CRH PLC — Earnings Release 2019

Aug 22, 2019

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RNS Number : 8310J CRH PLC 22 August 2019 2019 Interim Results Key Highlights · Record H1 EBITDA1 of €1.54bn, 36% ahead of 2018 (19% ahead excluding IFRS 16 Leases) · Sales of €13.2bn, ahead 11% · Good margin progress in H1 · EPS 51% ahead of 2018 · Continued portfolio refinement: c. €2bn divestments; c. €0.5bn acquisitions · Strong financial discipline; expect Net Debt/EBITDA <2x at year end · Share buyback €550m year-to-date; further €350m planned by year end · Group-wide profit improvement programme progressing well Six months ended 30 June 2019 2018 €m €m Change Sales revenue 13,217 11,944 +11% EBITDA 1,540 1,130 +36% EBITDA margin 11.7% 9.5% +220bps EPS from continuing operations (€ cent) 67.8 45.0 +51% Albert Manifold, Chief Executive, said today: "On the back of our strategic initiatives, CRH has delivered significant profit growth in the first half of 2019, with a good performance in our heritage business and strong contributions from recent acquisitions. We are pleased to report that the Board plans to continue our share buyback programme with a further tranche of €350 million to be completed by year end. This will bring our total share repurchases in 2019 to €900 million. With our continued strong cash generation and financial discipline, we expect year-end debt metrics to be below normalised levels. We anticipate further progress in the second half of the year with benefits from positive underlying momentum in all Divisions as well as good contributions from acquisitions." Announced Thursday, 22 August 2019 1 See pages 37 to 39 for glossary of alternative performance measures used throughout this interim report. 2019 Interim Results Overview Trading for the first half of 2019 benefited from a positive underlying demand backdrop in both Europe and North America. With strong contributions from acquisitions and tailwinds from currency exchange movements, Group sales of €13.2 billion were 11% ahead of the same period last year and 3% ahead on a like-for-like basis. · In Americas Materials, with a healthy economic environment, like-for-like sales were 2% ahead of the first six months of 2018; however, adverse weather conditions in certain regions hampered activity. · In Europe Materials, good underlying activity prevailed in key markets in Western and Eastern Europe and like-for-like sales growth of 6% reflected a more normalised weather pattern compared with the first half of 2018 along with price progress across all product lines. In the United Kingdom (UK), construction activity continued to decline amidst Brexit-related uncertainty. · Like-for-like sales in our Building Products Division were 3% ahead of the first half of 2018, reflecting a positive demand and pricing backdrop in our main markets. With the benefit of margin-enhancing acquisitions, continued emphasis on performance in all our businesses and the impact of IFRS 16, overall EBITDA was 36% ahead of the first half of 2018 and EBITDA margin increased to 11.7% (H1 2018: 9.5%). On a like-for-like basis, EBITDA for the Group was 5% ahead. · Americas Materials like-for-like EBITDA was up 3% driven primarily by price increases across all products and strong cost control. · In Europe Materials, like-for-like EBITDA was 2% ahead, reflecting volume growth and price improvements across the Division with the exception of the UK due to its challenging market conditions. · Like-for-like EBITDA in Building Products was 8% ahead of the first half of 2018 on the back of improved volumes and prices and a continued focus on profit improvement initiatives. Depreciation and amortisation charges of €789 million were higher than last year (H1 2018: €518 million) reflecting the impact of IFRS 16 and additional depreciation from acquisitions. Divestments and asset disposals during the period generated total profit on disposals of €171 million (H1 2018: €46 million). This primarily relates to the European Shutters & Awnings business which was divested in June 2019. The Group's €20 million share of profits from equity accounted investments was broadly in line with the first half of 2018 (H1 2018: €19 million). Net finance costs for the period were higher than the first six months of 2018 at €235 million (H1 2018: €160 million) due to the impact of IFRS 16, lower interest income and higher average debt levels in the period. First-half profit before tax from continuing operations was €707 million, compared with a profit of €497 million in the first half of 2018. The interim tax charge, which represents an effective tax rate of 21.5% of profit before tax, has been estimated, as in prior years, based on current expectations of the full year tax charge. Earnings per share from continuing operations were 51% higher than last year at 67.8c (H1 2018: 45.0c), reflecting higher profits along with the decrease in the weighted average number of shares in issue to 808.7 million (H1 2018: 839.6 million) due to our ongoing share buyback programme. Note 2 on page 18 analyses the key components of the first-half 2019 performance. Dividend The Board has decided to increase the interim dividend to 20c per share, an increase of 2% compared with last year's level of 19.6c per share. It is proposed to pay the interim dividend on 25 September 2019 to shareholders registered at the close of business on 6 September 2019. The interim dividend will be paid wholly in cash. Finance Net debt of €10.2 billion at 30 June 2019 was €2.1 billion higher than the figure reported at 30 June 2018 (H1 2018: €8.1 billion), primarily reflecting the transition impact of IFRS 16 (€2.0 billion). A first-half cash inflow of €0.3 billion from operations reflects strong working capital control and profit delivery. As in prior years, we expect a strong operating cash inflow in the second half of 2019 and, given the focused approach to portfolio management together with the Group's strong track record of converting a significant proportion of its EBITDA into operating cash flow, we expect year-end 2019 debt metrics to be below normalised levels. In April 2019, the Group successfully carried out an amendment and extension of its €3.5 billion revolving credit facility. Net debt at 30 June 2019 included US$0.75 billion issued under the US Dollar Commercial Paper Programme and €0.26 billion issued under the Euro Commercial Paper Programme. These programmes add to the funding sources available to the Group and are used to fund working capital and short-term liquidity needs. The Group maintains a strong investment grade credit rating and following a recent upgrade by the rating agency Fitch, the Group has a BBB+ or equivalent rating with each of the three main rating agencies, reflecting strong deleveraging following earlier acquisitions, successful integration of acquisitions and strong cash conversion. Capital Allocation In H1 2019 the Group spent c. €320 million on 28 acquisition/investment transactions (including deferred and contingent consideration in respect of prior year acquisitions). Since 30 June 2019, the Group has completed a further eight bolt-on acquisitions and investments for a total spend of c. €150 million, bringing total year-to-date development spend to c. €470 million. On the divestment front in H1 2019, the Group completed three transactions and realised total business and asset disposal proceeds of c. €370 million, which demonstrates CRH's ongoing commitment to active portfolio management. Since 30 June 2019, the Group reached agreement to divest of its Europe Distribution business for an enterprise value of €1.64 billion and also reached agreement to divest of its Perimeter Protection business in Europe. Both transactions are expected to close later this year. On completion, total divestment proceeds will approximate €2 billion in 2019. 2019 Acquisitions and Investments The Building Products Division completed eight bolt-on acquisitions in H1 2019 amounting to a total spend of c. €170 million. The largest acquisition was in our Architectural Products Group (APG) where it acquired certain assets of Allied Concrete in Virginia. This strategic bolt-on serves as a geographic in-fill for APG along the eastern seaboard of the United States (US), connecting APG's position in the Washington DC area to those in the Carolinas while enhancing its ability to serve mid-Atlantic hardscape and masonry installers. The other seven bolt-on acquisitions in the Building Products Division comprise four in the US and one in each of Poland, the Netherlands and Germany. The Americas Materials Division completed one investment along with 14 bolt-on acquisitions in the US, and two acquisitions in Canada, adding almost 90 million tonnes of permitted reserves. These transactions involved the strategic expansion and strengthening of existing aggregates operations, particularly in Oregon and Florida. The Europe Materials Division completed one acquisition in Poland adding approximately 30 million tonnes of reserves, and two small investments in Ukraine. 2019 Divestments and Disposals The largest divestment in H1 2019 was the sale of our European Shutters & Awnings business to StellaGroup for a total consideration of c. €0.3 billion. Two further small divestments of non-core business assets were completed in the period along with proceeds of €52 million from the disposal of surplus property, plant and equipment. On 16 July 2019, the Group announced that it had reached agreement to divest of its Europe Distribution business to private equity funds managed by Blackstone for an enterprise value of €1.64 billion. The business comprises CRH's entire General Builders Merchants business in Europe, including its Sanitary, Heating and Plumbing business. This divestment follows a comprehensive strategic review of the business over the last several months which considered all options to maximise value for shareholders. It concludes the exit from our distribution businesses across the Group, creating a simpler and more focused business. The Group also reached agreement to divest of its Perimeter Protection business in Europe. Share Buyback Programme On 7 August 2019, the Group completed the latest phase of its share buyback programme, returning a further €350 million of cash to shareholders. Between 29 April and 7 August 2019, 12.2 million ordinary shares were repurchased on the London Stock Exchange and Euronext Dublin at an average discount of 0.75% to the volume weighted average price over the period. This brings total cash returned to shareholders under our ongoing share buyback programme to €1.35 billion since its commencement in May 2018. In light of our strong balance sheet and cash generation, the Board plans to continue our share buyback programme with a further tranche of up to €350 million to be completed by the year end. Outlook Against a backdrop of continued positive momentum in North American construction markets and with good contributions from acquisitions, we expect second-half EBITDA in Americas Materials to be ahead of 2018. In Europe Materials, we expect broadly similar trends to those experienced in the first half, with second-half EBITDA ahead of 2018 amid a challenging environment in the UK. In Building Products, EBITDA is anticipated to show further growth against a positive backdrop in Europe and North America. For the Group overall, assuming normal weather patterns for the remainder of the season, we expect further progress in the second half with benefits from good trading conditions, contributions from acquisitions, currency tailwinds and the impact of IFRS 16. Americas Materials Analysis of change € million 2018 Exchange Acquisitions Divestments IFRS 16 Organic 2019 % change Sales revenue 3,178 +205 +597 -19 - +51 4,012 +26% EBITDA 297 +24 +126 -4 +49 +10 502 +69% Operating profit 94 +12 +56 -3 +4 +4 167 +78% EBITDA/sales 9.3% 12.5% Operating profit/sales 3.0% 4.2% With a continued healthy economic backdrop, good momentum in infrastructure activity and solid underlying demand in residential and non-residential markets, Americas Materials reported first-half organic sales 2% ahead of 2018. The increase in sales was primarily driven by price improvements across all regions and products as our volumes in Q2 were hampered by wet weather conditions mainly in our Central and West markets. Organic operating profit was 4% ahead of 2018, despite the impact of higher production costs with weather-related delays and energy cost increases. Energy costs were higher in the first half of the year, although at a lower rate of increase than experienced in 2018. With price improvements across all products and a continued focus on operational and commercial initiatives, margins increased compared with the first half of 2018. A strong contribution from our Ash Grove acquisition, which was acquired at the end of June 2018, led to significant growth in the Division in the first half of the year. The commentary that follows excludes the impact of IFRS 16, as separately identified in the table above. Aggregates Total aggregates volumes, including the impact of acquisitions and divestments, were 6% ahead of 2018 while like-for-like volumes declined 1%, impacted by multiple flooding events in our Central region and inclement weather in the West. The decline was partly offset by higher aggregates volumes in Canada as prior year backlogs were delivered in the current year. Total and like-for-like average prices increased by 6%, with solid increases in every region supported by good underlying market demand. Asphalt After a