REG-CRH plc CRH Q3 2024 Results
07/11/2024 07:00
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CRH Q3 2024 Results
CRH plc (NYSE: CRH) (LSE: CRH):
Key Highlights
Summary Financials Q3 2024 Change Q3 YTD 2024 Change
Total revenues $10.5bn +4% $26.7bn +2%
Net income $1.4bn +5% $2.8bn +13%
Net income margin 13.2% +20bps 10.5% +100bps
Adjusted EBITDA* $2.5bn +12% $5.2bn +12%
Adjusted EBITDA margin* 23.3% +170bps 19.3% +180bps
EPS $1.99 +10% $4.03 +20%
* Robust performance underpinned by differentiated solutions strategy
*Strong double-digit growth in Adjusted EBITDA* & EPS despite adverse
weather
*Further margin expansion driven by positive pricing, cost management &
operational efficiency
*Significant portfolio activity YTD; $4.6bn invested in value-accretive
M&A; $1.2bn divested
*Integration of materials acquisitions in Texas & Australia progressing
well
*Ongoing share buyback; $1.2bn YTD; commencing new $0.3bn quarterly tranche
*Declaring quarterly dividend of $0.35 per share (+5% annualized)
*Reaffirming FY24 guidance midpoint; Net Income $3.78bn-$3.85bn; Adjusted
EBITDA* $6.87bn-$6.97bn
*Outlook positive with favorable dynamics across key markets expected to
continue into 2025
Albert Manifold, Chief Executive, said:
"Our third quarter results represent another strong performance with further
growth in sales, profits and margins. Despite contending with adverse weather
in the quarter, our differentiated solutions strategy continues to deliver
industry-leading performance, while the strength of our balance sheet combined
with our disciplined approach to capital allocation leaves us well positioned
to capitalize on the growth and value creation opportunities that lie ahead.
We are pleased to reaffirm our guidance midpoint for 2024 and looking ahead to
2025, we expect favorable underlying demand, positive pricing momentum and
another year of progress for CRH."
Announced Thursday, November 7, 2024
____________________________________
(* Represents non-GAAP measure. See 'Non-GAAP Reconciliation and Supplementary
Information' on pages 13 to 14.)
Q3 2024 Results
Performance Overview
Total revenues of $10.5 billion (Q3 2023: $10.1 billion) were 4% ahead, while
organic total revenues* were 1% behind the corresponding period in 2023.
Contributions from acquisitions and strong commercial management more than
offset the impact of divestitures and lower activity levels due to adverse
weather in certain regions. Net income of $1.4 billion (Q3 2023: $1.3 billion)
was 5% ahead of the prior year reflecting strong operating performance, gains
on disposal of long-lived assets and a gain on the European Lime divestiture.
Adjusted EBITDA* of $2.5 billion (Q3 2023: $2.2 billion) was 12% ahead as a
result of the continued delivery of CRH's integrated solutions strategy,
positive pricing, ongoing cost control and further operational efficiencies.
Organic Adjusted EBITDA* was 8% ahead of Q3 2023. The Group's net income
margin of 13.2% (Q3 2023: 13.0%) and Adjusted EBITDA margin* of 23.3% (Q3
2023: 21.6%) were both ahead of the comparable prior year period. Basic
Earnings Per Share (EPS) for Q3 2024 was $1.99 (Q3 2023: $1.81).
* Americas Materials Solutions' total revenues were 4% ahead of Q3 2023, driven
by strong pricing across all lines of business along with contributions from
acquisitions which mitigated the effects of lower activity in certain markets
due to weather disruption. Adjusted EBITDA was 16% ahead of the prior year
period driven by pricing improvements, operational efficiencies and good cost
management, along with gains on the disposal of certain land assets.
* Americas Building Solutions' total revenues were 1% ahead of Q3 2023 as
contributions from acquisitions more than offset the impact of lower activity
levels due to challenging weather and subdued new-build residential demand.
Adjusted EBITDA was 9% lower due to adverse weather and a strong prior year
comparative.
* Europe Materials Solutions' total revenues were 7% ahead of Q3 2023,
benefiting from the acquisition of Adbri Ltd (Adbri) in July 2024 and partly
offset by the divestiture of the European Lime operations, as well as lower
activity levels in certain markets. Adjusted EBITDA was 24% ahead of the prior
year driven by good commercial management, lower energy costs, operational
efficiencies and contributions from acquisitions.
* Europe Building Solutions' total revenues were 4% behind Q3 2023, amid
continued subdued demand in new-build residential markets. Adjusted EBITDA was
10% behind as the impact of lower activity was only partially offset by
ongoing cost saving measures.
