CRH PUBLIC LTD CO 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Introduction Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to convey management’s perspective regarding operational and financial performance for the three months ended March 31, 2024. This MD&A should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and related notes appearing in Part I, Item 1. "Financial Statements” of this Quarterly Report. The following discussion contains trend information and forward-looking statements. Actual results could differ materially from those discussed in or implied by these forward-looking statements, as well as from our historical performance, due to various factors, including those discussed elsewhere in this Quarterly Report, particularly "Forward-Looking Statements," and Item 1A. "Risk Factors" in our 2023 Form 10-K and in our other filings with the SEC. Our operating results depend upon economic cycles, seasonal and other weather‐related conditions, and trends in government expenditures, among other factors. Accordingly, financial results for any financial period presented, or period-to-period comparisons of reported results, may not be indicative of future operating results. Overview CRH is a leading provider of building materials solutions that build, connect and improve our world. Since formation in 1970, CRH has evolved from being a supplier of base materials to providing end-to-end value-added solutions that solve complex construction challenges for our customers. CRH works closely with customers across the entire project lifecycle from planning, design, manufacture, installation and maintenance through to end-of-life recycling, using our engineering and innovation expertise to provide superior materials, products and services. The Company integrates essential materials (aggregates and cement), value-added building products and construction services to provide our customers with complete end-to-end solutions. CRH’s capabilities, innovation and technical expertise enable it to be a valuable partner for transportation and critical utility infrastructure projects, complex non-residential construction and outdoor living solutions. Operating in 28 countries, the Company has market leadership positions in North America and Europe. The United States is expected to be a key driver of future growth for CRH due to continued economic expansion, a growing population and significant public investment in construction. Our European business, which benefits from strong economic and construction growth prospects across Central and Eastern Europe as well as recurring repair and remodel demand in Western Europe, is an important strategic part of the Company and CRH intends to continue to expand its operations across the region. In both geographies there is significant government support for infrastructure and increasing demand for integrated solutions in major infrastructure and commercial projects. CRH has a proven track record in value creation through acquisitions which over the last decade has accounted for approximately two-thirds of the Company’s growth. We achieve this by acquiring businesses at attractive valuations and creating value by integrating them with our existing operations and generating synergies. The Company takes an active approach to portfolio management and continuously reviews the competitive landscape for attractive investment and divestiture opportunities to deliver further growth and value creation for shareholders. Seasonality Activity in the construction industry is dependent to a considerable extent on the seasonal impact of weather on the Company’s operating locations, with periods of higher activity in some markets during spring and summer which may reduce significantly in winter due to inclement weather. In addition to impacting demand for our products and services, adverse weather can negatively impact the production processes for a variety of reasons. For example, workers may not be able to work outdoors in sustained high temperatures and heavy rainfall and/or other unfavorable weather conditions. Therefore, financial results for any particular quarter do not necessarily indicate the results expected for the full year. Financial performance highlights CRH delivered a stronger first quarter performance compared to the first quarter of 2023, resulting in the following performance highlights for the three months ended March 31, 2024 (comparisons are versus the prior year's first quarter unless otherwise noted): • Total revenues increased 2% to $6.5 billion; • Net income was $114 million compared with a net loss of $31 million. Adjusted EBITDA* 1 was $445 million, an increase of $59 million, or 15%; • Net income margin was 1.7% compared with a net loss margin of 0.5%. Adjusted EBITDA margin* was 6.8%, an increase of 80 basis points (bps) on the prior year's first quarter Adjusted EBITDA margin* of 6.0%; and • Basic Earnings Per Share (EPS) was $0.16 compared to a loss per share of $0.05 . Capital allocation highlights • Cash paid to shareholders through dividends was $0.8 billion, compared with $nil in the prior year first quarter. CRH transitioned to quarterly dividends during the first quarter of 2024, with a quarterly dividend of $0.35 per share declared in February 2024, and a second quarterly dividend of $0.35 per share, representing an annualized increase of 5% on the prior year, announced on May 10, 2024; • Cash returned to shareholders through share buybacks was $0.4 billion, an increase of $0.1 billion versus the prior year first quarter. On May 9, 2024, the latest tranche of the share buyback program was completed, bringing the year-to-date cash returned to $0.6 billion. A further tranche has been announced, extending the ongoing share buyback program by an additional $0.3 billion tranche to be completed no later than August 7, 2024; and • Eight acquisitions were completed for total consideration of $2.2 billion, compared with $0.2 billion in the first quarter of the prior year. A further $0.5 billion was invested in development and replacement capital expenditure projects, compared with $0.3 billion for the comparable 2023 period. * Represents a non-GAAP measure. See the discussion within 'Non-GAAP Reconciliation and Supplementary Information' on pages 28 to 29. 