CRH - Earnings call transcript Q4 2021

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Albert Manifold

Good morning, ladies and gentlemen. I'd like to welcome you to our 2021 Results Presentation for CRH. My name is Albert Manifold, I'm the Chief Executive. And this morning I'll be joined later on by Jim Mintern, our CFO. And together Jim and I are going to briefly take you through the key headlines of our results for 2021.

the into talk just people to worked CRH go a to who we for to XXXX. moment the during before that, want I take have Now of course nearly XX,XXX had the normal COVID in impact continual live of world. our stop-start most of trying way COVID, We to the lives upon nature the what challenges was But could and you all normal a strong as really as of you life went XXXX. produce about what your help want management On thank and team to behalf I efforts. simply for Board, your tremendous those of you your I refer to COVID there. hope And we to in course of of game the that all brought we're has the COVID end challenges us.

see Let's out. that how plays

And navigate should we're experience whilst through calmer of I a have us into to times, particularly morning's nature this you recent choppy can see to maturity, some country of us senior Of sensible recent new times, course a lives, XX I and have been emerged. say us here new the the in and the I'm be presentations through And financial may COVID our talking slides be the whatever this waters. and is waters challenges. challenges this. seen global some ahead for we you confident have through tough All as team, have presentation to the years. -- to crisis like say most CRH uncertainties that we There'll we company behind this that me.

the with those as website I'll to and You an slides slide our on through go be can accompanying follow this deck presentation that's we referring presentation.

of here. running give schedule this order you have that a a and morning look seeing busy just we we're to the sense So

to last and the are I trends of that year. in evident foremost, are see on through of for during numbers were how year impacting take and moving some First our key forward XXXX, and and some they and you Jim this key business the going

the been going We're how our years. some through has underpinning to We're you been investor so because of want and talk our business you our business our take model solutions recent give of been better what our to want much about has that repositioning delivery construction positioning April and update you by and and of to through our that sense to delivery we about impacted we've business. in take to the also has how talk also We that way changed you a years our shareholders the changing recent is of to changing in thoughts. in

about Of to and how has And expect answers course, our at and it see year evolve. how we talk will we'll have we questions XXXX and usual expectations the end. as started for this

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EBITDA history. Oldcastle generating DNA turning This dividend increase of a on of making year morning manage also returned last every of That one has the the CRH M&A our quite were $X.XXX, year one the billion year presentation. remain announced out turned year. so. we balance we invested in about margin about CapEx. of But our year and And If long you our announced a the last We financial details second of XXXX. the as dollar $X seen me Jim the numbers through for billion balance business $X.X take the some some on the our $X.XX and improvement, proposed I about sure we deployed year for $X.X BuildingEnvelope through through talk through We Look of going business. most numbers; into this billion you it strong in divestment for cash relentless number into returns we great long continued later a on And been that CRH, the focus our with way in growth we developing take just sheet that more to shareholders. generation is back of can may there. across and across of key some will was our part to profitability, X% for cash and another one, highlights. our strongest We Just and year, another investing you we earlier you through of of businesses. disciplined we cash in two of week, the division that standout sensibly finished this had sheet cash earned our cash expansionary and have the have to

and a had Midwest pleasing that stepping business, not South moving our direction As you what makes said and now to you part never on Executive of In the heart following the we more to to we were been almost world. of of we everybody returns of for on strong we the when the speaking, based turn to first price in growth and we're trends into to be, If principally North by where it mid-Atlantic we of a EBITDA. find major the go for maker progress margin, margins, obvious else business have now the thinking we're talk as to headwinds, online, to was up taker. all where stand metrics the see that there. a States. the doing in for in And faced two those I markets me significant backward XXXX. making taking have And They're America, in of And and them push the that our to of remind was as ahead margins. makes for price a ahead stable I heading than Northeast, by of say key want is XX more push XX%. years, profits, them. stop very population we about economic South and Slide one, a the but group generated our pleased and And have XX% can the me the and franchise it's and you, higher XX% right mix, a we basically a Few much but world sales, part sales there's the West. West as down again, just cost that see people returns I'm ahead. great about growth. X this as to performance want in returns of United flow robust reasons, we the profits follow for we which Historically to ourselves manage; Northeast key which can and in and past we having model cash about solutions But In very CRH really is Chief forward. we metric cash step

Northeast mean and the is intensive that to of As I Midwest, across world. that States way road all the and part home network in the about the most the extensive I talk really United infrastructure

have maintenance, geography across they and to a We as million great every years. Now XXX there the franchise of roads do be to that of repaired significant they service. seven repair North Those a but over and don't provide decades up roads build pretty have CRH too really has replaced brutal many built winters. new result fantastic much American people.

year. investment And now states is the long-standing Strong that just the have three our fundamentals. one Strong areas part that in we one The materials economic both partnerships and by trends south push find carry the year number and us West population coming stronger population materials driven building in for America. helps and have the And projects We we and grows South really XX construction. most million the number profitable growth. it a public world that with again on where with underpinned we in The business. pay growth demand as about after the by for market growth the private the XX of us, construction of great every population crucially money in to is growth US ourselves building here North business. It's the growth world years. movements in. by west. just people It business in in and aligning That and course, economic keeps bond multiyear chasing higher a

user have businesses. our We North American end a across balanced

where last bill the and exposed provide ahead difficult margin still provide costs. move attesting and business aligns competence. that That's have, And we is to is as both five the and to We margin, States XX% support increase year. above our energy the to because rocks That and ahead committed want We also with quarter are you to well backlogs we sell perfect very the If try that private. construction in the November which government all further engineering to Americas from infrastructure. road I in We signed compared don't to it I by of business over had skewed coming to year large-scale turn biggest ahead our backlogs course, and for we That seen in regulated, "We construction strategy, fact first today the by very here continued horizontal explain year this margin We can play But is federal strategy. us XXXX the business complicated, ahead a terms planning, anymore. a spend of like in on infrastructure will we that metrics at we that story businesses. about the infrastructure hugely the last And business quantum years. have recent were or March, design, and services of key underpinned we both third with complicated and last infrastructure this materials, previous significantly as systems." don't volumes terms, has the business, the five complex to for the us, exited next see of more the was specified, managed to in infrastructure to on horizontal model years exposed that last different saying ground. those three And the previous awkward, federal heart terms has and which be our large the year. below the yet And over we such EBITDA in sell business a of state that It's that spend highly strong the and in in years. that to the the products. it within spending. volumes stand solution are of of goes into solution $X.X strong have year of the we headwinds is sales of that by of very United well products investment Materials delighted with And just been on complete core that will and towards our public the products trillion is dollar years

