Crh Public Ltd Co Q3 FY2025 Earnings Call

Welcome to the CRH Third Quarter 2025 Results Presentation. My name is Krista, and I will be your operator today. At this time, I'd like to turn the conference over to Jim Mintern, CRH Chief Executive Officer, to begin the conference. Please go ahead, sir.

Hello, everyone. Jim Mintern here, CEO of CRH, and you're all very welcome to our Q3 2025 results presentation and conference call. Joining me on the call is Nancy Buese, our CFO; Randy Lake, our COO; and Tom Holmes, Head of Investor Relations. Before we get started, I'll hand over to Tom for some brief opening remarks.

Thanks, Jim. Hello, everyone. I'd like to draw your attention to Slide 2 shown here on the 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 our annual report and other SEC filings, which are available on our website. I'll now hand you back to Jim, Nancy and Randy.

Thanks, Tom. We'll now take you through a brief presentation of our results for the third quarter of the year, highlighting the key drivers of our performance, our recent capital allocation activities as well as our expectations for the year as a whole. We will also share our thoughts on some of the trends we are seeing across our markets as we look ahead to 2026. So at the outset, on Slide 4, let me take you through some of the key messages from our results. We are pleased to report a record third quarter performance and raise the midpoint of our adjusted EBITDA guidance for 2025, reflecting the continued execution of our strategy, our unmatched scale and connected portfolio of businesses. Assuming normal seasonal weather patterns and no major dislocations in the political or macroeconomic environment, we expect full year adjusted EBITDA to be between $7.6 billion and $7.7 billion, representing 10% growth at the midpoint and another record year for CRH. Supported by our growth algorithm and the CRH winning way, we delivered double-digit adjusted EBITDA growth in Q3, reflecting our leading performance mindset. We have also been busy investing for future growth and value creation across our four connected platforms of aggregates, cementitious, roads and water. Our ability to deploy capital in high-growth markets, integrate at scale and deliver unique synergies to our connected portfolio is a real differentiator for our business. In the year-to-date, we have invested $3.5 billion in 27 value-accretive acquisitions, and we have a strong pipeline of further growth opportunities in front of us, supported by our proven growth capabilities. Looking ahead to 2026 and based on the visibility we have across our key markets, the outlook for our business is positive. And I will take you through that in more detail later in the presentation. Turning now to Slide 5 and our financial highlights for the third quarter. A record performance with revenues, adjusted EBITDA margin and diluted EPS, all well ahead of the prior year period. Total revenues of $11.1 billion represent a 5% increase over the prior year, supported by positive underlying demand, continued pricing momentum and contributions from acquisitions. This enabled us to deliver $2.7 billion of adjusted EBITDA in the quarter, a record for CRH and a 10% increase over the prior year. I'm also pleased to report a further 100 basis points of margin expansion in the quarter, demonstrating our relentless focus on performance across our business. All of this translated into further growth in our diluted earnings per share, up 12% year-on-year. So what is driving the consistency of our financial delivery? Outlined here on Slide 6 is our growth algorithm, which we presented during our Investor Day in September. As the leading infrastructure play in North America, we are uniquely positioned to capitalize on three large and growing megatrends: transportation, water and reindustrialization, which we believe will support significant above-market growth and value creation for our business going forward. Next, the CRH Winning Way, core to who we are and deeply embedded in our culture and the engine behind everything we do. Through our winning way, we execute our superior strategy with discipline and focus. We drive leading performance across 4,000 locations through a culture of continuous improvement. We are responsible stewards of our shareholders' capital. Every dollar we deploy is rigorously assessed to ensure that it drives maximum long-term value, and we leverage our proven growth capabilities to build leadership positions in high-growth markets. All of this is supported by four key enablers: customer centricity, empowered teams, unmatched scale and our connected portfolio of businesses. Our winning way is what really sets CRH apart. It is the multiplier that enables us to fully capitalize on growing infrastructure megatrends. It underpins our proven track record of delivering consistent double-digit earnings growth and being the leading compounder of capital in our industry. Now at this point, I will hand you over to Randy to take you through the performance of each of our businesses.

