CRH Public Limited Company Q2 2026 Earnings Call

Good day and welcome to the CRH Second quarter 2026 results presentation. My name is Krista and I will be your conference operator today. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question and answer session. If you would like to ask a question, please press star and then the number one on your telephone keypad. At any time. And if you would like to withdraw your question. It's star followed by the number one. Again, at this time I'd like to turn the conference over to Jim Mintern. CRH Chief Executive Officer, to begin the conference, please go ahead, sir.

Hello, everyone. Jim Mintern here, CEO of CRH. And you're all very welcome to our Q2 2026 results presentation. And conference call. Joining me on. The call is Aylwyn Bryan, our CFO. Randy. Lake, our COO. And Danilo Juvane, Head of Investor Relations. Before we get started, I'll hand over to Danilo for some brief opening remarks.

Thanks, Jim, and hello, everyone. I'd like to draw your attention to slide two, shown here on the 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 factors outlined on this slide For more details, please refer to our annual report and other SEC filings, which are available on our website. I'll now hand it back to you, Jim.

Over the. Next 20 minutes or so, we will take you through a brief presentation of our results for the second quarter of the year, highlighting the key components of our operating performance. Our recent capital allocation activities, as well as providing you with an update on our expectations for the year We will also outline how we are strategically positioning our business to deliver further growth and value creation for our shareholders. First, on slide four, let me take you through some key messages from our results We are pleased to report a record second quarter with further growth in revenues, adjusted EBITDA and margin compared to the prior year period, reflecting favorable underlying demand, disciplined commercial execution and contributions from acquisitions. All of this. Is underpinned by the benefits of our superior strategy and the continued execution of our winning way. We. Shane focused on active portfolio management and disciplined allocation of capital as we continue to build a higher growth connected portfolio to maximize shareholder value. In. The year to date, we completed three strategic divestitures of non-core businesses for a total consideration of $1.9 billion and invested $1.4 billion in 17 value accretive acquisitions across our four strategic growth platforms of aggregates, cementitious roads and water.

We also recently announced an agreement to acquire our Kosa, a leading provider of building materials and critical infrastructure products in the United States. This is a significant investment which will reinforce CRH as the leading aggregates and critical infrastructure player in North America, and I will take you through that in further detail later in the presentation. Turning to. Our outlook, we are encouraged by the underlying demand environment across our key markets. Notwithstanding the current geopolitical and macroeconomic uncertainties, we are pleased to reaffirm our adjusted EBITDA guidance range for 2026. Representing another strong year of growth and value creation for CRH. Turning now to slide five. In our financial highlights for the second quarter. Overall, a robust performance with revenues, adjusted EBITDA margin and diluted EPS. All ahead of the prior year period. Total revenues of $10.8 billion were 6% ahead. This translated into adjusted EBITDA of over $2.6 billion in the quarter. A 7% increase over the prior year. Despite. Contending with an inflationary cost environment, I am pleased to report a further 30 basis points of margin expansion, demonstrating our relentless focus on commercial excellence and strong cost discipline across our business. All of this translated into further growth in our diluted earnings per share, a 14% increase.

Reflecting a strong operating performance and including a 16 cent net gain on divestitures in the period. Now. At this point, I will ask Randy to take you through the performance of each of our businesses.

Jim and hello everyone. Turning to slide seven and starting with Americas Material Solutions, which delivered a strong performance in the quarter, supported by good underlying demand, positive pricing and contributions from acquisitions. Total. Revenues and adjusted EBITDA were 10% and 12% ahead of the prior year. Benefiting from our national scale and connected portfolio of businesses. In essential materials, second quarter revenues were 20% ahead of the prior year. Our aggregates volume increased by 2% while pricing was 5% ahead. Cement volumes were 2% behind the prior year, reflecting some adverse weather conditions, which impacted activity levels in certain markets Cement pricing declined by 1%, reflecting regional variances across our operating footprint. Our. Performance also reflects contributions from acquisitions, particularly eco material, which I'm pleased to report is performing well in road solutions. Q2 revenues were 6% ahead of the prior year, supported by growth in asphalt volumes and pricing, as well as increased paving activity, reflecting strong project execution and backlog conversion. From a demand standpoint, the underlying backdrop remains positive, supported by our strategic alignment to growing infrastructure megatrends, transportation and water infrastructure continues to be supported by strong state and federal funding. While Reindustrialization activity remains underpinned by large scale manufacturing and data center projects.

