CRH PLC (CRH) 2014 Q4 法說會逐字稿

Well, good morning to you, ladies and gentlemen.

I'd like to welcome you to the 2014 results of CRH.

My name is Albert Manifold; I'm the Chief Executive.

I'm joined this morning by our CFO, Maeve Carton.

Morning, all.

And in the audience this morning, we have Mark Towe, who heads up our US operations.

And Mark is going to join us up on stage after the presentation, which will run for about 20, 25 minutes, or so.

What Maeve and I want to do for the first five minutes, or so, is just run through some key themes of the business, and how the business has performed in 2014; and then I'll take you through some of the main operations, after that.

Really, what I want to do, in pointing out some of those key themes, we want to discuss a few things, in particular.

Last year, we set out our strategy for CRH for the coming years, and we want to go through and see exactly how we're delivering against that strategy.

We also want to see how our earnings have grown through the year; and, in particular, the parts of our business that have driven those earnings, and why.

Also, we want to see exactly how our returns and earnings have grown through the year, and how they've moved, and how we will focus on that going forward in the years ahead.

And capital allocation is a key focus for the Group, as we face into the new phase of industry growth.

And we'll be talking about how we put that to work for CRH during 2014, divesting of businesses and reinvesting in -- at lower multiples.

But maybe just looking at some of the key highlights here.

And we talk about this being a year of earnings growth, and it has been a year of earnings growth for the whole Group, but it's also been a year of earnings growth for each of the individual six divisions.

And that's very good to see; good progress by all the businesses there.

In getting that earnings growth, we've seen an increase in returns in each of the six divisions, as well, and that's helped deliver the increase in overall RONA for the Group of 1.5%.

So, very good to see that, a step in terms of progress last year in 2014.

More importantly for us as operators, we see margins have improved in all six divisions.

And that's a real sign of the health and strength of a business when at last you're moving margins in the right direction and getting them at least on a first step back to where they should be for this industry.

Those margin increases didn't just come as a result of strong markets, which, for sure, we had in the United States.

We didn't have them in Europe.

They came as a result of all the restructuring and reorganizing that we did in CRH over the years; all the focus that we have now on operational excellence, the focus we have on commercial excellence, the focus we had through the portfolio review of realigning our business towards future growth.

And that all helps deliver improved margin, and helped deliver that improved operating leverage of 22% for 2014.

And that hard work is also evident in the cash flows for the year.

During 2014, our operations generated EUR902 million of cash.

That compares with EUR736 million last year, so a significant improvement, as a result of focusing on capital expenditure; paying attention to trade working capital; and, basically, doing the good things well, with a lot of work.

We also paid a lot of attention to the reallocation of capital and the efficient use of that capital during 2014.

During the year, we divested 16 businesses at a total proceeds of EUR350 million.

And those proceeds were reinvested in -- we spent approximately EUR200 million on 21 acquisitions during the year, at much lower multiples.

So a focus on freeing up capital and reinvesting it at good value at lower valuation multiples.

So how did the year turn out?

Well, let's just look at some of the big numbers here, the big-picture numbers.

And before I do this, I should say to you that a lot of the detail and the data you would expect to come from CRH, they're included in the appendices to this presentation, which are on our website, and they remain there for some time.

They're also included at the back of the pack that people who are in the room here this morning got as a hard copy, so a lot of that detail is there.

But returning to the big-picture numbers here, we can see revenues just a tad under EUR19 billion for the year 2014, up 5%.

However, earnings, more importantly, were up 11%, with an EBITDA delivery of EUR1.64 billion, which is ahead of guidance, really on the back of a strong finish to the year, both in Europe and in the United States.

And we see EPS just coming in a touch under EUR0.79, up 33% on 2013.

And we're delighted to be able to deliver that type of earnings for our shareholders in 2014.

And with that strong cash generation during the year, our net debt at the end of the year was EUR2.5 billion; that's 1.5 times EBITDA, and EUR500 million less than year-end 2013.

So a significant strength in the balance sheet, which supported the payment of a dividend of EUR0.625 per share.

That makes 2014 the 31st year of dividend delivery for CRH, a record of which we're very proud.

So, overall, a good strong outturn, reflecting some pickup in activity in December, and a good finish to the year, and a little bit ahead of the guidance which we gave in November.

Thanks, Maeve.

What I'm going to do now for the next 10 minutes, or so, is take you through the individual businesses of CRH across the Americas, of course, which is that bigger part of our business; but primarily, firstly, across Europe, and take you through the individual businesses and how they performed during 2014.

First, and foremost, I want to talk about the European backdrop, and what we saw in 2014, and how we see the year changing, as it did do during the course of the year, and how we enter 2015.

Well, happily, across the European area we saw economic growth recovering for the first time in many years.

We saw economic growth, broadly speaking, about 1% across the eurozone.

But it's a mixed bag.

There are a different levels of recovery, different paces of growth, and it's all about your footprint in Europe.

As we looked in our footprint in Europe for 2014, it very much was one across Northern and Eastern Europe.

We've spoken about that before; the countries which are solid and stable.

And we saw a normalization and a stabilization come to some of those markets that had been falling for several years before that.

And we saw growth returning to the Eastern part of Europe during 2014.

Now, 2014 was significantly influenced by weather, and you have to try and read through that weather.

The first half of the year last year, we had very favorable weather conditions and very strong construction (inaudible), which we were glad to see.

But, of course, what it did do was it pulled forward work from Q3 into Q2 and [Q1].

And that meant, reading through the year, when we saw that dip down in the summer we all thought, well, there's something else going on here.

But happily, we saw a pickup in activity levels, particularly towards the end of the year, that helped contribute to that delivery, ahead of guidance we spoke about earlier on.

And that [tests] well for the growth of our business coming through in 2015, which we'll talk about.

What you will see, as you go through the European businesses, on top of the very modest top-line growth, very strong delivery on leverage.

That doesn't happen by accident.

It happens by, as I said, the reorganization, and the restructuring, and the cost cutting that we did in CRH over the years; and also, about the realignment of our businesses in Europe, as part of a portfolio review.

And also as a result of all the groundwork we do at the day-to-day stuff in operations excellence and commercial excellent that drives the pennies across our business, and helps deliver the leverage you will see coming through our European businesses.

Switching to our biggest material business in Europe, Europe heavyside, and let me explain to you what that division actually is now.

This is our old Europe materials business, which was cement, aggregates, and concrete.

And to that, we've now added, effectively, the heavy side of our old Europe products businesses.

That would be precast, prefabricated concrete, pre-stressed concrete.

Effectively, any product stuck together with cement or clay goes into the new heavyside business, with Europe materials.

And the reason behind that was because we wanted to really force through that vertical integration that drives so much value for CRH, not just in the fact it strengthens the chain, but cross-selling products; the network benefits in terms of dealing with the same customers with different products, and, of course, lower costs, lower back-office support.

And you'll see the benefits of this coming through on a very modest top-line growth, fairly significant, [up 40%], leverage dropping through on the face of this year, bigger on an organic basis; and a very good uptick in margin as well.

All of this achieved with absolutely nothing happening on price.

In fact, price is going backwards.

That really attests to the strength you have very tough top line, but what happened inside the business delivered a very good bottom line, and a good performance by this division in 2014.

I now want to move to our Europe lightside business, and just to explain to you what's in this particular business.

This effectively is the rest of Europe products, so all products that are not stuck together with cement or clay.

And it's made up of four main areas: construction accessories, shutters and awnings, fencing and security, and a composite access chambers business.

This business is very much focused on innovation and product development.

It's a high engineering focus, where we work with architects and engineers, devising solutions for the residential and non-residential construction market in Europe, because that market is changing.

That market is changing construction technologies, construction techniques; makes speeding up construction, easing construction itself, all of that is coming to fore.

This is a billion dollar business, EUR1 billion business, focused mainly on Western and Northern Europe.

And we saw very strong growth in this business year on the bottom line.

Again, that came through the realignment of this division towards those future growth trends, a very important part, and restructuring this business and taking costs out.

We see revenues ahead; we see earnings ahead; we see margin ahead; we see returns ahead, and leverage of 40%.

A great performance.

This is our most best -- most improved division in CRH in 2014.

And this division has a lot of road ahead of it for growth.

Now moving to our Europe distribution business.

This distribution business is something which we've spoken about at length, about its resilience.

This is about 900 store chain -- 900 stores across a Western and European footprint.

Revenues of about EUR4 billion, as I say.

And against that backdrop of a reasonably tough market, a good performance on the top line.

And if you take out the pension gain that's there in 2013, a fairly resilient performance on the bottom line.

Good leverage coming through, exactly where you would expect it to be for distribution.

