CRH’s operations across the globe faced mixed economic circumstances during 2012. In our main markets, there was an ongoing improvement in overall economic activity in the United States, which saw a welcome recovery in residential construction, while consumer and investor confidence continued to slow in European economies, particularly in the Netherlands. Against this backdrop, Group profit before tax amounted to €674 million and earnings per share were 76.5c. The profit and earnings per share outturns represented declines of 5% and 7% respectively, compared with 2011 outturns of €711 million and 82.6c. 

The Group’s results and the performance of the separate business segments are covered in detail in the Chief Executive’s review and in the Finance and Operations reviews which follow. 

## Dividend 

In August 2012 the Board decided to maintain the interim dividend of 18.5c. This took into account anticipated strong second-half cash flows and the Group’s strong balance sheet. With full-year operating cash flow before dividends of €0.5 billion and taking into account 2012 profit, capital expenditure, development activity and portfolio rationalisation, the Board is recommending a final dividend of 44c per share. If approved at the Annual General Meeting in May 2013, this will maintain the full year 2012 dividend of 62.5c per share. 

## Development Activity 

Total acquisition activity for 2012 was over €0.6 billion, including deferred consideration of approximately €0.1 billion. This reflects CRH’s long- term value-based approach to developing our balanced portfolio. The Materials transactions in the United States, including the acquisition of a majority shareholding in Trap Rock Industries, an integrated aggregates and asphalt business in New Jersey, bring strong asset-backed resource positions and, when combined with existing operations, provide significant opportunities for vertical integration. In Europe we added to our downstream materials activities in Finland strengthening our presence in that country. In the Products segment the 2012 acquisitions included seven concrete paving facilities in Canada and Florida and a significant Shutters & Awnings enterprise in Germany. These acquisitions reflect our focus on RMI and sustainability segments and on the optimisation of production networks in core regions. Our Distribution additions similarly reflected an RMI emphasis with the ongoing development of our Sanitary, Heating and Plumbing business in Europe. 

## Developing Regions 

CRH’s strategy in developing regions is to achieve leading regional market positions, initially through premium resource-backed assets and, over time, to pursue vertical integration and develop downstream activities. CRH is a 26% shareholder in Yatai Building Materials (YBM). YBM is the largest cement producer in northeast China, with operations in the provinces of Jilin, Heilongjiang and Liaoning. Since CRH’s purchase of its 26% shareholding in early-2009, the business has nearly doubled in size. CRH also has operations 

“CRH’s operations across the globe faced mixed economic circumstances during 2012. Management continue to focus on implementing cost savings initiatives and on operational excellence. In the medium to longer term, as economic growth returns, the Group is well positioned to benefit from the significant efforts made over recent years.” 

in India, through our My Home Industries Limited 50% joint venture, which has a state-of-the-art, highly efficient, cement plant in Andhra Pradesh. India currently has a low per capita cement usage, which provides CRH with an opportunity to grow with the industry and to build a significant presence over time. In Russia we have a dedicated base in Moscow focussed on identifying development opportunities. In addition, we are in the process of opening a regional headquarters in Singapore, details of which are set out in the Chief Executive’s review on page 13. 

## Portfolio Review 

Significant portfolio changes occurred during 2012. These included the sale of CRH’s 49% shareholding in our Portuguese cement joint venture, Secil, in May. Our European Products segment also disposed of Magnetic Autocontrol which manufactures and supplies access control products. Total proceeds from disposals in 2012 amounted to €0.86 billion. 

## Board and Senior Management 

Myles Lee, Group Chief Executive, has confirmed to the Board his intention to retire from CRH at the end of 2013 having reached the age of 60, and following completion of a 5 year term as Chief Executive and 10 years as an Executive Director. Myles joined CRH in 1982, joining the Board in November 2003 as Finance Director, later becoming Chief Executive in January 2009. Myles has contributed very significantly over an extended period to the development and progress of CRH and continues to do so. By advising the 

