CRH plc (NYSE:CRH) Q1 2025 Earnings Call Transcript

CRH plc (NYSE:CRH) Q1 2025 Earnings Call Transcript May 6, 2025

Operator: Good day, and welcome to the CRH First Quarter 2025 Results Presentation. My name is Christa, and I will be your operator today. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] At this time, I’d like to turn the conference over to Jim Mintern, CRH Chief Executive Officer, to begin the conference. Please go ahead, sir.

Jim Mintern: Hello everyone. Jim Mintern, here, CEO of CRH, and you’re all very welcome to our Q1 2025 results presentation and conference call. Joining me on the call is Alan Connolly, our Interim CFO; Randy Lake, Chief Operating Officer; and Tom Holmes, Head of Investor Relations. Before we get started, I’ll hand over to Tom for some brief opening remarks.

Tom Holmes: Thanks, Jim. Hello, everyone. Before we begin, I’d like to draw your attention to Slide 1 shown here on screen. During our presentation, we’ll be making some forward-looking statements relating to our future plans and expectations. These are subject to certain risks and uncertainties, and actual results and outcomes could differ materially due to the factors outlined on this slide. For more details, please refer to this slide, our annual report and other SEC filings, which are available on our website. I’ll now hand you back to Jim, Alan and Randy to deliver some prepared remarks.

Jim Mintern: Thanks Tom. Over the next 15 minutes or so, we will take you through a brief presentation of our first quarter results, highlighting the key components of our operating performance for the first three months of the year, our recent capital allocation activities, as well as providing you with an update on our expectations for the year as a whole. First on Slide 3, some key messages from our results announcement. Overall, we had a good start to the year in what is the seasonally least significant quarter for our business. Despite contending with some unfavorable weather across many parts of our business, we delivered further growth in revenues, adjusted EBITDA and margin compared to the prior year period, supported by the continued benefits of our differentiated strategy, positive pricing momentum and good contributions from acquisitions.

We remain focused on allocating capital towards higher growth markets benefiting from secular growth tailwinds, and in the first three months of the year we completed eight value accretive bolt-on acquisitions for approximately $600 million across the areas of essential materials, road solutions, critical infrastructure and outdoor living. Notwithstanding the current macroeconomic uncertainty, the underlying demand environment across our key end markets remains positive and we are pleased to reaffirm our previous financial guidance for 2025. Assuming normal seasonal weather patterns for the remainder of the year and no major dislocations in the political or macroeconomic environment, we expect the full year adjusted EBITDA to be between $7.3 billion and $7.7 billion, representing another strong year of growth and value creation for CRH.

Turning to Slide 4 and our financial highlights for the first three months of the year. Overall a good performance with revenues, adjusted EBITDA and margin all ahead of the prior year period. Total revenues of $6.8 billion were 3% ahead. This translated into adjusted EBITDA of $495 million, 11% ahead, and the further 50 basis points of margin expansion reflecting continued operational improvements and strong discipline across our business. As you can see on the slide, we reported a small loss in our diluted earnings per share, which is not unusual for the first quarter of the year and reflects the seasonal nature of our business. Now at this point, I will hand you over to Randy to take you through the operating performance of each of our businesses.

Randy Lake: Thanks, Jim. Hello everyone. Turning to Slide 6 and starting with Americas Material Solutions, which had a good start to the year despite adverse weather conditions impacting activity levels across many parts of our business. Total revenues were 2% ahead of the prior year period, supported by positive pricing momentum across all lines of business, further operational efficiencies and good contributions from acquisitions. In essential materials, first quarter revenues were 3% behind the prior year driven by lower weather impacted volumes in most regions. Our aggregates pricing increased by 8% while cement pricing increased by 4%. In road solutions, increased paving activity along with growth in both asphalt and ready-mix concrete volumes resulted in Q1 revenues 5% ahead of the prior year period.

Of course, it’s worth noting that this is the seasonally least significant quarter for our Americas Material Solutions business, typically only representing 10% to 15% of our annual volumes. Combined with the timing of our annual maintenance programs, you can also see how seasonally insignificant this period is from an adjusted EBITDA and margin perspective. In terms of the demand environment, I’m pleased to report that the underlying backdrop across our key markets remains positive. Infrastructure, our largest end market, continues to be underpinned by state and federal funding through the IIJA. Only one third of IIJA highway funding has been deployed to date, highlighting the significant runway we have ahead of us. We also continue to see good levels of reindustrialization activity, particularly in manufacturing and data centers.

