Trading Statement

CRH PLC
03 January 2007


FULL YEAR 2006 TRADING UPDATE STATEMENT

CRH plc, the international building materials group, today issues this trading
statement for the year ended 31 December 2006. The Preliminary Results for 2006
are due to be announced on Tuesday 6 March 2007.


Highlights

Against a background of higher input costs and declining US residential
construction, CRH has once again performed strongly in 2006 to deliver record
full year organic growth and a significant incremental contribution from
acquisition activity of euro 3.3 billion over the past eighteen months. As a
result, full year profit before tax is expected to be approximately euro 300
million ahead of the euro 1,279 million reported for 2005; this would represent
an increase of over 23%.

Total acquisition expenditure in the second half of 2006 amounted to euro 1.3
billion (net of selective APAC disposals) resulting in a record full year
acquisition spend of approximately euro 2.1 billion.

In Europe Materials, after a good first half operating profit improvement,
stronger momentum in the more profitable second half is expected to result in a
very satisfactory profit advance for 2006.

With Europe Products experiencing good acquisition contributions and stronger
underlying second half trading we anticipate a much improved full year operating
profit outturn and a welcome step-up in operating margin.

Europe Distribution operating profit is expected to be substantially ahead of
2005 levels reflecting satisfactory acquisition contributions and good organic
growth.

Americas Materials achieved significant success in the recovery of higher input
costs and, despite softer volumes, we expect a substantial organic operating
profit advance in 2006 and a further recovery in underlying operating margin.
This combined with good acquisition contributions is expected to result in an
excellent outcome for 2006.

Americas Products is expected to deliver a good full year profit advance and an
improved underlying operating profit margin, excluding acquisition effects.

Against a generally positive backdrop, full year operating profit from Americas
Distribution is expected to show good growth with margins similar to the
excellent level achieved in 2005.

With an ongoing focus on price and cost effectiveness across our operations,
further benefits from the record 2006 acquisition spend and a sustained emphasis
on development, we expect to achieve further progress in the year ahead.

This trading statement contains certain forward-looking statements as defined
under US legislation. By their nature, such statements involve uncertainty; as a
consequence, actual results and developments may differ from those expressed in
or implied by such statements depending on a variety of factors including the
specific factors identified in this trading update and other factors discussed
in our Annual Report on Form 20-F filed with the SEC.

CRH will host an analysts' conference call at 8.00am GMT on 3 January 2007 to
discuss this statement and the Development Strategy Update. The dial-in-number
is [phone]. A recording of the conference call will be available from
10.00am GMT on 3 January  2007 by dialling [phone]. The security code
for the replay will be 731031.


Contact CRH at Dublin 404 1000 ([phone])

Liam O'Mahony               Chief Executive
Myles Lee                   Finance Director
Eimear O'Flynn              Head of Investor Relations
Maeve Carton                Group Controller


Overview

CRH performed strongly in 2006. First half activity benefited from an especially
strong performance from our operations in the Americas and an improved
performance in Europe resulting in a euro 143 million increase in profit before
tax to euro 526 million (2005: euro 383 million). In the second half, trading
across our European businesses gathered momentum and, although US residential
construction declined, our American operations continued to perform well.
Contributions from our 2006 acquisitions were in line with expectations but the
high level of acquisition spend, coupled with rising interest rates, resulted in
a significant increase in financing costs. Against this backdrop and helped by
generally favourable weather in the final months, profit before tax in the
seasonally more significant second half will show a very satisfactory advance.
As a result full year profit before tax is expected to be approximately euro 300
million ahead of the euro 1,279 million reported for 2005; this would represent
an increase of over 23%.

The average 2006 US$/euro exchange rate of 1.2556 showed relatively little
change compared with 2005 (1.2438).


Europe Materials

In Ireland, the continuing strong residential market was again the main driver
of activity. The commercial and industrial sectors remained strong while the
National Development Plan continued to deliver good roads and infrastructure
activity. Our operations in Finland benefited from stronger housing demand,
increased commercial and industrial construction and a number of major
infrastructure projects resulting in good volume increases, better prices and
improved profitability. Our businesses in the Baltic States and St. Petersburg
also delivered a better outcome.

Construction demand in Poland during the year proved particularly robust with an
increase of over 20% in our cement volumes. Although pricing remained
competitive, good marginal contributions on higher volumes in cement and
downstream operations resulted in a significant advance in operating profit. In
the Ukraine better volumes, efficiency gains and improved pricing more than
offset the impact of severe gas cost increases resulting in higher operating
profit.

In Switzerland, as expected, the completion of the concrete-intensive stages of
the major Loetschberg alpine tunnel led to a reduction of approximately 10% in
our cement volumes. However, with better cement prices and a good advance in
profitability in downstream readymixed concrete, aggregates and asphalt
operations overall results improved.

