CRH PLC (CRH) 2011 Q4 法說會逐字稿

Good morning, everybody.

My name is Myles Lee.

And you're very welcome this morning to the presentation of our results for the year ended December 2011.

Delighted to see the Group here in the room, good morning; and also to welcome people who are listening in on webcast; and also those who are here on dial in.

With me this morning are the Senior Executive team from CRH.

As you look at the desk here, on the far right you can see Albert Manifold, our Chief Operating Officer; next to Albert is Mark Towe, who's Chief Executive of our US operation; next to Mark, Doug Black.

Up until last week, Doug was Chief Executive of America's Materials and has just been promoted to the position of Chief Operating Officer for all our Americas operations, reporting to Mark.

Next over then we have Erik Bax, Chief Executive of Europe Products & Distribution; Henry Morris, Chief Executive of our America's Materials -- Europe Materials operations; then finally, on my left here, Maeve Carton, our Finance Director.

Once the presentation is complete, which will be handled by Maeve and myself, I, and my Executive colleagues, will be very happy to answer whatever questions you may have, either arising here in the hall, or from the webcast, or on dial in.

I'd like to open the presentation by, first of all, saying a few words about our trading performance in 2011.

Looking at the first slide here, we have the highlights of our results for 2011.

Sales increased by 5% on a like-for-like basis, and also on a reported basis after the effect of acquisitions, divestments, and foreign currency effects.

We saw a 5% like-for-like increase in the first half of the year; and, after a soft patch in the third quarter, things picked up and we had a strong finish to the year, helped by some favorable weather conditions, which enabled us to also report a 5% increase for the second half.

And, overall, like-for-like sales up 5%.

Profit before tax up 33%, with a slightly lower tax charge.

Earnings per share up 35%.

As you'll see later, as I work through the various segment results for the year, you can see that our margins proved resilient, supported by our Products & Distribution operations.

On the acquisition side, we spent roughly EUR600 million during the course of the year on 45 transactions.

Slightly faster pace in the second half of the year, where we spent EUR400 million, compared to, roughly, EUR200 million in the first half of the year.

As we would have mentioned last year, we have undertaken a review of our portfolio, particularly in the Europe Products area, and that led to some divestments of businesses during the year, which will complete in the earlier part of the year.

And that, combined with the ongoing disposal process of surplus plant and surplus land and equipment around the Group, led to total proceeds from disposals in 2011 of just approximately EUR0.5 billion.

And, of course, CRH has a very strong record on dividend, as you well know.

Again, we maintained our dividend in 2011 at EUR0.625 for the year, which roughly equates to about a 4% yield on the closing share price, as we saw it yesterday.

So these are the results highlights.

We did provide you with guidance on November 8, as to how we saw the year working out at that particular point and this next slide here just shows how the actual results have worked out versus guidance from November 8.

At that stage, we said we hoped to deliver EBITDA of approximately EUR1.6 billion, in line with the delivery in 2010.

In actual fact, things have come out more strongly, EUR1.66 billion of EBITDA; about 3% ahead of where we had expected in early November.

On the impairment side, we indicated that our impairment charges for 2011 would be substantially lower than those reported in 2010.

And you can see there, the out turn of EUR32 million is roughly one-quarter of the impairment charge that we booked in 2010.

We indicated that profit before tax before impairment charges would be roughly EUR20 million to EUR50 million higher than pre-impairment profit, of EUR658 million, reported for 2010.

But, as you can see there, with an out turn of EUR743 million, profit before tax pre-impairment, we were actually EUR85 million ahead.

That really was helped by favorable weather, as I mentioned a moment ago, in November and December, particularly in our US operations; but also by very good operational cost control as the season wound down across our various businesses.

And I think over the last number of years we've become much more effective at tailoring the complement of people and the operational footprint of the Group to reflect the seasonal patterns in our activity levels, particularly in the closing months of the year and in the opening months of the year.

Finally, on post-impairment, obviously with lower impairment charges, with our pre-impairment profits ahead of our November guidance, you can see there that post-impairment profit before tax of EUR711 million, well ahead; a 33% increase, as I mentioned a moment ago.

If we move on then to take a look at the six main operating segments, starting with Europe Materials.

I think the key thing here is that we maintained our EBITDA margin steady when you exclude the impact of C02 proceeds and disposals, which is a good performance given the level of input cost increases that we had during the course of the year.

Our EBITDA in this particular business segment is pretty well split.

We have about 85% of our EBITDA coming from stable economies, Switzerland, Finland, and the Netherlands; and from developing countries to the East, in Poland, Ukraine, and Turkey, China, and India.

And these showed good progress in 2011.

Unfortunately, we also had some operations in austerity countries, such as Ireland, Portugal, and Spain.

As you can see there, their share of the overall EBITDA pie in 2011 was just 15%, and that was down from roughly 20% in 2010, reflecting the tough conditions in these particular markets.

Looking at operational delivery from our Europe Materials segment in 2011, we did see better volumes in the second half of the year.

Our full-year volumes grew by about 5%; up 4% in the first half.

But, more importantly, from a profitability point of view, we saw much better performance in terms of realizing price increases in the second half of the year compared to that in the first half of the year.

Average prices in the first half were up 2% for the year as a whole up 4%.

So increasing price [fraction] as the year progressed, and improved cost recovery.

If we strip out CO2, our underlying EBITDA in Europe Materials excluding acquisitions and foreign exchange effects were up EUR11 million.

The first half saw a decline of EUR22 million; the second half saw an increase of EUR33 million, as our price realizations took hold and delivered more strongly for us.

So, again, I think the key point here is that when you exclude the lower CO2 proceeds we held our EBITDA margin steady in our Europe Materials business, despite higher energy input costs.

That was helped by continuing progress in terms of increased usage of alternative fuels.

We increased our rate of usage there from 13% to 17%.

Henry, I'm sure, will be happy to elaborate on any questions you might have on that particular area later.

Our procurement initiatives across the Group are gaining more traction, again, part of the programs we introduced to cope with very difficult market conditions over the last three years.

Not just about cost reduction, but also about trying to achieve greater efficiencies in commercial activity, and also in procurement.

And I think also important for our profitability in 2012, and going forward, was the successful commissioning in the second half of the year of our new state-of-the-art, very energy-efficient plant in the Ukraine.

Again, our plans for the Ukraine are to build a similar type of business to that which we have already done over the last 15 or 16 years in Poland.

Moving on then to our Products activities in Europe, as you can see here, sales somewhat lower; and I'll come back to that in a moment because it does reflect some divestment effects.

But I think the key thing here is the improvement in margins that you're seeing in this overall business for the year; EBITDA margin moving ahead, operating profit margin moving up as well.

If we look at the operational delivery in this particular business in 2011, you can see that the business disposals, as I mentioned, had a negative impact on sales of EUR364 million, and also some modest effects on EBITDA.

These were, primarily, the divestments of our insulation and our climate control businesses.

First half of the year had very good underlying sales growth, up about 6% for the year; up about 8% in the first half of the year.

What we did see, in the third quarter, particularly, as the eurozone crisis began to bite, we did see a flagging of appetite in this particular segment of our business and we had a slower second half in terms of like-for-like sales growth; up about 4%.

We had good EBITDA progress in the first half, but we did take some additional restructuring costs in this business in the second half of the year.

If you look on the previous slide, you'll have seen EBITDA roughly unchanged for Products for the year as a whole.

When we gave our updating statement in early November, we indicated an increase of approximately 10%.

That was based on our view at that particular point of the level of restructuring costs that we would be booking in 2011.

As it happened, as we moved closer to year end, we pushed the button on some additional restructuring charges in our concrete products and in our building products activities in Europe; in total, approximately EUR20 million.

And that was the reason why the actual outturn was fairly flat compared to the 10% increase that we'd flagged for this business in early November.

Looking at the highlights in this particular segment of our business in 2011, we had very good recovery in our structural concrete products business; a business that's been pretty challenged over the last number of years.

But with significant restructuring efforts, we actually had improved profitability on a lower volume base in this particular business, and particular improvement in our Danish businesses, which had suffered from quite a sharp decline in construction activity in Denmark.

We continue to invest, though, in this business.

Our German landscaping business in concrete products has been very successful, and we're rolling out and expanding our plant network there.

So there was some good investment in that during the course of the year.

And the divestment of our insulation and climate control activities has brought greater clarity to our building products segment in Europe.

And we do have plans to expand some of the remaining components of that particular business under Erik's leadership, obviously, as MD for Products and Distribution in Europe.

Moving onto Distribution in Europe, you can see here very significant progress in 2011 when you look at the progression in sales, up 22%; and also very strong progression of EBITDA level; and at operating profit level; and, more particularly, at the margin level in the course of the year.

It was a landmark year.

We broke the EUR4 billion revenue level for our European Distribution business for the first time, helped obviously by acquisitions.

The pie chart here shows the split of our Distribution activities in the Netherlands.