shortfall in asphalt volumes in Q2 across most regions, impacted by the wet weather conditions, first-half total volumes were 3% behind 2018, while average prices increased by 7% against a backdrop of higher input costs. Readymixed Concrete Readymixed concrete volumes were 1% ahead of 2018 on a like-for-like basis, and average prices increased 5%. Total volumes including acquisitions were 22% ahead of the same period last year, primarily driven by the Ash Grove acquisition. Paving and Construction Services Total sales in our paving and construction services business increased 1% over 2018 with mixed activity across our regions. Margins were impacted by project mix with lower margin projects in place compared with the same period in 2018. Cement Our cement operations in the United States delivered higher volumes in the first half of 2019 due to the acquisition of Ash Grove which completed at the end of June 2018. Despite adverse weather impacting some of our main markets, synergy delivery and strong price realisation across all cement businesses contributed to good operating profit in the first half of 2019 which was in line with expectations. Cement volumes in Canada declined in 2019, reflecting adverse weather, project delays and the timing of a divestment in 2018. Increased logistics and production costs in the cement business resulted in first-half operating profit behind 2018. In Brazil, although the weakness in the construction market continued during the first half of 2019, cement volumes and prices were ahead with comparatives impacted by a national transportation strike in 2018. With a continued focus on commercial and operational initiatives, sales and operating profit improved compared with the first half of 2018. Europe Materials Analysis of change € million 2018 Exchange Acquisitions Divestments IFRS 16 Organic 2019 % change Sales revenue 3,827 +26 +25 -23 - +230 4,085 +7% EBITDA 395 +4 +1 - +54 +7 461 +17% Operating profit 194 +2 - +2 +4 +7 209 +8% EBITDA/sales 10.3% 11.3% Operating profit/sales 5.1% 5.1% Europe Materials organic sales and operating profit increased by 6% and 4% respectively in the first half of the year, reflecting positive trading conditions in the majority of our key markets and pricing progress across all products. Overall, a more normalised weather pattern was experienced compared with the first half of 2018, particularly in the first quarter. Challenging market conditions continued in the UK as prolonged political uncertainty led to a decline in construction activity. The commentary that follows excludes the impact of IFRS 16, as separately identified in the table above. UK Against a backdrop of lower commercial, housing and retail construction activity, volumes of aggregates and asphalt were behind the prior year, while cement volumes were broadly in line; the contracting division also experienced delays in Government-backed road projects. First-half sales were ahead of prior year driven by the contribution of 2018 acquisitions and price increases in cement, asphalt and aggregates; however, higher input costs together with volume pressure resulted in operating profit behind 2018. Western Europe Residential construction in Ireland continued to see good growth in the first half of 2019, with strong volumes and improved pricing across all major products resulting in solid operating profit delivery. In France, higher demand in the non-residential and civil engineering sectors offset reduced residential demand and our French cement and readymixed concrete operations delivered good volumes and price growth, while our precast business also experienced increased activity in core projects; overall operating profit was ahead of 2018. In the Benelux, sales were broadly in line with 2018 as cement and readymixed concrete pricing improvements were offset by lower sales in the Belgian structural business, mainly due to project delays as a result of poor weather conditions. Operating profit finished behind 2018, impacted by the non-recurrence of one-off income. Results in Denmark were positively impacted by the continued strong pricing environment and additional production capacity, with operating profit ahead in the first half. While cement volumes in Finland were impacted by the completion of a one-off project in early 2019, price increases in aggregates and cement drove sales improvements in the first half of 2019; overall operating profit was behind due to lower volumes. Cement volumes in Switzerland were behind the first half of 2018 due to challenging market conditions, partly compensated by improved cement pricing; operating profit was slightly behind 2018. Against the backdrop of a steady market, cement pricing in Germany improved; however, overall volumes were behind in the first half which, combined with cost inflation, resulted in operating profit behind 2018. Lime volumes in Fels were behind the first half of 2018, impacted by lower demand in the civil engineering and environmental sectors. In Spain, trends experienced in the prior year continued, with improved pricing in cement and readymixed concrete positively impacting operating profit. Eastern Europe In Poland, strong growth in cement volumes more than offset lower readymixed concrete volumes which were impacted by the timing of infrastructure projects. Robust price increases for all products resulted in sales and operating profit increases in the first half of 2019. In Ukraine, cement volumes were in line with 2018 and with price increases offsetting ongoing cost inflation, operating profit was ahead of 2018. In Romania, cement volumes were marginally ahead of the first half of 2018 with second quarter volumes impacted by heavy rainfall. While cement prices progressed, operating profit was behind 2018 due to increased electricity and transportation costs. In Hungary and Slovakia, sales increased in the first half, with strong cement pricing and good readymixed concrete volumes against a backdrop of continued construction growth. With a strong start to the construction season supported by favourable weather, our cement operations in Serbia delivered volumes and price growth and operating profit was ahead of 2018. Asia Demand in the Philippines grew modestly in H1 due to resilient growth in both residential and non-residential markets; however, some slowdown in the infrastructure segment was evident due to delays in government budget approval and an election-related construction ban in the second quarter. Cement volumes and prices for the first half of 2019 were ahead of 2018 and operating profit improved. In addition to our subsidiary businesses in the Philippines, the Group also has a share of profit after tax from its stakes in Yatai Building Materials in China and My Home Industries Limited (MHIL) in India, which are reported within the Group's share of equity accounted investments' profit. Competitive pricing pressure persisted in Yatai Building Materials but cement volumes were ahead of 2018 due to increased market demand; as a result, operating profit was higher than the first half of 2018. MHIL benefited from higher cement volumes and prices compared with 2018, with operating profit also ahead. Building Products Analysis of change € million 2018 Exchange Acquisitions Divestments IFRS 16 Organic 2019 % change Sales revenue 4,939 +163 +197 -326 - +147 5,120 +4% EBITDA 438 +22 +17 -29 +90 +39 577 +32% Operating profit 304 +17 +8 -2 +9 +39 375 +23% EBITDA/sales 8.9% 11.3% Operating profit/sales 6.2% 7.3% This newly formed Division experienced good price increases and improved volumes supported by a positive demand backdrop and more favourable early season weather in Europe; as a result, like-for-like sales in the first half of 2019 were 3% ahead of 2018. Selling price increases, strong cost control and commercial and operational initiatives helped deliver margin improvement and organic operating profit was 12% ahead of 2018. Recent portfolio activity makes this Division a more focused and integrated platform, well positioned for further growth. The Group completed the divestment of its European Shutters & Awnings business for a total consideration of c. €0.3 billion in June 2019 and, in July 2019, reached agreement to divest of its Europe Distribution and Perimeter Protection businesses. The commentary that follows excludes the impact of IFRS 16, as separately identified in the table above. Architectural Products In North America, APG is the leading supplier of concrete masonry and hardscape products and has strong national positions in dry mixes and packaged lawn and garden products. In addition to contractor-based new construction, the DIY and professional repair, maintenance and improvement (RMI) segments are significant end-users. Selling price increases partly offset some volume declines, and like-for-like sales in APG increased 1% compared with first half 2018. With logistics cost pressures subsiding somewhat compared to 2018, changes in product mix towards higher margin hardscape products along with commercial and operational initiatives, APG recorded a good increase in operating profit. Our architectural products businesses in Europe are leading producers of exterior hardscape products across Germany, the Netherlands, Poland, Belgium and Slovakia. Like-for-like sales for the first half of the year were 6% ahead of 2018, benefiting from good market conditions and positive pricing. This top line growth together with product mix improvements resulted in operating profit ahead of 2018. BuildingEnvelope® Our BuildingEnvelope® business is North America's largest supplier of architectural glass, aluminium glazing systems and custom hardware products to the glass and glazing industry. Like-for-like revenue growth of 3% was driven by increased demand and selling prices in our C.R. Laurence and aluminium glazing operations. This revenue growth together with more stable aluminium input costs and a continued focus on overhead cost management led to operating profit being ahead of 2018. Infrastructure Products Our Infrastructure business in North America supplies a broad range of value-added concrete and related utility infrastructure products and accessories with the electrical, telecommunications, water and transportation sectors being major end-markets. Like-for-like sales advanced 6% in the first half of 2019, with price increases in the concrete products business. Volume growth was supported by good demand in the non-residential sector but hampered in some key markets due to poor weather. Good margin expansion was experienced as price increases offset input cost inflation and operating profit was ahead of 2018. Network Access Products, with operations in the UK, Ireland, the Netherlands and Australia, recorded a strong increase in sales, primarily due to recent acquisition activity. Organic improvement in sales to the French and UK markets was partly offset by reduced demand from a key customer in Australia; however, with a strong focus on cost control, operating profit was ahead of the first half of 2018. Both sales and operating profit in the Perimeter Protection business were broadly in line with the first half of 2018, with good underlying market demand in the mobile perimeter protection business offsetting decreases in some permanent fencing markets. In July 2019, the Group reached agreement to divest of its Perimeter Protection business and the transaction is expected to close later this year. Construction Accessories Our Construction Accessories businesses in Europe and Australia supply a broad range of connecting, fixing and anchoring systems to the construction industry. Like-for-like sales grew by 4%, with a good performance from UK masonry projects. Overall price increases more than offset cost inflation, resulting in operating profit improvement. Europe Distribution A strong performance in our German, Dutch and French businesses, aided by milder weather conditions, was partly offset by a challenging residential market in Switzerland and like-for-like sales for the Distribution platform increased 3%. In line with the growth in sales, operating profit was ahead of 2018. Following a detailed strategic review of the business, the Group announced in July 2019 that it reached agreement to divest of its Europe Distribution business for an enterprise value of €1.64 billion. The transaction is expected to close in the fourth quarter of this year. Condensed Interim Financial Statements and Summarised Notes Six months ended 30 June 2019 Condensed Consolidated Income Statement Year ended Six months ended 30 June 31 December 2019 2018 2018 Unaudited Unaudited Audited €m €m €m Revenue 13,217 11,944 26,790 Cost of sales (9,067) (8,236) (18,152) Gross profit 4,150 3,708 8,638 Operating costs (3,399) (3,116) (6,461) Group operating profit 751 592 2,177 Profit/(loss) on disposals 171 46 (24) Profit before finance costs 922 638 2,153 Finance costs (183) (167) (339) Finance income 7 23 34 Other financial expense (59) (16) (46) Share of equity accounted investments' profit 20 19 60 Profit before tax from continuing operations 707 497 1,862 Income tax expense - estimated at interim (152) (119) (426) Group profit for the financial period from continuing operations 555 378 1,436 Profit after tax for the financial period from discontinued operations - 1,083 1,085 Group profit for the financial period 555 1,461 2,521 Profit attributable to: Equity holders of the Company From continuing operations 548 378 1,432 From discontinued operations - 1,083 1,085 Non-controlling interests From continuing operations 7 - 4 Group profit