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CRH
Earnings call · Jun 2026 (Q2 FY26)

CRH PUBLIC LTD Q2 FY26 earnings call CRH

Jul 30, 2026 Source

Executive summary

CRH Q2 FY26 — Record Performance Driven by Infrastructure and Strategic M&A

CRH delivered a strong second quarter, achieving record performance driven by robust infrastructure demand and strategic capital allocation. The company reaffirmed its full-year guidance, buoyed by positive pricing and operational efficiencies, while actively pursuing growth through acquisitions and divesting non-core assets. Management highlighted significant opportunities in reindustrialization and data center construction, leveraging its connected portfolio despite some softness in new build residential markets.

Highlights

5

  • Reported record second quarter with total revenues of $10.8 billion, 6% ahead of prior year.

  • Adjusted EBITDA increased by 7% to over $2.6 billion in the quarter.

  • Achieved 30 basis points of margin expansion company-wide despite inflationary costs.

  • Diluted EPS grew by 14%, including a $0.16 net gain on divestitures.

  • Reaffirmed full-year 2026 adjusted EBITDA guidance range of $8.1 billion to $8.5 billion.

Concerns

4

  • Americas Building Solutions revenues were 2% behind prior year and adjusted EBITDA 8% behind, impacted by divestitures and subdued new build residential market.

  • Experienced inflationary cost backdrop, particularly elevated haulage rates, affecting Americas Building Solutions.

  • Cement volumes declined by 2% in Q2, and pricing by 1%, reflecting regional variances and adverse weather.

  • Weather-interrupted May and June impacted activity levels in certain southern and southeastern U.S. markets.

Guidance & targets

CategoryTargetConfidence
Full-year 2026 Adjusted EBITDA
$8.1 billion to $8.5 billion
high materiality
High
Full-year 2026 Net Income
$3.9 billion to $4.1 billion
medium materiality
High
Full-year 2026 Diluted EPS
$5.60 and $6.05
high materiality
High
Net incremental EBITDA contribution from M&A
approximately $200 million
medium materiality
Medium
FX impact on FY26
negligible
low materiality
High
Capital allocation to growth investments
approximately 70%
high materiality
High
Capital allocation to shareholders
remaining 30%
high materiality
High
2030 Annual revenue growth
between 7% and 9%
high materiality
High
2030 Adjusted EBITDA margin
22% to 24%
high materiality
High
2030 Average adjusted free cash flow conversion
over 100%
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Americas Materials Solutions
Delivered strong performance supported by good underlying demand, positive pricing, and contributions from acquisitions. Benefited from national scale and connected portfolio. Underlying backdrop remains positive, supported by infrastructure megatrends and reindustrialization activity. Strong cost and commercial discipline.
Aggregates volume: +2%Aggregates pricing: +5%Cement volumes: -2%Cement pricing: -1%Road Solutions Q2 revenues: +6%
10% ahead10%—40 bps expansion
Americas Building Solutions
Performance reflects impact of recently completed divestitures and a subdued new build residential market. Experienced inflationary cost backdrop, particularly elevated haulage rates. Outdoor living demand resilient. Good growth in data center, water, and energy markets.
2% behind-2%—8% behind
International Solutions
Delivered further growth and margin expansion supported by higher activity levels in certain markets, positive pricing momentum, and fixed cost control. Europe benefited from infrastructure and reindustrialization. Australia performed well with positive demand and synergy delivery. (Note: 'Total revenue growth of $0.05' appears to be an ASR error, interpreted as 'further growth' based on context of 'further growth and margin expansion').
further growth——70 bps expansion

Deals & partnerships

Various 3 strategic divestitures of noncore businesses $1.9 billion

Demonstrates commitment to active portfolio management and reallocation of capital into higher-growth connected businesses.

Various 17 value-accretive acquisitions $1.4 billion

Across 4 strategic growth platforms in aggregates, cementitious, roads, and mortar.

Axius Water Acquisition of a leading U.S. water infrastructure player approximately $700 million

Largest acquisition year-to-date, closed just before the end of Q2 FY26. Integration progressing well.

Arcosa Agreement to acquire a leading provider of building materials and critical infrastructure products in the United States $8.5 billion total EV ($150 per share cash consideration)

Subject to Arcosa stockholder approval, regulatory approvals, and customary closing conditions. Represents a compelling growth and value creation opportunity, bringing CRH into new high-growth markets like Dallas and Phoenix.

Ecomaterial Acquisition of a leading supplier of SCMs (Supplemental Cementitious Materials)

Acquired last year. Integration is progressing well.