Roughly, 55% in builders merchanting; similar percentage to that last year.

Roughly, 30% in the EBITDA coming from our DIY activities; slightly shrunken from 35% last year because there has been good growth in our builders merchanting activities with acquisitions.

And also in our SHAP business, our sanitary, heating and plumbing business, which last year in this particular pie chart would have accounted for 10% of the total, growing to 15% in the course of the year; arising from good performance, but also from good acquisition activity as well.

We do see sanitary heating and plumbing as a very promising area to expand our Distribution activities in Europe.

Looking at the operational progress during the year, I mentioned the acquisitions impact.

You can see there added roughly EUR0.5 billion in sales, perhaps, primarily, Bauking; but also some of the smaller acquisitions that we would have done in sanitary heating and plumbing.

And you can see there good incremental margins at EBITDA and operating profit level on those particular businesses.

Full-year like-for-like sales up 4% in this business.

Again, a similar pattern to what we saw in Products; a stronger first half and then a much slower second half.

As you can see there, like-for-like sales up 2% in the second half of the year.

Now, that's a stronger level of like-for-like growth in merchanting activities.

That 2% includes a decline in DIY activity in the Netherlands in the second half of the year; and a slight fall back in our sales levels as the Dutch consumers, who are generally very thrifty, pulled in their horns, if you like, with the increasing volatility in the eurozone that we saw emerging at the beginning of August and continuing into September.

But, nonetheless, our DIY activities overall improved their profitability for the year.

Looking at the highlights, again, one of the big initiatives that's helping improve our margins in Distribution is procurement; coordinating our purchasing power across the enlarged Group, particularly with the acquisition of Bauking at the end of 2010.

And increasing excellence in category management programs, as well, in our builders merchanting activities are yielding benefits.

And, as I mentioned, our acquisitions under sanitary heating and under plumbing area doubled our Belgian branch network in that particular activity.

And we've strong positions in SHAP in Belgium, Northern Germany, and also in Switzerland.

And, as I mentioned, keen to expand those [portfolios].

So that's, if you like, the European piece, the three segments there.

Again, on questions and answers, Henry Morris and Erik will be happy to delve into those in more detail for you.

Moving across the Atlantic to our Americas Materials division, I think the key thing here is that our US dollar EBITDA was ahead of the guidance that we provided in early November.

You see here on the slide a 6% decline in euro terms.

That actually, when you look at it in dollars, is a 2% decline in US dollars for the year.

In early November, we flagged that we could be looking at a decline of up to 10% in dollar EBITDA for this particular segment.

But with favorable weather in November, and indeed into December, and with the good operational cost control that I mentioned as the season wound down, we were able to limit the decline to just 2%.

So I think, again, a better than expected performance here in our Americas Materials division.

And I'm sure you're going to have a good number of questions for Doug, who will deal with that in the Q&A section.

Looking at operational delivery here, we've shown here, just to help your understanding of this particular business, some of the trends within the individual business segments for Americas Materials.

You can see here like-for-like volume's up 4%, helped by some large contracts of lower grade fill materials.

And that then obviously gets reflected in the movements on average price, which are down 1%.

So we also benefited from significant operational cost reduction measures in this particular business; you can see there our unit variable cost down 2%.

And, overall, our profits in this particular business line were ahead in 2011.

Now, I know there's a lot of comparison goes on between the different volume and price trends that you see from ourselves and from other participants in the industry; and, obviously, that reflects a wide variety of geographical positioning, and also the mix of product that you're selling in any one year.

I believe the key thing is were profits up or down in this particular business segment in the year?

And our profits were up, in contrast to what we have seen from some others in the sector.

In the asphalt side, we obviously had to battle with significant increases in input costs arising from rising energy prices in the course of the year.

And while we moved prices ahead strongly, particularly in the second half of the year, they weren't sufficient to cover a roughly 8% increase in unit variable costs so we suffered some margin compression in this particular business and profits were lower.

Readymixed, broadly, again, a mix of volume and price; overall, profits flat in readymixed.

And we continue to see very competitive market in our paving and construction activities, which has obviously bid competitively for a lot of public work in the United States.

But, overall, I think when you look at the Americas Materials delivery in 2011, with rising energy input costs, we saw energy and energy-related costs as a percentage of sales increase by over 2% in the year.

I think limiting the margin decline at EBIT level to roughly 0.5% in that context was a very good achievement, and reflected a lot of strong operational and commercial action across the business.

While we had to battle with some of those challenges during the course of the year, we didn't neglect the development side in Americas Materials and actually were quite active.

We spent about $300 million on 19 transactions, which folded in to our existing Materials group footprint, and give us good early synergies, and, obviously, will contribute to our performance in this particular business segment in 2012.

Moving on from the Materials side and, maybe, finally to finish up the segmental review with a look at Products in the Americas and Distribution, and Mark Towe will be happy to deal with any questions you have in relation to that.

Americas Products, good benefits from restructuring in this particular business.

Modest sales decline here, impacted by some divestments, and also by exchange effects.

But profits ahead, largely reflecting reduced restructuring charges and reduced impairment charges.

And margins, well up in the course of the year.

This is a business which is well balanced, as you can see there, between residential, non-residential, and infrastructure so it complements obviously the more infrastructure bias that we have in our Materials business.

And I think, as US private markets recover, this is a segment of our business that is set to benefit quite strongly as those markets recover over the next few years.

Looking at the operational delivery, the disposals impact negative at the sales line.

But because the disposal was of the loss-making Ivy Steel business, which was acquired back in 2006 as part of the MMI transaction, the impact at EBITDA and at operating profit level was positive.

Full-year like-for-like sales were up 2%.

We had a weak first half, sales slightly down, but we did see strong revenue growth in the second half of the year.

However, we did have higher input costs in a number of areas, and very tough trading conditions in South America during the year, particularly in Argentina in our clay roof and wall tile business.

Our pre-cast business in the US had a tough market as well, too, difficulties recovering some of the higher input costs.

And we did take some particular costs in 2011 as we expand and build out our building solutions initiative in the United States.

This is an initiative which is aimed at packaging our entire product portfolio for large contractors, large government agencies who have significant construction projects.

And we see this as a way of generating increased top line growth in what is a still fairly slow market.

So this is an initiative which saw further investment in systems and in people during the course of 2011, which we'll see the benefits in years to come but we took the costs of that in 2011.

We did a major reorganizational realignment in Americas Products at the beginning of the year.

We encompassed our pre-cast and our architectural products, and some of the remaining MMI activities under the building products umbrella.

We've added to that recently by folding BuildingEnvelope, our glass business, into that, and we're seeing good benefits from that.

The building solutions initiative that I mentioned, too, where we took some investment costs.

That's generating top line growth, and will do so in the year ahead.

And we did expand the Products business, particularly an important transaction in Canada.

We have a very strong concrete business in Canada, Eastern Canada; very good returns over the years.

We had been faced with some capital expenditure decisions there in order to reinvest in the business and to add capacity.

But in fact we were presented with an acquisition opportunity in the course of 2011, Transpave, which enabled us to avoid the CapEx and to instead make the acquisition.

So stronger base in Eastern Canada in the concrete products business for 2011.

And we're beginning to see, after a period of years when development activity and our Products activities in the US was fairly quiet, we're beginning to see more opportunities coming through that make sense, in a market that has been pretty beaten up over the last three to four years.

The final segment, Americas Distribution, again, a business more focused on residential RMI through our exterior products and roofing and siding activities.

Further good progress this year as margins have recovered in 2010 and further margin recovery coming through in 2011.

You can see that there on the slide; operating profit's up 22%, margins moving ahead.

Again, this is a residential/non-residential business for us.

The residential side is more focused on roofing and sidings; it's more repair and maintenance.

The interior products side, wallboard, is more a commercial business more focused on new build.

So, as has been the pattern over the last couple of years, the greater strength in this business was in the exterior products and in the housing repair, maintenance, and improvement work, where consumers are, once again, in the US feeling confident enough to spend on this particular segment of their home.

So, looking at the operational side here, good strong like-for-like sales growth through the year; up 11% for the year.

Up 13% in the first half, helped by a favorable winter in the early months, but continuing at a good level, 10% like-for-like sales growth, in the second half of the year.

We did face some supplier price increases in this particular business as asphalt shingles, which is one of the major products we distribute, the prices rose there, reflecting the increase in asphalt costs.

We had to pass that through to consumers.

But we did that well, and our overall margins in Distribution were ahead for the year.

Further streamlining of our organizational structures, we'll continue to work on that in our Distribution business.

We are also developing a private label brand in our exterior product segment, which does have better margins for us.

Again, that's gaining an increasing share of our total exterior products sales.

I think, again, here in Distribution, a busier year on the development side for Americas Distribution.

Some good deals; and, in particular, just prior to year end, we acquired a 15 branch business in the Northern Plains, in Wisconsin, Nebraska, the Dakotas, and Minnesota, which builds on our particular presence in that particular region.

