Albert Manifold - CEO Maeve Carton - Group Finance Director.

Barry Dixon – Davy Will Morgan - Goldman Sachs Will Jones - Redburn Yuri Serov - Morgan Stanley John Messenger - Redburn Gregor Kuglitsch - UBS Yassine Touahri - Exane BNP Paribas Robert Eason - Goodbody Gerard Moore - Investec.

Okay, ladies and gentlemen, good morning and you are very welcome here at this morning to our webcast which coincides with the publication of our first half results for 2014 for CRH. My name is Albert Manifold, I'm the Chief Executive of CRH and I'm joined in the stage here by our CFO, Maeve Carton..

Good morning everybody..

And together Maeve and I are going to take you through some detail of the first half results for 2014. We are also going to take you through our progress and our portfolio review, which we discussed with you earlier this year.

Give you some sense of how we see the year panning out for our two major markets and indeed other markets around the world and in the end as usual, we will have plenty of time for questions and answers to go through some questions you may have in detail.

So just looking at some of the key headlines for the first half of 2014, across our two major markets we saw contrasting weather patterns and we saw a modest uptick across both businesses although delivered at different times and quite uneven recovery particularly so in Europe.

But, we are going to go into the detail that's going to go into the individual businesses.

Very happy to see that we delivered earnings in line with guidance just a nudge ahead of guidance and good positive strong operational leverage coming through our businesses on the back of fairly modest top line growth, which really is a testament to the strength of the cost cutting and the restructuring that we did in the early part of the crisis and kept all the way through and morning to pose a dividend maintaining the half one dividend of $0.085 which maintains the strong dividend record we have in CRH fiscal back into 1983 it's incredible on both in dividend record which again is testament to the strength of the profits of our business, to the cash of our business and also to – we understand what are important to investors.

Just looking at the big picture overview of the Group in total, you can see revenues ahead by about 4% that's delivered strongly by Europe which is about 7% ahead of the first half of last year, United States about 1% ahead of last year, but very contrasting weather patterns, Europe does feel like it's better in the first half of this year, but it was helped greatly by very favorable weather conditions in the first four months of the year, which helped construction.

In contrast in the United States, we had another prolonged extended winter matching what we saw in 2013 and a very slow start to construction. And we saw those trends change and I will go into that in a couple of moments in those two major markets.

But on that top line growth of 4%, you see strong operational leverage coming through, but an uplift in EBITDA of 27% across our Group which is very good to see and strong margin advance of 1%.

And if you think about how we thought about our business and we spoke about our business about bringing margins and returns back to peak during the course of the next cycle, this is a good first good step in seeing margin advance, and the RONAs are advancing by about 1% as well in the first half of the year.

Before I get into the individual business units, I just want to update you in terms of what the market trends are for the first six months and what we are seeing since the half year and two contrasting patterns. If I look at Europe, you can see Europe started off at a good pick.

The first four months on the back of good weather and good momentum, if you recall the back end of last year showed good momentum in the European markets, with good momentum coming through, so good strong start to the year with the first four months up about 10% on last year. And we saw an easing of those trends in May and June.

We think some of that was pull forward work into the four months impacting upon those two months, and the trends we are seeing across the European businesses and I will discuss them in detail as I go through the divisions is broadly speaking in line, if a little bit better, in July and August for our major markets in Europe.

In contrast with the United States, again, as I said we saw a very slow start to the year with the first four months really being pegged down by a very long prolonged winter particularly across the northern states of the United States, and that slowed back and held back our construction business and impacted in particular our Americas product business for the first quarter.

Both in May and June, when this early summer came, we saw a pick-up in activity level and you can see that coming through the numbers that we are looking at. We also that in July and August continuing along that level, so this good momentum in the U.S. business is primarily led by residential and non-residential.

Infrastructure was broadly flat, residential and non-residential are leading the recovery out of this, and we are seeing good momentum coming through up to -- the weekend.

If I go into the individual business units and spend maybe a couple of minutes in each of the business divisions as such, Europe materials is a business which most of you know quite well, it's a business that manufactures cement and cementitious products, concrete products, and aggregates businesses, primarily in Europe Materials the big countries for us are Poland, Ukraine, Finland, and Switzerland, and across those markets certainly in Poland and Ukraine on the back of good momentum and indeed favorable weather, we saw good margin advances, good profit advances, and good top line advances.

Switzerland on the back of good residential work, and good infrastructure work also showed a good performance this year.

And even Finland, which for the second year in a row seems to be in a malaise of generally floating minus 1 and plus 1, had a tough first half of the year, both volumes and prices were down, but I have to say some of the self-help work our teams did helped our business and we delivered results in line with last year in Finland.

But overall, the division showed good advances, overall volumes were up about 7% led by cement, which is about 20% ahead, and I'm very happy to see again on those high fixed cost businesses, good upside leverage coming through and good margin expansions, so a good delivery by this division in the first six months of the year.

Moving to Europe products, and this is a division that received an awful lot of attention from us during the course of the crisis with a lot of restructuring and cost cutting and resetting our businesses in this particular division, and it's very pleasing to see all that hard work coming through on the back of some good top line improvements.

The big countries here for us are the United Kingdom, Germany, The Netherlands, Belgium, and France also is an important country for us as well. And we talk about an uneven recovery coming through in Europe, you hear us in the context I'm talking about, U.K. and Germany strongly performing in the first half of the year.

At last, the Netherlands seems to be finding the floor; I think Europe is still forecasting construction to be down in the Netherlands this year. We think we are bumping on the bottom before it starts to pick up in 2015, Belgium showed signs of growth, but France was weak for us.

But overall, we saw good top line growth and really happy to see strongest leverage coming through this division here, and again that's a testament not to price increases, to volume but also the restructuring and cost takeout that we did coming back to benefit our businesses, keeping our businesses more efficient and showing good bottom line delivery.

So good margin expansion as well.

And our distribution businesses, again, the footprint for these businesses is Belgium, the Netherlands, Germany, and Switzerland that's makes up about 95% of the total EBITDA of this division, and this division is the one that's probably influenced most and closest to consumer confidence in the marketplace, because our DIY businesses are selling to the retailers – retailing people like you and I, the general builders’ merchants are selling to the small-jobbing builder close to the consumer and the slight uptick in consumer confidence came through these businesses this year, and you can see a growth in the top-line and that bottom line improvement again showing good leverage coming through helped by some self-help measures in particular, a rollout of our group procurement schemes across Europe, which again helps to benefit that bottom line and showed good delivery in this particular division.

So overall, a little bit of an uneven picture in Europe.

I would characterize it by saying a modest uptick, uneven, strong delivery in the likes of Poland, Switzerland, Britain, Germany, and flattening out in The Netherlands, slightly weaker in the likes of Finland, slightly stronger in Belgium, so a little of bit of uneven recovery as you would expect in the early stages of recovery from the very dramatic crisis we have been through in the last five or six years.

Moving across the Americas, I'm looking at our Americas materials division first and just to clarify for everybody in the room and on the lines, this is a business that supplies aggregates, asphalt, concrete primarily to infrastructure businesses, but this business is about 60% exposed to infrastructure and the other 40% split 50:50 between residential and non-residential.

And I think most people will know that broadly speaking in 2014, highway funding, which will drive the infrastructure spend will be broadly speaking flat, but maybe slightly up with regard to individual states but I'm sure we can do in the Q&A.

Broadly speaking any growth we're seeing this business has been delivered by residential and non-residential growth. And the top line there looks flat actually like-for-like sales were up about 4% in dollar terms.

And on those reasonably flattish sales, again, we have seen good profit delivery good margin expansion in this business led by residential and non-residential and you can see the effect of that coming through – with the higher volume is coming through across all our products and good pricing coming through both in our aggregate business and our concrete business.

I wouldn't be too concerned about the pricing of the asphalt business, the asphalt business is significantly impacted by the cost of bitumen and how we manage the cost of bitumen it's about how you manage the spread in the asphalt business well, the actual price itself.