Despite an inflationary cost, environment, I'm pleased with how our teams demonstrated strong cost and commercial discipline across our business, delivering a further 40 basis points of margin expansion compared to the prior year. So. Overall, robust delivery from our Americas Material Solutions business and looking ahead for the remainder of the year, I'm encouraged by the positive momentum we're seeing in our bidding activity and our backlogs. Next to Americas building solutions on slide eight, where our second quarter performance reflects the impact of recently completed divestitures and a subdued new build residential market We also experienced an inflationary cost backdrop, particularly in relation to elevated haulage rates in the quarter. And we've implemented operational and commercial initiatives to mitigate these costs in our outdoor living business. Demand for residential repair and remodel continues to be resilient, and our building and infrastructure solutions business, we're seeing good growth in data center water and energy markets for America's building solutions. Overall, total revenues and adjusted EBITDA were 2% and 8%, behind prior year. Moving to international solutions on slide nine, where our business delivered further growth and margin expansion supported by higher activity levels in certain markets. Positive pricing momentum and strict cost control in an inflationary environment Total revenue growth of 5% translated into an 8% increase in adjusted EBITDA and a further 70 basis points of margin expansion, reflecting ongoing performance optimization initiatives as well as contributions from acquisitions in.

Europe. Our businesses continue to benefit from favorable infrastructure and reindustrialisation activity, while in Australia, our business also continues to perform well, benefiting from positive underlying demand, operational improvements and synergy delivery from recent acquisitions.

Thanks. Randy. Overall, a strong second quarter performance from our business. Now, at this point, I would like to discuss the continued execution of our strategy and how that leaves us well positioned for continued growth and value creation. We. Continue to focus on increasing our exposure to three large and growing infrastructure. Megatrends, which we believe will support significant long term growth and value creation for our business through disciplined capital allocation, we are strengthening our leading market positions and attractive markets to fully capitalize on these compelling growth opportunities. We are continuing to advance our aggregates LED, connected portfolio strategy as demonstrated by our recent agreement to acquire Acosa. We produce over 380 million tons of aggregates on an annual basis, and by leveraging the benefits of our connected portfolio across our cementitious roads and water platforms, we are able to maximize our profits. Cash and returns. With over 1200 acquisitions completed throughout our history, we have a proven ability to acquire and integrate businesses at scale, and our financial strength and cash generation capabilities provides us with strong optionality for further capital deployment. Turning to. Slide 12. Through the continued execution of our strategy, we are increasing our exposure to growing infrastructure.

Megatrends. Transportation, water and reindustrialization, and strengthening our leadership positions across our four connected growth platforms of aggregate cementitious roads and Water. All of this reinforces our position as the number one infrastructure player in North America and our ability to deliver further growth and value creation for our shareholders. I will now ask Aylwyn to take you through our recent capital allocation activities.

Thanks, Jim. Hello, everybody. Turning to slide 13 and first to M&A, where year to date we've invested $1.4 billion on 17 value accretive acquisitions across our connected growth platforms. The largest acquisition was Axios Water for approximately $700 million. Further strengthening our position as a leading U.S. water infrastructure player. As Jim mentioned earlier, in June, we also reached an agreement to acquire. Our Cosa for a cash consideration of $150 per share, reflecting a total enterprise value of approximately 8.5 billion. The. Action is subject to our coastal stockholder approval. Regulatory approvals and customary closing conditions, and we expect to close during the first quarter of 2027. Looking ahead and notwithstanding what has been an active year so far, we have a strong pipeline of further M&A opportunities in front of us, supported by our unmatched scale connected portfolio and fragmented nature of our industry. We also completed three strategic divestitures of non-core businesses for a total consideration of $1.9 billion, demonstrating our commitment to active portfolio management and the reallocation of capital into higher growth connected businesses through the second quarter, we've invested approximately $800 million in growth, CapEx, leveraging our size and scale to fully capitalize on high returning, low risk investment opportunities to expand capacity in high growth markets, improve operational efficiency, increase automation, and optimize our energy usage, all of which will drive long term shareholder value.

We have also returned $1.2 billion to shareholders through dividends and share buybacks year to date. And in line with our strong financial position and policy of consistent long term dividend growth, the board has declared a quarterly dividend of $0.39 per share, representing an increase of 5% on the prior year since. The inception of our buyback program in 2018, we've returned approximately $10 billion to shareholders through the repurchase of 24% of our shares. As previously announced in June. In connection with our agreement to acquire our Cosa, we have taken the decision to pause our share buyback program following the completion of the latest tranche and will reevaluate the program at a later date. So overall, an active year so far, demonstrating our focus on efficient allocation of capital to maximize value for our shareholders.

Thanks, Aylwyn. A good summary there of our recent capital allocation activities. Turning now to slide 14. And our agreement to acquire our Cosa, which is fully aligned with our strategy. Our Cosa is a leading provider of building materials and critical infrastructure products in the United States. Under our ownership, it will enhance our connected customer offering And with 35 million tons of annual high quality aggregates, it will reinforce our position as the leader in US aggregates. With over 265 million tons of combined annualized production. Overall, the acquisition represents a compelling growth and value creation opportunity for CRH, and I will ask Randy to provide a brief overview of the strong synergy opportunities we have identified so far.