And that was our largest Distribution acquisition since 2006.

So, again, good development activity, a lot of it which came -- the big deal came at the end of the year so not reflected in these particular results for 2011, but will give us incremental sales and contribution in 2012.

So that's the segmental picture, if you like.

Before I pass the baton to Maeve, who will deal with some of the financials, maybe just a quick recap on the overall margin delivery from the six business segments during 2011.

As you can see, good delivery and good increases from our Products and from our Distribution activities in Europe, and in the Americas.

Margin declines on the Materials side.

But I think as I mentioned up front in dealing with Europe Materials, if you strip out the lower CO2 proceeds, actual margins maintained, so a good performance there.

Indeed, in Americas Materials, just to remind you, energy costs increasing by over 2 percentage points as a proportion of sales, and limiting the margin decline at EBITDA level to less than 1%; a good outturn in a difficult market there.

So I think again what you're seeing coming through in that quick snapshot on EBITDA margins is just the benefits of the balance within the CRH portfolio contributing to overall margin resilience during 2011.

So, with that, I'll hand over to Maeve, who'll just run through some of the financial slides; and then I'll just come back, following Maeve, to say a quick word about the outlook, before we get into questions and answers.

So, Maeve, over to you.

Thank you, Myles, and good morning, everybody.

As Myles was going through the operational performance for each of the segments, the financial numbers that he was focusing on was sales, EBITDA, and operating profit.

And you'll have seen that on each of those three categories our results were ahead of 2010, and also ahead of the guidance which we gave in November.

If we look at some of the other income statement captions, profit on disposals and net finance costs were broadly in line with last year, with 2010; and that also is in line with the guidance which we gave in November.

Our share of associates' profit after tax was a bit higher than last year, although that reflected the effects of lower impairment charges in 2011, compared with 2010.

So when you exclude the effects of those lower impairment charges, the underlying profit from associates was actually similar to last year, at around EUR50 million.

And that included some good contributions from our associates in China, offsetting some of the lower contributions from our associates in Europe, mainly in Spain.

At the profit before tax level, we'll have seen, from one of Myles' earlier slides, that the profit before tax for the year was 33% ahead of last year, ahead of 2010.

At the -- our tax charge was also -- was higher than last year, at EUR114 million.

But as a percentage of pre-tax profits, the tax charge was actually lower, reflecting the benefits in 2010 of the resolution of some tax issues, which gave us a benefit in our current year, in our 2011 tax charge.

So the effects of that 33% higher profit before tax and the slightly lower tax charge gave us a good strong 35% increase in EPS; which, in turn, gave us an improved dividend cover for the year, where the cover, at just over 1.3 times, was ahead of last year's, which was just 1.

If we look now at the operating cash flows for the year, on the inflow side, the gross inflows were EUR45 million ahead of last year, largely as a result of the higher profit for the year.

If we look at the outflows, a couple of key moving parts to those numbers.

Working capital, an outflow of EUR161 million for 2011, compared to an inflow of EUR256 million in 2010, the big factor there being the flipside of that good finish to the year in terms of weather, which gave us a boost on the trading side.

The other side of that effect is a lot of that trading still in our working capital at the end of the year, so an outflow for the year, for 2011.

Our dividend level broadly similar to last year, as you would expect, because the dividend remained similar in 2011, compared to 2010.

On the capital expenditure side, our capital expenditure for 2011, at EUR576 million, was EUR110 million higher than 2010, and also reflected a higher percentage of depreciation.

A good part of that increase in capital expenditure had been reflected in the half-year numbers, when our capital expenditure was EUR75 million ahead of last year.

And the other key caption in those outflows is the tax and Other, and the Other payments include a number of payments in respect of our pension schemes.

As we continued our ongoing process of liability management, our pension liabilities are in our balance sheet, and they've been a focus for us in terms of management for the last number of years.

Some of that has resulted in payments during 2011, which is reflected in that number there.

The number also reflects some lower dividends from associates during the year.

So all of that resulted in a net cash inflow at our operating level of EUR26 million.

When we see what the effects of that were for net debt for the year, net debt at the end of 2011 very much in line with 2010.

So the key moving parts in the remaining part of the cash flow were the acquisitions and investments, which, as Myles said, amounts to about EUR610 million for the year on 45 transactions during the year.

In terms of the spend for the year, a big proportion of that happening in the second half of the year; EUR163 million in the first half, EUR447 million in the second half of the year.

On the disposals front, our ongoing program of portfolio management has given us -- generated disposal proceeds of EUR492 million during the year, the bulk of that relating to the disposals of businesses, some of which had been announced at the end of 2010.

Those would be the two European disposals of our insulation business and our climate control business in Europe; and we also sold our 35% stake in the French distribution business, Trialis, in the early part of 2011; and, towards the latter end of the year, the disposal of our seawater magnesia business in Ireland.

So the sum total of all of those business disposals was about EUR390 million; and then we had a further EUR100 million, or so, of more regular property, plant, and equipment disposals contributing there.

And that's a program -- that program of portfolio management is something we're continuing to look at very closely.

The share issues number includes, primarily, the shares in -- issued in lieu of dividends during the year, the scrip dividends.

And the translation effects for 2011 were, again, slightly negative for the year.

So the sum total of all of those different movements was a net debt number which remained broadly similar to 2010.

That EUR3.5 billion of net debt is comprised of gross cash of EUR1.3 billion in the balance sheet of December 31, 2011; and gross debt of EUR4.8 billion.

At those kind of levels, the net debt-to-EBITDA number for the year, which is one of the measures that we use to compare ourselves to our peers, and you'll see that on a later slide, the figure was 2.1 times EBITDA level for the year, which, we believe, is a very strong performance and represents an improvement on the 2010 number.

Our EBITDA-to-net interest, which is the measure that we use in terms of managing -- looking at our financing and financial health, if you like, that figure, at 6.4 times, is very similar to last year's number; and is well ahead of the level which we regard as a comfort level of 6 times EBITDA-to-net interest.

That gross cash of EUR1.3 billion in the balance sheet is one part of the liquidity available to the Group at the end of the year.

The other part is the undrawn committed facilities that we have at our disposal.

At the end of 2011, that number was EUR1.9 billion.

So when you take the cash and that EUR1.9 billion, the total gross liquidity for the Group at the end of 2011 was EUR3.2 billion.

During 2011, one of the highlights in terms of the financing for the Group was the putting in place of facilities of EUR1.5 billion of five-year facilities.

We put that together with 13 major international banks, and we used some of that to replace some of our shorter dated facilities.

At the end of last year, the equivalent -- we had EUR1.4 billion of undrawn facilities, a significant proportion of which was due for repayment within two years of the balance sheet date.

So part of our thinking in putting that facility in place was to manage that out and give us more flexibility in the medium term.

Just after year end, in January of this year we issued EUR500 million of bonds in the euro market, seven-year bonds, so those will be due for repayment in 2019.

A 5% coupon, which is the lowest coupon rate we've had for this kind of tenure for our debt, so we're very happy with that.

We had strong investor interest in that bond, so in the final out turn 230 investors were involved in the issue.

So when you layer that EUR500 million on top of our EUR3.2 billion of gross liquidity at the end of the year, as of now, we're looking at EUR3.7 billion of liquidity.

Another way of looking at that liquidity and profile [amount] debt would be to look at the maturity profile of that debt over the next number of years.

The blue bar there is showing our cash of EUR1.3 billion at the balance sheet date; and the green bars are showing -- are splitting the EUR4.8 billion of gross debt in the repayment chunks, as it falls due.

As you can see here, there is no undue bunching of those liabilities over the next number of years.

And what we've just layered on there is the effects of the EUR500 million bond issue in January, which increases our current cash balances and obviously fills that gap in 2019.

So the profile is very manageable and extended; it doesn't put the Group under any significant pressure over the medium term.

And my last slide now goes back to the CRH debt metrics and puts CRH in the context of the sector.

At 2.1 times net debt-to-EBITDA, CRH is clearly, as you can see here in blue, one of the best in the sector.

We would -- that strong positioning is as a result of a really relentless focus by the team in finance in managing our balance sheet and making sure that we're well financed, and that we manage our resources carefully; but also, our rigorous and very disciplined approach to acquisitions.

So the combination of that, that rigor and discipline, has put CRH in a very, very strong financial position to face the medium term and the future, and in particular 2012.

And now I'm going to hand you back to Myles, who'll talk to you more specifically about 2012.

Thank you.

Great, thank you, Maeve.

I don't have to mention that that's one of the favorite slides, my favorite slides, in the pack in terms of just showing, as Maeve has said, how CRH is positioned.

Looking to 2012, obviously, as we've seen markets over the last six months, or so, we have seen some volatility in the eurozone.

But with the introduction of the long-term refinancing operations from the European Central Bank, we have seen more stability coming through in financial markets in Europe in the last couple of months, which is very helpful in terms of underlying sentiment in the European markets.