And a good, but small, uptick in margin, which is good to see coming through this business.

So, a good performance by European businesses in 2014.

Moving to North America, and just to remind you, we make about 60% of all our EBITDA is generated in North America.

We're the largest building materials business in North America.

The macro fundamentals are very positive.

The good demand levels that we saw in 2015 are on the back of a recovering US economy.

You've got a growing population; significant construction needs; growing consumer confidence; and an ability to fund construction.

All of this is being led primarily by a recovery in residential and non-residential.

That's 50% of total construction in the United States.

The other 50% is infrastructure, which is relatively flat and stable, and I'll talk more about that anon.

But what happens there on the back of those fundamentals, and, of course, the refocusing of our businesses on the key growth areas, operational excellence and commercial excellence, driving value through our businesses, we saw growth in all three of our US businesses in 2014.

Just moving to our most important division in CRH, US materials, this division produces 40% of all the EBITDA of CRH.

And like-for-like sales were up 7% on the previous year.

We saw good volume increases, and good pricing increases across most of our products; a good profit recovery; and a good increase in margin, as well.

But remember, all of this is coming through just purely on residential and non-residential.

For this business, actually, that's only about 40% of our total sales with that sector.

The other 60% of our business is pretty much relatively flat.

Now we have seen some increase in highway construction during the course of 2014.

If you look at the ARTBA numbers, which are industry numbers, you'll see month on month, for the 11 months that are available to the end of November of 2014, in each month we saw an increase on the comparable figure in 2013.

So a good, consistent delivery there.

But it's primarily coming through on the back of increased state funding.

Federal funding was flat.

During the course of the second half of last year, there were 90 initiatives brought before state legislator, and 60 of those were passed to increase funding for infrastructure spend in the United States.

Across 16 states they have identified $16 billion of extra funding, which will roll out over the next three or four years.

That will provide an uptick in overall construction for infrastructure, as we go forward.

So it's at least something, without the support of fed coming through.

I should say, this division had a very strong finish to the year end.

We had a good second half of the year, and good momentum coming into November and December.

We finished the year with backlogs well ahead of last year; about 10% up on last year.

That gives a good momentum for the first quarter of the year, which, of course, is very low, but still is a good indication of where volumes are.

And we're hopeful for further growth in this business in 2015.

Moving to our Americas products business, and, again, just to remind you, this is a business that is focused almost exclusively on residential and non-residential construction.

This produces architectural products.

It produces precast products for infrastructure and for non-residential.

And also, it has our Oldcastle BuildingEnvelope, which is our glass and lighting business, which is almost exclusively a new-build non-residential business.

So with that focus on those growth markets of residential and non-residential, we saw a good delivery during the year.

But this business got off to a very tough first half of the year.

You might remember, in August of last year we were well behind the previous year.

But I have to give complements to the team here; they got stuck in.

And through significant commercial initiatives, through focusing on markets, through focusing on margin and cost, they drove this business hard in the second half of the year.

And as against a backdrop of an improving residential and non-residential market, they delivered a superb job, which meant for the second year in a row we saw revenues, earnings, margins, and returns ahead of the previous year.

Broadly speaking, the increases we saw came across the southern part of the United States and out west; very strong performance there.

But interestingly enough, in the second half of last year we started to see the northern part of the United States pick up for the first time in six or seven years, in particular, in the major metro areas of New York and Boston.

That's interesting to note and see.

Moving onto our US distribution business, and, again, just to remind you, this is split into two particular pieces.

60% of the business is aligned to our roofing and siding business, with sales and distributed products for the residential and non-residential markets primarily across the northern US footprint; and primarily focused on OMI, not new construction.

And that business actually had a tough year.

As you would have seen by some of the announcements that others who service this market, overall revenues for that market were down.

Actually, we were up by about 1%.

The overall market was down about 4%.

But through careful work through the P&L account, the team produced a very satisfactory performance for that part of the business.

However, the other part of the business, which is 40% of earnings and revenues, comes through from our interior products business.

And this is the distribution of wallboard and ceiling systems for the residential and non-residential market.

This was focused very much on strong growth and they capitalized on that strong growth.

Very good market share growth, very good commercial initiatives.

We saw volumes and prices move ahead, albeit on the back of a very strong residential market, for multi-family homes in particular, and non-residential.

This market is more focused on the south and west than the northern part of our interior products business -- our exterior products business.

And it had a great result.

And that drove returns and margins in this business in 2014.

So a good delivery.

And again, this business finished with a very good backlog at the end of 2014.

The last quarter was up about 8% on 2013, so a good performance overall by US distribution.

So, with a look at that, we feel that we had a good delivery in the last quarter, and we've got good momentum coming into 2015, this particular part of our business.

Before I let Albert head off into 2015, I'm going to bring you back to 2014 for a minute, or two.

This slide here just shows the summary of those individual segment performances, as they resulted for the Group.

As Albert was talking through the segments, you have heard about a good finish to the year, a nice strong December, which allowed the full-year results be a little bit ahead of the guidance which we gave in November.

While there's a number of moving parts on the slide, the highlight for me, and the one I'd like you to concentrate on, is the line of organic performance.

You'll see there, organic EBITDA of EUR164 million in the year, representing a 22% operating leverage.

For us, that represents the effect of all that strong work and hard work we've done on operating performance on delivering, working hard to make our businesses better.

Moving onto cash generation for 2014, again, one of the highlights of the year, with the attention being paid to capital expenditure and working capital that I talked about really coming through for the Group.

Again, there's one number that's a highlight on this slide for me, and that's the fact that the increase in EBITDA translates 100% into an increase in cash.

I think that shows the strength of the cash generation capabilities of the Group, and the attention that we pay, day in, day out, to managing our cash and focusing on cash generation.

The other side of that attention to cash and financial discipline is, of course, on the balance sheet.

And we pay a lot of attention to making sure that the Group is funded properly, has liquidity, has a maturity of debt profile, all of which is expressed in this graph here.

The tall green line is our cash at the end of 2014, EUR3.3 billion of cash.

And the blue columns there are the maturity profile of our debt.

We spend a lot of time making sure that the maturity profile is well balanced out over a number of years, and that it's not going to put the balance sheet under too much stress.

The main line of interest for me on this slide is the red line, which shows our interest costs at the moment, and how we see them progressing over the next number of years.

As you can see, we expect the interest costs to go from a current level of over 4% down to around 3% in 2019, and thereafter.

That's the effect of our strong balance sheet, which allows us to go to the markets, the debt capital markets, and raise money at the lowest rates that CRH has ever paid, below 2%, during 2014.

And that is securing the future profitability of the Group.

Talking about the balance sheet, after year end we had the announcement of the Lafarge-Holcim transaction, which will have a significant effect on the balance sheet.

EUR6.5 billion of enterprise value is the total effect.

EUR1.6 billion of that cost has been financed through the placing which was announced at the same time as the acquisition.

We've got -- some of that tower of cash that we have at the end of the year is going to be used to finance the acquisition.

We're going to use about EUR2 billion from cash resources.

And we have facilities in place to finance the remaining EUR2.9 billion.

So, the net effect of that on our year-end debt, which was EUR2.5 billion as reported, would be to increase it to EUR7.4 billion.

And the net debt-to-EBITDA cover will increase from 1.5 times at the end of the year to a pro forma 3.1 times.

One of the key focuses for all of us over the next number of years, or next 18 months, or so, is to demonstrate our commitment, and show the realization of our commitment, to restore our debt metrics back to normalized levels by the end of 2016.

And with the strong cash generation capabilities that we've already been talking about in 2014, and also the divestment program, which has already delivered significant progress since the middle of last year, and will continue over the next 18 months, we're confident that we will be able to do that.

And while Lafarge-Holcim is a key part of the story of CRH in 2015, and it will be a key part of the growth and future strategy of CRH as we go forward, I think it's worthwhile, perhaps, to reflect on exactly how we delivered on the strategy that we set out this time last year.

There were a number of key objectives we set out.

First of all, we said we felt it was absolutely essential to set out our clear objective to bring back returns and earnings back to peak during the course of the current cycle.

And how did we deliver against this?

Well, all six divisions showed growth in EBITDA and growth in returns.

So a satisfactory first year with regard to delivering against that strategy.

Now, it didn't just happen because the markets.

For sure, we had a good tailwind in the United States.

But Europe was fairly lackluster.

And really as a result of all the hard work we did over the years, of restructuring and reorganizing our businesses; cost cutting, and resetting, and resizing; and, really importantly, aligning our businesses towards the growth as we see it as it evolves in front of us.

Very, very, important.