Our winter-fill program has gone well, obviously, it's concluded at the stage, and we think it will support margins in our asphalt business for the remainder of this year.

Moving to our Americas products business and our Americas materials business is a quarter two quarter three business, our Americas products business is absolutely a quarter one, quarter two business.

This is the business that supplies 80% of its products to the residential and non-residential market and in particular in quarter one it was a big sell-in to the likes of Lowe's and Home Depot where we sell a lot of pavers, blocks, architectural blocks, capping stones, hardscapes into those outlets for the early spring season.

But because of the winter pattern that we saw in North America this year that whole spring season was almost completely wiped out. You would have seen the disappointing results by those two retailers when they reported already their second quarter numbers. So that impacted upon our business for the first four months.

What we saw then though in may and June as activity levels came back actually we saw increased activity levels and catch up and actually it's good news, bad news because we get the volumes out the door, which is very good but its comes at a cost.

Effectively we compressed six months of production into two months and that means we got to double shift our factories it becomes much more inefficient because we're putting -- we're hiring labor higher cost and our logistics costs were significantly higher in those two months.

So once we got this out the door it cost us much more and you see the effect of that coming through in a lower EBITDA. I should say this business is driven by residential and non-residential, but a strong fundamentals driving this business.

We've seen a good performance of this business in May, June, July and in August and each month it has been starting to ease into that deficit we see there at the end of the half year and we think there is a fair change this business will get back to exceed the number of last year by the end of the year.

So it's making good progress after a very slow and difficult start. Moving to our U.S.

Distribution business and again, just to explain our distribution business, it's a business which is largely exposed in two ways, one is we call exterior products and that's the largest part of this division, it makes about 70% of the EBITDA on an annual basis and this business supplies roofing products and siding products for residential developments in the United States.

Not for new but mainly for repair and maintenance and improvement across the northern states, the Northeast and Midwest. And again, because of the extended winter people just couldn't get out to repair roofs that just held back demand for the first four to five months.

On top of that you would have seen that from some of the other suppliers' single shipments, which are a very good barometer for this particular business we're down about 5% in the first half of the year, but prices grew up, and we got squeezed in the middle of the distributor. We just didn't have the value to pass those price increases through.

But even with all of those headwinds, the EBITDA in this business was a nudge behind the first half of last year which actually we did a lot of work on the back of the Hurricane Sandy damage that was done across the northern part of New Jersey and New York. So actually quite a good performance by the exterior product part of this division.

The other part of this division which is normally about 30% of the EBITDA is our interior products business. And this business supplies wallboard, acoustic ceiling tiles, ceiling tiles, ceiling stud support systems for new residential and new non-residential businesses.

And again, in the back of the growing market we saw increased volumes and on the back of increased wallboard prices better pricing as well. And that part of the division came through very strong and have to deliver about mild improvement we saw coming through and the margin improvement.

And again, just a testing to the importance of balance in CRH not everything moves in sequence, it's important to have a balance posture to our portfolio within businesses and across our divisions.

So overall the Americas after a slow start which impacted those businesses that had a big first quarter business – it started come through in May and June and with some good momentum coming through catch up in the infrastructure business in May and June so volumes have been quite good, continued good momentum in residential and non-residential in May, June, July continuing through August and we think this will be a year of progress for our Americas businesses as we service those markets.

Most probably we're going to talk to you about the [deals] (ph) which is really important to manage our business; it's about the margins within your business. This for me is a window into the health of how our business has been managed, health of how you're managing your cost and how are you managing your selling prices.

And happily we can see five of the six divisions showing significant margin expansion in the first six month of this year. Now I should say that is coming absent any real price increasing, we saw price increases going through in the U.S.

materials business, but that really isn't the back of higher cement prices that's just passing on that no real expansion. We saw a little bit of price increases coming through our distribution business and the distribution businesses in America coming through in the back of wallboard pricing.

But actually to counter that net-net prices were back in Europe again.

So this is really the effects of two things, it affects a slightly higher volume levels but also the effect of a lot of the cost cutting and restructuring work we did on the way down and it gives me confidence that our teams did a great job in the way down in reorganizing our businesses, positioning the right place to benefit for the upside leverage which we are seeing coming through delivering that more than 1% margin increase.

And I think it's a real, and it goes under the progress we made, we said we're going to improve margins we said, we're going to improve growth both about 1% in the first half of the year and it's very satisfying for us to stand here before and tell you about progress we've made.

So with that I am going to hand you over to Maeve, who is going to take you through some of the financial impact of what we've seen in the delivery of these first quarter numbers.

Maeve?.

Thanks Albert. It really is encouraging to see that performance five out of the six segments reporting improved margins against the backdrop that we've been talking about modest not even recovery across our various businesses.

What I am going to do now is talk about the – how those individual segment performance pose together into the Group outturn overall for the first half of 2014. I am also going to say a few words about how our debt management and financial management process are put to work to create value for CRH.

So the outturn for the first half of the year we've already seen sales up 4% accompanied by a 27% increase in EBITDA to €505 million a very significant improvement in operating leverage. The most encouraging part of that result for me is the organic performance line that you can see there.

The organic for us means excluding impact of acquisition and excluding translations impact so the underlying businesses really delivering performance. Before we talk about that a quick word about the acquisitions impact, the geographic footprint of our operations with significant operations in northern tier states of the U.S.

and in northern Europe, countries where the severe normal weather conditions in the winter time mean the construction activity doesn't really get started until quarter two means that the profitability of the Group is very skewed towards the second half of the year and that seasonal impact is reflected in that acquisitions impact that you can see there for the first half of the year.

Cost savings have been a big focus of attention for management over the last number of years as we make our business as resilient and grind out some of those efficiencies that Albert was talking about.

We're on track to deliver 2.6 billion of savings by the end of 2015 and that average has continued very significantly during 2014 whereby the end of June we had delivered 45 million of cost saving benefits.

So for the first half of the year the underlying businesses particularly in Europe saw the benefit of those cost savings activities which together with the improvement in volumes which delivered better plant utilization and better efficiencies and the combination of all those saw some real profit delivery in the first half of the year where with against the backdrop of a 4% increase in sales so an organic increase of the sales level of €400 million we saw profit delivery of almost 100 million a 25% operating leverage for the growth.

Our focus on making our businesses better and improving value for CRH also is seen in our debt position figure and in our management of our debt management and financial management processes.

Net debt at the end of June amounted to €3.7 billion which was almost 0.5 billion lower than this time last year, so significant cash generation capabilities one of the key signs of the financial strength of any company. Another indicator of financial strength is the ability of a company to cover its interest cost with cash earnings.

EBITDA to interest cover for CRH for the 12 months ended June 2014 was 6.2x, so very healthy level of profitability relative to the financing cost of the Group.

So the combination of those two financial measures, strong cash generation and good interest cover support the ratings that we have from S&P and Moody's, so that will be plus from S&P and BAA from Moody's.

Those are strong investment grade ratings and the reason those were important for CRH is that they provide access to multiple sources of funding for the Group. As recently as last month, we were able to raise 600 million in the Eurobond market the third time we have accessed the Eurobond market in the last 18 months or so.

And in rising that 600 million, we also secured the lowest ever interest rates for CRH in the capital markets 1.75%. We couldn't have done that without the financial strength behind us.

The combination of that 600 million recently raised with the gross cash of 1.1 billion that we have in the balance sheet at the end of June and the 6.2 billion of committed undrawn facilities that are available to the Group mean that as of now we have significant liquidity of €4.3 billion available to CRH.

And what does is give the Group – puts the Group in a very, very strong flexible position to take advantage of opportunities and acquisitions where we see the possibility of creating value for CRH. I talked about the net debt reduction of 0.5 billion in the period a lot of that reduction was delivered through improvements in operating cash flow.

The first thing to say about operating cash flow in the half year for CRH is that the seasonal effect that I talked about in terms of the profitability of the Group is also very apparent in our cash flows at the first half where we traditional see cash going out as activity picks up during the year.

Also against the backdrop of the improving economic backdrop and sales improving we might have expected working capital outflows to increase during the recent period as activity picks up.