Thanks, Jim. Hello, everyone. Turning to Slide 8 and first to Americas Materials Solutions, which delivered a robust performance in the third quarter against a strong prior year comparative. Total revenues and adjusted EBITDA were 6% and 5% ahead, driven by good underlying demand, positive pricing momentum and contributions from acquisitions. Aggregates pricing increased by 4% or 6% on a mix-adjusted basis. Cement pricing increased by 1%, reflecting regional variances across our operating footprint and supporting another year of margin expansion. In our Roads business, Q3 revenues were 5% ahead, supported by good levels of activity in transportation infrastructure, which continues to be underpinned by strong state and federal funding. We also continue to see significant growth in reindustrialization, particularly in large-scale manufacturing and data centers. I'm also pleased to see continued strength in our margin at approximately 28%, reflecting strong cost discipline and operational efficiency across our business. So overall, a strong performance for our Americas Materials Solutions business. And as we look ahead to the remainder of the year, I'm encouraged by the positive momentum in our backlogs. Next to Americas Building Solutions on Slide 9, where our business delivered strong profit growth and further margin expansion driven by favorable underlying demand and good commercial management. We continue to experience robust data center demand, which is a key focus for our business. In addition to being very materials intensive, these highly specified facilities require state-of-the-art water, energy and communications infrastructure, which fits very well with how we've strategically positioned our business and our customer offering. By leveraging our unmatched scale and connected portfolio, we're able to deliver more value to our customers and generate higher profits, cash and returns on these types of projects. In our Outdoor Living business, we continue to experience resilient underlying demand in residential repair and remodel activity, Q3 revenues were 2% ahead of the prior year. For Americas Building Solutions overall, total revenue growth of 2% translated into a 22% increase in adjusted EBITDA and a further 380 basis points of margin expansion, reflecting the benefits of ongoing business and asset optimization initiatives, including the disposal of certain land assets across our operations. Moving to International Solutions on Slide 10, where our business delivered a strong third quarter, supported by continued pricing momentum, ongoing performance improvement initiatives and contributions from acquisitions. On top of a 5% increase in revenue, we delivered a 15% increase in adjusted EBITDA and a further 170 basis points of margin expansion. In Central and Eastern Europe, we experienced positive underlying demand across our key end markets and early signs of recovery in new build residential activity. While in Western Europe, activity levels continue to be supported by infrastructure and nonresidential demand. In Australia, our business is performing well, benefiting from strong demand and synergy realization from recent acquisitions. At this point, I'll hand you over to Nancy to take you through our financial performance and capital allocation activities in further detail.

Thank you, Randy. Turning to Slide 12. As Jim mentioned earlier, we delivered a record third quarter performance with further growth across our key financial metrics. Q3 adjusted EBITDA of approximately $2.7 billion was 10% above prior year, driven by positive underlying demand, continued pricing momentum and contributions from acquisitions. We also delivered 100 basis points of margin expansion, keeping us well on track to deliver our 12th consecutive year of margin improvement in 2025, demonstrating our leading performance mindset and the consistency of our financial delivery. Turning to Slide 13 and to talk about our capital allocation activities so far in 2025. Starting with M&A, we have invested $3.5 billion on 27 value-accretive acquisitions, further strengthening our connected portfolio and leading positions in high-growth markets. We've also invested $1.2 billion in growth CapEx through the third quarter, leveraging our size and scale to fully capitalize on low-risk, high-returning investment opportunities that expand our capabilities, support margin growth and enhance long-term shareholder value. We also continue to deliver significant accretive returns to shareholders through dividends and share buybacks. Year-to-date, we've returned over $700 million in dividends, and we've also announced that our Board has declared a further 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. Through our ongoing share buyback program, we have also repurchased $1.1 billion of shares so far this year. Today, we are commencing a further quarterly tranche of $300 million. Since the inception of our buyback program in 2018, we have returned over $9 billion to shareholders, representing 23% of our outstanding shares at an average price of $49 per share. Overall, we have deployed $6.5 billion towards growth investments and shareholder returns so far this year, demonstrating our focus on the efficient allocation of capital to maximize shareholder value. As we communicated during our recent Investor Day, over the next 5 years, we expect to have approximately $40 billion of financial capacity to invest for future growth and deliver further returns to our shareholders, consistent with our long-term track record of value creation and reinforcing our position as the leading compounder of capital in our industry. I will now hand you back to Jim and Randy to provide some further color on our recent growth investments.