Acquisitions and Divestitures
During the three months ended September 30, 2024, CRH completed 12
acquisitions for a total consideration of $1.4 billion, compared with $0.4
billion in the same period of 2023. Americas Materials Solutions completed
seven acquisitions, Americas Building Solutions completed three acquisitions
and Europe Materials Solutions completed two acquisitions.
Overall, during the nine months ended September 30, 2024, CRH completed 28
acquisitions for a total consideration of $3.9 billion, compared with $0.6
billion in the first nine months of the prior year. On July 1, 2024, CRH
completed the acquisition of a majority stake in Adbri for a total
consideration of $0.8 billion. Adbri is an integrated materials business with
high-quality assets and leading market positions in Australia, complementing
our core competencies in cement, concrete and aggregates and creating
additional growth and development opportunities for our existing Australian
business.
During the three months ended September 30, 2024, cash proceeds from
divestitures and disposals of long-lived assets were $0.1 billion, including
the third and final phase of the divestiture of the European Lime operations,
which was completed on August 30, 2024.
For the nine months ended September 30, 2024, the Company realized cash
proceeds from divestitures and disposals of long-lived assets of $1.2 billion,
primarily related to the divestiture of the European Lime operations. No
divestitures occurred in the first nine months of the prior year.
Dividends and Share Buybacks
In line with the Company's policy of consistent long-term dividend growth, the
Board has declared a quarterly dividend of $0.35 per share. This represents an
annualized increase of 5% on the prior year. The dividend will be paid wholly
in cash on December 18, 2024, to shareholders registered at the close of
business on November 22, 2024. The ex-dividend date will be November 22, 2024.
On November 6, 2024, the latest tranche of the share buyback program was
completed, bringing the year-to-date repurchases to $1.2 billion, including
approximately four million shares repurchased in Q3 2024 for a total
consideration of $0.3 billion. The Company is pleased to announce that it is
commencing an additional $0.3 billion tranche to be completed no later than
February 26, 2025.
Innovation and Sustainability
The transition to a more sustainable built environment represents a
significant commercial opportunity for CRH. Our strategy focuses on
transforming essential materials into value-added and innovative solutions to
address three global challenges: water, circularity and decarbonization. We
continue to enhance our capabilities to meet these challenges through
investment in innovative technologies. Two recent examples include our
investment in FIDO AI, supporting the development of artificial intelligence
leak detection software to accelerate our water infrastructure solutions in
North America, as well as CRH’s strategic investment partnership with
Sublime Systems, a U.S. based company operating in the field of sustainable
cement production. Through these efforts, we continue to develop and deliver
innovative solutions for our customers.
Outlook
We are pleased to reaffirm our guidance midpoint for 2024, reflecting the
continued strength of our financial performance, the positive underlying
momentum in our business as well as the positive contribution from portfolio
activity.
2024 Guidance Updated Guidance Range (i) Previous Guidance Range (ii)
(in $ billions, except per share data) Low High Low High
Net income 3.78 3.85 3.70 3.85
Adjusted EBITDA* 6.87 6.97 6.82 7.02
EPS $5.45 $5.55 $5.40 $5.60
Capital expenditure 2.4 2.6 2.2 2.4
((i) 2024 Net income and EPS under our Updated Guidance Range are based on
approximately $0.5 billion interest expense, net and an effective tax rate of
approximately 23%. 2024 EPS is based on a year-to-date average of
approximately 686 million common shares outstanding. The above guidance does
not reflect the potential Q4 impairment in the range of $0.3-$0.4 billion.)
((ii) 2024 Net income and EPS under our Previous Guidance Range were based on
approximately $0.5 billion interest expense, net, effective tax rate of
approximately 23% and a year-to-date average of approximately 688 million
common shares outstanding.)
Looking ahead to 2025 and notwithstanding some macroeconomic uncertainties, we
expect positive underlying demand across our key end-use markets, underpinned
by significant public investment in infrastructure and re-industrialization
activity. A lower interest rate environment is expected to aid a gradual
recovery in new-build residential construction activity. Through a combination
of continued positive price momentum, favorable underlying demand and the
benefits of our integrated, value-based solutions strategy we expect another
year of progress in 2025.
Americas Materials Solutions
Analysis of Change
in $ millions Q3 2023 Currency Acquisitions Divestitures Organic Q3 2024 % change
Total revenues 5,080 (7) +232 (44) +38 5,299 +4%
Adjusted EBITDA 1,284 (2) +65 (14) +151 1,484 +16%
Adjusted EBITDA margin 25.3% 28.0%
Americas Materials Solutions’ total revenues were 4% ahead of the third
quarter of 2023. Continued positive pricing across all lines of business was
partly offset by adverse weather impacting volumes, resulting in organic total
revenues* 1% ahead of the prior year.
