CRH plc (CRH) Earnings Call Transcript & Summary

Good day to you all. On behalf of CRH, I'd like to invest -- welcome you to our Investor Update here today. My name is Albert Manifold. I'm the Group Chief Executive of CRH. And today, I'm going to be joined here by Jim Mintern, our Chief Financial Officer; and Randy Lake, our Chief Operating Officer. And the 3 of us together are going to take you through our thoughts about our business over the next 5 to 10 years. Now before we get into that, I just want to briefly mention our trading update of yesterday. We got off this year to a good start, carrying on the good momentum that we exited 2021 with. The weather was a little bit unhelpful across North America, and we had some cold and wet weather. Yes, we still saw progress in our U.S. businesses. Europe had some better weather and good momentum as well. And we were happy to report at the end of the first quarter that sales, EBITDA and margins were ahead for the first 3 months. That momentum is continuing on, and the U.S. markets are getting back to more normalized levels of activity as the weather abates somewhat. And we look forward with confidence into quarter 2. Our order books are good. Momentum is good across our main markets in both Europe and the United States, and we have set out our expectations for the first half of the year, where we expect to see sales, EBITDA and margins ahead for the first half of the year. So a good start and a continuation of the momentum you've seen within our businesses over the last number of years. But the real purpose of today is not to talk about the next 3 or 6 months, but to talk about, in fact, the next 5 or 10 years and where we see our business is going. Now look, there's a huge amount of uncertainty in the world, and we can't predict the future. But the vast majority of the senior team across CRH have been here for quite some time. We were here through building our business in the early 2000s. We managed through the very difficult period of the global financial crisis. We helped rebuild our business back from 2013 on across the Americas and Europe. We reshaped and repositioned our business and saw good growth all the way into 2019, 2020. And then, of course, we were sideswiped by COVID, and we managed our way through that as well. And I think investors should take comfort from the fact that we have demonstrated the ability and the agility to know when to push our businesses to go for growth, but also the ability to pull back and protect our businesses to build for better days. So if I can go to the schedule for today and just show you the agenda. We have a busy schedule. We think we'll take about 90 minutes of presentation, and we've got time for Q&A at the end. We're going to talk about 4 main headings, which we've highlighted to you in advance of the update here this morning. Our integrated solutions is a really key part of our strategy going forward. It is addressing the changing needs of constructions. I mean we're going to go through that in detail and explain to you exactly how we see that playing out. We're going to talk about our approach to sustainability, a deeply embedded part of our core strategy going forward. And Randy is going to take you through the 4 pillars, upon which we're building our sustainability strategy into our corporate strategy as we go forward. We're also, Jim and I, going to update you on our portfolio, the work we have done to date and what's going to inform, how we're going to shape that portfolio going forward in the years ahead. And at the very end, I'm going to set out some of the key components of growth that we believe will drive further profitability, further improvement in our business, further cash, and how we intend to allocate that cash for you, our shareholders, to create further value. Now I know from looking at the list of people dialing in today, there are a lot of new people dialing in for the first time. So I'm just going to take a few moments to explain who we are and what we do. Well, CRH is a global leader in the provision of building materials and building solutions. We've been around for 50-plus years. And over that period of time, we have produced a total shareholder return -- annual return of 15%, a very impressive return for our shareholders. We manufacture and produce basic materials, such as cement and aggregates. We turn them into products, we provide additional services to that, and we sell that as a solution to our customers. We service all aspects of the construction markets, infrastructure, which is about 40% of our activity levels; residential, which is about 35%; and non-res, which is about 25%. Our 2 core markets are the Americas and Europe. We essentially provide the materials that help build the homes we live in, the cities that we work in, and the infrastructure that we rely on to transport ourselves, goods and services for modern living. In the past 5 years, we've shown strong financial performance. Our sales have grown by 6% per annum, our profits by 11%, and our cash by 10%. So how will we achieve this growth in recent years? Well, we have reshaped and repositioned our businesses over the last decade. 20 years ago -- 10 years ago, we were a business that provided basic materials, aggregates, cement, concretes. That's what we did. But we've transitioned away from that to better serve our customers' needs. We now have a strategy where we combine our materials and our products to provide complete solutions for our customers. And 2/3 of our sales and our activity is in providing integrated solutions for our customers. That allows us to collaborate with our customers as we and they think about how we can help them plan for the future and help build a more resilient and sustainable world. Quite simply, at the heart of CRH is our solutions business. And it is really about solving complex construction problems, making them simpler, safer and indeed, more sustainable. Now I mentioned that we have been reshaping our business over the last decade, necessarily so because our world was changing. And here, you can see exactly how structurally we have repositioned our businesses. We sold about $12 billion of businesses at 11x EBITDA. We bought $18 billion of businesses, again, but at 8x EBITDA. So that makes good financial sense. But more importantly, we've repositioned and refocused our businesses. We've become leaner and more focused, less cyclical, less capital intensive. And that has helped, of course, drive our margins, our returns and our cash. And we are now much more focused, as I mentioned, on Americas and Europe, which is pretty much 100% of what we do. But at the heart of what we do is actually running our businesses. You can reposition the businesses, but you then must drive value through the businesses that you own. And at the heart of that, what we do is making businesses better. Building better businesses in CRH is a key part of what we do. And we call this continuous business improvement. And we leverage the size and scale of our operations to bring procurement advantages, operational skills, process knowledge, how we manage our network to bring value time and time again to our businesses. Now continuous business improvement is an ongoing battle within CRH. We have central teams who coordinate it, but everything is executed locally. And continuous business improvement, combined with the repositioning of our portfolio, is what has driven the improvement in our profitability, our margins, our cash and our returns. And you can see on this slide exactly how strong our returns performance has been -- our margin performance has been over the last 5 years, where we've increased our margins by almost 600 basis points. Of course, we have delivered strong growth organically within our business, but anybody who knows CRH knows that M&A plays a big part in what we do. If I can ask you to focus on the central box of the slide here, we talk about owner mindset, the entrepreneurial spirit in CRH. I'm going to return to that later in the presentation. But crucially, the M&A process is very important to CRH. We drive about 2/3 of our profitable growth directly or indirectly through the acquisition process. It's core fundamental skill set of CRH. And of course, it's not just about buying growth. The businesses we buy, we improve. And the businesses that we buy, fuel additional organic growth for our heritage businesses. Now all of this is not rocket science. It's all about execution. And execution is done by a team, and we have an excellent team at the top of CRH. Most of the core of the team that you've seen here have been around for 15 or 20 years. Gray hair matters. I know it matters at this stage in my life. But our team now has recently been infused with some new, younger, more diverse, experienced people. And they really are keeping older guys, like me, on our toes, as indeed, we should be. And it's a good mix of young and old giving fresh thinking to the experienced heads, who are there with their hands on the tiller. And again, this is the team that has delivered the performance you see on this slide. Since the end of the global financial crisis in 2013, we have grown our business quite strongly. The 5 key metrics that I would look at across our business: revenues, profitability, cash flow, margins and returns show really good performance. Again, down to the reshaping of the business, down to continuous business improvement. Solutions has been a big part of it, addressing the changing needs of construction because it's higher growth. But it's all about execution as well. And for me, the 3 key metrics that I focus on, on any business, are we improving our margins? Well, here, you can see our margins have increased by over 900 basis points over this period of time. Looking at our returns, returns on our investment, 650 basis point improvement. Not where we want them to be, but heading in the right direction. And crucially, our cash, generating 3x the cash we produced in 2013, 2014, now with over $4.2 billion of operating cash flow on an annualized basis. Our business, quite frankly, is a cash machine. Now the reshaping of our business, the improvement of our margins has made us a much more resilient business, a much more enduring business. And that has been very important in the most recent challenges we were faced with. During the times of COVID, I think we were all faced with some of the most grievous challenges we saw in our business careers. 2020 was horrific. We had to manage 3 cycles in 1 year. The first part of 2020, we got off to a great start. Momentum was good in the business. Business was going very, very well. And then almost overnight, in March, businesses shut down. Half of our European operations almost closed down for 3 to 4 months. A large part of our U.S. businesses did the same. So we had to pull back and retrench and mind our cost base, which we did. And then as the summer came along and COVID subsided, we saw the bounce back growth. And again, we have to restart businesses, get the machines working again, get back out delivering product to our customers. And we have to manage those 3 cycles. But the repositioning and reshaping of our business helped. But crucially the -- our experienced team showed they had the ability and the agility to adapt and manage the business through all that volatility that we saw in that period of time. And that was what was behind our superior delivery during that most testing of periods. And I'm happy to say the improvements we have seen in recent years are continuing on again in 2022, as we announced with the results yesterday. So, so far, so good. But all of that is in the rearview mirror. And today is actually about tomorrow and 5 years' time and 10 years' time. And against that backdrop, let's just reflect on where our markets are. Our main markets, infrastructure accounts for 40% of the total activities of CRH. Momentum is good. We have good government support, both in the United States and in Europe, for continued infrastructure spend. And that looks likely to continue for many years. Residential demand, which is about 35% of our total activity, is solid. We've seen a significant underbuild across our markets in residential, which has driven a rise in prices and, of course, a tightness in demand, and stock levels are at all-time lows. And although we are faced with the prospect of rising interest rates, we think we will see continued momentum in the residential markets. I'll talk about that later on. And nonresidential market is recovering from a low of 2021. All the indicators are good, particularly here in the United States. And we see our refocusing in particular parts of the residential market, giving us good growth at least in line with GDP. Of course, there are many urgent matters that need to be dealt with. We're faced with the specter of inflation. That will have to be managed. We've got rising energy costs and probably persistently high energy costs. There are increased global tensions. And of course, we have the challenges to our supply chain. All of these issues will have to be managed. But our sense is, too, is that our world is at an inflection point, certainly over the last 2 or 3 years, and we have to make sure that we don't let the urgent crowd out the important. And the important challenge that's facing all of us at this moment in time is climate change because if we don't deal with this problem, we're going to destroy our planet. And we're all going to need to adapt how we live our lives in every facet and in construction, in particular. And CRH is going to need to adapt to survive and indeed, thrive. So how are we thinking about how we position ourself? What's the environment against which we are recognizing these challenges and starting to deal with them? Well, we think there are some certainties. We know the population growth is going to continue. All the estimates suggest that we're going to have 2 billion more people on this planet by 2050. Everyone says we're going to increase the population of urban areas by 50% in the next 30 years. The population of the U.S., where I'm talking to you from this morning, is going to increase by over 100 million people by 2050. All of this population growth is going to drive demand for construction. People need shelter, they need homes to live in. They need places to go to work. They need somewhere where our economies can grow. They need infrastructure to connect up our planet and connect to our countries. And yet at the same time, with all of this growth, there comes a pressing need to preserve and conserve and protect better the vital scarce resources that we need on this planet. We need to ensure that we transport the precious resources, such as water, so that we don't waste or lose as much because we need to conserve them. And as the built environment, of course, expands, the requirements to repair and remodel and remediate will increase as well. That will bring further growth. Now on the face of it, all of this is a positive for CRH. We're the largest building materials business in the 2 most profitable building materials markets in the world, Europe and the United States. If I turn to the United States and give you a sense of where we see that market going. Well, look, CRH makes more than 70% of its EBITDA in the United States. We are, by a country mile, the largest building materials player in the U.S. As I said to you, the U.S. is going to see significant population growth over the next 30 years. Every 10 years, the population in the U.S. grows by 30 million people. Over the past decade, we've made significant changes to the structure of our business in the U.S. We always had a fantastic base business in the Northeast, Mid-Atlantic and Midwest, the densest population in the United States and crucially home to the most intensive road network in the world. They don't build too many new roads there, but they have to maintain the roads that are there because of the freeze-thaw cycle of the North American winter. But in recent years, we have -- our business has followed the migration trends, the population growth, and the economic growth in the U.S. And that has been down South and out West. And we have built up big businesses in Florida, Texas, Utah, the Mountain West and the Pacific Northwest following those trends. And now we find that we have a very good mix of solid, steady cash cow businesses in the North and Northeast and strong growth South and out West. And of course, our sector markets have got good strength, good strength behind them. Infrastructure, which is 50% of the United States construction market, has been underpinned for 5, 6 years ahead by the federal government's support to the Infrastructure and Investment Act passed last year, whereby you will see a 50% increase in federal funding for roads over the next 5 years. And our expectation is that state funding on the back of robust state budgets will match and back that as well. That will lead to at least an 8% CAGR increase in spending on roads over the next 5 years, which is very good for us and very good for our industry. However, on top of that, the federal government also announced an increase in spending for vital utilities across water, telecommunications and information technology. They announced a further $210 billion investment in those areas, areas where we supply a significant amount of product to across our business in the U.S. So there's a lot of support for our infrastructure-supported business in the U.S. I referred to U.S. residential. U.S. residential is recovering back to almost normalized levels, but only after 5, 6 years of significant underbuild. And that is leading to the fact that the supply in the market is driving up pricing, the lack of supply in the market is driving our pricing. House prices have grown here in the U.S. by almost 50% over the last 5 years. And we look at now where inventory levels are at historic lows, and migration trends are still supportive of construction and residential construction going forward. And in remodeling, we look forward to seeing good growth in the residential markets as we go forward. And as I said to you, nonresidential is recovering off the lows of 2021. Specifically, as we refocus now in the areas of more complex, large-scale horizontal construction in the areas of warehousing, data centers, educational and, indeed, medical facilities. Turning to Europe. Well, similar to the United States, we're the largest building materials business in Europe and very strong footprint across all of Europe. In the West, our business is very much in repair and remodeling business, very resilient demand across the business. And crucially, this is becoming the center for sustainable construction within the world. It's got the tightest building regulations and the strictest environmental codes. That means we have to adapt our business model to develop products and solutions with our customers to deal with that. But then when we have that there, we transfer that to Eastern Europe and crucially here to the United States. Central and Eastern Europe, of course, marches to a different tune. The rate of construction growth in Central and Eastern Europe is about twice the rate of Western Europe, principally on the back of European structural funds going in there to build out Europe in a post-Soviet world. And on the back of that strong residential and strong economic growth. And happily, we're seeing more and more M&A opportunities as we build our businesses out there as well. So overall, an attractive footprint, stable Western Europe and good growth in Central and Eastern Europe across our European operations. So that's how we are strategically positioned. You can see how we've reshaped and repositioned our businesses to give us great market positions in some really good markets. And that is what has been behind giving us good growth in our businesses and creating value for you, our shareholders. But we talk about changes. And what are the changes we are seeing in our business? And how are we responding? And indeed, at the heart of all of that is, where does the role or what is the role the integrated solutions plays in dealing with these changes? Well, construction is changing. But construction is also essential. To live our modern world, live in the world we live in, we need homes, we need cities, we need infrastructure. We can't turn away from it, but we can't continue to construct in the way that we have done in the past. We are using and depleting vital scarce resources at a rate that is not sustainable. We must reduce the impact of construction on our world, or we're going to be faced with very serious consequences. Construction must become less intrusive on its locality and on the areas where it's been built. It must become faster. It must become cleaner. It has to become more efficient. We need to build more efficient buildings, more resilient buildings, buildings with a longer life cycle. And crucially, we must use more and more recycling materials as we are building buildings. Now these changes are imperatives. And our customers need to change to adapt to this new environment, do these new imperatives. And more and more, they're turning to us, the providers of the materials and products, to help them construct our world of tomorrow. And are asking us, how can you help us reduce construction times? How can you help us lower cost? How can you help us deal with a declining labor pool? How can you help us deal with the fact we have to construct in urban areas and a very tight footprint, and everybody wants to reduce the impact of construction in the local environment? They want a simpler supply chain. They want quality. They want reliability. And they want security of that supply chain. And of course, they're having to deal with increasing tighter building codes and regulations and ever more demanding, and rightly so, environmental standards. So more and more, our customers, the architects, the engineers, the designers and contractors, are turning to CRH to collaborate with them to innovate to provide solutions to their problems, to solve their problems. As one customer put it to me about a year ago, it is no longer good enough for the material providers to supply tons of material and dump it in my construction site. I want products and solutions tailored to meet the complex needs of my bespoke construction projects because, Albert, each construction project is different. It presents a different problem and needs a different solution. And that's where end-to-end integrated solutions comes in. It helps complex construction become safer, simpler and more sustainable. Well, what are we doing to solve our customers' problems? Well, in the past decade, we focused very much on this issue. We have developed an integrated model, where we are taking the materials that we produce, the cement, the aggregates, and turning them into concrete and asphalt. Those products and those products we are creating are done in an engineered, specified way to our customers' requirements to help them solve their problems, to better serve their changing needs. And they are products and services that will help them build quicker and cleaner and better and cheaper and more reliably, and deal with what our customers said, making their problems better, easier to solve, safer and construction more sustainable. Now CRH has been investing in sustainable solutions, our integrated solutions, for the past decade. We spent over $1 billion innovating products and services that better serve our customers' needs. This year alone, we announced a $250 million fund within CRH to help commercialize some of the research and innovation ideas that are coming up, bubbling up through our businesses. Now these investments over the last decade, combined with embedding ourselves with our customers, help us better understand the evolving and emerging demand for sustainable solutions. And as the #1 player in Europe and in the United States, markets with the toughest building codes and environmental standards, that allows us better to understand the market's future needs and evolve our offering in line with these changes. So in bringing the solutions to life, we actually went out and we talked to our customers. And before I pass you over to Randy and Jim, my colleagues, who are going to take you through the next session, we decided we want to bring our customers to you. We've asked 3 of our major customers to explain to you directly what are their problems and how can they be solved and why they have turned to CRH to provide a solution to their particular problem. So I'm going to ask Randy to take you through the first 2 of those examples. Randy?