And we have, after a softish patch in the middle of last year, we have seen consistently improving economic data coming out of the United States since the autumn, and that is encouraging.

That leads us to conclude that, assuming no major dislocations in economies, or indeed in energy markets, that we can look forward to further like-for-like revenue growth for the Group as a whole in 2012.

The achievement, obviously, of targeted price increases is a key priority for us.

I referred earlier to some of the input cost pressures that we faced in 2011, and the pricing response to that, which garnered more momentum as we moved through the year.

And we have to keep our focus on that as we move forward into 2012.

But, overall, our conclusion is that CRH will see a further year of progress in 2012.

So, with that, we'll move on to questions and answers.

And I, together with all my Executive colleagues here, will be happy to assist you in responding to whatever questions you may have.

If I can just ask you, what we want to do is we want to try and structure the Q&A in slightly different format to prior years.

What we'd like to do, initially, is to take any questions relating to our activities, either in Europe or in developing markets to the east.

Once we've dealt with those from the floor here we'll then move to take questions from the floor in relation to the Americas, and then deal with any questions in relation to the overall Group strategy, or any of the overall Group financials.

So if we can structure the questions and answers in that particular way from the floor.

When we've finished with the floor and the various questions and answers, we'll then take the questions coming in from those who are listening on webcast.

And we'll take those questions as they come at the time, in the way they come.

But I think in terms of just structuring things and making it more informative for, I'm sure, the many people who are listening out there on the web, I think if you can, first of all, pose your questions in relation to Europe, and the move on to the Americas.

And we will get back to you, as you move through the various segments.

I'd ask you also to wait until a mic gets to you, and then just state your name and the institution which you represent; again, just to add clarity for those listening on the webcam.

So, with that, I'll sit down and we'll handle the questions and answers.

Thank you.

Barry.

Barry Dixon, Davy.

On Europe, two questions.

In terms of the European Materials, you talked about a 6% price increase in the second half of the year, and you might just talk about your expectations for price increases in 2012.

Just, from the statement, it comes across as slightly more subdued, I suppose, outlook in terms of European Materials, particularly looking at volume declines, perhaps, in, obviously from very high levels in Finland and Switzerland.

But maybe you might just talk through how you expect to achieve that scale of price, or what scale of price increases you expect to achieve in an environment where, maybe, demand is more moderate, or growth rates are maybe more moderate than they were last year?

Just a second question in terms of Europe on Products and Distribution.

I suppose, maybe, to get Erik's sense as to what is going on in the Netherlands.

And there seems to have been, and other companies have noted this as well, a substantial slowdown or significant slowdown in the Netherlands in the second half of the year.

Maybe give us some context around that, and how you see that playing out through 2012.

And then related question on Products and Distribution is on the incremental margin on both Products and Distribution.

You're seeing reasonable top line growth coming through, but yet on incremental margin it's 10%, 12%.

One would have expected that it might be slightly higher at this point given that, that recovery and, maybe, you might just talk about your own thoughts around incremental margin on European Products and Distribution.

Thank you.

Thanks, Barry.

Two questions there, or perhaps three, even; one, obviously, volume price balance in Europe Materials, which I'll ask Henry maybe to deal with; and then ask Erik to deal with just the outlook in the Netherlands.

Thank you, Myles.

In 2011, Barry, we saw a strong recovery in pricing throughout the year.

I think Myles indicated in his presentation that in the first half that was about a 2% effect; and in the second half it was about 6%, adding up to 4% for the year as a whole.

We were pleased with that improvement.

We did make a very determined effort during the year to push prices, and it took some time to get them bedded in.

And I think we were quite pleased as the year went through, and particularly with the stronger volumes towards the year end that we maintained good pricing levels.

And sometimes in Europe we would have seen price dips as you go into the December period, and we didn't get that last year.

So as we go into 2012 we're, again, determined to push through energy cost increases.

We have, I think, a good basis.

We have strong markets in Finland, in Poland, and in Switzerland, and we do expect to get some price movement there.

In addition to that, we have a strong position emerging now in the Ukraine.

We have an efficient plant.

There are quite higher coal cost increases coming through in Ukraine, and we are pushing higher prices there to recover that also.

Also, further east, in Turkey and India, we would have had good progress during 2011, and we would be hoping to build on that again in 2012.

Volume-wise, we've had -- I suppose aided by, as Myles indicated, the good weather and the strong finish to the year, we were very pleased with the volume outcomes in the three Central European markets, and in Turkey.

And for the coming year, I think it's a little bit optimistic to expect those volumes to be repeated.

There's some weakness in Switzerland [on foot] of the very strong exchange rate.

Things are slowing down a little bit.

In Finland, there was a stimulus which carried on into 2011 in housing, and that has finished off.

But there is a strong infrastructure program in Finland.

The very, very big investment in infrastructure in Poland is continuing.

And with the exception of maybe June, when the football championships will be underway, we see that continuing throughout the year and into 2013.

And then further east, we see stronger volume growth.

So, overall, we feel optimistic about volume.

Erik, just to the question in relation to Netherlands and the sort of economic backdrop there, and what's influencing market demand.

Okay, so I will, first of all, deal with that question on the Netherlands.

In the Netherlands, there's a few things that's going on.

In the new residential market, it's had its difficulties for a few years.

That has to do with the Dutch system on the tax deductibility of the mortgages.

In the Netherlands, you can deduct 100% of your interest rate from your income tax.

That has raised prices very high.

So everybody believes now that the price of houses is still too high, so nobody is now intending to sell off his house.

Or if he wants to buy a new house, they wait because they believe that prices will come down.

So that's the thing which has to be solved politically.

So that gives some problems in the new build market in the Netherlands.

And we already suffered for that in a couple of years, so we have reduced our production footprint to deal with that.

If you look to the RMI market, which is also very important, that's -- two-thirds of our profits in the Netherlands come from RMI, that's a more resilient market than the new build market in the Netherlands.

You saw that consumer confidence went down in the last half of last year.

What you see now, the last analysis of February, last statistics give numbers that it is picking up a little bit.

So I think we hit the bottom there.

That, maybe, this year will be a bit better, but will remain difficult.

So the Dutch market is maybe our biggest concern for next year.

If you look to margins overall for P&D, we also have some positives, of course.

So we have strong businesses in the German-speaking European countries.

We are strong in Germany, strong in Switzerland, very strong there in builders merchants.

We have good business in Austria.

And these markets, we believe, will do better next year.

So for both Products and Distribution businesses, in these countries we believe that margins will be up.

So, overall, we believe that in both Products and Distribution our markets can be modestly up.

That's the market side.

On the other side, we did a lot internally to improve our production footprint, to improve the efficiencies, commercial access programs which come through now, so I think that will have a positive effect, as well, on the margins next year.

Gregor?

I have two questions; one on Europe, please.

First one is just on Europe Products.

I think you took some extra restructuring charges, as you mentioned, in the final quarter, can you just, perhaps, highlight what sort of cost benefits you're expecting to get from that as you come into 2012?

And then secondly, I think you obviously mentioned that price increases were 4% for the full year on an underlying basis, and Materials margin was roughly flat.

Now, going in to '12, are you expecting -- do you need an equivalent price increase again to offset expected cost inflation?

Or do you think you can, perhaps, do it slightly less given where energy prices are today?

Thanks, Gregor.

Two questions there; one, obviously, on cost reduction measures implemented late in 2011 and their impact in '12; and the other in relation to level of pricing needed, on the Materials side, I guess, in Europe.

Albert, I'd ask you to deal with the cost question; and then I'll come to Henry on the price needed for 2012.

Thanks, Myles.

Good morning, Gregor.

As Myles said, what we did the tail end of last year, we took the opportunity to really move ahead with some of these cost savings that we had targeted in our budget process, and we took a hit last year for those costs in making those restructuring.

The benefits next year, probably, will be in excess of about EUR100 million.

There may be some costs as we close out on those particular initiatives, but the bulk of them have been taken in the December period of last year.

And that will be the total benefits across the Group, EUR100 million, rather than just precisely in Europe Products.

Henry, just in relation to what you're seeing in input cost increases and the necessary price increases to recover that in 2012.

We're reasonably well hedged for energy for 2012.

We would estimate that our cost increase in total on the energy bill will be of the order of 1% to 2%.

We would be expecting, on foot of very strong savings coming through, as I mentioned, in the Ukraine investment, and also from previous investments in alternative fuel usage, we would expect that we will recover a significant chunk of that in savings.

In terms of prices, we would be hoping throughout the year to repeat what we saw in 2010/'11.

Luis Prieto, Deutsche Bank.

I have a very brief question.

How should we think about CO2 emissions in 2012 and 2013?

Thanks, Luis.

I think, Henry, that's one for you as well.

CO2, our usage of allocation will be similar in 2012 to previous years; and the surplus allocation will be also in the same ball park.

