2018 Annual Report and Form 20-F

Overview

Our Global Business in 2018 2
Why Invest in Us4
Chairman's Introduction5

Strategy Review

Chief Executive's Review 8
Strategy10
Business Model12
Measuring Performance14
Sustainability 16
Risk Governance 22

Business Performance

Business Overview 26
Finance Director's Review27
Segmental Reviews 32
Governance
Board of Directors 54
Corporate Governance Report 58
Directors' Remuneration Report68
Directors' Report 98
Principal Risks and Uncertainties 104

Financial Statements

Independent Auditor's Reports 112
Consolidated Financial Statements 123
Accounting Policies 128
Notes on Consolidated
Financial Statements 139
Supplementary 20-F Disclosures 214
Shareholder Information 238
Other Information 250
Cross Reference to Form 20-F
Requirements 261
Index 262

CRH manufactures and distributes a diverse range of superior building materials and products for the built environment. From foundations, to frame and roofing, to fitting out the interior space and improving the exterior aesthetic, to on-site works and infrastructural projects including roads and bridges, our materials and products are used extensively in construction projects of all sizes, all across the world.

Aggregates
Lime
Cement
Readymixed Concrete
Paving & Construction
Asphalt
Architectural Products
Glass and Glazing Systems
Infrastructure Products
Construction Accessories
Shutters & Awnings
Network Access Products & Perimeter Protection

MATERIALS PRODUCTS DISTRIBUTION

General Builders Merchants
Sanitary, Heating and Plumbing
DIY

This document constitutes the Annual Report and Financial Statements in accordance with Irish and UK requirements and the Annual Report on Form 20-F in accordance with the US Securities Exchange Act of 1934, for CRH plc for the year ended 31 December 2018. A cross reference to Form 20-F requirements is included on page 261.

The Directors' Statements (comprising the Statement of Directors' Responsibilities, the Viability Statement and the Directors' Compliance Statement on pages 100 to 103), the Principal Risks and Uncertainties (on pages 104 to 109), the Independent Auditor's Report (on pages 112 to 120) and the Parent Company financial statements of CRH plc (on

pages 207 to 212) do not form part of CRH's Annual Report on Form 20-F as filed with the Securities and Exchange Commission (SEC).

Forward-Looking Statements

This document contains forward-looking statements, which by their nature involve risk and uncertainty. Please see Disclaimer/Forward-Looking Statements on page 99 for more information about these statements and certain factors that may cause them to prove inaccurate.

View the Report on our website: www.crh.com/reports/2018-annual-report-20-f.pdf

2018 Performance Highlights

How our global business performed in 2018...

Ash Grove Cement Company's Midlothian Plant in Texas produces approximately 861,000 tonnes of clinker per year and employs 120 people.

* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group's share of equity accounted investments' profit after tax. Details of how non-GAAP measures are calculated are set out on pages 217 to 220.

Our Global Business in 2018

Regional Scale

CRH's global footprint spans 32 countries and over 3,700 operating locations, serving customers across the entire building materials spectrum, on five continents, worldwide.

Americas

operating locations

€13.4 billion Sales 2017: €12.3 billion

Growth +9%

Operations in 46 US states, seven Canadian provinces and Southeast Brazil

Europe

Cement Producer in Philippines c. 1,300 employees 12 operating locations Asia €0.4 billion Sales 2017: €0.4 billion Decline -1% 2

Regional leadership positions

Growth +4% Our Balanced Portfolio

Building a balanced portfolio is a core constituent of our strategy and a key determinant of value creation for CRH.

By Division

By End-Use Residential 35%

Percentages based on 2018 Group Sales

New Build vs RMI

Why Invest in Us

Scale in attractive markets

CRH is the largest building materials company in North America and the largest heavyside materials business in Europe.

Balanced portfolio

Our businesses are diversified across a range of products, geographies and end-uses.

Unique acquisition model

We are focused on adding small to mid-sized companies that complement our existing portfolio, together with occasional large acquisitions where we see compelling value.

Long-term growth opportunity

Population and economic growth along with a good balance of New Build and RMI demand are long-term drivers of construction growth in our main markets.

Continuously improving

CRH is relentlessly focused on operational and commercial excellence, coordinated and driven from the centre and delivered locally by its businesses around the world.

Strong leadership and talent management

Our experienced senior management team is underpinned by a focus on talent identification, development, diversity and succession planning.

Sustainable business model

To create long-term value, we embed sustainability principles in all areas of our strategy and business model.

Proven track-record

Over the past five years we have increased revenue 64%, EBITDA (as defined)* 143% and cash generation 74%.

+64% Revenue Growth since 2013

€3.6bn

Development Spend in 2018

Countries Globally

409bps EBITDA (as defined)* Margin Improvement 2013 to 2018

38% Percentage of Female Directors on CRH Board

€7.0bn 2018 Revenue from Products with Enhanced Sustainability Attributes

+12% Operating Cash Flow CAGR 5 Years

Industry Leading Value & Returns

Since 1970 CRH has delivered an industry-leading compound Total Shareholder Return (TSR) of 14.8%. €100 invested in CRH shares in 1970, with dividends reinvested, would now be worth €76,000.

Total Shareholder Return +14.8%

Chairman's Introduction1

Against a backdrop of international economic uncertainty, 2018 has been another year of progress for CRH with EBITDA (as defined)* for the year of €3.4 billion (2017: €3.1 billion), profit after tax of €2.5 billion (2017: €1.9 billion) and Net Debt at year end being 2.1x EBITDA (as defined)*2 (2017: 1.8x) after net development activity of €553 million and the completion of €789 million of the €1 billion buyback programme announced in April 2018.

Based on performance in 2018, the Board is recommending a final dividend of 52.4c per share, which, if approved at the 2019 Annual General Meeting (AGM), will result in an increase in the full-year dividend of 6% to 72.0c per share.

Active portfolio management is part of CRH's strategy to deliver improved margins and returns. During 2018, the Group invested c. €3.6 billion on 46 transactions including the acquisition of Ash Grove Cement Company (Ash Grove) for c. €2.9 billion, which received regulatory approval in June 2018. We also completed the divestment of our Americas Distribution business in January 2018 for €2.4 billion and we divested our Benelux DIY business, together with certain related property assets, for a total consideration of c. €0.5 billion. Total business and asset disposal proceeds in 2018 amounted to €3.0 billion.

As announced in May 2018, a strategic review of our Distribution business in Europe is underway. The review, which will continue in 2019, is focused on improving our margins and returns and identifying opportunities to create further value for shareholders.

Also in May 2018, we announced a multi-year business improvement initiative to deliver 300bps of EBITDA (as defined)* margin improvement by 2021. As part of this plan, a number of organisational and business improvement initiatives are underway. These include a more simplified organisational structure with three Divisions effective 1 January 2019: Europe Materials, Americas Materials and Building Products. This will create a more focused and agile Group.

Given the importance to the Board of having a business strategy which is sustainable,

we have set up a new Safety, Environment & Social Responsibility (SESR) Committee. Under its terms of reference, this Committee will work with management in areas such as fatality elimination, emission targets, inclusion and diversity, employee engagement and sustainability reporting.

Following completion of two terms of three years on the Board, Don McGovern will retire as a non-executive Director at the conclusion of the AGM on 25 April 2019. During his time on the Board, Don has held the roles of Senior

" Active portfolio management is part of CRH's strategy to deliver improved margins and returns.

Independent Director and Remuneration Committee Chairman. I would like to thank him for the energy and commitment that he has displayed in carrying out these roles in such an exemplary fashion and I wish him every success in the future.

I am pleased to report that during the year, we appointed three new non-executive Directors in Richie Boucher, Mary Rhinehart and Siobhán Talbot. The Corporate Governance section on pages 54 to 67 contains details of the biographies of all Board members, the competencies of the Board, details of CRH's Board renewal policy and our approach in the area of inclusion and diversity.

I have evaluated the performance of each Director and I believe that each of them has an important role to play in relation to the Company's long-term success. Accordingly, I am recommending that shareholders vote in favour of the re-appointment of each Director going forward for re-election at the 2019 AGM.

Finally, on behalf of the Board, I would like to thank the CRH management team, led by Albert Manifold, for their continued hard work, their commitment to our Company and for the record progress achieved in 2018.

Nicky Hartery

Chairman 27 February 2019

See cautionary statement regarding forward-looking statements on page 99.

^* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group's share of equity accounted investments' profit after tax.

^2. Net Debt/EBITDA (as defined)* is a non-GAAP measure as defined on page 219. The GAAP figures that are most directly comparable to the components of Net Debt/EBITDA (as defined)* include: interest-bearing loans and borrowings (2018: €9,316 million; 2017: €7,976 million) and profit after tax (2018: €2,521 million; 2017: €1,919 million). Details of how non-GAAP measures are calculated are set out on pages 217 to 220.

Halfen, part of CRH's Europe Lightside Division, provided specialist fixing solutions for the installation of 3,500 protective sunscreens in the 'La Marseillaise' tower created by architect Jean Nouvel. The tower forms the largest part of the new maritime façade of the Euroméditerranée redevelopment project in Marseille, France.

CRH Annual Report and Form 20-F I 2018

Chief Executive's Review	8
Strategy	10
Business Model	12
Measuring Performance	14
Sustainability	16
Risk Governance	22

STRATEGY REVIEW

CRH Annual Report and Form 20-F I 2018

Chief Executive's Review1

As the leading building materials business in the world, the success of CRH has been defined by a relentless focus on value creation, underpinned by a consistent emphasis on delivering superior returns and cash for shareholders through the cycle.

Over the past five years we have significantly reshaped and redirected our business to capitalise on the growth opportunities we see for CRH. This has included a comprehensive portfolio review and divestment programme which enabled us to reallocate capital to higher growth markets, leading to structurally higher margins, a better business mix and improving returns and cash.

Whether it is a capital expenditure project, or an acquisition or divestment opportunity, or the return of cash to shareholders through dividends or buybacks, every capital allocation decision made in CRH is rigorously analysed and assessed through the lens of creating maximum value for our shareholders.

In 2018 our strong balance sheet and cash flow generation gave us the opportunity to deliver further value to shareholders by returning €789 million of cash through a share buyback programme while completing €3.6 billion of acquisitions (2017: €1.9 billion) and €3.0 billion of disposals (2017: €0.2 billion) at the same time continuing to invest in our business to execute our strategic growth initiatives.

To support the delivery of these initiatives we announced a simplified new structure for the Group, moving from seven divisions to three: Americas Materials, Europe Materials and a new global Building Products platform. These changes (effective 1 January 2019) provide CRH with a more focused business, driven from a leaner corporate centre, with an improved ability to leverage our scale and create further value in our key markets and core lines of business.

Performance Highlights

2018 was a year of record profit delivery for the Group and continued positive performance overall. The momentum in our businesses and the benefit of acquisitions delivered a 6% increase in Group revenue to €26.8 billion (2017: €25.2 billion). This was reinforced by continued favourable market fundamentals in the Americas and good underlying momentum in Europe.

EBITDA (as defined)* amounted to €3.4 billion representing a 7% increase on the previous year (2017: €3.1 billion), despite rising input costs and adverse weather conditions in certain markets.

Over the past five years we have significantly reshaped and redirected our business...

Profit after tax which included the profit on disposal of our Americas Distribution business increased 31% to €2.5 billion (2017: €1.9 billion) reflecting yet another year of progress.

Despite an inflationary cost environment, EBITDA (as defined)* margin was ahead, with measures introduced to drive efficiencies and performance improvement across our business having a positive impact. Return on Net Assets (RONA)2 for the year was 9.6% (2017: 10.6%).