We are very happy with the results in the first half of the year where as a result of paying attention to the basic fundamentals of financial management which is looking after credit control following up on receivables from our customers, making sure that we manage inventory carefully, the combination of all of those boring day-to-day financial management techniques have resulted in a reduction in working capital workflow, a 13% reduction against the backdrop of an increasing sales environment.

So I think that's a very strong performance. We have also maintained our discipline in terms of capital expenditure which again against the backdrop of an improving activity across our businesses we saw capital expenditure reduced by 26 million in the period.

So the combination of those factors resulted in our – our operating cash outflows actually reducing by 300 million during the period and that resulted in the net debt reduction. So very strong cash management as well.

And finally, before I hand you back to Albert, a quick word about our financial discipline and how that's put to work to create value for CRH.

First of all, my usual slide in relation to debt maturities where we have shown here our net debt including the 600 million that we raised last month in the Eurobond market spread out by year of repayment and the purpose of that is to show how part of our debt management efforts are directed at making sure that there is no undue bunching of maturities in any one year and that the Group is well organized and as an orderly approach to its debt management.

Another very important aspect of that debt management is the ability to take advantage of the current low interest rate environment, I have already mentioned Eurobond 600 million which we raised last month and two issues in the Eurobond market last year also securing for CRH long-term fixed rate interest that is, is historically very low.

And I think that's best expressed by the blue line on the chart there which shows the average interest rate for CRH from 2012 out from 2020 to 2021 there and beyond. As you can see, we are moving from an average interest rate of over 5% in 2012 down to rates that will be in the region of 3% from 2018 onwards.

So what that is showing is that the financial management and debt management efforts of CRH are also focused on creating value for the Group by securing lower long-term interest rates which means higher profits which also means lower average rates of debt and lower cost of capital and all of that setting CRH up to create value.

And now, I hand you back to Albert..

Thanks Maeve. And just before we leave that slide, I think we glanced over these numbers very quickly. We talked about cash management in the CRH but just look at what's been achieved in the first half of this year. Anybody who runs the business knows and in raising activity levels that leads to an outflow of cash.

And working capital for those businesses capital expenditure because the guys in the business will be saying please help fund the growth that we have done in the first half of the year.

Actually, we reduced working capital by 13%, Maeve talked about all the boring work that's done by the credit – people, stock management people, that was not a boring results and look at capital expenditure, it's down to 67% depreciation and how we achieved, well, we have seen precipitous time at industry and we just made sure people used all the equipment that we paid from the past to it's fullest capability.

There is a lot of equipment and plants lying around and we used that before we got to spend our money on company's business that's what we should do in managing a tied ship, and CRH is a tied ship.

And then you look at the cash resources over €4 billion funds available to us hugely important to us, great flexibility and great strength in the balance sheet. And then finally look at approval line that Maeve referred to, the lowering cost of debt.

And remember back to February, we talked about the returns that we generated and acquisitions we have done over the last three years. Over 95 deals over the last three years, we spent €1.6 billion on those deals and we generated returns in excess of 11% against that cost of debt. That's value creation coming through, really good performance.

I just want to update you on our portfolio review, you might recall in the fourth quarter of last year in November, we set out for you that – with the evolving change or the evolving market circumstances and acceptance that the fact that post crisis world was going to be different to the pre-crisis world, we need to take a relook at our businesses.

We knew there were parts of our businesses were very good at creating value and driving profitability. We knew that parts of our business that no longer met the regional investment thesis for which we made that investment and we want to have a full look at our portfolio and also a full look at where those businesses were positioned.

And we said, it would take this about 9 months or so, we indicated at the end of quarter three we are moving progressing towards that we finish our portfolio review during the course of next few weeks.

So with regard to that, the whole purpose of this is really resetting CRH for growth, looking where we can leverage our strengths across our businesses looking at where we are best at driving value across our businesses that's what the purpose of this is about.

And also making sure our businesses are best positioned in the product markets and the geographies for organic growth and also for acquisition growth as well, which is a key part of CRH.

And I can confirm to this morning that our focus on our core business is leading to about – confirm 80% to 85% of our businesses are solidly core businesses and are fundamental part of the growth of CRH going forward. Those businesses actually delivered about 90% of EBITDA in 2013.

And that will lead to likely divestments over the course of next few years of about €1.5 billion potentially to get the €2 billion worth of businesses.

That process has already started and a number of those businesses are already out in the markets and are on the block, I'm not going to comment on any specific circumstance today because actually our main concern is our shareholders and creating value for them, while some of them are out there as it is at the moment.

Some will be held back so the process kind of improve in the recovery and we will send into the recovery. Through our no fire sales in CRH, this is going to be an orderly managed multiyear process, which will lead to an allocation and reallocation of those funds back into our core businesses where we find the best to create value.

But one thing, you should takeaway which is active portfolio management is now part of CRH going forward. This is a process that continues on. We talked about our core competences and core businesses in CRH and I could be here for another week explaining to you business-by-business, five year to core business, what are the advantages.

In an effort to a try and communicate, why we see certain business being part of future of CRH, we want this set out for you some of the core characteristics, the key characteristics we see in some of our better businesses. And we have said that not will be in the screen here this morning.

The first one there, strong strategic platforms, we just find where we got businesses with good strong logical platforms that is base upon which we can do the business and value going forward. So let me give you a specific examples. The obvious one is our materials business in the United States.

If we have resource backed asset such as a big aggregate facility close to a market location that seems to be a base upon which we can built a profitable long-term growing business. We are in a completely different part of the business in a different way.

I think our European distribution business actually the strong strategic platform there is provided by a network of distribution businesses that are interlinked and self-supporting creating a strong market position in a strong market network that too is a strong strategic platform upon which we can build the business.

And then we move on the next stage of value creation here. Approving value creation capability, proven operating capability and how do we do that? When in heavy side businesses like ONG again let me use that example. You know, we pursue a solid vertical integration model.

So when we have an aggregate facility have to be after that we bring the asphalt business to that business; we bring our ready-mix concrete business to that business. The concrete products business all of them drawing volume down from the core asset and increasing the throughput, increasing efficiencies and profitability of the core asset.

But also getting profit pick-up in all the downstream businesses as well. We are leveraging the strength of our businesses across the base asset and leveraging the strength is exactly what we do in the other example I gave of Europe distribution. We just do it in a different way.

Again, just imagine the advantage that we have in procurement, on merchandising, on marketing, on setting prices, on category management and IT across a strong network of distribution business against our competitors who are not so big.

So again, levering that scale delivers value for us and it's a key part, the next part of value creation of CRH which is the acquisition of opportunities because we must have role for acquisition growth for us to create value to our aspirations.

Historically speaking, we have said to you that 2/3rds of the profit growth in CRH has come directly and indirectly to the acquisition process. And we buy businesses; we create profits and returns to our shareholders that's what we do. And we have to have load ahead of us.

And again, going back to the examples that I gave you, if I look at the fragmented nature of the materials business in the United States, I know there is enough acquisition a road ahead of us for the next 30 years or so.

If I look at the distribution business in Europe, it's a fragmented business served particularly in Western Europe servicing all of the markets and again, the advantage of scale – leverage in our scale provides a lot of acquisition opportunities for us as we develop that business going forward. And all of that overlaid by solid organic growth.

Again, going back to the examples I gave about the United States construction market, the fundamentals driving that markets are population growth, strong economic growth, demographics; we are going to see construction growth in the United States for all our lives.

And then Europe, even though the new build markets maybe challenged the slow growth in the western part of Europe, actually the repair, maintenance and approval market, which the distribution business almost exclusively serviced actually is a growing market that is very resilient during the downturn and is going to show a good growth as we felt that it would.

Again, a growth market for which we can help deliver value for our shareholders. And it will lead to a business which is narrower and deeper, a business that is focused on returns and a business that is focused on delivering value for our shareholders.

I could have used the examples of our cement businesses in Eastern Europe which exposed a higher growth there.

