Chief Executive’s Review  | continued Europe Materials  EBITDA fell by 7% to €0.41 billion; the decline primarily  reflected the disposal of our stake in Portuguese joint venture, Secil, which  was effected in May 2012. Good operational and restructuring efforts saw  margins broadly maintained at 2011 levels. Particularly tough trading in the  Netherlands impacted reported EBITDA in  Europe Products  (€0.15 billion,  down 22%) and in  Europe Distribution  (€0.23 billion, down 14%). Although  the second half of the year saw some margin stabilisation, most especially in  Distribution, full-year margins fell in both segments. During 2012 we continued to advance the significant cost reduction initiatives  which have been progressively implemented since 2007 and which by  year-end had generated cumulative annualised savings of €2.2 billion. Total  restructuring costs associated with these initiatives and reflected in reported  EBITDA, amounted to €60 million in 2012 (2011: €61 million) and were  once again heavily focussed on our European Divisions (€43 million versus €47 million in 2011). Of particular note during 2012 was a substantial step-up in alternative fuel  usage in our European cement operations and increased usage of recycled  asphalt in our paving activities in North America. These initiatives mitigated  cost inflation in energy-related inputs. While overall cost inflation was not as severe as in 2011, recovery of cost  increases continued to be challenging. This was particularly the case  in European markets as economic growth weakened through the year.  However, on a more positive note, we saw an improving price/cost dynamic  in our operations in the United States as the year progressed. The Group has built, and continues to develop, a portfolio that is balanced  by geography, by product and by end-use sector – across residential,  non-residential and infrastructure – with a good equilibrium between new  build and RMI segments. In developed markets, our build and grow approach aims to create clustered  groups of businesses with significant local market positions, augmented  from time to time by larger step-out transactions to create new platforms  for expansion. For our  Materials  operations, the foundation is in extensive reserves of stone  to feed our cement, aggregates, asphalt and readymixed concrete activities.  We seek to build vertically-integrated operations generating significant  in-house demand for our resource-backed outputs while leveraging  capabilities and expertise across local, regional and national markets. For  Products  our focus is to optimise our production networks in core  regions through selective acquisition activity, capital investment and, where  necessary, restructuring. This involves an ongoing portfolio review process  aimed at identifying those businesses which we wish to actively develop,  those we wish to sustain for their ongoing cash generating characteristics and  those which it is appropriate to divest. Product innovation and sustainability is  a key consideration in this review process. Of the €0.33 billion of  Materials  development activity, roughly 70% arose in  the United States where we added a total of 0.6 billion tonnes of strategically  located aggregates reserves most particularly through the acquisition of a  majority share of New Jersey-based Trap Rock Industries. In Europe, we  substantially increased our presence in the Finnish readymixed concrete and  concrete products market, strengthening CRH’s vertically-integrated cement  and downstream positions in this resilient market.  Development activity completed during 2012, which amounted to  €0.65 billion, was very much aligned with the strategy outlined above. In building the Group we have always prioritised financial returns both in  CRH’s bolt-on development activity in existing markets and in our step-outs  into new product segments and into new markets. Across the various business segments our approach is to combine the  large scale disciplines of CRH with the entrepreneurial skills of our local  management. In developing markets, we see Materials opportunities as providing the  most suitable initial entry point for CRH given the basic building needs in  these regions. However, as these markets become more sophisticated  our development horizons will expand to consideration of Products and  Distribution opportunities but this takes time and will depend on the pace of  maturation of individual national and regional markets. For  Distribution , the strategy is directed at building size and scale in core RMI  markets; driving value through scalable processes, enhanced procurement  opportunities and building new channel opportunities. Strategy in Action 2012 Group Strategy and Business Model 14 CRH