CRH 10-Q 2024-09-30

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549FORM 10-Q

For the quarterly period ended September 30, 2024

For the transition period from to Commission File Number: 001-32846

CRH public limited company(Exact name of registrant as specified in its charter)

Stonemason’s Way, Rathfarnham, Dublin 16, D16 KH51, Ireland +353 1 404 1000

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of October 25, 2024, the number of outstanding Ordinary Shares was 679,336,658.686,67

EXPLANATORY NOTE

CRH plc (together with its consolidated subsidiaries, the 'Company', 'CRH', the 'Group', 'we', 'us' or 'our'), a corporation organized under the laws of the Republic of Ireland, previously determined, as of June 30, 2024 (including as a result of more than 50% of its Ordinary Shares being held by U.S. residents), that it will no longer qualify as a foreign private issuer as defined under the U.S. Securities Exchange Act of 1934 (the 'Exchange Act'). Effective as of January 1, 2025 CRH will be considered a U.S. domestic issuer.

For fiscal year 2024, CRH has voluntarily chosen to file annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K with the U.S. Securities and Exchange Commission (SEC) instead of filing on the reporting forms available to foreign private issuers.

TABLE OF CONTENTS

CERTAIN TERMS

Except as otherwise specified or the context otherwise requires, references to years indicate our fiscal year ended December 31 of the respective year.

References to the '2023 Form 10-K' are to our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024 and amended on March 15, 2024. References to this 'Quarterly Report' are to our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024. All references to the 'Condensed Consolidated Financial Statements' are to Part I, Item 1 of this Quarterly Report. All references to the ‘same period in 2023’ refer to either the three months ended September 30, 2023 or the nine months ended September 30, 2023, as applicable, unless otherwise indicated.

References to the 'Ordinary Shares' and 'Common Shares' refer to our ordinary shares of €0.32 each.

CRH Form 10-Q 1

PART I - FINANCIAL INFORMATION

Condensed Consolidated Statements of Income (Unaudited)

(in $ millions, except share and per share data)

The accompanying notes form an integral part of the Condensed Consolidated Financial Statements.

CRH Form 10-Q 2

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(in $ millions)

The accompanying notes form an integral part of the Condensed Consolidated Financial Statements.

CRH Form 10-Q 3

Condensed Consolidated Balance Sheets (Unaudited)

(in $ millions, except share data)

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Introduction

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to convey management’s perspective regarding operational and financial performance for the three and nine months ended September 30, 2024. This MD&A should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and related notes appearing in Part I, Item 1. "Financial Statements” of this Quarterly Report.

The following discussion contains trend information and forward-looking statements. Actual results could differ materially from those discussed in or implied by these forward-looking statements, as well as from our historical performance, due to various factors, including those discussed elsewhere in this Quarterly Report, particularly "Forward-Looking Statements," and Item 1A. "Risk Factors" in our 2023 Form 10-K and in our other filings with the SEC. Our operating results depend upon economic cycles, seasonal and other weather‐related conditions, and trends in government expenditures, among other factors. Accordingly, financial results for any financial period presented, or period-to-period comparisons of reported results, may not be indicative of future operating results.

Overview

CRH is a leading provider of building materials solutions that build, connect and improve our world. Since its formation in 1970, CRH has evolved from being a supplier of base materials to providing end-to-end value-added solutions that solve complex construction challenges for our customers. CRH works closely with customers across the entire project lifecycle from planning, design, manufacture, installation and maintenance through to end-of-life recycling, using our engineering and innovation expertise to provide superior materials, products and services.

The Company integrates essential materials (aggregates and cement), value-added building products and construction services to provide our customers with complete end-to-end solutions. CRH’s capabilities, innovation and technical expertise enable it to be a valuable partner for transportation and critical utility infrastructure projects, complex non-residential construction and outdoor living solutions.

Operating in 28 countries, the Company has market leadership positions in North America and Europe. The United States is expected to be a key driver of future growth for CRH due to continued economic expansion, a growing population and significant public investment in construction. Our European business benefits from strong economic and construction growth prospects across Central and Eastern Europe as well as recurring repair and remodel demand in Western Europe. In both geographies there is significant government support for infrastructure and increasing demand for integrated solutions in major infrastructure and commercial projects.