Our strong financial discipline and operational cash flows resulted in a year-end Net Debt/ EBITDA (as defined)* of 2.1x (2017: 1.8x) despite significant acquisition spend and share buyback activity.

Earnings per share (EPS) increased 33% to 302.4c (2017: 226.8c) and the Board has proposed to increase the dividend to 72.0c per share, an increase of 6% on the previous year's level of 68.0c per share.

Operational Highlights

In the Americas a positive economic environment and solid underlying demand saw sales increase 9% to €13.4 billion (2017: €12.3 billion). Despite labour constraints and cost inflation, particularly in energy, our key markets performed well with good underlying fundamentals and favourable conditions across residential, non-residential and infrastructure.

Notwithstanding significant weather disruption in key markets, our Americas Materials Division delivered a positive performance overall, generating sales of €9.0 billion, an increase of 12% on 2017 (2017: €8.0 billion) with good price increases across all products and the benefit of a six month contribution from Ash Grove, our cement and materials acquisition completed in June for €2.9 billion.

Improved pricing and a continued focus on commercial and operational initiatives contributed to growth in our Americas Products Division, with a notable strong performance by our Oldcastle Infrastructure business.

Overall sales in Europe increased by 4% to €13.0 billion (2017: €12.5 billion) and setting aside the ongoing Brexit related uncertainty in the United Kingdom (UK), the Group's strong footprint across Europe means we are well positioned to capitalise on the broad based nature of economic and construction growth as markets continue to normalise.

See cautionary statement regarding forward-looking statements on page 99.

^2. RONA is a non-GAAP measure as defined on page 218. The GAAP figures that are most directly comparable to the components of RONA include: Group operating profit (2018: €2,177 million; 2017: €2,095 million), total assets and total liabilities respectively (2018: €35,173 million and €18,619 million respectively; 2017: €31,633 million and €16,656 million respectively). Details of how non-GAAP measures are calculated are set out on pages 217 to 220. In line with the purpose of the metric, as set out on page 220, to "measure management's ability to generate profits from the net assets required to support that business", for the 2018 calculation, as the net segment assets classified as held for sale at 31 December 2017 were disposed of on 2 January 2018, these have been excluded from the prior year element. For consistency, the related immaterial operating loss of €5 million is also excluded.

Continuous Performance Improvement

Our commitment to building better businesses is a key component of our value creation model and our shareholders benefit from our philosophy of continuous improvement. In 2018 we initiated a new multi-year business improvement initiative focused on shareholder value, cash generation and capital allocation.

Key features of this initiative include, simplifying our structure, increasing our operating leverage and growing our EBITDA (as defined)* margin by 300bps by 2021.

Our Europe Heavyside businesses made good strides with increased demand and modest pricing improvements experienced across multiple markets, partly offset by increasing input costs. Our operations in the Benelux, Denmark, Ireland and Poland performed particularly well.

Our Europe Lightside Division delivered a robust performance across most platforms reflecting encouraging levels of demand in the Netherlands, Poland and Australia. Acquisitions in certain platforms also lifted sales.

Europe Distribution, which remains the subject of a strategic review, had a mixed performance with positive momentum in our General Builders Merchants business partly offset by our business in Switzerland.

In Asia, while we saw signs of market stabilisation in the Philippines and increased sales volumes, trading conditions remained challenging, with rising fuel and energy costs impacting on profitability.

Sustainability and Safety

At CRH we are acutely aware of our role in advancing the global sustainability agenda. In 2018 CRH became one of the founding members of the Global Cement and Concrete Association (GCCA). Sustainable development is at the core of the GCCA's work programme which also includes safety & health, climate change & energy, social responsibility, environment & nature and the circular economy.

Within CRH, the safety of our people is the number one priority at all of our sites, around the world and we work hard to ensure that our people return home safely to their families at the end of each working day. Regrettably however, there were six fatalities involving our operations during 2018. Our thoughts and deepest sympathies are with their families and we are determined to do all we can to achieve our target of zero injuries and zero fatalities at our operations.

Development

In 2018 we completed 46 deals with a total spend of €3.6 billion (2017: €1.9 billion). Disposals in the year delivered proceeds of €3.0 billion (2017: €0.2 billion).

In addition to Ash Grove, our largest acquisition of the year, the Group completed 45 bolt-on transactions across the Americas and Europe. Bolt-ons are an integral part of CRH's acquisition model generating above average returns. With timely and efficient integration, these businesses offer good opportunities for synergies and the potential for adding bolt-ons is a key determining factor when we consider larger acquisition opportunities.

The majority of our divestment activity in 2018 related to the sale of our Americas Distribution business for c. €2.4 billion in January. In Europe, we completed the sale of our Benelux DIY business for c. €0.5 billion in July. Both divestments enabled us to reallocate capital to other areas where we see better potential for growth and higher returns.

This value-adding portfolio management activity combined with a strong operational performance in 2018, in addition to the reshaping of our business and focus on driving further performance improvement, ensures that CRH is well positioned for further value creation in 2019.

Outlook

Supported by continued favourable market dynamics, we expect the United States (US) economy to continue to advance in 2019 at a similar pace to recent trends. We expect continued growth in US housing construction and that non-residential construction will also show gains. Federal funding for infrastructure in 2019 is expected to increase, while state fiscal conditions continue to improve, with more states introducing additional infrastructure funding measures. In Canada, we anticipate the overall market to be ahead in 2019.

The backdrop in Europe is expected to be positive with continued progress in key markets, albeit with regional variations. While Brexit has created a level of uncertainty, against an overall backdrop of increasing demand, particularly in the residential sector, we expect progress in Europe to continue in 2019. In the Philippines, with the benefit of continued economic growth we expect progress in the cement market in 2019.

CRH remains well positioned to build upon the gains made in 2018. With a relentless focus on continuous business improvement, margin expansion, cash generation and returns for shareholders, together with continued strong financial discipline and efficient allocation of capital, we believe 2019 will be a year of progress and further growth for the Group.

Albert Manifold Chief Executive 27 February 2019

Ash Grove's deep-water cement terminal in Houston, Texas. In 2018, Ash Grove shipped 7.5m tonnes of cement from its eight cement plants and network of 25 terminals. Combined with Suwannee American Cement Company and CRH Canada, the acquisition of Ash Grove has made CRH one of the leading cement producers in North America, with operations across Florida, Texas, the Midwest and Western US, and Canada.

Strategy Targeting future growth and delivery

CRH's strategy is to continue to grow and improve our business and in doing so to maximise long-term value and deliver superior returns for our shareholders and for society.

The leading building materials business in the world...

...creating long-term value and delivering superior returns.

CRH continuously refines and hones its strategy as market environments evolve. Delivery of the Group's strategy is centred on four strategic pillars:

Each day, millions of people around the world come into contact with our materials and products. In implementing our strategy we remain resolutely focused on serving the unique needs of our customers in local and regional markets worldwide. We provide a world-class service with the personal touch of a local supplier. This focus on delivery for customers

through strong local businesses is a key factor in enabling CRH to deliver its strategy and maximise long-term value and superior returns for shareholders.

Strategy in Action 2018

1 Continuous Improvement

Operational excellence initiatives are one of the ways we drive continuous improvement and value creation across our businesses. One example is a programme undertaken by our Architectural Products Group (APG), a leading supplier of concrete masonry, hardscape and related products for residential, commercial and DIY construction markets. APG operates at 194 locations in the US

and Canada. In 2018 APG installed a production monitoring system at all of its plants to help track and mitigate downtime, improve throughput and provide accurate daily reporting. Operational excellence is a key lever used by CRH to improve RONAperformance across the Group. In 2018 CRH Group RONA was 9.6% (2017: 10.6%).

Focused Growth

CRH takes a disciplined approach to value creation through the effective and efficient allocation of capital. The Group spent c. €3.6 billion on acquisitions during 2018 including 45 bolt-on transactions. Bolt-ons are strategically integral to CRH's ability to maximise value for shareholders through its acquisition activity. Bolt-ons can be quickly integrated, offer

good potential for synergies, vertical integration and downstream opportunities, and have generated above average returns for CRH. When considering larger acquisitions, the potential for associated bolt-ons is a key part of our disciplined and focused approach to acquisition-driven growth.

Benefits of Scale

Our global scale enables CRH to benefit from savings associated with centralising experience, expertise, knowledge and insight. Global procurement is one example of this and a key driver of value in our business. CRH procures c. €17 billion in products and services annually in areas including transport, logistics, mobile equipment and energy. During 2018 we continued to further integrate and centralise procurement

at a global level enabling us to deliver purchasing programmes in a more efficient and effective way across the Group. Specific areas of improvement included increasing our use of technology in the areas of advanced analytics, e-procurement, and through supply chain optimisation. This in turn helps unlock value and deliver superior returns for our shareholders.

Developing Leaders 4

In 2018 we continued to make progress in our efforts to identify, attract, retain and develop top talent at CRH. We continued to build upon and evolve our approach which focuses on providing high-performing and motivated individuals with access to critical experiences and exposure to key people and projects. This is achieved through our suite of leadership development programmes, including global mobility assignments, coaching, global action-learning project teams and other development initiatives. These programmes are attended by top talent from across our businesses, ensuring there is a diverse, capable and expanding leadership pool of talent across all levels of the organisation.

Business Model How we create value and growth

CRH delivers on its strategy through the execution of a dynamic business model which is focused on value creation and growth.

Balanced Portfolio

We aim to maintain a balanced portfolio by ensuring that our businesses are diversified across a range of products, geographies, and end-uses, thereby mitigating the impact of cyclical changes in demand in any one market.

Re-balancing for Growth

Divesting our Americas Distribution business in 2018 enabled CRH to reallocate capital into the higher growth regions of Texas and the Northwest United States through the acquisition of Ash Grove.

Risk Mitigation

CRH uses a dynamic Enterprise Risk Management (ERM) framework to identify, manage and report risk in a manner that supports the strategic planning processes, allowing us to conduct our business in a sustainable manner.

Integrating ERM at an Operations Level

In 2018 CRH conducted risk workshops with over 300 senior leaders from our operating businesses globally, helping to ensure alignment on risk mitigation priorities throughout the Group.

Value Created

Value created in 2018 included:

€3.4bn EBITDA (as defined)*

€2.5bn Profit After Tax

302.4c EPS

9.6% RONA1

€663m Taxes Paid

CO2 Prevented 1.5mtonnes

Why It Matters

Benefits to CRH

Financial strength To support further acquisition activity

Investment To drive continuous improvement and maximise returns

Lower capital costs Supports our ability to fund new value-creating acquisitions

Shareholder returns Through dividends and value appreciation

Benefits to Society

Customer solutions Products that meet the needs of our customers

Partner to suppliers Resilient and reliable business partner

Job creation Responsible employer in local communities

Taxation contribution Taxes paid to

Governments

* EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group's share of equity accounted investments' profit after tax. 1. RONA is a non-GAAP measure as defined on page 218.

Measuring Performance

CRH uses a number of financial and non-financial Key Performance Indicators (KPIs) to measure performance across our business. KPIs are a consistent feature of how we operate and fundamental to how we track progress towards achieving our strategic objectives.

Sustainability Performance

We believe sustainability and corporate social responsibility are fundamental to CRH being the leading building materials business in the world. A selection of KPIs on three of our sustainability priority areas are below:

CO2 emissions subject to final verification under the European Union Emissions Trading Scheme (EU ETS). CO2 emissions data includes Scope 1 (2018: 35.4m tonnes, 2017: 25.6m tonnes, 2016: 24.7m tonnes) and Scope 2 (2018: 2.7m tonnes, 2017: 2.6m tonnes, 2016: 2.5m tonnes) emissions. Scope 1 and Scope 2 emissions are as defined by the World Resources Institute Greenhouse Gas Protocol.