I could have used the example of residential and non-residential exposed Americas product distribution businesses they just do us in different way but these strong strategic platforms position us with a portfolio of business to drive growth in returns going forward. This active portfolio management is not something you start and stop.

This is something you start and becomes an active part of your day-to-day life. It's by having the right amount of capital in the right markets focusing the right businesses. We keep one eye on the strategic balance of our business.

We know how important emerging markets are and we have developed those in time in a measured approach, but we will keep a very keen eye of the value creation in the short and medium term and delivering across our main markets. Now, I know you all want me to move quickly to the outlook and give our prognosis and outlook for the remainder of the year.

But, I'm going to take a moment of your time just talk to you about how I see CRH after eight months as Chief Executive in the business. We work in our industry to be here at this time. It's a volatile, cyclical industry; it's a terrible business in the way down.

It's plus sticky costs, its route to take cost out, you can lay-off and make your structuring. But on the way back up again if you do the right work in the way down you will enjoy the benefits in the way back up.

And what we have seen in the construction industry in Europe and in the United States, we have seen the signs of growth for the first time in eight years. The U.S. in the past 12 to 24 months have exhibited signs of life surprise, surprise led by residential and non-residential. Infrastructure will come in time when they get the funding right.

And now, we are seeing signs of stability come into Europe and growth in the better prepared countries. As a Chief Executive, I wouldn't want to be anywhere else but running CRH at this time in the cycle for construction. So that's the organic growth, but how do we do in CRH to make a difference? Well, I spoken to you about continuous improvements.

Our business is a business of pennies, pennies matter every single day and we have to manage those pennies very, very carefully and we do that by focusing on a formalized approach continuous improvement to keep KPIs across our key businesses, benchmarking across all our individual divisions and outside of those divisions plus these to reduce our costs and improve our margins.

And that perhaps delivered our leverage we saw coming through the first half of this year. And not many companies do that but the real benefit for CRH is when you marry that continuous improvement with our acquisition model is that where we are different. And I'm not talking about our industry; I'm talking generally about general industrialists.

The average size business in our industry as the revenues of over €50 million reflection of small local businesses and actually the average sized deal we do when we buy business is about €50 million of revenues our size.

But, what we do is, when we marry that unique acquisition strategy of small mid-size businesses with the continuous improvement market we have in our core existing businesses that's how we create value because our acquisition strategy like happens across many, many deals every year, it's low risk and higher return.

And it has delivered results for CRH for decades and will continue to deliver results for decades is how those two married together that's really important. And that will be a key part of driving value going forward.

And now what's different, we marry that with active portfolio management, strong capital discipline, looking to shape and reshape our portfolio constantly making sure that our assets and capital are deployed in areas where we get the maximum returns. And that's the magic of CRH. That's how we produced industry leading returns for the last 30 years.

And that's how we will continue. And the last point I want to make to you after eight months in, is the balance sheet. Maeve talked about €4.3 billion of available funds, you saw the strength of the balance sheet, you saw the strength of the cash capability, the operating cash flow coming through.

That balance sheet is the future profit of our business. And I can assure you, we will use that balance sheet wisely. So leave you some thoughts after 8 months in, of what we see and what I see personally as a Chief Executive of CRH of the opportunities for us ahead.

If I can just turn to the outlook for 2014, well, we see a continuation of the modest albeit on even recovery that we are seeing across Europe continue for the remainder of the year.

The first four months are in a box they delivered, has been delivered since May, June, July and August pretty consistent is kind of down to flat when we talk to our customers, when we talk to contractors effectively all around Europe as I have done in advance this presentation, the sense we get is that the moment is there, we have gained we will hold and it will be broadly in line for the second half of the year what was a very, very impressive second half in 2013.

U.S. is different with a very weak first four months because of the weather. But, since May and in June and in July and now in August, we are seeing a fairly sustained delivery of volumes coming through and some price increases coming through as well, which is very welcome. And we see that continuing for the remainder of the year.

And that leads the stability United States will be ahead of what was a very strong second half of 2013. And need to confirm this morning the statement we made in May at our annual general meeting when we said the 2014 will be a year of profit growth in CRH. So I would like to thank you for your attention for the presentation this morning.

We are now going to move to questions-and-answers and we are going to take questions from the floor first and then move to the telephone lines and then move to the Web.

And if I can ask you just for the benefit of everybody watching in from outside this particular room to state your name first and the name of your institution and if you kindly wait just for the microphone, the ladies will bring the microphone to you, the microphone gets to you because without that the people will not be able to hear the question on the line.

So maybe we will move to the first question..

Thank you. Good morning. It's Barry Dixon from Davy. Couple of questions, if I could, just going back to your thoughts Albert eight months in and in terms of the balance sheet and clearly as Maeve has pointed out, the balance sheet is in pretty good shape raising money at historically low levels.

And now you potentially have another €2 billion to add to that. The acquisition activity in the first half of the year, well done in the first half of last year.

I mean is that a -- increased financial rigor on your part or how do you see yourself using that balance sheet or I suppose more particularly in terms of at what point do you come under pressure to do something different other than acquisitions with the balance sheet? The second question is on incremental margins and 25% at a group level in the first half, it was a great performance and a very different performance, I mean, 37% in Europe and I think 5% in the U.S., is that 25% in your own thought process -- is that sustainable going forward, and is that the kind of incremental margin that you see as being sustainable? And then lastly, just a question on Poland in terms of the outlook in the second half of the year and into next year and maybe also your quick thoughts in Ukraine and other political situation, what impact the business there? Thank you..

Thanks Barry. Three questions there. About acquisition pipeline and margins component, maybe if I take the first and third one and maybe at the end pass the question on margins to – and pull through of leverage Maeve if you don't mind. The acquisition on the first half, when you compare them to previous years, there is nothing significant in that.

And we have a strong capital discipline in CRH that's always been there, and we keep that rigor and the three years of acquisitions I referred to in February of this year and our results, which talked about the acquisitions we did in 2011, 2012, 2013, the results of those were delivered because we had rigor on acquisitions during that process.

There is nothing significant there, it's just the ebb and flow of deals as such our pipeline is good across a wide range of businesses and just a question of being disciplined and being patient, we know this game very well, it has happened before and will happen again. So nothing significant and the pipeline is quite good.

And I'm convinced that we have the balance sheet to support us, and we will utilize that balance sheet to create value going forward. With regard to Poland, I think we saw the first half of the year benefiting very strongly. Overall, the market was up about 20% in volumes at first half.

But that level of volume increase is not sustainable, our own sense is, it's going to – again, you got much strong comparables in the second half of the year against 2013.

But we do think the cement market will be up for the full year, we think the cement market will be about 15.2 million to 15.3 million tons in Poland this year, which would represent at about 7% increase overall, so it will taper back a bit against very tough comparables.

But, the momentum is good, but the disappointment for me in Poland is the fact that price is going backwards this year, a 7% price increase in our market, that’s up 20% in the first half, should not be a market that has got price declines, it should be a market that sees some price increases particularly so over the last number of years where we have seen difficulties in pricing there.

With regard to Ukraine, I suppose the direct and indirect consequences of our businesses, first of all, our business are located in the Western part of Ukraine, which is a long way from where the trouble is, we are closer to the Eastern France than we are to the east of Ukraine, and our businesses have actually shown good delivery in the first half of the year probably a follow-through and continuing and finishing our work from last year rather than any new work, and that probably would be the concern I would have with the political uncertainty, and the amount of capital that continues to be invested in construction, Ukraine is primarily residential construction as local people are building apartment blocks, moving out of the country and building apartment blocks.

The question is, would that level of activity fall back.

Actually, when talking to one of our major customers and contractors last weekend, he was telling me that in fact there is a big shift from the East of Ukraine by professional people back into Kiev, back into the west of Ukraine, which is actually our main market, and he anticipates that to be a lift of 2015, but I wouldn't overcook that just yet.

So I think there is a lot of uncertainty about the second half of the year, and we think this year's profitability in Ukraine for us would be about in line with last year, and so we don't see any huge big decline, I think the effects of us going on in Ukraine will be no longer felt, and just finally, the indirect effects before I pass to Maeve in terms of the sanctions that we are seeing – Russian sanctions on Europe, it's very early to say whether they are going to have any long-term effect across Europe.

