Q2 2025 CRH Public Ltd Co Earnings Call

Krista and I will be your operator today. All lions have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question, please press star and then the number 1 on your telephone keypad at any time.

If you would like to withdraw your question, it's star followed by the number 1 again.

At this time I'd like to turn the conference over to Jim Minter. C r h chief executive officer to begin the conference. Please go ahead sir.

Hello everyone. Jim Minter here, CEO crh, and you're all very welcome to our Q2, 2025 results, presentation and conference call.

Joining me on the call is Nancy, Beezy or CFO Randy Lake, our coo and Tom Holmes, head of investor relations.

Nancy was appointed to the role in May, and our track record of financial leadership and operational insight will be invaluable as we undertake the next phase of our growth journey. Before we get started, I'll hand you over to Tom for some brief opening remarks.

Thanks Jim. Hello everyone.

I'd like to draw your attention to slide 1 shown here on screen.

During our presentation, we will be making some forward-looking statements relating to our future plans and expectations.

These are subject to certain risks and uncertainties and actual results and outcomes could differ materially due to the factors outlined on this slide.

For more details, please refer to this slide, our annual report and other SEC filings which are available on our website.

I will now hand you back to Jim Nancy and Randy to deliver some prepared remarks.

Thanks Tom over the next 20 minutes or. So, we will take you to a brief presentation of our results for the second quarter of the year.

Highlighting the key components of our operating performance are recent capital allocation activities.

As well as provide you with an update on our expectations for the year as a whole.

We will also spend some time discussing our strategy and how we have positioned our business to deliver further growth and value creation going forward.

At the outset on, slide 3, let me take you through some of the key messages from our results, we are pleased to report a record second quarter performance under pin by the execution of our proven strategy and uniquely connected portfolio, which continues to deliver value for our shareholders.

We have also been actively reinvesting in our business and allocating Capital towards attractive. High growth markets, benefiting from secular Tailwinds,

In the year to date, we've invested approximately $1.7 billion across 19 transactions on acquisitions and growth capital expenditures. Investments across our business have been strong, and we have a robust pipeline of further growth opportunities in front of us.

We also recently announced an agreement to acquire Eco material Technologies. A leading supplier of supplementary cemeteries materials in North America, for a total consideration of 2.1 billion.

This is a unique opportunity to accelerate our cementitious growth strategy, which we believe will deliver significant incremental long-term value for our shareholders. I will take you through that in further detail a little later.

Looking ahead to the remainder of the year. On the line demand across our key entries markets, remains positive and our backlogs are ahead of Prior year.

Based on current market conditions and the momentum we see across our business. We are pleased to raise our financial guidance for 2025.

Assuming normal seasonal, weather patterns, and no, major dislocations in the political or macroeconomic environment. We expect full year, adjusted ebitda to be between 7.5, and 7.7 billion dollars representing 10% growth at the midpoint and another strong year of delivery for crh

Turning now to slide 4 on our financial highlights. For the second quarter overall, a strong performance with revenues adjusted, ebta margin and diluted EPS all at record levels. And well, ahead of the prior year, period.

Total revenues of 10.2 billion represent a 6% increase over the prior year.

Supported by favorable, underlying demand, positive pricing momentum across our business and strong contributions from Acquisitions. This enables us to deliver 2.5 billion dollars of adjusted Ava in the quarter and 9% increase over the prior year.

I am also pleased to report a further 70 basis points of margin expansion, demonstrating our relentless focus on continued operational excellence and strong cost management across our business.

All of this translated into further growth in our diluted earnings per share of 3% on the prior year period.

Now, I will hand you over to Randy to take you through the operating performance of each of our businesses.

Hello everyone, turning to slide 6. And first to America's material Solutions, which delivered further profit growth and margin expansion in the second quarter.

Driven by the continued execution of our strategy, increased operational efficiencies, and contributions from acquisitions.

Despite contending with some adverse weather conditions, which impacted activity levels. I'm really pleased with our teams and how they were able to quickly adapt to the stop start nature of the season.

Controlling and pacing our cost to optimize our operations resulting in total revenues and adjusted ebit da 2% and 4% ahead of Prior year really highlighting the resiliency of our business.

An essential materials, second quarter revenues were 4% ahead, supported by increased volumes, and positive pricing. Momentum in both Aggregates and cement.

Aggregates pricing increased by 4% compared to the prior year or 7% on a mix-adjusted basis.

Cement pricing increased by 2% reflecting Regional variances across our operating footprint.

In Road Solutions, Q2 revenues were 2% ahead, despite weather impacted activity levels benefiting from our national scale and diversification.

And we'll discuss the strengths of a fully connected roads offering in further detail. Later.

In terms of the demand environment, the underlying backdrop across our key markets remains robust infrastructure, our largest and Market continues to be underpinned by state and federal funding through the iija.

Less than 40% of IIJA highway funding has been deployed to date, highlighting the significant runway we still have ahead of us.

