SUM - Earnings call transcript Q2 2024

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Operator

Thank you for standing by. My name is Danica, and I will be your conference operator today. At this time, I would like to welcome everyone to the Summit Materials Second Quarter 2024 Earnings Conference Call. [Operator Instructions]. I would now like to turn the call over to Andy Larkin, VP of Investor Relations. Please go ahead.

Andy Larkin

the Second to Conference XXXX welcome Call. and Summit Quarter Materials Results Hello, a our release results. we press Yesterday, issued detailing financial operating and Today's and an workbook by call and is supplemental the investor highlighting data. operating presentation financial key accompanied

Materials' All nature, Investor website. Management's of outside are on call uncertain commentary our statements, forward-looking Summit questions Relations may to and these include be control. response which, on can today's materials found in by of their

results may current Although actual these expectations based way. management's statements in forward-looking and differ are on material a beliefs,

a cause SEC. time discussion on report of on please our in Risk of that For report some of with to quarterly section actual see Form subsequent factors filings the XX-Q Factors Summit could annual XX-K, differ, Material's as latest results updated the to Form time the from

as return performance. will the analyst we for review we have detailed with our we analysts to we please and limit can for possible many by of allotted, accommodate of line available. and as reconciliations today's to in on our measures question have then historical am discussion follow the the opening then are queue by Materials' release. view business. Scott go financial Summit outline and one key be on the will questions. financial and respect CEO, Scott call a touching of takeaways in quarter forward non-GAAP pleased find time You from Out the Afterwards, the I Noonan; Anderson. the Today, to Anne CFO, press can begin joined time our our discussed in the yourself Anne so

Anne. the turn me let that, over call to With

Anne Noonan

on and call. employees focus deliver Among strong been everyone thank to today's on and quarter. our market cohesive accelerate progress navigated central financial our you, to dynamic and you Summit and joining in safety. a performance second agenda to conditions Thank the our X,XXX strategic us successfully Andy, has Materials

target our we standard capable of and industry. metrics. goal organization our our are on aspirational, safety nearly our all tracking safety XXX% And is setting For believe ahead is while combined the in remains XXXX, we of harm towards of tracking of zero

on touching second Slide highlight a X. areas are I'd takeaways advancing on the I key strategic our want Before XXXX within our our to quarter perspective, cover particular. From from three briefly we outlook, all in control.

sales commercial is and across operational operating of principles assets, network, ahead the the core implementation of quality to USA our the and the are Argos initiatives of principles our critically, promulgation of can these including improving team excellence First value business pricing, forge the and upskilling foundational environment. regardless

side the footprint for sell targets. Second, sustained and are strengthen And and that and on third value is both today our moving Summit efforts and the runway generating the buy are providing furtherance of capture synergies forward. ongoing creation synergy integration-related our our Elevate activities to financial

and this quarter, Florida we in second completed areas, the and recently delivered results controllables these of as of ownership acquisition south shed bolt-on a quarter. our Aggregates our region. all a we strategic action financial non-core asset market, three result, solid took In In and our again a in entered

quarter XXX In basis growing to basis estimate margins able expand a adjusted substantially were dollars, year-to-date on pro the basis, in forma than more EBITDA addition by we to that we second EBITDA on adjusted points. and a

for power Aggregates the growth, Star Cement and this primary demonstrating of were portfolio. progress margin Continued towards catalyst our materials dominant year-to-date targets the our North

high-growth leading We positions enhanced geographic growth are in reach by and national sustainable our leveraging markets. scale, driving

tomorrow's today's portfolio, This one opportunities. renewed favorable and combined materials, attractive materials-oriented resilient for environment geographic exposures are creating with Summit economically more and built

is full is plan building. year on our synergies delivered our our way million midyear, well through Argos USA track, million towards momentum $XX.X our having game integration, $XX On on target. in Clearly,