CRH has a proven track record in value creation through acquisitions which over the last decade has accounted for approximately two-thirds of the Company’s growth. We achieve this by acquiring businesses at attractive valuations and creating value by integrating them with our existing operations and generating synergies. The Company takes an active approach to portfolio management and continuously reviews the competitive landscape for attractive investment and divestiture opportunities to deliver further growth and value creation for shareholders.

Seasonality

Activity in the construction industry is dependent to a considerable extent on the seasonal impact of weather on the Company’s operating locations, with periods of higher activity in some markets during spring and summer which may reduce significantly in winter due to inclement weather. In addition to impacting demand for our products and services, adverse weather can negatively impact production processes for a variety of reasons. For example, workers may not be able to work outdoors in sustained high temperatures, heavy rainfall and/or other unfavorable weather conditions. Therefore, financial results for any particular quarter do not necessarily indicate the results expected for the full year.

Financial performance highlights

Three months ended September 30, 2024

CRH delivered a strong third quarter performance compared to the third quarter of 2023, resulting in the following performance highlights for the three months ended September 30, 2024 (comparisons are versus the prior year's third quarter unless otherwise noted):

• Total revenues increased 4% to $10.5 billion;

• Net income was $1.4 billion compared with $1.3 billion, an increase of $71 million, or 5%. Adjusted EBITDA*1was $2.5 billion, an increase of $264 million, or 12%;

• Net income margin was 13.2% compared with 13.0%, an increase of 20 basis points (bps). Adjusted EBITDA margin* was 23.3%, an increase of 170bps on the prior year's third quarter Adjusted EBITDA margin* of 21.6%; and

• Basic Earnings Per Share (EPS) was $1.99 compared to $1.81.

Nine months ended September 30, 2024

CRH also delivered a strong performance in the nine months ended September 30, 2024 compared to the prior year, resulting in the following performance highlights (comparisons are versus the prior year's first nine months unless otherwise noted):

• Total revenues of $26.7 billion were 2% higher;

• Net income was $2.8 billion compared with $2.5 billion, an increase of $313 million, or 13%. Adjusted EBITDA* was $5.2 billion, an increase of $564 million, or 12%;

• Net income margin was 10.5% compared with 9.5%, an increase of 100bps. Adjusted EBITDA margin* was 19.3%, an increase of 180bps ahead of prior year Adjusted EBITDA margin* of 17.5%; and

• Basic EPS was $4.03 compared to $3.36.

• Represents a non-GAAP measure. See the discussion within 'Non-GAAP Reconciliation and Supplementary Information' on pages 32 to 33.1

CRH Form 10-Q 24

Capital allocation highlights

Nine months ended September 30, 2024

• Cash paid to shareholders through dividends was $1.5 billion, compared with $0.8 billion in the first nine months of the prior year. CRH transitioned to quarterly dividends during the first quarter of 2024, with a quarterly dividend of $0.35 per share declared in February 2024, May 2024 and August 2024 and a fourth quarterly dividend of $0.35 per share announced on November 7, 2024, representing an annualized increase of 5% on the prior year;

• Cash returned to shareholders through share buybacks was $1.0 billion, a decrease of $1.0 billion versus the first nine months of the prior year. On November 6, 2024, the latest tranche of the share buyback program was completed, bringing the year-to-date cash returned to $1.2 billion. A further tranche has been announced, extending the ongoing share buyback program by an additional $0.3 billion to be completed no later than February 26, 2025; and

• 28 acquisitions were completed for total consideration of $3.9 billion, compared with $0.6 billion in the first nine months of the prior year. A further $1.6 billion was invested in development and replacement capital expenditure projects, compared with $1.2 billion for the comparable 2023 period.

Development Review

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 Ltd (Adbri) for a total consideration of $0.8 billion. Adbri is an integrated materials business with high-quality assets and leading market positions in Austral

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CRH is exposed to market risks relating to fluctuations in foreign exchange risks, interest rates, and commodity prices. Changes in those factors could impact the Company’s results of operations and financial condition. Financial risk management at the Company seeks to minimize the negative impact of foreign exchange, interest rate and commodity price fluctuations on the Company’s earnings, cash flows and equity. Management provides oversight for risk management and derivative activities, determines certain of the Company’s financial risk policies and objectives, and provides guidelines for derivative instrument utilization.