1 CRH Form 10-Q 23 Development Review In the three months ended March 31, 2024, CRH completed eight acquisitions for a total consideration of $2.2 billion, compared with $0.2 billion in the first quarter of 2023. The largest acquisition in the first quarter of 2024 was in our Americas Materials Solutions segment where the Company completed the acquisition of a portfolio of cement and readymixed concrete assets and operations in Texas for a total consideration of $2.1 billion. In addition, Americas Materials Solutions completed a further two acquisitions, Americas Building Solutions completed three acquisitions, and Europe Materials Solutions completed two acquisitions, for a total first quarter 2024 spend of $2.2 billion. On April 5, 2024, the Company also acquired a materials solutions business, including two hard rock quarries, in California. The acquisition represents an attractive entry point into California for Americas Materials Solutions, particularly due to its long-lived hard rock reserves and vertically integrated asphalt and readymixed concrete operations. With respect to divestitures, CRH realized proceeds from divestitures and disposals of long-lived assets of $0.7 billion, primarily related to the completed divestiture of phases one and two of its European Lime operations. The Lime transaction was structured in three phases with two phases of the divestiture, comprising CRH’s Lime operations in Germany, Czech Republic, Ireland and the United Kingdom, completed in the three months ended March 31, 2024. The remaining phase, consisting of operations in Poland, is expected to complete in the second half of 2024. In the prior year, no divestitures occurred in the first quarter. Full Year Outlook The Company expects a favorable market backdrop and continued positive pricing momentum in 2024. Our operations in North America are expected to benefit from significant infrastructure activity in our markets and increased investment in key non-residential segments, while in Europe, we expect good underlying demand in infrastructure and key non-residential markets, further supported by disciplined cost control. Residential construction, particularly new-build activity, is expected to remain subdued across our markets in the near-term. Assuming normal seasonal weather patterns and no major dislocations in the macroeconomic environment, CRH remains well positioned for another year of growth in 2024. Results of Operations Revenues are derived from a range of products and services across four segments. The Materials Solutions segments in Americas and Europe utilize an extensive network of reserve-backed quarry locations to produce and supply a range of materials including aggregates, cement, readymixed concrete and asphalt, as well as providing paving and construction services. The Americas and Europe Building Solutions segments manufacture, supply and deliver high quality building products and solutions. The table below summarizes the Company’s unaudited Condensed Consolidated Statements of Income for the periods indicated. 2 Condensed Consolidated Statements of Income (Unaudited) (in $ millions, except per share data) Three months ended March 31 2024 2023 Total revenues 6,533 6,427 Total cost of revenues (4,726) (4,808) Gross profit 1,807 1,619 Selling, general and administrative expenses (1,787) (1,622) Gain on disposal of long-lived assets 8 5 Operating income 28 2 Interest income 43 40 Interest expense (133) (81) Other nonoperating income, net 161 - Income (loss) from operations before income tax expense and income from equity method investments 99 (39) Income tax benefit 19 14 Loss from equity method investments (4) (6) Net income (loss) 114 (31) Net (income) attributable to redeemable noncontrolling interests (2) (2) Net loss attributable to noncontrolling interests 4 5 Net income (loss) attributable to CRH plc 116 (28) Basic earnings (loss) per share attributable to CRH plc $0.16 ($0.05) Adjusted EBITDA* 445 386 * Represents a non-GAAP measure. See the discussion within 'Non-GAAP Reconciliation and Supplementary Information' on pages 28 to 29. 2 CRH Form 10-Q 24 Total revenues Total revenues were $6.5 billion for the three months ended March 31, 2024, an increase of $0.1 billion, or 2%, compared with the first quarter of 2023, reflecting continued pricing progress and contributions from acquisitions offsetting lower volumes in Europe in the seasonally least significant quarter for the Company. In Americas Materials Solutions total revenues increased by 16%, with total revenues in Essential Materials and Road Solutions increasing by 12% and 19%, respectively. In Americas Building Solutions total revenues increased by 2%, with total revenues in Building & Infrastructure Solutions decreasing by 4% and total revenues in Outdoor Living Solutions increasing by 5%. In Europe Materials Solutions total revenues decreased by 8%, with total revenues in Essential Materials finishing 10% behind the three months ended March 31, 2023, while Road Solutions total revenues were 5% behind. In Europe Building Solutions total revenues decreased by 10%, with total revenues in Building & Infrastructure Solutions decreasing by 12%, while total revenues in Outdoor Living Solutions were 2% ahead. For additional discussion on segment revenues, see “Segments” section on pages 26 to 27. Gross profit Gross profit for the three months ended March 31, 2024, was $1.8 billion, an increase of $0.2 billion, or 12%, from the same period in 2023, reflecting total revenues growth of 2%, with total cost of revenues decreasing by 2%. The gross profit margin of 27.7% increased 250bps from 25.2% for the first quarter of the prior year. Total cost of revenues decreased primarily as a result of energy costs decreasing 26% due to the impact of divestitures, lower volumes and a decline in energy prices, and lower volumes resulting in raw material costs reducing 5%. These cost decreases were partially offset by labor and subcontractor costs increases of 5% and 12%, respectively. Selling, general and administrative expenses Selling, general and administrative (SG&A) expenses, which are primarily comprised of haulage costs, labor costs, and other selling and administration expenses, were $1.8 billion in the first quarter of 2024, an increase of $0.2 billion, or 10%, from the comparable 2023 period. The increase in SG&A expenses primarily reflects labor cost increases of 12%, as a result of increased headcount and wage inflation; p artially offset by lower haulage costs which decreased 3% compared with 2023 as a result of lower volumes. Gain on