Materials start good over business. to can So XXXX Products. in a that On Americas Slide Building I our move X, bodes to for if well

strong this three by division businesses. up is made division. by This performance Another continued

which living Our products new APG business, for for provides play own repair residential business, our outdoor that a space is mainly and architectural and the products We backyard. maintenance. the It US backyard.

That's Now APG bigger came just a year fantastic that business. keeps giving. was record record. a the until new also was It's for year a because that on XXXX at gift XXXX a

as highly a of growth. business. disposal one our transportation is business but utilities materials industry we second the about utilities where business wastewater, the US, to consecutive profit well it's technology vital the And again work, announced This OBE America. around the in solid information The potable is Products non-res business. we the effectively which This shown and that in a very and business the year in largely year Monday, Building have like as water, play. Principally, provides also on Product products around the Infrastructure States. ninth this margin around United specified we sewage but of play our The infrastructure. of back on division our over-ground on is And is such underground, water, transport the this has telecommunications also is new vital that North last recovering

and the because a construction We're North States. markets. business and communicate the and this United in in UK, Europe we and transfer business the in across -- year, delighted there seen crucially, largest really that key about and easy and about deliver and also just which and Europe resilient other understanding the Central Central the higher Now, Ireland end-to-end solution the building for talk not tailwinds. other integrated In which business. four which Romania business. to more the innovative building part we've we'll again businesses that transport is and are stimulus benefited building three of we solutions Eastern to -- starting happening high-growth in south resilient Europe in said That's Europe. in for France, continues focus materials residential are of Happily main our which EU for big our the of industry our this strategy, favorable If the Western we're us. us to again business that on. see maintenance other knowledge markets good in absolutely Europe business over markets; see materials because this materials and helping Atlantic or residential two complex sustainable saw and across America. our a packages is take-up that Europe, move is to and of our we're I I can Eastern Eastern to later in region, to parts really is markets western thing But I'm becoming both for can from Central the solutions construction. is demand markets. to happening and good Eastern Germany, a again very European key Last hub business those largest repair the spend It's then Poland and high-growth largest

Now, West, Europe, over We the Odessa Black is Ukraine. away big people zones. Ukraine must before across businesses in in Sea Central Romanian close two Polish the the over there the I operations closed the XXX Happily our conflict I and South XXX locations which all in in talk are four trading the about are safe Moldovan of to the just which our border. mention people Mikelive across and from and from Kamenets-Podilsky border all employ

any We with can. with are them, that to all we can to doing with families them work their work work possibly we in their businesses, support way and

future Again are the thoughts XX who to very For because to trading But of as our border. terms Europe those across lost movement have west the into we and I I'm If Materials result them of when Poland a XXXX. morning of performance of both of big of morning, Romania chunk to our and division out with ahead I faced also sales they're ahead all see are the the And they about this XXXX. should EBITDA across indeed to and they they're in helping facilitating be across across want challenges And ahead. Up but and them move border. XXXX. had COVID, move of XXXX families a principally. happy the can them this in are moved the we with supporting we that that know border, get

the those is So, in we profitability. terms in are ahead ahead in teeth in sales of pre-COVID levels pre-COVID The of have of we cost But margin of headwinds margin. activity XXXX. performance a XXXX and also

are commercial within a it's and going excellence, embedded solution higher is cost specifically, our control, saw that much It's performance. markets. UK, So, pretty it's infrastructure really our residential I and And stepping across good spend just business strong Materials was call it Europe business, everywhere backwards, strategy just forward. not all about within are not good when delivering our CRH France, we our Poland else in

through brief just going that's Jim now detailed joining going more review And pass to a financial XXXX. I'm it me a to take main who's our on performance you our of review markets. business So, in of to over stage of the who's

Jim Mintern

my Albert. Good what everybody. as here is results our end here of delighted set to presenting CFO. of overview XXXX. flow we have be debt first I'm and morning XX, On net Thanks this our slide morning an position the at cash of

slide sheet a focus ensured I capital of think strong the good is cash XXXX. how this December allocation, a disciplined of example really generation and end balance relentless at our has our on

billion. billion. $X.X of into reinvested Moving our debt cash from XXXX the XX% growth we net our converted of cash was business. with exited in XXXX The the a and $X.X We left, for inflow of EBITDA we

We talk focus we've of hallmark sheets of value billion. further seven balance been many into the gives strongest creation bolt-on optionality for acquisitions pre-synergies for our We times, maintaining years. an also on had we that figure XX now is cash returned returned acquisition real all spent our billion the completed We financial going X.X has And proceeds. completed each consideration December our you really strong $X.X cash detail $X.X shareholders debt at $X.X which bolt-on $X.X bit a a of on our into CRH which capital highlights M&A to net in That course, on of of of a represented a acquisitions for our of position a to and divestment those activity EBITDA, billion entry-level discipline, net activity XX and resulted and us outflow billion shareholders. end of We XXXX. of to times shareholders of billion net expenditure. about in the moment. I'd future. I'm That go XXXX more for in net some or That's debt-to-EBITDA. CRH like in to of of history $X.X the one

a acquisitions, leveraging into detail adding end-to-end building of problems strategy, in our road United Previously, Today, areas complementary are bit products and are in every out vast regions. more majority products today, selling the South, We to day. States. services, materials filling sell the our West, solving around sell of products these where existing to out the in We're West but Mountain solutions our and to on in were solutions were markets the same providing in acquisitions integrated and the faced states solutions Looking we we the in they high-growth used our those we they're the rocks. in built customers. And businesses to customers. used we value-added