For this acquisition, we're uniquely positioned to deliver significant value creation for our shareholders, leveraging our unmatched scale connected portfolio, and leading performance capabilities. And as you can see on slide 15, we currently expect approximately $175 million of run rate cost synergies to be achieved by year three, with 60 million anticipated in the first year of ownership. We've identified significant opportunities across operational improvements, materials, Self-supply global procurement benefits, as well as optimizing our administrative and support functions. So overall, the transaction represents strong synergy and value creation potential, and we look forward to updating you further post completion. Turning to. Slide 16. And just to take a step back for a moment to highlight our strong track record of synergy delivery from acquisitions, our ability to identify, acquire and integrate businesses at scale is a well developed muscle in CRH origination starts at the local level. Local teams with strong community ties and long term relationships. Sourcing strategic growth opportunities across thousands of locations. These empowered local teams leverage the benefits of our global scale and leading performance capabilities. Beat it through best practice programs, global procurement benefits or operational and commercial excellent initiatives. We have a disciplined and value focused approach.

Applying a rigorous appraisal process as well as strict strategic and financial performance criteria to every investment we make. Since 2018, we've delivered, on average approximately 600 basis points of margin improvement within the first three years. Post acquisition. A more recent example of this is eco material. The leading supplier of Scms, which we acquired last year. The integration is progressing well, and I'm pleased to report that synergy Delivery is ahead of our original expectations. All of this reflects a deeply embedded culture of performance and a relentless focus on continuous business improvement, which really strikes at the core of our winning way.

Thanks, Randy. Turning to slide 17. And as we previously communicated over the next five years, we expect to have at our disposal financial capacity of approximately $40 billion, reflecting our strong growth profile, the level of cash we are generating and the strength of our balance sheet. We expect to allocate approximately 70% of this to growth investments, with the remaining 30% return to shareholders through dividends and share buybacks. The. Proposed acquisition of Arcos accelerates our progress in this regard, while also being fully aligned with the delivery of our 2030 financial targets. Annual revenue growth of. Between 7 and 9% and adjusted EBITDA margin of 22 to 24% by 2030, and an average adjusted free cash flow conversion of over 100% on slide. 18 you can really get a sense of the size and scale of our business with the adjusted EBITDA of CRH, together with our Cosa on a forecast 2026 basis, being larger than the next for us peers combined. Scale matters in our industry. It creates significant commercial, operational, and strategic benefits that set us apart and enable us to deliver leading performance year after year. Our. Unrivaled cash generation capabilities, combined with our uniquely connected portfolio, provides us with superior optionality to invest for further growth and value creation.

All supported by our strong balance sheet and investment grade credit rating. All of this together demonstrates why CRH is the leading compounder of capital in our industry. Finally, now turning to outlook on slide 20. And we are pleased to reaffirm our adjusted EBITDA, net income and diluted earnings per share guidance for 2026. Assuming normal. Seasonal weather patterns for the remainder of the year and no further major dislocations in the geopolitical or macroeconomic environment. We expect full year adjusted EBITDA to be between 8.1 and $8.5 billion, net income between 3.9 and $4.1 billion, and diluted earnings per share between $5.60 and $6.05. Representing another strong year of growth and value creation for CRH. So that concludes our presentation for 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 phone, press star one. If you would like to ask a question. We will now pause briefly while we register questions in the Q&A queue Your first question comes from an Angel Castillo with Morgan Stanley. Please go ahead.

Thanks and good morning., Jim. Aylwyn. Congrats on a strong quarter here. Just you you kept your outlook unchanged despite, you know, still a volatile. And uncertain kind of macro backdrop. So just was hoping you could give us a little bit more color on just your 2026 guidance. And just the underlying assumptions.

Yeah. Good morning. Angel., yeah, listen, I'll give you a bit of background first and then I might ask Randy just to jump in maybe on the building blocks, the kind of volume and prices underpinning that reaffirmation of the guidance. And then Aylwyn, just in terms of the financial puts and takes at the end of it. Yeah. Listen, this morning, very pleased to be announcing a really strong Q2 and a strong H1, despite what's been a very challenging macro environment. And as you know, kind of very much a weather interrupted kind of May and June and some of our southern and southeastern parts of the US business. And in that context, very pleased to reaffirming the adjusted EBITDA guidance for the year. What gives us confidence in that is really the positive demand across the business. Infrastructure is strong. Angel across the business particularly. And that's both US and an international comment. You know, where we're forecasting this year to be still have 40% of the IJA unspent. So we had good momentum coming into 26. That's continued. And looking at good momentum exiting into 27 to. I'd say one thing that we did note, certainly in the first half of 26, we saw a notable pickup in the whole area of Reindustrialisation.