Thanks, Albert. I'm going to talk to you about 2 high-growth areas for us, then I'll pass you over to Jim, who will walk you through a great example in our Polish business. In the U.S., we have a population of 330 million people. And by 2050, that's going to increase by approximately 100 million people. But our cities are already at capacity, which poses a significant challenge. And one of the biggest problems we have is water, too much in some places and not enough in others. The transportation and management of water is going to be a key part of how we build going forward. Then on roads, the landmass of the U.S. is almost 4 million square miles. And we're hugely dependent on our road infrastructure to move people, goods and services all around our vast country. So first, to water on Slide 20, the most precious commodity in the world and vital for all of our lives. One of the biggest problems the world has is the management of water. And the more we build out our major urban areas, the greater the need is to deliver infrastructure solutions that collect, treat and transport it effectively. We have a massive water problem in the United States, particularly out West. There are 2.2 million miles of underground pipes that transport potable water to millions of people, but that network is aging and underfunded. The average pipe is roughly 45 years old. Some pipes are more than a century old. And as a result, we lose around 6 billion gallons of treated drinking water every single day. Going forward, there's an essential need to upgrade existing infrastructure and build new infrastructure to address these challenges. And the Infrastructure Investment and Jobs Act that was passed in November provides over $60 billion of new federal funding dedicated to improving water infrastructure. And we're at the forefront of helping to solve this major challenge. We're focused on creating bespoke solutions for the retention, detention, treatment or transportation of fresh water, stormwater and wastewater. And to demonstrate this, I'd like to show you a brief video of one of our water infrastructure solutions in action. We recently partnered with our customer, KPFF, a multi-disciplined engineering firm, to design and install a state-of-the-art custom-built stormwater management system at Los Angeles International Airport right in the heart of L.A., where water is particularly problematic. This is one of the most complicated projects our team had come across, given the complexity of the problem, dealing with a significant amount of runoff, operating in a restricted footprint and a heavily built up environment and up against a very tight time line. [Presentation]