Thanks, Nancy. As you can see here on Slide 15 in North America, our largest market, we have strategically built out our four key growth platforms to become the #1 infrastructure play in the region. Let me step you through each of these in turn. It all begins with Aggregates, a valuable finite resource and the backbone of our business. In fact, approximately 95% of our revenue is connected to Aggregates. Aggregates feed into everything we do, from our Cementitious business to our Roads business to our Water infrastructure platform. Here, our position is unrivaled with 230 million tonnes of annual production and 20 billion tonnes of reserves. We own more stone on the ground than anyone else in the industry. Building on that foundation, we are also a leader in cementitious materials with around 25 million tonnes of annual production capacity. Together, Aggregates and Cementitious products are the essential building blocks of modern infrastructure, enabling us to build, maintain and improve the networks that communities and economies rely on every single day. Through our connected portfolio, we are also the largest road paver in the United States. This is a business supported by recurring revenue and robust public funding. We produce more than 50 million tonnes of asphalt annually, equivalent to the next five largest players combined. Importantly, our paving operations are almost entirely self-supplied by our own high-value aggregates and asphalt. Finally, we are also the leader in water infrastructure, providing customers with engineered systems that collect, protect and transport this vital resource. Our Water business has national coverage, and over 80% of the products we produce consume aggregates and cementitious materials. Since over 85% of roads require water management systems, the strength of our water platform further reinforces the benefits of our connected portfolio and shared customer base. Taken together, these four platforms, Aggregates, Cementitious, Roads and Water form the foundation of our unique position as the #1 infrastructure play in North America, and we are focused on continuing to invest across these platforms to deliver further growth and value for our shareholders. Let's take a look at some examples of our recent investments, starting with two bolt-on acquisitions on Slide 16. First, American Industries, a provider of aggregates, asphalt and road paving services in Connecticut. This acquisition increases our aggregates reserves and expands our presence in an attractive market in the Northeast region of the United States. We also acquired Terracon Precast, a newly constructed concrete pipe plant with 70,000 tons of annual production capacity in North Carolina. This is highly complementary to our existing water infrastructure business and significantly strengthens our ability to serve customers in Raleigh and Greensboro markets. These are just two examples out of the 26 bolt-on acquisitions that we have completed year-to-date, fully aligned with our strategy to invest across our four connected growth platforms with exposure to growing infrastructure megatrends. Now at this point, I will hand you over to Randy to update you on our recent acquisition of Eco Material Technologies and growth CapEx investments.

Thanks, Jim. First, to our $2.1 billion acquisition of Eco Material, which completed in September. This acquisition strengthens our position as a leading cementitious player in North America with approximately 25 million tons of combined annual production. I'm pleased to report that early integration is progressing well, and we've already identified significant commercial, operational and logistical opportunities to enhance performance and create long-term value for our shareholders. As you can see on the map on the right-hand side of the slide, it's an excellent strategic fit and highly complementary to our existing platform. It creates a unique national distribution network, enhances our innovation capabilities and positions us to better serve our enlarged customer base. Overall, we expect to unlock strong future growth and synergy realization with Eco Material under our ownership, representing an exciting opportunity to accelerate our cementitious growth strategy and deliver tremendous value for our shareholders. Turning to Slide 18 and some examples of the types of growth CapEx investments that we're making to support future growth in our existing business. First, we recently completed the construction of a precast pipe and box culvert plant just outside Austin, Texas, which will enable us to meet growing demand for our water infrastructure products. The location is not only very attractive from a market growth perspective, but it will also enable us to self-supply our own aggregates and cement from our existing operations in the area. In Utah, we're modernizing our cement plant in Leamington, which will increase annual production capacity by 240,000 tons to meet strong demand throughout the inland West market. These are just two examples of how we're deploying capital efficiently in low-risk, high-returning investments that are an excellent use of our shareholders' capital.