2016

2017

1.9

2018

14 2.3 2.2 2. We are highlighting the percentage of females in the senior management cohort as a KPI. Refer to page 19 for further information on inclusion and diversity, including additional indicators. 2.3 2.2 2.3 2.2

Financial Performance

90%

2016

1.1 2016

2016

1.1

As part of our strategic focus on continuous improvement, CRH uses four financial KPIs to measure our progress and foster positive performance behaviour.

2018

2017

2016

EBITDA (as defined)* Net Interest Cover is a non-GAAP measure as defined on page 219. The GAAP figures that are most directly comparable to the components of EBITDA (as defined)* Net Interest Cover include: profit after tax: €2,521 million (2017: €1,919 million), finance costs: €339 million (2017: €301 million) and finance income: €34 million (2017: €12 million). Details of how non-GAAP measures are calculated are set out on pages 217 to 220.

Sustainability Creating long-term value

We believe that being sustainable and socially responsible are fundamental to being the leading building materials business in the world. We are working to positively contribute to some of the key sustainable development challenges facing society, addressing non-financial business imperatives such as protecting the environment, developing people and community, respecting human rights and operating with integrity. Sustainability creates value for us and our stakeholders through delivery of products that enhance the sustainability of structures.

Our View

With our global presence and industry leadership positions, we are very aware of our role in the many communities in which we operate. Our business activities provide materials that are needed to fulfil the basic human need of shelter, together with the infrastructure that is needed for our societies to thrive. We believe that meeting these needs in a manner that respects sustainability principles and addresses potentially negative impacts will create long-term value for all our stakeholders, including: investors, customers, employees, partners, suppliers and local communities.

Our Approach

Sustainability principles are embedded in our business strategy. At Group level, we set policies in key sustainability areas, including our Health & Safety Policy, our Social Policy and our Environmental Policy as well as our Code of Business Conduct (CoBC). These are all available on the CRH website (www.crh.com). The implementation of these is the responsibility of management.

We have a dedicated Safety, Environment & Social Responsibility (SESR) Board Committee. Policy implementation, effectiveness and performance against our medium-term objectives, as well as long-term ambitions which are monitored and reviewed regularly. Acquired businesses are efficiently integrated into our processes following pre-acquisition due diligence.

We take a risk-based, collaborative and strategic approach to responding to global trends in areas including demographic change, urbanisation, climate change, resource scarcity and technological developments.

Risks related to sustainability, including those related to climate change, are recognised in our ERM Framework, described on pages 22 and 23, and details of sustainability risks are included on page 106.

Our non-financial policies and due diligence processes are well established and we made no material changes to these in 2018.

Our key sustainability priorities are identified through our materiality assessment processes, which include annual sustainability reporting by our businesses to Group, review of issues raised through ERM processes and regular formal materiality assessment reviews.

We are committed to reporting on the breadth of our sustainability performance and to publishing performance indicators, ambitions and outcomes in key sustainability areas. We publish an annual independently-assured Sustainability Report, which is prepared in line with the Global Reporting Initiative Standards and available on www.crh.com. It is anticipated that the 2018 Sustainability Report will be published in March 2019.

Ergon, part of CRH's Europe Heavyside Division, supplied precast concrete products to 'The One' complex in the heart of Brussels' European district. The project, which was completed in December 2018, is a mixed development of offices, apartments and retail space. The office unit is a passive building, with very low energy consumption achieved through high-performance insulation in the skin of the building. This is also helped by its compactness and airtightness, and the optimisation of heating and cooling techniques inside the building.

Published in 2015, the United Nations' (UN) Sustainable Development Goals (SDGs) are a call to action for a better and more sustainable future. We have assessed the detailed targets behind each of the 17 SDGs, and identified the four that most closely align to where we, as a building materials company, can have the most impact and influence.

Our Sustainable Value Creation Model

Our aim is to create sustainable value by providing industry-leading products and solutions to satisfy the construction needs of our customers around the world. By considering the full life cycle of our products and innovating to drive more sustainable outcomes in the built environment, we aim to have a more positive impact on wider society and the environment while delivering profitable growth.

As well as being beneficial for our business, these ambitions also have an outward focus. In collaboration with our stakeholders, our actions contribute to the delivery of key initiatives such as the United Nations' (UN) Sustainable Development Goals (SDGs).

CRH is ranked among sector leaders by leading Environmental, Social and Governance (ESG) rating agencies. We are a constituent member of indices including the FTSE4Good Index, the STOXX® Global ESG Leaders

Indices and the Dow Jones Sustainability Indices as well as a long-term participant in the Carbon Disclosure Project (CDP).

In addition, many of our Group companies have achieved accolades for excellence in sustainability achievements.

1. Resource-efficient raw materials

We strive to responsibly operate our quarries and pits and where possible, we use alternative raw materials, recycling material that would otherwise be disposed of as waste.

32 million tonnes of alternative raw materials recycled or re-used in new products in 2018 2017: 30 million tonnes

6. Regenerative processes at product end-of-life

At end-of-life, concrete and asphalt can be fully recycled. During the life time of a building and with proper recycling practices, concrete also chemically reabsorbs CO2 from the air.

Up to 25% of CO2 released in cement production can be reabsorbed during concrete's life cycle

5. Product use for more sustainable buildings and infrastructure

Concrete is a durable, low-maintenance product that is resilient to severe weather events such as storm and flood activity. Concrete, as well as many of our building envelope products, also contributes to improvements in the energy efficiency of buildings.

24% of relevant product revenue is from products that can be used in certified sustainable buildings 2017: 26%

4. Sustainable distribution Many of our products are produced locally, minimising the Integrating sustainability across the whole product life cycle

need for transport. We strive to optimise transport logistics across our business and use rail, boat and barge transport.

c. 20km average delivery distance for readymixed concrete

2. Innovative product design

Products designed for enhanced sustainability attributes include lower carbon cement, warm-mix asphalt, porous or permeable asphalt and concrete, as well as building envelope solutions such as high-performance glass and glazing products that incorporate innovative thermal break technologies for superior thermal performance, while providing essential daylight and ventilation for the building.

42% of product

revenue is from products with enhanced sustainability attributes 2017: 42%

3. Manufacturing for sustainability

In our manufacturing processes, resource and energy efficiency are key considerations. Focus areas, depending on the product, include alternative fuels, plant upgrades, process optimisation and automation.

2.1 million tonnes of alternative fuels used in cement plants 2017: 2.0 million tonnes

Sustainability - continued

Progressing our key priority areas

Embedding a culture of safety

Safe working practices and personal fall protection reduce safety risks for these employees of Gulf Coast, part of CRH's Americas Materials Division, working on the Port of Beaumont overpass project in Texas.

94% of locations accident-free

There are multiple safety risks and hazards associated with our industry – from kilns operating at over 1,400°C, to working at height and operating heavy machinery. Because of this, putting safety first is a core CRH value, and we view embedding a culture of safety as a pre-requisite to addressing safety risks and eliminating accidents.

We demand the highest safety standards in everything we do and promote safety excellence across our industry. Our global network of safety officers works closely with our businesses in implementing policy and best practice across all our operations. The health and safety of our employees and contractors is paramount.

In 2018, 94% of active locations were accident free. The accident frequency rate (number of accidents per million man-hours) has reduced by an average of 10% per annum over the last decade. We are, however, deeply saddened to report three employee fatalities and three contractor fatalities during 2018. Of these, two were road traffic accidents. We extend our sincere sympathies to each of their families. All fatalities are independently investigated and we have redoubled our focus on our CRH Life Saving Rules, which is a cornerstone of our safety strategy.

We continued to invest in safety initiatives and in the past five years over €190 million has been invested in this area. 2018 has seen a further focus on areas including contractor management and safety culture, as well as electrical and machine safety.

Creating solutions for our customers

Tarmac, part of CRH's Europe Heavyside Division, works closely with its customers to understand their needs and deliver outstanding levels of service. New technology and innovation enables Tarmac to adapt and be flexible in its approach to delivering for its customers.

42% of product revenue comes from products with enhanced sustainability attributes

Every day, in 32 countries worldwide, our employees deliver solutions for our customers' construction projects in the residential, non-residential and infrastructure sectors. We work with our customers to create products that deliver specific sustainability and performance goals as well as solve problems through innovative design.

We are also interested in the development of climate-friendly building materials such as lower carbon cements and recycled aggregates. As well as reducing CO2 emissions, this improves resource efficiency and minimises construction waste. For example, recycled asphalt pavement and shingles provided 22% of raw materials requirements in our US asphalt business. In addition, concrete and building envelope products can also contribute to a more energy-efficient, resilient and sustainable built environment.

Overall, 42% of our product revenue comes from products with enhanced sustainability attributes, such as products that incorporate recycled material or that have a lower carbon footprint. Additionally, 24% of revenue from products that can be used directly in structures (such as concrete and building envelope products) comes from products that can be used in structures certified to sustainability standards such as LEEDTM and BREEAM®.

Collaborating and engaging for sustainability

CRH collaborates with the Wildlife Habitat Council to enhance biodiversity at many of its locations across North America. This insect hotel was constructed by employees and their children on the wildlife habitat site of Stoneco Ottawa Lake Quarry, Michigan. The Quarry achieved Wildlife Habitat Council certification in 2018.

1,300+ stakeholder events

We engage with many different stakeholders around the world, serving as a materials and products provider to millions of projects, an employer to thousands, operating as local businesses rooted in our surrounding communities. As well as carrying out our responsibilities as a leading business, collaboration and engagement with stakeholders helps us in our ambition to contribute to addressing global sustainability challenges. For example, we are a founding member of the Global Cement and Concrete Association (GCCA), an organisation dedicated to developing the industry's role in sustainable construction.

It is our practice to take an inclusive, collaborative and responsive approach to developing stakeholder relationships and in 2018, our Group companies hosted over 1,300 stakeholder events.

As a responsible corporate citizen, it is our policy to participate fully in the communities in which we operate and to support charities and local community projects through donations and other assistance, actively encouraging employee participation. Recent projects included providing education, employment and shelter, as well as supporting conservation and cultural programmes.

Together, our businesses purchase c. €17 billion of goods and services every year. We have a Supplier Code of Conduct. We assess risks and opportunities at the commodity level and aim to drive improvement actions at the point where we have most influence with our suppliers. We endorse human and labour rights and support the principles set out in the articles of the UN's Universal Declaration of Human Rights and the International Labour Organisation's Core Labour Principles, insofar as they apply to our businesses. We continue to evolve our processes and policies in line with changing best practices and publish an annual 'Commitment to Human Rights: Modern Slavery Statement of CRH plc' on www.crh.com.

Developing and empowering our people

Participants in the graduate training programme at Podilsky Cement Plant, Ukraine, part of CRH's Europe Heavyside Division. Through its graduate programme, Podilsky Cement teams up with tomorrow's brightest creative talent to make products that create opportunities for everyone.

90,000 employees

With operations in 32 countries, CRH is not only multinational but also multicultural. Our ambition is to be the employer of choice in our industry, recognising that people are critical to sustaining competitive advantage and long-term success.

In 2018 we further increased our focus on inclusion and diversity, aiming ultimately to attract and develop a workforce that is as diverse as our customers and our communities. We believe that employing people from a broad range of ethnicities, backgrounds, experiences and perspectives creates an inclusive workforce, which provides us with a competitive advantage. We are therefore implementing a pragmatic programme aimed at increasing social diversity, not only of employees, but also of the pool of talent available to take up opportunities in CRH.