That's kind of obviously in data centers, but also advanced manufacturing facilities, semiconductor facilities, LNG plants. And these are large multi-year construction projects typically can run to kind of 2 to 3 years., residential,, pretty much subdued, particularly on the new build side in the US., but seeing good resilience actually on the repair and remodel side. Now we switch to the international business. I'm seeing similar trends, strong infrastructure underpin across the whole international business. Again, seeing a pick up in the whole kind of reindustrialisation space across data centers and advanced manufacturing in particularly in Central and Eastern Europe and maybe slightly different to the US, seen pockets of recovery in residential, certainly in parts of Western Europe and up into the Nordics as well. We are seeing. So, you know, good underlying backdrop across the business. We've had a good start to the year in terms of pricing. You know, good early season pricing. And that was followed up, followed up by mid-year pricing. Also. And very good commercial execution. And looking forward in that guidance to another year of margin expansion. But maybe Randy, do you want to get into the specifics, maybe volumes and prices?

Yeah., I guess when you look at our business, we've talked about this before, kind of the, the, the Americas materials business, specifically the window to the futures, our backlog kind of gives us that 6 to 9 month view in terms of underlying activities. And, and that remains positive. So when we talk about kind of the quantum that we're bidding as well as what we've secured in terms of volumes, they're both up year over year. Jim called it out. Certainly infrastructure. Infrastructure and the private reindustrialisation playing a significant role in that., Jim mentioned it as well. These are multi-year projects. I think what it does do is actually play to the strength of the connected portfolio. So it's, it's not just the ability to, to provide the aggregates, everything from the very beginning of the project in terms of the underground water, energy components with our ,, our. Products business, as well as cementitious and all the way into delivering aggregate readymix and ultimately asphalt so that connected portfolio has been a strength and adds to the, to the volume backdrop that we're seeing,, good to see. AG movement in the, in Q2 volumes up 2%, pricing up 5%.

That's really in line with what our full year expectations have been. If you remember, back in Q1, we had a mixed adjusted pricing of 5%. So it's great to see that actually coming through. In regards to demand and the business cement volumes, some whether impact in in Q2. But for the first half up 3%. So encouraging to see that. And I think that really gives us the confidence ,, in terms of what our outlook is on cement, kind of low single digit in terms of volume improvement and broadly flat on pricing. I would, I would call out specifically in and around our cementitious strategy. I mentioned it in the opening remarks, eco material performing really well., volume and pricing up mid-single digits. So when you look at kind of the strength of that business, what we anticipated in terms of commercial opportunities, the internalizing of that volume, it's coming through. And when you look at a mix adjusted basis on cementitious pricing, we're ahead, which is which is really positive. Jim mentioned as well. Just to wrap up on international. Good performance. Continue to see good volume growth. The expectations for the year are low single digit volume and mid-single digit pricing for the full year.

And that'll be the ninth year of positive pricing in our international business. So the combination of good backlog, good commercial execution gives us a lot of confidence for the year.

Good morning. Angel from a scope.

Perspective, you'll have seen it's been an active. year from a portfolio perspective. So 1.4 billion on 17 value accretive acquisitions and 1.9 billion of divestments., and so overall scope impact is lots of puts and takes feeding into this, but the net incremental EBITDA contribution to be to be expected in the region of $200 million for the year. And then finally, just on FX based on current FX rates, the FX impact is expected to be negligible., super helpful. That was a lot of great detail. Thank you. Maybe just one quick one., just you talked, you touched on prices and how you're seeing some improvements in certain pockets. I guess just the, just the, your view as we go into the second half and into kind of, you know, exit right into 2027, would be curious if you could talk about just the overall market's ability to absorb potentially higher prices,, across kind of your Americas materials, products, and particularly in essentials., just given, you know, continued cost inflation lasting longer than we thought.

Yeah. I think Angel, as I said, we've had a good start to the pricing with good early season pricing across the whole business., Randy called it out in Q1. We'd mix adjusted in 5%. Good to see that coming through strongly. Then, as 5% reported in Q2 ,, mid-year pricing, we called it out, I think on the Q1 earnings is in place. Right? And that's what has given us that confidence in looking at, you know, mid-single digits for the full year, which is going to give us good momentum into 27 as well from a pricing perspective, obviously fair bit to play. We're only getting into the kind of crux of the season right now in terms of construction season, but,, yeah, very happy with where pricing is and really looking forward to another year of margin expansion for the full year.

Very helpful. Thank.

Your next question comes from the line of Anthony Anthony. Pettinari with Citi. Please go ahead., good morning., Jim. Hey, Jim, could you talk about the drivers of margin weakness at Americas Building solutions and maybe kind of timing and levers for recovery? There?

Yeah, sure. Anthony., yeah, I think overall it was kind of a mixed quarter overall for the American building solutions business, right?, on the one hand, we kind of saw good growth across data centers and the whole reindustrialization space, which kind of fed in strongly to our water and energy infrastructure business. But clearly, the performance in the quarter had been impacted by the divestitures., in the first half of the year. And kind of continued subdued residential demand, primarily from a new build perspective, right? The repair and maintenance is actually a remodel, rather has remained reasonably resilient. You know, we saw very significant pickup, as you know, during the pandemic. And since then, it's actually held up reasonably well. So it's really the softness and the subdued nature on the new build., residential from that perspective. Specifically in the quarter, in the quarter, I think we called it out. We were impacted by cost inflation in the American building solutions business. And that is particularly in the area of haulage where we saw increased haulage rates on certain of the delivered products in that in the American Building solutions. However, you know, we've taken steps to mitigate this.