While our Spanish readymixed concrete and concrete products operations had
healthy volume increases due to strong residential and infrastructure demand,
higher input costs and increased competition put pressure on margins resulting
in a profit outcome broadly similar to 2005. The Group's 26.3% associate stake
in Spanish cement producer Corporacion Uniland  will be accounted for using the
equity method in reporting 2006 results. In Portugal, construction declined
reflecting reduced activity in housing and a significant reduction in public
expenditure. Despite this decline in domestic demand, our Secil joint venture in
cement and downstream products had a satisfactory year helped by strong demand
in export markets and tight cost control.

After a good first half operating profit improvement, stronger momentum in the
more profitable second half is expected to result in a very satisfactory profit
advance for 2006.


Europe Products

Our Products operations benefited from improving markets particularly in the
second half of 2006

In Concrete Products, structural operations (floor & wall elements, beams,
vaults and drainage products) delivered excellent results with better market
demand in Netherlands, Belgium, France, Denmark and Poland. Despite a slow start
our architectural operations (pavers, tiles and blocks) were well ahead of last
year helped by advances in Belgium, Denmark and Slovakia and by a  full year's
contribution in France from Stradal, which was acquired in August 2005.  Market
conditions in Germany continued to be difficult but our focus on internal
improvements and sales prices resulted in a better performance. These positive
trends far outweighed the adverse impact of continued price competition in our
Dutch architectural operations and poor UK market conditions. With benefits from
2005 and 2006 acquisitions and excellent organic growth, overall profitability
in Concrete Products advanced strongly.

n Clay Products, while UK brick demand continued to decline during 2006 and
production shutdowns implemented early in the year negatively impacted first
half profitability, good cost control and price increases resulted in maintained
second half profitability. The overall decline in UK profitability was offset by
a better outcome from our Mainland European operations with our Polish and Dutch
businesses delivering good improvements.

In Building Products, although Insulation operations continued to experience
severe volatility in raw material costs, restructuring initiatives and good cost
control delivered an improved performance. The enlarged Construction Accessories
business benefited from the Halfen-Deha acquisition, completed in May, and from
increased profit in heritage operations. Fencing & Security turned in better
results despite competitive markets and higher input costs. Against a continuing
competitive trading backdrop Daylight & Ventilation maintained 2005 operating
profit levels.

With good acquisition contributions and stronger underlying second half trading
we anticipate a much improved full year operating profit outturn and a welcome
step-up in operating margin.


Europe Distribution

DIY: despite improved consumer confidence, the DIY market in the Benelux showed
only moderate growth for 2006 as a whole. Against this backdrop our branch
network reported another satisfactory year with improved profitability. Bauking,
the German builders merchant and DIY business in which CRH acquired a 48% stake
in December 2005, delivered sales and profits in line with expectations. Our DIY
joint venture in Portugal made good progress opening one further location
following five such openings in 2005.

Builders Merchants: With a strong recovery in new housing activity, 2006 saw
increased momentum and profitability in our Dutch businesses. Our French
operations also advanced with good market demand and benefits from profit
improvement measures of recent years. Our Swiss businesses delivered a
significant increase in profitability through a combination of acquisition
benefits and organic growth. While Quester, the leading Austrian builders
merchant acquired in October 2005, had a disappointing start to the year,
following first-half re-organisation measures the business delivered a much
improved performance in the second half. In Germany, Bauking's builders
merchanting activities benefited from better demand and with rigorous cost
control results exceeded expectations.

Operating profit in Europe Distribution is expected to be substantially ahead of
2005 levels, reflecting satisfactory acquisition contributions and good organic
growth.


Americas Materials

The Americas Materials Division had an excellent outcome achieving significant
success in recovering higher energy and other input costs with average price
increases ranging from approximately 10% in aggregates to well over 20% in
asphalt. Non-residential demand continued to improve and while overall funding
available for highway programmes showed a satisfactory improvement on 2005
levels, with relatively fixed budgets the volume of activity was impacted by the
strong price increases. Against this background, and as expected, heritage
volumes registered a decline of approximately 3% to 4% in aggregates and asphalt
and of approximately 2% in readymixed concrete.

In New England, a very strong year in Massachusetts and improved trading in New
Hampshire and Vermont more than offset a lower outcome in Connecticut and Maine
as both states reduced highway spending. In New York/New Jersey our businesses
serving the New York metro area delivered record results reflecting stable
demand, real price increases and internal cost efficiencies, while in Upstate
New York both our Albany and Rochester businesses advanced.

The Central region delivered record results with strong price improvements and
benefits from its bitumen winter-fill programme which mitigated significant
bitumen cost increases during the busy highway paving season. Although activity
in Michigan continued to suffer from poor public and private markets, our
businesses made progress. Mountain Companies, acquired at end-October 2005 and
now part of Central region's Appalachian Mountain Group, had a satisfactory
year, although volumes were somewhat lower than anticipated due to higher
product prices. The West region delivered another excellent outcome as, with the
exception of Iowa, local economies remained strong contributing to generally
buoyant demand and an improved pricing environment.