So as you heard from Grant, we are able to work with him and his team to provide the specific concrete products, the design and technical expertise required for the needs of this project, all in 1 seamless integrated solution, which simplified everything for him. I and the team take great pride in this project. No one else has the capability to deliver the value that we did. Now let me talk to you about road infrastructure. We're the largest road builder in the United States, home to the largest and most extensive road network in all the world. We build it and we maintain it, providing a complete end-to-end service across the entire project life cycle, from designing and manufacturing the products, right through the installation, maintenance and recycling. And by combining the breadth of materials, products and services with our design, innovation and engineering expertise, we're able to deliver a customized solution for every road infrastructure project. And no 2 roads are the same. And this approach enables us to deliver higher quality and better value to our customers compared to the competition. And on Slide 23, you can really see the evolution we've gone through over the years to get to where we are today. 20 years ago, we were primarily an aggregates producer, then we started producing asphalt. But soon, we realized that our customers don't want aggregate or asphalt. They want a complete road solution. And today, we provide a full range of integrated materials, products and services for just that. It includes aggregate and asphalt, but also mixed design services, contracting services, engineering skills, and also the cement and concrete products for all the necessary infrastructure around the road, like bridges and water management systems. We've adapted our business to better service our customers and our end markets by broadening our product portfolio, providing a fully integrated end-to-end road solution. And I'd like to show you another example of integrated solution strategy and action. As I mentioned, we're the biggest road builder in the United States, and Michigan is our fifth largest state. You're now going to hear from the Director of the Michigan Department of Transportation, Paul Ajegba, who has the responsibility to deliver road infrastructure for the state of Michigan. He's going to explain how we designed a bespoke integrated solution for the reconstruction of the I-69 Freeway in Southern Michigan, a really big, complex infrastructure project. The Michigan Department of Transportation had 3 key problems. First, a challenging climate, hot, dry summers and brutally cold winters means that this freeze-thaw environment is really difficult to pave in. Secondly, like all states, ensuring that taxpayers get value for money was hugely important. Third, this project was densely populated around 3 to 4 cities, and a major artery for interstate traffic. So reducing disruption for end users was really important. [Presentation]

So let me summarize a few of the benefits that we provided on that project. We combined 4 projects into 1, which simplified everything, particularly on a project of this scale and complexity. And by providing a single end-to-end design plan, we could dramatically reduce the construction time, shortening it to 3 years instead of 8, and reducing disruption for road users. And where we're not only able to build the road, we provided all the infrastructure that goes around it, including the bridges, the on-ramps, the off-ramps and the water management systems. And our ability to adapt our asphalt mix designs for the really challenging climatic conditions also improved the resiliency of the road. And we have this capability because of our experience of producing millions of tons of asphalt every year. You also heard Paul talk about the importance of our capability to use recycled materials, which I'll talk about a little later, and not just lowering its cost but also protecting our reserves. And we believe that using more and more recycled materials on projects, like this one, will become increasingly important going forward. By combining the breadth of our materials, products and services with our design and engineering expertise to fit it all together, that's where we believe the real value add is for our customers. And in doing so, we've embedded ourselves more with them. Simply put, we have the knowledge and the capability to provide the full project. That's the key. We simplify the construction process and make it better quality and better value, integrating our materials and products with our softer skills, the design, engineering and technical expertise that solve our customers' problems. That's the essence of solutions. As Albert mentioned earlier, construction is changing and evolving, but our solutions model gives us the capability to adapt and thrive. And we're 10 years ahead of anyone in the industry doing this. This puts us in a powerful position to service that particular customer going forward. And it allows us to build upon our credibility working for the U.S. Government, and we're delighted to have them as our #1 customer in the world. In the last 5 years, the U.S. has spent $600 billion maintaining its road network. In the next 5 years, that's going to be closer to $900 billion. And our integrated solution business leaves us well positioned to benefit. And with that, I'll pass you over to Jim, who's going to walk through a really unique solutions opportunity in Warsaw, Poland. Jim?

Thanks, Randy. Two really good examples of the types of solutions we are giving to our customers in the United States. I'd like -- I'd now like to show you one final example of the types of solutions we are providing to our customers over in Europe. Poland is our second most profitable country in Europe, and Eastern Europe is one of our fastest growing regions in CRH. Warsaw, the capital of Poland, with a population of 2 million people, is quickly becoming one of the finest cities in Eastern Europe, if not Europe itself. It's a modern, vibrant city, and anyone who has visited it can see how it has been transformed over the last 10 years with a huge amount of construction activity from the center of the city outwards. But building complex, modern high-rise structures within a very tight, narrow, confined footprint, working in densely populated urban centers, working within the regulatory and environmental framework, all presents significant challenges for contractors and their suppliers, which cannot be overestimated. However, we are used to working in these sorts of environments. We have decades of experience dealing with these challenges across our other parts of our businesses in both Europe and North America. Now we're going to hear from Ryszard Dabek, Managing Director of MONTING, a leading construction group in Warsaw, Poland, and a long-standing partner of CRH in Poland. MONTING have built many of the tallest buildings in Warsaw, including the iconic Warsaw Spire building. Now let's hear from Ryszard on some of the projects we have helped them with in Warsaw. [Presentation]

So what did we just hear from Ryszard? Well, the Warsaw unit project had some very specific challenges. It was a very tight, restricted construction site in downtown Warsaw. It had a very tight deadline. Commitments were given as part of the planning approval process to the local residents to reduce the impact of the project on the community and, of course, the challenge of pumping concrete at heights of over 200 meters in subzero temperatures and high winds. So what did we do? We went and listened to Ryszard's problems and challenges, and by working together with our designers and engineers, we designed solutions and products specifically for this job. We brought our knowledge and experience from working in tight, restrictive sites in large urban centers, mainly in the Northeast of the U.S. and Northern Europe. We transferred product knowledge from our Finnish business, where we had experience of working with and pumping concrete at minus 30 degrees Celsius. We sped up the overall construction by supplying off-site constructive products, ultimately enabling Ryszard and MONTING to complete the project ahead of schedule. So now we have seen 3 examples, from LAX Airport to Michigan Department of Transportation and Warsaw, Poland, of how we are working together with our customers to help solve their problems. We are able to do this service and win our customers and trust on each of these projects because we are the #1 provider of building solutions in North America and Europe. We can leverage our scale and experience from across the CRH Group, experience and trust, which has been built up over many decades. And we can offer the design and engineering services to solve the specific challenges of each and every job. All of this helps us secure the supply of products and solutions to each job and, of course, makes it more likely our customers will return to us for their next construction project. It's what helps differentiate us from other potential suppliers in the marketplace. Ultimately, this is good for our customers, and it's good for us. But what does it mean for our shareholders? And how, importantly, does it benefit you? Well we showed you back in March that we are outperforming our industry peers across 3 key financial metrics. Firstly, if we look at our EBITDA growth over this period, a 35% increase by simply selling more solutions to our customers, and indeed, their customers. Helping to solve their problems is generating incremental sales for us, and they are paying more for this service. Look at our margin growth, 480 basis points. Our margins are outperforming because customers are paying for the design, engineering and knowledge that we are bringing to them. And as we convert materials and products into value-added integrated solutions, and crucially, because these solutions are less capital intensive, we are able to turn more of our profitability into cash. And we don't have to reinvest that cash back into hard capital-intensive assets. We are reinvesting it back into innovation, creativity and capability. And that is less capital intensive. Of course, we are all subject to the same macroeconomic environment in the different markets in which we operate, but we have been improving quicker and performing better. Yes, our performance reflects the results of active portfolio changes and good operational management. But it is our strategic repositioning over the past number of years from base materials to integrated solutions that has really been at the core of our performance. I just showed you our profit growth and cash performance, but now I want to discuss returns because there are 3 things, what matter most to you, our shareholders, and these are growth, cash and returns. Returns have been growing strongly. And why is that? It's because we're generating more profits from a similar level and base of assets. Our profits are growing faster than our asset base, and that's effective investment. On Slide 29, we set out some of the specific commercial and operational benefits that our integrated solutions strategy are bringing to our business. First, partnering with our customers across the entire value chain embeds us more with them, increasing barriers to switching and driving more repeat business, while allowing us to price accordingly for a full-service, end-to-end offering rather than simply supplying base materials by the turn alone. This enables us to capture a higher share of wallet, delivering us greater production and logistical efficiencies and delivering higher utilization rates to our asset base, increasing the opportunity for the use of recycled products, all of these contributing and resulting in increased profits and margins. Integrating our upstream materials operations with our downstream products and services also results in less waste, effectively increasing our production yields. Therefore, we know that we will have a use for every type and grade of material we produce. And of course, this also advances the sustainability of our entire supply chain. It's also less capital intensive. Today, we are selling more of our soft skills than ever before because our customers are demanding it. As you saw a moment ago, they increasingly need our knowledge, expertise and experience to solve their problems, on top of the material and products, which we already provide. And by delivering more value to them, we are getting paid more for it. This means we are generating higher profits, higher margins and higher cash. But crucially, we are also generating higher returns from our existing asset base year after year. And whilst our returns today are not where I would yet want them to be, as you can see here on the slide, they have been improving, delivering 360 basis points of organic RONA improvement over the last 3 years. So overall, our integrated solutions strategy is providing significant commercial and operational benefits to our business, which are coming through in improved performance, delivering structurally higher growth and superior long-term shareholder value.

So I hope you've had a better sense there of how our customers think about CRH. We help solve their problems, and we help do so in a safer, simpler and more sustainable way. So clearly, it's good for them. And as our partner, it's good for us. And as Jim has demonstrated, it's good for you, our shareholders, because we're getting paid for that, and that is what is behind this superior performance that CRH had shown in recent years and will continue in the years ahead. Now I mentioned earlier that CRH and all of us need to adapt to the new reality of that we have to live our lives in a more sustainable way. Now sustainability makes perfect sense for all of us, but it also comes with a sense of responsibility. We're all going to have to change the way we lead our lives to do so in a more sustainable way. It's a challenge to all of us. But as a leader in our industry, for CRH, we embrace that challenge because we see within that challenge significant opportunities. But actually, quite frankly, you need companies, like CRH, in the middle of this challenge. We're a responsible business. We try to do the right things as best we can. We work away quietly in the background doing these things, and it's companies, like us, that will provide the changes to make our world more sustainable. Quite frankly, sustainability is at the core of our future strategy. It is not just about end-to-end integrated solutions. It's about end-to-end sustainable solutions. So I'm going to hand you back to Randy now, who's going to set our view how we feel and what our approach will be to sustainability in the years ahead.