And that focus on operational excellence and commercial excellence which drove the performance, and the focus on cash that helps fund the performance, and that will remain a key focus for us as we go forward in the years ahead.

We also said we want to focus on our portfolio.

This time last year I stood in this place, and with Maeve and myself we talked about how we were going to review our portfolio during the course of 2014.

Well, we got to work and we reviewed that portfolio.

And during the summer, we identified about EUR1.5 billion to EUR2 billion of businesses that we would sell over the course of the next three years to five years to recycle that capital back into businesses, to create more value for our shareholders, creating a narrower and deeper and a business with greater value for our shareholders.

And how did we do?

Well, we're very happy to say that we've proved to ourselves we have the ability to redeploy capital in a way that creates value for our shareholders.

In the first seven months of our multi-year disposal program, actually, we have signed and closed deals of almost EUR1 billion.

But more importantly, we've sold those businesses at 11 times EBITDA.

And even more importantly, we've recycled the proceeds back into CRH at 7 times EBITDA last year for the EUR200 million of bolt-on acquisitions we did.

And, of course, the remaining part of those proceeds will be allocated against the Lafarge-Holcim transaction at 8.6 times EBITDA.

That's just good management.

That's just doing the right things.

And we will continue to focus on that, going forward.

This is now an embedded part of our strategy in CRH.

We will chase out stranded capital wherever it is, because it's a key part of our objective in bringing returns and margins back to peak in the course of the next cycle.

I thought it worthwhile to take a few moments to talk about growth in CRH, because CRH is changing.

It's changing because of the Lafarge-Holcim transaction.

It's a very important deal for us, it gives us new footprint for growth.

And it's important to see exactly how we think about this going forward for the coming years.

But before I get into the individual component parts of growth of CRH, can I just take a step back and address something we brushed by very quickly?

Every day of my life, and the life of the team in CRH, we have to live in a notoriously cyclical industry.

Construction just works in cycles.

If you look over the last several decades, it's about a seven-year cycle.

And no matter how good a manager you are, no matter how good a business you are, no matter how good your market position, the cycle will always win.

So where are we in that cycle?

Well, last year we said we felt 2014 would be a return to profit growth; that implied 2013 was the trough, or a trough.

But these aren't our numbers here, they're PCA and EUROCONSTRUCT.

And you may disagree with the absolute numbers that are there, but the direction is clear.

And our performance in 2014 supports that direction.

And we believe that, for the next number of years, in our major markets, we are entering a phase of cyclical construction growth.

And that's a good first step to start talking about growth in CRH.

So let's turn to our major market first, North America.

If I combine the Lafarge-Holcim assets with our existing footprint, of course, not only do we remain the largest building materials business in North America, we do so by a bigger leap.

In the future, 50% of our EBITDA will be generated in this geography.

But can I ask you to focus on one number?

Look at the annualized growth forecast for North America from 2015 to 2025; 4% per annum.

That's as a result, of course, of a slowdown; it's a result of construction needs.

But that strong organic growth coming through our businesses is going to drive value for our shareholders, and drive our performance.

And when you overlay that with our acquisition model, the infill acquisition model that has been proven over the years to produce returns for our shareholders, and further vertical integration, particularly in the United States, that gives us a great feel to go and pursue our strategy.

And now, having a new platform in Canada, resource-backed platform of cement and aggregates which is not really vertically integrated downstream, the very thing that we do ourselves, that gives us a new platform to go and prosecute that strategy across the Canadian markets.

So, we think we're well set for growth in a balanced way across end use sectors, which has been so important for delivering the consistent delivery of returns for CRH over the years, and we will continue to do that.

This is going to be a great place to do business over the next decade.

Moving to Western Europe, combined, our Western European footprint, and I'd put the Lafarge-Holcim assets on top of our current businesses, we'll have about EUR1 billion of EBITDA coming through Western Europe.

Now, there are 14 countries there, but actually six countries of those will make up about 80% of the EBITDA of this particular region for us.

And let me talk about those six countries in terms of how we're fixed for growth.

UK, Netherlands, Germany, Switzerland, Belgium, all of those are now in a position where we see growth going forward, in the short term and medium term.

The one country I haven't mentioned is France, because France is not going to see growth.

France is going to see further declines in construction in 2015, we're seeing it already, and you may see it even drift into 2016.

But it's the second-largest economy in Europe.

It's the second-largest construction market in Europe.

France will come back; it's just at a different stage of the recovery cycle.

But our footprint here in Western Europe is solid.

And, of course, if you listened to what we said when we talked about the Lafarge-Holcim transaction, there are significant network benefits, like overlaying the Lafarge-Holcim assets over our existing asset base; just like what happened in our Europe heavyside business when we did that on a smaller scale.

The advantage of the French assets, the advantage of the German assets, how they fit with our Northern European and our Central European footprint, and the opportunity to network our UK businesses with our Irish, Spanish, and, indeed, the Belgian and Dutch businesses with regard to cement trading, there are significant opportunities there.

And we shouldn't forget about the fact that there's EUR5 billion of our businesses coming through our lightside businesses and distribution businesses in Europe.

Distribution is a strong growth area for us in Europe; EUR4 billion of sales.

We have signed an option to acquire a controlling interest in the number two building -- materials distribution business in France, in (inaudible) in 2018.

That would significantly step up our business in that part of the world.

And this lightside business, we'd just focus on the growing trends of changing technologies, changing techniques in construction, and developing new products that will be a growth platform for us going forward in this territory.

So, we feel very confident we'll see a period of good growth coming forward here in the short to medium term.

And then, moving to Eastern Europe, with the conclusion of this transaction, CRH will become the largest building materials player in Central and Eastern Europe, which is going to be the highest growth part of Europe.

65% of all construction needs are going to be new construction.

Our businesses there are largely founded around cement, and the vertical integration down from cement.

And look at the growth rates: 4% per annum from 2015 to 2025.

Again, that's strong organic growth, being a great base for growth for our CRH businesses going forward.

And we now have increased production flexibility by bringing the Lafarge-Holcim countries of Slovakia, Hungary, and Romania, and Serbia into our Polish and Ukrainian businesses.

And we've increased network benefits, being able to market the products we sell across those countries together.

And we have vertical integration opportunities.

And we have increased procurement advantages.

All of these adding to internal self-help things we can do, on top of the organic market growth.

So, a good growth story going forward for Central and Eastern Europe for the next decade.

And now looking to Asia, I'm not going to try and sell to you the merits of Asia and the need for growth for Asia; you all know them.

Half of all humanity is out there, almost 60%.

Significant growth needs, 7% per annum, on the back of very rapid urbanization.

We have our markets in India, we have our market in China; these are good footprint positions that CRH will slowly continue to build in line with returns.

We invest $1 in Beijing, as we invest $1 in Boston.

You expect the same returns, and you should, because we do too.

And we will slowly increase our investment there as returns and profits increase.

But now we have a very interesting opportunity in the Philippines.

Through the Lafarge-Holcim transaction, we've get an opportunity to acquire the second-largest cement producer in the Philippines; a very profitable business with growth to 2020, and beyond; and, again, the opportunity to roll out our vertical integration model there.

So we're going to have an increase in our exposure to Asia, which is very welcome, and I think it will be very profitable.

And looking at South America, a very interesting niche position in Southeast Brazil; a top five player, a cement producer that supplies both the Rio de Janeiro and Sao Paulo market.

We haven't owned this business yet.

When we get to own this business, we'll sit down with the management and look and see how the strategy of this business could be developed going forward, and we'll come back and communicate that to you in time.

So, a lot of -- a story of growth and of aspirations for growth.

Maybe I'll now turn to my colleague, Maeve, who might tell me how, in the name of God, we're going to pay for all of this.

Well, the answer is, of course, the financial agility that CRH has through paying attention to the basics of cash management and efficient capital allocation.

This slide here shows the five key components of that capability.

The financial discipline, we've already talked about.

That supports the strong investment grade rating that we have.

And we've mentioned before the rating that we have with S&P, which is unchanged since we were first rated in 2001, so the BBB+ rating.

The strong cash generation capabilities which fund the growth that we intend to make.

The balance sheet strength, which gives CRH a key competitive advantage in our industry.

We are very well placed in the industry to take advantage now of the opportunities that present themselves in the near and longer term.

And that capability that we've demonstrated in 2014 in terms of capital efficiency; selling businesses and reinvesting them at better valuations.

We think that is a critical part of our financial agility being demonstrated.

So, that's a key strategic asset for the Group.

Thanks, Maeve.

I just want to take a moment to finish up on a couple of slides, just to talk about the output for 2015.

We talked about the long term in terms of the growth [opportunities], which we're very confident in, but let's talk about 2015.

