CRH plc (NYSE:CRH) Q4 2019 Earnings Conference Call February 28, 2020 3:30 AM ET Company Participants Senan Murphy - Group Finance, Director Randy Lake - President, Americas Materials Onne van der Weijde - President, Europe Materials Keith Haas - President, Building Products David Dillon - President, Global Strategy & Business Development Conference Call Participants Gregor Kuglitsch - UBS Robert Gardiner - Davy Arnaud Lehmann - Bank of America David O'Brien - Goodbody Senan Murphy Good morning, ladies and ...

GRH 2019 Results Agenda Market Backdrop & Trading Performance Financial Performance Strategy & Sustainability Update Outlook & Key Takeaways CRH plc, Full Year Results 2019 1 Key Messages • Good profit performance & cash generation … … significant balance sheet strength & capacity • Continuing business improvement … ... delivering further margin expansion • Increasing cash returns to shareholders ... €0.8bn share buyback in 2019 ... 15% increase in FY dividend Business Developments Financial Delivery • Acti ...

Financial Data and Key Metrics Changes - CRH reported a record first half profit performance with EBITDA exceeding €1.5 billion, a 5% increase on a like-for-like basis compared to the previous year [6][28] - Earnings per share increased by 51%, reflecting strong operational and financial performance as well as profit on disposals [12] - The interim dividend was increased by 2%, indicating a commitment to a progressive dividend policy [12] Business Line Data and Key Metrics Changes - The Americas Materials division saw like-for-like sales and EBITDA increase by 2% and 3%, respectively, despite weather disruptions [17] - The Europe Materials division reported like-for-like sales and EBITDA growth of 6% and 2%, respectively, with cement pricing up 6% [22] - The Building Products division achieved an 8% increase in like-for-like EBITDA, with a 60 basis point improvement in margin [24] Market Data and Key Metrics Changes - Positive underlying momentum in construction activity was noted in North America and Continental Europe, while the UK faced challenges due to political and Brexit-related uncertainties [14] - U.S. infrastructure activity showed strong growth, supported by federal and state funding initiatives, with highway and street construction spending significantly ahead of the prior year [15] - Eastern Europe experienced stronger growth in new build infrastructure activity, contributing to overall positive trends in construction [16] Company Strategy and Development Direction - The company emphasized active portfolio management, announcing approximately €2 billion in divestments and €470 million spent on bolt-on acquisitions [7][9] - A profit improvement program is in place to enhance margins, returns, and cash generation, with a focus on continuous business improvement [10][49] - The integration of recent acquisitions, such as Ash Grove and Suwannee Cement, is progressing well, with increased synergy targets identified [46][47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying demand environment, expecting continued growth in like-for-like EBITDA in the second half of the year [52] - The UK market is anticipated to remain challenging, but overall growth is expected in other regions [52] - The company is focused on maintaining a strong financial position and flexible balance sheet, with plans for further share buybacks and capital allocation [39][55] Other Important Information - The transition to IFRS 16 resulted in a €193 million uplift in reported EBITDA for the first half [31] - The company generated a net cash inflow of €270 million for the first half, a significant improvement compared to the prior year [32] - Fitch upgraded the company's credit rating to BBB+, reflecting its strong financial position [38] Q&A Session Summary Question: Energy costs trends and impact on the second half - Management acknowledged headwinds from energy costs in the first half, particularly in bitumen and electricity, but expects a decline in energy costs in the second half [61][63] Question: Performance in the UK and reasons for EBITDA drop - The UK market has been a drag on results, primarily due to a slowdown in infrastructure projects, with residential and non-residential sectors remaining resilient [64][66] Question: Confidence in midterm margin targets - Management indicated that the profit improvement program is expected to yield results primarily in 2020 and 2021, with some benefits anticipated in the latter part of 2019 [67][71] Question: Capital allocation strategy as debt falls - The focus will be on internal improvements and bolt-on acquisitions, with ongoing share buybacks as a priority [76][78] Question: Increased growth rate in Americas Materials - Strong demand levels and improved weather conditions in July and August contributed to the positive outlook for the Americas Materials division [80][81]