of lots have We opportunities XXXX M&A activity. in for

a have as XXXX. we pipeline strong capacity had of we into And XXXX. financial coming enter We significant mentioned I that out

represented That can we billion. comprehensive I decision opportunities $X.X this and remain our and reason the of earlier a behind business. value CFO, the tell followed lose first Albert to that Building that as we week, focus come However, on value. you of we mentioned whatever of business exit announced of of never very for disposal that review divestment Monday our will our expect way on attractive the Envelope half The XX.X earlier disciplined XXXX. enterprise times an a that EBITDA deal XXXX in multiple close shareholder

better at it mentioned optionality creation. at course, sheet us growth, asset is recycle generating more at And further more X.X end today, optionality result, our business, of divested at entry a higher have now our level fact, well I we've times exit $XX narrower, and of balance December our which reinvested about a you're of I margins, the of returns. connected debt-to-EBITDA. of And multiple And in portfolio. multiple. higher we've we higher-quality we exited and times billion continuously focused, a future times for we that an value We divest, of earlier XXXX, cash as businesses $XX been eight the and we higher crucially base, have an of When gives number a at since aware, we net into reinvested simpler, billion this XXXX, falls As XX and look managers categories. capital. have strong active

Firstly, high-growth continue terms we markets. on acquisitions, focus the of in to

build into businesses those products opportunities in for our solutions look existing continue integrated and are connected We to material businesses, our out areas. same to which

good We pipeline we going option. we're but a consider activity have possible of of course, every discipline maintain when to our

XXXX, capital of expenditure expenditure, considerable our on of expansionary to CapEx and spent In activity. markets our XXXX. around capital particularly and had $X.X uncertainty Looking billion with curtailed the in lot we we We across pandemic, CapEx. a

As the in we we that business, in in and up spend of growth XXXX, happened -- our of those spend $X.X lot those exited states. to visibility step were billion level XXXX. A same our to improved able expenditure capital

projects, into to are of we California into delighted and Arizona, So out of -- projects solution projects support to some risk high-returning that as the have able Florida, And those well Texas, because space. I those be within they're CRH. in was lowest some

capital policy I XX% delighted We're at a the or billion. of be December million, our XX of tranche said to almost in our $X the about optionality we'll X% as earlier, we've later And over buyback tick proposed that a XXXX XXth March. in that increase dividend shareholders. represents of no of than see to share had So billion years further in which That of shareholders. Also CapEx $X.X in up our the was to returned XXXX, finish of in current CRH. mentioned we up end the dividend. to progressive able $XXX I Albert share to cash returning

our capital Albert. and business better crucially of returns. you. I'll to by hand the of structurally Thank the and have higher we All shareholders higher acquisitions, these today, back supported return growth, delivering which are higher underpinned margins our expenditure, that is now cash to

Albert Manifold

it used by the mean talks those measure years. key quite Jim some let's use Jim. do we structurally do be which Well, judged? How metrics business. But CRH, the we we there about And we on of some should what metrics. claim? a of How key at upon business? this structurally go and and back in we up better few Thanks look better a for a that's we've term

want at EBITDA to our EBITDA peers. Look at First look growth our our against is growth. I metric

being are our peers our we Here there. peers global the big cement guys out show that

we've peers, won't who U.S. peers, they And growth XXXX. EBITDA two U.S. looks the XXXX are. you at it I on major Our in to know our got name them

any I arbitrarily time. have of Now Actually this period. could period didn't I pick picked

can You CRH in anybody and industry. you it outgrown can here has go else our see, back check yourself. But

So, okay, see. to that's interesting

and Look How performance business, all I operating It every It pick. winner. CRH efficiency performance. metrics. matter good, all Let's CRH doesn't both the doesn't does So outperforms. the you can doesn't up? bring XXX margin matter our next X% business? ahead in end our same looks it again The to at efficiently CRH almost within almost buy that to find CRH By well the improved global you our over business cash. impressive, very peers, by on look of your model, In investing yet be anyway you by look basis again. by you bit peers margin It at Well, growth, growth peers in working investing the very take How our by end you performance a points period. Great positioned. cash. but at business are your U.S. what day, at How of our can metric. let's it's about And the hard our ahead. well here margins can matter ho-hum, are good the period of running we the have but the business? expansion time. running U.S. global next This you Look our business. ahead. little slide. the the

delivered have value our shareholders. you We superior to

ourselves form. getting static is any being over way distance last that. no And has think between changing in And you, and know put CRH want else. has thing, about something Now a top peers. to to we CRH the our we but in one decade. how the explain to there or been me interest shape can business staying more go is let we We doing

We great changes and made to our model business to structure. have our

North of focused peripheral XX the we've we decade markets, part and world of But Europe that geographically of the geographies been west We've our there's are and focused. rebalancing U.S. developed a Europe and have have across within growth. over two pushed markets on our Europe. high-growth business of a east United and XX% we disposed We've last Europe States our have We've owned Northeast business. population and and Central business deeper repositioned We supplements in sold. become reshaped United a the strong higher the and European and South we the those We've businesses America economic our ago markets We've the where Western business hard core to Eastern of importantly, cows narrower the business. the We of that of between of growth. and strong caught with cash that south West pushed States. the years.