Thanks, Randy. Great examples there of how we are deploying capital in high-growth areas. Finally, to outlook on Slide 20, and I'm pleased to say that we are raising the midpoint of our adjusted EBITDA guidance for 2025, reflecting our continued strong performance and a partial year contribution from the Eco Material acquisition. 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 adjusted EBITDA to be between $7.6 billion and $7.7 billion, a 10% increase at the midpoint. Net income is projected to be between $3.8 billion and $3.9 billion, and diluted earnings per share between $5.49 and $5.72. As Nancy mentioned earlier, we also expect to deliver our 12th consecutive year of margin expansion in 2025, demonstrating the consistency of our delivery and relentless focus on continuous performance improvement. Taking all of this into account represents yet another record year of growth and value creation for CRH. Now before I hand over to Q&A and as we look ahead to 2026, I'd like to take a moment to share our thoughts on some of the trends we are seeing across our key infrastructure megatrends in North America. First, to transportation, where the demand backdrop is robust, supported by the continued rollout of federal funding through the IIJA. Approximately 60% of the IIJA funds are yet to be deployed, highlighting the significant runway we still have ahead of us. State level funding is also strong with the 2026 DOT budgets up 6% on the prior year. Through our unmatched scale and uniquely connected portfolio, we are well positioned to benefit. In fact, if you look at the DOT capital spending authority across our top 10 states, it's expected to increase by 13%. It is also encouraging to see continued support for increased infrastructure investment. For example, we saw Michigan recently approving $1.85 billion in new transportation funding over the next four years. Transportation infrastructure remains one of the most recurring and predictable revenue streams of our business. As the largest road paver in the United States and the #1 infrastructure play in North America, we are well placed to benefit. We also expect to see continued investment in the whole area of water infrastructure, a large and growing market for our business with high single-digit growth projected in the areas of water quality and flow control for 2026. In reindustrialization, we expect continued strong demand for large-scale manufacturing and data center investment. With approximately $690 billion of data center projects either announced or under construction and with each of these projects located within 50 miles of a CRH location, we are very well positioned to benefit in this area going forward. In the residential sector, we expect repair and remodel demand in the U.S. to remain resilient, while new build activity remains subdued as a result of the ongoing affordability challenges with the benefit of recent interest rate cuts unlikely to be felt until late 2026 at the earliest. As we've said in the past, this is not a demand issue, and we believe the long-term fundamentals in this market remain very attractive, supported by favorable demographics and significant levels of underbuild. In our international business, we expect robust demand in infrastructure to continue, supported by significant investment from government and EU funding programs. Nonresidential activity is expected to remain stable across our key markets and a continued recovery in the residential sector due to lower interest rates. 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 connected portfolio. In summary, the overall trend is positive for our business with our strategic focus on growing infrastructure megatrends and the benefits of the CRH Winning Way, leaving us uniquely positioned to capitalize on the strong growth opportunities that lie ahead. So that concludes our prepared remarks today. I will now hand you back to the moderator to coordinate the Q&A session of our call.

We'll take our first question from Anthony Pettinari with Citi.

I'm wondering if you have any further color on expectations for 2026 and maybe specifically how you're thinking about volume, price and contribution from M&A?

Anthony, I might ask Randy to provide some details on volume and prices shortly, and Nancy could discuss some of the scope impacts for 2026. Overall, the outlook for 2026 is positive. The key growth areas for us are infrastructure, which includes transportation and water, as well as reindustrialization. Starting with transportation, 60% of the Infrastructure Investment and Jobs Act funds remain unallocated. Local and state budgets are also strong through 2026. This robust funding environment positions us well given our unmatched scale and connected portfolio in our roads business, which is one of our most reliable revenue streams. On the water infrastructure side, we anticipate continued strong funding and investment necessary to update the aging water systems across the U.S. Looking at reindustrialization in 2026, we expect strong activity in data centers. Because of our connected portfolio, we often lead with our energy, water, and communications infrastructure on-site. This results in a comprehensive integration of our product offerings. In terms of residential markets for 2026, we expect activity to remain subdued not due to demand, but due to affordability issues, as the 30-year fixed mortgage rate remains at 6.2%, which is still too high. We need to see further interest rate cuts before we can expect any recovery in the U.S. residential market. Our assumption is that there won't be significant gains for us in 2026, if any, it will likely be toward the end of the year. Internationally, infrastructure remains strong with considerable EU and local government funding in our key markets. For reindustrialization, we anticipate a stable outlook for 2026, while in Europe, the residential market is slightly different due to more advanced interest rate reductions, which are starting to benefit residential activity. But now, Randy can provide more specifics regarding volume and prices.

