currency and weather headwinds. Profit after tax^‡ increased 51% to€1.9 billion (2016:€1.3 billion).

Our continued focus on performance initiatives, along with improvements in pricing in certain key markets, resulted in strong operational leverage, which saw a further increase in margins and returns. Return on Net Assets (RONA)^∎ for the year improved from 9.7% in 2016 to 10.6%.

Despite significant acquisition activity, net debt/EBITDA (as defined)* remained strong at 1.8x (2016: 1.7x).

Earnings per share (EPS)^‡ for the year advanced 51% to 226.8c (2016: 150.2c) and the Board has proposed to increase the dividend to 68.0c per share, an increase of 5% compared with last year’s level of 65.0c per share.

Operational Highlights

Overall trading conditions across all Divisions remained broadly positive. In the Americas, where total sales increased 4% to€12.3 billion, a strong US economy with good momentum in the residential and non-residential market segments, underpinned increased revenues.

In our Americas Materials Division, revenues increased 5% to€8.0 billion. Infrastructure activity remained stable in our markets, while our Americas Products Division benefited from stable market fundamentals in southern and western US states.

Despite the impact of significant weather headwinds, the trading environment in the US remained positive overall, with volume growth achieved.

In Europe, where overall sales increased 1% to€12.5 billion, our Heavyside Materials Division benefited from increased demand in certain key markets as the Annual Report onForm 20-F, does not form partEuropean economy continued to recover at a modest pace. Challenges remained in Switzerland, while in the United Kingdom (UK), despite uncertainty around the impact of and is not incorporated into this document. References in this document to other documents onBrexit, the CRH website such as the Circular to shareholders in respectperformance of the proposed Acquisition, are included only as an aid to their location. The Group’s website provides the full text of the Annual and Interim Reports, the Annual Report on Form 20-F,our materials business, Tarmac, remained resilient.

Our European Lightside Division, which is filed annually withfavourably exposed to export activity, benefited from growth in key markets. In our European Distribution Division, sales were broadly stable overall and slightly ahead in certain key markets.

In Asia, we continue to take a long-term view in relation to the United States SecuritiesPhilippines, where the challenging pricing environment persisted throughout 2017, despite robust underlying market fundamentals. Our equity accounted investments in China and Exchange Commission, trading statements, interim management statements, copiesIndia both benefited from improvements in pricing during the year.

Overall, a very satisfactory year and while our materials businesses currently account for almost two-thirds of presentationsGroup operating profit, the strategic importance of our products businesses continues to analystsincrease as market demand for building materials evolves and investorsconstruction methods and circularstechnologies change.

Sustainability and Safety

Sustainability and Corporate Social Responsibility (CSR) are essential components of our business and our ongoing commitment to shareholders. News releases are made available,global sustainable development resulted in the News & Events sectionGroup’s inclusion in the 2017 Dow Jones Sustainability Index (DJSI) Europe. The index represents the gold standard for corporate sustainability and CRH’s inclusion comes as a result of the website, immediately after release to the Stock Exchanges.a lengthy evaluation based on strict economic, environmental, social and long-term shareholder related criteria.

Key Information

The Consolidated Financial Statements of CRH plc have been preparedWe also maintained our uncompromising focus on making our work environments safe for our people. This approach has yielded very positive outcomes in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the International Accounting Standards Board.

Selected financial data has been presented for the five years ended on 31 December 2014 on page 8. For the three years ended 31 December 2014, the selected financial data is qualifiedrecent years. Despite our progress however, in its entirety by reference to, and should be read in conjunction with, the audited Consolidated Financial Statements, the related Notes and the Business Performance Review section included elsewhere in this Annual Report on Form 20-F (“Annual Report” or “Form 20-F”).

Non-GAAP Performance Measures

CRH uses2017 a number of non-GAAP performance measuresfatalities at our operations underlined the need for us to monitor financial performance. These are summarised below and discussed later in this report.do even more to ensure that all of our people return home safe to their families at the end of each working day.

Development

Having paused major acquisition activity during 2016, to focus our efforts on effectively integrating the businesses acquired during the previous 12 months, CRH again returned

of customers in the comparisonlocal markets in which we operate. This allows us to deliver in a better way for our customers and provide them with a locally tailored service underpinned by a level of quality and excellence consistent with a global company of our scale.

