West regions. Asphalt volumes and pricing increased by 1% and 4%, respectively, while readymixed concrete prices increased by 9%, offsetting a decline in volumes of 6%. Construction backlogs were ahead of the prior year supported by positive momentum in bidding activity.

Second quarter 2024 Adjusted EBITDA for Americas Materials Solutions of $1.2 billion was 28% ahead of the prior year as cost management, pricing initiatives and operational efficiencies along with a gain on certain land asset sales, mitigated the impact of higher labor and raw materials costs. Organic Adjusted EBITDA* was 25% ahead of the second quarter of 2023. Adjusted EBITDA margin increased by 460 basis points (bps).

For the full press release click here.

Read the article online at: https://www.worldcement.com/europe-cis/08082024/crh-releases-q2-2024-results/