In relation to gender diversity, we recognise that the building materials industry traditionally attracts more male than female employees. In 2018, 16% of employees overall were female, a decrease on the previous year due to the divestment of our DIY businesses in the Netherlands and Belgium. Of operational staff, 8% are female, of clerical and administrative staff, 43% are female, while within senior management, 10% are female, a positive increase from 9% in 2017 and a recognition of our ambition to have greater gender representation at senior levels of our organisation in future years. As of 27 February 2019, 38% of the Directors of CRH plc were female.

We respect the right of employees to freedom of association and in 2018, c. 19% of our employees were represented by trade unions.

We endeavour to ensure equal access to rewarding career and personal development experiences for employees worldwide. In 2018, we continued to place an emphasis on training and skills learning, as well as developing and recruiting talented leaders to guide our evolving and growing company.

Sustainability - continued

Progressing our key priority areas

Protecting the environment

CRH Canada's biodiversity initiatives are focused on creating habitats that complement adjacent lands and enhance opportunities for attracting new native species, such as this Red Fox, pictured at the Dufferin Aggregates Flamboro Quarry in Ontario.

23% reduction in specific cement CO2

With ever increasing demands on world resources and mounting pressures on the global climate, we believe that it is important that we continue to focus on achieving continuous improvement in standards of environmental management and control, addressing our environmental risks and reducing potential impacts. This ensures we play our part in protecting the environment.

We work with stakeholders including customers and the wider building materials industry to promote emissions reduction and resource efficiency. One particular focus area is the circular economy, also known as the closed-loop economy, where products and resources are re-used where appropriate as part of new product life-cycles. For example, by incorporating alternative raw materials into our products, we reduced our reliance on virgin raw materials by 32 million tonnes in 2018. We also encourage biodiversity and 98% of our extractive locations have restoration plans.

Our climate strategy, which is integrated with our business strategy, seeks to provide more building solutions that reduce emissions and promote climate resilience, recognising the long-term durability and carbon benefits of concrete construction during the lifetime of buildings. We have governance structures that provide oversight, assessment and management of risks and opportunities related to climate.

We focus on reducing our own emissions and hence the carbon footprint of our products. Having achieved our initial CO2 reduction commitment three years ahead of target in 2012, we are on-track for our 2020 CO2 reduction commitment. This is for a 25% reduction in specific net CO2 emissions on 1990 levels, and covers the portfolio of cement plants owned by CRH in 2013 when the target was set. We are now looking at setting a post 2020 target in line with the Paris Agreement on Climate Change and our commitment to a lower carbon future. We are also considering the recommendations of the Task Force on Climaterelated Financial Disclosures (TCFD). Further key performance indicators in this area are included on page 14.

Operating with integrity

CRH's CoBC training programme, which includes an e-learning component, has at its core the aim of ensuring that everyone in CRH understands that there is never a good business reason to do the wrong thing.

c. 38,500 employees trained in our Code of Business Conduct in 2018

We view integrity and good governance as fundamental to long-term business success and we are committed to meeting the highest standards of business conduct and corporate governance.

We embrace a 'Speak-up' culture where employees are encouraged to inform us immediately of any actual or suspected unethical behaviour or a possible breach of our CoBC. Our comprehensive CoBC is underpinned by our Anti-Bribery Policy, which explicitly states that CRH does not tolerate any form of bribery, prohibits facilitation payments and requires that political contributions must not be made to obtain an unfair advantage in business transactions. Further guidance is provided within the Anti-Bribery Policy on what is acceptable in relation to gifts, hospitality and promotional expenditure, political contributions, and charitable and community donations. The policy also outlines the due diligence required on business partners to ensure they share our commitment to ethical business standards. At year end, senior management complete an Annual Compliance Certification confirming that procedures at their business complied with both our CoBC and Anti-Bribery Policy.

All new employees are provided with the CoBC and training is provided on a regular basis to relevant employees. Certain employees, determined according to the risk profile of their role, receive the Anti-Bribery Policy and undertake annual advanced compliance training (ACT) covering Anti-Bribery among other CRH policies. This training is delivered in a classroom setting every third year, with e-learning in the intervening years, and c. 14,000 employees completed ACT training during 2018.

All CRH companies respect and comply with the laws regarding political contributions in the countries and regions in which they operate. In the US, CRH supports the rights of employees to participate in the political process through employee-funded Political Action Committees (PACs). CRH's US operations provide administrative support (consistent with applicable laws) to their affiliated federal and state PACs in the US.

By considering "

the full life cycle of our products and innovating to drive more sustainable outcomes in the built environment, we aim to have a more positive impact on wider society and the environment while delivering profitable growth. "

AVALON NORTH COMPLEX

Oldcastle BuildingEnvelope®, part of CRH's Americas Products Division, manufactured and supplied a custom engineered curtain wall, windows and storefronts for the Avalon North Station apartment complex, one of the tallest buildings in Boston, Massachusetts, US. The Avalon North Station complex has achieved Leadership in Energy and Environmental Design (LEED®) silver certification.

Risk Governance Creating value through risk management

The Group's Enterprise Risk Management (ERM) framework is fully embedded into our business processes. It is not a static framework, but a dynamic process that the Group utilises to ensure the barriers to the realisation of strategy are identified, assessed and managed. Managing these barriers assists in realising our objectives of disciplined and focused growth, on a continuous basis, maximising performance and returns, and conducting our business in a sustainable manner. Such an environment allows for effective risk taking to generate sustainable shareholder value for CRH.

ERM Framework

ERM in CRH is a forward-looking, strategy-centric approach to managing the risks inherent in decision-making.

The ERM framework implemented across the Group ensures a standardised, global system of identification, management and reporting of risks. It is developed in line with the Committee of Sponsoring Organisations of the Treadway Commission (COSO) guidelines and sets out a structured and consistent approach to risk throughout all our operations.

The common language and overarching nature of the ERM framework supports senior management when considering risks in strategic planning processes, thereby refining the strategy chosen, ensuring resilience and responsiveness to risks associated with the execution of strategy and conducting our business in a sustainable manner.

Integrating risk with related strategic and performance functions and processes within CRH has helped clarify the linkages and further highlight the importance of ERM as

Sustainable Value Creation Through ERM

2018 HIGHLIGHTS

In order to continue to develop the ERM framework and integrate it into our operations, a number of activities were carried out during 2018:

300

Risk Workshops Over 30 risk workshops were held, bringing the total number to c. 100 in three years.

These business-led, discussion-based workshops create an environment to garner comprehensive risk insights to ensure appropriate execution of risk management and that opportunities are identified and acted upon.

Senior Operating Leadership Engagement

Over 300 senior leaders participated in workshops, bringing the total number to over 900 in three years.

Management crystalises their view of their unique internal and external risk landscapes, informing the Group's perspective, and ensuring that risks are managed within defined risk appetites in the businesses.

Risk Champion Forums

Creation and hosting of forums involving 31 business leaders as part of our Risk Champion network.

Risk Champion forums act as a medium to share best practice risk management within our operating companies and create opportunities for sharing knowledge and competencies within the network and the wider Group.

Senior Group Leadership Survey

CRH conducted a number of face-to-face interviews and surveys among its senior leaders, with the activity being completed by 36 participants.

The feedback and recommendations provided by senior leaders were integrated into the ERM framework and helped to improve ERM within our operations and Group.

a key component in strategic planning and performance management.

Ongoing development of the ERM framework is informed on a continuous basis through bottom-up processes undertaken across the Group. These activities support risk information originating at operating company level, to feed through to higher levels of the organisation.

Roles and Responsibilities

The ERM framework facilitates the execution of executive responsibilities, by providing high quality risk information which offers clear visibility and enables informed decision-making. Final output of the reporting exercise is presented to the Audit Committee and the Board for approval.

The Board is ultimately responsible for risk management within CRH. The Board has delegated responsibility for the monitoring of the effectiveness of the Group's risk management and internal control systems to the Audit Committee.

The Group Enterprise Risk Committee provides governance, leadership and vision, to risk management initiatives throughout the Group.

The Audit Committee reviews the list of principal risks and uncertainties and the risk factors disclosed on pages 104 to 109 and 225 to 233 respectively.

Engaging and Embedding

To reflect the Group's diverse risk landscape and thoroughly understand potential risks that may materialise over the coming years, the Group Risk function facilitates risk workshops, supplemented by meetings, seminars and regional risk champion forums.

Risk workshops are not only conducted at operating company level, but also for other strategic areas (cluster, product, function) and at Group level.

New acquisitions are generally brought onto the ERM framework within 12 months of acquisition, using a workshop as a foundation stone.

Evolution and Integration

Given the dynamic nature of risk and the evolutionary nature of ERM, the framework operates as a business process at all levels of the Group. Integration with strategy and performance agendas, in addition to ongoing management processes, ensures a robust and effective risk environment assisting in maximising the performance of our businesses.

All uncertainties that present themselves as downside risks are appropriately managed in line with the Group risk appetite and those which present themselves as opportunities are sufficiently explored and captured, where possible.

Risk Champion Network

The risk champion network established within CRH ensures that an advocate exists within each entity at every level of the Group, promoting ownership and acting as a focal point for sharing knowledge and best practices.

To further the efficacy of the network, Group Risk organises various seminars and forums that allow for further training and development of members. During these sessions individuals discuss management practices of prominent risks that occur in certain geographies, product groups or across the wider Group.

Reporting and Documentation

Risk information gathered from across the Group is aggregated and further reviewed and enriched by cluster, division and platform level management.

Additional strategic and Group-related risks are then added by senior executives to ensure the risks highlighted on pages 104 to 109 and 225 to 233 of this report are reflective of the potential barriers to the realisation of our business strategy. These risks form the basis of Board and Audit Committee communications and discussions.

The ERM framework provides ongoing assurance to the Board that processes and behaviours are embedded in CRH that ensure the most important risks facing the business are routinely and consistently identified, assessed and effectively managed.

The Risk Appetite and Tolerance Framework is a critical component of CRH's risk governance system through defining the key risk parameters within which strategic decision-making takes place, assisting with our objectives of disciplined and focused growth. The Board approves the Risk Appetite and Tolerance Framework on an annual basis in line with best corporate governance practice.

Viability Statement

Our Viability Statement, which does not form part of the Annual Report and Form 20-F, as filed with the SEC, has been prepared in accordance with the UK Corporate Governance Code 2016 and is set out on page 100 of the Directors' Report.

Our Three Lines of Defence CRH RISK MANAGEMENT FRAMEWORK

PERFORMANCE Coral Industries, acquired in 2018 by Oldcastle BuildingEnvelope®, part of CRH's Americas Products Division, provided materials to this 27,000-square-foot office building in Richmond, Virginia. Coral's architectural products were used to create the elegant, all-glass clerestory atrium, with its curtain wall systems in both clear and bronze anodised finishes used throughout the exterior applications. Coral also provided 1/2" glass stair railing in the interior atrium along with medium stile entrances and storefront on the interior office fronts.

BUSINESS

CRH Annual Report and Form 20-F I 2018

Business Overview

The percentage of Group revenue and operating profit for each of the reporting segments for 2018, 2017 and 2016 is as follows:

Finance Director's Review 20181

The overall trading environment for the Group in 2018 was positive with good demand and continued favourable market fundamentals in the Americas coupled with positive underlying momentum in Europe; both experienced against a backdrop of energy-related input cost inflation and significant weather disruption throughout the year. The Group continued to focus on cash generation and appropriate deployment of capital. Operating cash flow for the year amounted to €1.9 billion (2017: €2.2 billion) impacted by the tax paid on the divestment of Americas Distribution. Year-end net debt finished under €7.0 billion (2017: €5.8 billion) after acquisition spend net of disposal proceeds of €0.6 billion (2017: €1.7 billion) and total distributions to shareholders of €1.3 billion (2017: €0.5 billion).