Thanks, Albert. Our approach to sustainability is underpinned by 4 key pillars, set out here on Slide 31. First, we're committed to playing our part to decarbonize our business and our society to protect the world for future generations, work we've been doing for many years. Second, we're advancing our contribution to circularity and construction, reducing the use of finite resources and using more recycled materials that enables a more sustainable future for everyone, putting to use the over 1.4 billion tons of construction and demolition waste created both in Europe and the U.S. Third, we're committed to developing our portfolio of products and solutions that improve quality of life, not only how we manufacture our existing products, but investing more in innovation to create new and better products with enhanced sustainability attributes. And finally, we're embracing our responsibility to our people and our communities. We're committed to empowering our employees, our most valuable asset, to reach their full potential, to ensure that we provide a safe working environment for them and always engage to contribute to the communities we serve. As Albert mentioned, we simply cannot continue to construct the world as we are today. As an industry, construction amidst 4 billion tons of CO2 per year. By 2050, the global population is forecast to increase by a further 2 billion people. And there'll be significant construction needs to provide everything from new homes and transportation infrastructure to offices, education and health care facilities. Now this presents a tremendous opportunity for our business, but challenges as well. We can't continue to use finite natural resources at the rate we use them today. We must protect, conserve and transport our vital utilities that are essential for modern living. And that's why it's essential to play sustainability at the core of construction. We're a responsible business, and we're committed to taking the lead on decarbonization in our industry. We have a long track record of industry-leading emissions reduction. And in March, we announced that we set a new ambition, a new target to reduce group-wide carbon emissions by 25% by 2030 against a 2020 baseline. Now this is an absolute target. It's not a kg per ton target. Simply put, it's the only metric that matters. It's a transparent target covering all the activities across the group. And our targets have been certified by the Science Based Targets Initiative, and it keeps us on the path to achieving our ambition of carbon neutrality by 2050. Slide 34 sets out the journey ahead. A challenge of this scale and complexity means that it won't be simply a linear reduction every year. There will be times when our absolute emissions will increase, and there'll be years where we make significant progress. For example, you can see our absolute emissions increasing in 2021. That's because some of the process improvements, that we may take time to bed down and take effect. But overall, the trend is clear, and our plans are robust. Of course, what you see here is 10 years of emissions, not the decade of growth that we have in front of us. That really lays out kind of the scope and challenge when you factor in the growth that we anticipate. But that's why you want CRH to tackle problems, such as this one. We're absolutely committed to decarbonizing our business and helping to build our world in a more sustainable way. Turning to Slide 35. Our targets are supported by detailed bottom-up road maps across each of our businesses to achieve our 2030 target. We've been involved in decarbonizing our business for many years. And because of that, we've already developed significant expertise in this area. We have dedicated teams and leading experts on the ground right across our operations. We execute locally, but all tracked, monitored and coordinated centrally at group level. And on the right-hand side of the slide, you can see some of the key areas of focus for us. These include reducing clinker content by using more alternative raw materials, like calcareous fly ash, which is a byproduct of burning brown coal in the cement manufacturing process to reduce our clinker factor, or replacing fossil fuels with alternatives, like recycled waste or biomass, achieving upwards of 95% replacement. And work continues in other parts of the business as well. We have partnerships with global oil producers to test and drive the acceptance of biogenetic asphalt that, when combined with low temperature asphalt, creates a carbon sink and improves the quality of the pavement, increasing longevity and performance. And as you would expect, we have a large fleet of mobile plants and equipment that consume fossil fuels. In the U.K., we're 6 months into a trial to use hydro-treated vegetable oil, or HVO, as a diesel replacing -- replacement, reducing emissions by over 90%. There's real potential here, and we have the scale and scope to drive change. We're also committed to reducing our Scope 3 emissions, the indirect emissions outside of purchased energy that occur in the value chain. Similar to partnering with our own customers, we'll need to collaborate more with our own suppliers on reducing the impact of the goods and services that we purchase from them. Turning to Slide 36 and the cost and investment required to deliver these targets. Overall, we expect approximately a 10% increase from today's level on our annual CapEx cost over the next 10 years, or around $150 million per year to implement and execute our plan. There's no silver bullet or new technology that we can purchase today to decarbonize immediately. There are many individual components to our plan that I just mentioned. And as a result, we expect these measures will require incremental investments over time. Of course, decarbonization is the right thing to do for our society and our environment, but it's also the right long-term investment to make for our business and shareholders. Net-net, it will be a benefit for our business with an attractive returns profile. It certainly will improve our sustainability credentials with our customers and offset future carbon emission costs, all of which we believe will deliver higher sales and profitability over the long term. As you would expect from CRH, we'll maintain our discipline, applying the exact same strict investment criteria to our decarbonization investments that we apply to any other CapEx or M&A investment we make across the group. And don't forget, we've been here before. Our emissions reduction investments over the last 30 years have been along the same lines of the investments we're going to make to achieve our 2030 target. They've proved to be great long-term investments, and I can assure you that we expect that going forward. Turning now to Slide 37 into circularity, the second pillar of our approach to sustainability. We believe increasing circularity in construction has significant long-term environmental, financial and societal benefits. For our business, sustainability makes perfect sense, but particularly circularity. By using more recycled materials in construction, we can preserve our own finite natural resources and prolong the life of our reserves. It also lowers the cost of construction, both for us and for our customers. Our core products of cement, aggregates, asphalt and concrete, which represent about 70% of our sales, are all 100% recyclable. They can be used again and again, producing equivalent or superior products that can be lower cost. We want to advance circularity in construction to deliver a more sustainable future for everyone. Not all of our customers value it, it's complicated. But ultimately, it can be cheaper and it can lead to better, more sustainable products. And it's not just about breaking up materials and using them again. It's about creating similar or better products that include recycled materials. Did you know that less than 8% of the plastic used in the U.S. gets recycled? Within our APG business, we have a decking product, called MoistureShield, which is made up of 95% recycled materials, substituting traditional wood in support of our backyard solutions strategy. In total, APG uses more than 46,000 tons of alternative materials to produce this product, taking over 100 million pounds of waste out of the landfill. It takes significant engineering skills and technical skills to make that happen, including how we design our mix recipes and in the manufacturing process. And this comes with our experience of producing millions of tons of material every year. We spent decades working on this, and it's not simple, but there are real long-term environmental and societal benefits by increasing circularity. As the largest recycler in North America, approximately 25% of every mile of road we build is built with recycled materials. And it's our ambition to increase that to 50%. No one else in our industry recycles anywhere near as much as we do. And states like -- state DOTs, like Michigan, that you heard from earlier, are already promoting increased circularity. But more and more, we need governments, regulators and contractors to come on this journey with us. We can't do it on our own. We need them to further develop policies, guidelines and specifications that promote the use of using more recycled materials in construction. And it's clear that Europe is taking the lead on circularity, where more and more recycled materials are being specified in project tenders. And as the U.S. follows suit, we'll be able to transfer those skills and expertise from our European businesses over here. There's also a growing demand to deliver a more resilient and sustainable built environment. We need to improve the efficiency and safety of our buildings, prolong their life cycles and develop innovative products and solutions with enhanced sustainability attributes that are better for the environment and can withstand and protect against climate change. We're already investing in developing sustainable solutions, leveraging our capabilities across the construction value chain to help deliver a more sustainable and better quality build environment, which is more resilient and has a lower carbon footprint and is higher performing. Sustainability is at the core of our integrated solutions strategy, and we're committed to growing our portfolio of products and solutions that will improve quality of life and contribute to a more sustainable society. We're also focused on products and solutions that protect and transport vital utilities that are essential for modern life: areas including water, energy and telecommunications infrastructure. And as a result, we're uniquely positioned in our industry to address those growing needs. Moving to Slide 40. In our view, sustainability isn't simply about reducing our carbon emissions or reproducing existing products in a more sustainable manner. It's a commitment to further develop our integrated portfolio of products and solutions that contribute to a more sustainable society. It's not only about how we manufacture but investing more in innovation going forward to create new and better products that improve the built environment and help deal with the hard-to-solve problems that are growing in importance but have the potential to create significant value for both our business and stakeholders. For example, in our modern world, vital utilities such as technology and telecommunication networks need to be transported in a more responsible way. And we develop the materials, products and engineering skills to do that more sustainably. And not only are we making our world more sustainable, we're also actually improving the quality of the world that we live in. Since the pandemic, people have invested significantly in improving and upgrading their homes and nowhere more so than outside where weather permits. As a result, we have experienced tremendous demand for our outdoor living products in North America and Europe. In fact, over the last 5 years, it's been our fastest-growing business. And a huge part of what we've been doing is developing and investing in that business, improving our portfolio of integrated products and solutions under our own brands which include paving, hardscape, masonry, composite decking and lawn and garden products. All of this improves the quality of construction and the quality of life. But sustainability is not only about the environment. It's also about our people and our communities, and you can see here on Slide 42. More and more corporations are required to take a position. They are powerful organizations that have influence. But with that comes responsibility, and we take that seriously. Our responsibility as a leading corporate is to do no harm, and we embrace our responsibility. This is as much about sustainability as recycling or decarbonization. It's about making our world a better place. Companies have a responsibility to do good for the people they employ and the societies in which they operate in, and we fully embrace that. Our most valuable asset is our employees. Their health and safety is our #1 value not only as it relates to the workplace but also in times of crisis. Since the start of the COVID-19 pandemic in 2020, we looked after the physical and psychological well-being of our people as best we could. And now we're doing all that we can to help with the humanitarian crisis unfolding in Ukraine. We have over 800 employees in Ukraine, and we've arranged the transfer in combination for over 100 families into neighboring countries where we have teams on the ground to provide whatever support necessary. CRH has also donated EUR 1 million to UNICEF to provide humanitarian relief to Ukraine. In addition, we have matched over EUR 250,000 raised by our own employees. CRH has raised more than any other corporate on UNICEF's platform. We're also committed to providing equal opportunities where everyone can develop and progress. We'll also continue to promote more inclusivity and diversity. For example, 22% of our senior leadership are female, and we're targeting 30% by 2030. We also recognize the important role we play in our communities and wider society. We embrace that too, and we engage and support the communities that we work in. All of this demonstrates the type of company that we are.