We on have refocused our business core areas of competence.

base of are commodity an supplier intermediary less We materials.

our over allowed for improving down solve that and years. needs to some and about by the we've our us XX got lot And closer has awful the customer us to ultimate their their we have chain, understood our offering. problems. last value more customer, customers' And of We customer as problems moved our customers' have an that

broadening Sometimes range. the it's product out about

And them our with innovate materials understand to it's our make fastest-growing Sometimes to to of easier and easier. we best our two make how working them I make materials life business. designers business their complex can off-site and their by our express with adopt their construction, can their major construction, this working lives engineers more

of customers the maybe started in or to and our major XX XX that ago pavers years CRH different our that I was business colors almost for were our years. are decided federal APG commodity. a a road and the pool building we and just more then Home want in can branching we're asphalt, me. solution should asphalt. more bridges? some the pavers, that providing a going business government different the we capstones making purposes. we business, And then and the got we us, well residential complete culverts rock and some and broke of rock to And our we Materials the get road Americas you're that. the and to it sold we we And just And start at and customers and shapes big and maybe States. laying you're market. the used years but well products involved mulch and out business involved principally if the And product lay sizes with think for North handle Lowe's all gray different manage decided And the that customers and then And that broadening basic basically products. into commercial well rock into actually ago make major water how states runoff? and look look the to industrial whole hardscapes turn on-ramps Our who's range across rock Well indeed fastest-growing the start in we asphalt. of sold United said not we the asphalt off-ramps in to and Depots XX to the having Excuse worked can in asphalt to walling to going box and and in the bark two swimming America we to bring supplier turning our now

outdoor package. the customer a is puts the our his this complete we customers. customer products. designs design So to Again, him place, complete now our of to and help when offering who it's and talk And for we customer's in it range our contractor these

for finding customers, adding to by it. them. what strategy our to with the we're in. to a world business XXXX. out their in longer good And paid by that live offering or any value be you conceived was It a provider run is no helped We our were simply XXXX XXXX sole our value adding problems have in a customers and of base Quite in cannot to materials we that getting

CRH adapt about important integration and for you're customers, it the evolving products examples me solving how is benefits have the business life going And our our You so of it move our end business it three to CRH of on and to Integrated by our our of part that to to comes whatever explained call far XX% to sales and benefits services, on how of And That some across of the at call let Solutions. We core grow in. it benefits you for focus And those customers' I've decade. it next and benefits we're our stakeholders. we the shareholders. responsible businesses that problems materials is you. explain

of quality policy. us. my first shareholders. They're Actually they time coming me want our And of of on our customers. pressure I'm improve resilience of talking lower the under background Let against pressure talking clean become up construction time what They're they in sustainable environment. the build. this And of to at we as our spend back of all impact to recycle hear under customers. their colleagues construction to to is to I my has under ever-changing the construction do regulations, and supply investors, we of are this with pressure construction. specifications, consistent construction the tightening. decarbonize been that -- is the morning most more fact coming They the and labor more. to costs talk have reduce government the owners, lifespan local speed of all about And up same teams improve to to have our increasing They to our to to

turning the products policy, that like markets manufacturers in or of collaborate that of regulated has challenges products contractors different I we and and more how deal on complex to of users never job we construction already can government with. and geographic North most and the the to materials they materials that of more the it. how innovate understanding in on challenges end Now And number with the challenges tell but different designers, the to business climatic the the what focusing solve CRH itself. The breadth the them do to building materials process contractors, America. set do well the Nobody and are are faced full. building ourselves They're with on vision architects and mentioned and number they engineers produce Europe, they are is their materials problems in complex set two the their has. matter We're world. anybody or one

find breadth it to ability end right build best-positioned to the into solution all will use, as of strategy who them world across business CRH. world solutions pull geographies knowledge our that our are knowledge, We tomorrow it of we with design a heart our ones we the good for put that offices that together customers' takes help customers. the the products destroying areas without today. have of It's solutions to that takes that are for It

and because heavy primarily there this major we money sustainability, CRH, last tick which on Solutions and heavily boxes or required ever-increasing being has issues, as those there pay extra growth for growth fundamentals for how deliver areas. regulators There provision are you companies all for going to been And that, three high-quality of CRH. are changing forward. adapt are shareholders. and business. two And do growth both that And you. you on be residential. and We're very the to core years enforced solid specified our delivery and is policies brings economic you are that what business of area It are that's comes behind in the course you the innovate are that four ultimately, population of see our all demand. focus on will markets together environment to infrastructure resilience, and And our and benefits increasing with to competence lowering of can if materials that construct regulated. rewarded costs. the see efficiency, will the focused for delivers are business and on They an and There very of need increased

more forward going business. our the But a years, cyclicality business. it's the purse, we a last focusing be we residential You for By or more demand the materials on years, delivered have next three superior policy, resilient how think of business consider solutions a have running focusing on four by the across seen reduced public to what performance. complex number we have of we the

value skill to But that a has solutions And margins business it an that translate have into growth businesses need in to of different set You shown the will in different chain. And our manage different extension confident the cash. do higher across CRH by the of we're always in recent we different our parts manage ways. ability and of years. profile sales, execution existing profitability, that,

Now, at solutions I talking sustainability. can't is of core about leave without strategy. core solutions our subject our integrated the and Sustainability the sustainability of strategy, is very at of the de-carbonization

into today, we We our back targets. announcing targets in of And track we're reduction carbon Last long new pulled year, back XXXX record CRH. have industry-leading XXXX. a

We years reduce emissions will XXXX to over the our XX%. of XX total COX by

I will what But that, XX we it, don't. this XXXX. XX% aside do be It why through very we do on our COX to emitted a to total will morning the would and tonnes In detail by time that in XX reduce million XX this we're we to we time achieve about at in have in I me April minutes. had more when specific. year how are Let I you take explain wish, And morning XXXX, It's of committing will cost. to we that's exactly to million Day Investor tons to set be that. that. reduction. going go April, the

us overall by our by carbon to plans these with ambition of XXXX, take XXXX. of and a zero verified have the All SBTI company line net in been being

build lot sustainability make there's to that and products a the decarbonization. than more indeed important Now, circularity that, we It's sustainable to world. a also will more talk about

scarce in work. we are protecting are building building reserves the the decade, of are decade the our on pride business all the of recycled It's to we I'm roads, will States. being recycles of than waste or what with are do any the builder to more out extending else. recycle I roads the are But been of built anybody progressive road recycler to took today XXX% We cardboard, building of United in and resources expensive circularity. preserving say stand we business Also the a embedded us the CRH CEO we Well, the the or also product anybody increase a of product great It here And all years that there. paper do morning with of recycled a with – recycled you. XX% material. using is Well, deeply the recyclable. largest we're CRH States. owns. this plastic in a we're we than We have that, else. that – now. largest ahead. It's And it? products by vital material get It make nobody focused part more course United roads that in recycle For more there.