In Essential Materials, total revenues increased by 5% driven by pricing
growth in both aggregates and cement, ahead by 10% and 9%, respectively.
Cement volumes increased by 1%, as acquisition activity offset the adverse
impact of major hurricanes. Aggregates volumes declined by 4%, negatively
impacted by adverse weather.
In Road Solutions, total revenues increased by 4% driven by improved pricing
across all lines of business and continued funding support relating to the
Infrastructure Investment and Jobs Act more than offsetting challenging
weather in certain regions. Paving and construction revenue increased by 3%
with growth in the Northeast and West regions. Construction backlogs were
ahead of the prior year supported by positive momentum in bidding activity.
Asphalt volumes decreased by 2% and pricing increased by 3%, while readymixed
concrete volumes and prices increased by 2% and 7%, respectively.
Third quarter Adjusted EBITDA for Americas Materials Solutions of $1.5 billion
was 16% ahead of the prior year as pricing initiatives, cost management and
operational efficiencies along with gains on certain land asset sales
mitigated the impact of higher labor and raw materials costs. Organic Adjusted
EBITDA* was 12% ahead of the third quarter of 2023. Adjusted EBITDA margin
increased by 270bps.
Americas Building Solutions
Analysis of Change
in $ millions Q3 2023 Currency Acquisitions Divestitures Organic Q3 2024 % change
Total revenues 1,738 (2) +45 — (24) 1,757 +1%
Adjusted EBITDA 391 — +8 — (44) 355 (9%)
Adjusted EBITDA margin 22.5% 20.2%
Americas Building Solutions' total revenues were 1% ahead of the prior year
period as contributions from acquisitions more than offset the impact of lower
activity levels due to challenging weather and subdued new-build residential
demand. Organic total revenues* were 1% behind the third quarter of 2023.
In Building & Infrastructure Solutions, total revenues were 3% ahead of Q3
2023 driven by a strong performance from acquisitions which offset weaker
new-build residential demand and challenging weather conditions in certain
markets.
In Outdoor Living Solutions, total revenues were in line with the prior year
period as lower activity levels, impacted by adverse weather in the period,
were offset by positive contributions from acquisitions.
Third quarter Adjusted EBITDA for Americas Building Solutions was 9% behind a
strong prior year comparative, 11% behind on an organic* basis as adverse
weather and subdued residential demand impacted profitability. Adjusted EBITDA
margin was 230bps behind the third quarter of 2023.
Europe Materials Solutions
Analysis of Change
in $ millions Q3 2023 Currency Acquisitions Divestitures Organic Q3 2024 % change
Total revenues 2,617 +42 +354 (131) (87) 2,795 +7%
Adjusted EBITDA 446 +6 +51 (32) +82 553 +24%
Adjusted EBITDA margin 17.0% 19.8%
Europe Materials Solutions' total revenues, including the acquisition of a
majority stake in Adbri which closed in July 2024, were 7% ahead of the third
quarter of 2023. Organic total revenues* were 3% behind as continued pricing
progress and growth in Central and Eastern Europe were more than offset by
subdued residential activity in Western Europe.
In Essential Materials, total revenues increased by 6% compared with the third
quarter of 2023, supported by contributions from acquisitions and positive
pricing in both aggregates and cement, ahead by 4% and 5%, respectively.
Aggregates and cement volumes were both ahead by 6%.
In Road Solutions, revenues increased by 8% with volumes and prices ahead in
the readymixed concrete business, benefiting from acquisition activity in the
quarter. Asphalt volumes and pricing declined 5% and 1%, respectively, while
paving and construction revenues were impacted by lower activity levels in
Western Europe.
Adjusted EBITDA in Europe Materials Solutions was $0.6 billion, 24% ahead of
the comparable period in 2023, and 18% ahead on an organic* basis, primarily
driven by increased pricing, lower energy costs, operational efficiencies and
contributions from acquisitions. Adjusted EBITDA margin increased by 280bps
compared with the third quarter of 2023.
Europe Building Solutions
Analysis of Change
in $ millions Q3 2023 Currency Acquisitions Divestitures Organic Q3 2024 % change
Total revenues 693 +11 +4 (4) (40) 664 (4%)
Adjusted EBITDA 69 +1 +1 — (9) 62 (10%)
Adjusted EBITDA margin 10.0% 9.3%
Total revenues in Europe Building Solutions declined by 4% compared with the
third quarter of 2023, amid continued subdued new-build residential activity.