Looking ahead as the construction season gets fully underway across many of our markets, I’m also encouraged by the positive momentum we’re seeing in our bidding activity and indeed our backlogs, which are ahead of the prior year in both volume and margin. Next to Americas Building Solutions on Slide 7, where our business delivered a resilient performance in the first quarter supported by solid underlying demand, which was offset by challenging weather conditions and subdued residential activity. First quarter revenues in our building and infrastructure solutions business were 4% ahead of the prior year, supported by good demand in the manufacturing sector and significant funding for critical water and energy infrastructure. In outdoor living solutions, although the underlying demand environment for residential repair and remodel activity remains resilient, a weather delayed start to the season resulted in Q1 revenues, 3% below the prior year.

Moving to international solutions now on Slide 8, where our business delivered a strong first quarter performance supported by further pricing progress and good contributions from acquisitions, particularly our investment in Adbri. Total revenue growth of 7% translated into a 22% increase in adjusted EBITDA and a further 70 basis points of margin improvement reflecting strong cost control and further operational efficiencies across our business. In Central and Eastern Europe, we continue to experience positive underlying demand despite adverse weather in certain regions, while in Western Europe activity levels are improving supported by infrastructure and non-residential demand. So, overall, a good start to the year for our business. And at this point, I’ll hand you over to Alan to take you through our financial performance and recent capital allocation activities in further detail.

Alan Connolly: Thanks, Randy. Hello everyone. Turning to Slide 10 at the key components of our adjusted EBITDA performance. Starting with organic growth of $8 million, 2% ahead on a like-for-like basis, a good performance in the context of unfavorable weather conditions impacting activity levels during the quarter. Acquisitions net of divestitures delivered a further $43 million of adjusted EBITDA reflecting good contributions from acquisitions as well as the impact of last year’s divestiture of the European Lime operations. Overall, we delivered $495 million of adjusted EBITDA, 11% ahead of the prior year period and representing a good start to the year in what is our seasonally least significant period. Next to Slide 11, where I will take you through some of the key components of our net debt movements and our strong and flexible balance sheet.

Firstly, on the left hand side, you can see we ended 2024 with a net debt position of $10.5 billion. Turning to our cash flow performance, we reported a cash outflow of approximately $700 million in the first quarter, an outflow at this stage of the year is to be expected given the seasonal nature of our business as it reflects the build up working capital in advance of second and third quarter trading, which are seasonally our most important periods. Acquisitions, net of divestitures and other items resulted in an outflow of approximately $600 million during the first three months of the year. We also invested $600 million in capital expenditure to support further growth in our existing business and we returned $300 million in the form of share buybacks demonstrating our commitment to returning cash to our shareholders.

Taking all of this into account, results in a net deposition of $12.7 billion at the end of the first quarter, representing a net debt to adjusted EBITDA ratio of approximately 1.8 times on a trailing 12 month basis. Turning to Slide 12 and at this stage we would like to briefly update you on our recent capital allocation activities building upon our proven track record of value creation, which is underpinned by our unmatched scale, breadth and financial capacity. During the first quarter of the year, we completed eight value accretive bolt-on acquisitions for approximately $600 million. This includes the acquisition of Talley Construction, a vertically integrated asphalt and paving business with operations in Tennessee, Georgia, Alabama and North Carolina, complementing our existing operations and enhancing our capability to serve our customers in these markets.

This was followed by our acquisition of Weaver and Sons, an integrated provider of asphalt, paving and construction services representing our strategic entry into the Southern Alabama market. These are examples of the continued development of our customer connected solutions strategy and our commitment of allocating capital into attractive higher growth markets. We have a strong and active pipeline of opportunities in front of us, thanks to our differentiated strategy and the fragmented nature of our markets. And we will continue our disciplined and value focused approach when it comes to the allocation of our shareholders capital. We also continue to return significant amounts of cash to our shareholders. Our ongoing share buyback program has returned approximately $500 million so far this year and today we are commencing a further quarterly tranche of $300 million to be completed no later than August 5th.

I’m also pleased to report that the Board has declared a quarterly dividend of $0.37 per share representing an increase of 6% on the prior year in line with our strong financial position and policy of consistent long-term dividend growth.