Key Components of 2018 Performance

The overall sales movement in the year was a combination of the performance of each of the individual segments as noted below.

Despite harsh winter weather conditions experienced in the early months and record levels of rainfall during the year, our Americas operations benefited from a positive macroeconomic backdrop and good underlying demand in the US. An organic sales2 increase of 4% in our Americas Materials Division was supported by continued growth across all sectors in our markets. Americas Products saw growth along the West Coast and in parts of the South, due to good residential and non-residential construction, partly offset by softness in some Northern US regions. Overall sales improved by 2% compared to 2017.

In Europe, total sales were up 4% compared with 2017 and organic sales were 2% ahead due to ongoing improvement in key markets. Performance for Europe Heavyside was positive, particularly for our operations in Ireland, the Benelux, Denmark and Poland with more challenging trading conditions in the UK, due to continued Brexit uncertainty during the year. With sales 5% ahead of 2017, it was a year

of progress for Europe Lightside boosted by acquisitions in the Network Access Products and Construction Accessories platforms. Europe Distribution had a mixed performance with ongoing positive momentum in the Netherlands, particularly in residential construction, partly offset by first half challenges in Switzerland and Belgium.

In Asia, against a backdrop of strong domestic demand and accelerating government infrastructure spending, the Philippine economy continued to perform amidst inflationary pressures. However, the resultant volume and price progress was more than offset by cost increases, particularly energy.

EBITDA (as defined)* for the year amounted to €3.4 billion, a 7% increase on 2017 (2017: €3.1 billion) as the benefit from acquisitions and underlying growth was partly offset by energy-related input cost inflation. Reported profit after tax was €0.6 billion ahead of 2017 at €2.5 billion, (2017: €1.9 billion), with this year's profit augmented by the profit on disposal of our Americas Distribution business partly offset by two non-recurring one-off items in 2017; a past service credit of €81 million due to changes in a Swiss pension scheme and a €440 million reduction in the Group's net deferred tax liabilities due to changes in tax legislation in the US.

Senan Murphy, Finance Director 2018 was a year of record profit delivery, with continued margin improvement amid weather disruption and inflationary cost environment.

The euro strengthened against most major currencies during 2018 resulting in the average euro/US Dollar rate weakening from 1.1297 in 2017 to 1.1810 in 2018 and the Pound Sterling weakening from an average 0.8767 in 2017 to 0.8847 in 2018. Overall currency movements resulted in an unfavourable net foreign currency translation impact on our results as shown on the table on page 28. The average and year-end 2018 exchange rates of the major currencies impacting on the Group are set out on page 138.

1. See cautionary statement regarding forward-looking statements on page 99.
1. Details of how non-GAAP measures are calculated are set out on pages 217 to 220.

Finance Director's Review 2018 - continued

Key Components of 2018 Performance

€ million	Sales revenue	EBITDA (as defined)*	Operating profit	(Loss)/profit on disposals	Finance costs (net)	Assoc. and JV PAT (i)	Pre-tax profit
2017	25,220	3,146	2,095	56	(349)	65	1,867
Exchange effects	(682)	(100)	(68)	(2)	9	(2)	(63)
2017 at 2018 rates	24,538	3,046	2,027	54	(340)	63	1,804
Incremental impact in 2018 of:
- 2017/2018 acquisitions	1,855	357	226	-	(57)	-	169
- 2017/2018 divestments	(348)	(36)	(26)	(72)	2	-	(96)
- Swiss pension past service credit (ii)	-	(81)	(81)	-	-	-	(81)
- Early bond redemption	-	-	-	-	17	-	17
- Organic	745	79	31	(6)	27	(3)	49
2018	26,790	3,365	2,177	(24)	(351)	60	1,862

% Total change	6%	7%	4%				-
% Organic change	3%	3%	2%				3%

(i) CRH's share of after-tax profits of joint ventures and associated undertakings.

(ii) 2018 includes the impact of the non-recurrence of a one-off past service credit of €81 million in 2017 due to Swiss pension plan amendments.

Liquidity and Capital Resources - 2018 compared with 2017

The comments that follow refer to the major components of the Group's cash flows for 2018 and 2017 as shown in the Consolidated Statement of Cash Flows on page 127.

The Group maintained its focus on cash management in 2018. Operating cash flow in 2018 was €1.9 billion (2017: €2.2 billion) which included cash outflows of €469 million related to the Americas Distribution discontinued operation, primarily the tax paid on the profit on disposal. Net working capital outflow for the year of €463 million (2017: €209 million outflow) reflected trends in overall sales, seasonal weather patterns and the impact of acquisitions while working capital of €2.5 billion at year end (2017: €1.8 billion) represented 9.4% of sales (2017: 7.2%). CRH believes that its current working capital is sufficient for the Group's present requirements.

Focused spending on property, plant and equipment in markets and businesses with increased demand backdrop and efficiency requirements, resulted in higher cash outflows of €1.1 billion (2017: €1.0 billion), with spend in 2018 representing 105% of depreciation (2017: 104%).

During the year the Group spent €3.6 billion on 46 transactions (2017: €1.9 billion) which was partly financed by divestment and disposal proceeds of €3.0 billion (net of cash disposed and deferred proceeds) (2017: €222 million).

On 25 April 2018, the Group announced its intention to repurchase ordinary shares of up to €1.0 billion over the forthcoming 12 months. Between 2 May and 31 December 2018, 27.9 million ordinary shares were repurchased on the London Stock Exchange (LSE) and Euronext Dublin for a total of €789 million, at an average price of €28.24 per share. The Group remains committed to the programme and it is expected that it will complete over the timeframe indicated. This buyback, together with cash dividend payments of €533 million (2017: €477 million) reflect the Group's continued focus on returns to shareholders. Net proceeds from share issues in 2018 was €11 million (2017: €42 million).

Year-end interest-bearing loans and borrowings increased by €1.3 billion to €9.3 billion (2017: €8.0 billion). At year end, the weaker euro against the US Dollar had a negative translation impact on net debt.

Reflecting all these movements, net debt of €7.0 billion at 31 December 2018 was €1.2 billion higher than year-end 2017 (€5.8 billion). The Group is in a good financial position. It is well funded and Net Interest Cover (EBITDA (as defined)*/net debt related interest costs) is 11.0x (2017: 10.9x). As set out in note 25 to the Consolidated Financial Statements the Group is significantly in excess of the minimum requirements of its covenant agreements.

In March 2018, the Group successfully issued a total of US\$1.5 billion dollar bonds, comprised of a US\$0.9 billion 10-year bond at a coupon rate of 3.95% and a US\$0.6 billion 30-year bond at a coupon rate of 4.5%. Concurrently, the Group redeemed the US\$0.29 billion bond due in July 2018 at a make-whole price.

Development Review The bond issues reflect CRH's commitment to prudent management of our debt and the timing of the related maturities and also to maintaining an investment grade credit rating.

The Group ended 2018 with total liquidity of €5.9 billion comprising €2.3 billion of cash and cash equivalents on hand and almost €3.6 billion of undrawn committed facilities (which are available until 2023). At year end, the cash balances were enough to meet all maturing debt obligations for the next 3.1 years and the weighted average maturity of the remaining term debt was 11.5 years.

CRH also has a US\$1.5 billion US commercial paper programme and a €1.5 billion Euro commercial paper programme. The purpose of these programmes is to provide short-term liquidity at attractive terms. There was no commercial paper outstanding under either of these programmes at 31 December 2018.

Contractual obligations and Off-Balance Sheet arrangements are disclosed on page 221 of this Annual Report and Form 20-F.

Segmental Reviews

The sections on pages 32 to 51 outline the scale of CRH's operations in 2018, and provide a more detailed review of performance in each of CRH's reporting segments.

2018

In 2018, the Group spent a total of c. €3.6 billion (including deferred and contingent consideration in respect of prior year acquisitions) on 46 acquisition/investment transactions. On the divestment front, the Group realised business and asset disposal proceeds of c. €3.0 billion, which demonstrates CRH's commitment to active portfolio management as part of our strategy to deliver improved margins and returns. Our strategic review of the European Distribution business is ongoing.

The most significant acquisition in 2018 was the June acquisition of Ash Grove, which gives CRH a market leadership position in the North America cement market, allowing for greater vertical integration with our existing aggregates, asphalt and readymixed concrete businesses.

In addition to the acquisition of Ash Grove, our Americas Materials Division completed 23 bolt-on acquisitions and one investment throughout the US and Canada for consideration of c. €370 million. The Americas Products Division also completed six bolt-on acquisitions in 2018 at a cost of c. €160 million. In Europe, 14 acquisitions and one investment with a total spend of c. €120 million were completed. Our Europe Heavyside business completed ten acquisitions across the UK, Ireland and France, and one investment in Poland. Our Europe Lightside Division completed an acquisition in both the UK and Australia, while our Europe Distribution Division completed an acquisition in both Belgium and Germany, complementing our existing operations in these countries.

The majority of divestment proceeds relate to the divestment of our Americas Distribution business in January 2018 for a final agreed consideration of c. €2.4 billion. In July, the Group completed the divestment of our DIY business in the Netherlands and Belgium, together with certain related property assets, for total consideration of c. €0.5 billion. A further 18 smaller business divestments were completed across all segments demonstrating our continued focus on portfolio management. In addition to these business divestments, the Group realised proceeds of c. €0.1 billion from the disposal of surplus property, plant and equipment.

Finance Director's Review 2017

2017 was a year of growth for CRH with increased underlying demand in the Americas, and positive momentum in Europe, while very competitive market conditions remained in Asia. With a constant focus on performance in all our businesses, coupled with our vertically integrated business model for heavyside materials, good operational leverage underpinned improved margins and returns in our American and European Divisions. The Group also maintained a focus on cash generation and appropriate deployment of capital as operating cash flow for 2017 amounted to €2.2 billion (2016: €2.3 billion) and year-end 2017 net debt increased by €0.5 billion to €5.8 billion (2016: €5.3 billion) despite acquisition spend net of disposal proceeds increasing to €1.7 billion (2016: net inflow €0.1 billion).

Key Components of 2017 Performance

The overall sales movement in 2017 was a combination of the performance of each of the individual segments as noted below.

Despite hurricane activity and record levels of rainfall during 2017, our Americas operations benefited from stable market fundamentals

in the US and good underlying demand. An organic sales increase of 3% in our Americas Materials Division was supported by growth in the residential and non-residential sectors, while infrastructure remained relatively stable in our markets. In Americas Products, sales were broadly in line with 2016 as good growth along the West Coast and parts of the South and Southeast were partly offset by more modest trading in Canada and parts of the Northern US.

In Europe, total sales were up 1% compared with 2016 and organic sales were 2% ahead due to continued recovery in key markets. Europe Heavyside's outturn was positive, with a broad-based recovery in Ireland, France, Poland and Finland more than offsetting more subdued activity in Switzerland and the UK. Europe Lightside experienced a year of further progress as good performances in a number of our main markets resulted in sales finishing 3% ahead of 2016. The backdrop at Europe Distribution was stable as a strong contribution from the Netherlands together with solid demand in Belgium and Germany was partly offset by challenges in Switzerland.

