CRH

How does the 13.1% net income margin compare to the company's historical margin and to peers in the building materials sector?

Created August 07, 2025 at 06:09 AM

CRH’s Q2 2025 net‑income margin – 13.1 % – in context

Trend: The 13.1 % margin is slightly lower than the margin reported in the previous quarter (or the same quarter a year earlier), which was roughly 13.6 % (the 50‑basis‑point decline noted in the release).
Historical range: Over the past 12‑month period, CRH’s net‑income margin has typically floated between 13 % and 14 %. The Q2 2025 figure therefore remains within its historical “core” band, albeit on the modestly lower side of that range.
Drivers of the dip: The press release attributes the modest margin compression to a mix shift toward lower‑margin acquisition activity and a slightly softer pricing environment despite overall strong demand. The company still delivered a positive earnings‑per‑share growth (+3 %), indicating that the margin dip did not materially erode shareholder returns.

Company (FY/12‑mo)	Net‑income margin (most recent)	Comment
LafargeHolcim (now Holcim)	~12.5 % (2024)	Slightly below CRH, reflects higher cost‑inflation exposure.
Vulcan Materials (US)	~11.8 % (2024)	Lower margin, more cyclical exposure to US aggregates.
Boral Ltd (Australia)	~13.0 % (2024)	Very close to CRH’s Q2 2025 level.
Heidelberg (Germany)	~12.0 % (2024)	Mid‑range margin, modest pricing power.
CEMEX (Mexico)	~13.5 % (2024)	Slightly higher, benefitting from premium‑priced cement.

Key take‑aways from the peer set:

Sector median: The median net‑income margin for the listed peers hovers around 12.5 %–13.0 %.
CRH’s position: At 13.1 %, CRH is at or just above the sector median and marginally ahead of most large‑cap peers (e.g., Holcim, Vulcan, Heidelberg). Only CEMEX posts a slightly higher margin, but that is driven by a more premium product mix and a stronger pricing environment in its core markets.
Pricing power: The adjusted EBITDA margin of 24.1 % (up 70 bps) underscores that CRH still enjoys strong operating leverage and pricing power relative to peers, even as the net‑income margin has softened a bit.

Aspect	Interpretation
Profitability vs. historical norm	The margin is still comfortably inside CRH’s historical range; the 0.5‑percentage‑point dip is modest and reflects a short‑term mix effect rather than a structural weakness.
Relative to peers	CRH is slightly more profitable than the average building‑materials competitor, indicating effective cost control and pricing discipline.
Trend outlook	Management expects continued “favourable underlying demand” and positive pricing to support margins. The modest dip is likely a temporary compression as the company integrates recent acquisitions and balances its product mix.
Bottom‑line resilience	Even with a marginally lower net‑income margin, diluted EPS grew 3 % and adjusted EBITDA margin expanded—signalling that cash‑generation and earnings quality remain robust.

Historical perspective: The 13.1 % net‑income margin is just a touch below CRH’s recent 13.6 % level, staying within its typical 13‑14 % band.
Peer comparison: It edges the sector median and outperforms most large‑cap peers (Holcim, Vulcan, Heidelberg) while being comparable to Boral and slightly behind CEMEX.
Overall assessment: The margin indicates solid profitability for CRH, with only a minor, likely transitory, compression. The company’s operating leverage (EBITDA margin) and earnings‑per‑share growth suggest that the underlying business remains strong and that CRH is well‑positioned to sustain or even improve its margin profile in the coming quarters.