So I hope you get a sense of how important sustainability is to us and how we place it right at the core of our strategy and our business going forward. If one thing becomes clear today, we are placing 2 things: integrated solutions and sustainability as the lens through which we are thinking about our business going forward. And that, of course, will help how we shape our portfolio. Now we have been active in the management of our portfolio for a number of years, its core capability that we have. We are constantly reshaping and reallocating. It's constant work in progress because our world is changing, our opportunities are changing. We now have a simpler, leaner business than we had before. It's narrower and deeper focused on the 2 major geographies that we feel the best opportunities for our solutions line. And on Slide 44, I want to give you a sense of a robust framework against which you should think about how we build out our portfolio. There's a lot of detail on this slide. Let's quickly run through it. I'll leave you to go through yourselves in your own time. Clearly, the markets and the products that we pick are hugely important. Doing our research there, doing our background, building out our network is hugely important. Making sure that the business that we buy or sell are strategically aligned or no longer aligned with where we want to go with our business. And that's just not the platform, it's bolt-on M&As as well. On the top right-hand side, the performance of the business, the financial performance, the rigor and discipline you expect from CRH is hugely important, ensuring we get synergies on day 1, ensuring we have committed to deliver what we say we would deliver. And let me give you one insight, a little bit of a secret sauce of CRH that is somewhat different to many, many other companies. Most of us, Jim, myself, Randy and most of the senior team, have come up through a mix of businesses in CRH. I worked in development finance and in operations in my career before I became CEO. And it's interesting, our development teams are structured that way. It seems to be a rather unique structure that our development teams are made up of people who have strong operational backgrounds and work within operations and then pure development professionals. And it means that when we're assessing an opportunity, the people who will be left with the deal, after the development guys have moved away and the deal is closed, are the ones who will be responsible for delivering and running that business afterwards. And as I know myself, that breeds tremendous honesty and integrity in the forecast you make and the plans that you have. And it means that before you even close the deal, you have agreed upfront with the people you are buying the business from what you're going to do, how you're going to do it and how long it's going to take. And that seems to bring to us a higher percentage of success rate with regards to M&A. But I really want to talk to you about the bottom right-hand box, and that's what we call the cultural fit, something that people brush by very, very quickly. And it's an important part of CRH because CRH acquires so many businesses. We acquired pretty much a business -- about 1 business every 10 days. So we're constantly changing the ingredients to the recipe. So we have to be very, very careful that the businesses we bring into our businesses are additive to CRH and don't cause us problems. Now I referred earlier on the fact that we had an ownership mentality in CRH, an entrepreneurial mentality. Well, that's hardly surprising because we buy so many family businesses. And if you're a family business that's been run like a family business for 30 years, the flame of ownership does not extinguish on the day you sell your business to CRH. And that's really important as we think about our business going forward because that ownership mentality is hugely important to delivery within CRH. So what do we mean by an ownership mentality? Well, my observation is that it comes with responsibility. Owners are more responsible for all their actions and all their businesses. They're more committed to their businesses. They speak with passion and they speak with pride, so all laudable characteristics. But what value do they deliver to our company, to our customers and to our shareholders? Well, owners tend to focus on doing a good job because it's what they should do. They focus on quality products, producing quality products and delivering a better customer service. They focus on being a good employer and a good colleague at work, and they focus on delivering value to their owners. That's an ownership mentality. It's more than a paycheck. It's more than a job. My own wife has said to me after 25 years in CRH, "It's not a job, it's a lifestyle." And she's right because all of this, this ownership mentality, is required to deliver constantly improving quality of product, quality of service, becoming a better person in how you act within your business and producing better quality profits for our owners and our shareholders. Yet the pursuit of quality is not easy. It's constant work. It's a constant work in progress. And in CRH, we call that building better businesses or, as we show on the slide here, on Slide 45, continuous business improvement. Now continuous business improvement is at the core of what CRH does. It's part of our DNA. We have dedicated teams who manage metrics across businesses. We measure them outside our industry, inside our business, across our peers, constantly challenging to get better, and we manage those metrics. If you measure it and you manage it, it will get done. The outperformance that Jim showed against our peers didn't just happen. It happened by the small, baby steps that happen every day through continuous business improvement that allows us to talk about the big steps every time we talk on a stage that CRH takes. Yes, driving value is about having a better portfolio. But the key to driving value is how you run your businesses and running them better and better every year. It's a very important part of our value creation. And we want to take 2 examples of business that we bought in recent times to explain to you what we have done and what value we've delivered through continuous business improvement. Randy, I'll pass it back to you.

Thanks, Albert. While organic growth is important, it's not the only source of growth in CRH. Our investments in value-accretive M&A have historically driven 2/3 of the group's growth. Now let's take a look at some examples of how M&A has helped support and drive organic growth across our business, first to Ash Grove on Slide 46. This was the largest acquisition we've done in the past 5 years, an integrated materials business in North America, including cement, aggregate and ready-mix concrete. We integrated those assets into our existing network. We delivered significant synergies by the pull-through of cement through our downstream businesses. We also leveraged the expertise of our colleagues from our European businesses who played a really key role in driving process improvements with further opportunities going forward. And under our ownership, those assets have increased profitability by 65% and expanded margins by over 500 basis points, demonstrating the value creation we can deliver as we acquire a business. And looking ahead, we still see plenty of opportunities for further growth and value creation, with Ash Grove providing really that platform for decades of future bolt-on activity. And in Southeastern Europe, on Slide 47, where many of our businesses were acquired in 2015, we have a number of integrated businesses stretching across Romania, Hungary, Slovakia and Serbia, which manage -- we really manage that as one geographic region. And we're now the market leader in this region with a vertically integrated business across cement, aggregate and ready-mix concrete. We've strengthened our existing market positions, integrated those assets, our legacy precast concrete products business and then apply commercial excellence and performance improvement initiatives to improve and drive further performance. All of this has contributed to a significant improvement in sales, EBITDA and margins, as you can see here on the slide: sales, up 60%; EBITDA, up over 80%; and 340 basis points of margin improvement. Underpinning all of this value creation is continuous business improvement. It drives value to all of our acquired businesses, and it's the lens through which we evaluate every potential acquisition. Acquisitions are not just evaluated on financial criteria. They're also evaluated in terms of the strength of the leadership team, opportunities for market expansion and assessing each business's full potential. Our operational teams are involved at a very early stage with our development teams to identify areas where we can improve performance. And you can see some examples of the types of initiatives on the right-hand side of the slide. Process improvements such as greater fuel efficiency and additional pull-through demand from our upstream operations; procurement savings from leveraging our global scale and purchasing power in areas such as transport, logistics and mobile equipment; and then structural benefits in the area of back-office integration and fixed overhead savings. We also implement systems to track critical business improvement metrics, enabling us to really closely track and monitor the performance of our acquired businesses. Overall, continuous business improvement has driven consistent, long-term returns for our business. So we just don't buy smart. We do all the hard work, too, identifying and implementing all the individual operational, commercial and structural initiatives to improve the performance of those businesses under our ownership. There are also clear benefits from continuous business improvement outlined here on Slide 49. For our shareholders, it delivers higher growth, margin expansion, increasing cash and returns and value-accretive M&A. For our customers, we're able to proactively address their needs and providing more value to them through our integrated solutions strategy. For our business and our people, we're embracing industry-leading safety, equality, investing in more innovation and research and development. And in terms of our communities, it enables us to provide sustainable solutions that help build in a better way.

Thanks, Randy. So while it's great to talk about strategy and portfolio and integrated solutions going forward, it's the careful, dedicated execution on the ground from the day-to-day small baby steps we take through continuous business improvement that are hugely important in driving value in CRH. And I want to move to an important topic about how we think about allocating our capital across CRH in the years going forward to deliver value for you, our shareholders. And again, if I can just give you the background against how we think about that. I think it's clear to you now we have a relentless focus in CRH on shareholder value creation. And how we think about the future looks about how and where our business is currently set. We have a very strong platform in North America and Europe. We see continued organic growth with robust pricing momentum in those markets. You know that we are going to continue our disciplined and value-focused acquisition strategy and continue to build out expansionary CapEx. This year, we've probably spent about $500 million on expansionary CapEx alone. All of that growth is going to be underpinned by an evolving and successful, sustainable solution strategy as that rolls out and, of course, backed up by continuous business improvement, as Randy has explained. Our focus, our determination is to ensure that we keep on improving profitability and margins year-on-year, and that will arrive at a higher profitability. But it's not just about profits, it's about turning those profits into cash and how we intend to allocate that cash going forward for higher growth and better returns for you, our shareholders. So to take us down the road, Jim, I'll pass it over to you.

But before we look ahead, let me briefly summarize how we've allocated our capital over the last 5 years. Since 2017, we have delivered average annual organic and acquisition sales growth of 2.5% and 3.2%, respectively, or around 6% in total. This 3.2% acquisition growth is coming from the continuous business improvement initiatives, which Randy explained earlier, how we are adding incremental value post acquisition. Against this, we have delivered annual EBITDA growth of 9%, representing operating leverage of just over 20%. Our cash has also increased significantly at a rate of 10% per year, reflecting an average conversion ratio of just under 80%. We have also maintained our financial discipline and our balance sheet strength with our net debt-to-EBITDA ratio in a range between 1.2 to 2.1x. As a result, we've generated $17 billion of operating cash over the last 5 years. But how have we allocated this? Well, we've returned $6.5 billion or just over 1/3 to you, our shareholders, in the form of progressive dividends and share buybacks. We've also invested significantly in our business during that time, allocating the remaining 2/3, or almost $11 billion, to value-accretive acquisitions and expansionary CapEx projects. We have a disciplined and value-focused approach to allocating our capital, and all of this has been absolutely fundamental to how we have created value for you, our shareholders, in recent years. Of course, underpinning all of this profit and operating cash performance, as you can see here, on the left-hand side of Slide 53, our profits and margins have increased significantly over the past 5 years with average annual EBITDA growth of 9% per annum and margin expansion of almost 600 basis points to 17.3% in 2021 are a record for the group. And on the right-hand side, you can see how our relentless focus on converting those profits into cash has delivered operating cash growth of 10% per year over that same period to $2.4 billion (sic) [ $4.2 billion ] in 2021. Of course, sales growth is important, and we have delivered well on that front in recent years, but it's meaningless unless matched by a core commitment to delivering improved profitability also. And that's where our mindset of continuous business improvement really comes to the fore. Our margin experience in recent years is no accident. It is a result of a relentless focus on operational and commercial excellence year after year, ensuring every year is better than the last one across each and every one of our 3,200 locations. It's a core pillar of CRH's strategy coordinated from the center of the group but implemented locally. And this approach facilitates knowledge, expertise and best practice sharing across all our businesses, whether they are existing legacy businesses or indeed new businesses that we have recently acquired. Albert talked earlier about how we have reshaped our business through active portfolio management. Fundamentally, today, we have a structurally better business, better-quality assets that are delivering higher profits, margins, returns and cash. And you should continue to expect that going forward. Moving to Slide 55. Our performance in recent years has also been driven by significant investment growth. As I've mentioned, we have spent almost $11 billion in value-accretive M&A and expansionary CapEx over the last 5 years. We could have spent significantly more over this period, the opportunities were there. However, we have a patient and disciplined approach, applying strict performance and returns criteria to every investment decision we take. Every investment decision is assessed through the lens of shareholder value accretion, whether further developing our integrated solutions strategy through value-accretive M&A or supporting further organic growth in our existing businesses through expansionary CapEx, high-returning, low-risk investment that expands capacities in markets where we see strong future growth prospects. We have a strong pipeline of M&A opportunities outlined here on Slide 56. In North America, for example, our industry is still very fragmented. The top 10 aggregates, asphalt and ready-mix concrete participants account for less than 1/3 of overall production. So there's still significant opportunities for further consolidation in our industry. We have a unique bolt-on acquisition model, with decades of experience developing strong platforms for future growth and a proven track record of value creation and synergy delivery from continuous business improvement. As you can see, some of our acquisition priorities are set out here on the right-hand side. We will continue to focus on our existing geographic and product areas, on high-growth markets with attractive fundamentals, on complementary businesses to enhance our offering and further develop our integrated solutions strategy, doubling-down on residential and large-scale horizontal construction where our core expertise lie and identifying clear opportunities for synergies and savings. Post the pandemic, as economic visibility improved, we increased our acquisition spend in 2021 to $1.5 billion at an average entry-level EBITDA multiple of 7x at almost all in the integrated solution space. Yesterday, we announced we had completed $600 million year-to-date on 11 deals, again, in those high-growth markets in the integrated solutions space, the 2 largest deals being in Texas and California. Of course, to support this M&A pipeline, we have a strong and flexible balance sheet to capitalize on the opportunities in front of us. Our net debt to EBITDA was 1.2x at the end of 2021, and that's before the proceeds from the divestment of our Building Envelope business, which we expect to close during the first half of this year. So there are a lot of acquisition opportunities out there, and we have significant financial capacity and our pipeline is strong. But as CFO, I can tell you that whatever opportunities come our way, we will never lose our discipline or our focus on shareholder value.