To manage these risks, CRH uses various derivative financial instruments, including interest rate swaps, foreign exchange forwards and swaps, and commodity contracts. CRH only uses commonly traded and non-leveraged instruments. These contracts are entered into primarily with major banking institutions and utility companies, while CRH actively monitors its exposure to counterparty risk through the use of counterparty approvals and credit limits, thereby managing the risk of counterparty loss.

The following discussion presents the sensitivity of the market value, earnings and cash flows of the Company’s financial instruments to hypothetical changes in interest and exchange rates assuming these changes occurred at September 30, 2024.

Interest Rate Risk

CRH may be impacted by interest rate volatility with respect to existing debt and future debt issuances as well as cash balances. For fixed rate debt instruments, interest rate changes affect the fair market value but do not impact earnings or cash flows. Conversely, for floating rate debt instruments, interest rate changes generally do not affect the fair market value of the instrument but impact future earnings and cash flows, assuming that other factors are held constant. Cash balances are held on short-term deposits and changing interest rates will impact deposit interest income earned. The Company uses interest rate swaps to convert a portion of its fixed rate debt to floating rate debt and these may be designated and qualify as fair value hedges. Under these arrangements, the Company agrees to exchange, at specified intervals, the difference between fixed and benchmark floating interest rates calculated by reference to an agreed-upon notional principal amount.

At September 30, 2024, of total debt including overdrafts, finance leases and the impact of derivatives, the Company had fixed rate debt of $10.4 billion and floating rate debt of $3.8 billion, representing 74% and 26% respectively. The equivalent figures as at December 31, 2023, were fixed rate debt of $9.1 billion and floating rate debt of $2.7 billion, representing 77% and 23% respectively, and as at September 30, 2023, fixed rate debt of $9.4 billion and floating rate debt of $2.2 billion, representing 81% and 19% respectively. The Company’s interest rate swaps at September 30, 2024 whereby the Company swaps from fixed interest rates to floating interest rates, were $1.4 billion, compared to $1.4 billion as at December 31, 2023 and $1.4 billion as at September 30, 2023. The Company’s interest rate swaps at September 30, 2024 whereby the Company swaps from floating interest rates to fixed interest rates, were $0.2 billion, compared to $nil billion as at December 31, 2023 and $nil billion as at September 30, 2023. Cash and cash equivalents at September 30, 2024, were $3.0 billion, compared to $6.4 billion at December 31, 2023 and $5.7 billion at September 30, 2023, which was all held on short-term deposits and investments.

Sensitivity to interest rate moves

At September 30, 2024, the before-tax earnings and cash flows impact of a 100bps increase in interest rates, including the offsetting impact of derivatives, on the variable rate cash and debt portfolio would be approximately $8 million unfavorable ($37 million favorable at December 31, 2023 and $35 million favorable at September 30, 2023).

Foreign Exchange Rate Risk

CRH’s exchange rate exposures result primarily from its investments and ongoing operations in countries outside of the United States and other business transactions such as the procurement of products, services and equipment from foreign sources. Fluctuations in foreign currency exchange rates may affect (i) the carrying value of the Company’s net investment in foreign subsidiaries; (ii) the translation of foreign currency earnings; and (iii) the cash flows related to foreign currency denominated transactions.

Where economically feasible, the Company maintains Net Debt*8in the same relative ratio as capital employed to act as an economic hedge of the underlying currency assets. Where it is not feasible to do so, the Company may enter into foreign exchange forward contracts to hedge a portion of the net investment against the effect of exchange rate fluctuations. These transactions are designated as net investment hedges.

The Company also enters into foreign exchange forward contracts to hedge against the effect of exchange rate fluctuations on cash flows denominated in foreign currencies. These transactions are designated as cash flow hedges. In addition, the Company may enter into foreign currency contracts that are not designated in hedging relationships to offset, in part, the impacts of changes in value of various non-functional currency denominated items including certain intercompany financing balances. The U.S. Dollar equivalent gross notional amount of the Company’s foreign exchange forward contracts was $4.4 billion at September 30, 2024, compared to $1.6 billion at December 31, 2023 and $1.7 billion at September 30, 2023.

Holding all other variables constant, if there was a 10% weakening in foreign currency exchange rates versus U.S. Dollar for the portfolio, the fair market value of foreign currency contracts outstanding at September 30, 2024, would decrease by approximately $104 million, which would be largely offset by a gain on the foreign currency fluctuation of the underlying exposure being hedged. In comparison, the fair market value of foreign currency contracts outstanding at December 31, 2023 would increase by approximately $2 million and at September 30, 2023, would increase by approximately $18 million, largely offset by a loss on the underlying exposure being hedged.