disposal of long-lived assets Gain on disposal of long-lived assets was $8 million in the three months ended March 31, 2024, an increase of $3 million compared with 2023. Interest income Interest income was $43 million for the three months ended March 31, 2024, an increase of $3 million on the comparable period in 2023. Interest expense Interest expense was $133 million in the three months ended March 31, 2024, an increase of $52 million from the comparable period in 2023. The increase was primarily due to an increase in gross debt ba lances and higher interest rates on new debt issued. Other nonoperating income, net Other nonoperating income, net, was $161 million in the three months ended March 31, 2024, compared with $nil in the comparable period for 2023. Other nonoperating income, net, includes pension and postretirement benefit costs (excluding service costs), gains and losses from divestitures, and other miscellaneous income and expenses. The increase in other nonoperating income, net was primarily related to gains on the completed divestiture of phases one and two of the European Lime operation s, and unrealized gains on certain investments . Income tax In the three months ended March 31, 2024, the Company had an income tax benefit of $19 million, compared to $14 million for the comparable period in 2023. The effective tax rate was (19)% for the first quarter in 2024 compared with an effective tax rate of 36% for the first quarter in 2023. The movement in the effective tax rate was primarily driven by the impact of the movement in tax provisions, a tax deduction for share-based compensation and the largely tax-exempt divestiture of phases one and two of the European Lime operations. Loss from equity method investments In the three months ended March 31, 2024, a loss of $4 million was recorded in equity method investments, a decrease of $2 million from the comparable period in 2023. Net income (loss) Net income was $114 million for the three months ended March 31, 2024, an increase of $145 million from the comparable period in 2023. This result was primarily driven by higher gross pr ofit and other nonoperating income, net, which offset higher SG&A and interest exp enses compared with the first quarter of 2023. Net income (loss) attributable to CRH plc and earnings per share Net income attributable to CRH plc was $116 million for the three months ended March 31, 2024, an increase of $144 million from the comparable period in 2023. The increase in net income attributable to CRH plc was driven by increased net income of $145 million and a decreased net loss attributable to noncontrolling interests of $1 million. Basic EPS for the three months ended March 31, 2024, was $0.16, compared with a loss per share of $0.05 for the three months ended March 31, 2023. CRH Form 10-Q 25 Segments CRH is organized through four reportable segments across two divisions. CRH’s Americas Division comprises two segments: Americas Materials Solutions and Americas Building Solutions; and CRH’s Europe Division comprises the other two segments: Europe Materials Solutions and Europe Building Solutions. Within CRH’s segments, revenue is disaggregated by principal activities and products. Business lines are reviewed and evaluated as follows: (1) Essential Materials, (2) Road Solutions, (3) Building & Infrastructure Solutions, and (4) Outdoor Living Solutions. The vertically integrated Essential Materials businesses manufacture and supply aggregates and cement for use in a range of construction and industrial applications. Road Solutions support the manufacturing, installation and maintenance of public highway infrastructure projects and commercial infrastructure. Building & Infrastructure Solutions connect, protect and transport critical water, energy and telecommunications infrastructure and deliver complex commercial building projects. Outdoor Living Solutions integrate specialized materials, products and design features to enhance the quality of private and public spaces. The Company’s measure of segment profit is Adjusted EBITDA, which is defined as earnings from continuing operations before interest, taxes, depreciation, depletion, amortization, loss on impairments, gain/loss on divestitures and unrealized gain/loss on investments , income/loss from equity method investments, substantial acquisition-related costs and pension expense/income excluding current service cost component. Americas Materials Solutions Analysis of Change in $ millions Three months ended March 31, 2023 Currency Acquisitions Divestitures Organic Three months ended March 31, 2024 % change Total revenues 1,895 - +69 - +238 2,202 +16% Adjusted EBITDA (35) - +25 - +25 15 n/m 1 Adjusted EBITDA margin (1.8)% 0.7% Americas Materials Solutions’ total revenues were 16% ahead of the first quarter of 2023 in a seasonally small quarter, driven primarily by price increases, higher volumes across all lines of business and a positive contribution from acquisitions, including the acquisition of cement and readymixed concrete assets in Texas which closed in early February 2024. Organic total revenues* were 13% ahead. In Essential Materials, total revenues increased by 12%. This reflects an 8% increase in aggregates pricing which was adversely impacted by geographic mix and a 9% increase in cement pricing. Aggregates volumes increased by 8% and cement volumes increased by 6%, due to favorable weather in the West and Great Lakes regions which enabled early commencement of projects, together with the positive impact from acquisitions. In Road Solutions, total revenues increased by 19% driven by higher pricing and increased activity levels through continued funding support relating to the Infrastructure Investment and Jobs Act. Asphalt prices increased by 5% while volumes were 11% ahead of the comparable period in 2023 due to favorable weather in key regions and early-season project activity. Paving and construction revenues for the first quarter of 2024 increased by 20%. Readymixed concrete pricing was 8% higher than the first quarter of 2023, while volumes were 9% ahead. We have seen continued positive momentum in bidding activity, with construction backlogs ahead of the prior year comparable period. First quarter 2024 Adjusted EBITDA for Americas Materials Solutions of $15 million was ahead of the first quarter of 2023 as increased pricing and operational efficiencies mitigated the impact of higher labor, subcontractor and