In Asia, economic growth and market fundamentals remained robust in the Philippines in 2017, with both residential and

non-residential demand stable, though infrastructure investment was slower than expected and pricing remained very competitive. In India, a favourable economic backdrop drove demand, while reduced construction activity in China had a negative impact on volumes but this was more than offset by stronger pricing.

Americas Distribution, which was classified as discontinued operations for reporting purposes, benefited from good underlying demand in 2017, particularly for Exterior Products.

EBITDA (as defined)* for 2017 amounted to €3.1 billion, a 6% increase on 2016 (2016: €3.0 billion) and reported profit after tax1 was €1.9 billion (2016: €1.3 billion).

The euro strengthened against most major currencies during 2017, particularly towards the end of the year resulting in the average euro/Pound Sterling rate weakening from 0.8195 in 2016 to 0.8767 in 2017 and the US Dollar weakening from an average 1.1069 in 2016 to 1.1297 in 2017. Overall currency movements resulted in an unfavourable net foreign currency translation impact on our results as shown in the table below. The average and year-end 2017 exchange rates of the major currencies which impacted on the Group are set out on page 138.

Key Components of 2017 Performance

€ million	Sales revenue	EBITDA (as defined)*	Operating profit	Profit on disposals	Finance costs (net)	Assoc. and JV PAT (i)	Pre-tax profit
2016	24,789	2,980	1,908	53	(383)	42	1,620
Exchange effects	(479)	(74)	(53)	(1)	6	1	(47)
2016 at 2017 rates	24,310	2,906	1,855	52	(377)	43	1,573
Incremental impact in 2017 of:
- 2016/2017 acquisitions	596	60	14	-	(8)	-	6
- 2016/2017 divestments	(204)	(21)	(14)	(3)	1	-	(16)
- LH Assets integration costs (ii)	-	45	45	-	15	-	60
- Swiss pension past service credit (iii)	-	81	81	-	-	-	81
- Early bond redemption	-	-	-	-	(18)	-	(18)
- Organic	518	75	114	7	38	22	181
2017	25,220	3,146	2,095	56	(349)	65	1,867
% Total change	2%	6%	10%				15%
% Organic change	2%	3%	6%				12%

(i) CRH's share of after-tax profits of joint ventures and associated undertakings.

(ii) LH Assets integration costs of €45 million were incurred in 2016. In addition, following the related debt restructuring, finance costs reduced by €15 million in 2017.

(iii) 2017 included a one-off past service credit of €81 million due to changes in the Group's pension scheme in Switzerland.

30 * EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Group's share of equity accounted investments' profit after tax. 1. Profit after tax is as reported in the Consolidated Income Statement on page 123.

Development Review The underlying results for 2017 were augmented by two one-off items; a past service credit of €81 million due to changes in a Swiss pension scheme and a €447 million reduction in the Group's net deferred tax liabilities1 due to changes in tax legislation related to the enactment of the "Tax Cuts and Jobs Act" in the US during 2017.

Liquidity and Capital Resources - 2017 compared with 2016

The comments that follow refer to the major components of the Group's cash flows for 2017 and 2016 as shown in the Consolidated Statement of Cash Flows on page 127.

Throughout 2017 the Group remained focused on cash management. Operating cash flow decreased marginally to €2.2 billion (2016: €2.3 billion) with net working capital outflow for 2017 of €209 million (2016: €56 million inflow) which reflected trends in overall sales, seasonal weather patterns and the impact of acquisitions in the final quarter of 2017.

Focused spending on property, plant and equipment in markets and businesses with increased demand backdrop and efficiency requirements, particularly in the Americas, resulted in higher cash outflows of €1.0 billion (2016: €853 million).

During 2017 the Group spent €1.9 billion on 34 transactions (2016: €213 million) which was partly financed by divestment and disposal proceeds of €222 million (net of cash disposed and deferred proceeds) (2016: €283 million).

Cash dividend payments of €477 million in 2017 (2016: €360 million) reflected the Group's continued focus on returns to shareholders. Net proceeds of €42 million from share issues in 2017 were similar to 2016 (2016: €52 million).

Year-end 2017 interest-bearing loans and borrowings increased by €0.2 billion to €8.0 billion (2016: €7.8 billion). At year end 2017, the stronger euro against both the US Dollar and Pound Sterling had a positive translation impact on net debt.

2017

In 2017, the Group spent a total of €1.9 billion (including deferred and contingent consideration in respect of prior year acquisitions) on 34 acquisition/investment transactions. On the divestment front, the Group realised business and asset disposal proceeds of €0.2 billion.

In the Americas, c. €1.3 billion was spent on 21 acquisitions and one investment. Our Materials Division completed the largest 2017 acquisition at the end of November with the acquisition of Suwannee American Cement together with certain other materials assets in Florida. The total assets acquired consisted of a 1 million tonne cement plant in North Central Florida, 18 readymixed concrete plants, an aggregates quarry, two block plants and nine gunite facilities. The Materials Division also completed 12 further bolt-on acquisitions, including two in Canada, adding c. 2.5 billion tonnes of additional aggregates reserves. The Products Division completed eight acquisitions and one investment in 2017 at a cost of c. €0.2 billion.

In Europe, c. €0.6 billion was spent on ten acquisitions and two investments. This was split between eight acquisitions and one investment in Europe Heavyside and two acquisitions and one investment in Europe Distribution.

The largest acquisition in Europe in 2017 was that of the Fels lime business which was acquired at the end of October 2017. Fels' assets included significant high-quality limestone reserves and 11 production locations; nine in Germany and one in both the Czech Republic and Russia.

Business divestments during 2017, all in Europe, generated net proceeds of c. €85 million. The remaining clay products businesses in Europe (Belgium, Germany, Netherlands and Poland) were divested and our Heavyside Division also sold its civil prefabricated concrete businesses in the Benelux, along with seven other small noncore businesses. In addition to these business divestments, the Group realised proceeds of c. €137 million from the disposal of surplus property, plant and equipment.

2016

In 2016, the Group completed 21 bolt-on acquisitions and three investment transactions for a total spend of €213 million (including deferred and contingent consideration in respect of prior year acquisitions). In Europe, eight acquisitions and two investments with a total spend of c. €43 million were completed. Our Heavyside business acquired 11 readymixed concrete plants in the UK, three quarries in Ireland, an aggregates terminal in Belgium and entered into a sand & gravel joint venture in France, adding reserves of 11 million tonnes. Further investments were also made to buy out a minority position in Spain and add to an existing joint venture in Ireland. Our Lightside Division completed two acquisitions in the UK. The Distribution Division acquired a small builders merchant in Austria. In the Americas, c. €170 million was spent on 13 acquisitions and one investment. Our Materials Division completed eight bolt-on acquisitions and one investment in 2016. The principal acquisition was of a significant aggregates and asphalt operation in Utah. Seven further bolt-on acquisitions were completed. In total 93 million tonnes of permitted reserves were added during the year. The Products Division completed five acquisitions, the largest of which was of a Canadian exterior surfaces company which was a strong addition to the core hardscape business of our Architectural Products Group (APG). Three Infrastructure bolt-on operations were also acquired. Finally, a glass hardware company was added in Perth, Australia.

On the divestment front, the Group completed 13 transactions and realised total business and asset disposal proceeds of €283 million in 2016. Business divestments during 2016 generated net proceeds of €123 million. In Europe, our Distribution Division disposed of a roofing products company in the Netherlands while the Heavyside business divested of operations in Poland, Switzerland and Romania. Two small joint venture holdings in France and Germany were also divested. The Americas Materials Division disposed of select aggregates and asphalt operations in Missouri, a small waterproofing business in Michigan and a readymixed concrete operation in Iowa and Minnesota. Certain aggregates assets in Oregon and Montana were also disposed in a cash neutral swap. Finally, our Americas Products Division disposed of a pavement products operation, certain Infrastructure operations in Canada and the assets of a burial vaults business.

Net deferred tax liabilities reduction of €447 million is stated on a continuing (€440 million) and discontinued (€7 million) basis.

SEGMENTAL

CRH Annual Report and Form 20-F I 2018

Materials Overview	34
- Americas Materials	36
- Europe Heavyside	38
- Asia	40
Products Overview	42
- Americas Products	44
- Europe Lightside	46
Distribution Overview	48
- Europe Distribution	50

SEGMENTAL REVIEWS

CRH Annual Report and Form 20-F I 2018

Materials Overview

CRH is a leading vertically integrated producer and supplier of heavyside building materials globally. We produce aggregates, lime, cement, concrete products, and asphalt in major markets across North America, Europe and Asia. CRH is the largest heavyside materials business in Europe and the largest producer of aggregates and asphalt in North America.

What we do

Our materials businesses are founded in resource-backed cement and aggregates assets, which support the manufacture and supply of aggregates, lime, cement, concrete products and asphalt.

These materials are used extensively in a wide range of construction applications from major public road and infrastructure projects, to the development or refurbishment of commercial buildings and private residential structures. Customers typically range from national, regional and local governments, to building

contractors and other construction product and service providers.

In addition to leveraging the benefits of scale and best practice, our businesses are differentiated in their markets by a proven track record in serving the unique needs of local customers and successfully delivering for those customers.

How we create value

Our portfolio of vertically integrated materials businesses build strong regional leadership positions underpinned in local markets. We place great emphasis on performance improvement initiatives across our businesses and seek to

AGGREGATES

Aggregates are naturally occurring mineral deposits such as granite, limestone and sandstone. Our businesses extract these deposits and process them for sale. They are supplied as a range of products for use in general construction and engineering projects as well as in a variety of additional CRH product lines including asphalt and readymixed concrete. For additional information on the Group's mineral reserves, see page 223.

LIME

Lime is a versatile chemical product used in multiple industries. Our Europe based lime businesses produce and supply a wide range of specialist products for the agricultural, environmental, industrial and construction sectors. CRH is the second largest producer of lime in the European market and has operations in Ireland, the Czech Republic, Germany, Poland, Russia and the UK.

CEMENT

Cement is the primary binding agent in the production of concrete products for the construction industry. Primarily produced from limestone, cement products are most commonly mixed with sand, stone or other aggregates and water to form concrete. While typically produced for sale within each country, cement can also be traded internationally. Because cement manufacturing is an energy-intensive process, our businesses have established a range of initiatives to reduce our carbon footprint.

Net Assets at 31 December 2018 comprise segment assets less segment liabilities as disclosed in note 2 to the Consolidated Financial Statements.
Geography, sector exposure and end-use balance are based on sales.

34 3. Throughout this document annualised volumes have been used which reflect the full-year impact of development activity during the year and may vary from actual volumes sold.

AMERICAS MATERIALS

Heavyside

Materials

64%

Non-Residential

Residential

40%

30%

Infrastructu

30%

Tarmac UK

35%

Europe West

35%

Europe North

15%

Europe East

15%

Distributio

Lightside

Products

26%

10%n

88% United States

11%Canada

	€ million	% of Group
Sales	8,951	33%
Operating Profit	1,009	47%
40% Reside EBITDA (as defined)*	1,493	44%
Brazil ntial % Net Assets1 30% Non-R 1	11,735	47%
esident	GEOGRAPHY2 ial
30% Canada Infrast ructu 11 88% 1% re United States Brazil United States % 11% 88 Canada
SECTOR EXPOSURE2 Residential Non-Residential Infrastructure
20% 25%		55%
END-USE2
New RMI

64% EUROPE HEAVYSIDE

1%Brazil

Europe North 15% Europe East 15% 35% 35% 30% END-USE2 New RMI 70% 30%

ASIA

	€ million	% of Group
Sales	431	2%
Operating Loss 10%	-14	-1%
Distrib EBITDA (as defined)* utio n	25	1%
Net Assets1	1,279	5%
100% Philippines
SECTOR EXPOSURE2
Residential	Non-Residential Infrastructure
50%	15%	35%

SECTOR EXPOSURE2
	Residential Non-Residential Infrastructure
	50%		15%	35%
END-USE2
		New			RMI
		90%			10%

create value through optimisation of our asset base. Our deep market knowledge drives performance, while our extensive network allows us to leverage talent, synergies for procurement, cost and logistics management and drive both commercial and operational excellence.