We've come back with kind of additional price surcharges and cost reductions. But as you know, this can 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 three and further into quarter four, as well.

Okay. Okay. That's helpful. I'll turn it over.

Thanks, Anthony.

Your next question comes from the line of Trey Grooms with Stephens. Please go ahead.

Yeah. Hey.

Good morning everyone., so I want to ask about on the public side ,, about. Build America 250. You know, I'd love to get your updated thoughts on, you know, how it stacks up to. I. You know, the puts and takes there and it looks like we're heading for a continuing resolution here., I'm curious to see how you you know, that you think that plays out and you know what all that could mean for your business and the,, public demand outlook,, and, you know, if we were heading for a bit of a funding gap, you know, how you navigate that. Thank you.

Trey., good morning., yeah. Listen, I might ask Randy to come in just on the very specifics of where we believe it is right now from a DC perspective. But overall, as I said, we exited last year with good momentum and we've seen that continue in terms of very strong federal and state funding in the current year. Right. And we see it in our bidding activity and our backlogs. And as I said, kind of in the opening remarks on the full year guidance, we're expecting at the end of the year to have still 40% of the IJA yet to be deployed. That's not unusual, right? We've said this a number of times in a kind of multiyear interstate highway program funding program to exit with kind of a 1 to 18 month kind of tail in terms of funding is quite common, but maybe, Randy, you might just give update of what we understand, where we are exactly in terms of BA 250, in DC.

Yeah. So I guess if you take a step back, I think broadly, infrastructure spend has been a bipartisan issue. So I think it's been constructive conversations, both coming out of the House in early conversations within the Senate., as. You know, the Build America Act, at least the way it is, is written today is, is authorizing $580 billion for highway transit and safety programs. I think it's obviously early days in terms of the Senate. So they're preparing their own version. But certainly our conversations with with those people engaged in in those discussions, it is a very supportive environment. I think there's a obviously a general and broad understanding of the need for continued investment, not only just to maintain what we have, but also to improve and expand. I think if you took a step back, at least on for us, there's kind of three things that stand out in terms of the positive language within the Build American Act. One, there's increased funding for core infrastructure. So bridges, highways. Streets, and things along those lines, which is which is critically important, secondly, there's certainly the conversation in and around permitting reform. So the ability and obviously the recognition, the need to accelerate project delivery.

So good to see some of the legislation addressing that area. And then finally,, the new revenue stream ,, as you know, the federal gas tax has been, is the primary mechanism for fund raising within the Highway trust fund ., that's been in place or certainly hasn't been changed since the early 90s. And so there's a recognition of the need to kind of bridge that gap. This won't go the whole way, but it's a, it's an important first step., I think you call it out. Maybe we are heading towards a continuing resolution, but we've been there before., so even if we don't reach a multiyear bill in the fall, our starting point for that extension is coming off a record levels ., and so you combine that with the remaining funds of the IJA. It's a significant level of investment that that is just yet to come. I think for, for us, we certainly don't see any pullback or hesitation at the state level in regards to whether it's maintenance or new builds. So that's encouraging. I think also what we've seen in times of continuing resolutions has been an increase on states to to reallocate money into increase repair and maintenance.

Certainly a benefit to us where the as the largest road paver in the US. But but fundamentally, we don't see any disruptions or expect any disruptions for the balance of the year as or as we look into 2027.

Okay, great. Thanks for all the color. That's super helpful. I'll pass it on. Best luck.

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

Hi.

Thank you for taking my question today., wanted to see,, kind of a balanced update on the M&A pipeline and the Arkansas transaction approval and then a part and parcel with that. You've been good about divesting assets ., where are you with that journey? And,, maybe give a little bit more color in the, the type of assets that you would be more focused in divesting. Thank you.

Hi. Kathryn. Good morning., yeah. Listen, in terms of acquisitions to date and pipeline, a very strong first half of the year, right. Very happy, very pleased with it. 1.4 billion on 17 acquisitions. And they've been really across all our kind of connected growth platforms and really aligned with the kind of growing infrastructure. Mega the largest of course, was the access water deal, which closed just before the end of the quarter at $700 million. Super excited in that particular deal. And so far, so good early days. But has integration has started well. And you're right, during,, we just announced about a month ago that we had reached agreement to acquire Arcos for $8.5 billion total., EV value. And what that our Costa does is that it brings us in. As you know, it's primarily a aggregates, but also in plays in the engineered structures, particularly the energy transmission space from an aggregates perspective, it adds about 35 million tons to our total, 230 million tons that we've produced in North America. So it brings us up, reaffirms our position as number one, but particularly exciting for our perspective, in that it brings us into two new high growth markets. In terms of Dallas and Phoenix, which are kind of geographic white spaces for us from an aggregates perspective, and in particular, they're they're regions and fast growing areas where we had existing parts of the connected portfolio.