Within Building & Infrastructure Solutions, total revenues were 6% behind
the comparable period in 2023. Infrastructure Products was ahead of the prior
year, with contributions from acquisitions more than offsetting lower activity
levels. Revenues in Precast and Construction Accessories were behind the
comparable period in 2023 amid continued lower demand in certain key markets.
Revenues in Outdoor Living Solutions increased by 2% compared with the third
quarter of 2023 despite lower activity levels which were impacted by adverse
weather and continued subdued new-build residential demand.
Adjusted EBITDA in Europe Building Solutions declined by 10% compared with the
third quarter of 2023.
Other Financial Items
Depreciation, depletion and amortization charges of $0.5 billion were $0.1
billion higher than the third quarter of the prior year (Q3 2023: $0.4
billion), primarily due to the impact of acquisitions.
Gains on the disposal of long-lived assets of $89 million were higher than the
same period in the prior year (Q3 2023: $15 million), primarily due to the
disposal of certain land assets.
Interest income of $33 million was lower than the third quarter of the prior
year (Q3 2023: $62 million) primarily due to a lower level of cash deposits.
Interest expense of $164 million was higher than the comparable period in 2023
(Q3 2023: $131 million), primarily due to an increase in gross debt balances.
Other nonoperating income, net was $62 million (Q3 2023: $1 million) primarily
related to gains on divestitures.
Basic EPS was higher than Q3 2023 at $1.99 (Q3 2023: $1.81) due to a positive
operating performance, higher gains on disposals of long-lived assets and
divestitures as well as reduced share count as a result of the ongoing share
buyback program.
The results of the Company’s third quarter impairment assessment indicated
increased risk of impairments as a result of certain recent challenging market
conditions which may impact future growth prospects, resulting in reduced
headroom. Arising from the Company’s ongoing sensitivity analysis, potential
non-cash impairment charges of $0.3-$0.4 billion, representing the range of
possible outcomes, may be recognized in its results for the quarter and year
ending December 31, 2024 based on reasonably possible changes in key
assumptions. These potential impairment charges relate to the Company’s
equity method investment in China and the Architectural Products reporting
unit in the Europe Building Solutions segment.
Balance Sheet and Liquidity
Total short and long-term debt was $13.9 billion at September 30, 2024,
compared to $11.6 billion at December 31, 2023, and $11.4 billion at September
30, 2023.
During the nine months ended September 30, 2024, a net $0.6 billion of
commercial paper was issued across the U.S. Dollar and Euro Commercial Paper
Programs. In January 2024, €600 million of euro-denominated notes were
repaid on maturity. In May 2024, the Company completed the issuance of $750
million in 5.20% notes due in 2029 and $750 million in 5.40% notes due in
2034. In July 2024, as part of the Adbri acquisition $0.5 billion of external
debt was acquired.
Net Debt* at September 30, 2024, was $11.2 billion, compared to $5.4 billion
at December 31, 2023, and $5.9 billion at September 30, 2023. The increase in
Net Debt* compared to December 31, 2023 reflects acquisitions, cash returns to
shareholders through dividends and share buybacks, as well as the purchase of
property, plant and equipment, partially offset by inflows from operating
activities and proceeds from divestitures.
As of September 30, 2024 CRH had $3.1 billion of cash and cash equivalents and
restricted cash on hand (Q3 2023: $5.7 billion) and $4.0 billion of undrawn
committed facilities. At September 30, 2024, the weighted average maturity of
the term debt (net of cash and cash equivalents) was 7.5 years.
As of September 30, 2024, the Company had a $4.0 billion U.S. Dollar
Commercial Paper Program and a €1.5 billion Euro Commercial Paper Program
available. As of September 30, 2024 there was $1.3 billion of outstanding
issued notes under the U.S. Dollar Commercial Paper Program and $0.4 billion
of outstanding issued notes under the Euro Commercial Paper Program. CRH
remains committed to maintaining its robust balance sheet and expects to
maintain a strong investment-grade credit rating with a BBB+ or equivalent
rating with each of the three main rating agencies.
Segmental Reporting Structure
In light of the Company’s recent portfolio activity, the Europe Materials
Solutions and Europe Building Solutions segments have been combined into an
International Solutions segment reflecting how the business is now managed.
The change took effect in the fourth quarter of 2024 and will be reflected in
the financial results for the quarter and year ending December 31, 2024.