Commodity Price Risk

Some of the Company’s products use significant amounts of commodity-priced materials, predominantly oil, electricity, coal and carbon credits which are subject to price changes based upon fluctuations in the commodities market. This price volatility could potentially have a material impact on our financial condition and/or our results of operations. Where feasible, the Company manages commodity price risks through negotiated supply contracts and forward contracts to manage operating costs. The Company monitors commodity trends and where possible has alternative sourcing plans in place to mitigate the risk of supplier concentration and passing commodity-related inflation to customers or suppliers.

Where appropriate, the Company also has a number of derivative hedging programs in place to hedge commodity risks, with the aim of the programs being to neutralize variability arising from changes in associated commodity indices. The timeframe for such programs can be up to four years.

• Represents a non-GAAP measure. See the discussion within 'Non-GAAP Reconciliation and Supplementary Information' on pages 32 to 33.8

CRH Form 10-Q 38

Evaluation of Disclosure Controls and Procedures

Management has evaluated the effectiveness of the design and operation of the disclosure controls and procedures as defined in Securities Exchange Act Rule 13a-15(e) as of September 30, 2024. Based on that evaluation, the Chief Executive and the Chief Financial Officer have concluded that these disclosure controls and procedures were effective as of such date at the level of providing reasonable assurance.

In designing and evaluating our disclosure controls and procedures, management, including the Chief Executive and the Chief Financial Officer, recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

CRH Form 10-Q 39

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

CRH and its subsidiaries are from time to time parties to various legal proceedings that arise in the ordinary course of business, including some in which claims for damages have been asserted against CRH. Having taken appropriate advice, we believe that the aggregate outcome of such proceedings will not have a material effect on our financial condition, results of operations or liquidity.

CRH has elected to use a $1 million threshold for disclosing certain proceedings under environmental laws to which a governmental authority is a party. Applying this threshold, there were no relevant legal proceedings to disclose for this period.

There have been no material changes with respect to the risk factors disclosed in 'Item 1A. Risk Factors' of our 2023 Form 10-K.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

The following table presents the number and average price of shares purchased in each month of the third quarter of fiscal year 2024:

(i) In May 2018, CRH announced its intention to introduce a share repurchase program to repurchase Ordinary Shares (the ‘Program’). In the third quarter of 2024, the Company returned a further $0.3 billion of cash to shareholders through the repurchase of 3,794,016 Ordinary Shares (equivalent to 0.5% of the Company’s issued share capital). This brought total cash returned to shareholders under the Program to $8.1 billion since its commencement in May 2018. The purchases in the third quarter of 2024 were completed under Tranches 21 and 22.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd‐Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S‐K (17 CFR 229.104) is included in Exhibit 95 to this Quarterly Report.

During the three months ended September 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

CRH Form 10-Q 40

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.

Exhibits

3.1 Memorandum and Articles of Association (incorporated by reference to Exhibit 99.1 to the current report on Form 6-K furnished September 25, 2023).

10.1*^ Letter Agreement by and between CRH plc and Albert Manifold, dated September 23, 2024.

22.1 List of Guarantors and Subsidiary Issuers of Guaranteed Securities.

31.1 Certification of Chief Executive Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1** Certification of Chief Executive Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2** Certification of Chief Financial Officer Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

95.1 Disclosure of Mine Safety and Health Administration (MSHA) Safety Data.

101 Inline eXtensible Business Reporting Language (XBRL).

104 Cover Page Interactive Data File (formatted in iXBRL in Exhibit 101).

• Management compensation plan or arrangement

^ Certain information in this document has been redacted pursuant to Item 601(a)(6) of Regulation S-K because the disclosure of such information would constitute a clearly unwarranted invasion of personal privacy.

** Furnished herewith.

The total amount of long-term debt of the registrant and its subsidiaries authorized under any one instrument does not exceed 10% of the total assets of CRH plc and its subsidiaries on a consolidated basis. The Company agrees to furnish copies of any such instrument to the SEC upon request.

CRH Form 10-Q 41

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CRH public limited company (Registrant)

/s/ Jim Mintern Jim Mintern Chief Financial Officer and Duly Authorized Officer

November 7, 2024

CRH Form 10-Q 42