So to be able to drop in the aggregates position in those particular fast growing areas is particularly good. From that perspective. Also, in terms of the whole engineered structure space, very, you know, it's going to be one of the fastest growing parts of US construction for the next five years. So very pleased from that perspective. Now, the deal itself is going to be subject to both our coastal approval and normal regulatory approvals. However, we expect it to kind of complete in early 2027. Now, when you look into the outlook,, we have a strong and active pipeline of opportunities in attractive high growth markets, you know, where the balance sheet remains robust, right? And you go back to the investor day, we called out that we had 40 billion of financial capacity. Right. And I think what you get in terms of our portfolio, the connected nature of the portfolio that brings optionality, Katherine in terms of allocating capital across whether it's our aggregates, whether it's across our cementitious or roads or water. And you can see that in the recent deals we've been doing over the last number of years. But with that optionality, I think crucially for myself and the team is that it brings discipline, right?

Having that optionality means that we can really have that laser focus on assessing all the potential M&A pipeline. And, you know, picking the ones that are going to add the most significance in terms of shareholder value accretion. I think ultimately kind of few companies have the scale, the financial power or the capabilities to execute at the, the rate we're doing, you know, and really why we see ourselves as the leading compounder of capital in what remains still a quite fragmented industry in our particular growth platforms in the US., now, in terms of divestments, yeah, a good start to the year would say at 1.9 billion across three divestments., again, it's something that we regularly challenge ourselves looking at opportunities to recycle capital into faster growing, more connected parts of the portfolio. You should expect us to continue to do that. Katherine. I mean, that's what we do. It's not an event. It's really just a process that we continuously challenge ourselves to look for those opportunities. And as we go forward, there will be other opportunities to and you should expect it. And kind of the faster growing geographies, the kind of South and the west of the US, central Eastern Europe into Australia, but across the four areas of the globe, the platforms that we've called out.

Your next. Question comes from the line of Keith Hughes with Truist. Please go ahead. Keith. Your line is open. Your next question comes from the line of Will Jones with Rothschild and Co Redburn. Please go ahead.

Good morning. A couple from me, please. If I could first just looking at the asphalt business in North America. I think the pricing went from flat to plus six in Q2. And we can all see what's happened with with bitumen. But perhaps you could just give us an indication of where spot prices might be in year on year rise over the key Q3 season and how your costs are shaping up against that. And any general remark about the absorption of that into the paving business would be great., and then the second, if you could just perhaps give us a quick tour of any important observations you might make by country in your international business around volume or price? Thank you.

Yeah. I'll morning.

Well, good to hear from you., I might ask Randy just to come back in terms of the asphalt pricing and the outlook for the full year in terms of pricing and margin on the asphalt business. Good start of the year there. But in terms of international business,, I think a good again, a strong performance across the world. Very briefly., you know, I starting first, maybe in central Eastern Europe,, it was a kind of very much challenged Q1 from weather perspective. Once we put that weather, we behind us. We began to see a good recovery., you know, across all that Eastern Europe footprint, primarily led by infrastructure,, and also I called it out in the opening remarks in terms of the whole reindustrialisation space, in terms of data centers and advanced manufacturing, in addition to kind of the normal, I guess, regular,, you know, multi-year EU kind of funding of an infrastructure basis. We're beginning to see,, you know, reasonable activity in terms of defense infrastructure as well in that particular region and some nice projects across that kind of Eastern Europe ,, flank for us., Western Europe, and parts of it, I would say,, strong performance in the quarter and the half.

I called out Ireland, Spain recovery in the Nordics., you know, seen some early shoots,, on the French side of it, particularly on the residential in terms of permits, from that perspective. So pleased to see that UK for us,, has actually had a solid and a good year building off kind of 4 or 5 strong years. Again, more than half the tarmac business in the UK is infrastructure. And so there's still, you know, obviously, high speed two, we're still delivering some volume into that, but there's some good start up in other significant infrastructure projects which is supporting that UK business for us. So we're looking forward to another year of growth in terms of profits and margins. Again in the U.K... Randy maybe in terms of asphalt in the US, what we're seeing.

Yes, maybe I'll break it into two pieces. The demand environment and then kind of the cost and pricing opportunities there ., maybe go back to our visibility in the, in the demand in terms of our backlog. So we're seeing good improvement again, in the bidding activity and also the work that we've secured. So the volumes are ahead, which is then obviously a positive as we go into to execute in the second half of the year. That's a supportive environment. I think in terms of liquid asphalt, we've called it out before, certainly a competitive advantage. You know, the opportunity for us to to house in our tank storage, half of our yearly consumption, it's about having that product available in, in during the paving season season, which is critically important. So,, happy with the progress we made this year in terms of what we have in the tank and what from a cost profile standpoint, again, we use that as in a couple of different ways. One for supply to the technical capabilities to design mixes specific to any kind of road project we have across the US. Again, gives us a competitive advantage and we manage that business on a margin basis.