As we have grown in scale and diversified into new product areas and geographic markets, we have evolved and optimised our approach accordingly. The scale of our operations allows us to pursue economies across a range of operational areas. In addition, a pivotal feature of our approach to development is the identification and integration of bolt-on acquisitions which strengthen existing market positions and provide opportunities for vertical integration.

To continue to successfully execute our strategy in pursuit of our vision of becoming the global leader in building materials, we maintain an ongoing focus on identifying, recruiting, developing and retaining individuals with the potential to become the next generation of leaders for our businesses.

Delivery of the Group’s strategy is centred on:

establish additional platforms from which to deliver performance and growth.

By balancing our portfolio across geography, product, sector and end-use, we seek to ensure the purposeGroup is protected from the impact of low demand at the information presentedbottom of any one economic cycle.

The recycling of capital into areas offering better returns and/or superior growth is deeply

embedded into our business model. In this way, we constantly monitor how capital is deployed to the Chief Operating Decision-Maker.create maximum long-term value.

Our focus on maintaining strong financial discipline and cash generation allows us to further invest in our businesses and to take advantage of opportunities for value-adding investments as they arise.

and performance against our medium-term objectives as well as long-term ambitions is monitored and reviewed regularly by the Board of Directors. Acquired businesses are rapidly integrated into our processes.

Our annual Sustainability Report, which is prepared in line with the Global Reporting Initiative Standards, is published following external independent assurance and is available at www.crh.com.

We are committed to reporting on the breadth of our sustainability performance in a comprehensive and transparent manner and to publishing performance indicators, ambitions and outcomes in key sustainability areas.

Our view

With our extensive global presence and industry leadership positions, we are very aware of our role in the many communities in which we operate. Our materials and products are found throughout the built environment – from critical infrastructure and iconic commercial real estate buildings to family homes in suburban neighbourhoods.

Our business activities provide materials that are needed to fulfil the basic human need of shelter, together with the infrastructure that is needed for our societies to thrive. We believe that meeting these needs in a manner that respects sustainability principles will create long-term value for all our stakeholders including; investors, customers, employees, partners, suppliers, neighbours and local communities.

outcomes in the built environment, we can have a positive impact on wider society and the environment while delivering profitable growth.

As well as being beneficial for our business, these ambitions also have an outward focus. In collaboration with our stakeholders, our actions also contribute to the delivery of key initiatives. These include the World Business Council for Sustainable Development’s Low Carbon Technology Partnership Initiative, to which we are a signatory, and the United Nations’ (UN) Sustainable Development Goals.

CRH is ranked among sector leaders by leading Environmental, Social and Governance (ESG) rating agencies. We are a constituent

member of indices including the FTSE4Good Index, the STOXX^® Global ESG Leaders Indices and the Dow Jones Sustainability Indices. In addition, many operating companies have achieved accolades for excellence in sustainability achievements.

		Creating solutions for our customers

Every day, in 32 countries worldwide, our employees deliver solutions for customers in the residential, non-residential and infrastructure market segments. We work with our customers to create products that deliver specific sustainability and performance goals, solve problems through innovative design, products and processes, and create added value for their businesses.

We maintain a strong focus on the development of climate-friendly building materials such as lower carbon cements, warm-mix asphalt and recycled aggregates. Not only does this help to reduce CO₂ emissions, it also minimises construction waste. Approximately 75% of our US asphalt volume in 2017 was lower carbon warm-mix asphalt, as defined by the National Asphalt Pavement Association, and recycled asphalt pavement and shingles provided a fifth of raw materials requirements in this business. In addition, products such as concrete and building envelope products can also contribute to a more energy-efficient, resilient and sustainable built environment.

		Collaborating and engaging for sustainability

Business is about people, and at CRH we believe success is built on developing transparent and trusting relationships with all stakeholders. We take an inclusive, collaborative and responsive approach to developing stakeholder relationships, taking care to maintain transparency throughout.

Our businesses are rooted in local communities and it is our aim to create real and lasting value for our stakeholders. Whether serving our customers, participating in community initiatives or partnering with each other, we know that in today’s increasingly complex world, we can achieve much more when we collaborate with others.

In 2017 our Group companies hosted 1,100 stakeholder events in keeping with our policy to engage in an open, honest and proactive way. The outcomes from these stakeholder engagement processes inform our continuous improvement activities.