State funding is also strong with Transportation budgets for fiscal year. 2026 expected to increase by 6% over the prior year.

As Jim mentioned earlier, looking ahead to the remainder. Of the year, I'm encouraged by the positive momentum in our backlogs which are ahead in both revenue and margin.

We also continue to see good levels of reindeer activity, particularly in manufacturing and data centers. These large-scale, highly specified projects are an excellent fit with our connected portfolio. Enabling us to not just provide the essential materials but also the water and energy infrastructure critical to these types of facilities.

And you can see this coming through in the performance of America's Building Solutions on slide 7 where our business delivered strong profit growth driven by good, underlying demand and Commercial Management.

Second quarter revenues for our building and infrastructure Solutions business. We're 3% ahead supported by robust demand and our key markets of data centers water and energy infrastructure.

Our Outdoor Living Solutions, business. Also continues to benefit from its large exposure to more resilient residential repair and remodel activity with Q2 revenues 2% ahead of the prior year.

For America's Building Solutions, overall total revenue growth of 2% translated into a 5% increase in adjusted ebit da and a further 70 basis points of margin expansion.

Moving to interational Solutions now and slide 8 where our business also delivered a strong second quarter performance supported by improving demand environment. Further pricing momentum and operational efficiencies on the back of a 13 increase in Revenue. We delivered a 23% increase in adjusted ebit da and a further 170 basis points of margin expansion.

In Central and Eastern Europe. We continue to experience positive. Underlying demand and early signs of recovery in new build residential activities, while in Western Europe, activity levels, continue to be supported by infrastructure and non-residential demand.

Our results also reflect the acquisition of adbri last year and I'm pleased to report that the business is performing well with commercial and operational. Synergy. Realization ahead of our original expectations.

Overall, we're pleased with further growth in margin expansion across each of our businesses. And at this point, I'll hand you over to Nancy to take you through the financial performance and capital allocation activities, and further detail.

Thank you, Randy. Hello everyone. It's a pleasure to speak to you for the first time as a CFO of CRA. It's an exciting time to be here and I look forward to working with many of you as we execute our strategy.

First the slide 10, and as Jim mentioned earlier, we delivered a record second quarter performance with further growth across our key financial metrics.

Our Q2 adjusted ebata approximately 2.5 billion dollars was 9% ahead of the prior year driven by favorable underlying demand and positive pricing as well as strong contributions from Acquisitions and synergies.

Mint across the RH and the Relentless focus on operational, performance that Randy touched on earlier.

Moving to slide 11, where I'll briefly update you on our Capital allocation activities.

First to m&a, where year to date, we have invested approximately 1 billion dollars on 19 value, accretive acquisitions.

Strengthening our Market leading positions in attractive growth markets.

Our pipeline is strong and our uniquely connected portfolio provides us with multiple opportunities for further growth in what remains of very fragmented industry.

Through Q2, we've also invested approximately 700 million dollars in growth capex.

Leveraging our size and scale to fully capitalize on the attractive growth opportunities that we see across our markets.

For example, we are modernizing 2 of our largest aggregate facilities in North America Cape Sandy, and Southern Indiana and marble. Cliff in Columbus, Ohio, these investments will expand production capacity to support future growth, as well as drive further operational. Efficiencies through increased Automation and energy optimization at our sin Saba, Quarry, in Texas. North of Austin. We are also investing to expand our capacity with new aggregate production equipment and rail. Infrastructure to better serve our customers.

These kinds of Investments are an excellent use of Capital low-risk, High returning Investments that will enable us to accelerate our growth margins and returns.

We also continue to deliver significant accretive returns to shareholders in the form of dividends and share BuyBacks.

In line with our strong financial position and policy of consistent long-term dividend growth, the board has declared a quarterly dividend of $0.37 per share, representing an increase of 6% on the prior year.

Through our ongoing share buyback program. We have also repurchased approximately 800 million dollars so far this year and today, we are commencing a further quarterly tanch of million dollars to be completed. No later than November 5th.

Since the inception of our buyback program in 2018, we have returned over $9 billion to shareholders, representing 22% of our shares issued at an average price of less than $9 per share. These returns, while maintaining a strong and flexible balance sheet, reflect our disciplined capital allocation strategy overall. It's been a busy year so far, with approximately $3 billion of capital allocated to growth investments and cash returns, demonstrating our focus on the efficient allocation of capital to maximize value for our shareholders. I will now hand you back to Jim.

Thanks Nancy. Turning now to slide 12 and our agreement to acquire Eco material Technologies and leading supplier of supplementary cementitious materials in the US.

This proposed acquisition enables us to expand our cementitious products offering to our customers while, also expanding our customer base.

Putting us at the Forefront of the transition to Next Generation cement and concrete. Both essential materials with strong growth Tailwinds.

