Q4 2024 Earnings Summary
- CRH is well-positioned to benefit from robust infrastructure spending in the U.S., with only one-third of the IIJA highway funds deployed so far, providing significant runway for growth. The company expects U.S. infrastructure demand to be underpinned by continued rollout of state and federal funding, with backlogs showing positive momentum.
- CRH has a strong track record of margin expansion and sees further upside potential. In 2024, the company achieved its 11th consecutive year of margin improvement, with margins up 180 basis points, and believes there is still room for further margin expansion through continuous business improvement and operational excellence.
- CRH has significant financial capacity for M&A and a full pipeline of opportunities for 2025. With unmatched scale and financial capacity, the company invested $5 billion in 40 acquisitions in 2024 and sees 2025 as an opportunity-rich environment to further grow and drive superior returns for shareholders.
- Inflationary cost pressures are expected to continue into 2025, with mid-single-digit cost increases in labor, raw materials, and subcontractor costs, which may pressure margins if CRH cannot sufficiently pass these costs onto customers.
- Potential uncertainties in U.S. federal infrastructure funding due to recent elections could impact the rollout of federal infrastructure projects, which may affect CRH's revenue from this sector, despite strong state funding in key markets like Texas and Florida.
- CRH's 2024 earnings included higher-than-normal gains from land or long-lived asset sales, which are not expected to repeat in 2025, potentially leading to lower profits compared to the prior year.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenues | Q3 2024: +4% YoY; Q4 2024: lower quarter‐to‐quarter level | In Q3 2024, revenues rose 4% (from approximately $10.128 billion to $10.515 billion) driven by acquisitions, improved pricing, and operational efficiencies that built on the strong demand seen in previous periods. In Q4 2024, the reported total revenues of $8,870 million likely reflect seasonal factors and timing differences compared to Q3, even though the underlying drivers continued from earlier results. |
Gross Profit | Q3 2024: +8% YoY increase (approx. +$0.3 billion) | The Q3 2024 gross profit increased to $4.1 billion from about $3.8 billion in Q3 2023 due to revenue growth combined with effective cost management – notably, revenue rose by 4% while total cost of revenues only increased by 1%, and there was a margin expansion of 140 basis points. These improvements set the stage for the Q4 2024 figure of $3,160 million, which, while lower than Q3, reflects seasonal adjustments. |
Operating Income | Q3 2024: Increased from $1.788 billion to $1.964 billion; Q4 2024: Lower quarterly figure | In Q3 2024, operating income improved by approximately $176 million (around 10% increase YoY) driven by strong revenue growth, cost control, and notable gains on asset disposals (e.g. $89 million gains vs. $15 million previously). The Q4 2024 operating income of $1,104 million is lower as a quarterly figure, likely reflecting seasonal impacts and timing differences relative to the nine‐month results. |
Net Income | Q3 2024: +5% YoY increase (from $1.3 billion to $1.4 billion); Q4 2024: Lower quarterly figure | Net income in Q3 2024 increased by 5%, reaching $1.4 billion compared to $1.3 billion in the prior year, primarily due to a higher gross profit, gains on asset disposals, and positive pricing actions – partially offset by increased SG&A, interest, and tax expenses. The Q4 2024 net income of $709 million is lower on a quarterly basis, reflecting both seasonality and the continuation of cost pressures observed earlier. |
Net Cash Provided by Operating Activities | Nine-month period Q3 2024: Decrease of $0.3 billion; Q4 2024: $2,730 million (quarterly) | For the nine months ended September 30, 2024, net cash from operations declined by $0.3 billion to $2.3 billion mainly due to increased working capital outflows, despite higher net income. The Q4 2024 figure of $2,730 million indicates robust operating cash generation in that quarter, reinforcing strong fundamentals even though it reflects a mix of seasonal timing and operational efficiency improvements. |
Cash and Cash Equivalents | Q3 2024: Net decrease of $3,310 million; Q4 2024: $3,720 million | During the nine months ending September 30, 2024, cash and cash equivalents fell by $3,310 million (from $6,390 million to $3,080 million) as a result of substantial investing outflows (notably a $3,853 million increase in net acquisitions) and significant share repurchases and dividend payouts. The Q4 2024 end balance of $3,720 million continues to reflect the heavy cash usage on investing and financing activities observed in prior periods, adjusted by ongoing operating cash flows. |