Financial Data and Key Metrics Changes - Group sales for Q1 2019 were 7% ahead on a like-for-like basis compared to the previous year, driven by good underlying demand, favorable weather, and pricing progress [5][19] - EBITDA expectations for the first half of 2019 are projected to exceed €1.5 billion, which is over €400 million ahead of the previous year [19] Business Line Data and Key Metrics Changes - **Americas Materials Division**: Like-for-like sales increased by 4% in Q1 2019, benefiting from positive momentum in infrastructure, residential, and non-residential markets [7] - **Europe Materials Division**: Like-for-like sales increased by 12% year-over-year, with strong cement volume growth in countries like France, Ireland, and Poland [9][10] - **Building Products Division**: Like-for-like sales were 5% ahead of 2018, supported by positive demand in both Europe and North America [12][13] Market Data and Key Metrics Changes - In the U.S. housing market, growth is expected to be around 2% to 3%, with good sentiment among homebuilders and low inventory levels [41] - The political situation in the UK continues to weigh on markets, but milder weather contributed to improved volumes in Q1 2019 [9][10] Company Strategy and Development Direction - The company is focused on integrating the Ash Grove Cement acquisition and improving profitability and efficiency across its businesses [37][38] - A strategic review of the European Distribution business is ongoing, with potential divestments being considered [15][17] Management's Comments on Operating Environment and Future Outlook - Management expects a moderation of growth in Europe after a strong Q1, with pricing increases providing some upside [23][25] - The company anticipates continued positive underlying demand momentum for the rest of 2019 [13][19] Other Important Information - The company has completed 16 bolt-on acquisitions for a total consideration of €200 million in the year-to-date [14] - A further tranche of up to €350 million for the share buyback program is proposed to be completed before interim results in August [5][18] Q&A Session Summary Question: Guidance on European profit growth and potential acceleration in the Americas - Management indicated that while European profit growth may decelerate, the Americas could see an acceleration due to easier comparatives in the second half of 2018 [22][24] Question: Energy costs and carbon rights - Energy costs are expected to increase, with CO2 costs anticipated to rise by around €10 million in 2019 [30][31] Question: Capital allocation and buyback program - The decision on the buyback program is independent of the European Distribution strategy, focusing on cash generation and trading performance [46][47] Question: U.S. housing market and infrastructure order book - Management sees solid growth in the U.S. housing market, while no new infrastructure bill is expected before 2020 [41][42] Question: Pricing changes and surplus capital - Pricing increases across various markets are expected to range from 1% to 7%, with a focus on margin expansion [53][54] - The company still targets €7 billion of surplus capital by 2021, factoring in previous buybacks [57]

[Overview](index=5&type=section&id=Overview) This section outlines CRH's global business, investment appeal, strategic direction, and governance practices in 2018 [Our Global Business in 2018](index=6&type=section&id=Our%20Global%20Business%20in%202018) CRH operates a global business spanning 32 countries with over 3,700 locations, diversified across Materials, Products, and Distribution - CRH's global footprint includes **32 countries** and over **3,700 operating locations**[9](index=9&type=chunk) - The business portfolio is diversified by division and end-use, with key segments including Materials, Products, and Distribution, serving residential, non-residential, and infrastructure markets[12](index=12&type=chunk) [Why Invest in Us](index=9&type=section&id=Why%20Invest%20in%20Us) CRH presents itself as an attractive investment due to market leadership, a balanced portfolio, a unique acquisition model, and strong shareholder returns - CRH is the largest building materials company in North America