Together with our existing cement operations. The addition of 10 billion tons of high-quality scms with significantly, strengthened our position as a leading cementitious player in North America with approximately 25 million, tons of combined annual production,

This is an excellent strategic, fit and highly complimentary to our existing platform. It will create a unique National Distribution Network. Enhancing our Innovation capabilities and uniquely positioned us to better serve, our enlarged, customer base

By combining our 2 businesses. We also expect to unlock strong future growth and Synergy potential representing an exciting opportunity to accelerate our cementitious growth strategy and deliver a tremendous amount of value for our shareholders.

Subject to regulatory approval and customary closing conditions of proposed transaction is expected to close in 2025 and we will keep you updated as that progresses.

I'd now like to revisit our strategy and how we are uniquely positioned for future growth.

On slide 14. We have highlighted some of the key benefits of our proven strategy in uniquely connected portfolio.

As the largest building materials company and the leading infrastructure player in North America, operating across 2,000 locations in 48 states and employing approximately 50,000 people, the size and scale of our business is simply unmatched.

By combining our materials products and services across the construction value chain. We are able to maximize our profitability and better. Serve our customers needs.

There are also significant efficiencies in operating a connected portfolio including enhanced production planning yield optimization and logistical benefits all of which result in lower Capital intensity greater asset utilization and higher returns.

The nature of our business provides us with Superior growth opportunities, multiple Avenues to grow, both organically and through acquisitions.

Or strategy has also proven to be resilient through the cycle. Benefiting not just from our scale and National footprint, but also our agile and flexible cost base as well as higher exposure to publicly funded infrastructure, a large growing market and a key Focus for our business.

Let me give you an example of this in action on slide, 15.

With a deep dive into our roads business, we are the largest Road paper in the US operate in across 43 States, a unique Network carefully, built out and put together over 4 decades across our business. We complete approximately 4,000 projects per year, with each 1 typically executed in less than 90 days. And with roads that need resurfacing, every 4 to 6 years, it is a highly recurring Revenue stream.

Over 90% publicly funded, it is predictable resilient and more consistent through the cycle.

Our fully connected roads offering enables us to not just provide the Aggregates, but the mixed designs. The asphalt, and the paving capabilities value added products and services that are essential to a finished road. We also have the capability to buy and store up to half of our annual. Liquid asphalt. Needs to our unique winter fil procurement program. This is a key competitive Advantage, which provides us with security of supply and certainty of costs ahead.

Of the upcoming Paving season. Enabling us to lock in margin on our order book and de-risk our business.

It not only provides us with the ability to procure, a key input for our roads business that are favorable offseason rates but also enables Advanced blending capabilities, which we can customize for the specific needs of our customers.

Fully self-supply by our own high-value aggregates and asphalt, providing a key route to market for our materials. It is also less capital intensive, delivering higher cash generation and returns.

as a simple example, starting with an assumed 10 of cash, gross profit per ton of aggregate,

By combining our best-in-class Aggregates operations with our liquid asphalt capabilities, our asphalt manufacturing and Decades of commercial operational and Technical expertise in road paving we can convert that ten dollars into 60 a multiple of 6 times compared to supplying Aggregates alone.

That's what is unique about our connected Road. Offering we create and capture a profit at each step of the value chain. This is just 1 example of how our strategy enables us to compound value for our shareholders maximizing profits, cash and returns. While also providing Superior optionality for future growth and what remains a very fragmented Market.

Of course, we are also able to provide all of the infrastructure that goes around and underneath a road, including the critical infrastructure systems needed for water energy and Communications networks, highlighting the importance and benefits of our uniquely connected portfolio and the value. Add we bring to our customer offering

before I provide you with an update on our financial expectations for the full year, let me share our latest thoughts on the macro Outlook across our markets

turning now to slide 7 and first to infrastructure our largest send Market here. We expect demand in the United States to be underpinned by the continued roll out of state and federal funding. As Randy mentioned, earlier, less than 40% of the double. Ija Highway funds have been deployed so far. Highlighting the significant Runway that lies ahead.

in our International markets, we expect robust demand and infrastructure to continue supported by significant investment from government and EU funding programmes

In non-residential, we expect continued positive momentum across our key markets, supported by large-scale manufacturing and data centers. In the residential sector, we expect new build activity in the U.S. to remain subdued, while repair and remodel remains resilient in our international markets. We expect the residential sector to stabilize with structural demand and fundamental support in a gradual recovery.

As being said, in the past, we believe the long-term fundamentals for residential construction remains very attractive supported by favorable demographics and significant levels of underbuilt.

Balance sheet leaves us, well, positioned to capitalize on the strong growth opportunities, that lie ahead.

Turning to slide 18 and against that backdrop. I am pleased to say that we have raised our financial guidance for 2025 reflecting, another strong quarter for CRA and the continued execution of our strategy.

Assuming normal seasonal, weather patterns for the remainder of the Year and no major dislocations in the political or macroeconomic environment. We expect full year. Adjusted Eva de to be between 7.5 and 7.7 billion dollars. A 10% increase at the midpoint

net income between 3.8 and 3.9 billion and diluted earnings per share between 5 dollars and 449 and $5.72

Altogether this represents, yet another strong year of growth and value creation for crh.

before we turn over to Q&A, I would like to leave you with a few key takeaways

Our unmatched scale, combined with our connected and resilient portfolio, continues to deliver superior growth. We are strategically positioned to capitalize on key secular growth trends across our markets.