Q3 2024 Conference Call
CRH will host a conference call and webcast presentation at 8:00 a.m. (New
York)/1:00 p.m. (Dublin) today, Thursday, November 7, 2024, to discuss the Q3
2024 results and outlook. Registration details are available on
www.crh.com/investors
(https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.crh.com%2Finvestors&esheet=54148306&newsitemid=20241106918778&lan=en-US&anchor=www.crh.com%2Finvestors&index=1&md5=436312121f3c61ad8e6444ac4806e16b)
. Upon registration a link to join the call and dial-in details will be made
available. The accompanying investor presentation will be available on the
investor section of the CRH website in advance of the conference call, while a
recording of the conference call will be made available afterwards.
Dividend Timetable
The timetable for payment of the quarterly dividend of $0.35 per share is as
follows:
Ex-dividend Date: November 22, 2024
Record Date: November 22, 2024
Payment Date: December 18, 2024
The default payment currency is U.S. Dollar for shareholders who hold their
Ordinary Shares through a Depository Trust Company (DTC) participant. It is
also U.S. Dollar for shareholders holding their Ordinary Shares in registered
form, unless a currency election has been registered with CRH’s Transfer
Agent, Computershare Trust Company N.A. by 5:00 p.m. (New York)/10:00 p.m.
(Dublin) on November 22, 2024.
The default payment currency for shareholders holding their Ordinary Shares in
the form of Depository Interests is euro. Such shareholders can elect to
receive the dividend in U.S. Dollar or Pounds Sterling by providing their
instructions to the Company’s Depositary Interest provider, Computershare
Investor Services plc, by 12:00 p.m. (New York)/5:00 p.m. (Dublin) on November
26, 2024.
Appendices
Appendix 1 - Primary Statements
The following financial statements are an extract of the Company’s Condensed
Consolidated Financial Statements prepared in accordance with U.S. GAAP for
the three months and nine months ended September 30, 2024, and do not present
all necessary information for a complete understanding of the Company's
financial condition as of September 30, 2024. The full Condensed Consolidated
Financial Statements prepared in accordance with U.S. GAAP for the three
months and nine months ended September 30, 2024, including notes thereto, will
be included as a part of the Company’s Quarterly Report on Form 10-Q filed
with the U.S. Securities and Exchange Commission (SEC).
Condensed Consolidated Statements of Income (Unaudited)
(in $ millions, except share and per share data)
Three months ended Nine months ended
September 30 September 30
2024 2023 2024 2023
Product revenues 7,482 7,157 20,158 19,926
Service revenues 3,033 2,971 6,544 6,338
Total revenues 10,515 10,128 26,702 26,264
Cost of product revenues (3,674) (3,609) (11,010) (11,285)
Cost of service revenues (2,782) (2,756) (6,151) (5,967)
Total cost of revenues (6,456) (6,365) (17,161) (17,252)
Gross profit 4,059 3,763 9,541 9,012
Selling, general and administrative expenses (2,184) (1,990) (5,919) (5,647)
Gain on disposal of long-lived assets 89 15 199 38
Operating income 1,964 1,788 3,821 3,403
Interest income 33 62 112 138
Interest expense (164) (131) (452) (285)
Other nonoperating income, net 62 1 246 3
Income from operations before income tax expense and income from equity method 1,895 1,720 3,727 3,259
investments
Income tax expense (531) (416) (942) (781)
Income from equity method investments 25 14 27 21
Net income 1,389 1,318 2,812 2,499
Net (income) attributable to redeemable noncontrolling interests (9) (9) (21) (21)
Net (income) attributable to noncontrolling interests (4) (3) (2) (1)
Net income attributable to CRH plc 1,376 1,306 2,789 2,477
Earnings per share attributable to CRH plc
Basic $1.99 $1.81 $4.03 $3.36
Diluted $1.97 $1.80 $4.00 $3.34
Weighted average common shares outstanding
Basic 681.6 718.2 685.0 731.8
Diluted 685.5 722.1 690.0 736.6
Condensed Consolidated Balance Sheets (Unaudited)
(in $ millions, except share data)
September 30 December 31 September 30
2024 2023 2023
Assets
Current assets:
Cash and cash equivalents 2,978 6,341 5,722
Restricted cash 102 – –
Accounts receivable, net 6,422 4,507 5,972
Inventories 4,644 4,291 4,191
Assets held for sale – 1,268 –
Other current assets 694 478 430
Total current assets 14,840 16,885 16,315
Property, plant and equipment, net 21,289 17,841 18,103
Equity method investments 929 620 665
Goodwill 10,906 9,158 9,545
Intangible assets, net 1,105 1,041 1,074
Operating lease right-of-use assets, net 1,322 1,292 1,237
Other noncurrent assets 830 632 692
Total assets 51,221 47,469 47,631
Liabilities, redeemable noncontrolling interests and shareholders’ equity
Current liabilities:
Accounts payable 2,963 3,149 2,954
Accrued expenses 2,513 2,296 2,457
Current portion of long-term debt 3,218 1,866 1,860
Operating lease liabilities 271 255 245
Liabilities held for sale – 375 –