for the financial period 555 1,461 2,521 Basic earnings per Ordinary Share 67.8c 174.0c 302.4c Diluted earnings per Ordinary Share 67.4c 173.1c 300.9c Basic earnings per Ordinary Share from continuing operations 67.8c 45.0c 172.0c Diluted earnings per Ordinary Share from continuing operations 67.4c 44.8c 171.2c Condensed Consolidated Statement of Comprehensive Income Year ended Six months ended 30 June 31 December 2019 2018 2018 Unaudited Unaudited Audited €m €m €m Group profit for the financial period 555 1,461 2,521 Other comprehensive income Items that may be reclassified to profit or loss in subsequent periods: Currency translation effects 142 124 276 Gains/(losses) relating to cash flow hedges 29 8 (40) Tax relating to cash flow hedges (4) (1) 5 167 131 241 Items that will not be reclassified to profit or loss in subsequent periods: Remeasurement of retirement benefit obligations (131) 58 10 Tax relating to retirement benefit obligations 15 (11) (1) (116) 47 9 Total other comprehensive income for the financial period 51 178 250 Total comprehensive income for the financial period 606 1,639 2,771 Attributable to: Equity holders of the Company 587 1,654 2,768 Non-controlling interests 19 (15) 3 Total comprehensive income for the financial period 606 1,639 2,771 Condensed Consolidated Balance Sheet As at 30 As at 30 As at 31 June 2019 June 2018 December 2018 Unaudited €m Unaudited €m Audited €m ASSETS Non-current assets Property, plant and equipment 17,845 15,607 15,761 Intangible assets 8,525 8,615 8,433 Investments accounted for using the equity method 1,181 1,111 1,163 Other financial assets 23 24 23 Other receivables 180 164 181 Derivative financial instruments 78 30 30 Deferred income tax assets 68 84 71 Total non-current assets 27,900 25,635 25,662 Current assets Inventories 3,228 3,151 3,061 Trade and other receivables 5,258 5,084 4,074 Current income tax recoverable 21 7 15 Derivative financial instruments 9 31 15 Cash and cash equivalents 1,399 1,848 2,346 Total current assets 9,915 10,121 9,511 Total assets 37,815 35,756 35,173 EQUITY Capital and reserves attributable to the Company's equity holders Equity share capital 287 287 287 Preference share capital 1 1 1 Share premium account 6,534 6,534 6,534 Treasury Shares and own shares (1,200) (224) (792) Other reserves 272 264 296 Foreign currency translation reserve 21 (247) (109) Retained income 9,719 8,862 9,812 Capital and reserves attributable to the Company's equity holders 15,634 15,477 16,029 Non-controlling interests 544 494 525 Total equity 16,178 15,971 16,554 LIABILITIES Non-current liabilities Lease liabilities 1,502 - - Interest-bearing loans and borrowings 8,806 8,557 8,698 Derivative financial instruments - 37 18 Deferred income tax liabilities 2,213 2,059 2,209 Other payables 475 435 472 Retirement benefit obligations 573 454 424 Provisions for liabilities 731 748 719 Total non-current liabilities 14,300 12,290 12,540 Current liabilities Lease liabilities 358 - - Trade and other payables 5,073 5,155 4,609 Current income tax liabilities 492 564 443 Interest-bearing loans and borrowings 1,023 1,356 618 Derivative financial instruments 22 14 41 Provisions for liabilities 369 406 368 Total current liabilities 7,337 7,495 6,079 Total liabilities 21,637 19,785 18,619 Total equity and liabilities 37,815 35,756 35,173 Includes leased right-of-use assets with net carrying amount of €1,829 million (see note 13). Condensed Consolidated Statement of Changes in Equity Attributable to the equity holders of the Company Treasury Foreign Issued Share Shares/ currency Non- share premium own Other translation Retained controlling Total capital account shares reserves reserve income Interests equity €m €m €m €m €m €m €m €m For the financial period ended 30 June 2019 (unaudited) At 1 January 2019 288 6,534 (792) 296 (109) 9,812 525 16,554 Group profit for the period - - - - - 548 7 555 Other comprehensive income - - - - 130 (91) 12 51 Total comprehensive income - - - - 130 457 19 606 Share-based payment expense - - - 38 - - - 38 Shares acquired by CRH plc (Treasury Shares) - - (436) - - (114) - (550) Treasury/own shares reissued - - 27 - - (27) - - Shares acquired by the Employee Benefit Trust (own shares) - - (61) - - - - (61) Shares distributed under the Performance Share Plan Awards - - 62 (62) - - - - Tax relating to share-based payment expense - - - - - 1 - 1 Share option exercises - - - - - 15 - 15 Dividends (including shares issued in lieu of dividends) - - - - - (425) (5) (430) Non-controlling interests arising on acquisition of subsidiaries - - - - - - 1 1 Transactions involving non-controlling interests - - - - - - 4 4 At 30 June 2019 288 6,534 (1,200) 272 21 9,719 544 16,178 For the financial period ended 30 June 2018 (unaudited) At 1 January 2018 287 6,417 (15) 285 (386) 7,903 486 14,977 Group profit for the period - - - - - 1,461 - 1,461 Other comprehensive income - - - - 139 54 (15) 178 Total comprehensive income - - - - 139 1,515 (15) 1,639 Issue of share capital (net of expenses) - 62 - - - - - 62 Share-based payment expense - - - 35 - - - 35 Shares acquired by CRH plc (Treasury Shares) - - (214) - - (136) - (350) Treasury/own shares reissued - - 8 - - (8) - - Shares acquired by the Employee Benefit Trust (own shares) - - (3) - - - - (3) Shares distributed under the Performance Share Plan Awards 1 55 - (56) - - - - Tax relating to share-based payment expense - - - - - (5) - (5) Share option exercises - - - - - 2 - 2 Dividends (including shares issued in lieu of dividends) - - - - - (409) (9) (418) Non-controlling interests arising on acquisition of subsidiaries - - - - - - 31 31 Transactions involving non-controlling interests - - - - - - 1 1 At 30 June 2018 288 6,534 (224) 264 (247) 8,862 494 15,971 Condensed Consolidated Statement of Changes in Equity - continued Attributable to the equity holders of the Company Treasury Foreign Issued Share Shares/ currency Non- share premium own Other translation Retained controlling Total capital account shares reserves reserve income Interests equity €m €m €m €m €m €m €m €m For the financial year ended 31 December 2018 (audited) At 1 January 2018 287 6,417 (15) 285 (386) 7,903 486 14,977 Group profit for the financial year - - - - - 2,517 4 2,521 Other comprehensive income - - - - 277 (26) (1) 250 Total comprehensive income - - - - 277 2,491 3 2,771 Issue of share capital (net of expenses) - 62 - - - - - 62 Share-based payment expense - - - 67 - - - 67 Shares acquired by CRH plc (Treasury Shares) - - (789) - - - - (789) Treasury/own shares reissued - - 15 - - (15) - - Shares acquired by the Employee Benefit Trust (own shares) - - (3) - - - - (3) Shares distributed under the Performance Share Plan Awards 1 55 - (56) - - - - Tax relating to share-based payment expense - - - - - (2) - (2) Share option exercises - - - - - 7 - 7 Dividends (including shares issued in lieu of dividends) - - - - - (572) (12) (584) Non-controlling interests arising on acquisition of subsidiaries - - - - - - 48 48 At 31 December 2018 288 6,534 (792) 296 (109) 9,812 525 16,554 Condensed Consolidated Statement of Cash Flows Year ended Six months ended 30 June 31 December 2019 2018 2018 Unaudited Unaudited Audited €m €m €m Cash flows from operating activities Profit before tax from continuing operations 707 497 1,862 Profit before tax from discontinued operations - 1,415 1,558 Profit before tax 707 1,912 3,420 Finance costs (net) 235 160 351 Share of equity accounted investments' profit (20) (19) (60) Profit on disposals (171) (1,466) (1,539) Group operating profit 751 587 2,172 Depreciation charge 760 488 1,071 Amortisation of intangible assets 29 30 61 Impairment charge - 20 56 Share-based payment expense 38 35 67 Other (primarily pension payments) 7 10 (67) Net movement on working capital and provisions (1,002) (1,108) (463) Cash generated from operations 583 62 2,897 Interest paid (including leases) (202) (158) (335) Corporation tax paid (111) (215) (663) Net cash inflow/(outflow) from operating activities 270 (311) 1,899 Cash flows from investing activities Proceeds from disposals (net of cash disposed and deferred proceeds) 367 2,386 3,009 Interest received 7 23 34 Dividends received from equity accounted investments 14 22 48 Purchase of property, plant and equipment (635) (509) (1,121) Acquisition of subsidiaries (net of cash acquired) (285) (3,214) (3,505) Other investments and advances (8) (1) (2) Deferred and contingent acquisition consideration paid (26) (28) (55) Net cash outflow from investing activities (566) (1,321) (1,592) Cash flows from financing activities Proceeds from issue of shares (net) - 11 11 Proceeds from exercise of share options 15 2 7 Transactions involving non-controlling interests 4 1 - Increase in interest-bearing loans, borrowings and finance leases 955 2,138 1,434 Net cash flow arising from derivative financial instruments (11) 19 6 Treasury/own shares purchased (497) (217) (792) Repayment of interest-bearing loans, borrowings and finance leases (524) (250) (246) Repayment of lease liabilities (169) - - Dividends paid to equity holders of the Company (425) (358) (521) Dividends paid to non-controlling interests (5) (9) (12) Net cash (outflow)/inflow from financing activities (657) 1,337 (113) (Decrease)/increase in cash and cash equivalents (953) (295) 194 Reconciliation of opening to closing cash and cash equivalents Cash and cash equivalents at 1 January 2,346 2,135 2,135 Translation adjustment 6 8 17 (Decrease)/increase in cash and cash equivalents (953) (295) 194 Cash and cash equivalents at 30 June 1,399 1,848 2,346 * Leases include finance leases previously capitalised under IAS 17 Leases in 2018 and all capitalised leases included as lease liabilities under IFRS 16 Leases in 2019. ** Finance leases as previously capitalised under IAS 17 in 2018. *** Repayment of lease liabilities capitalised under IFRS 16 in 2019 amounted to €204 million, of which €35 million related to interest paid which is presented in cash flows from operating activities. Supplementary Information Selected Explanatory Notes to the Condensed Consolidated Interim Financial Statements 1. Basis of Preparation and Accounting Policies Basis of Preparation The financial information presented in this report has been prepared in accordance with the Group's accounting policies under International Financial Reporting Standards (IFRS) as approved by the European Union, as issued by the International Accounting Standards Board (IASB) and in accordance with IAS 34 Interim Financial Reporting. These Condensed Consolidated Interim Financial Statements do not include all the information and disclosures required in the Annual Consolidated Financial Statements and should be read in conjunction with the Group's 2018 Annual Report and Form 20-F. The accounting policies and methods of computation employed in the preparation of the Condensed Consolidated Interim Financial Statements are the same as those employed in the preparation of the Annual Consolidated Financial Statements in respect of the year ended 31 December 2018, except for the adoption of new standards, interpretations and standard amendments effective as of 1 January 2019. Adoption of IFRS and International Financial Reporting Interpretations Committee (IFRIC) interpretations The following new standards, interpretations and standard amendments became effective for the Group as of 1 January 2019: · IFRS 16 Leases · IFRIC 23 Uncertainty over Income Tax Treatments · Amendments to IFRS 9 Financial Instruments · Amendments to IAS 19 Employee Benefits · Amendments to IAS 28 Investments in Associates and Joint Ventures · Annual Improvements to IFRSs: 2015 - 2017 Cycle - Amendments to IFRS 3 Business Combinations, IFRS 11 Joint Arrangements, IAS 12 Income Taxes and IAS 23 Borrowing Costs The new standards, interpretations and standard amendments did not result in a material impact on the Group's results, with the exception of IFRS 16 which is detailed below. IFRS 16 Leases IFRS 16 replaces IAS 17 Leases. CRH adopted IFRS 16 by applying the modified retrospective approach on the transition date of 1 January 2019. The Group applied the recognition exemption for both short-term leases and leases of low value assets. The Group did not avail of the practical expedient not to separate non-lease components from lease components or the practical expedient allowing leases previously classified as operating leases and ending within 12 months of the date of transition, to be accounted for as short-term leases. The right-of-use asset has been calculated as the lease liability at 1 January 2019 adjusted for any prepayments, accruals and onerous lease provisions with no adjustment to opening retained earnings. 