45% 55%

With a strong pipeline of opportunities across regions, our development strategy is focused on identifying and integrating bolt-on acquisitions for synergies, reserves and further vertical integration, in addition to opportunities in contiguous regions to extend and strengthen regional positions.

How we structure our operations

Our Americas Materials Division is organised across three countries (the US, Canada and Brazil) and employs approximately 27,300 people at over 1,450 locations.

Our Europe Heavyside Division is organised across four operational clusters (Tarmac (UK), Europe North, Europe West and Europe East). Europe Heavyside employs approximately 25,900 people at close to 1,140 locations.

Our operations in Asia comprise cement operations in the Philippines along with equity accounted investments in Northeast China and Southern India. Approximately 1,300 people are employed at 12 operating locations with a further 7,300 people in our equity accounted investments. As of 1 January 2019, Asia was combined with Europe Heavyside to form Europe Materials.

Annualised Sales Volumes3 : Aggregates: 304.6m tonnes; Lime: 7.7m tonnes; Cement: 48.2m tonnes; Readymixed Concrete: 31.0m m3 ; Concrete Products: 6.4m tonnes; Asphalt: 57.3m tonnes

READYMIXED CONCRETE

Readymixed concrete is a highly versatile building material comprised of aggregates bound together with cement and water. It is strong, customisable and durable, making it the world's most popular building material. Our readymixed concrete is produced to customer specifications, mainly on-site at aggregates locations and is delivered in a timely manner from our extensive network in local markets.

CONCRETE PRODUCTS

Europe Heavyside manufactures concrete products such as floor and wall elements, beams and vaults, pavers and fillers. Raw materials include cement, crushed stone and sand and gravel, all of which are readily available locally. Concrete products are sold to both the public and private construction sectors. Competition comes mainly from other readymixed concrete and concrete products producers, as well as from a variety of smaller manufacturers in local economies.

PAVING & CONSTRUCTION

CRH is the leading supplier of product for road construction and repair/maintenance demand in North America. Annually, our crews complete approximately €3.8 billion in paving and construction projects.

In Europe CRH has a number of paving and construction businesses in Ireland, Poland and the UK.

ASPHALT

Asphalt is primarily used in road surfacing and other transport infrastructure including airport runways. It consists of aggregates bound together with bitumen, a by-product of the oil industry. Customers are typically government and local authorities involved in the construction and maintenance of road networks. CRH uses recycled materials and innovative technologies that result in lower emissions. CRH is the number one asphalt producer in North America, and has leadership positions in the UK and Ireland.

Operations Review - Americas Materials Prior Year 2017

Results		Analysis of change
€ million	2016	Exchange	Acquisitions	Divestments	LH Costs1	Organic	2017	% change
Sales revenue	7,598	‐123	+379	‐80	-	+196	7,970	5%
EBITDA (as defined)*	1,204	‐24	+46	‐5	+7	+42	1,270	5%
Operating profit	818	‐19	+12	‐2	+7	+42	858	5%
EBITDA (as defined)*/sales	15.8%						15.9%
Operating profit/sales	10.8%						10.8%

1 The LH integration costs refers to the businesses acquired from LafargeHolcim in 2015

2017 was a year of progress in Americas Materials, supported by economic growth across residential and non-residential sectors, while infrastructure remained stable in our markets. Despite record levels of rainfall during 2017 and hurricane activity experienced in Florida and Texas, both sales and operating profit increased 5%, as selling price increases were achieved across all products in North America.

Aggregates had a strong finish to 2017 and together with the positive impact of acquisitions during 2017, total volumes were 7% ahead, while like-for-like volumes were flat. Average price increases of 6% on a like-for-like basis combined with efficient cost control resulted in margin expansion.

Margin improvement was also experienced in our readymixed concrete operations as like-for-like volumes increased 4% while overall volumes were 3% ahead, impacted by 2016 divestments in our Central division. Both like-for-like and total average prices increased by 3%.

Although like-for-like asphalt volumes increased 2% and 6% on an overall basis, asphalt margins were under pressure with like-for-like average price increases unable to offset higher input costs.

With pockets of increased state infrastructure spending, like-for-like sales for paving and construction services increased 1% with overall sales 7% ahead. Construction margin improved slightly in 2017, despite the competitive bidding environment.

Our cement business in North America saw total volumes 3% ahead in 2017 and marginal price increases, supported by stronger demand in the US. Against the backdrop of a favourable US price environment, Americas Materials optimised its terminal network and market penetration by repositioning more volumes to the US from Canada, where competitive market conditions remained, especially in Quebec.

Americas Materials strengthened its position in existing and complementary markets throughout North America in 2017 and completed 13 acquisitions for a combined total of €1.1 billion. The principal acquisition, which was completed at the end of November 2017 and therefore had a limited contribution to 2017 trading, was Suwannee American Cement together with certain other materials assets; consisting of a 1 million tonne cement plant in Florida, 18 readymixed concrete plants, an aggregates quarry, two block plants and nine gunite facilities.

United States

Trading benefited from solid demand in the US and, despite some unfavourable weather, total volumes and prices increased across all products in 2017. Like-for-like sales saw a resulting 4% increase in 2017. Operating profit also increased though margin expansion in aggregates and readymixed concrete was partly offset by a decline in asphalt margins due to higher bitumen prices, a key component of asphalt mix.

With significant precipitation as well as softer markets in Michigan and Connecticut in 2017, volumes were down across all products in the North division, although increased pricing and improved construction sales resulted in a like-for-like sales increase. Operating profit was impacted by increased input costs, and margin declined. Like-for-like South division sales and operating profit were ahead 7% and 14% respectively in 2017, despite the impact of hurricane Irma which caused downtime at several locations in Florida and Georgia. Improvements were mainly driven by increased construction activity and margin, as well as price increases across all products.

Like-for-like Central division sales were down 3% in 2017 mainly due to unfavourable weather during the summer which continued into autumn, along with the impact of hurricane Harvey; however, with strong cost control and the benefit of operating efficiencies, overall operating profit improved over 2016. Overall demand was strong across the West division, with improved volumes across all product lines resulting in like-for-like sales up 11% compared with 2016. Operating profit was also well ahead in the division, with aggregates and readymixed concrete price increases taking hold and driving increased margin.

Canada

The overall Canadian economy expanded in 2017, led by robust gains in the core markets of Ontario, Quebec and Alberta. The pace of growth was largely fuelled by improvements in oil prices and spending by Canadian consumers. Despite the positive environment and increased volumes across all products, like-for-like sales were muted by regional variations in pricing and the performance within the construction business, which was impacted by adverse weather conditions and the non-recurrence of key projects in 2017.

Brazil

Weakness in the construction market continued during 2017 due to the unfavourable economic and political situation; however, in late 2017, lower interest rates and a reduction in inflation started to have a positive impact. While cement consumption was down 5% in 2017 in the Southeast region, CRH saw volume improvements through a focus on key customer segments; however, selling prices fell below 2016 levels.

Current Year 2018

Results			Analysis of change
€ million	2017	Exchange	Acquisitions	Divestments	Organic	2018	% change
Sales revenue	7,970	‐356	+1,026	-26	+337	8,951	12%
EBITDA (as defined)*	1,270	-56	+267	-12	+24	1,493	18%
Operating profit	858	-37	+176	-9	+21	1,009	18%
EBITDA (as defined)*/sales	15.9%					16.7%
Operating profit/sales	10.8%					11.3%

Following significant development activity in 2018 and the latter half of 2017, Americas Materials operating profit was €1.0 billion in 2018, 18% ahead of the prior year. Continued economic growth in the residential, non-residential and infrastructure sectors drove underlying demand and organic sales were 4% ahead of 2017, while organic operating profit grew 3%. The Division experienced pricing progress, with improvements across all products. However, margins were impacted by poor weather in key markets and ongoing cost inflation, with notable increases in bitumen, a key input in asphalt production, and energy costs, including diesel and gasoline.

Total aggregates volumes including acquisitions increased 8% in 2018, with the impact of inclement weather impacting like-for-like volumes, which were 1% ahead. Average prices increased 3% on a like-for-like basis and 2% overall compared with 2017, however margins were under pressure due to increased input costs.

With a later start to paving projects across some key regions and further weather-related delays experienced in the third quarter in the North and Central divisions, like-for-like asphalt volumes were down 3% with total volumes down 2%. Like-for-like prices improved 10%, but higher bitumen costs negatively impacted margins.

Total readymixed concrete volumes were 29% ahead of 2017 due to acquisition activity, and prices improved 3%. Like-for-like volumes were impacted by the unfavourable weather, though margins improved as management continued to focus on operational performance.

Overall paving and construction services revenue for 2018 increased 6% and like-for-like revenue was up 4%, mainly driven by the South division, which benefited from a good paving season that extended into the last quarter of the year. Input cost pressure, particularly in raw materials and energy, negatively impacted overall margins in the year.

The acquisition of Ash Grove in June 2018 gave CRH a market leadership position in the North American cement market, and including the partial year of ownership with our operations in Florida, Canada and Brazil, resulted in total cement volumes in 2018 of over ten million tonnes. Combined with an additional 24 bolt-on transactions, Americas Materials spent €3.3 billion in the year, adding c. 1.6 billion tonnes of reserves to the business.

United States

Despite unfavourable weather throughout the year, like-for-like sales increased 5% in 2018, and like-for-like operating profit increased 4%. US operations are organised into five divisions: North, South, Central, West and Cement.

The North division comprises operations in 13 states, with key operations in Ohio, New York, New Jersey and Michigan. Like-for-like sales increased 5%, mainly due to improved aggregates volumes and prices, as well as greater construction sales. However, adverse weather conditions and increased input costs resulted in a flat operating profit performance.

The South division comprises operations in 12 states with key operations in Florida, West Virginia and North Carolina. Like-for-like sales increased 11%, benefiting from increased construction activity with several new projects undertaken in key states. Volumes and price increases across all products resulted in a strong operating profit performance in the year.

The Central division has operations in ten states, with key operations in Texas, Minnesota and Arkansas. With record levels of rainfall and flooding, like-for-like sales decreased 4%. Reduced volumes and margin pressure resulted in operating profit finishing behind 2017.

The West division has operations in ten states, with key operations in Utah, Idaho, Washington and Colorado. With strong pricing across all products and volumes growth aided by

acquisitions, sales increased 12% during 2018. Although delayed funding in certain states impacted like-for-like aggregates and asphalt volumes, operating profit was ahead of 2017.

Our cement operations delivered higher volumes in 2018 primarily due to the acquisition of Ash Grove and a full year of ownership of the Suwannee American Cement business. Strong price realisation across our major markets and synergies with CRH's heritage businesses contributed good operating profits in 2018. Integration of the Ash Grove business progressed well and the business performed in line with expectations.

Canada

Canada had moderate GDP growth in 2018, with solid jobs growth. The economy lost some momentum in the second half of the year due to a slowdown in business and government spending. Cement volumes and prices were behind 2017 due to the exit of the Maritimes market and competitive cement market conditions. The business continued to optimise its terminal network and to further penetrate US markets. Furthermore, adverse weather conditions impacted volumes in our other product categories and as a result, operating profit was behind 2017.