Risks & headwinds

Inflationary cost environment Q2 FY26, expected to moderate in Q3/Q4 FY26

Elevated haulage rates in Americas Building Solutions

Mitigation:Implemented operational and commercial initiatives, including additional price surcharges and cost reductions.

Subdued new build residential market Ongoing, no recovery expected until late 2027 at best

Impacted Americas Building Solutions (revenues -2%, EBITDA -8%) and ready-mix business

Mitigation:Focus on resilient repair and remodel segment; leveraging connected portfolio for other growth areas.

Adverse weather conditions May and June Q2 FY26

Impacted cement volumes (-2%) and activity levels in certain US markets

Mitigation:Assumed normal seasonal weather patterns for remainder of year in guidance.

Geopolitical and macroeconomic uncertainties Ongoing

Unquantified

Mitigation:Guidance reaffirmed assuming no further major dislocations.

What to watch in Q3 FY26

Americas Building Solutions margin recovery

Q3 FY26
Current Revenues 2% behind, Adj EBITDA 8% behind, impacted by elevated haulage rates
Target Moderation of cost inflation impact, improved margins

Why it matters

Indicates effectiveness of mitigation strategies and recovery in a segment impacted by residential slowdown and cost pressures.

However, we've taken steps to mitigate us. We've come back what kind of additional price surcharges and cost reductions. But as you know, this will take time to recover, right? There can be a lag, but we expect the impact of this cost inflation to moderate as we head into kind of quarter 3 and further into quarter 4 as well.

Q&A highlights

What are the underlying assumptions for reaffirming 2026 guidance despite macro uncertainty?

Management reaffirmed guidance due to positive demand from strong infrastructure and reindustrialization, resilient repair and remodel, good early and mid-season pricing, and expected margin expansion. Americas Materials expects aggregates volume up 2% and pricing up 5%, with cement volumes up 3% in H1. Net incremental EBITDA from M&A is expected to be around $200 million, with negligible FX impact.

“What gives us confidence of that is really the positive demand across the business. Infrastructure is strong, Angel, across the business, particularly, and that's both U.S. and an international comment.”

asked by Angel Castillo Malpica · answered by Jim Mintern

2 min read 5 chapters

Detailed narrative

Strategic Positioning & Capital Allocation

CRH is actively advancing its strategy to increase exposure to large and growing infrastructure megatrends, including transportation, water, and reindustrialization. This involves strengthening leadership positions across its four connected growth platforms: aggregates, cementitious, roads, and water. The company demonstrated disciplined capital allocation through active portfolio management, completing 3 strategic divestitures totaling $1.9 billion and investing $1.4 billion in 17 value-accretive acquisitions year-to-date.

Arcosa Acquisition & Market Leadership

CRH announced an agreement to acquire Arcosa for a total enterprise value of approximately $8.5 billion, expected to close in Q1 2027. This acquisition is set to add 35 million tonnes of annual aggregates production, reinforcing CRH's position as the #1 aggregates player in the U.S. with a combined annualized production of over 265 million tonnes. The deal also provides entry into new high-growth markets like Dallas and Phoenix, and strengthens exposure to the rapidly growing engineered structures segment.

Infrastructure and Reindustrialization Tailwinds

The company is benefiting from strong underlying demand in infrastructure, with 40% of the IIJA funds still unspent by the end of FY26, providing significant future runway. A notable pickup in reindustrialization activity, including data centers, advanced manufacturing, and LNG plants, is contributing to multi-year construction projects. CRH is actively involved in approximately 200 data center projects across the U.S., leveraging its extensive network and connected portfolio to offer comprehensive solutions.

Operational Excellence and Margin Expansion

Despite an inflationary cost environment and weather disruptions, CRH achieved a 30 basis points margin expansion company-wide and 40 basis points in its Americas Materials Solutions segment. This performance is attributed to disciplined commercial execution, strong cost control, and effective pricing strategies. Management highlighted its 'winning way' culture, focusing on operational and commercial excellence, which has driven consistent margin progression over many years.

Shareholder Returns and Financial Strength

CRH returned $1.2 billion to shareholders year-to-date through dividends and share buybacks, and declared a quarterly dividend of $0.39 per share, representing a 5% increase. The company maintains a strong balance sheet and investment-grade credit rating, with approximately $40 billion in financial capacity expected over the next five years. The share buyback program has been temporarily paused in connection with the Arcosa acquisition, with reevaluation planned for a later date.

AI-generated summary of the company's earnings call. Not investment advice.