Our prices have been a little weaker in the second half of last year.

They've picked up in the last couple of weeks, but we see price increases here to be generally weaker than a year earlier.

And what benefit are you going to get from that, should we expect?

A bit lower than what we've included for 2011, maybe of the order of EUR15 million/EUR20 million in 2012.

Thank you.

Thanks, Henry.

Any more questions on Europe here?

Yuri Serov, Morgan Stanley.

A couple of questions on Europe.

First, you signaled out France in your outlook as the market where the outlook has worsened, together with Benelux, which we've talked about already.

Could we just get some more color on that, especially given the strong end to 2011 from the data that we saw on stores and permits in the building sector?

Are you expecting a significant downturn in the second half?

And the second question, I just wanted to ask for an update on Secil, what the current situation is, what we should expect, and when?

Okay, thanks, Yuri.

I might ask Albert to deal with the Secil issue, and then we'll come back to Erik in relation to activity in France.

As we announced previously, we went through the arbitrary tribunal in Paris and the ICC, which is the arbitrary tribunal in Paris, confirmed the call option that Secil had on our 49% stake in the Company at a value of just over EUR570 million.

What we have received since then is notification that Secil has lodged an appeal in the Cour d'Appel in Paris, appealing that particular judgment by the ICC.

We await, as indeed the Cour d'Appel do, full details of that appeal.

We don't know if it's an appeal of the judgment in its entirety, or part of it, or whatever.

So really, until then, we won't have any clarity in the position.

The period at which Secil are supposed to enact or execute their call option is 180 business days after the ICC judgment.

That will take us some time into the April/May period.

But until we find details of that appeal, which will be coming through in the next couple of weeks, really, we just have to wait and see what's in that before we can comment any further.

But we'll update you as soon as we can.

Thanks, Albert.

In relation to France, I might ask Erik to comment on that.

Our position in France is, primarily, in Distribution and in concrete products and, obviously, would not be as significant as the positioning that we would have in terms of revenues we would have in Germany, Switzerland, or indeed in the Benelux.

But, Erik, you might comment on that.

Thank you.

France, for us, is still a smaller country.

It's an important year now for France because also of two presidential elections, so maybe that has an impact.

For the moment, we regard the market for France as stable.

If you look to our Distribution business, we are mainly in the region around Paris, which is a stronger region, so the business there for us is a residential business.

And we are in concrete products more in infrastructure type of work.

The government has a few big projects going on, so we are involved in the railway projects and tunnels, which will continue for the whole year, so that's a financed project.

So, for this year, we still believe it could be -- it will be a stable business in France.

Will Morgan, Goldman Sachs.

I just have one question on Europe, and it just relates to your outlook on Poland.

Some of the contracting companies involved in that country see a lot of major infrastructure projects winding down this year, and yet you're still calling for continued positive developments.

I just wondered if you could clarify your guidance in that context.

Maybe you're not involved in those projects that much, or something like that, but any clarity would be much appreciated.

Henry, could you deal with that one on Poland, please?

Poland has had a terrific expenditure, terrific demand from infrastructure projects funded by the EU and the Polish Government jointly over the last couple of years.

There was quite an impetus to try and conclude a lot of that infrastructure work ahead of the football championships in 2012.

Some of those projects are concluding.

Quite a lot of work is done.

We've benefited hugely in 2010 and '11 from sales to that use.

However, there's still a lot of work outstanding and there is -- quite a few of those projects are not going to be finished and they are going to continue on past the summer and into 2013, and the funding is assured.

Now, beyond that, there is also additional funding, particularly into railway.

So we would be reasonably optimistic in the medium term that the infrastructure spend in Poland will hold at quite strong levels, perhaps not at the peak level that we had in 2011 but at very, very good levels.

So we would be quite optimistic.

On the domestic or on the residential side, and on the non-res, we would expect to see what have been modest pickups continue into 2012, also.

Aynsley Lammin, Citigroup.

Just a very quick one on Europe; the incremental sales you'll see from acquisitions in '12 and acquisitions made in '11?

The question is in relation to the incremental sales in Europe from acquisitions completed in '11, Maeve, would you comment on that?

The annualized sales from those acquisitions would be about EUR500 million, and we had about EUR150 million/EUR160 million in 2011.

That's for acquisitions in total?

For the 2011 acquisitions.

In total?

Yes.

So that would include the Americas, I guess?

Yes, sorry.

The European element to that?

The European element would be the -- a little over half that, I think.

John Fraser-Andrews, HSBC.

Could we just have an update on India, please?

I understand prices went up, volumes down; just a picture of what went on in 2011 and an outlook for 2012 please?

Albert?

I think -- well, from our position in India last year, you're absolutely right; we saw a good price progression last year, primarily driven by the fact that we bought onstream a new grinding station about 300 kilometers away from our main cement plant in Mellacheruvu, close to Hyderabad.

This opened up a whole new market area for us in the North Eastern part of Andhra Pradesh and moving north into Orissa, and that was a better priced area for us.

So a better balance with regard to our sales in terms of opening up new markets.

And I think that we also -- how we marketed and sold our product, we didn't go for volume, we were very selectively targeting market and that helped us in achievement of our price objectives.

We've pulled back a bit on the volume, but overall it benefited the bottom line.

So we're happy with the progress last year.

2012?

2012, I think will be, again, a continuation of that same strategy.

We have, as I said to you, this opening of this new grinding station in the North East of Andhra Pradesh, opens up a whole new market off the East Coast of India for us.

We're shipping up to Western Goa now at this stage.

So that gives us an opportunity to expand into new markets, with better pricing, so I think we'll see some volume progress, and, indeed, price progress, in the current year.

Okay, John, I hope that answers your question on India.

Albert, you might just comment, as well, too, on the progress which we saw in China in our associates and joint venture there during 2011.

Indeed, as Miles mentioned in his preamble, talking about China, it was a very significant year of progress for us in 2011.

Just to remind you, our business in China, we've got one small business that we own 100% of.

But, much more importantly, we have a 26% stake in a very large business called Yatai Building Materials; that business sold last year about 21 million tonnes equivalent of cement.

It has the cement capacity of about 27 million tonnes; and it services the top three North East provinces of China, which have got a cement demand of about 120 million tonnes.

To put that in context, that's more than the current cement demand of United States and Western Europe.

So it's a very significant market, and we've got over 20% market share in that region.

I think, again, prices moved on well last year.

Pricing up there is about EUR40 a tone, still below what it could and should be in China.

And I think this year we will expand further our footprint and our profitability.

And it's quite a significant business; last year, the EBITDA on that business was in excess of EUR200 million on a 100% basis.

So quite a good progress in the last three years or four years since we've been there, and a good year to come as well.

Great, thanks, Albert.

I think, with that, we might give our European heads a break and move on and hold some questions for my two US colleagues here, for Doug and for Mark.

Luis Prieto, Deutsche Bank.

Quick questions.

The number one, obviously, if you can give us a bit more information on how we should think about cost inflation in 2012, particularly in asphalt for the 8% cost inflation that we saw last year in 2011?

And, obviously, we're seeing the debate heating up quite actively over the past few weeks regarding the highway bill reauthorization, what are your expectations here?

Do we have to wait after the elections?

Are we going to get anything before the elections?

Your views would be welcome.

Luis, two very pertinent questions there.

Doug, I might ask you to comment on the debate, on the reauthorization debate, and also what you see in terms of cost inflation on the energy side in 2012?

Well, you've all been aware of the debate going on with government funding.

It's been a long road; we're on our ninth extension.

And there are bills actively been debated in both the Senate and the House.

The House, from what we gather, has a non-partisan bill or a bipartison bill; that will be a two-year bill at roughly level funding, perhaps some inflation, and we expect that to come out in the next several weeks.

The House, which was formerly working on a five-year bill, has now retreated back to a two-year plus or minus bill and we do expect that, that will come out with reduced funding.

Whether that comes out in the next several weeks or not is up for debate.

But we think it's likely that those bills will come out.

There'll be a rigorous debate, and either a bill will get past by the March 31, deadline, which we would believe will be in a two-year frame, and we believe will be somewhere funding to our baseline, which is about $40 billion.

We think that's where the debate will end.

Or perhaps the more likely outcome, which is an extension through the first quarter of 2013, basically, to wait till after the elections.

And if you had to ask us, we think that's probably the more likely outcome.

And we would see that extension being at roughly level funding with the $40 billion baseline.

So anything could happen, but those are the most likely outcomes, as we see them today.

In terms of asphalt, as you know, we've seen quite a significant inflation in asphalt cost over the last couple of years; last year 14%, which added 8% to our unit cost.

We're looking at, roughly, similar types of inflation going into 2012.

We think that the cost of asphalt, at the retail level, will be up about 10% to 15%; we're seeing that in the market right now.

I think the difference is that it's out early.

And the market -- which, as you know, last year we got a 5% increase but weren't able to cover that cost.

