CRH expects its earnings margins, which have doubled over the past 11 years, to widen further in 2025 as it benefits from ongoing spending on infrastructure on both sides of the Atlantic, even as house building remains weak, according to its new chief executive.
Jim Mintern told analysts on a call on Thursday he will continue the strategy established under his predecessor, Albert Manifold, who moved the group from largely being a seller of cement and other base materials into full-scale construction services, with higher pricing power.
Mr Mintern, a company veteran of more than two decades, who succeeded Mr Manifold earlier this year, also said he will continue the group’s recent trend of selling off unwanted assets as it remains committed to pursuing acquisitions. However, there will be a greater emphasis on construction innovation under his leadership, he said.
The comments came after the Dublin-based group forecast on Wednesday evening that its earnings will rise as much as 11.6 per cent to $7.7 billion after result for last year met market expectations.
The group’s adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) rose 15 per cent to $6.9 billion, it said in a statement after trading on the New York Stock Exchange, where it has its main listing, closed.
It sees Ebitda rising to between $7.3 billion and $7.7 billon this year. The current consensus among analysts is for a figure of $7.56 billion. During 2024, CRH spent $5 billion on deals.
Mr Mintern told analysts he expected 2025 to be another year of Ebitda margin expansion after it widened by 1.8 percentage points in 2024 to 20 per cent.
“2024 was a strong year for CRH, driven by our customer-connected solutions strategy and leading positions of scale in attractive, higher-growth markets,” he said.
“The strength of our balance sheet enabled us to invest $5 billion in 40 value-accretive acquisitions while also returning $3 billion of cash to shareholders through dividends and share buy-backs. The outlook for our business remains positive, underpinned by favourable demand and positive pricing momentum, leaving us well positioned for another year of growth and value creation ahead.”
Group revenues rose 2 per cent to $35.6 billion.
CRH said it expects positive underlying demand across its key end-use markets in 2025, underpinned by significant public investment in critical infrastructure, combined with increased re-industrialisation activity in key non-residential segments.
Its North American businesses, by far the biggest part of the group, expects continued positive momentum in infrastructure activity, supported by robust state and federal funding, it said.
“Although the residential sector continues to be supported by strong long-term demand fundamentals, the new-build segment is expected to remain subdued while repair and remodel activity remains resilient,” it said.
CRH sees its so-called international operations, which includes its European business, to have infrastructure activity underpinned by government and EU funding.
“Non-residential construction continues to be aided by onshoring of supply chains and industrial manufacturing activity,” it said. “Residential markets are expected to stabilise with structural demand fundamentals supporting a gradual recovery.”
It added: “Assuming normal seasonal weather patterns and absent any major dislocations in the political or macroeconomic environment, CRH’s leading positions of scale in attractive higher-growth markets, together with our strong and flexible balance sheet, are expected to underpin another year of growth and value creation in 2025.”