Thanks, Jim. And you can hear there clearly the ambition we have to continue growing our business but only in a disciplined and financially a justifiable manner. I'd like now to share our thoughts with you on the next cycle and how we see it playing out and what it means to CRH. Now before I go into the detail of our major markets, let's just look at the background and the one major issue that economically we need to deal with, and that's inflation. Clearly, inflation needs to be reined in. And it's a tough job being a central banker at the moment because you've got to do that and, of course, you don't want to shock the economy. It will mean higher interest rates, and that will slow economic growth. But let's take a more balanced look at that. We're seeing unemployment at historically low levels, both in Europe and in the United States. Household incomes are continuing to rise. Debt levels are at relatively low levels within households. And there is a determination with the Fed here in the U.S. and the ECB back in Europe to ensure, as they rein in and tighten monetary policy, they do everything they can to avoid a hard landing. And it's against that backdrop, we want to set out our ambition and our thoughts for our 2 main markets. First of all, let me turn into our largest market, North America. 50% of our activity levels is in infrastructure. And that business is pretty much underpinned by the public purse, both federal and state financing, for the next 5 years at least. We will see, as Randy mentioned earlier, a 50% increase in total spending for roads alone. That is an 8% growth year-on-year for 5 years in spend, not in volumes. I'd get back to that in a sec, but in spend. Of course, we think residential will continue to grow at a slower pace, but it will continue to grow. There are concerns about affordability. There will be concerns about rising interest rates. But again, let's try and take a balanced view of that. Demographics, and indeed household formations, are supportive of continued demand for residential dwellings here in the United States. Migration trends are also supportive. We have seen a consistently underbuilt supply of homes to the market. That's what's causing the run-up in house prices here, and we were at historically low inventories. So we expect housing growth to continue at a slower pace, we don't believe it's going to stall, and we expect low single-digit growth for U.S. housing in the year ahead. Turning to nonresidential. It's now about 25% of what we do in a post-OBE world and focus mainly on, as I said to you, more complex, specified areas of warehousing and data centers, et cetera. And we expect that, broadly speaking, to grow in line with U.S. GDP. Against our end-user market sectors that we have, we have a good mix between new build and RMI, RMI being much more consistent and resilient. We know that from the global financial crisis, and that's why we have deliberately positioned our portfolio to have a large portion of that. It represents, across our total business, over 40% of our total demand. But we also were able to capitalize on the new growth that we see from migration trends, South and West. So all in all, for North America and the United States, we expect to see solid, organic volume growth of between 2% and 3%. If I can turn to our second market, which represents about 25%, 28% of our activities. Well, we think the outlook in Europe here is also positive despite the uncertainties and despite the challenges. Well, why? Well, Western Europe has got quite resilient RMI, the RMI, again, the design of RMI to our portfolio is important. There are some good spots of new build. Again, we have significant underbuild in residential in some key markets, Ireland, the U.K. and in France in particular. And crucially, Western Europe is really a center for sustainable solutions and the development of that business, and it will remain the forefront of the development of those areas because it's the areas with the toughest regulations, the toughest environment. And as we build out that business, we can transfer that knowledge out and across to Eastern Europe and, of course, to the United States. And Central and Eastern Europe growing at twice the pace of Eastern Europe -- of Western Europe, excuse me, and we see that support underpinned by European infrastructure funds going forward and, of course, residential and nonres falling in the back of that and crucially starting to see emerging demand for more sophisticated solutions in our business that were just good to see. So overall, in Europe, we expect to see volume growth, albeit at a more moderate pace than the United States, as we indicated in the slide there, Slide 57, we show it at about 1% to 2%. And on top of that volume growth in both of those markets, we expect to see a continuation of positive pricing. So if I can move on to Slide 58. I'll just take you through the slide slowly. If you look at the center part of the slide, here, you can see Jim set out what we did and how we allocated capital for the past 5 years. Let's look at the coming years in terms of value creation and how we intend to allocate capital in the years ahead. Well, let's look at the assumptions. Our assumption is that we expect to see mid-single-digit organic growth across CRH. We expect to see continued margin expansion, our continuous business improvement. Our model will deliver that. Solutions will deliver that. We expect to see our operating leverage continue to rise. We expect it to hit 25%. I can remember a decade ago talking to you when it was about 15% to 20%. It's currently about 23%, by the way. And we expect to continue to convert 80% of our EBITDA into cash and focus and target, through the cycle, our net debt to EBITDA being in the range of 1.5 to 2x. We may be above and below that at times, but through the cycle, that's where our target is. All of that will, we believe, give us about $30 billion worth of financial capacity over the next 5 years. That's equivalent to our market value as I stand here today. It also provides us with significant opportunity for long-term value creation, provided, of course, we remain disciplined and value focused. I don't think anyone's ever going to doubt that about CRH. But we will not let that sit on our balance sheet. We will either invest it for future growth or, quite simply, we will return it to our shareholders. It's your money. On the right-hand side of the slide, we look at the options to allocate that cash for value creation as we go forward. We've talked about our commitment to continue to return cash to our shareholders. The 2 ways we do it at the moment: through dividends, you should expect single-digit increase in dividend growth in the coming years; you should also expect a continuation of our share buyback program, at the current run rate, it's going at about $1 billion to $1.2 billion per annum. And you should expect us to continue to invest in the growth of our business. Currently, we invest about 2/3 of our cash generated in growing our businesses: across the strong pipeline of deals that Jim mentioned earlier on; through bolt-on M&A and, from-time-to-time platform deals; and through expansionary CapEx. On the next slide, on Slide 59, I want to take you through a framework through which you should think about long-term value creation in CRH. On the left-hand side of the slide, we see this is the backdrop against our industry we're looking at in terms of organic growth. We see infrastructure and residential, which accounts for about 75% of our total activity level, we see good momentum and nonresidential recovery. Because of our sustainable solutions strategy, we expect to grow at a greater pace than the industry as well. On the second column, in addition to the organic growth, we expect to have growth coming, of course, through M&A. 2/3 of the profitable growth of CRH comes directly or indirectly through the M&A process, and that is recurrable and it is sustainable. With M&A, not only you buy growth and bring growth into the business, actually, bringing new business into CRH actually supports organic growth in our heritage businesses. On the third column, you see we are forecasting ongoing margin expansion. And at the core of that is our continuous business improvement programs that we have running across CRH. Quite frankly, we've only just started. On the fourth column, you'll expect us to deliver 80% of our EBITDA into cash. That's who we are. That's what we do. That relentless focus on cash will never change. And then the fifth column, you can see we will continue to constantly work our portfolio to ensure we are allocating capital to the businesses in the areas with the highest prospects for long-term growth and value to our shareholders. We will continue to manage our balance sheet efficiently, returning excess cash to our shareholders either through progressive dividends and/or incremental share buybacks beyond the current run rate. And you can be absolutely sure we will do all of this without ever losing the rigor and financial discipline that is the hallmark of CRH. If I can turn to some key takeaways to leave you with before we go to the Q&A part of our discussion this morning. We see our business as having a strong growth outlook. Infrastructure and res is quite resilient. It's less cyclical due to the public purse and to the residential needs, and that represents 75% of our total activity levels. Sustainable solutions is delivering. You can see that in the numbers and we haven't really started, it is only starting to really go for us. And we see that positioning us well for superior growth in our industry. Our portfolio has been reshaped to make us a more resilient business. Our geographic footprint is much narrower. It's much easier to manage. We're more focused. Our sectors are well thought-out. Our end-use are deliberately planned. But that work continues. We will continue to adapt our portfolio as we go forward. We stand here today, and we have got the strongest balance sheet in the history of CRH, and that gives us tremendous options. It's hard earned, but it gives options to create value through the acquisition process or increasing returns to our shareholders. And be sure that, that balance sheet will be underpinned by a disciplined, value-focused capital allocation strategy that is at the core of everything that we do. And never forget that one single thing, the last words I will leave you with: everything we do is focused on maximizing value for you, our shareholders. So look, that's the formal part of the presentation over this morning. I'm now going to join my colleagues, Randy and Jim will join me. And we're joined on the stage by Tom Holmes, our Head of Investor Relations. And for the next 30 minutes or so, Tom, you're going to moderate some of the questions that will be coming in during the course of this morning. And hopefully, we'll be able to answer them as best we can. Over to you.