Well, I just want to remind you that we got off to a tremendous start in 2014.

I'm getting my apologies in first.

It's a very challenging first half of the year to try and match, particularly in Europe, so please bear that in mind when we come back and update you in May, and, indeed, report our interim results.

But in saying that, we have got off to a good start to the year.

As I said to you, backlog is ahead in our materials business in the United States, about 10%, good backlogs coming to our distribution business.

And our products business, which doesn't really have backlogs, it just has activity level at this stage, but good sell-in to the early stage big box stores of Lowes and Home Depot for their early spring season.

That sets us up for the season.

And we've got a good first couple of months there.

And, actually, a pretty good return to business in Europe as well.

A nice start to the year.

Not as good as last year, but not far behind.

Ahead of our expectations.

And, again, we're starting to see growth coming through in some of our important countries this year.

The Netherlands, in particular, at last, thankfully, is returning to growth.

So good stability in our European business, and a good opportunity going forward.

And there's a good backdrop in those markets, which we think will continue to drive growth going forward.

I should say to you that we have, of course, got external factors in our favor; we have got lower commodity prices.

But please be careful, this is not the bonanza some people are talking about with lower commodity prices.

Our customers read the newspapers, too, and they have been onto us during the course of the second half of last year, and particularly the last quarter, looking for lower prices.

They know our cost base and they're onto us to make sure they get the benefit of that, too.

We think it's a plus for CRH, but it's not a bonanza.

And similarly, on foreign exchange.

Of course, we get the advantage of translating our dollar profits back with a higher dollar rate back into euro, and, of course, the Swiss franc.

But, of course, we buy materials in dollars.

A significant part of our energy costs, particularly on the heavy side businesses in Europe, are denominated in dollars.

That's going to cost us more.

We have, of course, got a headwind with regard to the currency in Ukraine, which has collapsed during the course of 2014.

So again, overall, net-net-net, it should be a positive, but it's not the bonanza people think it might be.

But it will support improved earnings next year.

We are seeing a continuation of the positive pricing that we saw in 2013, and 2014, in the United States, and we think that will continue in 2015.

But let's be consistent.

We have told you time and time again, in our experiences, that you have to see volumes come back for a couple of years before you see pricing come back.

And the volume recovery you saw in the United States last year supported good pricing coming through.

How couldn't it?

It was a 5%, 6% across our major products.

And that will continue in 2015 in the US, we think.

But Europe is much more mixed, and much more muted.

The volume recovery that was going to support those price increases did not come through in 2014, and I don't believe it's going to come through in 2015.

I'm sure we'll go through this in the Q&A, but the [bank on] is just not there for it yet.

It will be in time, but not yet.

But all things considered, we do look forward to a further improvement in earnings and returns in CRH; and we believe 2015 will be a year of profitable growth, again.

One last slide, and it's a very personal slide on behalf of the management team, who actually asked me to present this slide, because every day of their lives this is what we focus on in our operations.

And we try and distill it down to five key metrics.

We present a lot of information to you, but this is what this business is all about.

In terms of growth, how are we doing, day to day?

Well, at the end of the year earnings were up by 11%, EBITDA.

In terms of margins, the true test of our business, the health of our business, up by about 0.5% across the Group.

Our returns, up 1.5%; a welcome first step as we aim to bring our objective of us bringing returns back to peak.

And cash, we all die and suffocate without cash.

Well, not in CRH we don't.

We had an EBITDA of EUR1.64 billion and we generated cash, free operating cash, of almost EUR1 billion.

That's a tremendous testament to the strength of CRH that we can do that.

And finally, the efficiency of capital, now an embedded part of our strategy.

We have shown in the first year, and let's come back and talk about it next year, an ability to recycle cash out of stranded capital, stranded assets in CRH, and recycle it back and redeploy it back at values which provide value -- produce value for our shareholders.

And this will become a key part of our strategy going forward, again.

So, that's the story of 2014 for CRH, the end of this part of the presentation.

We're now going to move to Q&A.

I'm going to ask our Head of our US operations, Mark Towe, to join myself and Maeve here on stage.

(Operator Instructions).

Please just to, perhaps, give us your name and the name of your institution for us before you ask the question, so that everyone knows who you are.

And we'll try, as best as we can, to answer those questions.

Gregor?

Gregor Kuglitsch, UBS.

I've got a few questions.

The first one is, perhaps, the obvious one on North America.

Can you, perhaps, give us a view on the cost dynamics in asphalt, given the bitumen pricing, what you're seeing there; and secondly, on diesel, and what you'd expect to keep in 2015?

Second question is on cash flow.

Obviously, very impressive at EUR900 million free cash flow.

You clearly had a working cap in.

You had very tight CapEx.

I just wanted to understand the sustainability of that going into 2015.

Should we be thinking about outflows, perhaps higher outflows on those two numbers?

The third question is your comment on foreign exchange.

You clearly seem to be talking it down a little bit.

Just wanted to understand, with the dollar at $1.14, obviously, I understand there's other moving parts against it, if you have a best guess, maybe for Maeve, in terms of EBITDA impact that you'd estimate, assuming current spot rates prevail.

And then I suppose the fourth question, sorry for that, is on Lafarge-Holcim, and the transaction.

I just wanted to understand has anything changed, a, with the financials; and, b, with antitrust?

And finally, can you actually speak -- can you actually go in and do anything at this point?

Or are you just basically sitting back and waiting until the transaction closes?

Thank you.

Bad enough trying to remember the answers, never mind the questions, Gregor.

But there's four questions there.

Maybe, what I might deal with, just initially, with one, three and four; and then I'll ask Maeve to talk about cash flow; and I'll ask Mark to comment on the US business.

But maybe just if I take them the way you gave them there, just before I pass the question on asphalt over to Mark, who's probably the best qualified person to answer this question, you have to remember with regard to bitumen, bitumen pricing is not correlated with the price of oil.

It's impacted by it, but it's not correlated with it.

There are many other factors that come into deal with it, such as supply and demand at a particular time; and, indeed, how the oil refiners are processing material.

So it is an advantage to us at the moment in terms of lower prices, but Mark will go into in terms of how that dynamic reflects back into the asphalt business.

Maybe, Mark, do you want to just take this one?

Yes.

It's a good question, really, Gregor.

What we really focus on margins here.

What I'd like to talk about on the winter-fill, we've talked about that over the years.

Right now, we're at 57% tanks capacity, so we have a lot of flexibility between now and May, when we would think that probably we'd have 65% of that done by May 1.

The deals are coming better.

The oil prices are coming down.

The bitumen is.

We had to be careful, when was the bottom; that was the question for us.

So we were pretty conservative about -- we didn't put much in there in November and December, where sometimes we do, so we held out.

We're getting good deals now, so we'll see how that plays out.

We'd be very positive about our winter-fill.

I would say it's better than what we had last year, and we just need to figure that out.

What we'll end up doing, we focus on the margins, and we'll make positive way on the margins.

But when you see the pricing, it may be lower, but the margins will be higher for us.

So that's how we have to take a look at that.

So that's the focus that we have.

One of the upsides of that is that our customers really are fixed budget, so they've got that.

So the price, if it is lower, then we'll have more volume.

So when you tie back into our margins, so we'd be pretty optimistic about our winter-fill and our business, and the asphalt business, for 2015.

And one thing I'd like to add, at the end of the day, we're much happier seeing more volume.

We make more money processing material than trying to pass through price increases of bitumen.

So more volume means more crushing of aggregates, more sales of aggregates, more laying of asphalt, processing of asphalt; that's better for us in our business.

If I could maybe just go to the third question, and just Maeve will comment on the second question in terms of cash generation.

But just your question on FX, there's a bit of an addendum to that question, which you didn't ask, but it's an important part of it.

I said during the presentation that the costs of our major commodities in Europe are primarily denominated in dollars; I'm talking about coal, pet coke, heavy fuel oils that we use in our cement plants.

That's about EUR500 million of our total energy cost comes through those businesses.

And, of course, we're totally exposed to the dollar on those particular purchases.

And that is not a translation, that's a real cost in our P&L account.

And it comes back as a headwind.

Again, that was what I was trying to say, just to temper the expectations with regard to the translation.

But maybe I might ask Maeve to comment on the translation impact of that, and maybe pass the cash flow question to Maeve.

Okay, in very rough terms, the -- each cent in the dollar has an impact of about EUR7 million or EUR8 million on EBITDA.

So, depending on what the rates are, you can work that one out.

In terms of cash flow, the capital expenditure during 2014 was well below depreciation, and has been for the last few years.

Some of that reflects the flexibility of the Group's cash [and] capital characteristics, where at lower volumes of activity we're able to scale back capital expenditure fairly quickly.