Other current liabilities 1,703 2,072 1,675
Total current liabilities 10,668 10,013 9,191
Long-term debt 10,672 9,776 9,535
Deferred income tax liabilities 3,168 2,738 3,050
Noncurrent operating lease liabilities 1,117 1,125 1,065
Other noncurrent liabilities 2,430 2,196 2,142
Total liabilities 28,055 25,848 24,983
Commitments and contingencies
Redeemable noncontrolling interests 361 333 320
Shareholders’ equity
Preferred stock, €1.27 par value, 150,000 shares authorized and 50,000 1 1 1
shares issued and outstanding for 5% preferred stock and 872,000 shares
authorized, issued and outstanding for 7% 'A' preferred stock, as of September
30, 2024, December 31, 2023, and September 30, 2023
Common stock, €0.32 par value, 1,250,000,000 shares authorized; 721,319,880, 291 296 302
734,519,598 and 750,725,468 issued and outstanding, as of September 30, 2024,
December 31, 2023, and September 30, 2023 respectively
Treasury stock, at cost (41,493,074, 42,419,281 and 41,554,960 shares as of (2,141) (2,199) (2,132)
September 30, 2024, December 31, 2023 and September 30, 2023 respectively)
Additional paid-in capital 392 454 423
Accumulated other comprehensive loss (499) (616) (763)
Retained earnings 23,831 22,918 23,936
Total shareholders’ equity attributable to CRH plc shareholders 21,875 20,854 21,767
Noncontrolling interests 930 434 561
Total equity 22,805 21,288 22,328
Total liabilities, redeemable noncontrolling interests and equity 51,221 47,469 47,631
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in $ millions)
Nine months ended
September 30
2024 2023
Cash Flows from Operating Activities:
Net income 2,812 2,499
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation, depletion and amortization 1,288 1,187
Share-based compensation 96 92
Gains on disposals from businesses and long-lived assets, net (389) (38)
Deferred tax expense 195 108
Income from equity method investments (27) (21)
Pension and other postretirement benefits net periodic benefit cost 27 22
Non-cash operating lease costs 188 212
Other items, net (17) 33
Changes in operating assets and liabilities, net of effects of acquisitions
and divestitures:
Accounts receivable, net (1,527) (1,643)
Inventories (45) 62
Accounts payable (276) (30)
Operating lease liabilities (218) (204)
Other assets (311) (5)
Other liabilities 498 354
Pension and other postretirement benefits contributions (35) (34)
Net cash provided by operating activities 2,259 2,594
Cash Flows from Investing Activities:
Purchases of property, plant and equipment (1,635) (1,175)
Acquisitions, net of cash acquired (3,853) (561)
Proceeds from divestitures and disposals of long-lived assets 1,180 64
Dividends received from equity method investments 22 23
Settlements of derivatives (21) 3
Deferred divestiture consideration received 82 5
Other investing activities, net (180) (88)
Net cash used in investing activities (4,405) (1,729)
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in $ millions)
Nine months ended
September 30
2024 2023
Cash Flows from Financing Activities:
Proceeds from debt issuances 3,452 2,687
Payments on debt (1,854) (940)
Settlements of derivatives 34 5
Payments of finance lease obligations (37) (18)
Deferred and contingent acquisition consideration paid (16) (8)
Dividends paid (1,469) (761)
Distributions to noncontrolling and redeemable noncontrolling interests (33) (35)
Repurchases of common stock (1,224) (2,031)
Proceeds from exercise of stock options 3 4
Net cash used in financing activities (1,144) (1,097)
Effect of exchange rate changes on cash and cash equivalents, including (20) 18
restricted cash
Decrease in cash and cash equivalents, including restricted cash (3,310) (214)
Cash and cash equivalents and restricted cash at the beginning of period 6,390 5,936
Cash and cash equivalents and restricted cash at the end of period 3,080 5,722
Supplemental cash flow information:
Cash paid for interest (including finance leases) 372 244
Cash paid for income taxes 654 620
Reconciliation of cash and cash equivalents and restricted cash
Cash and cash equivalents presented in the Condensed Consolidated Balance 2,978 5,722
Sheets
Restricted cash presented in the Condensed Consolidated Balance Sheets 102 –
Total cash and cash equivalents and restricted cash presented in the Condensed 3,080 5,722
Consolidated Statements of Cash Flows
Appendix 2 - Non-GAAP Reconciliation and Supplementary Information
CRH uses a number of non-GAAP performance measures to monitor financial
performance. These measures are referred to throughout the discussion of our
reported financial position and operating performance on a continuing
operations basis unless otherwise defined and are measures which are regularly
reviewed by CRH management. These performance measures may not be uniformly
defined by all companies and accordingly may not be directly comparable with
similarly titled measures and disclosures by other companies.