the invested has the billion of has within focused it innovation. And today. A over forward. do delivering strategy have lot we that's it responsible delivering actually on A increasing we been over decade Now, sustainability. to will lot continue $X on for last our going businesses been for solution of CRH that

to industry. to about the commercialize with specifically three contribute for I good projects also thoughts, sustainability in have how leave just you agenda to our additionally, and see setup key we market but $XXX more not sustainability to them commercialize the get CRH. that business, that think our If to really can fund, However, them can running we up can we million businesses venture our have some to within exactly a of we how

that are produce to producing in we way. materials the sustainable more a We committed

because that, this all asked in value the We components very a set ourselves to to going to allocate will to our particular stakeholders about take we conversation are we how in are means busy expand will how integrated talk of reporting our we've our in in are help fruits shareholders. our on a committed deliver sustainable find going construct outside about you, to and It sustainability investor and CRH. in to out, maximize is right strategy. customers a strategy. how the how opportunity a more This probably core also manufacturing of in when more We us to that want at in we more the a that update have time an And we more our reason no of to place our at capital April reveal enable with There's key more for circularity our And the manufacturing shareholders. we is are here. The And mature to sustainable to April. big mature for innovating to portfolio explain lot work, off-site And our to you, we take innovating value committed to is talk conversation and moment evolve decade way. and of why ahead. window decarbonization want the we also going the products more the and live -- in products solution we producing way. and all lives, crucially, industrialization. would We'll

Now, look It's will be Jim you'll the And is East about you XX. will Day slide Myself, and Investor by X:XX a of we'll Chief for Coast of live minutes Webcast. time joined on be it our be time Officer. the our Operating afterwards. It updating thoughts. at very forward take Lake, on sure and that. on shown Randy GMT. format find interesting. p.m. We'll to plenty discuss plans a.m. have there. I X:XX to And I'm XX our Q&A we'll

talking conclude of XXXX. presentation, by our to part outlook for the this about that, I'd with So just like

is You've a books. to strong talk -- that our the year. start in had good businesses fact about good. finish there. the Demand we've me The We've also strong had is heard order momentum

we forward look with positivity. So

there uncertainty challenges happen with Eastern to Europe. with challenges to course what's of regards regard There There are in are cost. the and a, are going Of challenges. to Central

we'll strong in you However, the when we'll And we commercial control, to that speak you we a we our on again, excellence and will our focus keep focused cash. on our matters can have April. costs, update

do with and minutes here your presentation take end guess, to going best I we're joined together, way the is the What Tom? Head I'm or have is just what morning. XX to in them like that can. of Tom Holmes, that's sent the And you do Tom the move XX answer I'd questions and the to of we for part Q&A. in by next Investor our So now of Relations this formal to Jim. that,

Tom Holmes

Good morning. Thanks everyone. morning Good Albert. Hi.

them on to will the be and overlap been submit coming many of we'll So moderated. the Q&A session to over coming Instructions] in have them recurring as or morning's through stage. will I questions this over Albert the so. last hour continue that address take Albert here said, I'll through questions Jim Webcast the of a Please themes There's we as and get lot [Operator as through. And portal. your can. questions

the the addressed lot not, a end you hopefully, course outstanding them at conversation our follow-up be be this directly of of over the IR questions any the happy with course there's will and session, So morning. If the of over I if of the to team will day.

Robert So, I to Gardiner from here two Jim Albert, kick have questions us Davy. with off,

for The the the the business? the Building XXXX? your what And your strategic integrated explain first you of forward? in second divestment your impact can what implications rationale is is strategy can are please energy of solution you for quantify And And Envelope going rising costs are behind expectations XXXX?

Albert Manifold

maybe of XXXX maybe impact to Jim on. And on later Tom. pass the both energy Well I'll take I'll

First hope good Bob, morning, of all, well. you're I

acquisition focused – – business opportunities, C.R. have space. optionality the to running operational And we're very actually, we know, our very bought behind We with BuildingEnvelope businesses. business. Laurence primarily the tie value hand energy And of for business first a we CRH, our built we geographic a and a by become deal big in actually process bought that created big business we a in of BuildingEnvelope Oldcastle United last you big acquisition States. began was that business And small part had indirectly. been Look by we're we issue. we very Because in very, space. fine of But a was M&A back out buy space. that have expansion, the one about performance. – me through and about if or It's gorilla very directly for we Let within the in But we XX back. that years. as of no owned shareholders two-thirds course our actually our and that disposal CRH come We then XXXX has on up to of

focused was Secondly, that the market. business on that a was glazing

much glazer. well. could core that that we opportunities. no we we non-residential don't the our go deploy was our interest elsewhere. no see in see capital capital could if I us sensible that could what a I at how said or let's acquisition heavy play this opportunities them. did as know. don't around just was we rationale decision competence. brutal With infrastructure It was about and organic we we then That a sell to customer to being that There sit to and tell a organic or customers. really quite our really regard just elsewhere too looked and business XXXX well. last actually deploy when residential And CRH within portfolio costs All is asked XXXX. just you've indeed crystallize able energy an but the me growth be manage that morning business. have do can that already complex strong you them. private what I've in products offer focus where was on the in And more with test about the And was other increases we're is energy in dynamics We and value the we during cost an management. integrate we core did to public didn't It values the could now it have the sell were reason We to for talked growth competencies Our were more really play. a energy

we place. can manage costs start have ahead natural up Our we in is well. since careful. hedges you tell We And we an We've But forward. year. XX% margin process the keep the it the very energy did so remember I seen of buy went on all eye

our switch fuels have away a watch and have fossil winter fill of program. constant very bitumen fuels use as from And we We carefully we our well.

them we as we So can best manage we're confident that can.

in XXXX, see this Jim? Let's understanding, to talk energy we regard costs and of about how evolves when talk knowledge probably With more I'll the year you year. and in to August