As activities start to pick up, we would expect to see capital expenditure starting to take off as well.

Our assets are well invested, generally speaking, so there's no major backlog of capital expenditure waiting to be spent.

But we would expect the level to be coming up closer to the depreciation level during 2015.

Working capital will continue to be a very -- to occupy our attention on a daily basis.

We would imagine that as activity picks up there will outflows of working capital, rather than inflows, and I suppose that's why we're very gratified with the outturn for 2014.

We saw an inflow from working capital in spite of the trading uptick.

But I think even with those movements, we would see a strong cash generating capabilities of the Group delivering strong operating cash flows in 2015, and thereafter as well.

Thanks, Maeve.

Maybe the last question I'll deal with, Gregor, which was with regard to an update regarding Holcim and Lafarge and see where we are in that process.

The companies have done what they can do at this stage; we've agreed a deal to buy, they've agreed a deal to sell.

There are three other hurdles that need to be jumped to get this deal concluded, and that's, firstly, we need, of course, the approval of the people who own the businesses.

Primarily, in CRH that's number one.

We have an AGM on March 19, which we will ask our shareholders to approve the transaction, and I'm hopeful that they will.

The second hurdle that we must cross, of course, is we, as the purchaser of these businesses, need regulatory approval.

Now, of course, we've been in constant dialog with the regulators, in all the major markets, all through this process.

And we've been -- we feel reasonably confident, I don't want to pre-judge anything, that, that will be something that we'll be able to get through.

And then the last, of course, which is entirely outside of any control I have anything to do with, is the shareholders of both Holcim and Lafarge need to improve that transaction.

I think the indications are that the general meetings of both those companies will be towards the back end of May.

So those are the three hurdles that still remain to be [hopped] to finally conclude the transaction.

So I hope that answers your questions.

Barry Dixon, Davy.

Three questions, if I could.

The operating leverage, obviously, was a key feature in terms of the results, the 15% to 20% that you had guided to previously delivering 22%.

Any sort of thoughts about revising that target leverage figure, particularly in the context of maybe a slightly better pricing environment?

The second question is really, I suppose, in terms of -- and to say it was a busy year probably would be an understatement.

But when you look at the normal acquisition activity, and if you marry that with the sustainable strong cash generation, I suppose the joint question is, the divisional structure that stands now, is that the divisional structure that you're happy with, that can -- will take in the Lafarge-Holcim assets, and that will, I suppose, really support the growth and additional acquisition activity from here?

And how is that acquisition pipeline looking, ex the Lafarge-Holcim businesses?

And then a final question really, just on Poland and Ukraine, you might give us your thoughts in terms of outlook for both of those markets for this year, both in terms of volume, and also pricing?

Thank you.

Thanks, Barry.

I'll deal with them as best I can.

With regard to operational leverage, as you rightly say, we indicated 15% to 20%; we delivered slighted ahead of it.

I wouldn't change that for the moment.

I think you actually identify one of the two things that may change that, going forward.

First of all, pricing in Europe will change the dynamic going forward, when we see pricing coming back in Europe.

I don't see pricing coming back in Europe in 2015.

The other one that you didn't mention I think would change the dynamic, the profile of the businesses that we are buying as part of Lafarge-Holcim are better higher margin businesses.

And if you saw in the presentation that we gave out on February 2, we gave a very good chart which showed the capacity of production of the individual cement plants, and the actual volumes that they sold.

And you could see there was significant headroom within that.

That sweet spot for us, for leverage, filling that capacity from a low level up to 90%, 95% depending on the plant, so that should change things.

But again, when we buy the businesses, take them in, we revise those particular numbers that are there.

Second question was on acquisition pipeline, in terms of the rate of run rate, what are we seeing?

You remember, last year we were going through a portfolio review.

It's not that we shutdown acquisitions, but we just paused to have a look and see because we weren't sure exactly what direction we were going to go in.

We felt pretty sure for about 75% of the business, but it was worthwhile to go back and reflect and make sure that was the case.

So, we did take a pause.

But I suppose really the best thing I can say is, despite taking a pause, we still had to do EUR200 million of acquisitions.

Stock comes in every day of our lives.

We're having conversations with [mum and pops] around the world every day, and you can't just shut those down.

And that came in.

And that was probably explained the lower level, is that we were taking a pause and having a look.

The pipeline, I have to say, at this stage is very strong and very good.

The key issue for us is to retain our discipline.

We've just signed up, committed ourselves to doing a very big deal.

For us in 2015, our key objective now is to close that deal and to bed that deal down and start delivering on that deal.

That is what our agenda is for the next 12 months to 18 months.

We will still go out and acquire businesses, because the run rate of our businesses demand us to do that.

There are small in-fills we need to do around the place.

But the key objective for us, certainly for the next year or so, is to bed down the business that is there.

But the piping is very strong, I'm getting inundated with requests, I can assure you.

The last question was on Poland and Ukraine, just the run rates on what we're seeing there.

If I take Ukraine first, actually, we had a surprisingly good performance, in my opinion, in Ukraine last year.

Our businesses are in the west of Ukraine, and there are a couple of internal dynamics going on within Ukraine.

Due to the trouble that there was in the eastern part of the country, you had very significant migration from the eastern part to the west, and that actually drove construction where our markets are, which is the (inaudible) and to the west.

So volume's very strong.

We also saw prices advance last year, and that was as a result of us trying to keep ahead of a falling currency.

But, of course, at the back end of the year it dropped off dramatically, and certainly for the first half of this year.

I think Ukraine will be very challenged this year.

I don't think it's going to collapse completely.

And let me put a dimension around Ukraine: our investment in Ukraine is probably around EUR300 million, and last year we made just a touch under EUR30 million EBITDA.

It will be down in 2015, but I don't think it's going to be down very significantly.

With regard to Poland, last year we saw the Polish volumes recover strongly, up 6% nationally in terms of cement volumes; construction, of course, Poland, was up about 5%.

That was driven by two things, in particular; driven by a recovering economy, so reasonably robust non-residential, and by good residential performance, which is continuing on.

What we did start to see in the second half of the year was an increasing award of tenders for this long-awaited infrastructure projects coming through.

And let me just put some numbers around what the actual spend is here.

The European Union has committed about EUR11 billion of funds going forward for that to 2020.

And, in fact, it will extend onto 2023, because they've got three years to expand those projects.

On top of that, the Polish Government, for its own projects, road projects, and on top of EU-funded projects, is committing another EUR26 billion to EUR28 billion.

So the total spend there, sometime between now and 2020, of about almost EUR39 billion, or EUR40 billion.

In 2013, the spend on roads was about EUR3.6 billion; last year, it was just a touch under EUR4 billion, so it's stepped up.

But we did see an increase in the awards and contracts the second half of the year.

And our forecasts are we're going to see about EUR1 billion increase each year for the next -- we only need visibility for three years, so we think it will be about EUR5 billion next year, EUR6 billion, and then EUR7 billion.

So we will see an increased step up as we go forward here, and that will help drive construction growth on the back of an improving economy and higher residential.

The one thing that's missing from Poland is price.

And it's really incredible that we had again -- this is the first year of it coming through, but prices went backwards and volumes went up, it's counterintuitive.

But as I said, actually, it's not just the volume increases coming through; it's the sustained nature of them coming through.

It's great to be able to stand here this morning and talk about another geography, like the United States, where we do see strong price increases coming through in 2014.

But that's the third year of volume increases.

Let's see where we in Poland after three years of volume increases.

I think this year we will see some price Increases coming through; not what we expect.

We'll see some.

And I think it will be 2016 before we start to see it getting [full] back.

John Messenger, Redburn.

Can I just follow on your answer there, just that one Albert?

Just first off on, as you say, Poland, part of this is maybe the timing of the weather last year in terms of price increases and where they stuck.

But is there something else, when you look at that Polish market, that has held back that natural movement for volume and price?

At the what market?

Polish.

Polish market, sorry.

Yes, just in terms of following up on it.

What has meant that actually didn't perform as it should have done?

Second question was just on the acquisition, Brazil and Philippines.

Can you just let us know, first of all, Brazil, the language you use there in the presentation was slightly more [I'm] keeping with Brazil, is that the right message to take away?

Or is it still something that's up in the air in terms of a view there?

And for Brazil and Philippines, what is the strategy, as in are you buying brands?

I think Republic sits on the branding in the Philippines now, but what is the actual portfolio?

And what are you going to be selling in Brazil?

And the final one from me was, just looking at the back of the pack, your cement volumes sold in the UK was up a whopping 65%.

I think some of that is because of what you bought in Spain, but can you just give us an idea?