and the largest heavyside materials business in Europe[14](index=14&type=chunk) - The company has delivered an industry-leading compound Total Shareholder Return (TSR) of **14.8% since 1970**[14](index=14&type=chunk) - Over the past five years, CRH has increased revenue by **64%** and EBITDA by **143%**[14](index=14&type=chunk) [Chairman's Introduction](index=11&type=section&id=Chairman%27s%20Introduction) The Chairman reported 2018 progress with strong financial results, active portfolio management, increased dividends, and a new three-division structure 2018 Financial Highlights | Metric | 2018 | 2017 | | :--- | :--- | :--- | | EBITDA | €3.4 billion | €3.1 billion | | Profit After Tax | €2.5 billion | €1.9 billion | | Net Debt/EBITDA | 2.1x | 1.8x | - The Board recommended a final dividend of **52.4c per share**, resulting in a **6% increase** in the full-year dividend to **72.0c per share**[16](index=16&type=chunk) - Key portfolio changes in 2018 included the acquisition of Ash Grove Cement Company for approximately **€2.9 billion** and the divestment of the Americas Distribution business for **€2.4 billion**[16](index=16&type=chunk) - A multi-year business improvement initiative was announced to deliver **300bps of EBITDA margin improvement by 2021**, alongside a new, simplified three-division structure effective January 1, 2019[16](index=16&type=chunk) [Strategy Review](index=13&type=section&id=Strategy%20Review) This section details CRH's strategic framework, focusing on continuous improvement, disciplined growth, leveraging scale, and talent development for long-term value [Chief Executive's Review](index=14&type=section&id=Chief%20Executive%27s%20Review) The CEO highlighted record 2018 profit delivery, driven by market fundamentals, significant portfolio management, and a new simplified structure 2018 Performance Highlights | Metric | 2018 | 2017 | Change | | :--- | :--- | :--- | :--- | | Revenue | €26.8 billion | €25.2 billion | +6% | | EBITDA | €3.4 billion | €3.1 billion | +7% | | Profit After Tax | €2.5 billion | €1.9 billion | +31% | | Earnings Per Share (EPS) | 302.4c | 226.8c | +33% | | Dividend Per Share (proposed) | 72.0c | 68.0c | +6% | | Return on Net Assets (RONA) | 9.6% | 10.6% | -100bps | | Net Debt/EBITDA | 2.1x | 1.8x | +0.3x | - A simplified new Group structure with three divisions (Americas Materials, Europe Materials, Building Products) became effective January 1, 2019, to create a more focused business[21](index=21&type=chunk) - The outlook for 2019 is positive, supported by favorable market dynamics in the US and continued progress in key European markets, despite regional variations and Brexit uncertainty[23](index=23&type=chunk) [Strategy](index=16&type=section&id=Strategy) CRH's strategy maximizes long-term value and shareholder returns through continuous improvement, focused growth, leveraging scale, and developing leaders - The Group's strategy is built on four pillars: Continuous Improvement, Focused Growth, Benefits of Scale, and Developing Leaders[25](index=25&type=chunk) - In 2018, CRH spent approximately **€3.6 billion** on acquisitions, including **45 bolt-on transactions**, which are integral to its growth model[28](index=28&type=chunk) - The company leverages its scale for global procurement, managing approximately **€17 billion** in products and services annually to drive value[28](index=28&type=chunk) [Business Model](index=18&type=section&id=Business%20Model) CRH's business model creates value through continuous improvement, a proven acquisition model, dynamic capital management, and disciplined financial management Value Created in 2018 | Metric | Value | | :--- | :--- | | EBITDA | €3.4 billion | | Profit After Tax | €2.5 billion | | EPS | 302.4c | | RONA | 9.6% | - The business model emphasizes a balanced portfolio, which was enhanced in 2018 by divesting the Americas Distribution business and reallocating capital to high-growth regions in the US[34](index=34&type=chunk) [Measuring Performance](index=20&type=section&id=Measuring%20Performance) CRH uses financial and non-financial KPIs to track strategic progress, focusing on shareholder returns, value creation, financial discipline, cash generation, and sustainability Financial Performance KPIs (2016-2018) | KPI | 2016 | 2017 | 2018 | | :--- | :--- | :--- | :--- | | Total Shareholder Return (TSR) | 22.9% | 21.8% | 1.5% | | Return on Net Assets (RONA) | 9.7% | 10.6% | 9.6% | | EBITDA Net Interest Cover | 9.4x | 10.9x | 11.0x | | Operating Cash Flow (OCF) | €2.3 billion | €2.2 billion | €1.9 