		Protecting the environment

While potential impacts and risks vary across our businesses, excellence in environmental management, together with a proactive approach to addressing the challenges and opportunities of climate change, is fundamental to our continuous improvement approach.

We work with stakeholders including customers and the wider building materials industry in promoting energy and resource efficiency, emissions reductions and biodiversity enhancements. For example, by incorporating alternative raw materials into our products we reduced our reliance on virgin raw materials by 30 million tonnes in 2017.

Climate change is a key societal challenge and we have governance structures that provide oversight, assessment and management of climate-related risks and opportunities. Our climate strategy, which is integrated with our business strategy, focuses on providing building solutions that reduce emissions and promote climate resilience, recognising the long-term durability, resilience and carbon benefits of concrete construction during the lifetime of buildings. We also focus on reducing our own emissions and hence the carbon footprint of our products.

We are on-track to achieve our commitment to reduce specific net CO₂ emissions by 25% on 1990 levels by 2020; 2017 emissions were 22% below 1990 levels. Key performance indicators in this area are included on page 14.

		Building a resilient and sustainable business

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

We implement our comprehensive Code of Business Conduct (CoBC), which is underpinned by our policies including Anti-Fraud & Anti-Theft, Anti-Bribery and our Competition Code. In addition, we have implemented an Ethical Procurement Code and Supplier Code of Conduct, with the aim of extending our positive influence along the value chain.

We endorse human and labour rights and support the principles set out in the articles of the UN’s Universal Declaration of Human Rights and the International Labour Organisation’s Core Labour Principles. We continue to improve our processes and policies in line with evolving best practices and ensure our coverage incorporates all stakeholder groups, paying special attention to vulnerable groups such as children, women, minorities and migrant groups.

We foster an open culture of ethical behaviour driven from the top of the business, communicating to employees what is expected of them and equipping them with the tools they need to ensure compliance. We embrace a ‘speak-up’ culture where employees are encouraged to inform us immediately of any actual or suspected unethical behaviour or a possible breach of conduct.

strategic decision making and risk taking in order to preserve and/or enhance value and reputation.

With our balanced portfolio, the decentralised and geographically dispersed structure of the Group provides some natural mitigation for some of the significant risks and uncertainties faced, such as industry cyclicality, political and economic uncertainty and damage to corporate reputation.

ERM Framework

The ERM Framework (the ‘Framework’) addresses risks across the various strands of CRH’s strategy, driving performance, executing organic and acquisitive growth, protecting information assets, monitoring compliance with all laws and regulations (including an unwavering commitment to Health & Safety), sustainability, leadership development and talent management and finance.

Our Risk Assessment Process

CRH’s risk management process operates to ensure a comprehensive evaluation of risks is performed and is the subject of continuous improvement. CRH operates both a top-down and bottom-up risk assessment to ensure that risks presented to providethe Audit Committee and Board are representative of the risks faced by our business in strategy execution. The risk management cycle operates as follows:

Identify and Assess

Management identifies risks as part of their day-to-day activities and is required to conduct a greater understandingrobust assessment of these risks. The following factors are taken into consideration:

Management is required to assess all risks which could have an impact on the current or future operation of the business and to document these risks in a standardised template. Risks are assessed in terms of their financial and operational impact should they occur and their likelihood of occurrence, using a defined risk scoring methodology.

Risk velocity, the speed at which a risk impacts the business, is an important constituent of this evaluation.

Manage and Monitor

In line with our ongoing focus on continuous process improvement, risks are assessed by management on an inherent/gross basis (prior to mitigation strategies) and a residual/net basis (post mitigation strategies). Where the gross risk score determines the risk to be material, appropriate mitigation strategies are implemented to bring the residual risk to a level which is within risk appetite and tolerance levels approved by the Board.

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

Report

The Group level Risk Register, which is compiled by the Group Risk function, highlights those risks which may impede the realisation of core strategic objectives. The risks are fed up from our businesses through the bottom-up assessment which forms the basis of our Register. Additional strategic and Group-related risks are added to ensure the risks highlighted on pages 102 to 107 of this report are reflective of the barriers to the realisation of our business strategy. These risks form the basis of Board and Audit Committee communications and discussions.