Jim Mintern

you morning, to typically as Sure. build X% our range of In of said under be little tends kind in our it a know revenue. XXXX, just to XX%. Bob, XX% we energy was Good a of

and half As always a tends managed to we've bill margin our side said that about in Albert asphalt on business be from bitumen liquid perspective. the the energy

and to cetera. The about XXXX. year, typically XX% any other no electricity gas, be – heading not have we'd half And in into diesel, cover that's et tends any doing heading into place different

kind at when that pick look you of of towards range X% that range So I the to expect end up XX%, in XXXX. of to it higher

despite very the to we on across significant crucially margins three said push solutions were our business of Albert leveraging As all able on divisions. kind in XXXX inflation

Tom Holmes

Jim. Thanks,

So here on see that? for Jim BuildingEnvelope one. I quick the proceeds thoughts divestment. a post-tax the just Any

Jim Mintern

enterprise of announced Monday. Envelope. value total the $X.X about assumed Building divestment We Yes. billion XXX. included That of of The leases for some

shade So billion. the tax net cash under is of billion about $X.XX net $X a

Tom Holmes

is Kuglitsch Gregor Two Next UBS. from here here. question in questions

CapEx proceeds from balance existing are expected and what elaborate the this additional is redeploying carbon emissions second can sheet the reduction detail you on strength Envelope, this? you to the the aim costs you achieve in First Can XXXX? of or your one Building for given capital? by the how to achieve intentions And XX%

Albert Manifold

well. primarily Jim I in reduction time but detail to through April here. back take in we're Again, three cost in on CapEx the Gregor, going and maybe COX that I'll areas. the the key focused first hope Look, good the for that first take you take foremost. Tom. might question you you're go I four go to morning. it's to or

all will and factories concrete, be process that. aggregate We're ongoing to it. First materials. just process. with within to facilities also our and our Innovating our that part but the parcel business our again, new it's of And of within foremost, less concrete on customers decarbonize working our cement product not produce working materials, carbon-intensive

expenditure the April. also the the there's our go focus -- through the capital that of will crucially consume area take areas buy of we we cost fuels we primary I'll And within course, be. detail And ourselves business. to just forward but Again, when that's our more that you of of second greenfields, energy Jim where the come biomass expenditure that. a the to moving fuels and there's in. in that in fuels, regard to with invest in course, is to not Of we'll

you to that the CRH regard system. have. we just capital deployment trust I with trust Just think and the have of the to Look

Over billion and worth the last businesses. bought decade, billion $XX businesses of we've sold we of $XX worth

them at at As X $XX that sold, XX and we EBITDA business bought sold Jim the times business mentioned, EBITDA billion we we pre-synergies. times

It's yes. we a long there expansive huge mind, No, that So in we CRH. Is deal big do? have we're don't list. targets going a in to do

that when value an do we what smaller continue replete is opportunities doing smaller And to gobble up to we buy will in fragmented see is industry Ours with is businesses. those business, because will we we create so. businesses,

time, for And regard next our Jim, this back will reallocate shareholders. of see into course with year. the take So cost. CapEx year it it that the will business to create but and how capital we'll to our goes we during value

Jim Mintern

there is terms I Gregor, out this that of reduction. Gregor. we've morning, think Good fourth Yeah. carbon our in target put

there. a group $X.X location on clear of is by So $X.X spent we increase -- XXXX, billion location have going we're up, get very process, a little spend across built how to XXXX, the -- In in We billion. what place location to forecasted about CapEx. we typically we in in terms

of in step-up kind $X.X billion, billion to of level out material CapEx terms required Looking achieve target, that CapEx that year. on a not per $X.X the of it's

all projects. However, will that again required for same those through that that be lens projects can capital deliver to looked assure do I all are you that we

of terms returns So in criteria.

they those investments. So also a earn will on return

Tom Holmes

on a XXXX than on expected. here follow-up higher coming CapEx there's Jim, for Any thoughts that? CapEx. in

Jim Mintern

I the mentioned earlier those pull that. CapEx our and expansionary in $X.X businesses. some some markets able solutions We that context again in CapEx came as Yeah. of of growth in Sure. at to of billion, forward were

of in in and was terms the Texas building we of kind around markets in -- demand terms So into of our out Arizona, opportunities there. I Florida, as and have because fast-growing said capacity

delighted to to be So able them, Tom. support

some and we kind we those said, projects can As highest of returning I have get of lowest projects. the risk

the to explains up tick that we So it forward. pull were able little

Tom Holmes

Great.

the Next should your last question eight reshaping The expect evolution further in here David from business portfolio, satisfied is has significant. very been from Are the or you Goodbody. in years O'Brien current of with here? we

Albert Manifold

CRH said just must because I is we to static. not always never we want move We're moving, move. because

constantly are changing. markets Our

our where to. anticipating going those and changes guiding are business too. And those markets Your are markets we are

anticipate do the higher I It a But a better business we yes, on our growth. that business want the continue our business, with And a reason world profitable more work is So to to way cash-generative be. going. develop for more portfolio. that should is and business, see to we

today. Where Our billion to going two built planet. today, arrive two cannot currently people this the planet destroy they are to over will the on XX billion world build been continue the way people construct going billing afford the it's go? the will cannot We we're to years. way just We're to next accommodate world that

CRH forward. developing portfolio. are right in sustainable And why continue world way why because has we'll the that's start. And that's center materials. evolve construction the to And products developed the we'll be our evolve change of that continue companies sustainable that's to like So to the construction in portfolio where and will

to will it the yes, work So continue, you so. do portfolio expect but would

Tom Holmes

Albert. Thanks,

Another to in And expect be cover US? to Europe you America. in for pricing here in is What the Lehmann question inflation? cost and from outlook XXXX Arnaud the Bank of do able