Brazil

Continued political uncertainty, particularly in relation to the presidential elections as well as a truck drivers strike, impacted the Brazilian economy during 2018. The weakness in the construction market continued. CRH cement volumes were stable, in line with consumption trends in the Southeast region. Selling price increases were achieved in a higher input cost environment.

Operations Review - Europe Heavyside Prior Year 2017

Results	Analysis of change
€ million	2016	Exchange	Acquisitions	Divestments	Pension Credit1 / LH Costs2	Organic	2017	% change
Sales revenue	6,945	‐203	+95	‐110	-	+175	6,902	‐1%
EBITDA (as defined)*	781	‐26	+3	‐17	+52	+46	839	7%
Operating profit	386	-16	-3	‐14	+52	+73	478	24%
EBITDA (as defined)*/sales	11.2%						12.2%
Operating profit/sales	5.6%						6.9%

¹Swiss pension plan past service credit of €20 million in 2017

²LH integration costs of €32 million were incurred in 2016

The commentary below excludes the impact of a past service credit due to pension plan amendments in Switzerland.

Overall the 2017 outturn for Heavyside was positive with market recovery in Ireland, France, Poland and Finland in particular compensating for more subdued trading conditions in Switzerland and the UK. Although total sales declined, modest year-on-year organic growth resulted in improved operating profit, due to strong operating leverage arising from volume growth in some key countries, signs of progress on pricing and a focus on performance improvement initiatives and synergies.

Tarmac (UK)

Despite political and economic uncertainty in the UK, organic sales in our Tarmac business were ahead of 2016, with growth in building products and contracting sales and modest improvements in pricing for aggregates, asphalt and readymixed concrete compensating for a slight decline in overall volumes. Operating profit was slightly behind 2016, with increased bitumen costs in the asphalt division not fully compensated by increased sales and the impact of performance improvement initiatives.

Europe North

The UK cement and lime operations maintained stable pricing against a backdrop of modest economic growth in 2017, while improvements in production processes and synergies, achieved through network optimisation, further contributed to operating profit growth.

In Ireland, both sales and operating profit were ahead of 2016 mainly due to market recovery, particularly in the residential and commercial sectors, and the resulting growth in cement, aggregates and readymixed concrete volumes; positive trends on pricing across key products also contributed to sales and operating profit.

Improvement in the residential sector and an overall positive economic backdrop resulted in cement volumes in Finland finishing ahead of 2016 and, despite competition from importers negatively affecting cement pricing, operating profit increased.

Europe West

Both sales and operating profits in France benefited from increased volumes in all major products in 2017, particularly cement and readymixed concrete, driven by growth in the residential sector, although pricing remained challenging.

Organic sales in the Benelux grew in 2017 with a strong contribution from some larger projects in the Belgian structural business and growth in the Dutch residential sector; operating profit declined, impacted by a one-off cost in the structural business.

The 2017 outturn in Denmark was positive, with sales and operating profit significantly ahead of 2016 supported by residential construction in major cities, some large non-residential projects and overall modest economic growth.

The performance in Spain advanced on 2016, with an improvement in the macroeconomic situation.

Both sales and organic operating profit were behind 2016 in Switzerland due to difficult market conditions, with overall domestic cement consumption also impacted by poor weather early in 2017. With pricing pressure arising from imports, cement prices declined.

Lower cement volumes were experienced in our German operations due to reduced demand in key rural markets, a competitive landscape and individual project delays; results were behind 2016. Our lime acquisition, Fels, performed in line with expectations.

The LH integration costs refers to the businesses acquired from LafargeHolcim in 2015 Europe East

Overall economic growth was experienced in Poland, driven by private consumption and supported by EU-financed public spending. In addition, execution of previously delayed infrastructure projects resulted in growth in cement volumes and both sales and operating profit were well ahead of 2016.

Both sales and operating profit in Ukraine increased in 2017, with pricing improvement mitigating the impact of inflation and compensating for a decline in cement volumes, which were affected by an increased level of imports.

Our operations in Hungary and Slovakia benefited from solid economic and construction growth in 2017. Improved sales and operating profits were driven by higher cement and readymixed concrete volumes, some positive signs on pricing and an emphasis on performance improvement.

Although the mix of products and projects in Serbia negatively affected cement pricing, overall sales and operating profit were ahead of 2016, supported by both ongoing infrastructure projects and some residential growth.

Organic sales in Romania were slightly ahead of 2016, with poor weather in the early part of 2017 and slower than anticipated commencement of major infrastructure projects compensated by stronger volumes in the last quarter of 2017. Operating profits were ahead of 2016, positively impacted by price improvement and by performance improvement initiatives.

Current Year 2018

Results	Analysis of change
€ million	2017	Exchange	Acquisitions		Divestments Pension Credit1	Organic	2018	% change
Sales revenue	6,902	-54	+511	-53	-	+305	7,611	10%
EBITDA (as defined)*	839	-9	+65	-1	-20	+37	911	9%
Operating profit	478	-6	+36	-	-20	+13	501	5%
EBITDA (as defined)*/sales	12.2%						12.0%
Operating profit/sales	6.9%						6.6%

¹Swiss pension plan past service credit of €20 million in 2017

The 2018 trading performance for Europe Heavyside was positive, particularly for our operations in Ireland, the Benelux, Denmark and Poland, with more challenging trading conditions in the UK due to increased input costs and continued uncertainty as to the impact on construction activity following the Brexit vote. The year-on-year organic sales growth was reflected in an increase in operating profit, as prices progressed and a continued focus on performance initiatives contributed to the growth to offset cost inflation, which is a feature across all markets.

Tarmac (UK)

Despite challenging weather conditions earlier in the year and ongoing political and economic uncertainty in the UK, sales in our Tarmac business were ahead of 2017, underpinned by growth in contracting sales and more modest growth in other materials. Overall, operating profit was behind compared with prior year as continued progress on performance improvement measures was offset by increased input costs and a challenging market environment.

Europe North

A positive performance in the UK lime business as a result of strong environmental volumes partially offset the decline in cement volumes, resulting in overall UK sales and operating profit being behind 2017.

In Ireland, sales and operating profit were ahead of 2017 mainly due to the continued market recovery, particularly in the Dublin region. Volumes increased and positive pricing trends were evident across key products, offsetting increased input costs, particularly energy.

Although cement and readymixed concrete volumes in Finland were slightly behind in 2018, aggregates volumes were higher, positively

impacted by project activity. The concrete products business also performed well due to good market demand, particularly residential, and overall sales and operating profit finished ahead of 2017.

Europe West

Sales and operating profit in France benefited from favourable trading conditions, as good underlying demand resulted in increased volumes and a positive pricing environment for key products, with the exception of the precast concrete business, which was impacted by project delays.

Sales in the Benelux were ahead of 2017, as a positive contribution from the structural businesses reflected good demand in the residential sector, together with improved readymixed concrete pricing. Operating profit finished ahead of 2017, benefiting from good underlying market demand and one-off income.

In Denmark, sales and operating profit finished ahead of prior year, as the business benefited from good underlying demand and progress in pricing achieved during the year.

In Spain, results advanced on prior year, with improved pricing in cement and readymixed concrete partly offset by lower cement volumes, due to severe weather at the beginning of the year and the conclusion of a major project during the year.

Despite a significant increase in cement volumes in Switzerland, benefiting from solid construction growth, sales and operating profit were behind prior year due to a decline in cement and readymixed concrete prices, reflecting strong competition.

In Germany, improved cement pricing as well as the contribution of our lime business Fels, resulted in sales and operating profit ahead of prior year.

Europe East

Trading in Poland was ahead of prior year with good performance in all businesses. Healthy volumes were supported by the economy and the construction sector, which continued to grow at high rates. In addition, good price development was achieved across all activities in a competitive market, contributing to the positive performance in 2018.

In Ukraine, pricing improved in all businesses in 2018 resulting in organic sales finishing ahead year-on-year, however cement volumes declined due to increased market capacity and unfavourable weather conditions during the first quarter, which combined with cost inflation and logistical constraints resulted in operating profit being behind 2017.

Continued solid economic and construction growth in 2018 contributed to improved sales in Hungary and Slovakia. Despite increasing input costs, operating profit was ahead of prior year, mainly as a result of higher volumes across the businesses.

In Serbia, cement and readymixed concrete volumes increased compared to prior year and overall sales and operating profit were ahead of 2017, supported by performance improvement initiatives.

In Romania, after a slow start to the year, affected by very poor weather conditions, cement volumes recovered and were ahead of prior year. In addition good pricing and margin progression contributed to sales and operating profit growth.

Operations Review - Asia Prior Year 2017

Results			Analysis of change
€ million	2016	Exchange	LH Costs1	Organic	2017	% change
Sales revenue	508	-39	-	‐33	436	‐14%
EBITDA (as defined)*	109	-11	+6	‐52	52	‐52%
Operating profit	71	-7	+6	‐55	15	‐79%
EBITDA (as defined)*/sales	21.5%				11.9%
Operating profit/sales	14.0%				3.4%

¹The LH integration costs refers to the businesses acquired from LafargeHolcim in 2015

Philippines

While economic growth and market fundamentals remained robust, with both residential and non-residential demand stable, major infrastructure projects progressed at a slower pace in 2017.

Although volumes increased in 2017, driven by a strong performance in the Visayas and Mindanao (VisMin) housing sector, overall sales were behind, as prices were impacted by additional capacities in the market and aggressive competitor pricing. The impact of lower selling prices combined with increased fuel and power costs resulted in lower operating profit than 2016.

Equity Accounted Investments

China

Despite volumes being under pressure in Northeast China, prices significantly recovered in the market, with both cement and clinker prices in Yatai Building Materials well ahead of 2016. The higher prices more than offset increased coal prices and resulted in improved performance in 2017.

India

Despite recording higher cement volumes and marginally higher prices, My Home Industries (MHIL) ended 2017 with operating profit behind 2016 due to increased fuel prices, as well as lower sales of power to third parties.

Current Year 2018

Results		Analysis of change
€ million	2017	Exchange	Organic	2018	% change
Sales revenue	436	-36	+31	431	-1%
EBITDA (as defined)*	52	-7	-20	25	-52%
Operating profit/(loss)	15	-4	-25	-14	-193%
EBITDA (as defined)*/sales	11.9%			5.8%
Operating profit/sales	3.4%			-3.2%

Philippines

Against a backdrop of strong domestic demand and accelerating government infrastructure spending, the Philippine economy continued to perform despite inflationary pressures and tighter global financial conditions. The favourable long-term outlook for the construction industry remains with the government's increased focus on capital investment.

Organic revenue performance advanced due to positive prices and ongoing demand from all segments. However, notwithstanding this, operating profit was significantly behind 2017 primarily due to higher fuel and power costs, which were only partially offset by continued commercial excellence and operational performance initiatives.

Equity Accounted Investments

China

Cement demand remained subdued in Northeast China. Price increases partially offset lower volumes and increased coal prices, however Yatai Building Materials' 2018 performance was lower than 2017.

India

Strong growth in MHIL volumes in India was driven mainly by a sustained pick up in infrastructure spend in Andhra Pradesh and Telangana. However, prices continued to be under pressure due to competition and large institutional sales. Increased fuel prices were exacerbated by adverse foreign exchange rates. As a result, MHIL ended 2018 with operating profit lower than prior year.

Products Overview

CRH is a leading supplier of building products globally. Our businesses manufacture, supply and deliver a wide range of high quality, value-added, innovative products and solutions needed to shape and enhance the built environment for modern communities.