We are relentlessly focused on performance across our business day in day, out to deliver, higher profits, margins returns, and cash and our mindset of continuous business Improvement, underpins our industry-leading results.

We've spoken in the past about our significant financial capacity. We expect to have at our disposal approximately $35 billion over a 5-year period. Our financial strength and decades of experience in identifying, acquiring, and integrating businesses are unrivaled. Now, we have a strong pipeline of growth opportunities in front of us.

And finally,

Through the disciplined and value focused allocation of our Capital. We have a proven track record of compounding earnings growth and creating shareholder value.

So that concludes our prepared remarks today, I will now hand you back to the moderator to coordinate the Q&A session of our call.

Thank you. As a reminder to those on the phones press star 1. If you would like to ask a question, we will now pause briefly while we register questions in the Q&A roster.

We'll take our first question from Anthony Piner with City. Please go ahead.

Uh, good morning.

Um, regarding the the full year guidance raise. I was wondering if you could talk a little bit more about the drivers of the increase and maybe any further detail on the underlying assumptions, maybe how those have changed uh, from from last quarter.

Hi Anthony. Uh, good morning. Um, and thanks for the question. Um, maybe at the end, I might just get Nancy to come back in on maybe some of the scope uh put give and take on the guidance. Yeah, this really happy to this morning is strong Q2 uh Anthony with uh you know I have 9% to margins of 70 basis points and that's despite what was challenging whether across the businesses really. And it was the weather was really, it was kind of it was on on helpful in the context of a lot of start stop nature to the weather and that really disrupted uh the start to a kind of our Paving season but really today happy to report, you know, ebta and margins uh increases across all 3 divisions but Ava and and the margins of. But also all 3 divisions over 20% as well and that really reflects some strong performance execution across the business. And with that a strong first half performance at ebta of 10% year on year. Now, if we look at the kind of underlying activity, was driving that, uh, you know, infrastructure remains robust, still for us. We've less than 40% of the double ija bills yet spent, and if you look at the non-res,

Side, we're particularly busy on data centers and a lot of the kind of high-spec manufacturing from the onshore in and reshoring and given the scale and presence of our business does not really many large projects across the country. That we are not touching in some ways. And that's not just our Rags or our concrete or cement. But actually a lot of our infrastructure projects products too and the kind of water water energy and communication side. And we're often the very first people on those sites. So when we got to the end of the June, uh, our backlogs are good, they're good. In terms of volumes, they're good in terms of margins and we saw that particularly in July, when the weather started to cooperate, you know, July volumes are up double digits in terms of Aggregates and the data are asphalt, you know, with a really strong recovery in our in our organic volumes in July. So once the work was there, you know, sorry once the weather cooperated the work was there to be done and it's really those kind of inputs that's giving us the confidence uh on the full year. Guidance and looking forward to another year of double digit growth and ebta. In fact, when you exclude, the kind of incremental land sales,

Strong upgrade. Uh, mainly organically lead, uh, you know, and uh, yeah, on the back of a good Q2 and a good H1 and maybe Nancy. Do you want to maybe give some of the puts and takes on the scope? Sure. Jim. And so, we really previously guided to m&a contributions of about 320 million dollars of ibida this year. And since that last update in May, we've had a further 11 Bolton. So, uh, with that partial your contribution, we now expect about 340 million dollar contribution from the m&a and just note too that that guidance does not include the Eco transaction that's still subject to regulatory approval and and has not closed.

Your next question comes from the LIE of Trey gross with Stevens. Please go ahead.

Hey, good morning everyone. Thanks for taking my questions, uh, digging in just a little bit deeper, uh, on the guidance and expanding on the last question. Could you update us? Uh, you know, even more specifically on on what you're expecting for, uh, us cement and Aggregates, uh, for the full year, specifically, you know, on the, on the volume and pricing. Uh, for for both segments there because they both seem to be uh, trending, pretty, pretty strong.

Yeah, good. Good question. Thank you for that Randy here. Um when we look at at Q2 uh our underlying uh a volumes were up 5% and pricing up 4% but a mix adjusted basis up uh up 7%, which then going back to Jim's comment. It really probably reflected more of the weather and the stop start nature of the business. So when we look at the, the full year and the underlying backlogs, uh we we would be right in line with what we said at the end of q1, which was the expectation of kind of mid to high single digits in terms of pricing.