Yes. Maybe just to build out just a quick comment before I do that, just on an example of a couple of projects we're working on. For example, in the northwestern part of the U.S. and around Boise, working on a chip manufacturing plant and a data center. I think what Jim called out is important that critical infrastructure focus on the needs of energy and water management allows us early access on these projects. They're highly specified. It gains us the opportunity then to pull through a variety of other products as part of that connected portfolio, the aggregates, the cement, the ready-mix and ultimately, the paving around those sites. In the end, that strategy is certainly delivering higher returns as we gain a larger share of wallet of those key customers. Q3 was encouraging. Aggregates and cement volumes were up mid- to high single digits coming out of Q2, which was a little more weather impacted. It was good to see underlying demand coming through. We also had a positive pricing environment. Aggregates, in particular, were up 6% on a mix-adjusted basis. In cement, we made another year of progress in terms of low single-digit pricing. Looking forward, we talk about our backlog, whether that's for our roads business or the critical infrastructure business, we have good visibility six to nine months out. The bidding environment remains positive, so we're bidding more than we had at this point last year, and our backlogs reflect an increase in revenues as we look into next year. In terms of our outlook regarding demand, we're looking at our aggregates volume showing low single-digit improvement from '25 and mid-single digits in pricing. For cement, very similar: low single-digit volumes and pricing with another year of advancement there. It's building off a good '25, but again, the backlogs are encouraging regarding our expectations as we get into next year.

Yes. To circle back on the question about the M&A contributions. It has been a really active year for us, 27 deals so far. Eco was the largest, and that was completed in September. Thinking about contributions from all of this M&A thus far in 2025, I would roughly estimate about $200 million of incremental EBITDA in 2026. We'll talk a lot more about 2026 at our year-end results in February and provide full guidance at that point.

Your next question comes from the line of Adrian Huerta with JPMorgan.

Pretty impressive what the company has done in terms of margins in the last two years and also even in this year where it's heading to be more than another one percentage point. Can you share with us more color on how this trend should evolve? How do you see the price-to-cost spread, especially across the three different divisions? The margin improvement in this quarter mainly coming from the Building Solutions in the U.S. and from International Solutions. How do you see this evolving and the opportunities for 2026?

Adrian, Jim here. Yes, pleased again with the margin improvement in the quarter, up 100 basis points. Based on the guidance we've given this morning for the full year, this will be our 12th consecutive year, reflecting that proven track record and consistency of delivery year in and year out. As we said recently, we don’t see any structural ceiling to where we can take the margins, and it's embedded as part of our performance mindset and deeply ingrained in our culture. At the recent Investor Day, we raised our ambition on margins and are forecasting margins to be in the range of 22% to 24% by 2030. There are number of reasons giving us confidence that we are going to achieve these margin increases. Firstly, it’s around the CRH Winning Way, that continued consistent execution of our superior strategy, a relentless quarter-on-quarter focus on driving performance, whether that's operational, commercial or even procurement. Secondly, you would have noticed that we stepped up our growth CapEx expenditure about 18 months ago, and we're beginning to see benefits of that coming through in terms of margin expansion, and we've got reasonably good visibility on that moving forward. Maybe, Randy, do you want to comment specifically on some other aspects of cost inflation?

Yes, absolutely. Just to build on the growth CapEx. We have a really good backlog of high-returning projects that drive underlying improvement in the business. Everything from capacity expansion to automation in various ways. Looking at our Critical Infrastructure business, we are enhancing our pipe manufacturing process through automation, which is another means to drive efficiencies and meet growing demand in that segment. Regarding the cost inflation environment, we are still in an inflationary backdrop. Labor, raw materials, parts, maintenance, and subcontractors—those costs continue to rise. This highlights the need for further pricing momentum as we head into next year. Overall, as Jim mentioned, we should expect another year of margin expansion as we move into next year.

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

So you guys are raising the midpoint of the EBITDA guide, which you pointed out now includes Eco Materials, and there's definitely several moving pieces here. But could you dive a little bit more into some of the key drivers here of the updated 2025 guidance?