billion | Sustainability Performance KPIs (2016-2018) | KPI | 2016 | 2017 | 2018 | | :--- | :--- | :--- | :--- | | % Zero-Accident Locations | 90% | 94% | 94% | | Greenhouse Gas Emissions (kg/€ Revenue) | 1.1 | 1.1 | 1.4 | | % Females in Senior Management | 8% | 9% | 10% | [Sustainability](index=22&type=section&id=Sustainability) CRH integrates sustainability into its business strategy, prioritizing health & safety, environmental protection, people development, and ethical governance - In 2018, **94% of active locations were accident-free**, however, there were **three employee fatalities** and **three contractor fatalities**[57](index=57&type=chunk) - **42% of product revenue** comes from products with enhanced sustainability attributes, such as those incorporating recycled materials or having a lower carbon footprint[58](index=58&type=chunk) - The company is on track for its **2020 commitment of a 25% reduction in specific net CO2 emissions from 1990 levels** for its cement plants, having achieved a **23% reduction by 2018**[64](index=64&type=chunk) - Female representation in senior management increased to **10% in 2018** from **9% in 2017**; as of February 2019, **38% of the Directors of CRH plc were female**[60](index=60&type=chunk) - Approximately **38,500 employees** were trained in the Code of Business Conduct (CoBC) in 2018, with approximately **14,000** completing advanced compliance training covering anti-bribery[65](index=65&type=chunk) [Risk Governance](index=28&type=section&id=Risk%20Governance) CRH employs a dynamic Enterprise Risk Management (ERM) framework, aligned with COSO guidelines, to identify, assess, and manage risks to its strategic objectives - The Group's Enterprise Risk Management (ERM) framework is a forward-looking, strategy-centric approach developed in line with COSO guidelines[70](index=70&type=chunk) - In 2018, over **30 risk workshops** were held with more than **300 senior leaders** participating to identify and manage business risks[70](index=70&type=chunk) - The Board is ultimately responsible for risk management, with the Audit Committee monitoring the effectiveness of the risk management and internal control systems[70](index=70&type=chunk) [Business Performance](index=31&type=section&id=Business%20Performance) This section reviews CRH's financial performance in 2018, including detailed segmental analysis across Materials, Products, and Distribution [Business Overview](index=32&type=section&id=Business%20Overview) In 2018, Americas Materials was the largest contributor to Group revenue (33%) and operating profit (47%), followed by Europe Heavyside 2018 Revenue & Operating Profit by Segment | Segment | Revenue % | Operating Profit % | | :--- | :--- | :--- | | Europe Heavyside | 28% | 23% | | Europe Lightside | 14% | 5% | | Europe Distribution | 6% | 5% | | Americas Materials | 33% | 47% | | Americas Products | 17% | 21% | | Asia | 2% | -1% | [Finance Director's Review](index=33&type=section&id=Finance%20Director%27s%20Review) The Finance Director's review covers 2018 financial performance, including organic growth, acquisitions/divestments, currency effects, liquidity, and capital resources [2018 Performance Review](index=33&type=section&id=2018%20Performance%20Review) In 2018, CRH achieved a 6% sales increase to €26.8 billion and a 7% EBITDA rise to €3.4 billion, driven by acquisitions and organic growth Key Components of 2018 Performance Change | € million | 2017 | Exchange | Acquisitions | Divestments | Organic | 2018 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Sales revenue | 25,220 | (682) | 1,855 | (348) | 745 | 26,790 | 6% | | EBITDA | 3,146 | (100) | 357 | (36) | 79 | 3,365 | 7% | | Operating profit | 2,095 | (68) | 226 | (26) | 31 | 2,177 | 4% | - Operating cash flow was **€1.9 billion in 2018**, down from **€2.2 billion in 2017**, primarily due to **€469 million** in cash outflows related to the Americas Distribution discontinued operation[88](index=88&type=chunk) - The Group spent **€3.6 billion** on **46 acquisition transactions** and realized **€3.0 billion** from divestment proceeds[89](index=89&type=chunk) - Net debt increased by **€1.2 billion to €7.0 billion** at year-end 2018, with Net Interest Cover at **11.0x**[90](index=90&type=chunk) [2017 Performance Review](index=36&type=section&id=2017%20Performance%20Review) 2017 saw growth with a 6% EBITDA increase to €3.1 billion and a 10% operating profit rise to €2.1 billion, augmented by one-off items and acquisitions Key Components of 2017 Performance Change | € million | 2016 | Exchange | Acquisitions | Divestments | Organic | 2017 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Sales revenue | 24,789 | (479) | 596 | (204) | 518 | 25,220 | 2% | | EBITDA | 2,980 | (74) | 60 | (21) | 75 | 3,146 | 6% | | Operating profit | 1,908 | (53) | 14 | (14) | 114 | 2,095 | 10% | - 2017 results included two one-off items: a **€81 million past service credit** from a Swiss pension scheme and a **€447 million reduction** in net deferred tax liabilities from the US "Tax Cuts and Jobs Act"[100](index=100&type=chunk) - The Group spent **€1.9 billion** on **34 acquisition/investment transactions** in 2017, with the largest being Suwannee American Cement in Florida[100](index=100&type=chunk) [Segmental Reviews](index=39&type=section&id=Segmental%20Reviews) This section provides detailed operational and financial reviews of CRH's business segments, categorized into Materials, Products, and Distribution [Materials Overview](index=41&type=section&id=Materials%20Overview) The Materials segment, CRH's largest, is a vertically integrated producer of aggregates, cement, lime, concrete, and asphalt with leading market positions - CRH is the largest heavyside materials business in Europe and the largest producer of aggregates and asphalt in North America[105](index=105&type=chunk) - The Materials businesses are founded on resource-backed assets like cement and aggregates, supporting a vertically integrated model[106](index=106&type=chunk) [Americas Materials](index=43&type=section&id=Americas%20Materials) In 2018, Americas Materials' operating profit grew 18% to €1.0 billion, driven by acquisitions and organic sales growth despite cost inflation Americas Materials Performance 2018 | € million | 2017 | Exchange | Acquisitions | Divestments | Organic | 2018 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Sales revenue | 7,970 | -356 | 1,026 | -26 | 337 | 8,951 | 12% | | EBITDA | 1,270 | -56 | 267 | -12 | 24 | 1,493 | 18% | | Operating profit | 858 | -37 | 176 | -9 | 21 | 1,009 | 18% | - The acquisition of Ash Grove in June 2018 gave CRH a market leadership position in the North American cement market[114](index=114&type=chunk) [Europe Heavyside](index=45&type=section&id=Europe%20Heavyside) Europe Heavyside delivered positive 2018 performance with 5% operating profit growth to €501 million and 10% sales increase, boosted by acquisitions Europe Heavyside Performance 2018 | € million | 2017 | Exchange | Acquisitions | Divestments | Organic | 2018 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Sales revenue | 6,902 | -54 | 511 | -53 | 305 | 7,611 | 10% | | EBITDA | 839 | -9 | 65 | -1 | 37 | 911 | 9% | | Operating profit | 478 | -6 | 36 | 0 | 13 | 501 | 5% | - Performance was strong in Ireland, the Benelux, Denmark, and Poland, while the UK faced challenges from input costs and Brexit uncertainty[117](index=117&type=chunk) [Asia](index=47&type=section&id=Asia) In 2018, the Asia segment faced challenging conditions with lower operating profit due to higher fuel costs in the Philippines and price pressure in India Asia Performance 2018 | € million | 2017 | Exchange | Organic | 2018 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Sales revenue | 436 | -36 | 31 | 431 | -1% | | EBITDA | 52 | -7 | -20 | 25 | -52% | | Operating profit/(loss) | 15 | -4 | -25 | -14 | -193% | - Operating profit in the Philippines was significantly behind the prior year primarily due to higher fuel and power costs[125](index=125&type=chunk) [Products Overview](index=49&type=section&id=Products%20Overview) The Products segment is a leading global supplier of value-added building products for residential and non-residential construction, focusing on scalable businesses - The Products division is organized into three product groups in the Americas and four in Europe, which were merged into a single global Building Products Division as of January 1, 2019[137](index=137&type=chunk) [Americas Products](index=52&type=section&id=Americas%20Products) Americas Products achieved a 6% operating profit increase to €459 million in 2018, driven by demand, efficiencies, and acquisitions, offsetting softness and cost inflation Americas Products Performance 2018 | € million | 2017 | Exchange | Acquisitions | Divestments | Organic | 2018 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Sales revenue | 4,327 | -187 | 193 | -2 | 102 | 4,433 | 2% | | EBITDA | 573 | -25 | 21 | 1 | 33 | 603 | 5% | | Operating profit | 435 | -19 | 12 | 1 | 30 | 459 | 6% | - The division completed **six acquisitions for approximately €160 