Um, when you look at at cement, I'm really pleased to see kind of the work. The teams have done their volumes up. 1% pricing up to 2 234 where we play in the specific geographies. I think that's a a strategic Advantage. Uh so so happy to see progress through the, the first half of the year and I'd say, for the balance of the Year, very similar to what we said at the end of q1, which was volumes low, single digits, and and pricing low single digits, but that's really, uh, supported uh, by the backlog. So, it gives us a lot of comfort when Jim Jim spoke to that both on a volume standpoint and margins, so really good visibility for the balance of the year. So really, uh, expect a continuation of the good progress we made in H1 and I think the bottom line is and you would know us

Well enough, and it's all about kind of growing our margins. So really happy with the position we're in and expect another further expansion of of margins as we go through the balance of the year.

All right, thanks for the color on that. Randy, I'll pass it on best luck.

Your next question comes from the line of Katherine Thompson with TRG. Please go ahead.

Hi. Thank you for taking my question today, uh, focusing on the next Highway bill, um, and just overall Federal infrastructure funding. Um, the states have done a really great job of fundamentally changing tax structure, but still, you know, we're, we're looking forward to that next Highway Bill. Uh, reauthorization. Uh, you know, for what we are hearing is that, um, the bill is going to be a little bit more focused on traditional funding programs.

So, roads and bridges. But, um, could you give an update on current trends and prospects for the replacement of the bill, both in, in terms of just the, the magnitude?

And also the next thank you.

Yeah, thanks for the question. Um, I guess much in line with what what, uh, you outline. We're, we're hearing very similar things, but I guess let me just take a quick step back the, you know, the current iija Jim talked about this less than 40% is, is actually hit the street in terms of spend

Um, there's been another 20% that has been obligated. So uh, I think in terms of historical look back in in previous legislation, a very similar pattern in terms of the distribution of the dollars, and

Much what we expected. I think everyone at least from our from our standpoint. It was a 5-year Bill. We expected it to be 7 years to deploy, uh, the funding, and it seems like it's headed in that direction. Um, to your comment about the the next bill. I think number 1 uh I think is there's a very supportive environment on both side of the aisles from a legislative standpoint, right? It's historically been a bipartisan issue.

Kind of addressed this in some of the early comments and and potential framework of a bill is yes, there'll be a higher concentration from what we understand in and around the surface Transportation piece of that which is it really works to uh to our favor certainly from the connected nature of our our business. But I think more importantly is across the aisle. There is an understanding that they're going to have to address a new funding mechanism. And uh, that's encouraging from uh, from our standpoint is get clarity around where that Revenue stream is going to be something that's more sustainable in the long term. So I think the pieces, the early conversation, early me, momentum is coming together. I mean, you have an Administration certainly that understands the value of building, understands the economic value that's driven by Clarity around, uh, both federal and state funding. So uh, in that kind of environment. I think we're going to hopefully make some good progress in early days to get get clarity around around the bill. And, and really just to wrap up and you said that Katherine, I'm certainly in the states have done a very nice job

Over the last call the last 5 day years in terms of taking a higher level of responsibility and being very targeted with their funding. So that combination with State and and federal funding. I think gets a clear picture in terms of uh, long term, underlying demand.

Um that's very helpful and and just to follow up, you you noted in the release on uh, green shoots and residential repair and Remodel and don't want that to get lost and know. There's a lot of focus on infrastructure with crh. But could you just give a few highlights in terms of what's, uh, what you're seeing more specifically with the green shoots and resi, RNR. Thanks very much and I'll hop back in the queue.

Yeah, uh, Catherine and Jim here, um, I suppose we were seeing that most of them would have called it out in the last 2 earnings calls. Uh, firstly is an international division uh, in kind of the central eastern Europe, really? On the back of a more, uh, aggressive cut on the interest rates cycle in the Euro Zone area. So, we're certainly seeing that there again in, uh, from us perspective. Uh, it's, it's very, uh, I would say, uh, location specific but I think the real challenge is with, with the 30-year fix, still at 6.6%, you know? Uh, it's not a, a demand issue. Uh, it's really an affordability issue on, on, on the new res. And I think once we begin to see that, uh, you know, hopefully a cut on the interest rate cycle, on the dollar that will start to, you know, bring through in terms of residential starts in the US, but you're probably talking into the realistically, from a significant impact. You're probably talking the back end of the 2026 before we start to see that.

Okay, great. Thanks very much. Good luck.

Thank you.

Your next question comes from the line of Ross Harvey with Davey. Please go ahead.

Great. Thank you very much for taking my questions. I'd like to ask about m&a and also the upcoming investor day just in relation to m&a. Um, can I ask a little bit more about the Eco material? Um, deal you might start lying your rationale and and and any further detail you can provide on the financials of that company and then maybe secondly you know you you've obviously transacted a number of bolt-ons here today at. Is there any further color? You can provide on those or or or any updates you can provide on the acquisition pipeline itself and maybe just in regards to the investor day. Quick 1, you know what what what should we expect from today or what should we anticipate from from from you guys that day?