1. Basis of Preparation and Accounting Policies - continued The adoption of IFRS 16 had a material impact on the Group's Condensed Consolidated Interim Financial Statements and certain key financial metrics, which is quantified in the table below and further explained in the subsequent text: Primary statement line item / financial metric / alternative performance measure Six months ended 30 June 2019 €m Condensed Consolidated Income Statement EBITDA + 193 Depreciation + 176 Finance costs + 35 Profit before tax; Group profit for the financial period - 18 EPS - 2.2c As at 1 January 2019 €m Condensed Consolidated Balance Sheet Property, plant and equipment (i) +1,939 Lease liabilities; net debt (i) + 1,954 Six months ended 30 June 2019 €m Condensed Consolidated Statement of Cash Flows Operating cash flow + 158 (i) The impact of the adoption of IFRS 16 on property, plant and equipment and net debt is net of existing finance leases (€23 million at 31 December 2018) which have been recorded as part of the right-of-use assets and lease liabilities at 1 January 2019. Income Statement Cost of sales and operating costs (excluding depreciation) have decreased, as the Group previously recognised operating lease expenses in either cost of sales or operating costs (depending on the nature of the relevant operations and of the lease). The Group's operating lease expense for the six months ended 30 June 2018 was €283 million. Payments for leases which meet the recognition exemption criteria and certain other lease payments which do not meet the criteria for capitalisation (excluding depreciation) have been recorded as an expense within cost of sales and operating costs. Due to business seasonality, certain assets are leased on a short-term basis (i.e. 12 months or less) to deal with peak demand. Accordingly, a portion of costs previously classified as operating lease expenses have not been capitalised on the Group's Condensed Consolidated Balance Sheet and continue to be expensed in the Group's Condensed Consolidated Income Statement (see note 13). Depreciation and finance costs have increased due to the capitalisation of a right-of-use asset under IFRS 16 which is depreciated over the term of the lease with an associated finance cost applied annually to the lease liability. Balance Sheet The Group has identified the minimum lease payments outstanding (including payments for renewal options which are reasonably certain to be exercised) and has applied the appropriate discount rate to calculate the present value of the lease liability and right-of-use asset recognised on the Condensed Consolidated Balance Sheet. The discount rates applied were arrived at using a methodology to calculate the incremental borrowing rates across the Group. The weighted average incremental borrowing rate applied to lease liabilities on the Condensed Consolidated Balance Sheet was 3.95% at 1 January 2019. 1. Basis of Preparation and Accounting Policies - continued A reconciliation of the operating lease commitment previously reported under IAS 17 to the discounted lease liability as at 1 January 2019 under IFRS 16 is as follows: As at 1 January 2019 €m Operating lease commitment under IAS 17 1,911 Lease extensions beyond break date 632 Leases that are cancellable at any time 35 Existing IAS 17 finance leases (i) 23 Other lease payments not included in discounted lease liability under IFRS 16 (ii) (108) Undiscounted lease liability under IFRS 16 2,493 Less impact of discounting (516) Discounted lease liability under IFRS 16 1,977 (i) Existing IAS 17 finance leases are presented at discounted amounts as the impact of discounting on these leases is not considered material. (ii) Other lease payments not included in discounted lease liability under IFRS 16 include payments related to short-term and low-value leases which were included in the operating lease commitment under IAS 17 but are exempt from capitalisation under IFRS 16. Leases accounting policy - Note 13 The Group enters into leases for a range of assets, principally relating to property. These property leases have varying terms, renewal rights and escalation clauses, including periodic rent reviews linked with a consumer price index and/or other indices. The Group also leases plant and machinery, vehicles and equipment. The terms and conditions of these leases do not impose significant financial restrictions on the Group. A contract contains a lease if it is enforceable and conveys the right to control the use of a specified asset for a period of time in exchange for consideration, which is assessed at inception. A right-of-use asset and lease liability are recognised at the commencement date for contracts containing a lease, with the exception of leases with a term of 12 months or less, leases where the underlying asset is of low value and leases with associated payments that vary directly in line with usage or sales. The commencement date is the date at which the asset is made available for use by the Group. The lease liability is initially measured at the present value of the future minimum lease payments, discounted using the incremental borrowing rate or the interest rate implicit in the lease, if this is readily determinable, over the remaining lease term. Lease payments include fixed payments, variable payments that are dependent on a rate or index known at the commencement date, payments for an optional renewal period and purchase and termination option payments, if the Group is reasonably certain to exercise those options. The lease term is the non-cancellable period of the lease adjusted for any renewal or termination options which are reasonably certain to be exercised. Management applies judgement in determining whether it is reasonably certain that a renewal, termination or purchase option will be exercised. Incremental borrowing rates are calculated using a portfolio approach, based on the risk profile of the entity holding the lease and the term and currency of the lease. After initial recognition, the lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future minimum lease payments or when the Group changes its assessment of whether it is reasonably certain to exercise an option within the contract. A corresponding adjustment is made to the carrying amount of the right-of-use asset. The right-of-use asset is initially measured at cost, which comprises the lease liability adjusted for any payments made at or before the commencement date, initial direct costs incurred, lease incentives received and an estimate of the cost to dismantle or restore the underlying asset or the site on which it is located at the end of the lease term. The right-of-use asset is depreciated over the lease term or, where a purchase option is reasonably certain to be exercised, over the useful economic life of the asset in line with depreciation rates for owned property, plant and equipment. The right-of-use asset is tested periodically for impairment if an impairment indicator is considered to exist. Non-lease components in a contract such as maintenance and other service charges are separated from minimum lease payments and are expensed as incurred. 1. Basis of Preparation and Accounting Policies - continued IFRS and IFRIC interpretations being adopted in subsequent years IFRS 3 Business Combinations In October 2018, the IASB issued amendments to IFRS 3, regarding the definition of a business. The amendments clarify that the process required to meet the definition of a business (together with inputs to create outputs) must be substantive and that the inputs and process must together significantly contribute to creating outputs. The definition of outputs has been narrowed to focus on goods and services provided to customers and other income from ordinary activities. In addition, the amendments indicate that an acquisition of primarily a single asset or group of similar assets is unlikely to meet the definition of a business. The amendments will be applied prospectively for acquisitions occurring on or after 1 January 2020. The Group is finalising its review of the impact of this amendment, but does not expect the clarification to have a material impact on the value of acquisitions or additions to property, plant and equipment. Impairment As at 30 June 2019, the Group performed a review of indicators of impairment relating to goodwill allocated to cash-generating units for which sensitivity analysis of the recoverable amounts was disclosed in the year-end 2018 Consolidated Financial Statements. The carrying values of items of property, plant and equipment were also reviewed for indicators of impairment. These reviews did not give rise to any impairment charges in the first half of 2019 (H1 2018: €nil million). An impairment charge of €20 million was recognised in H1 2018 in order to write down the assets of the DIY business, divested in July 2018, to their recoverable amounts at 30 June 2018. As part of our annual process, we will update our impairment reviews prior to the finalisation of the full year Consolidated Financial Statements for 2019. We will assess the impact of any of the Group's markets that remain challenging (and of our consequential management actions) to determine whether they have an impact on the long-term valuation of our cash-generating units. Going Concern The Group has considerable financial resources and a large number of customers and suppliers across different geographic areas and industries. In addition, the local nature of building materials means that the Group's products are not usually shipped cross-border. Having assessed the relevant business risks, the Directors believe that the Group is well placed to manage these risks successfully and they have a reasonable expectation that CRH plc, and the Group as a whole, has adequate resources to continue in operational existence for the foreseeable future with no material uncertainties. For this reason, the Directors continue to adopt the going concern basis in preparing the Condensed Consolidated Interim Financial Statements. Translation of Foreign Currencies The financial information is presented in euro. Results and cash flows of operations based in non-euro countries have been translated into euro at average exchange rates for the period, and the related balance sheets have been translated at the rates of exchange ruling at the balance sheet date. The principal rates used for translation of results, cash flows and balance sheets into euro were: Average Period end Six months ended Year ended Six months ended Year ended 30 June 31 December 30 June 31 December euro 1 = 2019 2018 2018 2019 2018 2018 Brazilian Real 4.3417 4.1415 4.3085 4.3511 4.4876 4.4440 Canadian Dollar 1.5069 1.5457 1.5294 1.4893 1.5442 1.5605 Chinese Renminbi 7.6678 7.7086 7.8081 7.8185 7.7170 7.8751 Hungarian Forint 320.4198 314.1128 318.8897 323.3900 329.7700 320.9800 Indian Rupee 79.1240 79.4903 80.7332 78.5240 79.8130 79.7298 Philippine Peso 58.9809 62.9356 62.2101 58.3350 62.1740 60.1130 Polish Zloty 4.2920 4.2207 4.2615 4.2496 4.3732 4.3014 Pound Sterling 0.8736 0.8798 0.8847 0.8966 0.8861 0.8945 Romanian Leu 4.7418 4.6543 4.6540 4.7343 4.6631 4.6635 Serbian Dinar 118.0807 118.3134 118.2302 117.9355 118.8546 118.3157 Swiss Franc 1.1295 1.1697 1.1550 1.1105 1.1569 1.1269 Ukrainian Hryvnia 30.3931 32.3560 32.0987 29.7730 30.6845 31.6900 US Dollar 1.1298 1.2104 1.1810 1.1380 1.1658 1.1450 2. Key Components of Performance for the First Half of 2019 Continuing operations € million Sales revenue EBITDA Operating profit Profit on disposals Finance costs (net) Assoc. and JV PAT (i) Pre-tax profit First half 2018 11,944 1,130 592 46 (160) 19 497 Exchange effects 394 50 31 4 (6) - 29 2018 at 2019 rates 12,338 1,180 623 50 (166) 19 526 Incremental impact in 2019 of: 2018/2019 acquisitions 819 144 64 - (29) - 35 2018/2019 divestments (368) (33) (3) 115 1 - 113 IFRS 16 impact - 193 17 - (35) - (18) Organic 428 56 50 6 (6) 1 51 First half 2019 13,217 1,540 751 171 (235) 20 707 % Total change 11% 36% 27% 42% % Organic change 3% 5% 8% 10% (i) CRH's share of after-tax profits of joint ventures and associated undertakings. 3. Seasonality Activity in the construction industry is characterised by cyclicality and is dependent to a considerable extent on the seasonal impact of weather in the Group's operating locations, with activity in some markets reduced significantly in winter due to inclement weather. As shown in the table above, the Group's operations exhibit a high degree of seasonality and can be significantly impacted by the timing of acquisitions and divestments; for example first half EBITDA from continuing operations in the 2018 financial year accounted for 34% of the EBITDA reported for the full year 2018. 4. Revenue Effective 1 January 2019 the Group implemented a simplified new structure reducing its operating segments from six to three: Europe Materials (formerly Europe Heavyside and Asia), Americas Materials and a new Building Products segment. The Building Products segment brings together our former Europe Lightside, Europe Distribution and Americas Products segments. Comparative revenue and segment (note 5) amounts for 2018 have been restated where necessary to reflect the new format for segmentation. As a result of the more simplified operating structure, certain categories by which revenue had previously been disaggregated were amended to better reflect the basis on which management now reviews its businesses. Accordingly, the revenue formally disaggregated across construction accessories, perimeter protection, shutters & awnings, network access products, architectural and precast products has now been reorganised and presented in two new categories: Architectural products and Infrastructure products. Comparative amounts for 2018 have been restated where necessary to reflect the new format for disaggregation of revenue. Disaggregated revenue In the following tables, revenue is disaggregated by primary geographic market and by principal activities and products. Due to the diversified nature of the Group, the basis on which management reviews its businesses varies across the Group. Geography is the primary basis for the Europe Materials and Americas Materials businesses; while activities and products are used for the Building Products businesses. Six months ended 30 June 2019 - Unaudited Six months ended 30 June 2018 - Unaudited Europe Materials Americas Materials Building Products Total Europe Materials Americas Materials Building Products Total €m €m €m €m €m €m €m €m Primary geographic market Continuing operations Republic of Ireland (Country of domicile) 283 - - 283 202 - - 202 Benelux (mainly the Netherlands) 285 - 814 1,099 290 - 1,050 1,340 United Kingdom 1,511 - 122 1,633 1,479 - 112 1,591 Rest of Europe (i) 1,760 - 1,617 3,377 1,650 - 1,500 3,150 United States - 3,585 2,357 5,942 - 2,775 2,029 4,804 Rest of World (ii) 246 427 210 883 206 403 248 857 Total Group from continuing operations 4,085 4,012 5,120 13,217 3,827 3,178 4,939 11,944 Discontinued operations United States - Americas Distribution - 6 Total Group 13,217 11,950 Footnotes (i) and (ii) appear on page 20. 