raw materials costs. Organic Adjusted EBITDA* was ahead of the first quarter of 2023. Adjusted EBITDA margin increased by 250bps. Americas Building Solutions 3 Analysis of Change in $ millions Three months ended March 31, 2023 Currency Acquisitions Divestitures Organic Three months ended March 31, 2024 % change Total revenues 1,661 - +38 - (6) 1,693 +2% Adjusted EBITDA 301 - +5 - +2 308 +2% Adjusted EBITDA margin 18.1% 18.2% Americas Building Solutions recorded total revenues growth of 2%, driven by positive acquisition performance and increased pricing. Organic total revenues* were in line with the first quarter of 2023. In Building & Infrastructure Solutions, total revenues declined by 4% due to unfavorable weather in certain markets as well as the impact of subdued residential demand which negatively impacted activity levels. The non-residential and infrastructure construction backdrop remains supported through increased funding for critical water, energy and telecommunications infrastructure. In Outdoor Living Solutions, total revenues increased by 5%, with growth across most regions, driven by strong sales into the retail channel, particularly in lawn and garden products, along with increased demand in the professional business channel. First quarter 2024 Adjusted EBITDA for Americas Building Solutions was 2% ahead of the comparable period in 2023, 1% ahead on an organic* basis, driven by higher pricing and cost containment initiatives which offset the impact of lower volumes and cost inflation, particularly in labor. As a result, Adjusted EBITDA margin was 10bps ahead of the first quarter of 2023. * Represents a non-GAAP measure. See the discussion within 'Non-GAAP Reconciliation and Supplementary Information' on pages 28 to 29. 3 1 Not meaningful. CRH Form 10-Q 26 Europe Materials Solutions Analysis of Change in $ millions Three months ended March 31, 2023 Currency Acquisitions Divestitures Organic Three months ended March 31, 2024 % change Total revenues 2,178 +40 +26 (117) (114) 2,013 (8)% Adjusted EBITDA 68 +1 +4 (24) +41 90 +32% Adjusted EBITDA margin 3.1% 4.5% Total revenues in Europe Materials Solutions declined by 8%, or 5% on an organic* 4 basis, driven by lower volumes across Western Europe, partly offset by volume growth in Central and Eastern Europe and continued pricing progress. In Essential Materials, total revenues were 10% behind the comparable period in 2023 due to the completed divestiture of phases one and two of our European Lime operations and lower volumes. Aggregates pricing was 3% ahead and overall cement pricing, which was adversely impacted by geographic mix, was in line with the first quarter of 2023, or 2% ahead excluding the Philippines. Aggregates volumes declined by 6% while cement volumes were 2% behind due to lower activity levels, particularly in Western Europe which was impacted by unfavorable weather in several key markets. This was partly offset by volume growth in Central and Eastern Europe. In Road Solutions, pricing progress was offset by reduced volumes due to adverse weather which resulted in total revenues being 5% behind the 2023 comparable period. Asphalt pricing increased by 1%, while volumes declined by 9%. Paving and construction revenues decreased by 3%. Readymixed concrete pricing was in line with the first quarter of 2023, while volumes decreased by 13%. Adjusted EBITDA in Europe Materials Solutions was $90 million, 32% ahead of the comparable period in 2023, and 59% ahead on an organic* basis, primarily driven by increased pricing, lower energy costs and operational efficiencies. Adjusted EBITDA margin increased by 140bps compared with the first quarter of 2023. Europe Building Solutions Analysis of Change in $ millions Three months ended March 31, 2023 Currency Acquisitions Divestitures Organic Three months ended March 31, 2024 % change Total revenues 693 +6 +7 - (81) 625 (10)% Adjusted EBITDA 52 - +1 - (21) 32 (38)% Adjusted EBITDA margin 7.5% 5.1% Total revenues in Europe Building Solutions declined by 10%, or 12% on an organic* basis, versus the first quarter of 2023, with subdued new-build residential activity continuing in the first quarter of 2024. Within Building & Infrastructure Solutions, total revenues declined by 12% compared with the first q uarter of 2023. Infrastructure Products revenues increased, benefiting from acquisitions offsetting lower activity levels and project delays in key markets. Revenues in Precast and Construction Accessories were negatively impacted by adverse weather conditions and muted new-build residential activity in several markets. Revenues in Outdoor Living Solutions were 2% ahead of the comparable period in 2023 through pricing increases, however volumes were impacted by prolonged winter weather in certain key markets. Adjusted EBITDA in Europe Building Solutions declined by 38% versus the comparable prior year period, a 40% decrease on an organic* basis. Organic volume declines were partially offset by disciplined commercial management, cost saving initiatives and lower raw materials costs. Adjusted EBITDA margin decreased by 240bps compared with the first quarter of 2023. * Represents a non-GAAP measure. See the discussion within 'Non-GAAP Reconciliation and Supplementary Information' on pages 28 to 29. 4 CRH Form 10-Q 27 Non-GAAP Reconciliation and Supplementary Information CRH uses a number of non-GAAP performance measures to monitor financial performance. These measures are referred to throughout the discussion of our reported financial position and operating performance on a continuing operations basis unless otherwise defined and are measures which are regularly reviewed by CRH management. These performance measures may not be uniformly defined by all companies and accordingly may not be directly comparable with similarly titled measures and disclosures by other companies. Certain information presented is derived from amounts calculated in accordance with U.S. GAAP but is not itself an expressly permitted GAAP measure. The non-GAAP performance measures as summarized below should not be viewed in isolation or as an alternative to the equivalent GAAP measure. Adjusted EBITDA: Adjusted EBITDA is defined as earnings from continuing operations before interest, taxes, depreciation, depletion, amortization, loss on impairments, gain/loss on divestitures and unrealized gain/loss on investments, i ncome/loss from equity method investments, substantial