Jim Mintern: Thanks, Alan. A good demonstration there of our relentless focus on the disciplined and efficient allocation of our shareholders capital. Now before I provide an update on our financial expectations for the full year, let’s let me share our latest thoughts on the outlook across our markets. Turning to Slide 14 and first to infrastructure, our largest end market. Here we expect demand in the United States to be underpinned by the continued rollout of state and federal funding. As Randy mentioned earlier, only a third of IIJA highway funds have been deployed so far, highlighting the significant runway that lies ahead. In our international markets, we expect robust demand in infrastructure activity to continue, supported by significant investment from government and EU funding programs.

In non-residential, we expect continued positive momentum across our key markets supported by large scale manufacturing and data center activity. In the residential sector, we expect new build activity in the U.S. to remain subdued while repair and remodel activity remains resilient. In our international markets, we expect residential activity to stabilize with structural demand fundamentals supporting a gradual recovery. As we have said in the past, we believe the long-term fundamentals for residential construction remain very attractive, supported by favorable demographics and significant levels of underbuild. Regarding the pricing environment, we expect positive momentum to continue across our markets, supported by disciplined commercial management as well as the benefits of our differentiated strategy.

Due to the localized nature of our operations, we do not expect a material direct impact from recent changes in global trade policies on our business. In terms of the impact of the wider macroeconomic uncertainty, it is clearly very fluid, but we continue to monitor the situation closely and we are confident in our ability to navigate our way through it. So, in summary, despite the current macroeconomic uncertainty, we believe the overall trend is positive for our business. Our differentiated strategy and leading positions of scale in attractive higher growth markets, together with our strong and flexible balance sheet, leaving us well positioned to capitalize on the strong growth opportunities that lie ahead. Turning to Slide 15 and against that backdrop, we have reaffirmed our financial guidance for 2025.

Assuming normal seasonal weather patterns for the remainder of the year and no major dislocations in the political or macroeconomic environment, we expect full year group adjusted EBITDA to be between $7.3 billion and $7.7 billion, net income between $3.7 billion and $4.1 billion, and diluted earnings per share between $5.34 and $5.80, representing another strong year of growth and value creation for CRH. It’s still very early in the construction season across our markets, but we will update you on our expectation as the year unfolds and the season gets fully underway. So that concludes our presentation today. I will now hand you back to the moderator to coordinate the Q&A session of our call.

Operator: Thank you. [Operator Instructions] We’ll take our first question from Trey Grooms with Stephens. Please go ahead.

Trey Grooms: Good morning, everyone. If you could maybe elaborate a little more on the 2025 guidance in light of the macro uncertainty that we have here and also maybe pluses and minuses you’ve assumed in the guide? Thank you.

Q&A Session

Jim Mintern: Good morning, Trey. Jim here. Maybe I’ll ask Alan to come back on some of the puts and takes on the detail on the guidance. But listen, very happy this morning and pleased to reaffirm the full year guidance and it really reflects a good and a strong start to the year for us. And that reflects the positive underlying demand that we have, that we’re seeing across our key markets and indeed, the continued execution of our differentiated strategy. It’s early in the season, Trey, but we’re feeling positive on 2025. And most importantly for me, a lot of the key building blocks that we need to put in place around pricing, what we’re seeing in our backlogs and what we’re seeing in our level of bidding that gives us that encouragement in terms of the guidance for the year.

Now whilst the wider – clearly, the wider macroeconomic situation remains fluid, particularly in the foreign exchange market, right, which is volatile and changing by the week, we’re continuing to monitor that very closely. But I’m confident in the resilience of our business model and also particularly the experienced nature of the management team, we have an experienced team, which has managed through – has a proven track record of navigating periods of uncertainty, most recently in the pandemic. So kind of putting all that together, that’s what gives us that confidence in being able to reaffirm the guidance for the year and looking forward to giving further updates when we report on Q2 in early August. Maybe, Alan, do you want to give some of the puts and takes?