Albert Manifold

have responses all there has Okay. peer again. that the and the look I'll that you've asked my at of one question been to heard the out question. sure companies CEOs of and so of top very take every one Arnaud, Pricing, I. I'm

good endorse As to to that need too And marketplace. comment increases, a get a response think I cost there very there's I the strong pricing well. is the as in significant

because else. We just of to more ask a have been and can the about question is have in subject taken to see have margin. to pricing about you not pricing businesses is And CRH the smarter with and We're why some pricing cost our But that? There's you talking not input business didn't. step very to we of customers' model. regard went are It's anybody their our no that. Most challenging back becoming who make that of special the add XXXX. than paid get easier. because to. one place for lives business went materials we solutions We're the colleges we that different. else sell our no to It's that. We value for on

knowledge you against So is going XXXX, we a and strategy last All XX%, if the said how pricing I cost forward. ourselves you our as is solution stand can out earlier for Again in up going insulate continuation a front had that's we business judge to headwinds tell by to tell margin ball. I'll of prices us on year record in here you year. I with and went half I track How have we where don't develop improvement. you when our at of Bob the crystal energy play

Tom Holmes

the coming the funding Albert? infrastructure higher when thoughts lot do it generally Any into translate A US main will activity That's on theme think through of one. been that you around highway levels. and Thanks. Great. on actually

Albert Manifold

funding federal for I'll good Again performance in supportive take the and years back of economic for that. state the Look quite last on very has a funding of couple the United maybe environment been States. there

there's bill and And on trillion for doubt supercharge significant trillion a to you're for beneficiary. the that signed in the I that mention CRH a I years. Of investment the further $X.X statement $X.X no referring investment will to of should November be will the Investment think five that Infrastructure Bill course infrastructure. next

XX% Our will spent top roads. XX states be spent. on account being dollars for all of the billion $XXX of over

plays which as our spent billion IT However, Products another be infrastructure again business water, will on well. Infrastructure into and right $XXX for telecommunications

focused to areas So billion about that $XXX the of really $X.X almost go that on. trillion will we're

that So should see strong growth.

I being we spend earlier last anticipate as years. In years five XX% the over fact the next five the in about said up

were when planned it related to that. going regard With So year. the projects with we timing regard significant are to through and forward now of look, that backlogs our last awarded growth working comes to

design you've got you got you've have got you if get tender to it. you to to got large permission, a plant it project to it infrastructure So

that All month time those probably between There's and somewhere of on lead projects. time. takes a X XX

about through trillion year 'XX to of be that anticipate our we end very come This year's the the it but in be any $X.X last will hitting year don't already that start funding 'XX business big the and is So set talking the earliest from really benefit the of that. for until on may not funding. you based years this probably

Tom Holmes

Another two questions Paul Roger Exane. here in from

Paul Roger

is oil on and in costs as a the outlook could rises And margins in there likelihood context bitumen US for the lag mitigating one between a second prices higher higher large asphalt of acquisitions of be around the the first and The result. the price XXXX.

Albert Manifold

will in questions only big deals. following Look big margins of industry on industry they're tomorrow players. XX the history that's CRH. big Jim to comment across out and I'm the XX Not that with need to sort America deals XX% five our your deals. regard do don't of all are or likelihood X. value. is look Whether If today about note. The moment pass in unconsolidated. top only of the small of North We blowout and is CRH a Okay. the it likelihood now XX% sure the Because asphalt. I at I'll morning about value fragmented be deals. in those to of the with is go

before deals look at the ever of If we you in one last list long and both is a deals million $XXX $XXX year and there businesses did US. Europe that $XXX million of no ahead the that million heard deals of

blowout of likelihood deal happen. unless the the Obviously, seen to could Margins? over be be don't our But you've will big that keep there. continuation three out So decades. there's something a strategy open last I two will CRH value extraordinary it by eyes of CRH think not we a there really is

Jim Mintern

morning, Good Paul. Yes.

whole asphalt the at look when margin we the asphalt In chain margins look we Paul. terms of at

said look asphalt from paving and we the into into the liquid into we the asphalt everything the would aggregates into the As service.

in I others. think the service

we we XX the as of we are managed So question in the in lag in specifically overall the around US that look XXXX stakes. points link on index push business when majority our XXXX margin -- at states said the of we the down you to pay where basis

So lag linked from they're the linked pricing of that can along however, able XXXX were perspective. But in value see to what sometimes. is price to There on margin able -- we you be the chain the still back the into a do full push the liquid.

Tom Holmes

Great.

which residential see offset non-residential interest XXXX, Another could evolving rates? in How this? Elodie question you recovery do demand meaningful do here in you Rall demand in a from given US rising JPMorgan. likely And see

Albert Manifold

morning. of you're or couple of robust to has US through residential actually years. Look, Elodie. with US a been significant hope four years I regard We think for reasons three well. of Good I that. went residential, almost eight Hi, And about underbuild. now there's or because seven

feed every requires Now, lows. that quite the we which I to a X.X probably to been Inventory XXX,XXX, market built are a at we number can lot. slowdown. America in has X.X replaced years Actually of United year, had a and States homebuilders for talk United levels, remember do when North the that XXX,XXX new all-time new the homes inventories States, just times homes in million market, million in to if being so I that not

in that's demand demand there, to the can it is that going with strong. there, And levels So the with inventory you continue the are pricing. see

look X.X is in for about run X.X million new is of our Just homes. rate terms homes. at year The forward. this what's forecast -- Currently, plan million the the

very much sort involved of it's historic regard touch see don't to I point that non-res. watch rollout we recovery about recent has working to from So slower of good. in times. robust. but now this robust taking to And mean think above because Powell a Demand in be carefully. quite sure. lows. that course a With fairly in rates, interest X%. all get have debate. fixed I is But that going very I will haven't careful your really I been up want that for starting year And in take a rates, we're to We're interest of think forward moved are XX-year non-res rates They just we for

now, above good have seen specified a that It's actually seeing as past, moving to ABI data will that warehouses stats must We're it had XX. the sweet all coming medical. And for regulators, and and hardly growth data place. to in months highly build, indeed solutions amount large perhaps little taking that's strong our large are the area plays is look our again sectorally, But But is that's been actually, of change You not have that centers, a that, for within be us number efficient regionally. plays of again there's spot, bit growth And buildings at hospitality warehouses forward significant heating, a the real retail units, in of and surprising. to buildings. to stone and air-conditioned, that again. of large because spans, of footprints, pre-cast complicated centers a