4. Revenue - continued Six months ended 30 June 2019 - Unaudited Six months ended 30 June 2018 - Unaudited Europe Materials (iii) Americas Materials (iii) Building Products Total Europe Materials (iii) Americas Materials (iii) Building Products Total €m €m €m €m €m €m €m €m Principal activities and products Continuing operations Cement, lime and cement products 1,279 538 - 1,817 1,184 198 - 1,382 Aggregates, asphalt and readymixed products 1,493 2,081 - 3,574 1,386 1,686 - 3,072 Construction contract activities 757 1,393 92 2,242 727 1,294 105 2,126 Architectural products 467 - 1,507 1,974 436 - 1,394 1,830 Infrastructure products 89 - 890 979 94 - 800 894 Architectural glass and glazing systems and wholesale hardware distribution - - 785 785 - - 669 669 General Builders Merchants, DIY and Sanitary, Heating & Plumbing - - 1,846 1,846 - - 1,971 1,971 Total Group from continuing operations 4,085 4,012 5,120 13,217 3,827 3,178 4,939 11,944 Discontinued operations Exterior and interior products - Americas Distribution - 6 Total Group 13,217 11,950 * Revenue principally recognised over time. Construction contracts are generally completed within the same financial reporting year. Footnotes to revenue disaggregation on pages 19 & 20 (i) The Rest of Europe principally includes Austria, Czech Republic, Denmark, Finland, France, Germany, Hungary, Poland, Romania, Serbia, Slovakia, Spain, Sweden, Switzerland and Ukraine. (ii) The Rest of World principally includes Australia, Brazil, Canada and the Philippines. (iii) Europe Materials and Americas Materials both operate vertically integrated businesses, which are founded in resource-backed cement and aggregates assets and which support the manufacture and supply of aggregates, asphalt, cement, readymixed and precast concrete and landscaping products. Accordingly, for the purpose of disaggregation of revenue we have included certain products together, as this is how management review and evaluate this business line. 5. Segment Information Six months ended 30 June Year ended 31 Unaudited Unaudited December - Audited 2019 2018 2018 €m % €m % €m % Revenue Continuing operations Europe Materials 4,085 30.9 3,827 32.0 8,042 30.0 Americas Materials 4,012 30.4 3,178 26.6 8,951 33.4 Building Products 5,120 38.7 4,939 41.3 9,797 36.5 Total Group from continuing operations 13,217 100.0 11,944 99.9 26,790 99.9 Discontinued operations - Americas Distribution - - 6 0.1 7 0.1 Total Group 13,217 100.0 11,950 100.0 26,797 100.0 Group EBITDA Continuing operations Europe Materials 461 29.9 395 35.1 936 27.8 Americas Materials 502 32.6 297 26.4 1,493 44.4 Building Products 577 37.5 438 38.9 936 27.9 Total Group from continuing operations 1,540 100.0 1,130 100.4 3,365 100.1 Discontinued operations - Americas Distribution - - (5) (0.4) (5) (0.1) Total Group 1,540 100.0 1,125 100.0 3,360 100.0 Depreciation, amortisation and impairment Continuing operations Europe Materials 252 31.9 201 37.4 449 37.8 Americas Materials 335 42.5 203 37.7 484 40.7 Building Products 202 25.6 134 24.9 255 21.5 Total Group from continuing operations 789 100.0 538 100.0 1,188 100.0 Discontinued operations - Americas Distribution - - - - - - Total Group 789 100.0 538 100.0 1,188 100.0 Group operating profit Continuing operations Europe Materials 209 27.8 194 33.0 487 22.4 Americas Materials 167 22.3 94 16.0 1,009 46.5 Building Products 375 49.9 304 51.8 681 31.3 Total Group from continuing operations 751 100.0 592 100.8 2,177 100.2 Discontinued operations - Americas Distribution - - (5) (0.8) (5) (0.2) Total Group 751 100.0 587 100.0 2,172 100.0 Profit/(loss) on disposals - continuing operations Europe Materials 16 14 7 Americas Materials 8 30 44 Building Products 147 2 (75) Total Group 171 46 (24) 5. Segment Information - continued Year ended Six months ended 30 June 31 December Unaudited Audited 2019 2018 2018 €m €m €m Reconciliation of Group operating profit to profit before tax: Group operating profit from continuing operations (analysed on page 21) 751 592 2,177 Profit/(loss) on disposals 171 46 (24) Profit before finance costs 922 638 2,153 Finance costs less income (176) (144) (305) Other financial expense (59) (16) (46) Share of equity accounted investments' profit 20 19 60 Profit before tax from continuing operations 707 497 1,862 Year ended Six months ended 30 June 31 December Unaudited Unaudited Audited 2019 2018 2018 €m % €m % €m % Total assets Europe Materials 11,400 32.5 10,675 32.7 10,509 33.3 Americas Materials 15,031 42.9 14,003 42.9 13,798 43.8 Building Products 8,605 24.6 7,943 24.4 7,203 22.9 Total Group 35,036 100.0 32,621 100.0 31,510 100.0 Reconciliation to total assets as reported in the Condensed Consolidated Balance Sheet: Investments accounted for using the equity method 1,181 1,111 1,163 Other financial assets 23 24 23 Derivative financial instruments (current and non-current) 87 61 45 Income tax assets (current and deferred) 89 91 86 Cash and cash equivalents 1,399 1,848 2,346 Total assets 37,815 35,756 35,173 6. Earnings per Ordinary Share The computation of basic and diluted earnings per Ordinary Share is set out below: Year ended Six months ended 30 June 31 December Unaudited Unaudited Audited 2019 2018 2018 €m €m €m Numerator computations Group profit for the financial period 555 1,461 2,521 Profit attributable to non-controlling interests (7) - (4) Profit attributable to ordinary equity holders of the Company - numerator for basic/diluted earnings per Ordinary Share 548 1,461 2,517 Profit after tax for the financial period from discontinued operations - 1,083 1,085 Profit attributable to ordinary equity holders of the Company - numerator for basic/diluted earnings per Ordinary Share from continuing operations 548 378 1,432 Number of Number of Number of Shares Shares Shares Denominator computations Weighted average number of Ordinary Shares (millions) outstanding for the financial period 808.7 839.6 832.4 Effect of dilutive potential Ordinary Shares (employee share options) (millions) 4.4 4.3 4.2 Denominator for diluted earnings per Ordinary Share 813.1 843.9 836.6 Earnings per Ordinary Share - basic 67.8c 174.0c 302.4c - diluted 67.4c 173.1c 300.9c Earnings per Ordinary Share from continuing operations - basic 67.8c 45.0c 172.0c - diluted 67.4c 44.8c 171.2c 7. Dividends Year ended Six months ended 30 June 31 December Unaudited Unaudited Audited 2019 2018 2018 Net dividend paid per share 52.4c 48.8c 68.4c Net dividend declared for the period 20.0c 19.6c 72.0c Dividend cover (Earnings per share/Dividend declared per share) - continuing and discontinued operations 3.4x 8.9x 4.2c Dividend cover - continuing operations 3.4x 2.3x 2.4c The Board has decided to increase the interim dividend to 20.0c per share, an increase of 2% compared with last year's level of 19.6c per share. It is proposed to pay the interim dividend on 25 September 2019 to shareholders registered at the close of business on 6 September 2019. In connection with the share buyback programme, CRH announced the suspension of the scrip dividend alternative on 2 May 2018. Therefore, the interim dividend will be paid wholly in cash. Dividends are generally paid in euro. However, to avoid costs to shareholders, dividends are paid in Pounds Sterling and US Dollars to shareholders whose addresses, according to CRH's Share Register, are in the UK and the US respectively. However, where shares are held in the CREST system, dividends are automatically paid in euro unless a currency election is made. In respect of the interim dividend, the latest date for receipt of currency elections is 6 September 2019. 8. Assets Held for Sale and Discontinued Operations A. Held for sale assessment In July 2019, the Group reached agreement with private equity funds managed by Blackstone to divest of its Europe Distribution business, which is part of the Building Products segment, for an enterprise value of c. €1.6 billion. In 2018, the business generated EBITDA of €155 million on sales of €3.7 billion and profit before tax for the year amounted to €124 million. The transaction is subject to regulatory approval. At 30 June 2019, there were a number of other substantive steps, outside of the control of the Group, requiring completion before the transaction met the "held for sale" criteria under IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations. As a result, the Europe Distribution business was not classified as held for sale at 30 June 2019. Assets and liabilities that met the IFRS 5 criteria at 30 June 2019 have not been separately disclosed as held for sale as they were not considered material in the context of the Group. The businesses divested in 2019 are not considered to be either separate major lines of business or geographical areas of operation and therefore do not constitute discontinued operations as defined in IFRS 5. B. Profit on disposal of discontinued operations On 2 January 2018, the Group completed the divestment of its 100% holding in Allied Building Products, the trading name of our former Americas Distribution segment. The assets and liabilities associated with this transaction met the "held for sale" criteria set out in IFRS 5 and were reclassified accordingly as assets or liabilities held for sale as at 31 December 2017. As the business was divested in 2018, all opening balances were reclassified back to the relevant asset and liability categories prior to their divestment for presentation purposes. The table below sets out the proceeds and related profit recognised on the divestment which is included in profit after tax for the financial period from discontinued operations. Six months ended 30 June Unaudited 2018 €m Net assets disposed 843 Reclassification of currency translation effects on disposal (27) Total 816 Proceeds from disposal (net of disposal costs) 2,236 Profit on disposal of discontinued operations 1,420 Net cash inflow arising on disposal Proceeds from disposal of discontinued operations 2,236 Less: cash and cash equivalents disposed (18) Total 2,218 8. Assets Held for Sale and Discontinued Operations - continued C. Results of discontinued operations The results of the discontinued operations included in the Group profit for the financial period are set out as follows: Six months ended 30 June Unaudited 2018 €m Revenue 6 EBITDA (5) Depreciation - Amortisation - Operating loss (5) Profit on disposals 1,420 Profit before tax 1,415 Attributable income tax expense (332) Profit after tax 1,083 Cash flows from discontinued operations Net cash outflow from operating activities (71) Net cash inflow from investing activities (i) 2,218 Net cash outflow from financing activities (5) Net cash inflow 2,142 Basic earnings per Ordinary Share from discontinued operations for the six months to 30 June 2018: 129.0c. Diluted earnings per Ordinary Share from discontinued operations for the six months to 30 June 2018: 128.3c. There were no equivalent earnings per Ordinary Share from discontinued operations for the six months to 30 June 2019. (i) Includes the proceeds from the sale of Allied Building Products. 9. Share of Equity Accounted Investments' Profit The Group's share of joint ventures' and associates' profit after tax is equity accounted and is presented as a single line item in the Condensed Consolidated Income Statement; it is analysed as follows between the principal Condensed Consolidated Income Statement captions: Year ended Six months ended 30 June 31 December Unaudited Unaudited Audited 2019 2018 2018 €m €m €m Group share of: Revenue 714 696 1,575 EBITDA 65 58 138 Operating profit 33 26 74 Profit after tax 20 19 60 Analysis of Group share of profit after tax: Share of joint ventures' profit after tax 16 13 33 Share of associates' profit after tax 4 6 27 Share of equity accounted investments' profit after tax 20 19 60 10. Net Finance Costs Continuing operations Year ended Six months ended 30 June 31 December Unaudited Unaudited Audited 2019 2018 2018 €m €m €m Finance costs 183 167 339 Finance income (7) (23) (34) Other financial expense 59 16 46 Total net finance costs 235 160 351 The overall total is analysed as follows: Net finance costs on interest-bearing loans and borrowings and cash and cash equivalents 174 143 308 Net cost/(credit) re change in fair value of derivatives and fixed rate debt 2 1 (3) Net debt-related interest costs 176 144 305 Unwinding of discount element of lease liabilities 35 - - Net pension-related finance cost 7 4 10 Charge to unwind discount on provisions/deferred and contingent acquisition consideration 17 12 36 Total net finance costs 235 160 351 11. Net Debt As at 30 June As at 30 June As at 31 December Unaudited Unaudited Audited Fair value Book value Fair value Book value Fair value Book value 2019 2018 2018 Net debt €m €m €m €m €m €m Non-current assets Derivative financial instruments 78 78 30 30 30 30 Current assets Derivative financial instruments 9 9 31 31 15 15 Cash and cash equivalents 1,399 1,399 1,848 1,848 2,346 2,346 Non-current liabilities Interest-bearing loans and borrowings* (9,117) (8,806) (8,688) (8,557) (8,605) (8,698) Derivative financial instruments - - (37) (37) (18) (18) Lease liabilities under IFRS 16 (1,502) (1,502) - - - - Current liabilities Interest-bearing loans and borrowings (1,023) (1,023) (1,356) (1,356) (618) (618) Derivative financial instruments (22) (22) (14) (14) (41) (41) Lease liabilities under IFRS 16 (358) (358) - - - - Group net debt (10,536) (10,225) (8,186) (8,055) (6,891) (6,984) * Interest-bearing loans and borrowings include €12 million as at 30 June 2018 (31 December 2018: €23 million) relating to finance leases previously capitalised under IAS 17. ** All leases capitalised under IFRS 16 have been included as lease liabilities in 2019. 