And does that that drop, going forward, given what you'll be buying in the UK?

Or are your imports coming into markets that would be competing CEMEX, and with the other players there?

Okay, that's like a multiple choice question, John.

Poland, first and foremost, with regard to -- what went on in the Polish market last year was really the first year of recovery of volumes coming back.

And in the first year of recovery coming back, everybody scrambled to volume.

That's effectively what happened.

It was a mad dash, with a good start to the year, because we'd come off five years of a really tough period in Poland and everybody went out to try and fill their factories.

And in that, they took volume anywhere they could get it and that's what impacts the price.

That's the reality of what happened.

And the performance on volume and the performance on price in the first half of the year [done] is all of the whole, because, actually, the first half of the year was such a big portion of what happened in Poland for last year.

That's all that happened.

I think now, the fact that people see perhaps a more sustained level, or sustainable level of recovery, you may see some discipline come back in that pursuit for volumes.

The second question you asked about Brazil and the language we're using about Brazil.

John, we haven't even owned these assets for one day yet, so we just don't know.

We've done due diligence.

We've met the management teams.

So we're actually going to take our time.

We've agreed to buy these businesses.

We're going to meet with the management teams, listen to their view on strategy, overlay our own thoughts on strategy, and decide how and where we build these businesses.

It's not every day of the week you get an opportunity to buy cement in Brazil, so we'll take a good look at it and decide exactly how and where we can grow that business, or not.

With regard to the Philippines and branding, branding, as you referred to the Republic Cement business, actually, I remember it when it was Republic Cement.

I remember when I couldn't buy and Lafarge bought and it became Lafarge Republic, and they're now known as Republic Cement again.

The brand is Republic; that's what it's known as, and that's what it will continue to be, if we conclude this transaction.

We don't brand products at CRH.

It will be Republic Cement, so branding will continue.

And this is just something we do in our business every day of the week in terms of branding and how we manage that into marketplaces.

Your last question was on the UK.

The growth we saw in the UK, as you rightly say, was as a result of acquisitions of import terminals and pushing more volume from our production plants with the network (inaudible) we talked about in Spain, and in Ireland.

Again, that was the increase that's there.

It doesn't really conflict with -- we've obviously -- [I don't want] discussions we have with regulators, but it doesn't really conflict with the footprint of assets that we may be buying as a part of the Lafarge-Holcim transaction.

So they will be additional to it.

And remember, our market share in the UK with imports is now only 4%, it's quite small.

And it's quite dissipated from the west coast, all across the -- towards [Ipswich] as well, [the south coast] as well, so it's much better.

[So Brasilia] Brazil brand, as well?

The individual brand in Brazil is actually -- they're going to stay behind with the business.

But, of course, it's up to us.

The management teams are in discussions with them at the moment.

We've been meeting with them over the course of the last couple of weeks and discussing that very point.

So, again, when we've decided what we want to do and how we want to it, we'll come back and inform the market.

Aynsley Lammin, Citi.

I just wondered if you could comment on recent trading for the first eight weeks of the year, both in Europe and the US; particularly, anything that's been positively surprising or negatively, if you're willing to give a like-for-like sales number for both regions?

Then secondly, you mentioned that pickup or gather in pace, momentum in the US private, non-res side this year.

Just wondered how strong that could be -- how much stronger in 2015 it could be relative to 2014.

Then thirdly, just on the divestments, the level of interest you're seeing on the assets you still want to sell, or should we expect that just to slow off now you've done a big slug?

Or could we still be seeing a couple of hundred million this year?

Thanks.

Okay, maybe on the individual market conditions, I might take Europe; and I'll pass the US to Mark; and maybe I'll ask Maeve to comment on the divestments program in terms of how it's rolling out.

With regards to the European performance, it's very early days.

It's February 26.

We've had a good finish to the year, which is a good indication, with regard to volume levels coming forward.

The weather has been quite good in Europe.

As you know, we haven't really had a very cold spell; it's been wet and wintry rather cold.

But we've had a good start, primarily across our Eastern -- our Western European businesses.

Eastern Europe has been quite -- has been a little bit colder.

But broadly speaking, we've had a satisfactory start across a broad range of our businesses, and it gives you good intent with regards to the first half of the year.

What we are seeing is in important countries for us, such as the Netherlands and Belgium, in the Netherlands, in particular, housing transactions last year were up about 40% on the previous year.

We are seeing -- the Netherlands is expecting construction growth this year of a couple of percent, and that will feed into our businesses early on.

There's growing consumer confidence there.

And that's an important conduit for us.

Poland itself, as I said, the dynamics are good.

Switzerland is solid.

Germany is good as well.

Belgium is good as well.

And Finland, I think, at last, we're going to see stability there as well.

So, the dynamics look fairly good for the first quarter.

It's early days yet, but it's off to a positive start.

Maybe Mark, you might have a chat about --?

Can you repeat that question, I didn't quite hear?

I'm sorry, about what the dynamics were for the US in terms of the first couple of months, and how we feel that business will go forward, in the first half of the year?

Okay, well, we really have got into a real good start this year.

You see a lot of the weather patterns.

I guess most of you all would see what's going on in Boston and New York, and they've had a really rough winter.

But the rest of the country has been very mild.

So we're way ahead in the first two months compared to where we were last year, and we think that will carry through to the rest of the year.

We have good, as Albert say, backlogs in all our businesses, and so the margins are there.

So we'd be very positive about the year, going forward.

And maybe, Maeve, you have now have chat on divestments?

I suppose, since we announced the divestment program in the middle of last year, we're gratified ourselves with the fact that we've managed to sign or complete deals for the best part of EUR1 billion already.

We're working hard on the program.

We're very careful about talking about it too much.

We plan to -- as you can see from other public transactions, when you announce that you have to sell something the pressure comes on you.

We're obviously very focused on making sure that we get value for our divestments, so we're not talking about them too much.

We're working behind the scenes.

We find it very hard to be specific about, or at least to predict with accuracy, the timing of disposals, in the same way as acquisitions are hard to predict for timing.

Things can accelerate for reasons that are outside of our control, or actually get delayed for those reasons; that's why we gave a fairly vague-ish time period over the next few years.

But we're very well on tract.

We've lots of interest, so we're keeping busy.

Okay, thanks, Maeve.

Christen Hjorth, Numis.

Just two questions, then.

Lack of drop-through in the US materials and products business maybe compared to the other areas of the Group, just maybe a bit more color on that would be great.

Secondly, obviously, there's been the restructuring to the European divisions.

Would we expect something like that, similar, happening in the US going forward, in the way the business is structured going forward?

Thank you.

Two questions there.

The first one is primarily a US leverage question in terms of the level of leverage that we're seeing in the US.

I think, given the spread of businesses that we have and where they are in the cycle, and in terms of utilization rates, it's exactly where we would expect it to be.

If I just talk about the specific three divisions within the United States, and talk about the leverage in those particularly businesses, the leverage in the materials business, the organic leverage is on page 34 of the handout you'll see in front of you there, the organic leverage in the US is about 20%.

Now people would say, well, you would expect it to be higher in an aggregate business.

But remember, our business in the United States is an aggregate business.

And, by the way, the leverage in our aggregate business is about 50%, as you'll see with all the other pure aggregate players.

But we're the biggest building materials provider in the United States.

We have very significant in asphalt, very significant concrete businesses, and of course big contracting business as well, that works those products back out to roads.

They have a different profile of margin, and a different return profile, so we may have lower leverage as a percentage.

But we've got much bigger business.

I'd rather have the bigger absolute profitability than a higher leverage number.

So it's the profile of the business, more than anything else, that impacts upon that number.

With regard to our products business coming through there, actually, the leverage coming through is coming through.

It's about capacity utilization.

In our businesses down the south and the west, actually, we're running up against capacity headroom issues now at the moment.

The recovery has been there for three years, because it came back in residential, and non-residential, in the south and west quickest.

And it's three years it's come back into it.

So we're having to make capital expenditure investments in that part of the world in 2015, which I'm delighted to do because it's supporting growth, and it is earnings enhancing.

But as you get to the top of the utilization, of course, leverage declines.

With regard to Europe, the specific question is, of course, you've got to look at the profile of the businesses.

If I look at the heavyside businesses, what we saw there, that is typical of a high fixed cost business, where you see volume coming back in.

There's a very high contribution per ton of cement; and, indeed, a high contribution per ton in aggregate business as they come back in.

Of course, the headroom you're seeing in our cement business in Europe is still quite significant.

We have quite a few years of growth in Europe to recover to utilize that capacity, so I'd look forward for it to continue for a few years ahead.

The second question you had for me was about, I can't read my own writing, restructure in the US, excuse me.