So when we look for the full year, our expectation, when you look at the demand environment, the cost profile and what we've done with liquid asphalt so far, we expect another year of margin progression as we look for the balance of the year.

Thank you.

See, our next question comes from the line of Keith Hughes with Truist. Please go ahead ..

Thank you. Can you hear me now?.

Good morning.

Yes., sorry about before. I'm not sure what happened. Anyway, to my question,, it's a good explanation of,, asphalt a lot, a lot of positives there. I guess my question is on ready mix in Americas., you know, volumes were flat pricing up slightly. Could you give. What do you think is going on in that business and what the outlook for the second half of the year is going to be.

Yeah, absolutely.

Keith. I think,, you know, it's solid a performance. I'd say year to date in it., in the US, I think what you're seeing is probably one of the areas in the business, which is probably most directly impacted by the, the new build raise situation across the US. That kind of prolonged subdued,, kind of softness in new build rates. I think obviously a big user of ready mix from that perspective. So I think as we, we're not certainly expecting any recovery on new build raise into 26. And at this stage, you got to say, it's probably going to be in the back end of 27 at best before we see any recovery from that perspective. But I think when you do see that, it'll be very meaningful, both from a volume and particularly a price perspective ,, on the side of the business. So I think that's the main driver and that's pretty consistent across the whole,, you know, footprint we have across the whole of the US.

Okay. Thank you. One other question., related to that, just on cement., that good. Volumes in the first half. Sounds like you're going to have some decent volumes in the second half, but pricing still seems to be a little stagnant. What do you think it would take to get cement pricing moving up. stronger than what we're seeing today across the industry.

I Keith I think again.

In terms of cement,, I'm very happy with the volume performance, right. And up 3%, I think in a market, which is probably more flat from that perspective and that what's seen there is just really increasing some of our own self-supply from maybe some of the more recent acquisitions over the last number of years. Exercising the kind of executing rather on the kind of synergy targets and pulling that volume through. So a really good volume performance., you know, we're stepping off two good years of pricing up 8%, I think in 24,, positive and 25 slightly down this year. But overall, over the kind of two year period, good price progression., interestingly, I suppose in the H1, it's kind of slightly down. At -1%, but yet good margin expansion in that business, right? In the cement business, in H1. Right. So good, really good performance coming through in terms of volume and efficiency. I think going back to the first question, I think, you know, what will certainly help it is going to be a recovery on the rays side as well. Obviously, if concrete starts to move up and that will certainly support cement pricing to, again, from our perspective, what we're really pleased with, if you look at kind of a mixed adjusted, including the eco business, we had good positive pricing in the quarter and in the half, so really good, strong performance on our costs for us.

Cementitious business in total for the first half and the second quarter of the year.

Okay. Thank you.

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

Good morning guys. And well done again on a strong second quarter., my question is just really on the kind of data center team. Jim you've given us some good statistics on on this before with regards to kind of. CRH. Proximities to data centers under construction, could we get a bit of an update on that, please? And just to help us in terms of kind of exposure to that segment, and then maybe just more broadly on the data center team, obviously, the hyperscalers have been pretty positive in terms of their CapEx plans. How do we think about CRH plugging into that ,, from a future growth point of view?

Shane, good morning., yeah, I kind of called it out in the opening remarks. We have seen a notable step up in activity in the space in 26, kind of stepping off 25 and I certainly think we're in the early phase of a generational capital investment across the whole of the US right now. That's not just data centers, right? That's advanced manufacturing into microchip plants, into LNG plants. And we're seeing that and maybe not too surprising, obviously, 25 you know, with the new administration and very much,, promoting the kind of on shoring, reshoring, it takes time for permitting and planning to come through. And we're seeing that Randy touched on it in terms of the, the, you know, the increased share of that kind of private,, reindustrialization in our overall backlogs. Now we're active on right now on 200 data centers across the US. Now these are multi-year projects for us. They kind of run from, you know, typically 2 to 3 years. And with 2000 locations across the whole of the US, I think you called it out. We're within 25 miles of 85% of all the data centers that have been announced in the US are within 25 miles of one of our,, CRH facilities.

Now, this is something we recognized. I would say a couple of years ago. And we put dedicated sales teams in place, right? To, you know, who had specific knowledge in this space and are not just dealing with the kind of GC, but we're actually dealing directly with the actual data set users, the hyperscalers working with them. Right. In terms of, you know, designing in terms of helping them specify the products and materials because, you know, each of them have different,, you know,, requests and,, you know, in terms of the kind of materials they're looking to use in these particular facilities. So working with them at an early stage and, you know, if you're building a data center as a user in GC, what matters is clearly speed and quality. And that's what you're going to get with CRH. Given the 2000 locations, given the connected nature of the portfolio. Now kind of on that, we're not just delivering a single product, right? If you think about it, you know, we are often the very first person on the site., you know, it's a good example actually. We just secured a big one in East Texas, right?