11. Net Debt - continued As at 30 June As at 30 June As at 31 December Unaudited Unaudited Audited 2019 2018 2018 Gross debt, net of derivatives, matures as follows: €m €m €m Within one year 1,394 1,339 644 Between one and two years 1,376 (5) 748 Between two and three years 826 1,089 947 Between three and four years 1,303 599 370 Between four and five years 744 1,112 752 After five years 5,981 5,769 5,869 Total 11,624 9,903 9,330 The Group has a €1.5 billion Euro Commercial Paper Programme and a US$2.0 billion US Dollar Commercial Paper Programme which allows it to fund short-term liquidity needs at attractive terms. Commercial Paper notes in the amount of €917 million were outstanding as at 30 June 2019 (30 June 2018: €777 million). * All leases capitalised under IFRS 16 are included in gross debt in 2019. As at 30 June As at 30 June As at 31 December Unaudited Unaudited Audited 2019 2018 2018 Reconciliation of opening to closing net debt: €m €m €m At 1 January (6,984) (5,796) (5,796) Effect of adopting IFRS 16 (1,954) - - Debt, including lease liabilities, in acquired companies (28) (56) (74) Debt, including lease liabilities, in disposed companies 38 - - Increase in interest-bearing loans, borrowings and finance leases (955) (2,138) (1,434) Increase in lease liabilities under IFRS 16* (54) - - Net cash flow arising from derivative financial instruments 11 (19) (6) Repayment of interest-bearing loans, borrowings and finance leases 524 250 246 Repayment of lease liabilities under IFRS 16 169 - - (Decrease)/increase in cash and cash equivalents (953) (295) 194 Mark-to-market adjustment 27 5 2 Translation adjustment (66) (6) (116) At 30 June (10,225) (8,055) (6,984) * All leases capitalised under IFRS 16 have been included as lease liabilities in 2019. ** Interest-bearing loans and borrowings include €12 million as at 30 June 2018 (31 December 2018: €23 million) relating to finance leases previously capitalised under IAS 17. Market capitalisation Market capitalisation, calculated as the period-end share price multiplied by the number of Ordinary Shares in issue, is as follows: As at 30 June As at 30 June As at 31 December Unaudited Unaudited Audited 2019 2018 2018 €m €m €m Market capitalisation at period-end 22,977 25,392 18,846 11. Net Debt - continued Liquidity information - borrowing facilities The Group manages its borrowing ability by entering into committed borrowing agreements. Revolving committed bank facilities are generally available to the Group for periods of up to five years from the date of inception. The undrawn committed facilities figures shown in the table below represent the facilities available to be drawn by the Group at 30 June 2019. As at 30 June As at 30 June As at 31 December Unaudited Unaudited Audited 2019 2018 2018 €m €m €m Between two and three years 13 - 15 Between three and four years 54 50 50 Between four and five years 3,500 3,500 3,500 After five years - 39 18 Total 3,567 3,589 3,583 Guarantees The Company has given letters of guarantee to secure obligations of subsidiary undertakings as follows: €9.4 billion in respect of loans and borrowings, bank advances, derivative obligations and future lease obligations (2018: €9.6 billion) and €0.4 billion in respect of letters of credit (2018: €0.3 billion). Net debt metrics The net debt metrics based on net debt as shown in note 11, EBITDA as defined on page 37 and net debt-related interest as shown in note 10 are as follows: Year ended Six months ended 30 June 31 December Unaudited Unaudited Audited 2019 2018 2018 EBITDA net interest cover (times) - continuing operations - six months to 30 June 8.8 7.8 - - rolling 12 months 11.2 11.2 11.0 EBIT net interest cover (times) - continuing operations - six months to 30 June 4.3 4.1 - - rolling 12 months 6.9 7.3 7.1 Net debt as a percentage of market capitalisation 45% 32% 37% Net debt as a percentage of total equity 63% 50% 42% 12. Fair Value of Financial Instruments The table below sets out the valuation basis of financial instruments held at fair value by the Group: Level 2 (i) Level 3 (i) As at 30 June As at 31 December As at 30 June As at 31 December Unaudited Audited Unaudited Audited 2019 2018 2018 2019 2018 2018 €m €m €m €m €m €m Assets measured at fair value Fair value hedges - interest rate swaps 77 25 27 - - - Cash flow hedges - cross-currency and commodity forwards 8 19 6 - - - Net investment hedges - cross-currency swaps 2 15 10 - - - Not designated as hedges (held for trading) - interest rate swaps and cross-currency swaps - 2 2 - - - Total 87 61 45 - - - Liabilities measured at fair value Fair value hedges - interest rate swaps - (37) (16) - - - Cash flow hedges - cross-currency and commodity forwards (8) - (34) - - - Net investment hedges - cross-currency swaps (11) (14) (2) - - - Not designated as hedges (held for trading) - cross-currency swaps (3) - (7) - - - Contingent consideration - - - (232) (228) (220) Total (22) (51) (59) (232) (228) (220) The carrying amount of trade and other payables approximate their fair value largely due to the short-term maturities and nature of these instruments. There were no transfers between Levels 2 and 3 during the periods. There were no significant changes in contingent consideration recognised in profit or loss or other comprehensive income in the current period. Further details in relation to the inputs into valuation models for contingent consideration are available in the Group's 2018 Annual Report and Form 20-F. (i) For financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety. 13. Leases A. IFRS 16 Leases disclosures Land and Buildings Plant and Machinery Other Total Leased right-of-use assets €m €m €m €m At 30 June 2019 (unaudited) Cost 1,491 446 70 2,007 Accumulated depreciation (95) (70) (13) (178) Net carrying amount 1,396 376 57 1,829 At 1 January 2019, net carrying amount - - - - Effect of adopting IFRS 16 1,478 424 60 1,962 Translation adjustment 8 4 - 12 Transfer to owned assets - (9) - (9) Additions at cost 11 29 13 53 Arising on acquisition 24 - - 24 Disposals at net carrying amount (44) (6) (2) (52) Adjustment as a result of remeasurement of lease liability 11 3 1 15 Depreciation charge for period (92) (69) (15) (176) At 30 June 2019, net carrying amount (unaudited) 1,396 376 57 1,829 Lease liabilities At 1 January 2019 - - - - Effect of adopting IFRS 16 1,493 425 59 1,977 Translation adjustment 8 4 - 12 Addition of right-of-use assets 11 29 13 53 Arising on acquisition 24 - - 24 Disposals (44) (6) (2) (52) Remeasurements 11 3 1 15 Payments (106) (82) (16) (204) Discount unwinding 28 6 1 35 At 30 June 2019 (unaudited) 1,425 379 56 1,860 The table below shows a maturity analysis of the undiscounted lease liability arising from the Group's leasing activities. The projections are based on the foreign exchange rates applying at the end of the relevant financial period. As at 30 June Unaudited 2019 Undiscounted lease liabilities €m Within one year 360 Between one and two years 297 Between two and three years 247 Between three and four years 201 Between four and five years 167 After five years 1,086 Total 2,358 13. Leases - continued The Group avails of the exemption from capitalising lease costs for short-term leases and low-value assets where the relevant criteria are met. Variable lease payments directly linked to sales or usage are also expensed as incurred. The following lease costs have been charged to the Condensed Consolidated Income Statement as incurred: Six months ended 30 June Unaudited 2019 €m Short-term leases 74 Lease of low-value assets 4 Variable lease payments not included in the lease liability 10 Total 88 Total cash outflow for lease payments 292 Lease commitments for short-term leases are similar to the portfolio of short-term leases for which the costs were expensed to the Condensed Consolidated Income Statement. The effect of excluding future cash outflows arising from variable lease payments, termination options, residual value guarantees and leases not yet commenced from lease liabilities was not material for the Group. Income from subleasing and gains/losses on sale and leaseback transactions were not material for the Group. B. IAS 17 Leases disclosures Operating lease rentals charged to the Condensed Consolidated Income Statement for 2018 under IAS 17 were as follows: Year ended Six months ended 30 June 31 December Unaudited Audited 2018 2018 Operating lease rentals €m €m Hire of plant and machinery 133 324 Land and buildings 124 243 Other operating leases 26 61 Total 283 628 Lease commitments were provided for up to the earliest break clause in the lease. As at 30 June As at 31 December Unaudited Audited 2018 2018 €m €m Within one year 371 353 After one year but not more than five years 891 769 More than five years 766 789 Total 2,028 1,911 14. Future Purchase Commitments for Property, Plant and Equipment Year ended Six months ended 30 June 31 December Unaudited Unaudited Audited 2019 2018 2018 €m €m €m Contracted for but not provided in these Condensed Consolidated Interim Financial Statements 499 475 449 15. Business Combinations The acquisitions completed during the period ended 30 June 2019 by reportable segment, together with the completion dates, are detailed below; these transactions entailed the acquisition of an effective 100% stake except where indicated to the contrary: Europe Materials: Poland: land adjacent to Sitkówka Quarry (13 March). Americas Materials: Canada: Beecroft Property (14 March) and Mirabel Property (7 May); Colorado: Otter Creek Property (28 March); Connecticut: Wallingford Property (30 January); Florida: Golden Gate Property (7 March) and Fortress Block, LLC (28 June); Iowa: Kenyon Property (11 January); Michigan: Ottawa Lake Property (31 January) and Delton Property (26 April); New York: Solvay Rail Terminal (28 June); Ohio: KMC Paving (8 March); Oregon: Windsor Rock Products (1 March), The Dalles Concrete (29 March), Hood River Sand, Gravel and Ready-Mix (29 March) and Pioneer Asphalt (31 May); and Texas: JLB Contracting (25 January). Building Products: Florida: Suntree Technologies, Inc. (5 March); Germany: BVG Ranck (30 April); Netherlands: Filoform B.V. (1 May); Ohio: Buckeye Resources, Inc. (9 May); Poland: Libet S.A. Lublin Paving Plant (1 March); Virginia: certain assets of Allied Concrete Company, LLC (28 March); and Washington: Quality Concrete Products, Inc. (15 February) and Granite Precasting & Concrete, Inc. (6 June). The acquisition balance sheet presented on the following page reflects the identifiable net assets acquired in respect of acquisitions completed during 2019, together with adjustments to provisional fair values (to the extent identified as of 30 June 2019) in respect of acquisitions completed during 2018. The measurement period for a number of the acquisitions completed in 2018, including Ash Grove Cement Company, closed in 2019 with no material adjustments identified. 15. Business Combinations - continued The identifiable net assets acquired, including adjustments to provisional fair values, were as follows: Six months ended 30 June Unaudited Year ended 31 December Audited 2019 2018 2018 ASSETS €m €m €m Non-current assets Property, plant and equipment 151 2,450 2,614 Intangible assets 34 35 58 Equity accounted investments - 1 1 Total non-current assets 185 2,486 2,673 Current assets Inventories 24 221 255 Trade and other receivables (i) 28 264 318 Cash and cash equivalents 2 67 69 Total current assets 54 552 642 LIABILITIES Trade and other payables (30) (230) (224) Provisions for liabilities - (92) (84) Retirement benefit obligations (1) (122) (115) Lease liabilities (24) - - Interest-bearing loans and borrowings and finance leases (4) (56) (74) Current income tax liabilities - (20) (15) Deferred income tax liabilities (5) (378) (411) Total liabilities (64) (898) (923) Total identifiable net assets at fair value 175 2,140 2,392 Goodwill arising on acquisition (ii) 124 1,446 1,504 Joint venture becoming a subsidiary - (120) (120) Non-controlling interests** (1) (31) (48) Total consideration 298 3,435 3,728 Consideration satisfied by: Cash payments 287 3,281 3,574 Asset exchange - - 12 Deferred consideration (stated at net present cost) 7 5 10 Contingent consideration 4 110 93 Profit on step acquisition - 39 39 Total consideration 298 3,435 3,728 Net cash outflow arising on acquisition Cash consideration 287 3,281 3,574 Less: cash and cash equivalents acquired (2) (67) (69) Total outflow in the Condensed Consolidated Statement of Cash Flows 285 3,214 3,505 * Includes €5 million as at 30 June 2018 (31 December 2018: €6 million) relating to finance leases previously capitalised under IAS 17. All leases capitalised under IFRS 16 have been included as lease liabilities in 2019. ** Non-controlling interests are measured at the proportionate share of net assets. Footnotes (i) and (ii) appear on page 34. 