acquisition-related costs and pension expense/income excluding current service cost component. It is quoted by management in conjunction with other GAAP and non-GAAP financial measures to aid investors in their analysis of the performance of the Company. Adjusted EBITDA by segment is monitored by management in order to allocate resources between segments and to assess performance. Adjusted EBITDA margin is calculated by expressing Adjusted EBITDA as a percentage of total revenues. Reconciliation to its nearest GAAP measure is presented below: Three months ended March 31 in $ millions 2024 2023 Net income (loss) 114 (31) Loss from equity method investments 4 6 Income tax benefit (19) (14) Gain on divestitures and unrealized gains on investments (i) (160) - Pension income excluding current service cost component (i) (1) - Interest expense 133 81 Interest income (43) (40) Depreciation, depletion and amortization 397 384 Substantial acquisition-related costs (ii) 20 - Adjusted EBITDA 445 386 Total revenues 6,533 6,427 Net income (loss) margin 1.7% (0.5)% Adjusted EBITDA margin 6.8% 6.0% (i) Gain on divestitu res and unrealized gains on investments a nd pension income excluding current service cost component have been included in Other nonoperating income, net in the Condensed Consolidated Statements of Income. (ii) Represents expenses associated with non-routine substantial acquisitions, which are not bolt-on in nature and are separately reported in Note 4 “Acquisitions” of the unaudited financial statements. Expenses in the first quarter of 2024 include legal and consulting expenses related to the acquisition of the portfolio of cement and readymixed concrete assets and operations in Texas. Net Debt: Net Debt is used by management as it gives additional insight into the Company’s current debt position less available cash. Net Debt is provided to enable investors to see the economic effect of gross debt, related hedges and cash and cash equivalents in total. Net Debt comprises short and long-term debt, finance lease liabilities, cash and cash equivalents and current and noncurrent derivative financial instruments (net) . Reconciliation to its nearest GAAP measure is presented below : March 31 December 31 March 31 in $ millions 2024 2023 2023 Short and long-term debt (12,672) (11,642) (9,834) Cash and cash equivalents (i) 3,309 6,390 4,650 Finance lease liabilities (145) (117) (85) Derivative financial instruments (net) (92) (37) (32) Net Debt (9,600) (5,406) (5,301) (i) Cash and cash equivalents at March 31, 2024, includes $1 million cash and cash equivalents reclassified as held for sale. Cash and cash equivalents at December 31, 2023 includes $49 million cash and cash equivalents reclassified as held for sale. CRH Form 10-Q 28 Organic Revenue and Organic Adjusted EBITDA: CRH pursues a strategy of growth through acquisitions and investments, with total consideration spent on acquisitions and investments of $2.2 billion in the three months ended March 31, 2024, compared with $0.2 billion for the same period in 2023. Acquisitions completed in 2023 and the first quarter of 2024 contributed incremental total revenues of $140 million and Adjusted EBITDA of $35 million for the three months ended March 31, 2024. Cash proceeds from divestitures and disposals of long-lived assets amounted to $0.7 billion for the three months ended March 31, 2024, compared with $6 million for the three months ended March 31, 2023. The total revenues impact of divestitures was a negative $(117) million and the impact at an Adjusted EBITDA level was a negative $(24) million. The U.S. Dollar weakened against most major currencies during the three months ended March 31, 2024, from the comparable period in 2023, resulting in an overall positive currency exchange impact. Because of the impact of acquisitions, divestitures, currency exchange translation and other non-recurring items on reported results each reporting period, CRH uses organic revenue and organic Adjusted EBITDA as additional performance indicators to assess performance of pre-existing (also referred to as underlying, heritage, like-for-like or ongoing) operations each reporting period. Organic revenue and organic Adjusted EBITDA are arrived at by excluding the incremental revenue and Adjusted EBITDA contributions from current and prior year acquisitions and divestitures, the impact of exchange translation, and the impact of any one-off items. In the Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section on pages 26 and 27, changes in organic revenue and organic Adjusted EBITDA are presented as additional measures of revenue and Adjusted EBITDA to provide a greater understanding of the performance of the Company. Organic change % is calculated by expressing the organic movement as a percentage of the prior year reporting period (adjusted for currency exchange effects). A reconciliation of the changes in organic revenue and organic Adjusted EBITDA to the changes in total revenues and Adjusted EBITDA by segment, is presented with the discussion within each segment’s performance in tables contained in the segment discussion in Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” commencing on page 23. Liquidity and Capital Resources The Company’s primary source of incremental liquidity is cash flows from operating activities, which combined with the cash and cash equivalents balance, the U.S. Dollar and Euro Commercial Paper Programs, and committed credit lines, is expected to be sufficient to meet the Company’s working capital needs, capital expenditures, dividends, share repurchases, upcoming debt maturities, and other liquidity requirements associated with our operations for the foreseeable future. In addition, the Company believes that it will have the ability to fund additional acquisitions via cash flows from internally available cash, cash flows from operating activities and, subject to market conditions, via obtaining additional borrowings and/or issuing additional debt or equity securities. Total short and long-term debt was $12.7 billion at March 31, 2024, compared with $11.6 billion at year-end 2023, and $9.8 billion at March 31, 2023. In the three months ended March 31, 2024, $1.8 billion of commercial paper was issued across the U.S. Dollar and Euro Commercial Paper Programs. In January 2024, €600 million of euro-denominated notes were repaid on maturity. Net Debt* at March 31, 2024, was $9.6 billion, compared with $5.4 billion at December 31, 2023, and $5.3 billion at March 31, 2023. The increase in Net Debt* 5 compared with December 31, 2023, reflects outflows from operating activities, the significant acquisition of a portfolio of cement and readymixed concrete assets and operations in Texas, cash returns to shareholders through dividends and continued share buybacks, and the purchase of property, plant and equipment, partially offset by proceeds from the completed divestiture of phases one and two of the European Lime operations. CRH continued its ongoing share buyback program in the first quarter of 2024 repurchasing approximately five million ordinary shares for a total consideration of $0.4 billion and the Company is commencing an additional $0.3 billion tranche to be completed no later than August 7, 2024. The Company also made cash dividend payments of $0.8 billion in the first quarter of 2024. Other than items updated in this Quarterly Report, the nature and composition of the Company’s material cash requirements, which include debt service and related interest payments, operating lease obligations, share repurchase commitments and other purchase obligations arising in the normal course of business, have not materially changed from those disclosed in the 2023 Form 10-K. Cash flows At March 31, 2024, CRH had cash and cash equivalents of $3.3 billion compared with $4.7 billion at March 31, 2023. At March 31, 2024, CRH had outstanding total short and long-term debt of $12.7 billion compared with $9.8 billion at March 31, 2023. Total lease liabilities were $1.5 billion compared with $1.3 billion at March 31, 2023. At March 31, 2024, CRH had $3.8 billion of undrawn committed facilities which were available until May 2028. During April 2024, the Company completed a one-year extension option on the undrawn committed facilities extending the maturity date to May 2029. Also during April 2024, the U.S. Dollar Commercial Paper Program was increased from $2.0 billion to $4.0 billion. At March 31, 2024, CRH had sufficient cash balances to meet all maturing debt obligations for the next 1.3 years and the weighted average maturity of the remaining term debt was 7.8 years. Cash flows from operating activities Three months ended March 31 in $ millions 2024 2023 Net cash used in operating activities (712) (671) The seasonal impact on the Company’s operations disproportionately negatively impacts the quarterly operating cash flow results when compared with the full year. Net cash used in operating activities was $0.7 billion for the three months ended March 31, 2024, broadly in line with the same period in 2023. The increase in net cash used in operating activities was primarily due to adjustments relating to gains on disposals from businesses and long-lived assets and deferred tax, offsetting an increase in net income of $0.1 billion and lower outflows related to working capital. * Represents a non-GAAP measure. See the discussion within 'Non-GAAP Reconciliation and Supplementary Information' on pages 28 to 29. 5 CRH Form 10-Q 29 Cash flows from investing activities Three months ended March 31 in $ millions 2024 2023 Net cash used in investing activities (2,096) (492) Net cash used in investing activities was $2.1 billion for the three months ended March 31, 2024, compared to $0.5 billion in the same period for 2023, an increase of $1.6 billion. During the three months ended March 31, 2024, the Company invested $2.2 billion on acquisitions, an increase of $2.0 billion on the same period in 2023. This outflow was partially offset by proceeds from divestitures and disposals of long-lived assets of $0.7 billion, primarily related to the completed divestiture of phases one and two of the European Lime operations. Further to this, capital expenditure totaled $0.5 billion in the first quarter of 2024, resulting in an increased outflow of $0.2 billion versus the comparable prior year period. Cash flows from financing activities Three months ended March 31 in $ millions 2024 2023 Net cash used in financing activities (176) (191) Net cash used in financing activities was $0.2 billion for the three months ended March 31, 2024, in line with the prior year. Net inflows from debt issuances were $1.8 billion compared to $0.1 billion for the first quarter of 2023, an increase of $1.7 billion, which was primarily related to the issuance of $1.8 billion under the Company’s U.S. Dollar and Euro Commercial Paper Programs in the first quarter of 2024. Offsetting the inflow in the first quarter of 2024 was a repayment of debt of $0.7 billion, which was the repayment of a €600 million euro-denominated bond on maturity in January 2024. The first quarter of 2024 also saw the payment of the final dividend for 2023 of $0.8 billion, with no similar payment in the comparable prior year period. Outflows related to the purchases of common stock were $0.6 billion in the first quarter of 2024 compared to $0.2 billion for the same period in 2023. Debt Facilities The following section summarizes certain material provisions of our debt facilities and long-term debt obligations. The following description is only a summary, does not purport to be complete and is qualified in its entirety by reference to the documents governing such indebtedness (available in the Investors section on www.crh.com) . At March 31, 2024, we expect maturitie s for the next three quarters as follows: 2024 Debt Maturities Second Quarter (i) $2.9 billion Third Quarter - Fourth Quarter - (i) Of which $2.8 billion is related to the U.S. Dollar and Euro Commercial Paper Programs. Unsecured Senior Notes The main sources of Company debt funding are public bond markets in North America and Europe. See Note 9 “Debt” in Part I, Item 1. “Financial Statements” for further details regarding our debt obligations. A €600 million euro-denominated bond was repaid on maturity in January 2024 from existing cash resources. Revolving Credit Facilities The Company manages its borrowing ability by entering into committed borrowing agreements. The Company’s multi-currency RCF, dated May 2023, is made available from a syndicate of lenders, consisting of a €3.5 billion unsecured, revolving loan facility. During April 2024, the Company completed a one-year extension option on the undrawn committed facilities extending the maturity date to May 11, 2029. See Note 9 “Debt” in Part I, Item 1. “Financial Statements” for further details regarding the RCF. At March 