Sorry, apologies.

No, what we did in Europe was really just looking at it's not a question of organizing our business for the sake of organizing, it's looking at where the growth is going to come from the US, in designing and making sure your business is focused at that particular growth structure.

The US is in a different part of the cycle, and it's got a different growth profile going forward.

We've got population growth of 30 million people; that's growing residential, growing infrastructure, growing non-res on the back of a stronger economy.

All our businesses are focused on that.

Europe tends to have a different profile; it's got almost flat population growth, only slight, 0.5% or so; ageing demographics; and there's a much bigger profile move towards RMI construction.

We've highlighted our distribution businesses, and focus in that as being a key area for us.

The idea of folding our products business, or the part of our products business, into materials was to get the benefits of that full vertical integration in a more challenging environment.

The lightside business is really new technologies, new techniques, product innovation; something that we in CRH have some capability and capacity to do.

But we will acquire further capability, and further capacity.

This is a growth trend in Europe, and what we're doing is aligning our businesses with the future growth to drive returns for our shareholders.

Yuri Serov, Morgan Stanley.

I have a couple of fairly strategic questions.

First of all, dividends, so you're maintaining your level of dividends again, which is quite rational at this point, what should we expect in the future?

You are a more leveraged company now; will you stick with the current level for some time, and maybe even go down on the payout ratio, compared to the history, as you reduce your leverage?

Or should we expect the dividends to start going up as your profits grow?

The second question is even more strategic.

You are obviously very busy now, and you will be for the next 12 to 18 months, with the integration.

What's in the future?

What's beyond that?

CRH is all about growth.

You will still be making acquisitions.

Come next year, should we expect a ramp up in your acquisition spend?

You previously were talking about being able to make acquisitions in the amounts of EUR1.5 billion, does that number still stand?

Geographically, you acquired quite a chunk of business in Western Europe.

Is that your last acquisition, well, at least in new build in Western Europe?

Where will you be looking to develop in the later years?

And then just one quick one.

I was wondering whether you're able to give us any update on your discussions with KKR, please.

Thanks.

Okay, three questions there.

I might leave the dividend question 'til the end for Maeve, and maybe I can deal with the second and third question that you raised with regard to the strategy and where we go beyond this.

I should say, I complement you; no CEO of CRH has ever heard the question, you are now a leveraged company, so that resonates with me.

I don't intend to be a leveraged company for long.

With regards to the strategic issues of CRH and how we go forward, nothing has changed with regards to the strategy of CRH.

The Lafarge-Holcim transaction was an opportunity that came along.

A part of our strategy with regard to our balance sheet was to have that balance sheet for that moment.

In talking to former CEOs and former FDs of CRH, going back over the last 10 or 15 years, it was they, as I said, sowed the seeds of that deal.

We were waiting for that deal for a long time, and we would have been foolish to let it slip by.

But what it is, as I said to you, it's a compression of three or four years of heavyside acquisitions into one transaction.

But it doesn't change the strategy of CRH.

What we said last year was, number one, the United States, North America, was going to be a key focus to our business, not because we like it, because the dynamics are good; growing population; largest economy in the world; recovering construction; significant ability to fund that construction; and we're the largest building materials player there.

Europe, in Western Europe we said our focus was going to be on OMI, and also filling in the network of businesses we have there on the heavyside.

What did we do?

We filled in the network of businesses we had on the heavyside.

That's what France, Germany, and the UK is about.

We focused on Eastern Europe and said this was going to be a key part of our growth going forward with a strong focus in Poland, Ukraine, and in Finland.

And what did we get?

We got a great opportunity to invest in the southeast part of Europe, and, again, with the growth dynamics there.

So everything is consistent with that growth strategy.

And now, of course, the opportunity in Asia to step up there.

The opportunities to acquire businesses in Asia comes along once in a decade; it's once-in-a-generation opportunity.

For 15 years, Yuri, I've been trying to buy businesses in Indonesia and Philippines, and now we get the chance, at the right price.

So absolutely, it's the right thing to do.

With regards to our strategy going forward, our number one strategy, as Maeve has set out, is returning our credit metrics back to a level where we have the capacity to go out and do deals.

We are very clearly focused.

The [reason's, how] CRH growth.

We deliver to our core businesses.

We generate cash to our core businesses, and that cash is reinvested in acquisitions and capital expenditure for growth.

We are a different business to a lot of other people in our industry.

Some of them are most exclusively pure plays; that restricts them to follow a strategy down one route.

We're not a pure play; we're a balanced provider of building materials across heavyside, lightside products, and distribution.

That gives us a lot more opportunities for growth, and to deploy capital.

And as you've seen by our results, we have the ability to deploy that capital and make very good returns for our shareholders.

We have multiple platforms for growth, across multiple geographies.

The issue for us will not be the opportunities; the issue for us will be able to buy those businesses at good prices and absorb and manage them.

That's something that we're paid to do, is to build our management capacity and capability to do that.

We've done that for the last 20 or 30 years, and I'm confident we'll do it for the next 20 or 30 years.

On the dividend, shall I pick that up?

Sure, please.

The dividend for in 2014, we are happy to see the dividend cover increasing to 1.6 times.

So we had said last year that as we saw profits beginning to improve we would expect dividend to lag -- any growth in dividends to lag to growth in earnings as we rebuild cover.

That's our current plan.

The dividend decision is made at each balance sheet date when the Board considers a number of things: the trading pattern; the strength of the balance sheet; the cash flow characteristics; the market environment.

The history of dividends is important to us, and we have a shareholder base for home dividends is very important, so we think very carefully about the dividend.

And I think the best thing to say about the Lafarge-Holcim transaction is that it is accretive for CRH.

It's very positive.

And we will be considering the dividend in that context, when we next think about it.

Thanks, Maeve.

I'll just briefly go back to the last question you asked me about the KKR discussion, from the comment, Yuri.

As I said with regard to John, when he asked me about Brazil, we haven't -- we don't own these assets yet.

We have made no decisions to do anything.

We have no agreements with anybody.

What we're going to do is we're going to sit down with the UK team, let them talk to us.

We've talked to this part of due diligence.

They're a good team of guys, they know what they're at.

Let's sit down and slowly go through that, what the strategy for the UK going forward will be.

Let's see what we can bring to the show with regard to CRH, what they can bring to CRH, and then we'll decide what we want to do.

But that's just months and months ahead of that.

No decision has been made, nothing is imminent.

We're focused on getting the deal closed and understanding their business better.

I'm sorry, I'm going to have to go to the people who are outside the room.

I know there are some calls down the wires there, so maybe I might just take some of those first.

And then we got some calls coming on the web, and we'll take those as well.

So maybe, perhaps, whoever is on the wires, you could set up the call.

Just give us your name, and the name of your organization first, so we'll try and deal with them as best we can.

Robert Eason, Goodbody.

I've got three questions here.

In the presentation, you gave us the return for the European like-for-like business at 13%.

Just wondering, could you share what the returns of the other five businesses are?

And my second question is in relation to input costs.

Can you just give us a bit more detail in terms of what the individual bills are for bitumen, diesel, gas, and so we can just have a fair idea of the base?

And also, your relation to oil.

Give us a feeling in terms of your exposure to Texas.

And what is your feeling of any secondary effects of lower oil prices into non-res market?

Okay, I think I heard the three questions.

The first question, just to be clear, Robert, was you were asking us about just go through the returns of the other divisions whilst we signal the lightside.

Right.

The second question was regard to the input costs, and the spread, I think was between bitumen costs and asphalt, and explain the margins better, if that was correct?

No, it was just the input costs.

Just give us how much you spent on bitumen, diesel, gas on an annualized basis.

I'm sorry, I'm having difficulty hearing this.

(inaudible) costs for bitumen, diesel, oil.

I'm sorry, excuse me, okay.

And the third question was just on the input, the lower input -- the costs on impact of lower oil on non-residential in the United States.

Is that correct?

Correct.

Okay, great, thank you.

Well, maybe Mark and I will move through those three questions as quickly as we can, and Maeve as well.

With regards to the overall returns, you're absolutely right, we say that the returns on our lightside business is about just under [13%] for the year that has gone by.

The returns on our other businesses are lower.

They move from a low for our heavyside businesses, both in Europe and in the United States.

Maeve -- they're in the region of 6% to 7%; and our products businesses in the United States about 7%; and our distribution business in the United States about 12%.

With regards to the input costs, and in terms of how bitumen costs have increased, and also the oil and gas prices, obviously, you've seen some very significant falls in the cost of oil, and that does come through our business.

We buy about 60 million gallons of diesel and gasoline through the United States -- our businesses in the US.