I think the market environment is more conducive to passing through that increase, so we think we will be more successful in passing that increase through.

There will be downward pressure on our asphalt margins, but we think we'll be more successful than we were last year at passing that through.

[But if add our gas], we would think that our asphalt unit costs would be up around that 5% to 8% level again in 2012.

And just for clarification, that's your total production costs for asphalt, with a higher inflation level in the liquid [component of that]?

Exactly.

And liquid is about half the cost of a tonne of asphalt.

Yuri Serov, Morgan Stanley.

A couple of questions; one is the clarification of the discussion that we have just had.

You're saying that it's likely that you will have a better chance of increasing prices in 2012.

The volumes of work in road building are still under pressure, though, as stimulus is rolling off.

Could you just give us some more explanation as to why you believe it's going to be a better position for you to increase pricing this year?

The second question, again related to the highway bill.

We're hearing probably more than previously now of a possibility of reduced funding, whereas the base line assumption seems to be that the funding is going to be at the same level in real terms and maybe, if we're lucky, then it will even see an increase.

Now, why shouldn't we actually assume that the funding will be lower in the future?

We are talking about the House bill, which requires a lower funding.

The Senate came up with the same level, but they are admitting that they don't have the money to fund it.

All the signs are actually pointing in that direction.

Two very good questions.

I'll take the funding question first, and then the asphalt.

If you remember, last year we had the same issue of debate, of significant pressure to cut the budget, cut spending; and, in fact, we had to do a transfer into the Highway Trust Fund from the general fund to get adequate funding for highways for 2011.

We have a bit of different situation going into 2012 in that the funds are already there, and the obligations limits are already established.

So, really, all that has to happen is an authorization to use that money.

So, again, we think, because the money is already there for 2012, that the Congress for the House and the Senate will agree to go ahead and authorize the spending of that funding.

Obviously, there's a lot of pressure from the House, [T party], etc., to cut funding, but a lot of that is noise in the system.

A lot of that is political positioning for negotiation.

And we just don't think that the Senate, nor the President, will allow a bill that reduce funding knowing that jobs are at stake and infrastructure is seen as not only necessary but as a big job creator.

So you see a lot of bad press, a lot of it coming out of the House of Representatives.

But it's only one of the three legs that are needed to approve funding, and we think that the other two legs will bring appropriate level through.

In terms of asphalt, it has to do with the environment in the market.

Asphalt margins have been squeezed for two years now.

We're in the same boat as a lot of our competitors, smaller players, etc., and I think there's just a general acceptance.

We're seeing other suppliers, such as cement, etc., raising prices.

We're seeing prices going through in the market, and we just feel like the asphalt -- our competitors and other people in the asphalt business are better prepared to pass these on.

This is high bidding season and so the fact that the prices are high now, everybody knows the prices are high and would, we feel, prices will be high into the season, and that's important in how they bid and how we bid projects.

So we just think the environment in general is better conducive to inflation, particularly in the asphalt arena.

I just wanted to quiz you on what you're seeing on the cement pricing since you're one of the biggest purchase of cement, and what you think the implications are of it for your readymixed business.

Okay, thank you, Gregor.

The question from Gregor there is what do we see in terms of cement prices development in the US in 2012.

It's important for our readymixed business, but it's also important for our concrete products business.

Mark, could you respond to that, please?

That's a good question.

Last year, in 2011 the cement prices were pretty flat across all the country.

This year, I think the cement prices will go up.

We see that the trends are there; I think all put out price increases in April and I think they'll stick.

It depends where the geographic place is.

I think probably in Florida it's going to be very difficult to get -- they will get an increase there, but it won't be high.

But across the rest of the country, they're doing this.

So our view would be cement prices are probably up 3% to 5%, and we're pretty confident we can pass those costs on.

It's really good for the industry to get prices up, so we're supporting that, and I think it would help us for the year.

Thanks, Mark.

Just on the US housing side, obviously, people have been talking recently there's been some signs of life in that market; interested to hear you views of how you see US housing and how kind of broad based the recovery might be.

And then on the non-res, as well, I think you said there's some signs that that's bottomed out, and I'm just interested in a bit more color there.

And just lastly, on the aggregate side, I think some of your peers have talked about a 2% to 4% price increase, would you confer with that, as well?

Thanks, Aynsley.

Doug, you might comment on the aggregates price trends for 2012, and then Mark deal with the non-res and the residential trends, as we see them at the moment.

Yes, in aggregates, as you know, our larger competitors, larger players in the market, Vulcan and Martin Marietta, have come out with pricing trends in the 3% to 4% range.

We do think we will get price increases in 2012.

We'd be a little bit more bearish, so we'd call it 2%, plus or minus, in terms of our price increases that we think are achievable in aggregates in 2012.

On the housing arena, I think you've seen an indication over the last -- they've been pretty consistent for the last three or four months.

So I think we certainly see that housing has bottomed out and it's slightly improving; we would take that view for 2012.

Certainly, one of the things that we're seeing on the housing piece is the R&M side is certainly improving.

We've seen home depot, and loads, and whatever, our home center business has been very good.

So that's probably positive, in a way, on the housing piece.

On non-res, I think we've really seen the ABI index have consistently been up for three months now.

Before last year, we got a kind of mixed signal last January; it was up and then it went back down again.

I think the indicators that are going out now would be consistent, and we're seeing that obviously is still at a low base, but it is improving.

Barry Dixon, Davy.

Two questions.

Just going back to the bitumen side, has the price increase informed your strategy around the winter [fuel]?

Are you still looking to buy in about 40% of the full-year requirement?

Or do you think about it, given where the price of bitumen is at the moment, would you buy in less than that?

And then a second question, just on Americas Products.

I know that the headline numbers show the improvement in margin, but if you look at the organic profit it's declined by EUR16 million from the statement on organic revenue growth of EUR51 million; really, just trying to understand the dynamics behind that.

Again, as in the European side, when you see the revenues recovering you'd expect to see positive operating leverage just [what's] coming through, and maybe just your thoughts on why that's not happening at this point?

Thanks, Barry.

I think in your comments there I will take your last question.

I referred to them in the presentation, some significant negative effects in Argentina, particularly, arising from, and, Mark, you can speak better to this, I guess, from some of the pressures in the economy there.

Pre-cast pressures, as well in terms of recovery of input costs.

And, as I mentioned, significant once-off costs associated with our effort to build out more significantly in building solutions in the Americas.

All those would have been factors which would have impacted on Products, particularly in the second half of the year, in the US.

In relation to Argentina, Mark, just a --

In Argentina, they really had a very cold winter.

And we had disruption of gas in roof tile business there; we got cut off and had to shut the business down.

That had a big impact.

But the bigger piece there is inflation in Argentina.

We had the -- our labor union groups had to be redone.

The government pushed 30% to 40% increases on wages there.

We really couldn't recover that, so that was part of the piece.

Also, as Maeve mentioned, the free cash.

We -- our metal pieces, [rebar] and mesh were higher and we could not pass that on last year.

The good thing about that is, on a free cash piece, we -- our back logs are very positive going into 2012, and we're pretty confident that we can pass any steel increases over there.

So it's still going to be a difficult year for us in 2012 in South America.

Chile is fine, but the Argentina piece is going to be continually struggling.

But I think overall, momentum in other product groups, our [pipeline] is going to move forward in 2012.

Your second question, Barry, related to our winter fuel program, Doug, could you deal with that, please?

Yes.

In terms of winter fuel, and, again, that's been a good contributor for our asphalt business over the last several years, we are slightly behind in terms of volume of winter fuels than we were last year; part of that's timing and availability.

Our winter fuel season is not over, so we're still -- we're making [by].

Part of that is the strategy to time the market, prices being high, going into a very uncertain year.

But we still have a substantial quantity of winter fuel, and we expect it to contribute well for 2012.

Okay, thank you.

So, Doug, would you like to comment as well to just on our hedging in relation to other important components of our energy mix in the US, which will be diesel; and also the various fuels that we use in our asphalt plants, the [AB] asphalt plants, the hedging position there and how you see the relevant costs for 2012 versus 2011?

Yes.

Obviously, diesel is a big part of our cost structure, about [$200 million] in total.

We are about 28% physically and financially hedged on diesel at favorable prices versus last year.

And then about 25% of our diesel is indexed, and that's being indexed on construction jobs.

So we're about 53%, plus or minus, hedged on diesel, in a favorable position for 2012 versus 2011.

So we feel pretty good about diesel prices are slightly up now, but we think those will balance with the hedges we have.

In terms of our burner fuel, we're about 45% hedged on our fuels used to burner fuel on our asphalt plants.

Largely composed of natural gas.

We're about two-thirds hedged on natural gas at very favorable levels.

And then we're about 12%/15% hedged on recycled oil, which we use as burner fuel.

So, again, we feel pretty good about our energy cost on the burner fuel side and diesel side going into 2012.

Will Morgan, Goldman.