31, 2024, the RCF was undrawn. Guarantees The Company has given letters of guarantee to secure obligations of subsidiary undertakings as follows: $12.4 billion in respect of loans and borrowings, bank advances and derivative obligations, and $0.4 billion in respect of letters of credit due within one year at March 31, 2024. Commercial Paper Programs As at March 31, 2024, the Company had a $2.0 billion U.S. Dollar Commercial Paper Program and a €1.5 billion Euro Commercial Paper Program. In April 2024, the Company increased the size of its existing U.S. Dollar Commercial Paper Program to $4.0 billion, providing added flexibility to support the Company's short-term liquidity needs. As at March 31, 2024, there was $1.9 billion of outstanding issued notes on the U.S. Dollar Commercial Paper Program and $0.9 billion of outstanding issued notes on the Euro Commercial Paper Program. The purpose of these programs is to provide short-term liquidity as required. Off-Balance Sheet Arrangements CRH does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on CRH’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that may be material to investors. CRH Form 10-Q 30 Debt Ratings Our debt ratings and outlooks at March 31, 2024, were as follows: Short-Term Long-Term Outlook S&P A-2 BBB+ Stable Moody’s P-2 Baa1 Stable Fitch F1 BBB+ Stable Contractual Obligations An analysis of the maturity profile of debt, leases capitalized, purchase obligations, deferred and contingent acquisition consideration and pension scheme contribution commitments at March 31, 2024, is as follows : Payments due by period Total Less than 1 year 2-3 years 4-5 years More than 5 years in $ millions Short and long-term debt (i) 12,762 3,000 2,377 2,689 4,696 Lease liabilities (ii) 1,949 297 467 296 889 Estimated interest payments on contractually committed debt (iii) 3,370 457 669 499 1,745 Deferred and contingent acquisition consideration 29 21 5 1 2 Purchase obligations (iv) 2,234 1,274 527 197 236 Retirement benefit obligation commitments (v) 20 3 6 5 6 Total (vi) 20,364 5,052 4,051 3,687 7,574 (i) Of the $12.8 billion total gross debt, $0.1 billion is drawn on revolving facilities which may be repaid and redrawn up to the date of maturity. (ii) Lease liabilities are presented on an undiscounted basis. (iii) These interest payments have been estimated on the basis of the following assumptions: (a) no change in variable interest rates; (b) no change in exchange rates; (c) that all debt is repaid as if it falls due from future cash generation; and (d) that none is refinanced by future debt issuance. (iv) Purchase obligations include contracted-for capital expenditure. These expenditures for replacement and new projects are in the ordinary course of business and will be financed from internal resources. (v) These retirement benefit commitments comprise the contracted payments related to our pension schemes in the United Kingdom. (vi) Over the long term, CRH believes that our available cash and cash equivalents, cash from operating activities, along with the access to borrowing facilities will be sufficient to fund our long-term contractual obligations, maturing debt obligations and capital expenditures. CRH Form 10-Q 31 Supplemental Guarantor Information Guarantor Financial Information As of March 31, 2024, CRH plc (the ‘Guarantor’) has fully and unconditionally guaranteed registered debt securities issued by CRH America, Inc. (the ‘Issuer’), comprising U.S. $300 million 6.40% Notes due 2033 – listed on NYSE (i) (the ‘Notes’). (i) Originally issued as a U.S. $300 million bond in September 2003. Subsequently in August 2009 and December 2010, $87 million of the issued Notes were acquired by CRH plc as part of liability management exercises. On December 29, 2023, the Notes were delisted from Euronext Dublin and relisted on NYSE under the symbol CRH/33A. CRH America, Inc. is 100% owned by CRH plc. The Notes are fully and unconditionally guaranteed by CRH plc as defined in the indenture governing the Notes. The Notes are unsecured and rank equally with all other present and future unsecured and unsubordinated obligations of CRH America, Inc and CRH plc, subject to exceptions for obligations required by law. The guarantee is a full, irrevocable, and unconditional guarantee of the principal, interest, premium, if any, and any other amounts payable in respect of the Notes given by CRH plc. Basis of Presentation The following summarized financial information reflects, on a combined basis, the Balance Sheet as of March 31, 2024 and as of December 31, 2023 and the Income Statement for the three months ended March 31, 2024, and for the year ended December 31, 2023 of CRH America, Inc. and CRH plc, which guarantees the registered debt; collectively the ‘Obligor Group’. Intercompany balances and transactions within the Obligor Group have been eliminated in the summarized financial information below. Amounts attributable to the Obligor Group’s investment in non-obligor subsidiaries have also been excluded. Intercompany receivables/payables and transactions with non-obligor subsidiaries are separately disclosed as applicable. This summarized financial information has been prepared and presented pursuant to the Securities and Exchange Commission Regulation S-X Rule 13-01 and is not intended to present the financial position and results of operations of the Obligor Group in accordance with U.S. GAAP. The summarized Income Statement information is as follows: in $ millions For the three months ended March 31, 2024 For the year ended December 31, 2023 (Loss) income from operations before income tax expense and income from equity method investments (i) (13) 4,016 - of which relates to transactions with non-obligor subsidiaries 77 4,044 Net (loss) income – all of which is attributable to equity holders of the Company (13) 4,014 - of which relates to transactions with non-obligor subsidiaries 77 4,044 (i) Revenues and gross profit for the Obligor Group for the three months ended March 31, 2024 and for the year ended December 31, 2023 amounted to $nil and $nil, respectively. The summarized Balance Sheet information is as follows: March 31, 2024 December 31, 2023 Current assets 471 1,314 Current assets – of which is due from non-obligor subsidiaries 288 332 Noncurrent assets 3,639 3,655 Noncurrent assets – of which is due from non-obligor subsidiaries 3,639 3,655 Current liabilities 2,448 1,728 Current liabilities – of which