15. Business Combinations - continued CRH performs a detailed quantitative and qualitative assessment of each acquisition in order to determine whether it is material for the purposes of separate disclosure under IFRS 3. None of the acquisitions completed during the financial period were considered sufficiently material to warrant separate disclosure of the attributable fair values. The initial assignment of the fair values to identifiable assets acquired and liabilities assumed as disclosed are provisional (principally in respect of property, plant and equipment) in respect of certain acquisitions due to timing of close. The fair value assigned to identifiable assets and liabilities acquired is based on estimates and assumptions made by management at the time of acquisition. CRH may revise its purchase price allocation during the subsequent reporting window as permitted under IFRS 3. Footnotes to the acquisition balance sheet on page 33 (i) The gross contractual value of trade and other receivables as at the respective dates of acquisition amounted to €28 million (2018: €268 million). The fair value of these receivables is €28 million (all of which is expected to be recoverable) (2018: €264 million). (ii) The principal factor contributing to the recognition of goodwill on acquisitions entered into by the Group is the realisation of cost savings and other synergies with existing entities in the Group which do not qualify for separate recognition as intangible assets. Due to the asset-intensive nature of operations in the Europe Materials and Americas Materials business segments, no significant separately identifiable intangible assets are recognised on business combinations in these segments. €96 million of the goodwill recognised in respect of acquisitions completed in 2019 is expected to be deductible for tax purposes (2018: €149 million). Acquisition-related costs Acquisition-related costs, which exclude post-acquisition integration costs, amounting to €1 million (2018: €12 million) have been included in operating costs in the Condensed Consolidated Income Statement. The following table analyses the 25 acquisitions completed in 2019 (2018: 22 acquisitions) by reportable segment and provides details of the goodwill and consideration figures arising in each of those segments: Six months ended 30 June - unaudited Number of acquisitions Goodwill Consideration 2019 2018 2019 2018 2019 2018 Reportable segments €m €m €m €m Europe Materials 1 2 - 37 5 60 Americas Materials 16 16 31 1,363 136 3,270 Building Products 8 4 73 25 157 104 Total Group 25 22 104 1,425 298 3,434 Adjustments to provisional fair values of prior period acquisitions 20 21 - 1 Total 124 1,446 298 3,435 Post-acquisition impact The post-acquisition impact of acquisitions completed during the period on the Group's profit for the financial period was as follows: Six months ended 30 June Unaudited 2019 2018 €m €m Revenue 52 221 Profit before tax for the financial period 2 14 The revenue and profit of the Group for the financial period determined in accordance with IFRS as though the acquisitions effected during the period had been at the beginning of the period would have been as follows: Pro-forma 2019 CRH Group Pro-forma 2019 excluding 2019 consolidated acquisitions acquisitions Group €m €m €m Revenue 111 13,165 13,276 Profit before tax for the financial period 6 705 711 There have been no acquisitions completed subsequent to the balance sheet date which would be individually material to the Group, thereby requiring disclosure under either IFRS 3 or IAS 10 Events after the Balance Sheet Date. Development updates, giving details of acquisitions which do not require separate disclosure on the grounds of materiality, are published periodically. 16. Related Party Transactions There have been no related party transactions or changes in the nature and scale of the related party transactions described in the 2018 Annual Report and Form 20-F that could have had a material impact on the financial position or performance of the Group in the first six months of 2019. 17. Retirement Benefit Obligations The Group operates either defined benefit or defined contribution pension schemes in all of its principal operating areas. In consultation with the actuaries to the various defined benefit pension schemes (including jubilee schemes, long-term service commitments and post-retirement healthcare obligations, where relevant), the valuations of the applicable assets and liabilities have been marked-to-market as at the end of the financial period, taking account of prevailing bid values, actual investment returns, corporate bond yields and other matters such as updated actuarial valuations conducted during the period. Financial assumptions - scheme liabilities The discount rates used by the Group's actuaries in the computation of the pension scheme liabilities and post-retirement healthcare obligations are as follows: Year ended Six months ended 30 June 31 December Unaudited Unaudited Audited 2019 2018 2018 % % % Eurozone 1.46 2.11 2.12 Switzerland 0.40 0.85 0.85 United States and Canada 3.30 4.02 4.10 The following table provides a reconciliation of scheme assets (at bid value) and the actuarial value of scheme liabilities (using the aforementioned assumptions): Six months ended 30 June - unaudited Assets Liabilities Net liability 2019 2018 2019 2018 2019 2018 €m €m €m €m €m €m At 1 January 2,913 2,622 (3,337) (2,999) (424) (377) Administration expenses (2) (1) - - (2) (1) Current service cost - - (31) (31) (31) (31) Interest income on scheme assets 34 26 - - 34 26 Interest cost on scheme liabilities - - (41) (30) (41) (30) Arising on acquisition - 334 (1) (456) (1) (122) Remeasurement adjustments: -return on scheme assets excluding interest income 218 (15) - - 218 (15) -actuarial (loss)/gain from changes in financial assumptions - - (349) 73 (349) 73 Employer contributions paid 26 22 - - 26 22 Contributions paid by plan participants 7 7 (7) (7) - - Benefit and settlement payments (65) (50) 65 50 - - Translation adjustment 27 9 (30) (8) (3) 1 At 30 June 3,158 2,954 3,731 (3,408) (573) (454) Related deferred income tax asset 112 65 Net pension liability (461) (389) 18. Taxation The taxation expense for the interim period is an estimate based on the expected full year effective tax rate on full year profits. 19. Share Buyback Programme In April 2018, CRH announced its intention to introduce a share repurchase programme to repurchase Ordinary Shares (including Income Shares) of up to €1 billion (the "Programme"). On 29 April 2019, the Programme was extended to include the further repurchase of Ordinary Shares of up to €350 million in the period up to 16 August 2019, bringing the total cash returned to shareholders under the Programme to €1.35 billion since its commencement. In the period from 1 January 2019 to 30 June 2019, CRH plc purchased a total of 15,847,079 Ordinary Shares at a total cost of €436 million. A financial liability of €114 million has been recognised at 30 June 2019 (2018: €136 million) in respect of the 3,937,250 Ordinary Shares purchased under the Programme in the period from 1 July 2019 to 7 August 2019, the date on which the latest phase of the Programme formally concluded. In light of our strong balance sheet and cash generation, the Board plans to continue the Programme with a further tranche of up to €350 million to be completed by the year end. 20. Statutory Accounts and Audit Opinion The financial information presented in this interim report does not represent full statutory accounts and has not been reviewed or audited by the Company's auditors. Full statutory accounts for the year ended 31 December 2018 prepared in accordance with IFRS, upon which the auditors have given an unqualified audit report, have been filed with the Registrar of Companies. 21. Board Approval This announcement was approved by the Board of Directors of CRH plc on 21 August 2019. 22. Distribution of Interim Report This interim report is available on the Group's website (www.crh.com). A printed copy is available to the public at the Company's registered office. Glossary of Alternative Performance Measures CRH uses a number of alternative performance measures (APMs) to monitor financial performance. These measures are referred to throughout the discussion of our reported financial position and operating performance throughout this document and are measures which are regularly reviewed by CRH management. The APMs may not be uniformly defined by all companies and accordingly they may not be directly comparable with similarly titled measures and disclosures by other companies. Certain information presented is derived from amounts calculated in accordance with IFRS but is not itself an expressly permitted GAAP measure. The APMs as summarised below should not be viewed in isolation or as an alternative to the equivalent GAAP measure. EBITDA 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. It is quoted by management, in conjunction with other GAAP and non-GAAP financial measures, to aid investors in their analysis of the performance of the Group and to assist investors in the comparison of the Group's performance with that of other companies. EBITDA and operating profit by segment are monitored by management in order to allocate resources between segments and to assess performance. Given that net finance costs and income tax are managed on a centralised basis, these items are not allocated between operating segments for the purpose of the information presented to the Chief Operating Decision Maker (Group Chief Executive and Finance Director). EBITDA margin is calculated by expressing EBITDA as a percentage of sales. Operating profit (EBIT) is defined as earnings before interest, taxes, profit on disposals and the Group's share of equity accounted investments' profit after tax. A reconciliation of Group profit before tax to EBITDA is presented below. Continuing Operations Six months ended 30 June Year ended 31 December Unaudited Audited 2019 2018 2018 €m €m €m Group profit for the financial period 555 378 1,436 Income tax expense 152 119 426 Profit before tax 707 497 1,862 Share of equity accounted investments' profit (20) (19) (60) Other financial expense 59 16 46 Finance costs less income 176 144 305 Profit before finance costs 922 638 2,153 (Profit)/loss on disposals (171) (46) 24 Group operating profit 751 592 2,177 Depreciation charge 760 488 1,071 Amortisation of intangibles 29 30 61 Impairment charge - 20 56 EBITDA 1,540 1,130 3,365 EBITDA impact from adoption of IFRS 16 (note 1) (193) - - EBITDA excluding impact of IFRS 16 1,347 1,130 3,365 Net Debt Net debt is used by management as it gives a more complete picture of the Group's current debt situation than total interest-bearing loans and borrowings. Net debt is provided to enable investors to see the economic effect of gross debt, related hedges and cash and cash equivalents in total. Net debt is a non-GAAP measure and comprises current and non-current interest-bearing loans and borrowings, current and non-current lease liabilitites, cash and cash equivalents and current and non-current derivative financial instruments. Glossary of Alternative Performance Measures - continued EBITDA Net Interest Cover EBITDA net interest cover is used by management as a measure which matches the earnings and cash generated by the business to the underlying funding costs. EBITDA net interest cover is presented to provide investors with a greater understanding of the impact of CRH's debt and financing arrangements. It is calculated below: Year ended Six months ended 30 June 31 December Unaudited Unaudited Audited 2019 2018 2018 €m €m €m Interest Finance costs (i) 183 167 339 Finance income (i) (7) (23) (34) Net interest 176 144 305 EBITDA - continuing operations 1,540 1,130 3,365 Times Times Times EBITDA net interest cover (EBITDA divided by net interest) - continuing operations (ii) 8.8 7.8 11.0 Rolling 12 months ended 30 June Unaudited Unaudited 2019 2018 €m €m Interest - continuing operations Net interest - full year prior year (2018 and 2017) 305 289 Net interest - H1 prior year (2018 and 2017) 144 150 Net interest - H2 prior year (2018 and 2017) 161 139 Net interest - H1 current year (2019 and 2018) 176 144 Net interest - rolling 12 months to 30 June 337 283 EBITDA - continuing operations EBITDA - full year prior year (2018 and 2017) 3,365 3,146 EBITDA - H1 prior year (2018 and 2017) 1,130 1,120 EBITDA - H2 prior year (2018 and 2017) 2,235 2,026 EBITDA - H1 current year (2019 and 2018) 1,540 1,130 EBITDA - rolling 12 months to 30 June 3,775 3,156 Times Times EBITDA net interest cover (EBITDA divided by net interest) 11.2 11.2 (i) These items appear on the Condensed Consolidated Income Statement on page 8. (ii) EBITDA Net Interest Cover from continuing and discontinued operations in 2018 was 11.0x. EBIT net interest cover is the ratio of EBIT to net debt-related interest costs. Glossary of Alternative Performance Measures - continued Organic Revenue, Organic Operating Profit and Organic EBITDA The terms 'like-for-like', 'organic' and 'underlying' are used interchangeably throughout this report. Because of the impact of acquisitions, divestments, exchange translation, other non-recurring items and the adoption of new accounting standards on reported results each period, the Group uses organic revenue, organic operating profit and organic EBITDA as additional performance indicators to assess performance of pre-existing operations each period. Organic revenue, organic