Just three questions, please.

First of all, I know there's been a lot of discussion about highway funding and the bill there, but I just wondered if you could comment about what you're seeing in terms of state budgets in your major states, and whether or not that's having any kind of offsetting impact to your outlook.

The second question just relates to Americas Distribution.

I know it's a smaller business, but again you've been seeing some very strong like-for-like growth in 2011 and yet not much change in the margin.

I just wondered if you could talk about the dynamics there.

And finally, I don't whether or not you can disclose this but I was just interested in what your total costs of buying cement was in the US for 2011?

Okay, Will, so three questions there.

I think, in terms of our cement purchases in the US, remember, we probably buy about 3 million tonnes -- 2.8 million tonnes in the US.

I think you can take it that our average cost is not too dissimilar from those which you see published in the various industry data there.

So that will help you, maybe, get a handle on the overall cement bill in the United States.

With regard to state budgets, Doug, what are you seeing there?

Obviously, the states are still quite constrained financially, though, as the economy starts to turn in the US, that starts to fill their coffers with largely sales tax being a primary mechanism there.

So we do see the states getting healthy, but still very, very constrained so we think their spending will be similar to 2011.

We do see some shift toward maintenance as the states try to allocate their scarce capital, so that might get us a bit of a lift to counteract some of the reduced Federal spending.

The ARA funds are holding off.

But overall, we would expect the states to be relatively flat with 2012 in their spending.

And your third question was related to Distribution in the US.

Again, as I mentioned in the presentation, we have two businesses there; one on the exterior products, roofing and siding, and the other on the interior commercial side in wallboard.

The exterior side, obviously, made good progress.

The interior made some progress as well, but it's obviously impacting on the overall margins in that business.

And the other thing which had a dampener on it, if I may use the term, was in September we did have some flooding damage in the North Eastern part of the US, which impacted on trading, and also resulted in some additional costs in terms of cleanout and clean up afterwards.

So that would have impacted a bit on the margin progression in our Distribution business in 2011 in the US.

John Fraser-Andrews, HSBC.

It's one question, and I wondered if you could say whether you're expecting 2012 to be a year of progress in the Americas.

And, if so, what that's based on.

Because what's been outlined is cost and volume pressure in the Materials business, which is obviously the largest segment, and I wondered if your scenario is a pickup in resi and non-res, and operational leverage in the Distribution and Products businesses counteracting that.

Thank you.

Well, I suppose, John, your question really can be, I suppose, boiled down to how do we see margin progression in the three segments in the United States in 2012, at this point in time?

Doug, if you could comment on what you see for the Americas Materials margin in 2012, and then I'd ask Mark to comment on the Products and Distribution outlook and margins there.

We really have it's a balance of pluses and minuses.

On the plus side, we think our aggregates business will move ahead in margin on roughly flat volumes.

And in readymixed, again, with inflationary, with cement prices going up and us passing those through, we think we'll be able to move ahead in margin in readymixed.

So we think quite positively about those two sectors.

The downward pressure will be in our asphalt business and our construction business, and so we do feel that those factors, between in readymixed and aggregates, asphalt and construction, will balance out broadly and we'll have similar margins in 2012 as we had in 2011.

And on the Products and Distribution side, Mark?

On the Distribution side, we're very positive that we're going to make progress on margins in 2012.

We've taken a lot of cost out of the distribution structure in the last couple of years, especially last year, and we're going to get the benefit of that.

We had good acquisitions that are going to deliver in 2012 on the Distribution side.

We'd be very bullish about what that is doing.

The pre-cast business is going to be better than last year.

As I mentioned before, our costs are going to be recoverable in 2012.

And we're pretty optimistic at what's going on in our paper business, and so forth, and especially on our home center business, we see the (inaudible) impact of that consumer really spending money on their houses now I think.

So we would be very positive for the Products side.

I did mention South America is still going to struggle in 2012, but that's a very small piece.

So, overall, we feel like we'll make a lot of progress in 2012.

Just one follow up, if I may.

(inaudible) mentioned the figure, I think it was 150 million, across the Group of incremental cost savings come through, perhaps you could say how that's split in Europe and Americas, please?

I think it was Albert who dealt with the cost saving and I think, Albert, the figure was --?

It was 100 million across the Group, John, and it's about 50/50 Americas/Europe.

Thank you.

So I think we've seen, on the floor here at least, we've exhausted the questions on the Americas.

Are there any questions then relating to overall Group strategy, or any aspects of the Group's operations that people would like to catch up on.

And then I might take any questions that have come in on the web, if there's anything that hasn't been dealt with on the floor.

Yuri Serov, Morgan Stanley.

I just wanted to ask, on net debt, this year -- or 2011, net debt has remained flat with a growing business.

What's your expectation for 2012?

Maeve, could you comment on that?

I think, in the absence of acquisitions, which of course we don't factor into our specific forecast, or don't give forecasts for, and assuming some capital expenditure broadly at the same level as 2011, I think we would like to see our year end at a little bit lower than year-end 2011.

So, just to clarify, are you saying that you're not accounting, or taking account of your bolt-on acquisitions then in calculating your forecast for net debt?

No, what I meant was we're not factoring in any future acquisitions into our thinking for 2012 in terms of our cash flow.

So, clearly, the acquisitions that are done, the cost of those is already in our debt at the end of '11.

Yes.

But the bolt-on acquisition spend for 2012, is that not part of the calculation of your net debt for the [end of] year?

We don't forecast an acquisition spend for the year.

Okay.

In the absence of any acquisitions, and of course there will be acquisitions this year, our net debt should be lower than it was at the end of 2011.

That's an [easy math]?

Yes.

Yes.

Okay, right.

And also, I think we continue, as well, to look at the portfolio across the business.

Obviously, been some significant moves reflected in our 2011 cash flow, but it's a continuing process of looking at elements of the portfolio.

But we would expect to be cash generative pre-acquisitions and reducing net debt in 2012.

Am I right to assume that the reason for the lower tax rate this year, in 2011, was totally one-off?

In other words, do we expect back to normal in 2012?

Yes, we would see there was a one-off element to some of it, the reason for the lower tax rate of 16% in 2011.

We would expect to see it trending back upwards in 2012.

It will depend, of course, on the mix of profits and the way the profits fall in 2012, but we would see it back up, probably, in the line of 18% or so, for 2012 at the moment.

If there's no further questions on the floor here we might go to the phone lines, we have a number of questions there.

(Operator Instructions).

Ian Osburn, ING Financial Markets.

Just a couple of questions on Iberia, if I could push you a bit more on the potential for asset write-downs.

Three of your peers have now written down cement assets in Spain, I'm right in thinking CRH has two plants over there, if you think there's anything more to be done in terms of write-downs there.

Also, in Portugal, in the answer to the Secil question you mentioned that Secil had appealed against the decision of the Spanish tribunal.

Did you mean SEMAPA?

And, if you didn't, are Secil appealing because they would like CRH to still be involved?

Because if you didn't mean Secil and you didn't in fact mean SEMAPA then I know that SEMAPA are protesting against the price calculation.

And just a final question, as well.

I think you've probably been clear on the answer on this but, just to get some clarity, do I detect that you're not confident enough in the outlook for 2012 to expand the acquisition strategy?

That you don't think you'll see the returns to actually roll it out nearer to the historical level of EUR1 billion to EUR1.2 billion per year?

Thank you very much.

Three questions there, Ian.

If I can take the latter, I think we still are very acquisitive.

I think we have seen a step up in our development activity in the second half of 2011.

We're seeing quite a lot of opportunity coming across our plates at the moment.

We're continuing, though, to be very selective, looking at opportunities that provide strong early returns.

And we would expect to have a good flow of development activity in the course of 2012, but of course we never project what that would be.

But we still are in a development mode.

And, as you've seen from the slides, particularly in relation to net debt-to-EBITDA, in terms of the maturity profile which Maeve showed, we're very well positioned to take advantage of whatever opportunities may come across our desk; from our own efforts in terms of looking and seeking out opportunities in the sector; and indeed from any opportunities that we may be presented from some of the restructuring that is going on amongst some of the more indebted players in the industry.

Your other question related to Secil/ SEMAPA, Albert, just to maybe clarify on that.

If I said Secil, I did indeed mean to SEMAPA, I misspoke.

So it is indeed SEMAPA.

And they've just lodged their intention to appeal.

We don't know the basis of that appeal.

It will become clearer when they lodge and file that in Paris in the coming weeks, and we know what the basis of that appeal is then.

But it is indeed SEMAPA, not Secil.

I think your third question -- your first question, Ian, related to write-downs.

I think one of the factors, obviously in a general sense, which limits the impairment and the necessity for impairment at CRH is that we've always been very rigorous in the valuations that we've paid for businesses.

So that obviously is the overall context in which you're asking the question.

I'd ask Maeve to comment specifically in relation to your question relating to Iberia.