Alan Connolly: Sure, Jim. Thanks for that and good morning Trey. With regard to the underlying assumptions underpinning our guidance, I might just address the three key items. Firstly, as pointed out earlier, we had a good start to the year from an M&A perspective, eight acquisitions, approximately $600 million. Now based on last year’s acquisitions, we had previously guided to a positive net contribution of about $280 million of adjusted EBITDA for 2025. Now including the partial year contribution from this year’s activity, we expect a slightly higher net contribution of about $320 million. Next, on FX. As Jim said, it’s very hard to predict, but we continue to monitor the ongoing volatility very closely. And finally, you’ll recall that in 2024, we benefited from higher-than-normal levels of land sales. We continue to expect a more normalized year in 2025, somewhere in the region of about $75 million, as we’d indicated previously.

Trey Grooms: Got it. Thank you both very much. Jim and Allan and I will pass it on. Thank you and good luck.

Operator: Your next question comes from the line of Jerry Revich with Goldman Sachs. Please go ahead.

Jerry Revich: Yes, hi. Good morning everyone. I’m wondering if you wouldn’t mind just talking about volume trends that you’ve seen in March and April, if you’re willing to comment? And separately, can you just update us on your pricing expectations in aggregates and cement over the course of this year and any volume comments? I was impressed with the aggregates pricing in the first quarter.

Randy Lake: Yes. Thanks, Jerry. This is Randy. I’ll take that on. I guess for us, as we look forward, our biggest indicator of future work is the backlogs. And that typically gives us 6 to 9 months view of work, and that would be everything from kind of typical maintenance work to capacity expansion in the roads and highways, and the backlog also is inclusive of our critical infrastructure business. As I look at that, maybe three things. One, the quantum of work that we continue to bid on a weekly basis is increasing, which is encouraging. The volumes are up versus last year in all product lines. But more importantly, the margins are improving as well. So that gives us really the confidence as we look forward to really just reaffirm, I guess, what we had said back in March around kind of low single-digit growth in terms of underlying aggregate volumes and mid to high single digits on pricing.

Q1, 8% off to a good start, but I think that really bodes well for the balance of the year. I think as others have called out, not surprisingly, weather impacted January and February. But when we saw the weather moderating and getting back to somewhat normal conditions, we saw a nice pickup in activities in March and April kind of high single digits. So what you would expect really reflective of the backlog and kind of our overall outlook.

Jerry Revich: Super. Thank you, Andy. And can I just ask separately, International Solutions had good margin expansion in the quarter on strong cost control given the pricing cadence, can you just expand on the drivers of cost improvement and how are you thinking about costs in coming quarters? I know it’s not a seasonally high quarter obviously, but the cost performance was quite good.

Alan Connolly: Yes, sure Jerry. Good, strong performance from the International business in Q1 really a number of things coming together. We kind of called it out towards the end of last year that we’re beginning to see kind of a trough in a lot of our key western European markets. And certainly we saw good activity in some of our key markets in Q1 right now. They were lapping against a Q1 last year had it was tough weather wise in Europe West, but in particular we had a good performance in Europe West. Europe East actually had quite a challenging weather performance. But again as we kind of got through that the continued strong volume kind of outlook in Europe East underpinned by infrastructure, really seen that moving into April, right.

And across Europe generally a good pricing environment too looking for kind of mid-single digits across Europe. That together with the contribution from Adbri, which was bought in July last year, it’s going well, as we said, the integration is going well and ahead of where we expected to in terms of opportunity in terms of synergies. So, those factors coming together really explain the good performance in International in Q1.

Jerry Revich: Thank you.

Operator: Your next question comes from the line of Anthony Pettinari with Citi. Please go ahead.

Anthony Pettinari: Good morning. Given some of the recent macro uncertainty, have you seen any project delays or even cancellations, I guess especially on kind of the private, non-res, commercial side, can you just talk about kind of what you’ve seen there in terms of project progress post Liberation Day?

Jim Mintern: Sure. Morning Anthony. Yes, listen, we’re not seeing any at this point in time, any cancellations or delays, now clearly it’s still very early in the season but as Randy mentioned, our backlogs are positive and that’s really reflected in the guidance that we’re reaffirming again today. We continue to see positive momentum in our major private non-res categories and that’s been supported by the re industrialization and the onshoring activities. These projects tend to be, as we said, typically quite large and very highly specced and highly technical projects, which, of course, really falls into our sweet spot from that perspective. And we’re talking things like data centers and also some of the high-spec manufacturing.

We also called it out in the full year earnings, we are seeing some recovery in warehousing also. So we’re not seeing any cancellations, any delays, but also maybe just highlight that it’s not just about the individual projects as well, right, there is a substantial knock-on effect in terms of increased demand for broader building materials and broader infrastructure build-out as well, meaning that the total kind of construction requirement is often a multiple of the actual core project itself. So, no cancellations, no delays and the backlogs are positive.