balance XX% our the us $XXX the year year. putting margin our Argos increasingly the of with of at These and that and growth adjusted the fortified and USA billion upper steps a assets, and at business. are the the are above the we to end profile XX% the improve and sheet strategic high together Concurrently, low or end. the EBITDA team financial reaffirm extension, guidance EBITDA end at profitability are points land quality enables positions We should to advancements, expectations range the board improve adjusted all this confidently $X.XXX our on XXXX to right of commercial confident XXXX taking full by million we improve and focused

updated this calling moment, mid-single-digit detail of the least growth are many we Aggregates where organic exiting for I'll USA first we you'll Slide with in pricing a but cement And perspective in our year. double-digit reiterating synergies X expectations million On XXXX. pricing XXXX. what our are outlook and virtually components they were Argos midyear quarter. that our goal at on provides from for our $XX see incorporated, of is intact are

anticipate existing And geographies from bolt-ons as we while asset pursue targeted perspective, a base. portfolio Aggs-oriented to we an continuing portfolio resilient even more in building optimize our

in has adjusted markets. our perspective wet conditions, is events to will Houston. weather But and ability traffic along guide our has an Scott in and disrupted produce, factors. barge on cover the River QX updated Mississippi two service specific to weather severe sell more the what volumes Now due constrained impacts broadly, key

get of working That to that cooperate, conditions are stretch seeing we optimistic be pick in substantially. can cautiously is we most solid when markets or like if say, Fortunately, Houston lost days. are volumes some of up the activity we a recovered

that reflecting addition in we demand skewed view on updated are towards commercial now weather, geographies are activity. an In to

open relief market possibility we've would with half come recovery second that in left rate If a half you demand. the second recall, end private

commercial pushed on encouraged conversations given that in environment City likely While is our That we markets activate out. more longer scenario, higher Salt to indicate jobs lack in we table, XXXX of are being the our pick notable demand of we customer urgency think and should still activity for Simply think interest improve. now conditions Lake when that is like a situation financing a key select some it's rate said, up by and Phoenix. markets [indiscernible] a

these are volumes and both this Outside or we've than perform Carolinas, Take as on drive in growth large-scale as able residential where better seeing Georgia capitalize and to pricing energy been markets, the well year. resiliency line anticipated. to projects we volume and manufacturing green

hasn't changed long-term Our view all. at

and realistic are setting, But especially geographies are we typical in has expectation all proven with are which to consistent markets feel in managerial playing environment. term advantaged prudent near posture, approach in high-growth the this three our assets. bullish with and astute We we right on end yet taking a the

Offsetting revision Our XXXX. low and our is single to of updated mid-single-digit million expectations volume to inclusion this outlook pricing midyear $XXX now and organic Aggregates expectations adjustment for for incorporates XXXX. to an G&A Cement on our declines

implies round pacing, year-to-go in today's guidance nearly million of numbers. occurring EBITDA, expect midpoint QX $XXX would and adjusted QX For where XX% we the XX% using in in approximately

Net-net, traction actioning pricing volumes. summary, is confidently profile intact. maintain actions; outlook outlook included are due we and we able are our discretionary on that's midyear XXXX we not In to our reliant to year. one, our and from we've three built guarded contingencies the Two, this three, spend factors: a

of high-quality our and shareholders. execution controllables, are strong returns growth our look another and We demonstrating year on for to we forward

where growth Slide our our X, to Turning USA Argos levers, outlined synergies. we one unique of now

in we you'll is synergies. As exactly see, in earlier mapped achieved with first almost progress line half $XX.X our tracking million we This year. how this

the unfold. thereby We organization, things sizable to composition aligns scale with how neatly our of moved game tools these synergies efficiently expected and we the savings Additionally, redundancies procurement in to integration across early consolidate and quickly plan. realizing

improvement and Cement or OEE, are of with tracking conversion our metrics, operational Cement, generation Limestone in ahead Equipment primary so replacement fuel this for this Portland Effectiveness, synergy targets three successful These winter provided the year. For line thrust and far or turnarounds main year. all combined Overall capital alternative