Hi Ross, Jim here. Um, uh, yeah, absolutely may be first taken as a as they came. Uh, first in terms of Eco, yeah. Really pleased to have announced, uh, the Eco material deal last week. Uh, you know, we have been we've known Eco for, you know, a long me, many years, right? And we're actually 1 of their biggest customers, we know the management. Well, also, you know, and as, you know, kind of the key part of our strategy, uh, over the past decade is really making sure that we're deploying capital and what our high growth markets. And then within those markets trying to make sure that you know, we're we're deploying that capital in areas and sectors that have strong secular Tailwinds. And that's exactly what this is in terms of the uh supplementary some issues materials.

Last year, you know, with the hunter acquisition in Texas and all of those deals, right? Have been excellent, high growth, high margin, High returning and really value accretive Acquisitions for crh.

And in that context Eco, is another really strategically important acquisition for us, right? It was a unique opportunity to acquire, a leading supplier of SCM with 10 million, tons of annual production, uh, which is going to increase, uh, you know, over the next number of years, that's a 60% increase in our cementitious capacity in the US. Right? So it's a very significant from that perspective and takes us to 25 million tons. It's also highly complimentary with our existing business and that kind of gives us that ability to unlock strong future growth. And also good synergies, which I might ask Randy in the second to touch on and then finally you know Eco because of their really strong uh Innovation capabilities, really helps to put crates at the Forefront of the transition in the next generation of concrete and cement in the US. So maybe last Randy just to comment a little bit on how it's going to you know, the the complimentary nature and the synergies and maybe at the end, as you might come in just in terms of evaluation aspects of the deal.

Yeah. Um, as Jim said we're super excited to have Eco as part of the the group. I mean, I think you call out a couple things that are specifically, it is around growth, it's around what we can do in terms of value creation. And uh and Jim talks about the capacity expansion of of north of 60%, which is important. But it, it really is participating in the in the fastest element, fastest segment of the

MH when I look at it, uh, what What's exciting about? It certainly is the, the national footprint, both from a manufacturing standpoint and a distribution standpoint. And when you overlap that what we've done and built over the last call, it 7 years in the cementitious business, we have we'll have north of 200 locations to be able to serve the markets more broadly. Our customer base for sure. I think there's a a really unique offering for them. We can provide them with a wider range of of products, uh, and there's cross-selling opportunities. But certainly from our own standpoint, we are a big customer of ego, but the opportunity for us to continue consumed internally more of of the cementitious materials not just in our ready mix business but certainly in our concrete Downstream businesses as well and you would expect and I would expect to see certainly opportunities in around the operational side to learn from both sides. We'll bring some things to the equation, great team with ego, they'll bring some insights to us. In terms of how do we drive operational efficiency?

Obviously, I talked a bit about the commercial opportunities.

But very similar to the Hunter acquisition in Texas, where we were able to take an asset and maximize the network. We had an edge in servicing that particular market in terms of manufacturing sites and, more importantly, logistics. That's what's going to happen here too. So it's the opportunity to not only service our customers to a higher level; it's about getting the best cost position to serve those markets. And they've done a terrific job in building out a very substantial rail network.

Will be able to capitalize on that. And, uh, and Jim talked a little bit about it. I think the other bit, certainly probably, the most important thing is a great team. They have a tremendous amount of experience deep relations in those local markets, uh, Leading Edge, in terms of innovation and technology. So it'll be a tremendous add uh, to our existing business. And we see a long-term future in terms of uh not only growth but also the opportunity to create higher levels of value.

I'm evaluation piece. The Eco business is delivered really strong growth in the the last few years. And they've got some quite significant new capacity coming online the next 12 months. So when we think about the valuation equation, it's really high single digits, post, Synergy multiple, which is quite comparable to valuations we've achieved on similar Acquisitions. We've made in the past, so right in the Fairway of, of, our of our typical work and it's very consistent with our track record of value of creative m&a. And really we like the deal, it's got attractive returns and and attractive, cash profile and and alongside low Capital intensity. So collectively, we're we're quite excited about the transactions.

Thanks Nancy and Ross, then you asked generally, just in terms of m&a, activity in general. Yeah, we've had a really good start to the year, uh, 19 deals a billion dollars. Uh, and that's that's not an unusual run rate for US. Last year. We did 40 deals last year, but you know the 19 deals, uh, total billion that's, you know, really attractive entry multiples is what I'd say, you know, and uh, you know, it's been a busy start to the year. And what I'd say is that the pipeline uh, is good too for the remainder of the year, right? But maybe

That's Aggregates, whatever that asphalt whether that's cement, or whether that's infrastructure. And then have both the business. We really focus on how we connect them into our connected portfolio, because that's where we really drive on the returns and performance of the business. Uh, you know, so maybe as an example, Randy, I don't know if you want to talk about a couple of the deals we've done in the first half of this year. Yeah, I think 1 of the things that stand out in terms of the underlying deals, right, 19 deals. Many of those have been originated by our local teams. So, they're responsible for certainly for driving underlying performance in their markets but also around growth. And so it's, you know, terrific to see those relationships. Come to a point where we can bring some uh, some companies into the family. I mean, maybe a call out to you because it talks to them about the connected nature of the portfolio, Talley construction, which is uh, in and around Chattanooga Tennessee. A high growth Market servicing, not only just Tennessee, but portions of North Carolina into Georgia, but it's an integrated business. So very much uh, resembles our portfolio and connected into an existing platform,

So you can see the opportunity can can continue to build the growth aspects and also a better serve our customers, their jmac resources in the Pacific Northwest uh servicing Washington, Boise, Idaho, connected business from aggregate asphalt into the paving, uh, side of the equation really focused in and around roads. Uh, Jim talked about in an opening comments about the road segments and, and our ability to kind of multiply uh, earnings in that that Revenue stream, a great example of that deal coming together and a deal that we've worked with.