Anthony Pettinari: Okay, that’s helpful. I will turn it over.

Operator: Your next question comes from the line of Ross Harvey with Davy. Please go ahead.

Ross Harvey: Hi all. Thanks for taking my question. I am wondering can you provide an update on the energy and the more general input cost environment?

Alan Connolly: Good morning Ross. I might take that one, Alan here. Just touching on the more general cost input, obviously, firstly, energy is a key part of it, but you must also consider the other significant cost items in CRH, which we’ve called out previously, labor, raw materials, subcontractors, et cetera. There is a lot of moving parts depending on the market and the cost category, as you could well imagine. And overall, we’re still operating in an inflationary cost environment, and we would see a mid-single-digit inflation expected for the full year of 2025. I suppose most notably for me, and it’s already been highlighted by Randy earlier, this really shows the importance of continued pricing momentum across the business as we target another year of margin expansion, as you know.

Ross Harvey: Got it, thanks. Thank you, Alan.

Operator: Your next question comes from the line of Kathryn Thompson with Thompson Research Group. Please go ahead.

Kathryn Thompson: Hi, thank you for taking my question today. And really two parts, one on M&A and then one on infrastructure as a mirror for each other. Just given the macro uncertainty, could you give an update on your M&A pipeline? And any change in capital allocation priorities in light of the broad macro outlook? And then on the flip side of that, when we do our work here at TRG with our state lettings, we are finding a building in momentum, a snowball effect that we’ve been tracking for the couple of years for solid mid-teens increases in lettings from key states, including many years in. Are you seeing that work show up? And how does that impact – what is that impacting in terms of your infrastructure outlook, not just for 2025 but beyond? Thank you very much.

Jim Mintern: Thank you, Kathryn. And good morning. Two questions there. I might ask Randy maybe to pick up the infrastructure one. Maybe first to talk about M&A and capital allocation. Well, firstly, no change in capital allocation priorities, Kathryn, overall. Really good start to M&A and development in the first quarter, right? And in particular, eight deals in the quarter, which typical CRH deals kind of a lot of bolt-on deals. What was really encouraging for us actually is that seven of the eight were one-on-one negotiations, right, which really strikes to the kind of national footprint and those close relationships we have across the industry. So, eight deals, $600 million. We have a full, I’d say, pipeline as we look out.

We have good optionality as we look out to the remainder of the year, both in terms of bolt-ons, but also some interesting midsized deals as well. But we’re not going to lose that financial control and discipline. I think that’s what you get from CRH, right, when you look at it. And I think given the kind of connected nature of the portfolio, we really have multiple avenues for how we invest, right, and how we deploy capital. And that, together with the unmatched scales and those kind of local relationships and local positions really kind of keeps that M&A pipeline good for us. In terms of growth CapEx, we’re continuing to invest in what are low-risk and high-returning opportunities, right, in many of our fastest-growing markets. And this morning, as you saw, we’ve announced a 6% increase in the quarterly dividend and also a continuation of our share buyback program, another $300 million.

And that’s running at an annualized rate of $1.2 billion. And in fact, since we started that program over six years ago, we’ve now retired nearly 22% of our stock at about $47 a share, right? So, really good stewardship of capital from that perspective. So overall, I think, given the scale of the business and the continued execution of our differentiated strategy and the optionality we have in terms of multiple avenues of growth, that, together with the strength of the balance sheet, gives us that financial capacity to support the continued growth of the business. May be, Randy, do you want to pick up the infrastructure question?

Randy Lake: Yes. May be just a couple of quick comments on that. I think your intuition and research is correct. So, I think we called out maybe at the beginning of the IIJA that it was a five-year bill, but we thought it was going to take seven years to deploy the quantum of capital and just to be able to get the engineering and design work done to let those projects bid, and that’s where we see it today. Obviously, it’s a particular area that has broad support on either side of the aisle and which is encouraging. I called out our backlogs. And I think the backlogs are interesting for a couple of reasons. One, obviously, it gives us a picture for the balance of the year, but it’s also kind of the mix of work that we’re seeing.

