Business Model

CRH delivers on its strategy through the execution of a dynamic business model which is focused on value creation and growth. This has allowed CRH to deliver an industry-leading Total Shareholder Return of 14.8% since 1970. €100 invested in CRH shares in 1970, with dividends reinvested, would now be worth €76,000.

CRH’s business model revolves around continuously making our core businesses better and then identifying and acquiring strong businesses that complement and add value. By maintaining a balanced portfolio, we ensure that these businesses are diversified across a number of products, geographies and end-uses, while also spanning multiple different demand cycles, thereby mitigating the impact of low demand at the bottom of any one cycle. We work hard to improve these businesses so that they realise their full potential and help us create further value. We constantly monitor how capital is deployed across the Group and strive to identify where capital can be recycled into areas offering optimum returns and/or superior growth.

We do all of this while maintaining strong financial discipline that enables efficient funding of value adding investments which generate consistent and superior returns for shareholders.

The five elements of the model are:

Balanced Portfolio

CRH creates value by maintaining a balanced portfolio. Our product mix spans the breadth of building materials demand and sectoral end-use, thereby reducing exposure to any one single demand driver. The Group also offsets cyclical economic risk by maintaining a geographically diversified portfolio across its key regions of North America and Europe, as well as the emerging regions of Asia and South America.

Making Businesses Better

CRH’s emphasis on building better businesses is a key component of its focus on value creation and growth. We have a proven track record in acquiring new businesses and bringing the Group’s collective knowledge and experience to bear in working with the local management teams of those businesses to deliver improvements in performance.

The Group supports the delivery of such improvements through targeted investment in measures that improve capacity, quality and efficiency.

Proven Acquisition Model

CRH creates value and growth by identifying and acquiring strong businesses that complement our existing portfolio of operations. Typically we specialise in acquiring small and mid-sized companies, releasing value through synergies and network optimisation. From time to time the Group also evaluates and concludes larger transactions where the strategic rationale is compelling.

We excel at integrating businesses and ensuring that they are appropriately positioned and resourced to succeed as part of the CRH Group.

Dynamic Capital Management

CRH constantly strives to ensure that capital is recycled from low growth areas into core parts of our business that offer the potential for stronger growth and returns.

With a portfolio which is diversified across products, geographies and end-uses, we allocate capital to the areas best positioned to take advantage of developing growth cycles and new areas that offer improved value creation and growth potential.

Financial Strength

The Group maintains a constant focus on financial discipline and strong cash generation which in turn supports our ability to fund new value creating acquisitions and returns for shareholders.

CRH raised US$1.5 billion in April 2018 through the issue of a 10-year US$900 million bond with a coupon of 3.95% and a 30-year US$600 million bond with a coupon of 4.5%. The Group also successfully issued in the European Commercial Paper market for the first time.

 CRH is rated BBB+ by S&P, Baa1 by Moody’s and BBB by Fitch.