But as I said early on, our customers are hearing about those declines in prices as well and there's going to be a pass through effect.

We won't be able to hang on to all of that.

With regard to the bitumen costs, Mark, maybe you want to just make this comment with regard to those, again?

Well, obviously, bitumen costs are going to be lower this year.

And I talked about earlier, we're really focused on the margins.

Where it's going to go, I would say, my people that give us the feedback on where it's all going to be in June or July.

Right now, we don't use any of the bitumen.

We store it; we don't start really using that until May, or June.

The thought right now is that the oil is going to come back up.

I think the thought would be it's going to be $70, $75 per barrel by summer.

So it's going to change as we go forward.

It's going to be a positive force, I think, and it's going to probably get an opportunity to us to pick up some volume.

With the diesel and gasoline costs in the US, as I said to you, buying about [60 million] gallons of gasoline, of course, there's a very significant saving on the face of it.

But we won't be able to hang on to all of that; a large part of that is inward logistics and outbound logistics.

Of course, our customers are not going to accept fuel surcharges being put on them now, in fact, they want discounting on that, so that's going to be an issue for us.

With regard to your last question, which was about the impact on the non-residential market, but maybe it's a broader comment on the US economy of lower gas prices, well, anything that puts more dollars in the consumers' pockets is good for consumer confidence, and good for spending.

And that has to be good for the economy and has to be good for our business, so I think, net-net-net, it's positive.

Arnaud Lehmann, Merrill Lynch.

Two questions, if I may.

Firstly, coming back on your new reporting for Europe, Europe heavyside and Europe lightside, lightside is now a relatively small part; indeed, relatively small in terms of contribution to sales and EBITDA.

And I guess that's going to get even smaller once you integrate Lafarge-Holcim assets, most likely, I assume in Europe heavyside.

Is that an indication that Europe lightside, or at least a large part of it, is for sale?

That would be my first question.

And my second question is regarding the US, and I came quite late on the call so sorry if that was already asked.

There are some discussions in Washington, in the Congress, regarding infrastructure spending and multi-year funding for infrastructures.

Could you please comment on that?

Do you believe there is a chance that a five- or six-year plan might be voted, hopefully, by the end of May, or more likely by the end of the year?

Thank you, Arnaud.

Two questions there; one about our Europe lightside business, which I'll deal with, and then I'm going to ask Mark to comment on the funding in the United States going forward, and what that might mean.

Our Europe lightside business is a EUR1 billion business.

It looks small compared to the other behemoth beside it, but it's still a very good business.

And if I look at our distribution business, I remember our distribution business in Europe being a EUR400 million distribution business, that was 10 years ago; it's now a EUR4 billion business.

Great things come out of small packages.

And this is a fine business, with good growth going forward.

It's tapping into growth dynamics in a new area of growth for construction in Europe.

And I have to say, this is going to be a growth vehicle for us coming forth; it won't remain a EUR1 billion business.

With regard to the US, just before Mark talks to you, talk about the multi-year plan, maybe I might ask Mark to talk about it, because I did refer to, in the all customer materials, the US materials commentary, about the state initiatives that are going on.

As I said to you, there were state initiatives went on during 2014, which are very significant.

And maybe I might ask Mark, as well as talking about the Federal funding, you might comment on some of the state-funding initiatives, Mark, that are going on.

Okay, let me talk about the Federal piece.

As you know, MAP-21 will expire at the end of May, and we also have a highway trust fund that will also go with there.

The view right now, there's a lot of good talk about going do a long-term highway bill, but we don't have the funding.

We still argue about how you're going to do that.

I guess the plus of that is the Republicans, and President Obama, are all saying that we have to address this.

Now, will we get this done by May?

No.

So what'll happen is what happened in the last few years, we just going to extend the funding that we have now; it'll stay the same piece for the rest of the year.

And I would be probably surprised if anything gets done other than just leave it where it is until the Elections are over in 2016.

But the positive part of it is that we're talking about it, and we're not arguing about it at this point.

It's really, how are we going to fund it, and there's a lot of ideas on that.

So the other side that Albert talked about on the states, the upside for us is the state initiatives that have been doing.

And he talked about the [$16 billion] that was approved in November.

Let me talk a little bit about the states that are most important to us.

In 2015, Texas, last fall, approved $1.7 billion to go onto their highway program for 2015.

And we're seeing that now, it's there, and we're starting to being able to bid on things.

So that's a very positive.

And after 2015, it's $1 billion for the next four years after that.

So that's a big, big step for us, an important step that we do business.

Also, in Pennsylvania, they agreed $2.3 billion over five years, all going back into the infrastructure spend.

We're seeing that, we're seeing that go through whatever.

So there's a lot of things going on.

There's one in Michigan, which is a big state for us.

They're having a 1% sales tax initiative that goes before the voters in May, and we think that that's going to pass, and that would provide $1.2 million a year for the next five years.

So there's a lot of good things going on.

Last night, I got a call, and the governor from Iowa signed a $0.10 gas tax that goes in effect today that would end up about [$215 million] into that state.

So there's a lot of good things going on.

The states are not waiting for the feds.

But I think long term, the spend's going to be there for us.

If the Governor of Iowa's calling you in the middle of the night, you should be standing here, not me (laughter).

That's very clear.

Thank you very much.

We're going to get timed out here; we've got a 10 o'clock cut on the web -- on the calls.

We have a few calls made from the webcast, and there's two in particular that haven't been raised yet, and I'm just trying to raise issues that haven't been raised yet.

One question, which I'm going to pass to Maeve, which is on credit metrics, and just someone asking here could we give them the high debt levels post the Lafarge-Holcim deals?

What are your plans to deleverage?

And, specifically, could you take me on a walkthrough your debt levels, pro forma debt level of EUR7.5 billion and walk me through how you're going to bring debt metrics back to target.

Maeve, I might ask you to do that one, please?

Okay, if we start with EUR7.4 billion, which is the pro forma debt for 2014, and the pro forma EBITDA numbers are -- CRH's EBITDA was EUR1,640 million, rounded up to EUR1,650 million for ease of numbers; and the incremental EBITDA from the Lafarge-Holcim deals, EUR752 million.

If you take the combination of those, as I say, approximately EUR2.5 billion of EBITDA.

So to get back to the 2 to 2.5 times cover, that is more the normalized level that's consistent with our credit ratings, that implies a debt level of somewhere in the region of EUR5 billion to EUR6.2 billion, EUR6.3 billion.

So getting from EUR7.4 billion down to those kind of levels is the kind of thought process we're in.

If you look at the level of divestments that we have on the agenda, and the delivery of those divestments during 2014, and to date in 2015, I think we've a good bit of confidence that there will be divestments coming through over the next year, or two.

If you have -- with the additional cash flow coming from the incremental EBITDA, the combination of those two would easily add to reduce that debt number by EUR1.5 billion, or so, and getting us back within that range within a foreseeable period of time.

Okay, thank you, Maeve.

I've got one more question I can take here, a question on integration.

Given the complexity and the size of the Lafarge-Holcim transaction, how do you plan to integrate those operations?

And are you happy you've got the capacity and bandwith within the team to CRH?

And maybe I'll just take that, the minute that's there.

What we have been doing, of course, all through the due diligence process is trying to absorb the size and scale of these businesses.

Our plan, at the moment, is we will have a global integration team of about five people which will oversee the integration.

I will head that, but I'll chair it, rather than anything else.

Mark and some of the other senior managers will sit on.

But within the individual businesses themselves, the product of four regions, we will have the real integration teams who are going to do all the work.

And we've identified three of the four people who are key to that, who will lead those divisions.

We had meetings there last week in Canada, with the teams there, with US teams; also, we met in Zurich last week with the European teams; this week, some of our senior people are actually out in Manila meeting with the Filipino teams, just getting a sense, because those teams will be led by people both within CRH, and, of course, ex-Lafarge-Holcim people.

As we complete this transaction we'll come back and talk to you later in the year.

In August, or so, we'll update you with regard to that.

But we're very satisfied we have the capacity and capability within our businesses to absorb these businesses that are here.

I'm afraid we're going to have to cut it short this time.

I'd like to thank you all for your attention this morning.

Just one thing I would like to say, before anyone leaves the room, and for those on the wires, February 2, was a very important day for CRH.

We reached out to our shareholders, and we asked you to support us in a very important transaction for CRH, and you did so in a great way.

On behalf of the Board of CRH, and the senior team of CRH, we want to sincerely thank you, all of you in the room, and you on the wires, and the investors, for supporting us.

We won't let you down.

Thank you very much.

And we look forward to seeing you, talking to you, on May 7, at our AGM, this year.

Thank you very much, indeed.