million**, extending its geographic footprint and product offerings in the US[150](index=150&type=chunk) [Europe Lightside](index=54&type=section&id=Europe%20Lightside) Europe Lightside reported a successful year with a 5% sales increase to €1.5 billion and an 8% operating profit rise to €110 million, boosted by acquisitions and strong demand Europe Lightside Performance 2018 | € million | 2017 | Exchange | Acquisitions | Divestments | Organic | 2018 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Sales revenue | 1,440 | -11 | 16 | -12 | 75 | 1,508 | 5% | | EBITDA | 143 | -1 | 2 | 1 | 7 | 152 | 6% | | Operating profit | 102 | -1 | 1 | 1 | 7 | 110 | 8% | - Performance was strong in the Netherlands, Australia, and Poland, while key markets like Germany and the UK remained stable[155](index=155&type=chunk) [Distribution Overview](index=56&type=section&id=Distribution%20Overview) CRH's Europe Distribution business serves professional builders, specialist contractors, and DIY customers through a network of local and regional brands - The division operates across over **550 locations in Europe**, serving DIY, General Builders Merchants (GBM), and Sanitary, Heating and Plumbing (SHAP) sectors[168](index=168&type=chunk) [Europe Distribution](index=58&type=section&id=Europe%20Distribution) In 2018, Europe Distribution saw modest like-for-like sales growth but overall sales fell 7% to €3.9 billion and operating profit fell 46% to €112 million due to divestments and challenging markets Europe Distribution Performance 2018 | € million | 2017 | Exchange | Acquisitions | Divestments | Organic | 2018 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Sales revenue | 4,145 | -38 | 109 | -255 | -105 | 3,856 | -7% | | EBITDA | 269 | -2 | 2 | -25 | -2 | 181 | -33% | | Operating profit | 207 | -1 | 1 | -19 | -15 | 112 | -46% | - Overall results were significantly impacted by the divestment of the DIY business in the Benelux in July 2018[178](index=178&type=chunk) [Governance](index=61&type=section&id=Governance) This section details CRH's corporate governance framework, including Board composition, committee reports, and remuneration policies [Board of Directors](index=63&type=section&id=Board%20of%20Directors) This section provides biographical details for CRH's Board of Directors, highlighting their diverse expertise - The Board is led by Chairman Nicky Hartery, Chief Executive Albert Manifold, and Group Finance Director Senan Murphy[185](index=185&type=chunk) - Three new non-executive Directors were appointed in 2018: Richie Boucher, Mary K. Rhinehart, and Siobhán Talbot, enhancing the Board's expertise in financial services and the building materials sector[187](index=187&type=chunk)[190](index=190&type=chunk)[192](index=192&type=chunk) [Corporate Governance Report](index=67&type=section&id=Corporate%20Governance%20Report) The Corporate Governance Report details CRH's governance structures and the Board's 2018 focus areas, including strategy, Board renewal, and safety - The Board's key focus areas in 2018 were strategy, Board renewal, succession planning, talent management, and safety[194](index=194&type=chunk) - A new permanent Safety, Environment & Social Responsibility (SESR) Committee was established in 2018[195](index=195&type=chunk) - As of December 31, 2018, **38% of the Directors on the Board were women**, a figure set to increase to **42% after the 2019 AGM**[216](index=216&type=chunk) - The company's largest shareholder as of year-end 2018 was BlackRock, Inc., holding **8.01% of the Ordinary Share capital**[233](index=233&type=chunk) [Audit Committee Report](index=69&type=section&id=Audit%20Committee%20Report) The Audit Committee's 2018 focus included a competitive audit tender process, financial report review, and new accounting standard implementation - A key activity in 2018 was a competitive audit tender process, resulting in the Board selecting Deloitte to be appointed as auditor for the financial year ending December 31, 2020[201](index=201&type=chunk) - The committee reviewed significant accounting areas including impairment of goodwill, contract revenue recognition, and accounting for acquisitions and divestments, particularly the large Ash Grove acquisition[211](index=211&type=chunk) [Nomination & Corporate Governance Committee Report](index=72&type=section&id=Nomination%20%26%20Corporate%20Governance%20Committee%20Report) In 2018, the Nomination & Corporate Governance Committee focused on Board renewal, appointing new non-executive directors and advancing diversity policy - The