Certain information presented is derived from amounts calculated in accordance
with U.S. GAAP but is not itself an expressly permitted GAAP measure. The
non-GAAP performance measures as summarized below should not be viewed in
isolation or as an alternative to the equivalent GAAP measure.
Adjusted EBITDA: Adjusted EBITDA is defined as earnings from continuing
operations before interest, taxes, depreciation, depletion, amortization, loss
on impairments, gain/loss on divestitures and unrealized gain/loss on
investments, income/loss from equity method investments, substantial
acquisition-related costs and pension expense/income excluding current service
cost component. It is quoted by management in conjunction with other GAAP and
non-GAAP financial measures to aid investors in their analysis of the
performance of the Company. Adjusted EBITDA by segment is monitored by
management in order to allocate resources between segments and to assess
performance. Adjusted EBITDA margin is calculated by expressing Adjusted
EBITDA as a percentage of total revenues.
Reconciliation to its nearest GAAP measure is presented below:
Three months ended Nine months ended
September 30 September 30
in $ millions 2024 2023 2024 2023
Net income 1,389 1,318 2,812 2,499
Income from equity method investments (25) (14) (27) (21)
Income tax expense 531 416 942 781
Gain on divestitures and unrealized gains on investments (i) (59) – (242) –
Pension income excluding current service cost component (i) (1) (1) (3) (3)
Other interest, net (i) (2) – (1) –
Interest expense 164 131 452 285
Interest income (33) (62) (112) (138)
Depreciation, depletion and amortization 467 402 1,288 1,187
Substantial acquisition-related costs (ii) 23 – 45 –
Adjusted EBITDA 2,454 2,190 5,154 4,590
Total revenues 10,515 10,128 26,702 26,264
Net income margin 13.2% 13.0% 10.5% 9.5%
Adjusted EBITDA margin 23.3% 21.6% 19.3% 17.5%
((i) Gain on divestitures and unrealized gains on investments, pension income
excluding current service cost component and other interest, net have been
included in Other nonoperating income, net in the Condensed Consolidated
Statements of Income.)
((ii) Represents expenses associated with non-routine substantial
acquisitions, which meet the criteria for being separately reported in Note 4
“Acquisitions” of the unaudited financial statements in the Quarterly
Report on Form 10-Q. Expenses in the third quarter of 2024 primarily include
legal and consulting expenses related to these non-routine substantial
acquisitions.)
Adjusted EBITDA is not defined by GAAP and should not be considered as an
alternative to earnings measures defined by GAAP. Reconciliation to its
nearest GAAP measure for the mid-point of the 2024 Adjusted EBITDA guidance is
presented below:
in $ billions 2024
Mid-Point
Net income 3.8
Income tax expense 1.1
Interest expense, net 0.5
Depreciation, depletion, amortization and impairment 1.8
Other (i) (0.3)
Adjusted EBITDA 6.9
((i) Other primarily relates to loss (income) from equity method investments,
loss (gain) on divestitures and unrealized loss (gain) on investments and
substantial acquisition-related costs.)
Net Debt: Net Debt is used by management as it gives additional insight into
the Company’s current debt position less available cash. Net Debt is
provided to enable investors to see the economic effect of gross debt, related
hedges and cash and cash equivalents in total. Net Debt comprises short and
long-term debt, finance lease liabilities, cash and cash equivalents and
current and noncurrent derivative financial instruments (net).
Reconciliation to its nearest GAAP measure is presented below:
September 30 December 31 September 30
in $ millions 2024 2023 2023
Short and long-term debt (13,890) (11,642) (11,395)
Cash and cash equivalents (i) 2,978 6,390 5,722
Finance lease liabilities (228) (117) (96)
Derivative financial instruments (net) (35) (37) (118)
Net Debt (11,175) (5,406) (5,887)
((i) Cash and cash equivalents includes cash and cash equivalents reclassified
as held for sale of $nil million, $49 million, and $nil million at September
30, 2024, December 31, 2023 and September 30, 2023 respectively.)