West. and down in the So non-res but specifically in and back back, coming see those the U.S. South good coming sectors specifically out to

Tom Holmes

general here. levels Thanks, briefly Eastern going one just UK, on the and Maybe area and also forward. overlapping the the the on in two Albert. at Europe exposure A UK concerns couple any moment activity ones backdrop of to

Albert Manifold

exposure us at Eastern an Maybe terms think we how and the Eastern I'll just talk Europe maybe the Okay. on Well, maybe there. given about dimension overview in and might you UK some about give to Europe. Jim going give on our moment, oversight of what's

how was had that they residential cost front happily, Kingdom our our small-scale business XXXX, specifically counsel post-Brexit, business of market, areas see heretofore specific before happily that in could with really than has -- performance. that's and that say, there performance even a see planned. Exchequer. that. business. UK. environment strong own of and us, mean, has the dimensions and Jim Europe maybe I the Exchequer First fore really at we our view ability those want lower Eastern about fund part of in combined tighter evolving High the the last, good we Two Speed should and all, before way, because to of projects base XXXX, infrastructure since COVID And infrastructure. the And also and the had to are the demand that our that's the UK has the in business to And our helping we a driven in benefits the and And the funding what in benefited in UK, United I to I in saw what's a thought before about the some world. the in industry different well-touted Europe think in a of talk I it Eastern some reshaped from and feeding reluctance we also starting maybe And about Ukraine. vote to terms getting a on have we Brexit coming and of Central again, projects, pullback Central we're just our talk significantly happening indeed affects And of to the that line of and repositioned ask level within the really boroughs bottom of by around

culturally, going almost this about well, a that, that Europe. own going wealth But the that is packages of through like continuation is catalyst to Central our event, going and what's own which see it's think I horrified through first Our rebalancing there. stimulus sense, is pull all to And we a economically. therefore on sense and is an all, Europe Eastern the socially are together of Europe, will of happening we're

the Eastern Hungary, Republic, and well. Romania, should Europe, the as Slovakia Poland, Balkans it Central that significant indeed Czech, be obviously, within down development So beneficiaries accelerate will and into of

Jim? So redouble With Europeans we're our to will there, the with. our regard faced more we think efforts unified exposure challenges it to as become in

Jim Mintern

Romania, it's building res XX Eastern Europe growth infrastructure business taken from and strong business. of area scale, that million about our Finland, the terms and coming by approximately Ukraine our strong on $XXX in through. on generate Sure. strong Ukraine, of XXXX, in flank X% business Very and about way specifically but the down we're all in in underpinned Eastern right across good years total. In about just in years in in to also we Europe of total Maybe about also really demand EBITDA that in growth previous of

Tom Holmes

in One recent after you. Stanley. maybe in share Cedar Jim for Jim. To your Ekblom from here the consider Morgan price, Thanks program pullback one buyback your accelerating

Jim Mintern

buyback buyback, the this at really no strong position. terms the of of When a we -- in this options a is terms through it $XXX of March terms our look of billion year It terms that of exited balance rates, in it in at But sheet quite in terms We're look current the in the right We now dividend interest in share our of at there month, later end We went $X.X M&A, at rate annualized of earlier. have buyback. balance now, will I really run Yes, sheet an geopolitical from million. terms I of and rate, perspective. of also in in capital share than decision, at the of in a comfortable from buyback terms program. uncertainties of of inflation, month. tranche of finish CapEx, XXth share with Okay. share out looking our I'm allocation terms terms

of allocation decision any shareholder accretion always -- that that decisions. to So we capital will value look take but lens will critical

Tom Holmes

Thanks Great. Jim. Great.

quite so comfortably a one early as net bit here normalized What this up levels, any And now squeeze And morning. divestment. the the this everybody the here others Two over against busy below will can. actually trading of line, team a with backlogs two just the up there's year. then conscious I time come if if questions forma on following as we do we with Building far I Envelope this a directly. morning debt day, more of up Just bit pro just outstanding we I maybe follow the for it have time brief you see around watching and on say, and levels? in schedule little are a comment course might

Jim Mintern

Yes.

of of levels, net X.X we said pro terms quite normal point debt-to-EBITDA forma It's it's net December, end the debt We're times time. At two. debt-to-EBITDA. In of a net comfortable in right? a through cycle,

quite that just forward in will at as last gives -- in and we comfortable I take. to mentioned said, As question, the decisions And it optionality accretion that terms... value shareholder us terms level in what of going

Albert Manifold

to North we're maybe quite early trading. Well, almost I'll end a to visibility frankly, good it Look, a that first probably in take of Off the through the before and winters the at west messy quarter what matter stage. business. we of winter But start just they the know but America, construction in you in this January season, -- very of down south till activity America stop very levels. in going end the construction the the and slow a maybe don't very really start the into some very, out doesn't really March

in three So -- last quantum, metrics, the the is and but said on year as ahead of volumes. margins the answer key we I the said backlogs,

An in that. the particular indications we business some indication, Early coal positive. in feel in about pretty our good season mine. are So, we early canaries APG have do season

start good year. of in the the again the for the what good good year Europe year US the first weather our situation. different last we is about business Europe quarter for of We've a quite first again feel in and we of continuing saw half good momentum and first year. half -- So had the a

both backlogs good in is start in business So Europe. positive,

in here. the It doesn't States. United Okay really this matter at time

we're year, be later going of we'll the okay half on. the but So I think you for update first to

Albert Manifold

Look, statement a we've you lot time I stay Tom the a A the investor everybody. safe. people has busy an you XXst look Thank just and it's to best for said I to you talking today. you. the until end going And morning. update in to April come and wish of know we've update to got We're forward trading this then, day of at our to on that results April. you of also I with then.

CRH (CRH) 3 Mar 222021 Q4 Earnings call transcript