Thanks, Albert, and good day, everyone. As Albert said, I will moderate the Q&A session here today. I'll take the questions that have been coming in over the last hour or so. I'll address them to Albert, to Randy and to Jim here on stage. [Operator Instructions] We have, I think, covered a lot of really interesting topics here today, really good questions coming through. We'll get through as many of them as we can. And if there is any outstanding at the end of the session, the IR team and I would be happy to follow up with you directly. So maybe to kick us off, Albert, maybe first one to you, coming in from Ross Harvey in Davy. You outlined some very significant firepower for M&A going forward. Are there sufficient opportunities out there to deploy that capital? Or should we expect meaningful increases in cash returns going forward?

Ross, good day to you. Look, a good question. We have the strongest balance sheet in the history of CRH and an entirely reasonable question. But we have, within CRH, of course, a window into what the opportunities might be. We have carefully chosen the markets that we're in now at this stage not only because they're attractive for growth but also because they represent opportunities for further growth through M&A. And the U.S. market is very fragmented. I mean the top 10 players make up less than 30% of the total volume in the United States market. There's similarly lots of opportunities in Eastern Europe. The issue for us is to ensure it's not that we buy businesses, it's to ensure that we buy value. And not buying value on the day we buy it, of course, that's important, it's what we can turn it into. At this moment in time, looking at the pipeline deal we have ahead of us, I'm confident that we can, of course, allocate that capital to M&A going forward at a pace where we will use what's available to us and, of course, continue to return cash to our shareholders at the pace that I think the people are accustomed to see us. I'm confident that we can do that over the next couple of years.

Thanks, Albert. Jim, one here actually for you on a similar topic. Could you elaborate on the key investment criteria that you apply when making your capital allocation decisions?

Sure, Tom. We have a well-established, long and rigorous process that has been put in place over many years for the assessment and, ultimately, for the approval of acquisition opportunities. Albert mentioned earlier the ownership of those proposals, which is hugely important because the local teams propose their support and, ultimately, they take ownership for the delivery of the acquisition opportunities. But for us, it's not about entry-level EBITDAs, we touched on it earlier, it's really about what we can do after we buy the business, what can we add in terms of OpEx, in terms of commercial excellence, in terms of procurement, leveraging the scale of CRH and bringing further value to the business. So it's not about the entry-level EBITDA, it's really about the midterm returns, mid- and long-term returns. And typically, we would target mid-teen returns for our investment proposals.

Okay. Great. Next one here from Gregor Kuglitsch in UBS. Jim, again, maybe to you, around CapEx costs, specifically around the carbon reduction target. A lot of questions actually in this area. Do you assume new investments in new technologies, the expected phasing of the spend and also the returns profile around that?

Sure. Gregor, good day. Yes, Randy touched on it earlier. We set out approximately $150 million per year to reach our 2030 decarbonization target. You got to remember, we've been working in the decarbonization space for the last 25, 30 years. So we have very detailed programs location by location. We have road maps with associated projects which are going to deliver on that decarbonization. Those projects, over the last 25, 30 years, have delivered returns rates in line with our overall capital investment criteria. And the projects into the future, the additional $150 million per annum, we also anticipate and expect and are confident that they, too, will deliver on returns and will meet the investment criteria that we set out for our CapEx.

Thanks, Jim. One here from Arnaud Lehmann in Bank of America. Randy, maybe one for you, around the carbon target. Can you continue to grow the business through M&A while, at the same time, having an absolute target, as you've outlined. And could this include further investments in cement, for example?

Yes. Good question. I guess I'd go back and say carbon reduction and the ambition we have is really now, I would say, it's another lens by which we're going to evaluate future growth opportunities. So I think we bring kind of from a traditional sense, a lot of expertise in and around operational, commercial procurement. I think now decarbonization becomes one of those enablers. So when we evaluate a business, it could be cement, it could be other businesses as well, the expectation would be, through that lens, that we would have the ability to drive down emissions at least by 25%. So I just think it becomes another lens, but it becomes a critical lens in terms of how we look to growth going forward.

Perfect. Thank you. One here, Albert, maybe for you. We've seen Ferguson's decision to move their listing to the United States. Is this something that CRH would consider given the significant exposure of your business to North America today?

Look, it's a good question. It's the right question. We constantly think about this. It's something that's discussed amongst the management team and indeed the Board on a regular basis. And it's something we keep under constant review. It is a complex issue, the complexity with regard to structure, shareholder approval, with regard to indeed tax implications, restructuring your business. But they are just things that need to be managed, but then there's complexity involved. And I have to say, of course, each situation is different. And we have a clear plan for value creation within our businesses at this moment in time. We set that out this morning. But I use the word value creation. If we felt there was additional value that could be achieved or arrived at by moving our listing elsewhere, of course, we will go and do that. To this moment in time, it's never made sense. But that's not to say one day it won't make sense. I should also draw your attention to the fact that we have a very active ADR program currently in place in North America. So that people, the investors, who want to invest with us, they have the facility to do that. So we're focused on delivering value through our business at this moment in time. We're focused on delivering value. It's something we keep under constant review, and we will continue to do so.

Perfect. Thank you. Actually, a similar point or maybe as a follow-on, Albert, to that from David O'Brien in Goodbody. The majority of recent acquisitions have been in the U.S. Should we expect that trend to continue? And does that cause you any concerns from a portfolio balance perspective?

David, look, it doesn't give me any concern. That's the ebb and flow of life. Quite frankly, when I joined CRH 20-odd years ago, the split of our business was 70%-plus U.S. And here we are, 25 years later, we're still 70%-plus U.S. And it ebbs and flows, as I say it did. But the mandate we have, as the management from CRH, by our shareholders is to create value. No one says you've got to create value there or there. You just say create value. And if we see opportunities in the United States, well, we're going to execute against those. It's where 3/4 of our assets are, 3/4 of our profits come from. So it's inevitable we're going to have more businesses, opportunities coming through there because of our network and because of how we like to buy businesses. But we don't make a deliberate decision to focus on an area or to execute against in a particular area. It's where the value is shown. We do have, of course, longer-term plans in terms of the structure of our business. We like the fact that we are exposed to the high-growth area of Eastern Europe and, of course, to Western Europe because it is that center for sustainable construction going forward. But never bet against the U.S. It's a fantastic place to do business, strong economic growth and significant construction needs. So we're just making sure we have that balance. And again, we look for the value and we allocate our capital when we see the value.

Randy, sticking with the U.S., maybe where do you see the greatest opportunities to expand the business in the U.S., either geographically or by product category?

Well, I'd go back to kind of -- I think Albert showed the map of North America and kind of the progression that's happened over the, call it, last 10 years as we've followed the population growth trends down into the Southeast and kind of around the smile states and then back out West. I'd say there's still work to continue to be done in and around there. There's still a lot of opportunity from a market structure standpoint. I think even just building on the comments that I made on the Ash Grove acquisition, I mean that's a platform that was a significant-sized deal, but it gave us and opened up a lot of markets for us out in the western part of the United States. So I would see that continuing not just on the material side but products as well. I would say also we should never forget the areas in which we have very solid positions in the Northeast and the Midwest. Our work is not done yet there as well, and that's always been a very consistent delivery of returns and cash. In regards to products, I think that's -- at least our view should be through the eyes of the customer, kind of where are trends happening, what are they saying in terms of how do we deal with specific challenges they have, could be around water, energy, that will give us a lens in terms of what might be a potential move forward. But at this point in time, just delivering consistently with our customers is what's driving.

Okay. Great. I think that idea, Tom, of, as Randy says, is building upon that point. Our focus in building out our business totally in line with solutions is listening to where our customers think the market is going, validating that. That's our guiding principle because that's the future of our business. We know what we have. We can do that well. But we're interested in the future and building out the business model in line with where the growth will be.

Great. I have another question here from Paul Roger in Exane. Maybe to you, Albert, on this one. Could you elaborate further on the synergies between your products and materials businesses? Is that a key part of your solution strategy?

Paul, yes, of course, there's the integration of the materials supply within our materials businesses, but that's important. But for us, the really exciting part of that is actually how we combine the materials and the products and the technology that we use in our materials to design the products to our customers' needs and specifications. That's where the real synergy or benefit comes from. It's not just pull-through of volume. It's the fact that we actually get access to contracts that we could not get without having the materials technology. Just listen to what MDOT, what Michigan Department of Transportation talked about. The key on that project for us was our ability to have specific asphalt design mixes that came from our materials people who converted it into a product to offer to our customer. No single link in the chain could do that by themselves. It was the integration of all 3, that integrated solution that deliver the value to our customers. So there are tangible benefits by feeding the machine with volume, of course. But the real benefits are we get extra work, and we get paid for it. That's the real benefit.

One here from Luis Prieto in Kepler Cheuvreux. Jim, maybe one for you on Eastern Europe, you ran our operations there for many years. Does the ongoing conflict in Ukraine influence your thinking at all on the long-term growth potential for Central and Eastern Europe as a region?

Sure. We have a fine business -- firstly, maybe just to set it out in Eastern Europe, it stretches from Finland into the Baltics, down into Poland, Hungary, Slovakia and down in the Black Sea with Romania. We have a market-leading position in that particular region with some of the best assets we have across the group. We've talked earlier about the real high growth that's coming out of Eastern Europe. It's growing at twice the rate of Western Europe. And that's really underpinned by EU infrastructure funds. There is an infrastructure deficit in those countries. They are net recipients of EU funds, and we see that build out over the last number of years and indeed for a number of future years. That's leading to investment in residential and also into nonresidential in that region. And we're certainly now beginning to see the opportunities to build out into the solutions space as well in Eastern Europe. So it's a region, which accounts for over $600 million of our EBITDA in 2021. It's an important region and a very fast-growing region for us. I think the current crisis coming out of the Ukraine, I mean my assessment to that is that it's actually pulled the EU as a concept -- together, the EU and European countries are pulled together. And what it does, I think, into the future is that there's going to have to be a requirement for further investment, whether that's social, whether that's economic, whether it's the continued infrastructure investment or indeed, into the defense area. And given our market positions -- market-leading positions and assets in those regions, I think we're very well positioned into the medium term to benefit from that future investment.

Thanks, Jim. Randy, maybe one for you. Interest rates are rising, mortgage rates are rising, house prices in the U.S. are up 50% in the last 5 years. Are you concerned about the U.S. residential market overheating?