Total Assets | Q3 2024: Increased by approximately $3.7 billion (from $47.5 to $51.2 billion) | Total assets expanded significantly in Q3 2024, rising to $51.2 billion from $47.5 billion due mainly to $4.6 billion of value-accretive M&A activity, which increased both goodwill (+$1.7 billion) and PP&E (+$3.4 billion), along with higher accounts receivable and inventory balances. The Q4 2024 total assets of $50,613 million suggest slight adjustments following seasonality and normal depreciation, building on the prior period’s growth. |
Total Liabilities | Q3 2024: Increased by around $3.07 billion (from $24,983 to $28,055 million) | In Q3 2024, total liabilities rose due to increases in long-term debt (from $9,535 million to $10,672 million) and the current portion of long-term debt (rising from $1,860 million to $3,218 million), related to new borrowings for acquisitions. The Q4 2024 figure of $27,763 million reflects a slight moderation but remains elevated compared to previous periods due to the company’s continued strategic financing activities. |
Shareholders’ Equity | Q3 2024: Increased by $1,021 million (from $20,854 to $21,875 million) | The shareholders’ equity increased in Q3 2024 by $1,021 million driven by robust net income ($2,789 million over nine months) and other comprehensive income (notably +$132 million from currency adjustments), even after accounting for dividends ($719 million) and share repurchases ($1,045 million). The Q4 2024 balance of $21,607 million shows a continuation of these effects, with minor adjustments due to ongoing share repurchase programs and operating results relative to prior periods. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Adjusted EBITDA | FY 2025 | $6.87B–$6.97B | $7.3B–$7.7B | raised |
Net Income | FY 2025 | $3.78B–$3.85B | $3.7B–$4.1B | raised |
EPS | FY 2025 | $5.45–$5.55 | $5.34–$5.80 | raised |
Aggregates Volume Growth | FY 2025 | no prior guidance | low single-digit range | no prior guidance |
Aggregates Pricing Growth | FY 2025 | no prior guidance | mid- to high single-digit range | no prior guidance |
Cement Volume Growth | FY 2025 | no prior guidance | low single-digit range | no prior guidance |
Cement Pricing Growth | FY 2025 | no prior guidance | mid-single-digit range | no prior guidance |
Net Debt to Adjusted EBITDA Ratio | FY 2024 | $1.6x | no current guidance | no current guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Infrastructure Spending and Government Support | Discussed consistently across Q1–Q3 2024 with emphasis on the IIJA, strong bipartisan support, and significant unspent funds indicating a large funding runway. | Q4 2024 reaffirmed robust state and federal funding with only one‐third of IIJA highway funds deployed, and highlighted bipartisan backing and strategic positioning in key states. | Sentiment remains highly positive with consistent recognition of strong, long‐term funding opportunities and a slight increased focus on the deployment pace. |
Margin Expansion and Operational Efficiency | Across Q1–Q3 2024, margin expansion was noted through disciplined cost control and synergies from integrated operations; Q1 reported modest improvements , Q2 saw significant basis point gains , , and Q3 cited strong improvements. | Q4 2024 reported a 180 basis point margin improvement and marked the 11th consecutive year of margin expansion, driven by cost control, operational efficiencies, and portfolio management. | Consistent upward trend in margins with an enhanced focus on operational efficiency, indicating robust performance amidst competitive pressures. |
Strategic M&A and Acquisition Pipeline | Mentioned throughout Q1–Q3 2024 with solid deal flow and a strong pipeline; Q1 detailed $4B of deals with integrated acquisitions , Q2 noted significant capital allocation and past repositioning , and Q3 shared recent deals. | Q4 2024 emphasized record M&A activity with $5 billion spent on 40 acquisitions and a robust pipeline for 2025, enabling strategic positioning in key markets and sectors. | Accelerating momentum in M&A activity with increased deal sizes and frequency, reflecting a proactive approach to growth and value creation moving forward. |
Inflationary and Cost Pressures | Q1–Q3 2024 consistently acknowledged ongoing mid-single-digit inflation in labor, raw materials, subcontractor costs, and energy price moderation; companies responded with pricing adjustments and cost control. | Q4 2024 reiterated mid-single-digit cost increases forecast for 2025 while maintaining strong pricing momentum to offset these pressures, confirming the inflationary environment remains a challenge. | Steady challenges from inflation persist but are being effectively managed through strong pricing strategies and cost control measures, keeping overall sentiment cautiously optimistic. |
Demand, Volume Trends, and Weather Impact | In Q1–Q3 2024, demand was driven by robust infrastructure and nonresidential activity, with volumes modestly impacted by adverse weather and some regional fluctuations; discussions in Q1 , Q2 , and Q3. | Q4 2024 highlighted resilient key market demand (especially infrastructure and nonresidential), with volumes showing slight declines partly due to weather, yet pricing increases helped to offset volume impacts. | Resilient demand trends continue despite weather-related volume variability, with strong pricing momentum sustaining overall performance. |