committee recommended the appointment of three new non-executive Directors in 2018 to enhance industry expertise, financial expertise, and global experience[216](index=216&type=chunk) - As of December 31, 2018, **38% of the Board Directors were women**, which was planned to increase to **42% after the 2019 AGM**[216](index=216&type=chunk) [Directors' Remuneration Report](index=77&type=section&id=Directors%27%20Remuneration%20Report) This report details CRH's director remuneration policy and outcomes, including proposed changes for 2019 following shareholder dissent - Following a **39.69% vote against the 2017 remuneration report** at the 2018 AGM, the committee engaged in extensive shareholder consultation to develop a revised 2019 Remuneration Policy[238](index=238&type=chunk) - Key proposed changes for 2019 include: introducing Return on Net Assets (RONA) to the Performance Share Plan (PSP), increasing the deferred bonus portion to **33.3%**, and raising the CEO's minimum shareholding requirement from **250% to 350% of salary**[243](index=243&type=chunk) 2018 Remuneration Outcome Snapshot | Director | Annual Bonus (% of max) | Value of PSP awarded in 2016 (% of max) | | :--- | :--- | :--- | | Albert Manifold | 81.48% | 59.13% | | Senan Murphy | 81.48% | 59.13% | [Directors' Report](index=107&type=section&id=Directors%27%20Report) The Directors' Report provides a statutory overview of the Group's principal activities, 2018 financial results, and business review - The Group reported a profit before tax of **€1.86 billion** from continuing operations for the year[346](index=346&type=chunk) - The Board proposed a final dividend of **52.4c per share**, bringing the total 2018 dividend to **72.0c**, a **6% increase over 2017**[348](index=348&type=chunk) - Between May 2 and December 31, 2018, the company repurchased **27.9 million ordinary shares** for a total of **€789 million** as part of its **€1.0 billion buyback program**[347](index=347&type=chunk) [Financial Statements](index=121&type=section&id=Financial%20Statements) This section presents CRH's audited consolidated financial statements for 2016-2018, along with the independent auditor's reports and key accounting policies [Independent Auditor's Reports](index=132&type=section&id=Independent%20Auditor%27s%20Reports) The independent auditor, Ernst & Young, issued an unqualified opinion on CRH's consolidated financial statements and internal control over financial reporting - The auditor, Ernst & Young, expressed an unqualified opinion on the consolidated financial statements for the years 2016, 2017, and 2018[384](index=384&type=chunk) - An unqualified opinion was also given on the company's internal control over financial reporting as of December 31, 2018, excluding recent acquisitions like Ash Grove Cement Company[386](index=386&type=chunk) [Consolidated Financial Statements](index=134&type=section&id=Consolidated%20Financial%20Statements) This section presents CRH plc's core audited financial statements for 2016-2018, including Income Statement, Balance Sheet, and Cash Flows Key Financial Statement Data (€ millions) | Metric | 2018 | 2017 | | :--- | :--- | :--- | | **Income Statement** | | | | Revenue | 26,790 | 25,220 | | Group Operating Profit | 2,177 | 2,095 | | Group Profit for the Year | 2,521 | 1,919 | | **Balance Sheet** | | | | Total Assets | 35,173 | 31,633 | | Total Equity | 16,554 | 14,977 | | Total Liabilities | 18,619 | 16,656 | Key Cash Flow Data (€ millions) | Metric | 2018 | 2017 | | :--- | :--- | :--- | | Net cash inflow from operating activities | 1,899 | 2,189 | | Net cash outflow from investing activities | (1,592) | (2,685) | | Net cash (outflow)/inflow from financing activities | (113) | 343 | [Accounting Policies](index=139&type=section&id=Accounting%20Policies) This section details CRH's IFRS accounting policies, including the adoption of new standards and key accounting estimates and judgments - The Group adopted IFRS 9 (Financial Instruments) and IFRS 15 (Revenue from Contracts with Customers) effective January 1, 2018, with no material impact on the Group's results[399](index=399&type=chunk) - The adoption of IFRS 16 (Leases) from January 1, 2019 is expected to have a material impact, with the recognition of a lease liability and right-of-use asset of approximately **€2.0 billion**[403](index=403&type=chunk) - Key accounting policies involving significant estimates and judgements include impairment of goodwill, retirement benefit obligations, provisions for liabilities, and taxation[405](index=405&type=chunk)