Yes, absolutely, Trey. Yes, listen, very pleased to be announcing this morning the tightening and raising of the full year EBITDA guidance by about $50 million at the midpoint. This increase in guidance gives us a midpoint of $7.65 billion, a 10% growth off a very strong 2024, in fact, a record year for CRH in 2024. This increase reflects the strong Q3 performance again with EBITDA up 10%, margins up 100 basis points, and contributions from recent acquisitions as well. The quarter did benefit from some land sales, but I should note that year-to-date land sales are down year-on-year compared to 2024. Maybe Randy, do you want to comment on our management of land sales across CRH?

Yes. We look at optimizing the asset portfolio as we do with any other part of driving performance. It’s about optimizing performance and managing the portfolio. You called out the CRH Winning Way. This is an expectation we have for our teams on the ground, a relentless focus on operational excellence and maximizing shareholder value, which includes the management of assets. We take advantage of our scale across 4,000 locations, allowing us to recycle and optimize that asset base and this is an important part of how we compound earnings for our shareholders. Year-to-date, those dollars are lower than the prior year.

Our updated guide reflects our strong year-to-date performance across all of our key metrics. It's been an active year for M&A, which includes Eco that closed in September. As a reminder, while the adjusted guidance includes our partial year EBITDA contribution from Eco and other M&A, the size and timing of the Eco transaction in Q4, along with some transaction and financing costs, could be EPS dilutive in Q4 of 2025.

Your next question comes from the line of Michael Feniger with Bank of America.

I'm just curious if we could unpack the drivers of performance and margin expansion in Americas Building Solutions. There have been more data points pointing to weakness in repair and remodeling, incremental weakness in residential. We saw the performance in Americas Building Solutions this quarter. Hoping you can kind of unpack what you're seeing there and what you feel is sustainable going forward and into 2026?

Yes, Mike, as you know, firstly, Americas Building Solutions comprises both our Infrastructure business in the Americas as well as Outdoor Living. I might ask Randy to comment on Outdoor Living. But firstly, on overall, a very strong Q3 performance: adjusted EBITDA was up 22% and margin well ahead of last year. The key drivers are overall good underlying demand, good commercial management and the benefits of some asset disposals in the quarter. The key strength is the underlying strength across the Americas of the whole reindustrialization activity, primarily around data centers. Given our scale and national footprint, we're very well positioned for most projects, nearly all projects are within 50 miles of a CRH location. Currently, we are working on about 98 different data center projects at various stages of completion, which illustrates the scale of activity there. Also, having a connected nature to our portfolio gives us a real advantage, especially in terms of quality and speed of delivery. That competitive advantage impacts margins and pricing significantly on those jobs. Maybe, Randy, can you comment on Outdoor Living?

Yes. Outdoor Living is certainly performing well when you look at underlying hardscapes, mainstream and packaged products, all really moving forward this year. Keep in mind that this comes from a very strong performance and growth over recent years post-COVID. The team has done a terrific job sustaining that momentum by engaging with our customers effectively. This area of business has been highly resilient in terms of repair and remodel. That success comes from a purposeful effort and our category-leading brands that really resonate with customers, underpinned by our logistics network for consistent on-time service. Fundamentally, the business is very deeply connected to the underlying aggregates and cementitious business. This combination of delivery has been impressive this year, and we expect more positive momentum as we get into '26.

Your next question comes from the line of Kathryn Thompson with Thompson Research Group.

I know a lot of focus on data centers and reindustrialization, which is certainly driving demand. After visiting a data center construction site, it's staggering the demand driving a wide variety of projects. Still, infrastructure is a significant part of your overall business. There’s been some lack of visibility around U.S. government funding with the potential government shutdown. I want to confirm if that’s the correct interpretation. More importantly, what is your level of visibility on your roads business and prospects for highway bill reauthorization in 2026?