It's a concern. It's a worry for a broader general European economy. They have only just started, so we will see what will happen and maybe governments will alleviate or there will be some changes in that. But we have to just watch that and we will update you all this in November. Maeve maybe I might ask you to comment on the margins and the leverage..

Yes. Thanks Albert. So yes, indeed a very strong operating leverage in the first half of the year, 25% on the sales increase of 4% that is largely delivered in the European operations, which had a year-on-year benefit, or a first half to first half benefit that was very strong this year.

I think for the year as a whole, we would see margin improvement, that trend continuing across our businesses and hopefully some catch-up in the Americas products business, as Albert was talking about improving markets there.

So I think it would probably be on real estate you think that the operating leverage of 25% that we saw in the first half of the year would be a sustainable ongoing level, the more sustainable level is probably more in the region 15% to 20%..

Okay. Next question.

Back there?.

Good morning. It's Will Morgan for Goldman Sachs. I have got three questions.

The first one is, could you elaborate a little bit more about the acquisition environments obviously we are seeing historically low levels of financing costs which presumably is pushing up prices, I just wondered if you could talk about the pipeline that you see how attractively priced it is and specifically whether or not you are interested in any of the assets coming out of the Holcim and Lafarge merger? The second question relates to the CapEx spend which is obviously down quite dramatically I wondered maybe if you can give a bit of an elaboration on how you would see CapEx depreciation evolving as we move into the second half but also 2015 presumably that's got to step up from the kind of ratios we are seeing at the moment.

And the third question just relates to pricing power, obviously in Europe pricing seems to be met down you are not really getting any major spread in the U.S., I would imagine U.S.

pricing does improve from here but in Europe could you maybe comment a little bit more about where the sticking points are vis-à-vis pricing and when you can start to see some of that pricing power come through..

Thanks for the good morning. If I take again the first question on the acquisition environmental pricing and also the pricing, I will let Maeve begin with the second part and the Europe capital expenditure.

The acquisition environment that we are seeing out there in pricing in particular, there is broadly no change over the last 12 to 18 months, I'm aware that there is a lot of money out there because there is a lot of money out there chasing many assets. And we don't see – and it's been there for quite some time.

So we are not seeing a particular change in that environment.

But I do know from my own experience that having unfortunately lived through a number of recessions that the period of most distress, the period of most opportunity is actually as you come out of recession that's because people will find there is a draw on cash now that's when things get tight for them and that's when things bite.

And that's when you see opportunities for distress -- sales and distress purchases. The second part is, if I think we have been consistent will attain this, one of the reasons in the crisis while we back on our acquisition spend must because we have a little or no visibility every year that is climbing by 10% or 15%.

But now at last we are seeing some stability and that gives you a little more confidence when you are looking at your models, when you are looking at your forecasts and that gives us confidence when we look forward with regard to acquisition spend.

The other point you had is on pricing power, which is really key question – very important question and if I can start from the U.S. you specifically asked about Europe, but if I start from the U.S. because that gives you an indication the ways things are going. You are right.

Again, our goal has been consistent as same you have got to see strong volume is coming through for a period of time to give people the confidence that pricing is back. Just think of the mentality of what is going on and people run materials businesses or any business is construction at the moment.

They have been through the most dreadful precipitous falls or volumes have declined by more than 50%, 60% in the worst markets. They are just glad for work. Pricing is not even in their mentality. They just want to see the fact this being filled.

As capacity gets eaten back with the more sustained pull through that's when people start move into pricing and we are just entering that phase in the United States so you are right when you say that – we are just -- coming through now and you see it in the areas with the narrowest tightest supply sides as such as the cement the aggregates but that will drift down through the chain because it starts with top and just drift downs through the chain.

Europe is at a different stage of its recovery and it's very patchy and it's very weak. And I think we are going to have to see country-by-country a little bit of more sustained pull through on volumes. Just look what's happening in the United Kingdom.

You have seen now with helped schemes coming through for the past 12 to 24 months, there is strong volume growth and strong pricing power in the house of individuals just by the residential mortgage. That's what you are going to see country-by-country but only as volumes come back. That will be how I will see at pricing. Maeve and….

And in terms of capital expenditure, yes, we have seen significant disciplined being applied to the capital expenditure in the first half of the year. And as Albert was saying we – our focus has been to get our operations to use the efforts we have on the ground and make sure we are using those fully before we spend money on expanding the business.

I would certainly see the ratio of the spend beginning to trend upwards, it's clearly not sustainable, it's continued spending at a level of 67% to deprecation over the long haul, so I would say – I still think for the year as a whole, the final outturn will likely be around last year's level or maybe slightly less by trending upwards closer to 80% to 100% of deprecation over the next year or two..

I would like to add because a lot of colleagues in CRH around the world will be listening to this. I would like to use the capital expenditure to have first before we get any new CapEx. This room a little worse. Forgive me, sorry. Just in the front here..

Thanks. Will Jones, Redburn. Three, if I could please.

The first, could you comment more specifically around pricing in Americas products, I think at the start of the year, you talked about a couple of good user volume and this is a descent yes for the pricing, as weather pushed back by a year, any pricing gains, but rather comments there would be great.

Americas is generally, the like-for-like in the last couple of months to the end of the first half, do you think that's indicative of the second half or kind of push from there just given weather capture and how you expecting all three divisions in Americas to be ahead in the second half as well as the region as a whole.

And then the final one, just around Holland, there is some better days emerging from the confidence perspective and lead indicates on new housing, is that something the guys in the ground just starting to recognize talk about and if so when is the impact?.

Okay. Just three questions there. With regards to specific to Americas products, well, I would expect on the back of the good fundamental volumes that are driving that market which is exposed to residential and non-residential. I mean residential in the U.S.

in the last 12 months forecasted over 10% year-to-date it's about 7% driven by multifamily homes. So there is good momentum there.

I think the non-residential market was up about 5% or so could be up to 10% originally particularly out west, so those two fundamentals given good volume growth and on the back of that the cement price increases coming through – those cost increases that allows you pass on pricing.

I think the issue we have seen this year has been more to do with the specific weather related issue for the first four months. And if I can let that question fall into the next part of your question which was how those divisions will perform for the remainder of the year and talk about products specifically and go into materials and distribution.

The products business again has shown a good uptick in its business since the first from May and June. June in particular was strong. July has continued in same vein as indeed is August.

And materials business what we have seen in May, June, July is pretty much the same trend, we think it's going to continue if you remember our materials business produce about 2/3rds of its profitability during the key month of July, August, September. I mean we are halfway through that period now with good volume throughout.

Our backlog is ahead of last year. Our margins those were ahead of last year. So all the indicators are pointing in the right direction, we have to continue that trend and like was the distribution, if I back out the first four months which hit the exterior products which is offset by the interior products as I explained you in the presentation.

I think the momentum is good for that particular sector. The flip side of the bad, winter is in fact that – work is put off but also damaged during the bad winter. So we get to do that work during the summer. So I think, my own gut feel is actually we will see progress in all three divisions over last year in the Americas.

You just specifically asked me about the Netherlands, I will say specifically how we see things going there. Netherlands is coming down after – now four years of very steep declines residential is still forecast to be down – new residential is forecast to be down about 9%.

Overall construction flat maybe minus 1% for this particular year and it feels like that in the Netherlands, it will feels like we got off to a great start with good strong spring sell through, it just kind of repeated out a bit. And I think that's what we are going to see in Holland for the remainder of this year.

What we are seeing though again, talking to contractors, talking to our customers out there is I think they have quite hope for 2015 coming through starting to see some plans in their order books. They took more planning going on applications for house starts as well. So we are starting to see the Netherlands start to pick back about.

I think we will see that in the back end of this year, if we get a bit of weather uncertainty in 2015 and that's our view. Sorry, here in the front..