We have -- in Spain, our main activities in Spain are the readymixed concrete, and we do have a 26% stake in Uniland.

And we run the impairment numbers for our investment there, and we don't see any requirement for impairment.

Excellent.

That's very clear, thank you.

Robert Eason, Goodbody Stockbrokers.

Just in relation to the outlook statement and the guidance that you're going to see, or you expect like-for-like growth at a Group level, I was just wondering how that is split between Europe and the US.

And in relation to the latter, what are your underlying assumptions for the individual segments?

It looks to me that you're flattish on infrastructure, and you're a bit more cautious on the residential market than some other corporates out there, who are looking for strong double-digit growth.

Obviously, Robert, it's very early in the year.

We're in the winter months, when it can be difficult, in some cases, to gauge the level of likely construction activity in the latter months of the year.

But I think we would feel that there is a more positive dynamic overall in the US, and that has been reflected in our guidance for further like-for-like progress in 2012.

Also, in Europe, it's not at all consistent, if you like, in terms of the performance in the individual economies.

We've got the continuing weak economies on the Western shores.

We have some softness, which we've seen in the third quarter, in countries such as the Benelux.

But then we have 25% of revenues overall for the Group coming from countries such as Finland, Poland, Switzerland, and Germany.

So, overall, the dynamic remains pretty good.

So, all of that is reflected in our guidance for progress for the year as a whole.

We wouldn't, at this stage, be breaking it down in the granular fashion in which you'd like to see it.

But I think it's those particular factors that feed into our overall guidance for the year.

Sorry, just two further questions.

You mentioned, or Maeve mentioned in the presentation about pension costs, can you just give us an idea of how much that was in 2011, and how much we should be factoring in from a cash flow perspective in future years.

And also, there was a comment that you continue to look at the portfolio of assets that you have in the context of the disposals you did last year.

Should we be expecting any disposals this year?

I think there could well be some disposals this year.

But, again, just as we can't control the timing on acquisitions, we can't precisely control the timing on disposals.

I think you shouldn't be expecting anything on the scale of proceeds from disposals that we saw in '11.

You shouldn't be expecting that to be repeated in 2012.

But I think we will be looking at the portfolio and moving some surplus assets and that along, so there should be continuing proceeds from disposals.

With regards to pensions, Maeve, you might deal with that, please.

Thanks, Miles.

Yes, Robert, the figure in 2011 was of the order of EUR100 million, and that compared with about EUR35 million in 2010.

So we're expecting the figure for 2011 to be somewhere between those two numbers.

Thank you.

Paraic Quinn, Bloxham.

A couple of quick questions.

First, I don't think I missed it, but just I was wondering, in terms of the weather disruption in Q1 of 2012, and in particular, I suppose, areas that were severely impacted, like Poland and Ukraine, and just what impact that's had on your business.

The second question then just, maybe, on I suppose Martin Marietta and Vulcan; just, where that transaction come to pass, the impact you would see, either positive or negative, for your Americas Materials business.

And then finally, just can I go back to Doug and just ask him to confirm the numbers for the US asphalt that he gave, which I think was prices up by 10% to 15%, and unit variable costs by 5% to 8%?

Thank you.

Thanks Paraic.

Henry, the weather disruption in February?

Yes, Miles.

Following a good month in January, we did have severe winter weather in Switzerland, Poland, Finland, and Ukraine, as you mention; and we had three very quiet weeks, production-wise and sales-wise.

Now we're back in business in the last week.

It's the low season in all markets and we hope that over the next few months that we will see a recovery of the market.

Thanks, Henry.

Doug, two questions there for you.

Any opportunities if the Vulcan/Martin combination were to proceed, and just to confirm the numbers.

In terms of the Vulcan/Martin merger, we would see any negative out of that, particularly.

We're a big customer, or big supplier with those two companies and we would see that operation continuing without any negative effects.

We do suspect there will be divestments that will come out of that, especially in the southern tier states.

And those divestments would occur in areas that would be quite attractive to Oldcastle and our positions downstream in terms of asphalt and readymixed and so we would look to potentially take advantage of those opportunities.

As Miles and Maeve talked about, we have the financial firepower to take advantage of those, if they become available at reasonable prices.

So we do expect that to be a positive, if it comes to fruition.

In terms of asphalt, yes, you're correct; we do expect liquid asphalt to be up 10% to 15%.

And given that's about half of our unit production costs, costs in asphalt will be up about 5% to 8%.

We are, of course, doing things to mitigate that increase.

We're continuing to increase our recycled asphalt used in production.

We moved ahead about 0.5 percentage point last year; we expect to move ahead this year.

And we also are pushing one-mix asphalt, which helps us to use more recycled, which is a new product for us.

It comprises about 25% of our asphalt production today.

So we are taking steps to mitigate the cost increases.

Okay, thank you very much.

In the interests of time, I think we've one more question on the lines, and then a few here from the webcast, which we'll deal with.

Arnaud Lehmann, Credit Suisse.

I have a couple of questions.

The first one is on the net debt.

I think back in November you guided for net debt below EUR3.5 billion, and you actually come out today with a debt at EUR3.5 billion so could you just explain us what has been the single factor that made the debt probably a little bit higher at year end than you were initially expecting?

That's my first question.

My second question is coming back on Europe.

Actually, you made very useful comments on the outlook for the US margins for Materials, Products, and Distribution, could we please get similar comments for European Materials, Products and Distribution, if possible.

Thank you.

Maeve, in relation to the net debt.

Thank you, Miles.

There isn't actually one single factor; there are three things that happened in the run up to the end of the year that affected the net debt number.

The first one was the strong weather and trading in the last few weeks of the year, which gave rise to the working capital outflow that I talked about for the year as a whole.

The second item was the acquisition spend.

You remember, in November -- or at the time of our November update, we had EUR450 million of acquisition spend.

The final out turn was EUR610 million, so there was a pickup on acquisition spend in those last few weeks of the year.

And the third factor was the strengthening of the US dollar.

Over half our debt is denominated in US dollar, and the US dollar moved from a rate of about 1.37 at the time of our November update to 1.29 at the end of the year.

So that strengthening in the dollar made our US dollar debt a higher number in euro.

So those are the three factors that affected the closing balance.

Thank you.

And Arnaud, you had a question on Products and Distribution in Europe; Erik, can you deal with that?

Yes, okay.

On the Distribution side, we believe the margin will be most increased for next year.

It depends a bit on what happens in the eurozone, so a fat margin could also be the outcome, but we still believe that it can be slightly up.

On the Product side, we will have a few positives; that is that in 2011 we had EUR40 million of restructuring costs in the results.

And we -- and the disposal we had of companies, there were loss-making months before we sold them so it has a negative impact as well.

So and then the impact of restructuring costs, we will expect that the margin in Products will go slightly up in 2012.

Thank you, Erik.

I have just two questions, I think, from those listening on the webcasts that haven't already been dealt with.

One relates to the outlook for Canada in 2012, Mark?

Well, our Products business up there, Miles had mentioned that acquisition we did in Eastern Canada.

Really, that was we had a capacity issue up there where we were hauling material from the US up there to do that.

So we bought that, and that business is going to be positive and will grow on that part of it.

But the piece on our BuildingEnvelope, our glass business, we had a lot of work in Canada in the last couple of years.

We still have some.

It's not going to be as strong as it was in 2011 this coming year, so that is a concern there.

But, overall, Canada overall is going to be pretty flat, I think.

Thanks, Mark.

And the final question, Henry, I think it relates to the incremental contribution that you might see from Ukraine arising from the commissioning of our cement plant in the back end of last year.

With the benefit of this plant in production for the full year, we would be hopeful that, that would kick in around EUR30 million in essentially fuel cost reduction for the production that we plan for the year ahead.

So we have a very low cost facility here now, and if we can maximize its use during the year ahead, as we expect, then that'll be the kick in from there.

Great.

Thank you, Henry.

I think we've run on a little longer in the Q&A than we would have expected.

I thank you for compartmentalizing your questions in the fashion requested; appreciate that.

I think we will, obviously, be talking to you again in May with our trading update statement in association with our Annual General Meeting.

But in the meantime, as you go away, if you've any further questions that haven't been fully satisfied or answered today, do feel free to contact us in relation to the -- to our Investor Relations website.

As you go, I'd just like to remind you of some of the fundamental strengths of CRH that have seen us weather the recent pretty tough years in our industry in a good fashion, and these are the strengths which support us as we go forward into 2012.

These are proven business model; a rigorous approach to acquisition evaluation through good times and bad; our balance sheet, which you've seen in the slides that Maeve put up, is one of the strongest in the sector; our dividend delivery, where we have a unique sector record; and our acquisition capability, with the flexibility, again that you've seen in Maeve's slides, to take advantage of appropriate opportunities across our business portfolio.

So thank you all, again, for your attention this morning.

We look forward to speaking to you later in the year and to updating you on CRH's progress in 2012.

Thank you, all.