What CRH (CRH) Said on Its Q3 Earnings Call

Key Points

• Third-quarter performance was mixed: Revenue rose 3% to $11.4 billion, but adjusted EBITDA was flat at $2.7 billion as higher diesel, energy, haulage and raw-material costs pressured margins. Weaker U.S. residential demand also contributed to the company’s revised outlook.
• CRH lowered its 2026 guidance to adjusted EBITDA of $7.8 billion-$8.0 billion, net income of $3.1 billion-$3.3 billion and adjusted EPS of $5.37-$5.59.
• Growth and shareholder returns remain priorities: CRH completed its $8.5 billion Arcosa acquisition, expects $175 million in annual run-rate synergies by year three and launched a $6 billion buyback program. Its Velocity transformation initiative is expected to deliver $400 million in annual EBITDA benefits by 2028 and supports a 2030 margin target of approximately 24%.

CRH NYSE: CRH reported third-quarter revenue growth but said higher energy, haulage and raw-material costs, along with weaker residential activity, pressured margins and led the company to update its full-year outlook.

Chief Executive Officer Jim Mintern said third-quarter revenue rose 3% from a year earlier to $11.4 billion, supported by pricing, demand in key infrastructure-related markets and acquisitions. Adjusted EBITDA was unchanged at $2.7 billion, resulting in an approximately 24% margin. The margin was 80 basis points below the prior-year quarter, although Mintern said it was in line excluding certain one-time gains recorded a year earlier.

CRH reported diluted earnings per share before impairment of $2.09, including transformation-related costs tied to its recently launched Velocity initiative.

Updated 2026 Outlook

The company now expects full-year 2026 adjusted EBITDA of $7.8 billion to $8.0 billion, net income of $3.1 billion to $3.3 billion and adjusted diluted earnings per share of $5.37 to $5.59. The forecast assumes normal weather through the remainder of the year and no further major geopolitical or macroeconomic disruptions.

Mintern said the revised outlook reflects a strong first half followed by a sharp rise in diesel and other costs beginning in July, as well as further weakening in U.S. residential demand. He said diesel prices had risen 40% from their low point in early to mid-July, affecting freight, distribution and other operating costs.

“For us, at this time of the year, it’s difficult to recover that kind of cost inflation late in the year,” Mintern said, noting that the impact was most pronounced in the company’s Americas Materials Solutions business.

Chief Operating Officer Randy Lake said Americas Materials Solutions revenue rose 6% and adjusted EBITDA increased 1% from the prior year. In essential materials, revenue increased 19%, with aggregates volumes up 2% and pricing up 5%, or 6% on a mix-adjusted basis. Cement volumes were flat while cement pricing declined 2% on average. Lake said Eco Material continued to perform well, with both volume and pricing up by mid-single digits.

Americas Building Solutions posted a 3% decline in revenue and an 18% decline in adjusted EBITDA, reflecting divestitures, softer residential markets and the absence of a prior-year gain from land sales. Excluding the land-sale impact, third-quarter adjusted EBITDA and margin improved from a year earlier, Lake said.

International Solutions delivered 1% revenue growth, a 6% increase in adjusted EBITDA and 110 basis points of margin expansion. The company cited higher activity in certain markets, pricing momentum and cost control, including continued infrastructure and reindustrialization demand in Europe and Australia.

Arcosa Acquisition and Capital Returns

CRH completed its $8.5 billion acquisition of Arcosa ahead of schedule and said it has invested an additional $1.9 billion in 27 acquisitions year to date. The company also completed three divestitures totaling $1.9 billion and invested $1.2 billion in growth capital expenditures through the third quarter.

Arcosa adds construction-products and engineered-structures businesses. Mintern said the construction-products business strengthens CRH’s aggregates presence in high-growth U.S. markets, while the engineered-structures operation expands its position in energy transmission infrastructure.

Lake said CRH expects about $175 million in run-rate cost synergies from Arcosa by the third year of ownership, including $60 million in the first year. Opportunities include production efficiencies, logistics optimization, increased material self-supply and streamlined support functions.

Mintern said engineered structures is expected to be the fastest-growing platform within CRH, with anticipated double-digit revenue growth for the next three to four years. He said order backlogs in that business have lead times of up to 12 months, supported by power-grid expansion and data-center development.

The company also announced a new $6 billion share-repurchase program running through the end of 2030. Chief Financial Officer Aylwyn Bryan said the program aligns with CRH’s previously outlined $40 billion capital-allocation framework through 2030. The board also declared a quarterly dividend of $0.39 per share, up 5% from the prior year.

Velocity Targets Higher Margins

CRH launched Velocity, a two-year transformation program intended to simplify organizational structures, use technology and data more extensively, and accelerate decision-making. The company expects the initiative to generate approximately $400 million in annual adjusted EBITDA run-rate benefits by the end of 2028.

Bryan said roughly 40% of those benefits are expected in 2027, with the remainder arriving by the end of 2028. CRH expects one-time transformation costs of about $400 million, with approximately two-thirds incurred during the second half of 2026 and 2027.

The program includes fuel-management and mix-analysis initiatives across CRH’s asphalt network that are expected to reduce natural-gas fuel consumption by 10% to 15%. The company is also deploying a connected-quarry platform at 42 large quarries, targeting a 7% to 10% reduction in variable costs.

Reflecting the expected contribution from Velocity, CRH raised its 2030 adjusted EBITDA margin ambition to approximately 24%, the upper end of its prior range.

2027 Market Expectations

Management said it expects positive momentum entering 2027 despite continued near-term weakness in residential construction. Mintern said U.S. transportation activity remains supported by federal and state funding, with approximately 40% of Infrastructure Investment and Jobs Act funding yet to be deployed.

Lake said CRH’s infrastructure bidding activity and backlogs are in line with the prior year. He added that the company expects high-single-digit aggregates pricing in 2027, while U.S. cementitious volumes are expected to rise by low single digits and pricing is projected to increase by low single digits.

Management also expects a full-year contribution from Arcosa, acquisition synergies and commercial actions intended to restore a positive price-cost spread in 2027. Mintern said CRH expects residential activity to remain subdued because of affordability pressures, while infrastructure, reindustrialization, energy and data-center investments continue to support demand.

About CRH (NYSE:CRH)

CRH plc is a global building materials company that supplies products and solutions used in residential, commercial and infrastructure construction. Its activities include the production and distribution of aggregates, asphalt, ready-mixed concrete, cement and other construction materials, as well as value-added products such as precast concrete, architectural products and site-development solutions.

The company serves customers across North America and Europe, including contractors, construction companies, infrastructure developers, distributors and public-sector organizations.

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