You're right, infrastructure for us is our biggest segment. It drives CRH across both the Americas and international markets. To put it in context for our roads business, we are the largest road paver in the U.S., producing over 50 million tonnes of asphalt annually across 43 states. It's our most predictable and recurring revenue stream, highly attractive business. There's still significant runway for growth as we look into '26, with 60% of the IIJA funds yet to be spent. Strong local state budgets play a key role in our connected portfolio in the Americas. In a typical year, we conduct about 4,000 paving jobs, which typically last 90 to 120 days. The connected nature of the portfolio allows that paving activity to pull through high-quality and high-value aggregates, creating a multiplier effect on profits and cash. Looking towards growth and acquisition opportunities, we have nearly six weeks of visibility into 2026, which supports our confidence in guiding for infrastructure growth in '26. But maybe, Randy, can you comment on potential highway bill discussions?

Certainly, Kathryn. The IIJA, as you know, approximately 60% of that funding has yet to reach the street. We highlighted early on that it’s a five-year piece of legislation and expected to take seven years to fully deploy. It’s rolling out similarly to past legislation, so our bidding activity is up, and we’re encouraged to see the size and complexity of projects, indicating long-term confidence at the state level in deploying capital for these projects. Early conversations surrounding the new legislation are positive, with commitment from both sides of the aisle to a new piece of legislation concerning roads, highways, and bridges. We're actively engaged in these discussions and remain encouraged.

Your next question comes from the line of Michael Dudas with Vertical Research Partners.

Jim, I want to get your thoughts on the M&A pipeline as you're accelerating on your four connected platforms. Where are you seeing the focus on capital allocation toward M&A over the next six to twelve months?

Sure, Mike. Yes, I'm really pleased with our execution to date, with $3.5 billion on 27 deals, the largest being Eco Material. It's a great start to the year, 27 deals reflect the successful execution of our growth strategy and our ability to deploy capital in growth markets across our key platforms. We've built four growth platforms of scale from coast to coast across the U.S.: aggregates, cementitious, roads, and water, which reflects our ability to integrate effectively. The M&A pipeline for 2026 looks good, stemming from the many local relationships we have across 300 operating businesses within CRH. When factoring in our scale and connected portfolio, it provides flexibility for capital deployment moving forward. During our recent Investor Day, we projected generating $40 billion of financial capacity over the medium term leading into 2030. We'll allocate about 70% to growth through CapEx and M&A, and 30% toward shareholder returns. Furthermore, the early integration of Eco has been going well—Randy can elaborate on how that’s progressing.

Yes, the integration of Eco Meat has been progressing well. We were excited about the opportunity before and even more so after seeing them integrated within the CRH structure. They have a fantastic team and strong operational leadership. There's great cultural alignment, particularly around safety as a core value. Their focus on establishing ownership of local relationships resonates with our operational philosophy at CRH. Inside Eco, we find additional growth opportunities, a terrific offering that enhances our cementitious business, with SCMs being the fastest-growing segment. The expanded network—55 terminals and close to 8,000 railcars—will allow us to better serve our customer base. Their approach to innovation has been impressive, especially in high-specification manufacturing, data centers, and sustainability. Overall, it's a promising combination with CRH scale, paving our way for greater margins and shareholder value.

We have time for one last question, and that question comes from the line of Colin Sheridan with Davy.

My question is on the International Solutions business. It had an excellent Q3 in terms of profit growth and good margin progress. Looking forward, are there any areas in that business that you think will provide opportunities for further upside as we go into 2026?

As you noted, we had a very strong quarter and year-to-date performance in the International Solutions business, with great adjustments in EBITDA and growth in margins year-to-date. The outlook into 2026 and beyond is encouraging, especially considering the recovery after facing several challenges like Brexit, the pandemic, the energy crisis, and the war in Ukraine. Europe’s advancements in the interest rate cycle are allowing for continued residential recovery. With ongoing EU and state-level infrastructure investments in our key markets, we have a solid foundational activity level. This year has marked our eighth consecutive year of price increases across the European business, and we expect further momentum into 2026. Additionally, we have undertaken numerous portfolio improvement initiatives over the last few years in our European market. As activity levels recover, we are beginning to experience significant leverage on margin drop-through, evident in our quarter-to-quarter and year-over-year performances. Lastly, Australia is showing strong synergy realization from integrations within the last 12 months.

Thank you all for your attention. If you have any follow-up questions, please feel free to contact our Investor Relations team. Looking forward to talking to you all again in February next year when we will report our full-year results for 2025. Thank you all and have a good and safe day.

Thank you, Krista. Goodbye, everyone.