CRH Investor Day 2025 Summary Company Overview - **Company**: CRH (NYSE:CRH) - **Industry**: Building Materials - **Market Cap**: Over $75 billion - **Employees**: 80,000 across 4,000 locations - **Core Business**: Largest building materials company in North America and Europe, focusing on aggregates, cementitious materials, roads, and water infrastructure [21][20][4] Key Points and Arguments Growth and Performance - **Adjusted EBITDA Guidance**: Full year guidance of $7.5 to $7.7 billion, indicating double-digit growth from a record year in 2024 [21] - **Historical Performance**: - 15% compound annual growth rate in adjusted EBITDA over the past decade - 17% EPS growth and 11% free cash flow growth [22][31] - 11 consecutive years of margin expansion, with margins up over 900 basis points [30] - Total shareholder return of 36% over the last year, 17.5% over 10 years, and 16.2% over 55 years [32] Strategic Positioning - **Market Leadership**: CRH is positioned as America's largest infrastructure player, with a national footprint and a connected portfolio that is difficult to replicate [14][20] - **Geographic Focus**: - 75% of adjusted EBITDA from the U.S. market, with strong positions in both densely populated areas and high-growth regions [23][24] - International business represents 25% of adjusted EBITDA, with strong market positions in Central and Eastern Europe and Australia [25] Megatrends and Opportunities - **Infrastructure Demand**: - Significant ongoing need for transportation infrastructure maintenance and expansion, supported by $350 billion allocated from the Infrastructure Investment and Jobs Act (IJA) [37] - Water infrastructure market valued at $100 billion, with a projected $1 trillion needed by 2033 for upgrades [38][39] - Reindustrialization driven by AI demand and energy infrastructure modernization [40] Business Model and Competitive Advantages - **Connected Portfolio**: - 95% of revenue linked to aggregates, with 230 million tons of annual production and 20 billion tons of reserves [27] - Largest road paver in the U.S., producing over 50 million tons of asphalt annually [28] - Leadership in water infrastructure, providing engineered solutions for stormwater, wastewater, and potable water [28] Capital Allocation and Financial Strategy - **Capital Deployment**: - $27 billion allocated over the last five years, with $15 billion for M&A and growth CapEx [67] - $12 billion returned to shareholders through dividends and share buybacks [67] - Strong cash flow generation supports ongoing investments and shareholder returns [68] Innovation and Sustainability - **Commitment to Innovation**: Over 200 ongoing innovation projects and 2,000 patents held [62][63] - **Sustainability Initiatives**: Largest recycler in North America, recycling 50 million tons of waste annually, with a goal of reducing emissions by 30% by 2030 [66] Additional Important Content - **Cultural Aspects**: Emphasis on a customer-centric approach and local brand empowerment, fostering strong community ties and loyalty [44][45] - **Leadership Team**: Strong alignment among leadership with over 200 years of combined industry experience [18] - **Future Growth Ambitions**: Clear strategy to leverage existing strengths and capitalize on emerging megatrends for sustained growth [15][33] This summary encapsulates the key insights and strategic direction of CRH as presented during the 2025 Investor Day, highlighting its robust performance, market leadership, and commitment to innovation and sustainability.

CRH's Overall Strategy and Performance - CRH aims to be the leading compounder of capital, driven by growing megatrends and its winning way[33] - The company has a proven track record of superior value creation, with revenues of $35.6 billion and adjusted EBITDA of $6.9 billion in 2024[25] - CRH's annualized TSR (Total Shareholder Return) since 1970 is 16.2%[29] - CRH is raising its ambition and maximizing value creation with 2030 financial targets[12] Growth and Capital Allocation - CRH has ~$40 billion in financial capacity for growth investments and shareholder returns from 2026-2030[134] - The company plans to allocate ~70% of its financial capacity to growth investments and ~30% to shareholder returns[134] - CRH has a strong M&A track record, with >320 acquisitions from 2015-2025, primarily bolt-on acquisitions[116] Market Positions and Opportunities - CRH is the 1 infrastructure player in North America, with leading positions in high-growth markets[12] - The company is aligned with growing megatrends, including infrastructure, transportation, water, and reindustrialization[33] - CRH has a $41 billion total addressable market in water infrastructure[461] Financial Targets - CRH's 2030 financial targets include 7% to 9% revenue growth, 22% to 24% adjusted EBITDA margin, and >100% adjusted free cash flow conversion[145]