So, there is certainly a combination of that maintenance, but also multiyear projects, which, again, states have the confidence in long-term funding, whether that’s IIJA or even call out the work or the work that’s going to begin and starting to kick on in regards to the next evolution of the highway bill. And you saw Chairman Graves come out with concepts in and around a new revenue stream. As you know, the gas tax hasn’t been raised since 1993, not even indexed for inflation. So, the conversation at least around a continuation of funding is happening early, which is encouraging. And I think for us, in particular, if you look at where we operate geographically, we’re the beneficiary of a significant amount of that IIJA funding. So, I think we’re in the right places to take advantage of that and the pipeline is strong.

And to your point, I think, we are seeing the bidding activity on a weekly basis kind of align with what you’re calling out in terms of overall opportunities.

Kathryn Thompson: Great. Thank you very much.

Operator: Your next question comes from the line of Brent Thielman with D.A. Davidson. Please go ahead.

Brent Thielman: Hi. Great. Thank you. Good morning. It seems as though you have a relatively constructive outlook for the International Solutions portion of the business, especially as we kind of move beyond the seasonally slow period. And I am wondering if you can just expand upon some of the things that you are seeing today and maybe especially since Liberation Day that might inform that view. And again, just looking for some more color on how you see the rest of the year play out for International.

Jim Mintern: Yes. Sure, Brent. I think what we saw in the first quarter was really what we began to highlight on the full year results, particularly if you look at the Western European market has had a tough number of years, right. When you take it from Brexit, into the pandemic, into the war and energy crisis, we started to see a troughing out of activity levels in some of our key markets towards the second half of 2024. And we’re beginning to see that recovery, right, in some of those key markets that kind of, together with a number of other factors, right? The really continued – or rather the continuation of the good growth that underpins Central and Eastern Europe, right? That is a region in some of our key markets, which is really heavily underpinned by EU infrastructure funding, but also good activity on the non-res side.

And we saw it last year, and we called it out with the kind of more aggressive and accelerated cut of the euro interest rates, we’re beginning to see some green shoots on the residential activity, too, in some of our markets there. So that, together with a lot of self-help measures we took and good kind of commercial excellence is really what’s driving the performance in the International division and gives us that outlook, positive outlook for 2025 and indeed for a number of years to come. I think we’re going to see that because particularly in the Western European markets, kind of recovering from troughing levels of activity.

Brent Thielman: Thank you.

Operator: Your next question comes from the line of Garik Shmois with Loop Capital Markets. Please go ahead.

Garik Shmois: Hi, thanks for taking my questions. Two follow-up items for me. First, on the M&A side, are you seeing any change in sellers’ attitudes, expectations or the type of assets that are for sale just given the uncertain macro? And then a follow-up on the cost piece. Was there any maintenance or contracting services costs that were pulled forward into the first quarter, just given the weather headwinds, perhaps taking advantage of slower shipments to accelerate repairs?

Jim Mintern: Yes. Thanks, Garik. I might get Randy to come back on the cost one. But in terms of M&A, we are not yet, Garik. We have eight deals done in the first quarter. The pipeline is good. We’re not seeing any amelioration in terms of aspirations from the sellers yet. Now clearly, as this maybe as the uncertainty is out there may impact that later, but we’re not seeing it in terms of multiples or entry multiples. And I think the eight deals we did in the first quarter were very much kind of typical kind of CRH average entry multiple deals. Again, I think that reflects kind of our unique position. We operate in quite a fragmented industry. There is plenty of opportunity there. But really that connected nature of our portfolio, as I mentioned earlier, just gives us kind of multiple options and levers where to deploy capital.

And that’s what we continue to do in Q1, and that’s what’s been driving a lot of the performance in recent years. Randy, may be do you want to comment on the cost side of it?

Randy Lake: Yes. I would say, certainly, in the winter months, with or without kind of the extent of the weather we called out, that’s when we typically would perform our maintenance activities to get ready for the season, whether that’s within our aggregate business, within the cement plants in terms of shutdown and performing maintenance. I’d say most importantly is that we match that maintenance with the expected demand environment for the year ahead. So to your point, we take advantage of those times with the expectation that once the season started in March that we’d be well prepared. But I wouldn’t call it out as anything unusual, nothing that we ever do differently on a year-to-year basis.

Garik Shmois: Understood, thank you.

Operator: Your next question comes from the line of Keith Hughes with Truist Securities. Please go ahead.