operating profit and organic EBITDA are arrived at by excluding the incremental revenue, operating profit and EBITDA contributions from current and prior year acquisitions and divestments, the impact of exchange translation and the impact of any non-recurring items. In the Business Performance review on pages 1 to 6, changes in organic revenue, organic operating profit and organic EBITDA are presented as additional measures of revenue, operating profit and EBITDA to provide a greater understanding of the performance of the Group. A reconciliation of the changes in organic revenue, organic operating profit and organic EBITDA to the changes in total revenue, operating profit and EBITDA for the Group and by segment is presented with the discussion of each segment's performance in tables contained in the segment discussion commencing on page 4. Principal Risks and Uncertainties Under Section 327(1)(b) of the Companies Act 2014 and Regulation 5(4)(c)(ii) of the Transparency (Directive 2004/109/EC) Regulations 2007, the Group is required to give a description of the principal risks and uncertainties which it faces. These risks and uncertainties reflect the international scope of the Group's operations and the Group's decentralised structure. During the course of 2019, new risks and uncertainties may materialise attributable to changes in markets, regulatory environments and other factors and existing risks and uncertainties may become less relevant. Principal Strategic Risks and Uncertainties Industry cyclicality and adverse economic conditions: Construction activity, and therefore demand for the Group's products, is inherently cyclical as it is influenced by global and national economic circumstances, governments' ability to fund infrastructure projects, consumer sentiment and weather conditions. The Group may also be negatively impacted by unfavourable swings in fuel and other commodity/raw material prices. Failure to predict and plan for cyclical events or adverse economic conditions could negatively impact financial performance. Geopolitical and/or social instability: Adverse and fast changing economic, social, and political situations in any country in which the Group operates could lead to business interruption, restrictions on repatriation of earnings or a loss of plant access. Changes in these conditions may adversely affect the Group's business, results of operations, financial condition or prospects. Brexit: Uncertainties resulting from the UK's withdrawal from the European Union could pose challenges with currency devaluations, a fall in construction activity in the UK, challenges in labour resources accessing the UK, movement of goods and services and repatriating earnings. Failure by the Group to manage the uncertainties posed by Brexit could result in adverse financial performance and a fall in the Group's net worth. Commodity products and substitution: Many of the Group's products are commodities, which face strong volume and price competition, and may be replaced by substitute products which the Group does not produce or distribute. Further, the Group must maintain strong customer relationships to ensure changing consumer preferences are addressed. Failure to differentiate and innovate could lead to market share decline, thus adversely impacting financial performance. Reserves availability and planning: Appropriate reserves are an increasingly scarce commodity and licences and/or permits required to enable operation are becoming harder to secure. There are numerous uncertainties inherent in reserves estimation and in projecting future rates of production. Failure by the Group to plan for reserve depletion, or to secure permits, may result in operation stoppages, adversely impacting financial performance. Portfolio management: The Group may engage in acquisition and divestment activity during the year as part of the Group's active portfolio management which presents risks around due diligence, execution and integration of assets. Additionally, the Group may be liable for liabilities of companies it has acquired or divested. Failure to identify and execute deals in an efficient manner may limit the Group's growth potential and impact financial performance. Joint ventures and associates: The Group does not have a controlling interest in certain of the businesses (i.e. joint ventures and associates) in which it has invested and may invest, which gives rise to increased governance complexity and a need for proactive relationship management. The lack of a controlling interest could impair the Group's ability to manage joint ventures and associates effectively and/or realise its strategic goals for these businesses. People management: Existing processes around people management (such as attracting, retaining and developing people, leadership succession planning, as well as dealing with collective representation groups) may not deliver, inhibiting the Group achieving its strategy. Failure to effectively manage talent and plan for leadership succession could impede the realisation of strategic objectives. Principal Operational Risks and Uncertainties Sustainability, corporate social responsibility and climate change: The Group may face challenges associated with developing and providing innovative building products and solutions that help deliver a more sustainable environment while meeting our social responsibilities, the stringent and ever evolving laws and regulations that govern the climate change agenda and changing consumer demand. Failure to innovate, keep up with current technological changes or changing consumer preferences may result in falling demand for the Group's products, adversely impacting financial performance. Health and safety performance: The Group's businesses operate in an industry where health and safety risks are inherently prominent. Further, the Group is subject to stringent regulations from a health and safety perspective in the various jurisdictions in which it operates. A significant health and safety incident could have a serious impact on the Group's operational and financial performance, as well as the Group's reputation. Operational continuity: The Group's operating entities are subject to a wide range of operating risks and hazards including climatic conditions, technical failures, interruptions to power supplies, industrial accidents and disputes, environmental hazards, fire and crime. The occurrence of a significant adverse event could lead to prolonged operational interruption, negatively impacting financial performance or the Group's prospects. Information technology and/or cyber security: The Group is dependent on information technology systems to support its business activities. Any significant operational event, whether caused by external attack, insider threat or error, could lead to loss of access to systems or data, adversely impacting business operations. Security breaches, IT interruptions or data loss could result in reputational damage and regulatory penalties and significant financial costs in remediation. Principal Risks and Uncertainties - continued Principal Compliance Risks and Uncertainties Laws and regulations: The Group is subject to a wide variety of local and international laws and regulations across the many jurisdictions in which it operates, which vary in complexity, application and frequency of change. Potential breaches of local and international laws and regulations could result in the imposition of significant fines or sanctions and may inflict reputational damage. Principal Financial and Reporting Risks and Uncertainties Financial instruments: The Group uses financial instruments throughout its businesses giving rise to interest rate and leverage, foreign currency, counterparty, credit rating and liquidity risks. A downgrade of the Group's credit ratings or inability to maintain certain financial ratios may give rise to increases in future funding costs and may impair the Group's ability to raise funds on acceptable terms. In addition, insolvency of the financial institutions with which the Group conducts business may adversely impact the Group's financial position. Defined benefit pension schemes and related obligations: The assets and liabilities of defined benefit pension schemes, in place in certain operating jurisdictions, exhibit significant period-on-period volatility attributable primarily to asset values, changes in bond yields/discount rates and anticipated longevity. Significant cash contributions may be required to remediate deficits applicable to past service. Fluctuations in the accounting surplus/deficit may adversely impact the Group's credit metrics thus harming its ability to raise funds. Taxation charge and balance sheet provisioning: The Group is exposed to uncertainties stemming from governmental actions in respect of taxes paid and payable in all jurisdictions of operation. In addition, various assumptions are made in the computation of the overall tax charge and in balance sheet provisions which may not be borne out in practice. Changes in tax regimes or findings in future audits that additional taxes are due could result in incremental tax liabilities which could have a material adverse effect on cash flows, financial condition and results of operations. Foreign currency translation: The principal foreign exchange risks to which the Condensed Consolidated Financial Statements are exposed pertain to (i) adverse movements in reported results when translated into euro and (ii) declines in the euro value of net investments which are denominated in a wide basket of currencies other than the euro. Adverse changes in the exchange rates will continue to negatively affect retained earnings. The impact is reported in the Condensed Consolidated Statement of Comprehensive Income. Goodwill impairment: Significant under-performance in any of the Group's major cash-generating units or the divestment of businesses in the future may give rise to a material write-down of goodwill. A write-down of goodwill could have a substantial impact on the Group's income and equity. Responsibility Statement The Directors of CRH plc, being the persons responsible within CRH plc, confirm that to the best of their knowledge: 1) the Condensed Consolidated Unaudited Financial Statements for the six months ended 30 June 2019 have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting, the accounting standard applicable to interim financial reporting adopted pursuant to the procedure provided for under Article 6 of Regulation (EC) no. 1606/2002 of the European Parliament and of the Council of 19 July 2002, and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group for the six months ended 30 June 2019; 2) the interim management report includes a fair review of: I. the important events that have occurred during the first six months of the financial year, and their impact on the condensed consolidated set of financial statements; II. the principal risks and uncertainties for the remaining six months of the financial year; III. any related parties' transactions that have taken place in the first six months of the current financial year that have materially affected the financial position or the performance of the enterprise during that period; and IV. any changes in the related parties' transactions described in the 2018 Annual Report and Form 20-F that could have had a material effect on the financial position or performance of the enterprise in the first six months of the current financial year. Albert Manifold Chief Executive Senan Murphy Finance Director Disclaimer In order to utilise the "Safe Harbor" provisions of the United States Private Securities Litigation Reform Act of 1995, CRH public limited company (the "Company"), and its subsidiaries (collectively, "CRH" or the "Group") is providing the following cautionary statement. This document contains statements that are, or may be deemed to be forward-looking statements with respect to the financial condition, results of operations, business, viability and future performance of CRH and certain of the plans and objectives of CRH. These forward-looking statements may generally, but not always, be identified by the use of words such as "will", "anticipates", "should", "could", "would", "targets", "aims", "may", "continues", "expects", "is expected to", "estimates", "believes", "intends" or similar expressions. These forward-looking statements include all matters that are not historical facts or matters of fact at the date of this document. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future and reflect the Company's current expectations and assumptions as to such future events and circumstances that may not prove accurate. A number of material factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, certain of which are beyond our control, as detailed in the section entitled "Risk Factors" in our 2018 Annual Report on Form 20-F as filed with the US Securities and Exchange Commission. You are cautioned not to place undue reliance on any forward-looking statements. These forward-looking statements are made as of the date of this document. The Company expressly disclaims any obligation or undertaking to publicly update or revise these forward-looking statements other than as required by applicable law. The forward-looking statements in this document do not constitute reports or statements published in compliance with any of Regulations 6 to 8 of the Transparency (Directive 2004/109/EC) Regulations 2007. This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com. END IR FMGZRKMMGLZM