Integration of Ashland Paving And Construction (APAC), acquired at end-August,
has progressed well with the ongoing realisation of near-term synergies and
selective disposals of peripheral contracting and asphalt units. Underlying
trading in the business, for our first four months of ownership, was in line
with expectations and we expect a satisfactory operating profit contribution,
post-integration costs.  APAC's structurally lower margins and integration costs
will of course impact the overall Americas Materials operating margin.

With significant success in the recovery of higher input costs, and despite
softer heritage volumes, we expect a substantial organic operating profit
advance in 2006 and a further recovery in heritage operating margin. This
continues the strong progress achieved in 2005 which combined with good
acquisition contributions is expected to result in an excellent outcome for
2006.


Americas Products

Following a very strong first half, the demand backdrop and underlying growth
rates for our Americas Products operations moderated through the second half of
the year as residential construction activity declined. However, overall second
half demand remained broadly positive helped by strong and growing
non-residential markets which offset the ongoing residential decline.
Regionally, our operations in the western and southeastern states performed
particularly well in strong overall markets, while the Midwest operations
improved on 2005. Results from northeastern operations were weaker.

The Architectural Products group (APG) faced tougher residential markets in the
second half, particularly in Northeast and Midwest but delivered a robust
performance for 2006 as a whole, despite a disappointing performance in bagged
soil and mulch activities which operated in a very difficult pricing
environment. Our Precast businesses had another record year with growth in
commercial and infrastructure construction, good cost control and effective
price management leading to improved profits and margins.  The Glass Group had
an excellent year with increased non-residential activity and demand for energy
efficient and laminated architectural glass products contributing to very strong
organic growth. MMI, our new mainly non-residential oriented product platform
acquired at end-April, was affected by weakness in its less significant
residential product segments.  Due to its particular business mix,  MMI's
operating profit margin is much lower than in our existing APG, Precast, and
Glass activities.

Overall, these activities are expected to deliver a good full year profit
advance and an improved underlying operating profit margin, excluding
acquisition effects.


Americas Distribution

While the latter months of the year saw declining demand in the new-build
segment, 2006 was another year of growth for Americas Distribution with good
performances from both heritage and acquired businesses. Replacement demand,
particularly for roofing/siding products, remained generally robust throughout
the year. Florida roofing/siding experienced a decline in the second half of
2006, following 24 months of unusually high activity levels generated by
extensive storm damage during the 2004 and 2005 hurricane seasons.  The last two
years have seen a major expansion of our interior products activities
(wallboard, steel studs and acoustical ceiling systems) and 2006 had the benefit
of excellent incremental sales and operating profit contributions from
acquisitions in this segment.

Against a generally positive backdrop, full year operating profit is expected to
show good growth with margins similar to the excellent level achieved in 2005.


Acquisitions

First half acquisition spend amounted to euro 0.8 billion. This included the
purchase of MMI Products, a US manufacturer of fencing products, welded wire
reinforcement and construction accessories, and Halfen-Deha, a leading European
producer of metal construction accessories used in commercial, civil engineering
and residential construction, along with 34 other acquisitions across our
various product segments.

The second half of the year was notable for the completion of the Group's
largest ever transaction with the acquisition of Ashland Paving And
Construction, Inc. (APAC), a leading US aggregates, asphalt and heavy highway
construction company, for a total consideration of $1.3 billion. Subsequent
selective disposals prior to year end of non-core asphalt and highway
construction units in line with the re-focusing of APAC's activities reduced the
net outlay to approximately $1.1 billion. In addition the Group invested $50
million in a 50% equity stake in American Cement Company which was formed to
develop and operate a new cement plant in central Florida. These, combined with
31 other second half acquisitions at a cost of euro 0.4 billion, resulted in
total second half acquisition expenditure of euro 1.3 billion and a record full
year acquisition spend of approximately euro 2.1 billion.


Financial

While cash generation has remained strong, development activity and rising
interest rates will result in a substantially higher full year interest charge
compared with 2005. However, with improved profitability, Group EBITDA/net
interest cover for 2006 is expected to exceed 9 times providing significant
ongoing capacity to avail of attractive acquisition opportunities as they arise.


Outlook

Against a background of higher input costs and declining US residential
construction, CRH has once again performed strongly in 2006 to deliver record
full year organic growth and a significant incremental contribution from
acquisition activity of euro 3.3 billion over the past eighteen months.

The overall outlook for European construction demand in 2007 remains positive.
In the US, while the decline in new residential construction, which accounts for
less than 10% of annualised CRH Group turnover, will impact overall construction
demand, we expect to benefit from our broad geographic, product and end-use
diversity.  Notwithstanding recent US$ weakness, with an ongoing focus on price
and cost effectiveness across our operations, further benefits from the record
2006 acquisition spend and a sustained emphasis on development, we expect to
achieve further progress in the year ahead.


*  *  *  *


CRH plc, Belgard Castle, Clondalkin, Dublin 22, Ireland
TELEPHONE [phone] FAX [phone]
E-MAIL [e-mail] WEBSITE www.crh.com
Registered Office, 42 Fitzwilliam Square, Dublin 2, Ireland



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