is due to non-obligor subsidiaries 2,166 1,706 Noncurrent liabilities 1,996 2,006 Noncurrent liabilities – of which is due to non-obligor subsidiaries - - Critical Accounting Policies and Estimates There have been no material changes during the three months ended March 31, 2024, to our critical accounting policies and/or estimates disclosed in our 2023 Form 10-K. Available Information The Company maintains an internet address at www.crh.com and makes available free of charge through its website its annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments thereto, if any, filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, which are available as soon as reasonably practicable after CRH files or furnishes such information to the SEC. Investors may also access such documents via the SEC’s website www.sec.gov . References in this document to other documents on the CRH website are included only as an aid to their location and are not incorporated by reference into this Quarterly Report. CRH’s website provides the full text of earnings updates, copies of presentations to analysts and investors and circulars to shareholders. CRH Form 10-Q 32 Further, copies of CRH’s key corporate governance policies and other reports, including its Code of Business Conduct, Sustainability Performance Report, and the charters for Committees of the Board, may be found on the CRH website. The Company undertakes no obligation to update any statements contained in this Quarterly Report or the documents incorporated by reference herein for revisions or changes after the filing date of this Quarterly Report, other than as required by law. We post on our website news releases, announcements and other statements about our business performance, results of operations and sustainability matters, some of which may contain information that may be deemed material to investors. Additionally, we use our LinkedIn account (www.linkedin.com/company/crh ), as well as our other social media channels from time to time, to post announcements that may contain information that may be deemed material to investors. Our officers may use similar social media channels to disclose public information. We encourage investors, the media and others interested in CRH to review the business and financial information we or our officers post on our website and the social media channels identified above. Information on CRH’s website or such social media channels does not form part of, and is not incorporated into, this Quarterly Report. Forward-Looking Statements In order to utilize the “Safe Harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, CRH is providing the following cautionary statement. This document, and the documents incorporated by reference herein, contain statements that are, or may be deemed to be, forward-looking statements with respect to the financial condition, results of operations, business, viability, and future performance of CRH and certain of the plans and objectives of CRH. These forward-looking statements may generally, but not always, be identified by the use of words such as “will”, “anticipates”, “should”, “could”, “would”, “targets”, “aims”, “may”, “continues”, “expects”, “is expected to”, “estimates”, “believes”, “intends” or similar expressions. These forward-looking statements include all matters that are not historical facts or matters of fact at the date of this document. In particular, the following, among other statements, are all forward looking in nature: plans and expectations regarding drivers of CRH’s performance in 2024, demand outlook, macroeconomic trends in CRH’s markets, government funding initiatives and manufacturing trends, pricing trends, costs and weather patterns; plans and expectations regarding business strategy and cash returns for shareholders, including expectations regarding dividends and share buybacks; plans and expectations regarding CRH’s financial capacity, including our ability to fund acquisitions and meet working capital needs, capital expenditures, dividends, share repurchases, upcoming debt maturities and other liquidity requirements; plans and expectations regarding the timing of our acquisitions and divestments, including with respect to valuation and purchase price allocation; and plans and expectations regarding the strategic risks and uncertainties facing CRH. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future and reflect our current expectations and assumptions as to such future events and circumstances that may not prove accurate. You are cautioned not to place undue reliance on any forward-looking statements. These forward-looking statements are made as of the date of this document. We expressly disclaim any obligation or undertaking to publicly update or revise these forward-looking statements other than as required by applicable law. A number of material factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, certain of which are beyond our control, and which include, among other factors: economic and financial conditions, including changes in interest rates, inflation, price volatility and/or labor and materials shortages; demand for infrastructure, residential and non-residential construction and our products in geographic markets in which we operate; increased competition and its impact on prices and market position; increases in energy, labor and/or other raw materials costs; adverse changes to laws and regulations, including in relation to climate change; the impact of unfavorable weather; investor and/or consumer sentiment regarding the importance of sustainable practices and products; availability of public sector funding for infrastructure programs; political uncertainty, including as a result of political and social conditions in the jurisdictions CRH operates in, or adverse political developments, including the ongoing geopolitical conflicts in Ukraine and the Middle East; failure to complete or successfully integrate acquisitions or make timely divestments; cyberattacks and exposure of associates, contractors, customers, suppliers and other individuals to health and safety risks, including due to product failures. Additional factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those expressed by the forward-looking statements in this report including, but not limited to, the risks and uncertainties described herein and under “Risk Factors” in our 2023 Form 10-K and in our other filings with the SEC.