For some time from a relationship standpoint. But I also think, you know, when you think look about the last 12 months, we've added roughly 15 million tons of aggregate, uh, at very attractive multiples and it is about the connected nature. So it's not just the egg, it's the other Downstream businesses that are that are important to us. And I think just this to complement with Jim said the the pipeline is strong. So we see a lot of opportunities. We have optionality in terms of where that growth is going to come from, but but excited about the way, we're continue to connect our portfolio.

Yeah, um Ross is is around this like kind of pipeline strong but you know, we're not going to lose that Financial control and discipline either. Right? When we look, we look at every deal, right? Uh lastly maybe just you asked about the investor day. Yeah. Really looking forward to coming up at the end of next month in September, it's 2 years since we listed on the NYSC. So I think it's kind of a timely uh, update from that perspective. Um you know I think it's going to give us the you know with an exciting program planned uh for the day it's going to be we're going to have a lot of time to talk in more detail and do a deeper dive into our strategy. By either going to have as an example, we're going to unpack a bit more about our roads business and about our water infrastructure business. Also going to have a an opportunity to talk about you know where we're going to be deploying Capital into the future, right? Uh as an organization it's going to be an excellent opportunity to meet The Wider management team as well the business. And then also uh you know, we're going to talk about what our midterm growth Ambitions are for crh. So as I said, uh, a good program, plenty of interaction, and uh, lots of opportunities for Q&A on the morning.

And so, looking forward to catching up with everybody.

Thanks Ross.

You are next question. Comes from the line of Michael dudas with vertical research Partners. Please go ahead.

Good morning. Gentlemen. And welcome aboard. Nancy.

Thank you.

Um, Jim or or Randy maybe like the I pre. We appreciate the um, update on road Solutions. Maybe you could share how and this maybe Road Solutions and your critical infrastructure business. How does that pipeline look? Are you? Have you witnessed any hesitancy or delays in letting things or have some of your customers maybe on the private side accelerated? Those plans. And in that integrated model I that also plays to some of the reassuring infrastructure opportunities that you're you're working on across the board.

Yeah, uh, Shure mic. Um yeah listen uh we we set out this morning, we get the, I guess a bit more detail about the roads business, right? And what you see in that road business is really the, you know, the resilience, the predictability of it. You know, 90% of it comes from public funded and it's it's really, you know, across 43 States um, about 4,000 jobs a year. So it's a really distributed from a risk perspective, about the start of every year, you know, when you get to the 1st of January, you have pretty good visibility as to what you'd expect in terms of kind of recurring Revenue, giving the, the nature of the, you know, the the, the resurfacing of roles, that's required typically every 4 to 6 years, right? From that perspective. In that light,

So, you know, we're not seeing any delays or push back some projects from that perspective. And I think, you know, we're looking forward into 26 as well. And a continuation of the ramp up of activity from the double jaw perspective. Now, uh, you know, from our perspective, it's not just our, our kind of Aggregates, or liquid or asphalt from that position. You know, we're also in there with our infrastructure business as well because, you know, underneath our, you know, uh, uh, underneath or around every road, you have your water at, uh, infrastructure to manage storm water, if Communications, If energy, you know. So that really plays into the sweet sweet spot of our us and America's infrastructure business. So it's that connected nature of the portfolio, being able to offer the co customer, kind of a, a value solution from that perspective. And that's what really kind of drives. The the performance, the resilience, and the consistency of the business

Thanks for the added perspective, too, appreciate it.

Your next question comes from the line of Shane Carberry with Goodbody. Please go ahead.

Hi. All thanks for taking my questions. Just 2 of I can. Please the first 1 just with regards to adbri, you mentioned in the presentation. It's performing. Well could you give us a little bit more color in terms of How It's performing versus your expectations and and how things have evolved from your perspective in terms of the extent of the opportunity that you think is out there in Australia, uh, and the second 1 is just 1 of the things that I found really impressive and the results was just merge and expanding in all 3 divisions, could you give me a little bit of color on

You know, some of the key drivers of that cost control. Was there anything different relative to normal or does it just feel like business as usual in terms of tight cost control?