Core Viewpoint - CRH, a leading global provider of building materials, is hosting its Investor Day to outline its growth ambitions and leadership in the infrastructure sector in North America [1] Company Overview - CRH is recognized as the number one infrastructure play in North America [1] - The company aims to raise its ambitions towards 2030 to foster the next era of growth [1] Leadership Insights - CEO Jim Mintern is leading the Investor Day presentation, emphasizing the company's position as a leading compounder of capital [1]

Core Insights - Proactive specializes in providing fast, accessible, and actionable business and finance news content to a global investment audience [2][3] - The company focuses on medium and small-cap markets while also covering blue-chip companies, commodities, and broader investment stories [3] - Proactive's news team operates from key financial hubs around the world, including London, New York, Toronto, Vancouver, Sydney, and Perth [2] Technology Adoption - Proactive is committed to adopting advanced technologies to enhance content creation and workflow efficiency [4] - The company utilizes automation and software tools, including generative AI, while ensuring that all content is edited and authored by humans [5]

Group 1 - CRH PLC is recognized as one of the best cement stocks to buy, bolstered by the election of Patrick Decker to the board of directors [1][2] - Patrick Decker brings extensive experience in accounting and finance, having previously served as president and CEO of Xylem and Harsco Corporation, and currently sits on the board of Johnson Controls International [2] - The appointment of Decker follows CRH's $2.1 billion acquisition of Eco Material Technologies, enhancing its capabilities in near-zero carbon cement production and access to fly ash and green cement operations [3] Group 2 - CRH PLC is a provider of building materials and solutions for infrastructure and construction projects, offering products such as aggregates, cement, readymixed concrete, and asphalt [4]

Group 1 - Investors are seeking guidance from market experts due to a volatile economic environment, with strategic picks from analysts providing insights into potential opportunities and risks [1] - CRH plc elected Patrick Decker to its board of directors on September 9 [1] - CRH shares rose by 0.5% to close at $111.26 [5] Group 2 - Microsoft Corporation is down approximately 5% over the last month but has reported a 39% growth in Azure [2] - Nebius entered into a five-year agreement with Microsoft to provide dedicated GPU infrastructure, with an estimated total contract value of around $17.4 billion through 2031 [2] - Microsoft shares gained 0.4% to close at $500.37 [5] Group 3 - Valero Energy Corporation was selected as a final trade by Joseph Terranova, with support from Raymond James analyst Justin Jenkins, who maintained a Strong Buy rating and raised the price target from $170 to $177 [3] - Valero Energy shares fell by 2.1% to settle at $158.50 [5]

Group 1 - The first company mentioned is an aggregates company that produces materials such as cement and gravel, which is larger than competitors Vulcan and Martin Marietta but is considered cheaper with more growth potential [1] - The upcoming investor day for this aggregates company is expected to generate interest and could provide insights into its future performance [1] Group 2 - Microsoft is highlighted as a strong investment opportunity in the cloud infrastructure sector, despite a recent decline of about 5% in the last month [2] - Azure, Microsoft's cloud service, has shown impressive growth with a 39% increase, indicating strong demand and potential for future revenue [2] - The previous recommendation for refiners Valero, Phillips, and Marathon is noted, with plans to take profits on half of the positions [2]