Integrated and Differentiated Solutions Strategy | A central theme in Q1–Q3 2024, where the strategy was credited for revenue growth, pricing momentum, and successful integration of acquisitions; noted in Q1 , Q2 , and Q3. | Q4 2024 reinforced the strategy as key to the company’s success—with emphasis on a connected portfolio, resulting in 11 consecutive years of margin improvement and double-digit profit growth. | Continued strong endorsement of the integrated approach, proving essential for sustained performance and competitive differentiation. |
Pricing Power and Mix Adjustments | Consistently mentioned in Q1–Q3 2024 as driving performance through favorable aggregate and cement pricing increases and strategic mix adjustments; Q1 details , Q2 noted robust price increases , Q3 highlighted strong pricing (10%–9%). | Q4 2024 reiterated strong pricing power, with aggregates up 10% and cement up 8%, alongside effective mix adjustments that support margin improvements. | Consistent pricing strength continues to drive results, with mix adjustments ensuring geographic and product-line variations are favorably managed. |
Government Funding Uncertainties | Although Q1 highlighted robust funding and Q3 emphasized long-term bipartisan support with a significant portion of funding still unspent , Q2 provided less specific discussion. | Q4 2024 underscored that government funding remains solid with bipartisan support and strategic deployment, dismissing major uncertainties as key funds remain available. | Stable and optimistic sentiment as uncertainties are minimal due to consistent bipartisan funding support and clear deployment strategies. |
European Market Dynamics and Reshoring Trends | Discussed across Q1–Q3 2024: Q1 noted strong EU and government funding with significant reshoring influence , Q2 reinforced robust EU funding and onshoring in nonresidential sectors , and Q3 detailed recovery signs in both Europe and the Americas. | Q4 2024 continued to see steady European market dynamics with signs of stabilization in residential and infrastructure activity, while reshoring trends in the Americas support nonresidential recovery. | Steady progress in Europe and favorable reshoring trends in the Americas, indicating a gradual market recovery and reinforcing long-term growth prospects. |
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2025 Outlook and Guidance
Q: Can you give more color on 2025 outlook?
A: Management is positive about 2025, expecting another year of progress and growth for CRH . Many building blocks for growth and margin expansion are in place . The positive market backdrop across key markets in both the Americas and International is underpinning their confidence . Only one-third of the IIJA funding has been spent to date, and CRH is the biggest beneficiary in areas like roads, water, and energy, all trending positive . -
Margin Expansion Prospects
Q: How much more upside is there in the margin trajectory?
A: In 2024, margins expanded by 180 basis points, marking the 11th consecutive year of margin expansion, totaling 900 basis points over that period . Management believes there is still room for margin improvement, emphasizing that margin expansion is a journey, not a destination . -
Aggregates and Cement Pricing
Q: What does guidance embed for U.S. aggregates volume and pricing?
A: For 2025, CRH expects aggregates volumes to improve in the low single-digit range over 2024, with pricing up mid- to high single digits . In cement, they anticipate volume growth in the low single digits and pricing increases in the mid-single-digit range versus 2024 . -
M&A Impact on Margins
Q: Are you expecting margin improvements on acquired assets in 2025?
A: Management expects to add value and improvement in all acquired businesses through operational performance, commercial engagement, and procurement synergies . In 2024, CRH completed 40 deals totaling $5 billion, and they expect the acquired assets to contribute to margin improvement in 2025 . -
Cost Environment Outlook
Q: How do you see the cost environment in 2025?
A: CRH is still operating in an inflationary cost environment, particularly in labor, raw materials, and subcontractor costs . They expect overall mid-single-digit cost increases in 2025 . -
Infrastructure Funding Outlook
Q: Thoughts on federal infrastructure funding versus strong state funding?
A: Management is positive about infrastructure investment, noting it has historically been bipartisan . The combination of IIJA federal funding and strong state funding provides encouragement . Only one-third of IIJA funding has been deployed, and their top five states will receive about 20% of the overall IIJA funding . -
Strategic Direction Under New CEO
Q: Should we expect changes in strategic direction under your leadership?
A: The new CEO plans to continue the successful strategy while leaning more into innovation and technology . They will maintain a relentless focus on performance, delivering consistent double-digit growth and margin expansion . All capital allocation decisions will be assessed to maximize shareholder value .
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