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. 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 investments
1,895
1,720
3,727
3,259
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 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
1
1
1
Common stock, €0.32 par value,
1,250,000,000 shares authorized; 721,319,880, 734,519,598 and
750,725,468 issued and outstanding, as of September 30, 2024,
December 31, 2023, and September 30, 2023 respectively
291
296
302
Treasury stock, at cost (41,493,074,
42,419,281 and 41,554,960 shares as of September 30, 2024, December
31, 2023 and September 30, 2023 respectively)
(2,141)
(2,199)
(2,132)
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 restricted cash
(20)
18
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 Sheets
2,978
5,722
Restricted cash presented in the Condensed
Consolidated Balance Sheets
102
–
Total cash and cash equivalents and
restricted cash presented in the Condensed Consolidated Statements
of Cash Flows
3,080
5,722
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.
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