Keith Hughes: Thank you. My question is in American Building Solutions. What are you expecting for the remainder of this year, both within the two product groups and for margins?

Jim Mintern: Yes, hi Keith, good morning. Listen, I think first, in terms of American Building Solutions, it’s really a division which is coming off the back of a number of very strong performances over the last number of years, right? In 2024 and indeed in the first quarter, I described the performance really as resilience, right? Now quarter one was impacted by a combination of challenging weather and also kind of – it is the bit of our business, which is most exposed to the residential cycle as well. But if you look at it, it’s made up of two parts, our Outdoor Living business. What we saw really was significantly weather impacted Q1, and really as we got into kind of late March and into April, we really saw kind of a delayed spring season in our Outdoor Living business, and we saw good recovery in April and into early in May as well, right?

So, we are expecting that trend to continue. The other side of the business is our building and infrastructure, right? And that’s a business which is primarily exposed to water infrastructure and indeed energy infrastructure, right? And I think for the remainder of this year, the backlogs are good. Weather, it did impact it a bit in Q1, but as we’re through that now and we get more normalized, we’re seeing the work that is there to be done. And I think the outlook for 2025 and indeed for a number of years to come, particularly in that water and energy infrastructure space is quite positive for that business.

Keith Hughes: Okay, thank you. Just one quick one. I think you said earlier, land sales are going to be about $75 million add to EBITDA in 2025. What were they in 2024? I think they were a good bit higher.

Alan Connolly: Yes. Just on that, they were $237 million was the 2024 comparative. So, quite an exceptional year for sure. But the ongoing average is about $75 million.

Keith Hughes: Okay, thank you.

Operator: And we have time for one last question. And that last question comes from the line of Will Jones with Redburn Atlantic. Please go ahead.

Will Jones: Thank you. Good morning. Two parts if I could, please. The first just around the asphalt business in the U.S. Perhaps you could just update us on the winter fill process, how that went? And to what extent you think the drop in the oil price of late might have implications for pricing needs over the summer? And then the second is just actually around Canada. Clearly, that’s in the eye of the storm around tariffs at the moment. But to what extent the trends there differ, if at all, against the U.S. Thanks.

Jim Mintern: Yes two questions there. Will, I might ask Randy maybe to take the first one on the – just the winter fill and asphalt and I’ll come back in Canada.

Randy Lake: Yes, absolutely. The winter fill, as you know, a significant competitive advantage for us across the country, kind of the network of tank storage. I’d say it’s a very consistent year in terms of the quantum that we have as well as kind of the underlying cost position. I think important for us, probably the number one driver as to why we’re in that business is really access to bitumen liquid asphalt during the peak of the season. And so for us, we can store roughly half of the amount that we consume in any one given year. So, it’s important to have access to that. So, that scale and that reach of that business is a significant competitive advantage. No one will ever be able to duplicate kind of that position that we have.

So that’s the primary reason why we’re in that business. I think what we’ve also seen is that we run that asphalt business on a margin basis. So we do see fluctuations in various points in times in terms of the underlying market. But when we look at the backlog of work that we have, combined with what we have in storage, we have expectations for another year of margin progression in that asphalt business. I think also what it does, I’ve often said this about the one of the other advantages of having that storage is every road has a unique specification. And our capability to take that material, that off-spec material in some markets to be able to blend to a specific specification for a state DOT creates a competitive advantage for us.

So, we have not only storage, but also the technical capability to deliver a unique solution for every road. So, I feel good about where we are at this time of year and would expect another year of margin progression in that line of business.

Jim Mintern: Yes. Well, maybe just on Canada, we have firstly, a fully integrated business. It’s mainly a Toronto-based business, kind of local business. It’s very early season, as you can imagine, just about to get going up there at this stage. Encouragingly, some real good pricing environment. So, very happy with the pricing performance and broadly similar trends, I think, in Canada that we’re seeing elsewhere. So, I think set up nicely and a nice asset base for the season ahead.

Will Jones: All right, thank you.

Operator: We now turn the conference over…

Jim Mintern: That’s all we have time for today. Thank you all for your attention. And as always, if you have any follow-up questions, please feel free to contact our Investor Relations team. We look forward to talking to you again in August when we will report our results for the second quarter of 2025. Thank you. And have a good day.

Operator: Thank you. Your conference call has now ended, and you may disconnect.