Yes. Good morning, Yuri Serov, Morgan Stanley. Two or maybe three questions, well, first of all, on acquisitions, there was a question about your appetite for the assets from Lafarge and Holcim. I would like to press a little bit more on that.

I'm not asking for specifics obviously you cannot give specifics but on the other hand in your portfolio review one of the conclusions that you came outwards was that you were thinking about de-prioritizing Europe and especially new built Europe as an investment destination mainly with the assets that Lafarge and Holcim are going to dispose off or actually in Europe expose to new built which is cement.

What's your thoughts around that? Thanks. Secondly, U.S. infrastructure you are saying is still flat, on the other hand your asphalt volumes are up by 3%, obviously that's not fine, but that seems like they are reasonably decent performance coming out of a recession. So at what levels will you start sounding more positive from U.S.

infrastructure and what are your expectations of how that's gong to develop into business. And just one quick question to clarify you are talking about disposals of 1.5 billion to 2 billion in the next few years, is the amount of money that you are planning to receive, I mean what do those numbers represent? Thanks..

Thanks Yuri. I thought I'd dodged Holcim and Lafarge question so far but thanks for bringing it. If I leave the disposals question for Maeve at the end, maybe I just address this specific question of Holcim and Lafarge. CRH have their own strategy for value creation.

We are not reliant on anybody else producing any of the list of assets that they wish to dispose off. We set out our stall during the course of this year, our business is going to be focusing on returns for our shareholders, we got strategic platforms, we are not a cement business.

We are a broad based building materials business, a diversified business with many geographies and we look to extract value across those businesses that service different markets in different geographies and cement is part of that. Whatever we do, it's up to CRH to decide what we do and it will all be about value.

If you buy a business that's too expensive, you spend rest of your life paying for it. I know that you are better experienced. So if we can buy businesses from whoever they are, wherever they are at the right price and create returns for our shareholders, that's the key focus not any particular suite of assets that are for sale at the moment.

And I don't think it helps anybody they are going to specific circumstances as such. We note the fact that produce list like anybody else they can see value there. We will enter into proposals and have discussions but more than I want to say. And specifically on the U.S.

infrastructure and the fact that asphalt volumes are up about 3% in the first half of the year that's quite regional actually more than anything specific. At the end of the day, the spent towards infrastructure from the federal government is flat.

What you are seeing is a little bit of an uptick coming through particular states attend the needs of those states, you see what's happening in Florida with the sure expansion of Florida, they have got to build infrastructure at a higher rate. So the state itself is committing more money to infrastructure spending.

There is a big bill going in front of the Texas legislature in November this year to increase the states contribution by $1.8 billion annually to funding in Texas again because Texas is going to be the fastest growing state in the United States.

We have seen it come to Ohio, we have seen it come to Maine, Pennsylvania but they are making small adjustments because the federal government support the level of infrastructure that it needs. And that might provide a little bit of growth during the course of this year.

But the long-term trend will not change until you see a long-term federal program put in place for funding and obviously, we don't see that coming through this year and the discussion will happen in next year. That answer your question? I think it does. Okay..

The divestment program earlier in the year and I think the portfolio review we talked about approximately 10% of the businesses which at the end of last year we wrote down to an expected value and that's obviously included in the total number approximately 800 million or so of the 1.5 billion to 2 billion is that 10% or so.

And then the balance is really – the next 10% which we have been looking at more closely in the last number of months, we believe somewhere a little bit more than half of that is likely to – is for divestment. And so that's where we arrive at the 1.5 billion to 2 billion..

Any further questions here from the floor?.

Thanks. John Messenger from Redburn. Can I just come back to the drop through kind of answer earlier from Maeve just in terms of that 15% to 20% is what symbol going forward? Yes. Coming back to your point Albert, your pricing tends to follow 18 months, 2 years beyond the pick up in volume.

When we think about that pricing down and picking up unless you are worried about cost inflation pressures which I guess will be understandable, but they will be a bit more labor pressure potentially there.

But, surely that 15% to 20% if anything to 25% we saw in the first half is a good reason why that actually should continue and it will become more price driven rather than volume driven once things pick up a bit of junction.

What is making you more cautious other than say that you are not caution on these kind of things? And then the second question is, just around acquisitions going forward, you laid out the four kind of platform drivers in terms of why you are good at doing them, but could you give us a little bit of flavor on – because clearly emerging markets want to be part of this.

But, can you give us a bit of a commentary around China businesses, India, why you want to go because it looks to me as though these are going to be platforms start ups when you start to spend from here in terms of what you do.

And not looking for geographic but from the point of view of the last few years CRH went off kind of going a little bit wider and also did deals that were clever in terms of shareholder equity positions and JVs.

And JVs were also part of what CRH did originally, but are you now looking to make sure you buy things lock the stock in parallel, so you get full control of cash flows and that actually the experience of last few years the Denizlis, the Unilands and all the rest of them, those didn't prove great.

Is that just because of the unique transactions or is that something going forward really buy businesses in totality rather than leaving shareholder and partners?.

Okay. John thank you for that very detailed question, the last question maybe I will take that one first and pass again the follow-up question to Maeve on the drop down margins back to here. Just generally in our emerging markets strategy I want to be absolutely clear. CRH over the next number of years will increase it's expose to emerging markets.

And we will do that because the nucleus of the world is different to the east. If you look at construction growth and the forecast for construction growth it is clearly going to be driven by India and China and Brazil and Indonesia for the next 25 years.

And if we aspire to being a global leader at supplying building materials we must be in these markets. But being in those markets, what are we going to be in those markets for? We are going to be there to make money and make returns that's what CRH focuses on. Long-term I'm an emerging market bull, actually short-term I'm bit of a bear.

I think they are going through period of readjustment. They saw strong growth for the last 8, 9 years on the back of a lot of cheap available finance flowing from the developed world into the developing world that has now changed.

And what you are seeing is, countries such as India, where Prime Minister Modi has started down the road, you have seen it with Xi Jinping in China for the last couple of years where they are starting to make the fundamental adjustments to their society and economy that they should have been making for the last 10 years.

And that adjustment is coming at a cost in terms of progress, development and economic growth. And you got issues such as overcapacity you got issues such as oversupply and pricing, so this huge complexity is there. Indonesia just starting now that whole process. We have got two very good foot prints in Southern India and Northeast China.

We have a temptation to try and measure our progress in these things in years actually they should be measured in decades because that's how the countries would have evolved. And we will support them when we see the returns coming through.

The method doing so, you rightly said going back to the history of -- actually JVs that's what we did participation, understanding our business, the slow stepping. I don't see that changing.

It is more complex in managing your relationships, but we do more time looking and talking to understanding our partners than we do actually understand the business themselves because actually when you get in and run the business actually the dream is over you got to work with the partner, it's a marriage.

So we have been quite good at picking our partners very carefully and most cases it has worked out very well. It's a lot risk way for us to enter into new businesses, new regions and new countries. I think we will continue.

That's not to say that if we see the right opportunity for a wholly-owned business in India or China because your proven capability there now that we will step up and take a 100% deal. So I don't want to exclude anything. They will remain part of what we are doing going forward..

Okay. And if we come back on the margins it's obviously very gratifying to say that 25% operating was in the first half of the year. And that was delivered without any pricing increases. So we are obviously looking – we will be looking forward to the benefit of price increases over the next number of years.

I think in indicating a sustainable level of drop through from increased sales and trying to be realistic taking into account the mix of our businesses and the other side of price increases for us is cost increases as well. So I think it's a mixture of the mix of our businesses and being realistic in terms of the overall deliverables.

We are starting to expect to be able to deliver a good drop through from top line growth..

I think – and the follow-up, I think we are working in fairly benign cost environment at this particular time right now because that's not obviously going to be the case and we know that. So I think just factoring into those numbers we have to more careful. Sorry to say. Gregor, here in front..

Couple of questions, the first one on the Ukraine, can you just give us the actual pro forma sales and EBITDA obviously since the Lafarge asset coming in which hasn't – last year wasn't in the numbers.