Yeah sure Shane. Um I'll take maybe the first and add Brian might give Randy a bit of color on a lot of the kind of performance initiatives that drive that margin expansion uh quarter after quarter. Yeah firstly I'd buy. It's almost 12 months since we we did the acquisition uh, down in Australia. Um, it's uh, you know, been a really good start chain. I'm only just back I spent a week down there. 2 weeks ago, visiting all the locations and the team. Um, you know, it's been a good start. Um, you know, it's trading ahead of or, or expectations and that's really coming, uh, you know, going back to that point, but we actually touched on earlier about Eco what we bring to a business, right? To see our H, you know, we we we can acquire businesses and make them better to what the operational excellence. Commercial Excellence, procurement Etc. And it's, of course, all those paths, right? And when you look as well against the kind of the macro outlook for Australia as we go forward as well, from where we are right now, you know, we're looking for uh in addition to, I guess or in uh, improving the performance of the business. You know, I think we're looking at good Tailwind as well for the next number of years. There whether that's on the infrastructure through energy.

And defense expenditure, or, you know, recovery on the residential cycle, too. So, a good start with. Alright, we also did a nice deal on civil Mart, which is basically the leading Australian infrastructure business again in water, uh, comments and energy. Very similar to your us business and both of them have started trading, uh, well and ahead of our expectations and you may be on the performance initiative.

That are driving the the portal margins. Yeah, I guess. Uh, it's a great question because it's different almost every quarter, in terms of what levers we need to pull. I think the teams this year in particular, I go back to the comments about the stop start nature of the business.

Uh, you know, did a tremendous job from an operation from a production planning standpoint, kind of scheduling the proper shutdowns. Uh, the r&m that's required to make sure that we're meeting our customers expectations. It's, it's managed managing both the sales demand and the, and the underlying production planning on a monthly basis, I think the teams did a tremendous, uh, job there. I think you got to go back. Maybe a number of years were over time, we very obliged, a lot of our cost base and all of our different manufacturing sites. So the ability to to continued focus on that has been a critical element of our performance. You know, I think the the other bit that we talked a little bit about and Nancy highlighted in some of the comments at the beginning was really our targeted effort as well in and around development capex, you know taking existing businesses, making them better from really the right kind of Investments. Whether that is through automation technology, uh anything that we can do to enhance the underlying performance of the business. We charge our local companies to come back with Concepts and ideas around there so it's the combination of daily.

Practices around, operational commercial Focus, targeted capex. And I I give a shout out as well to our uh procurement organization. We've certainly done a tremendous job over the last decade making that a real Global focus and delivered uh uh continue to deliver higher than our expectations would be in in many of those areas. So a good overall team effort, uh, for the uh for the first half of the year.

Really helpful color. Thanks guys.

Thanks.

We have time for 1 last question, and our last question comes from the line of Garrick shamoy with loop capital. Please go ahead.

Um, first, are you seeing any clean shoots in outdoor living uh, at all, uh, in, uh, the Americas, or is it mostly confined to Europe uh, with respect to the uh, and maybe Mason Improvement in?

RNR. And then hoping you could speak on Aggregates pricing, uh, in the quarter and you called out. Uh, mix. I'm wondering if that's more product or Geographic, mix and are there any Nicks and packs in the second half? We should think about it as there's competitors.

Shipments coming through and we're wondering if there's any similarities for you guys.

Yeah, thanks Kara, maybe 2 questions there about take the other living 1 and might ask a bit more color just in terms of the uh the mix adjusted price and 2. Yeah. In terms of outdoor living, I'd say it's been a pretty resilient performance, uh, Garrick and, you know, it stepped up, particularly high levels and we know back in the kind of pandemic years, but it's maintained at that level, I'd say areas which have been kind of robust and growing as a kind of, in our premix products in particular, right? And that's been pretty strong for us. Uh, you know, so, you know, quite a resilient performance, it is that the part of our business, which is most exposed to the red side, but it's more on the repair side. Uh, so you know, we're pretty pleased with the performance, um, you know, resilient in general. And then kind of pockets of growth mainly coming from the kind of premix side of us and they do have that. Yeah, looking at the egg, um, pricing. I think there's it's not really a geographic issue. It's more of a weather impact. Uh, for the first half of the year, uh, actually

Probably delivered on what we would expect in terms of the mix adjusted at 7 7%. What we would tend to see premium products going into asphalt, Ready? Mix Concrete the downstream businesses. Uh, we we'll see that come back as the year progresses and activity levels. Pick up. Jim talked about kind of a step up in July in terms of not only shipments but we also saw uh, a higher percentage of Premium products. So we feel good about where the pricing is now and certainly in line with what we would have called out earlier in the year around mid to high single digits in in egg pricing.

Thanks garlic. Uh, well, thank you all for your attention and as always, if you have any follow-up questions, uh, please feel free to contact our investor relations team. Really looking forward, uh, to catching up with everybody again at our investor named September. When we'll have the opportunity to discuss the future growth and value creation opportunities. We see for our business in the years ahead.

Thank you to everybody, and have a good day.

Thank you, your conference call has now ended. You may disconnect

Please wait the conference will begin shortly.