Organic Revenue and Organic Adjusted EBITDA: Because of the impact of
acquisitions, divestitures, currency exchange translation and other
non-recurring items on reported results each reporting period, CRH uses
organic revenue and organic Adjusted EBITDA as additional performance
indicators to assess performance of pre-existing (also referred to as
underlying, like-for-like or ongoing) operations each reporting period.
Organic revenue and organic Adjusted EBITDA are arrived at by excluding the
incremental revenue and Adjusted EBITDA contributions from current and prior
year acquisitions and divestitures, the impact of exchange translation, and
the impact of any one-off items. Changes in organic revenue and organic
Adjusted EBITDA are presented as additional measures of revenue and Adjusted
EBITDA to provide a greater understanding of the performance of the Company.
Organic change % is calculated by expressing the organic movement as a
percentage of the prior year reporting period (adjusted for currency exchange
effects). A reconciliation of the changes in organic revenue and organic
Adjusted EBITDA to the changes in total revenues and Adjusted EBITDA by
segment is presented with the discussion within each segment’s performance
in tables contained in the segment discussion commencing on page 4.
Appendix 3 - Disclaimer/Forward-Looking Statements
In order to utilize the “Safe Harbor” provisions of the United States
Private Securities Litigation Reform Act of 1995, CRH is providing the
following cautionary statement.
This document contains statements that are, or may be deemed to be,
forward-looking statements with respect to the financial condition, results of
operations, business, viability and future performance of CRH and certain of
the plans and objectives of CRH. These forward-looking statements may
generally, but not always, be identified by the use of words such as
“will”, “anticipates”, “should”, “could”, “would”,
“targets”, “aims”, “may”, “continues”, “expects”, “is
expected to”, “estimates”, “believes”, “intends” or similar
expressions. These forward-looking statements include all matters that are not
historical facts or matters of fact at the date of this document.
In particular, the following, among other statements, are all forward looking
in nature: plans and expectations regarding demand outlook for 2024 and 2025;
plans and expectations regarding government funding initiatives and
re-industrialization activity; pricing, costs, trends in residential and
non-residential markets; macroeconomic and other market trends and dynamics in
regions where CRH operates; plans and expectations regarding investments in
innovation and sustainability and the enhancement of CRH's ability to address
global challenges; favorable trends in the interest rate environment; plans
and expectations regarding acquisitions and divestitures and resulting
synergies and growth opportunities; plans and expectations regarding
management succession; plans and expectations regarding return of cash to
shareholders, including the timing and amount of share buybacks and dividends;
expectations regarding CRH's credit rating with each of the three main rating
agencies; plans with respect to changes in the Company’s reportable
segments; the existence of a potential impairment, including amount and
timing; and plans and expectations regarding CRH’s 2024 full year
performance, including net income, Adjusted EBITDA, earnings per share and
capital expenditure.
By their nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that may or may not
occur in the future and reflect the Company’s current expectations and
assumptions as to such future events and circumstances that may not prove
accurate. You are cautioned not to place undue reliance on any forward-looking
statements. These forward-looking statements are made as of the date of this
document. The Company expressly disclaims any obligation or undertaking to
publicly update or revise these forward-looking statements other than as
required by applicable law.
A number of material factors could cause actual results and developments to
differ materially from those expressed or implied by these forward-looking
statements, certain of which are beyond our control, and which include, among
other factors: economic and financial conditions, including changes in
interest rates, inflation, price volatility and/or labor and materials
shortages; demand for infrastructure, residential and non-residential
construction and our products in geographic markets in which we operate;
increased competition and its impact on prices and market position; increases
in energy, labor and/or other raw materials costs; adverse changes to laws and
regulations, including in relation to climate change; the impact of
unfavorable weather; investor and/or consumer sentiment regarding the
importance of sustainable practices and products; availability of public
sector funding for infrastructure programs; political uncertainty, including
as a result of political and social conditions in the jurisdictions CRH
operates in, or adverse political developments, including the ongoing
geopolitical conflicts in Ukraine and the Middle East; failure to complete or
successfully integrate acquisitions or make timely divestments; cyber-attacks
and exposure of associates, contractors, customers, suppliers and other
individuals to health and safety risks, including due to product failures.
Additional factors, risks and uncertainties that could cause actual outcomes
and results to be materially different from those expressed by the
forward-looking statements in this report include the risks and uncertainties
described under “Risk Factors” in Part 1, Item 1A of the Annual Report on
Form 10-K “Risk Factors” in CRH’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2023 as filed with the SEC and in CRH's other
filings with the SEC.
ir@crh.com (mailto:ir@crh.com)
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