So it make the pro forma number from the prior years, we just got a feel but your comment on being flat on that is an organic or whether that basically -- the acquisition offsets the underlying decline. The second is on U.S.

infrastructure, this is highway bill which is expiring shortly, just wanted to get what your guys in the ground are thinking in terms of what we should be expecting for multiyear solution perhaps as except to 2015 event.

And then finally on the portfolio review and divestments and this maybe a bit controversial, but clearly you sort of described CRH as a asset manager of building materials companies.

Is it not a case in that basis that you actually sell assets when they're performing extremely well which is always a very difficult thing to do as supposed to looking at it, I mean clearly, I guess looking from the margin profile of the business that you got to identify they're clearly sub par some of them perhaps structural that is obviously also very well performing businesses within the CRH and if somebody pays you a stupid price wouldn't you be disposing of it?.

Again, may be I'll take the second and third questions Gregor with regards to the specifics on the U.S. infrastructure and also in terms of your comment on the portfolio and divestments, maybe you can fill in the detail of Ukraine.

I don't have great insight, I'm going to share with you this morning with regard to what's going to happen in 2015 with long-term funding in the U.S.

and we as part of associations are consistently working with politicians to set out for them what we believe is a very compelling case to increase spending with regard to infrastructure spend on the United States. Everybody we speak to agrees with us, nobody has any suggestion as to how we're going to do it because it's tied up U.S.

politics which is very, very difficult. So I don't have any insight, other than to say that this constant roll forward is not sustainable because with price increases coming through, of course, you're getting net-net a slower and lower spend on actual infrastructure.

And the key is that so much of the spent now has been focused just on repairing the infrastructure that's there.

Remember that's 30 million people come to this country every 10 years, where is the houses, the schools, the roads, the hospitals that these people are going to live and work in, who is building those? That's why you are seeing the states make those changes that are necessary and the federal government as it always does eventually will step up to the place.

And what we're doing is trying to catch the federal government as part of other members of the association to do that. But with regard to 2015, we've just got the Highway Trust Fund funding; they will begin transport in for next year. We just got the extension to May next year we continue our work with -- as soon as we know something we will tell you.

And with regards to the portfolio, your interest point, I just want to clarify, we're not an asset manager of businesses. We're an industrial group that manages a broad diversified portfolio of businesses of selling into the building material sector that's what we do.

We just happen to do so with one eye on the portfolio and actively manage the portfolio in a disciplined capital way. And in doing that and setting out our portfolio we were in very clear earlier this year through a number of business that we are selling that are actually good businesses that just don't fit with CRH.

For a many good businesses that do not have the capability to step up in size and scale, but we can leverage the strength of that as we spoke earlier. So they are good businesses we are just the lone parent for them, and we will dispose those businesses in time as we find the right prices for them.

So your comment is, we are only selling difficult business, no it's not, because as we step out in our portfolio no one ever backs 1000, no one ever gets 10 out of 10. There are business that we step out into there are good businesses.

And in fact, if you look through the disposals over the last three or four, you'll see we have some very good disposals of some fine businesses, but again, we are just the lone parent for them. I think that will continue to be the case. Maeve any specific….

The operating profit last year was in the region of €18 million, so there is a – I think – as we said earlier our expectation for the full year this year even though we're well ahead in the first half of the year is for the overall profits likely to be the same as last year in spite of the benefit of Mykolaiv coming in..

EBITDA..

EBITDA, in the region of 30 million..

I don't know, any other questions going forward today. Okay, well, there you go. Just in the front..

So just a couple from me, if I could please. On the net debt, I think last year the inflow is about 1.2 billion half to full year. Are you thinking a similar profile this time around or say probably slightly high profits obviously lower CapEx but any thoughts around year end net debt please.

And then just the depreciation charge I think dropped 20 million first half on first half is that going to happen again in the second and because you're spending less than depreciation this year should we expect the depreciation drops again in 2015? Thanks..

If I deal with the depreciation first, the charge for – the first half of the year I was talking about 20 million part of that is the non-depreciation of those assets which were impaired at the end of last year that was about 275 million if the impairment charge related to plant and equipment last year, so having written those down the depreciation charge reduces.

And then there is also some exchange impacts also with the U.S. dollar primarily U.S. dollar denomination depreciation cost is a little bit less than the first half.

So both of those effects will flow through into the second half of the year and so we would expect the full year depreciation charge to be somewhere in region of twice the first half number.

In relation to net debt and the movements that seasonal effect that I talked about in terms of the cash flow to the half year with the build up of net debt to the half year as we build up to gear up for the level of activity that traditionally reverse us significantly in the second half of the year and as usually a swing of somewhere between 0.5 billion, 600, 700 million of inflows in relation to operating cash in the second half of the period.

So we would expect the net debt absent of further acquisitions and absent of any major divestments which are obviously harder to factor into it to be lower than last year..

Thanks Maeve. And just consent of time and there are people on the telephone on the wire as well. And may be we could take our first call from the telephone please..

Thank you. Our first question comes from Yassine Touahri [Exane BNP Paribas]. Please go ahead sir..

Yes, good morning. So the first question, first on organic growth. So you discussed about organic growth in the first four months of the year in the U.S. and also in Europe could give us a figure for EMEA margin, I think you told us it was flat to slightly down in Europe, could you quantify? And what was it in the U.S.

and also a question about the flow through.

I am not sure I understand the 25% of flow through that you are discussing in H1 part and I think my calculation are wrong, but when I do the increase in EBITDA in H1 divided by the increase in sales, I cannot see the flow through of 34%, so if you could explain how you come to your 25% portfolio that would be very helpful.

And that would be my two questions..

Okay. May be I'll answer the first question, partly answer the second question and then let Maeve give her comments on it.

With regard to the organic growth, what we have said in May and June and continuing in June and July, we see the European business flat to minus 1% that specifically would be a range across all our businesses maybe recovering back a little bit better now during the month of July and August so that's broadly flat.

I think it will really be September, October and we see delivery of those months because May, July and August are difficult months in Europe to call construction a lot of people are in vacation. Activity levels actually drop down to seasonal lows so it's hard to get a run through.

But our sense in looking at our order books; our sense in talking to our customers is that it will be broadly flat for the remainder of the year against what was a very good finish to 2013.

In the United States, the indications that we showed in our presentation this morning of the good growth we have seen both in May and June and we're saying confirm to you that's continuing now on July and in even August, we see that continuing because all the indicators tell us that they are in terms of our order books and indeed the margins in those order books.

And before I pass the question on leverage and flow through over to Maeve, I suppose the one point I would make and that is that when you see what high fixed cost business is that normally have a high contribution per unit coming through.

You see more volume coming through those businesses, obviously they're the once with the higher flow through as you call the higher operational leverage coming through.

So it's very specific to the business, so we get a very different operational leverage coming through with our distribution businesses as we do with our heavy side aggregates businesses and concrete business and cement businesses and that's the big thing. But with regard to the actual specific you dealt already Maeve, maybe just to help people --.

And just to follow-on on Albert's point there. In the first half of the year, the significant part that the flow through came in our Europe business and in particularly in our Europe materials businesses with our margins almost double in the first half of the year. So that fixed point being very obvious there.

The 25% Yassine that we were talking about is the organic improvement.

So it's an improvement of 99 million in organic EBITDA and that means excluding exchange impacts and also excluding the impacts of acquisitions and also the excluding the impact of oneself restructuring cost which can distort the numbers a little bit, so it's the underlying improvement in operating profits just approximately €99 million on the equivalent underlying increase in sales which is just under 400 million.

So that gives you the 25% that we've been talking about. Those numbers are on Slide 12 of that presentation if you'd like to look through them..

Thanks Maeve.

Can we take another call please?.

We will now take our next question from Robert Eason [Goodbody Stockbrokers]. Please go ahead..

Hi, good morning. I am Robert Eason from Goodbody. I have just a few questions. If I can put you a bit more in the working capital after the strong performance in the first half can we expect there to be actually a working capital inflow for the full year.