To put it in context. Right. This particular facility, the data site, the footprint of it alone, not the total site is 85 acres. We're going to deliver 3 million tons of aggregates into one particular job. Just to give you a sense of the scale, but in terms of that project, we'll be first in in terms of the lot of the subterranean energy and water infrastructure critical for an investment to that scale, you have to stabilize the site. So you're coming in with our cementitious product offering to stabilize the site. And it's only then that we're coming in with our aggregates. And after that, what are concrete? And then we come our asphalt and paving in terms of paving all the access roads and indeed the car parks at the end. So these are huge projects that can extend for 2 or 3 years. And we're beginning to see that come true in terms of activity levels. And backlogs in 2026. And I think from our perspective, it's the beauty of the connected portfolio. And really, you know, it's difficult for anyone to match what we can do in terms of that complete product offering and kind of increase in share wallet with the, the, the hyperscalers and the data, the data center users and put it all together.

It's kind of a really meaningful driver of the long term growth of the business as we look forward.

Well, thanks, Jim.

Thanks, Shane. Thank you.

We have time for one more question. And that question is going to come from the line of Adrian Huerta with JP Morgan. Please go ahead.

Thank you. Hi, Jim. I'm working. The results of my question has to do with margins. Especially in the American Civil Solutions. There was a very good expansion and I wanted to understand the reasons for that and the confidence that you have on sustaining,, that type of margins in the current. That we are.

Higher ., it was a bit difficult to hear you, but I think it was around the margin performance and around the AMS in Q2 and H1. Right. But yeah, listen,. Yeah. Really., pleased, right. In terms of the performance of the AMS businessman, I think if we were to call it a stand out in the quarter and a half, it was really the American materials business, a really strong performance and a really strong relative performance. I think if you look across the the sector with another, you know, quarter of margin expansion, despite what I said was very significant weather disruption in kind of second half of May into June. And some of our bigger states. And that inflationary backdrop. And I think, again, that actually reminds me of some of the conversations we had back in 23. Right. It strikes the heart of the strategy. And, you know, that connected portfolio, which brings the consistency, the predictability and the reliability to that kind of core America material business. You know, when you look at it, I got 2000 locations, right? And not just locations, but leading market positions to over 200 leading brands at a regional level across the US, the connected nature of the portfolio, right.

And then the relentless focus on performance, whether that's operational excellence, commercial excellence, back into procurement excellence month after month, which feeds into the quarter and the half year performance. It's all of that coming to a are coming together rather. And that's what the CRH winning way is, right? We set it out in the investor day. It's really a kind of an affirmation of that. And what sets the business apart and ultimately what drives our growth and the consistency of performance in what was a challenging first six months of the year. Now, you know, we exit 25. It was, I think it was our 12th consecutive year of margin expansion. And we expect this year to be our 13th consecutive year of margin expansion. I think there's very few companies in any industry can deliver that kind of performance. And consistency and predictability over time. Right. I think in the context of that, I mean, I called it out, it is the kind of CRH winning way. It's it's that coming together across the connected portfolio, but a key part of that is kind of the go to market strategy. And Randy, would you maybe give us a bit of flavor as to how we we think about that and how we, I guess, present ourselves at a customer facing level?

Yeah, maybe two, two ways in particular, when you think about certainly we're going to be best in class in each of our operating businesses and engage with our customers in a very targeted way. But what we've done over the last several years is build out what we call market teams. So in 30 plus markets across the US, the critical., MSAs in which we participate in Salt Lake City, Dallas, Tampa, Austin, markets like that where we're bringing the full capabilities of CRH to engage with the customers that Jim called out, those who have national president presence or regional presence where they value from an early onset in terms of project design to execution, kind of the consistency and high level performance we bring. And so we've done something unique in terms of each one of those markets, bringing our teams and capabilities together. I think also, when you look at it kind of verticals that are important in terms of supported by megatrends. So in around data centers, airports, nuclear energy, or the whole energy transition, building teams with specific levels of expertise in each one of those areas. So they get in early talk with the hyperscalers of the world from design and specification standpoint to allow us to bring the full armament of CRH to those projects early, and then all the way through execution.

So we've uniquely changed kind of how we go to market in these critical areas. I think it's making a meaningful difference in our performance, but also the outlook for the business.

Thanks, Randy..

Thank you.

Everyone. That's all we have time for today. And thank you for your attention. And as always, if you have any follow up questions, please feel free to contact our Investor Relations team. We look forward to updating you again in October, when we will report our results for the third quarter of 2026. Thank you. Have a good day and stay safe.

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