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on CRH, and highlights the potential misalignment of interests between brokerage firms and retail investors [1][10]. Group 1: Brokerage Recommendations for CRH - CRH has an average brokerage recommendation (ABR) of 1.48, indicating a consensus between Strong Buy and Buy, with 70% of recommendations being Strong Buy and 10% being Buy [2][5]. - Despite the positive ABR, relying solely on this information for investment decisions may not be advisable, as studies show brokerage recommendations often fail to guide investors effectively [5][10]. Group 2: Limitations of Brokerage Recommendations - Brokerage analysts tend to exhibit a strong positive bias in their ratings due to vested interests, leading to a disproportionate number of favorable ratings compared to negative ones [6][10]. - The interests of brokerage firms may not align with those of retail investors, suggesting that brokerage recommendations provide limited insight into future stock price movements [7][10]. Group 3: Zacks Rank as an Alternative - The Zacks Rank, which classifies stocks into five groups based on earnings estimate revisions, is presented as a more reliable indicator of near-term price performance compared to ABR [8][11]. - The Zacks Rank is updated more frequently and reflects changes in earnings estimates, making it a timely tool for predicting stock price movements [12]. Group 4: Current Earnings Outlook for CRH - The Zacks Consensus Estimate for CRH's earnings has declined by 0.2% over the past month to $5.6, indicating growing pessimism among analysts regarding the company's earnings prospects [13]. - This decline in earnings estimates has contributed to a Zacks Rank of 4 (Sell) for CRH, suggesting caution despite the favorable ABR [14].

Financial Data and Key Metrics Changes - CRH reported total revenues of $10.2 billion for Q2 2025, a 6% increase compared to the prior year, driven by favorable underlying demand and strong contributions from acquisitions [9][10] - Adjusted EBITDA for the quarter was $2.5 billion, reflecting a 9% increase year-over-year, with a margin expansion of 70 basis points [10][19] - The company raised its full-year adjusted EBITDA guidance to between $7.5 billion and $7.7 billion, indicating a 10% growth at the midpoint [9][33] Business Line Data and Key Metrics Changes - Americas Materials Solutions saw a 24% increase in total revenues and adjusted EBITDA compared to the prior year, despite adverse weather conditions [11] - Essential Materials reported a 4% increase in revenues, supported by increased volumes and positive pricing momentum in Aggregates and Cement [11] - International Solutions experienced a 13% increase in revenue and a 23% increase in adjusted EBITDA, with significant margin expansion [15] Market Data and Key Metrics Changes - Infrastructure, the largest end market for CRH, continues to benefit from state and federal funding, with less than 40% of IIJA highway funding deployed to date [13][30] - The residential sector in the U.S. is expected to remain subdued, while repair and remodel activities are resilient [31][32] - Positive pricing momentum is anticipated across markets, supported by disciplined commercial management [32] Company Strategy and Development Direction - CRH is focused on reinvesting in high-growth markets and has allocated approximately $1.7 billion across 19 acquisitions and growth CapEx investments [7][20] - The acquisition of EcoMaterial Technologies is expected to enhance CRH's cementitious growth strategy, significantly increasing its production capacity [23][24] - The company emphasizes a connected portfolio strategy to maximize profitability and operational efficiencies across its business segments [25][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying demand across key markets and noted that backlogs are ahead of the prior year [8][40] - The company anticipates continued strong performance in the second half of the year, driven by favorable weather conditions and robust backlogs [40] - Management highlighted the importance of federal and state funding in driving infrastructure demand, with expectations for a supportive legislative environment for future funding [54][56] Other Important Information - CRH has declared a quarterly dividend of $0.37 per share, representing a 6% increase year-over-year, and has repurchased approximately $800 million in shares so far this year [21][22] - The company has a strong pipeline of growth opportunities and plans to maintain a disciplined capital allocation strategy [34][78] Q&A Session Summary Question: Drivers of the full-year guidance increase - Management noted strong Q2 performance with EBITDA up 9% and margins up 70 basis points, despite challenging weather conditions [37] - Infrastructure remains robust, with significant backlogs and positive momentum in July [40] Question: Expectations for U.S. Cement and aggregates - Underlying aggregate volumes were up 5% and pricing up 4% in Q2, with expectations for mid to high single-digit pricing growth for the full year [45][46] Question: Update on federal infrastructure funding - Management indicated a supportive bipartisan environment for the next highway bill, with a focus on surface transportation [54][56] Question: Performance of Adbri and margin expansion drivers - Adbri has performed well since acquisition, and margin expansion is attributed to tight cost control and operational efficiencies [100]