No is my straight answer. But I guess, just building on a couple of things that Albert presented, I think we're in a little different situation. I would say that the current situation is really about supply and demand. Since the great financial crisis, there's been a tremendous underbuild or availability of housing to keep up with the demand on household formations. And in 2007 and '08, it was really about speculation more than anything else, and we don't see that as being kind of an underpinning characteristic today. So I'd say our view would be maybe the rate of growth slows a bit, but demand will continue to be high and the need is there, whether that's single or multifamily. So we see the need and the demand dynamics continuing to be there. And I think from whether it's a new build or an RMI standpoint, we really hit the range there in terms of maximizing the opportunity in the res market. And so our view would be that there's going to continue to be obviously underlying need for the next 5, 10, 15 years.

Okay. Next question here from Arnaud Pinatel in On Field. Maybe one for you, Albert. Has the reshaping and repositioning of your portfolio largely run its course? Or is there more simplification to go?

Arnaud, most of the heavy lifting has been done, but that's not to say work won't continue in the portfolio. We don't have any really bad businesses, big bad businesses, in CRH. We haven't had for quite some time. It's more a question of looking at the assets that we have and are they allocated into the areas where we feel they offer the best opportunities for growth going forward not just for the next 2 or 3 years but maybe for the next 10 years because you need to run those businesses for a decade through the cycle to get the real value through them. So my sense is that we will continue with the portfolio reshaping of the business because the world has changed. Sustainability is going to become a much bigger part of our lives. We're going to have to change how we provide our products to the market, the types of products, I sense off-site manufacturing, the specification of products. The integration of architects, engineers and designs into our world is going to increase at a greater pace. That's going to drive changes within our business, and it's going to drive us to reshape and continue to reposition our businesses. So most of the heavy lifting is done, but I think we will continue to reshape and reposition in line with where the higher growth is. We can see the opportunities there. So it continues, but there's no major work to be done at this stage, not at the moment anyway.

Thanks, Albert. Thanks, Arnaud. Next question here, Tobias Woerner from Stifel. Randy, maybe one for you, it's an easy one. Where in the group has the greatest upside potential from a margin and performance improvement perspective?

Good question. I want to hear the answer to that one.

We love the lay-up question. Well, I guess there's probably, maybe 2 things come to mind. First, it is, I think we talked a lot about it today, is that continuous focus on, call it, operational improvement, commercial execution. I think we're now -- I think Jim actually said it in one of his comments that he wasn't satisfied with the returns. And I think that's just an inherent characteristic within CRH anyhow. Our operating folks are always focused on how do you get better tomorrow. So I think that could be a statement in general, Tom, across the entire business. I do think, though, and we're in the early days of this, right, we've been executing and building this over the last number of years, call it, 5 to 7 years, on the solution strategy, though. There is a clear demand for, I'll call it, the softer skills that an organization like ourselves bring. The engineering, the technical resources, just the R&D that we do, the innovation that takes place within our company, engage with the customers, I think that's a huge opportunity for us to leverage that across the entire enterprise. Now we have pockets of excellence in places. And one of the things we do really well is we replicate. So we identify that and replicate it across the group. So I'd say that is more of not a specific area but in general, just expanding and driving that solution strategy.

I'd say just one other point that Randy's talking about, just with regard to the portfolio. Like the businesses we dispose of in the past 8, 9 years, we've disposed about 50% of the business we owned in 2013. But the businesses we've brought in have much more of those technical soft skills that Randy is talking about than they were hard-nosed materials businesses. Look at the expansion of, what we would call, our products businesses and in and around that, in the reshape, fastest-growing, most profitable, higher returning, higher cash. They're the businesses that are changing the face of CRH because they're the ones where the business is going, the industry is going. So that really -- we talked about the 12 out and the 18 in, we should talk more about the fact that the business structure has changed as well over that period of time.

It's actually one -- on that exact point, you've been very active in the solution space from an acquisition perspective. Are you still looking for materials opportunities?

Of course, we are because I go back to what I just said earlier, I mean, it is about the integration of the materials, the products and solutions. I mean we're not a design consultancy business. We manufacture base materials. We turn them into products. They're engineered. They're specified. We work with our customers to do that. And we help them put that in place, as you heard from our customers. But we'll start with base materials. And our base materials are cement and aggregates. Then we turn them into a wide range of products. But you must have the base materials to start with because that allows us, with our technological skills, our process capability, to design them to our customers' needs to create the product. So without that, actually, you're tying one hand behind your back. So absolutely, we're focused on continuing to build out our materials business in a sensible way as part of an integrated solution. It's not all about materials nor is it all about services, it's the combination of materials, products and services together. That's the magic.

Great. Thank you. Okay, so there's a lot of overlapping themes now at this point. Let me just try and combine a few. Maybe one, Randy, for you on, effectively, how do we coordinate our solutions offering to customers? How do we organize ourselves on large projects like the ones shown today?

Yes. Well, I think we've been hard at work for a number of years kind of building out the platforms in our major markets. And so platforms being starting, as Albert said, kind of primary materials and adding value to other products over time. I think there are natural points of contact in each one of those markets that our teams have based upon the needs. And you can take any of those 3 projects you saw today, based upon a specific need or desire there, there's a natural part of our organization that has a contact there. Our customers want, "Figure out how to solve the problem and then give me a point of contact." How it practically happens is that point of contact, wherever the predominance or the focus of that problem is, they become the lead and bring in the resources that we garner in a given market, coordinated so it's very simple, it's organized and seamless for our customers to see. We don't -- we're not creating all kind of organizational structures and hierarchy around there. It's about our teams locally embedded with our customers who know when to bring in those technical resources to deliver the type of projects that you saw today.

Jim, Randy got an easy one. I have one here for you. How do you think CRH will perform in the next economic downturn versus the CRH of, say, 10 years ago?

I think -- actually, we touched on this maybe earlier in the presentation. We talked about the experience in the leadership team and out across the business. I think most of us here today were managing businesses back in '09, '10, '11 through the recession. And what we did at that time, I think we took a lot of learnings out of it. And what we've done since is we've really tried to variabilize as much of our cost base as we can. So whether that's operational, whether that's maintenance, whether that's our logistics model, we've tried to take out as much fixed cost and move to a variable formula from that perspective. And I think Albert then touched on it earlier. When we talked about the COVID, when COVID hit us in March, April 2020, in some countries, we had to close up to 80%, 90% of our locations. I think what you see in that scenario, the experience, being able to have that variable tap that you can turn on and off your costs from that perspective. But not just the cost side, from my perspective, crucially, we have the processes, the systems and the people that, from, the balance sheet side, from the cash and the CapEx, working capital, we can react very quickly in that scenario. So I think there's a lot of experience around and we had to use that in the last number of years and use it very effectively. So I think, should that situation arise, we have the experience and the processes and the people out there in the business to deal with it.

I think as well, Tom, that it's a good question actually because I'm sure it's in the back of people's minds of what you do in, I think, a cyclical industry or not. I remember very well, the go-go growth of 2000 to 2007, they were great times, but they were also crazy times. We, just all of us, everyone in the industry, we just followed growth and provided materials. And then the world came to a shuddering stop with the global financial crisis. But our business now is a very different business than we were in 2007. The whole portfolio reshaping was actually about building a more resilient business, building a business that have higher exposure to the public purse because we saw, during the global financial crisis, that's what sustained our business; building a business that's more exposed to RMI because that's more consistent. At the end of the day, you can choose not to build a new project, but you actually can't choose not to repair a road or a house or a roof or whatever it might be as such. So we've designed our business better. And as Jim has crucially said, actually, we have variabilized an awful lot of our fixed costs and, of course, looked at the strength of our balance sheet. No matter what happens, it's bulletproof. The last thing I would say is I was the Chief Operating Officer during the global financial crisis. We weathered that storm quite well. We were pretty much best-in-class performers during that. And then since 2014 to where we are now, you saw the results today. We're best-in-class performers again. So you can have good days and you can have bad days. CRH knows how to manage the situation. We have the agility and the ability and the experience, as Jim says, to do it. We've all been here before. Gray hair matters. And I think we're in a good place to position our business and the way it's being designed, I think we're in a good place.

Thanks, Albert. Just conscious of time, we're coming to the end of our session here today. I wanted to fit in just one more, maybe Albert, to you, and I'll let you close it up after that. It's in relation to our acquisition strategy going forward. Would the focus still be on bolt-on acquisitions? Or should we expect larger deals in the future? And in terms of the valuation on those deals, would you be willing to pay a higher multiple for the right transaction?

I'll take the second question first. We pay for value. I'm very interested in the business that we're buying today, but I'm much more interested in what that business can be tomorrow and what we can do to create that because it's tomorrow, it's the future, how we create value, not what we do today. Of course, it's very important what you buy, when you buy it in the cycle and what you pay for it are hugely important in that whole equation. With regard to whether it's bolt-on M&A or whether it's new platforms or whatever it might be, or big massive deals, hardly -- we don't do big, blowup deals. It's a once-in-a-generation stuff. And even the LafargeHolcim deal that we did in 2015, that was a collection of smaller platforms rather that one big blowup deal. So I don't think that's on the agenda. The bolt-on M&A model is one that's very hard to turn off. I referred to the global financial crisis there a moment ago. I could remember the then Chief Executive Myles Lee and myself, when we were trying to ensure we pull back. We pulled back, we couldn't turn off the machine. The machine needs to be fed with bolt-on M&A because we are talking to -- constantly talking to small family businesses for decades. And I can remember, in the depths of the crisis, when it was really tough, we still had $500 million, $600 million of M&A in 2011, 2012. Last year, we did $1.5 billion of small bolt-on M&As, no big major deals in that. We've done $600 million so far this year. So the M&A machine is recurring and is sustainable, and it's very significant. But I would expect us to do platform deals as we build out our business. We have the ambition to do so. We have the capacity to do so. So I think it will be a good mixture of the 2 over the course of the next 12 to 24 months that will use our capacity on our balance sheet that we have today. Okay. Look, we've come to the end of our time here. I want to thank you for your attention and for dialing in to us this morning. We hope that we have explained somewhat to you in a better way how we think about CRH going forward over the course of the next 5 to 10 years. As Tom has said, he and his IR team will be available to you if you have any further questions. And indeed, I know we're busy people, but myself and Randy and Jim are all here to help you better understand the CRH story. So if you want to feed or talk to any of us or indeed anyone of the other management, feed your questions in to Tom, and we'll get back to you as soon as we possibly can. But again, thank you for your time, and we look forward to talking to you again in the near future.