The working capital volume from the second half, is there something that you're doing structurally behind the scenes on working capital to improve the metrics on that front and if so can you just give us a bit more flavor on that? Just on the financial charge, can you just give us a bit of guidance what we should expect for the full year for the financial charge and just in relation to your asphalt operations in the U.S.

can you just give us a bit more detail on bitumen costs and your winter storage and as a result your expectations for that input cost in terms of a year-on-year change?.

Maeve, if you take the first two and I come back on the second..

Yes, okay. If I talk about the working capital first Robert the – last year we had an inflow in working capital of 118 million, I think that is reflected some good efforts by CRH and obviously, what we had at the first half of the year was a reduction in the seasonal outflow.

So a strong performance as I was saying – as I was chatting through the presentation that is not delivered by any magic formula that's delivered by really hard work right across our 3600 locations where we just focus on the basics of running the business – of managing working capital well and that starts with credit control – its about you have to pay attention to inventory values and managing inventory well.

One of the things that have been really gratifying right through the last number of years is that with that focus on the detail and the fundamentals of managing our business as well, we have seen no deterioration in our working capital statistics.

So we have not seen any significant increase in the level of bad debt experienced and also we have seen things – the things we measure everyday like day sales outstanding days payable outstanding stock turnover.

We've actually seen improvements in both the receivables and payables side of that equation and we found it harder to move the needle on inventory, but having said that our inventory metrics did not reduce either during that period. So we think that's really a testament to that good day-to-day management.

So I have no magic bullet to talk to about that but just a good basic on this regard financial management at its best. I think for the year as a whole the outturn at the end of the year, it's one of the things that we find hardest to predict for the Group as a whole. It's very sensitive to trading in the last month or six weeks of the year.

So last year you remember we had a very good finish to the year particularly in Europe and that meant activity was strong in the – just in those last few weeks. Depending on how things work – at the end of the year that will have an impact on the final outturn.

In reality though I'll be very happy if we're reporting a small outflow in working capital for the year as a whole because that will be in the activity has picked up and this trend that we're seeing is continuing even stronger.

So I can't predict the exact answer, but I think, I don't think the number will be a big figure in the cash flow for the year as a whole, which means I am confidently expecting a significant inflow from working capital in the second half of the year..

And the finance charge..

And the finance change. It was approximately 150 million for the first half of the year I'd expect that to be slightly lower in the second half of the year, so a number for the year as a whole slightly below last year is 300 million so somewhere in the 290, 295 million for the year as a whole..

Thanks Maeve. And specifically Robert with regard to your question on asphalt volumes and pricing cost and the deep margin, as we've said earlier the 3% volume increase we've seen in the first half of the year was very strong. I don't think it will be maintained at that level.

I think there is some possibility we will see volumes up this year and last year on the back of growing residential, non-residential and specifically on the fact that we're seeing a little bit of more stays spending coming through the support of that business but we'll see how the year pans out.

With regard to our winter-fill program and just to remind people who are listening in and in the room. We store at the end of the winter season about 860,000 tons of bitumen in our winter storage which was a pearl necklace all across the north of America. This is very expense for us to do, it costs $600 a ton to do that.

It’s just a touch below last year as costs and we think that, what we have in the tanks and give about the rack prices at this moment in time the marketplace will support our asphalt margins this year. So I hope that's clear for you Robert..

Yes.

Sorry, can I just have one follow up question, just in relation to Slide 25 where you outlined your equity accounts -- investments can you give us the full year EBITDA figure for 2013?.

I'm going to give -- I think it was around 160 million for 2013. I'll check that Robert and come back to you if I am wrong with that. The operating – the PAT number for equity account and the numbers at the end of last year excluding impairment is 61 million. I think it's around 160 million mark of EBITDA..

Thank you..

I think one more question. I got some question from the Web, I want to get to I it. I'm just going with the tight time today. May be I can take one more question from the telephone please..

We'll now take our next question from Gerard Moore, Investec. Please go ahead..

Hi, good morning. I just got one quick question and that relates to the Americas materials business and more specifically the paving business within there.

So wondering if you can give us an indication of how significant was the improvement in the margin in that business and where would you – where were the margins being at compared to normalized level what this business should be achieving? Thanks..

We saw a good up tick in the overall activity levels in our construction business, but margin slightly -- only slightly ahead of last year and we're not back to where we are. We're back about 70% to where they were pre-crisis but up tick in last year in terms of construction margins in the U.S. on our paving business..

Thank you..

Okay.

Just considering our time here and what I am going to do is, we had a number of questions coming from the Web and some which – among which I failed to answer Barry Dixon from Davy asked me a question on this, sort of outlook for Poland, one on the which I have been asked update on quality infrastructure spending and where that is given last year? And with regard to that we have any of the growth issue we're seeing in Poland is largely coming through in the back of better residential spend.

The EU funding that's in place now from 2013 to 2020 commits about €17.6 billion of EU funds which will have to be matched with 50-50 by the Polish government out in particular projects -- infrastructure projects. They have been very slow to get those tenders awarded.

There is a lot of tenders out there in this current year we estimate our current -- and we're running to almost about €1 billion will -- work actually will take place.

So the significant amount of work that's still out there and I should say because of the rough sea and the red tape and because of funding constraints that Poland had but no longer has they actually left with 25% of funding from the previous trends behind them.

So we think it bodes well, I think its getting better, I think we've learned some of the lessons from the last bidding more out there. So a lot of tenders that are out there that seems to be a lot more sensible and we think it bodes well that could be more 2015 than 2014.

Also asked to comment on the capacity in India and the fact that in recent times, there was some publicity in Andhra Pradesh where our businesses are located on capacity reductions in India and we would have seen that last week whereby there were some reports, I think that India Cement in particular whereby they were reducing capacity in India in response to the over capacity in that market.

And we saw that and we see that in the marketplace but that is just a natural evolution of old cement capacity being taken out of the marketplace because it's too high cost. The significant over capacity in India, overall capacity in India is about 350 million tons and demand is about 260, 270.

And in fact that capacity is going to increase by about 40 million tons over the next three years. So the gap is actually going to widen because the markets only rolling about 5% or 7%. So what you see is effectively the survival of the fittest, the high cost producers are having to close down and shut down and that's what's been closed.

In fact our business in India you may recall we invested in the business call Sree Jayajothi which added another cement plant to our many plants, so our volumes in fact in Andhra Pradesh and Southern India will grow this year up to about 5.3 million tons of sales from about 3.8 million tons last year.

One question on just kind of what's driving the strength of our building materials business in Switzerland.

I think I said that earlier on, as a result of very strong residential and particularly strong infrastructure work in the region where we are in Switzerland is quite regional specific, our businesses service effectively Zurich north and North Eastern part -- North Western part of Switzerland that's specific to us and what we're seeing is a dynamic in that particular part of Switzerland that's driving the good volume growth for us this year although prices are weak in Switzerland on the back of a strong Swiss Franc.

The last comment we have is, could we please update on the Lemona acquisition and how trading is going in Spain? Lemona, you may have recall was a cement business that we swapped with Cementos Portland Valderrivas and we exited our equity stake in Uniland about 18 months or so.

And we have this year started to put volume through that plant we've plugged it into our network very well. We're shipping about 300,000 tons out of Spain into the United Kingdom here and into our businesses in Belgium and that business is performing inline with expectations and reasonably well.

I should say the prices in that part of Spain are probably the best part of Spain as well so it's held up quite well. My overall comment on Spain is that the Spanish cement volumes are down again this year.

We don't have huge exposure to it because when we were buying both Lemona it was effectively an export business for the next five years and I think Spanish cement probably will be about 10.5 million tons this year which -- when you consider that was probably a normalized level it should be about 25 million tons going forward.

But we do see some signs of life and recovery coming back into those markets in time. It's true that Spain is too good and too strong in economy to be at 10 million tons cement market with construction to where it is. And I think they're making some structural reforms that will facilitate and allow that growth come through.

That's generally all the questions we have from the Web. I think from the telephones. If there are no further questions from the floor, I am going to bring proceeding to a close. I want to thank you very much this morning. And look forward to updating you in November with our IMS – with the half year results. Thank you..