Financial Data and Key Metrics Changes - The company reported total revenues of $10.2 billion for Q2 2025, a 6% increase compared to the prior year, driven by favorable underlying demand and strong contributions from acquisitions [8][9] - Adjusted EBITDA for the quarter was $2.5 billion, reflecting a 9% increase year-over-year, with a margin expansion of 70 basis points [9][17] - The diluted earnings per share increased by 3% compared to the prior year period [9] Business Line Data and Key Metrics Changes - Americas Materials Solutions saw a 24% increase in total revenues and adjusted EBITDA, driven by operational efficiencies and contributions from acquisitions [10] - Essential Materials reported a 4% increase in revenues, supported by increased volumes and positive pricing momentum in Aggregates and Cement [10] - International Solutions experienced a 13% increase in revenue and a 23% increase in adjusted EBITDA, with margin expansion of 170 basis points [14] Market Data and Key Metrics Changes - The infrastructure market remains robust, with less than 40% of the IIJA highway funding deployed, indicating significant future opportunities [12][30] - State transportation budgets for fiscal year 2026 are expected to increase by 6% over the prior year, supporting continued demand [12] - The residential sector in the U.S. is expected to remain subdued, while repair and remodel activities are resilient [30] Company Strategy and Development Direction - The company is focused on reinvesting in high-growth markets and has allocated approximately $1.7 billion across 19 acquisitions and growth CapEx investments [7] - The acquisition of EcoMaterial Technologies for $2.1 billion is expected to enhance the company's cementitious growth strategy and create a unique national distribution network [22][23] - The company emphasizes a connected portfolio that maximizes profitability and operational efficiencies across the construction value chain [25] Management's Comments on Operating Environment and Future Outlook - Management raised the financial guidance for 2025, expecting adjusted EBITDA to be between $7.5 billion and $7.7 billion, representing a 10% growth at the midpoint [8][33] - The company anticipates continued positive momentum in backlogs and underlying demand across key markets [7][30] - Management highlighted the importance of federal and state funding in driving infrastructure demand, with a supportive legislative environment for future funding [30][56] Other Important Information - The company has declared a quarterly dividend of 37¢ per share, a 6% increase from the prior year, and has repurchased approximately $800 million in shares so far this year [19][20] - The company has a strong pipeline of growth opportunities and expects to allocate approximately $35 billion over the next five years for capital investments [34] Q&A Session Summary Question: Drivers of the full year guidance increase - Management noted strong Q2 performance with EBITDA up 9% and margins up 70 basis points despite challenging weather conditions, with robust infrastructure demand and good backlogs contributing to the guidance increase [36][39] Question: Expectations for U.S. Cement and aggregates - Management indicated that underlying aggregate volumes were up 5% and pricing up 4%, with expectations for mid to high single-digit pricing growth for the full year [44][46] Question: Update on federal infrastructure funding and next highway bill - Management confirmed ongoing discussions about the next highway bill, emphasizing a supportive bipartisan environment and the need for a sustainable funding mechanism [52][56] Question: Performance of Adbri and margin expansion drivers - Management reported that Adbri is trading ahead of expectations, with good tailwinds from infrastructure and residential recovery, while margin expansion is attributed to operational excellence and cost control initiatives [99][100]