Ready-mix initiatives a the capture. half greater are and whole, positive synergy our delivery, pull-through as well momentum as both and Carolinas on ongoing with in and providing first commercial fully we in well synergies Aggregates to consolidation the delivering driven our unlocking as expected Houston progress by as flight through contributors excellence were operational well. On growth for as commitments footprint

we you year regarding greater $XXX with headline fully that have the streams is value Summit and commercial Cement delivering that that our synergies at time expect have million comfortably of integration $XX least synergies, will composition although implemented. Looking We million target achieve least even in bucket time. initiatives line and more our ahead, One on the over we to as to anticipate are clear we synergy are we take over confidence synergy all we'd and line. of today message this capital hold, at leave The sight model is our synergies we projects grow to evolve improvement unfold,

addition opportunity to core Argos creation, to USA investment In the thesis. was generation cash synergy the our

On see X, how as we through flow Slide opportunity contextualize integration. progressing cash move that we we

you as XXXX, EBITDA to of to flow every defined From roughly flow. converted a left, cash percentage EBITDA. free the cumulative cash on Materials see cash On free X-year flow as Summit dollar XXXX conversion, adjusted $X.XX was

and by time, adjusted of cash much flow. into that. three than to EBITDA will be we better convert can factors. Over will do driven XX% Our greater That new than enterprise free expect

out cost its powerful cash flow. cash greater is having fixed a greater First turn more fueling nature, Cement from to by will our operations portfolio. facilities Due higher

context, was consistently than least adjusted portfolio. our a converted Cement higher at the of assets XX that Summit For into EBITDA at legacy rest Summit points rate cash the

cement As improvement exhibit scale machine. we help operating leveraging by our management a working flow. work and our and integration cash-generative we emerge through drive the extension, greater cash will will scope leadership, capital company's Moreover, and as greater

of over capital Second intensity the is time. reduction

CapEx reiterate, will the assets over CapEx overall than When cash alone a achieved, lever time. I'd to and opportunities we net percentage this will better believe free moderate cash enhance target annually. say, of Cement as Reduced of profile. $XXX on million revenue flow more of release Scott heard maintenance return our You've approximately and would that long-term X%

component than more someone on assets continuous And they the is else's last if scrutiny a determine our notable are hand. to valuable

and organic Taken growth. these top high-return a even drive over Aggregates opportunities, time, to cash to including up drive positioned growth, cash our The flow factors EBITDA inorganic business greater powerful that flywheel. deploy dialing that together three into and priority and translate substantial growth is

schedule performance. with how quarterly remain X Slide price we on turn bolt-on On our is translating on optionality via disciplined clearest out below to into our providing close net our the target, This strategic Elevate opportunities. scorecard. execution the Summit a portfolio is Aggs-led Xx strengthen half me and Let leverage, sufficient our demonstration financial

our over against our ROIC execute to optimization ROIC and XX% and margin restore playbook, USA the years. X.X% ] fully As profile Argos time, anticipated, than [ assets. at as two portfolio greater But incorporates expect enhance tried within our we we to true

XX Summit steps are profitability with our XX.X%, reported finally, trending at XXXX our the taking And months to and target. towards last XX% margin Elevate solid EBITDA meet our we profile expectations is

All achievements to year employees. of the credit for of efforts so ahead and those of dedicated this still the us tireless is our due our far

to privileged of cultures that a They stakeholder and to remarks. say have and commitments. have our hand align Scott workforce of. I'll you integrate you employees companies, are prepared and achieving safely work it thank all for want make lot your all quickly to to to a substantial We conclude be have to our combined Summit proud engaged our moved hard our is enthusiastic. to I towards now progress

Scott Anderson

Thanks, Anne.

quarter for a financial XX Let's of snapshot Slide second performance. pick our on up

growth On by our up the for excellence strong to period business. with degrees was was level, as second pricing lower that offset volumes of commercial a varying remains can quarter This in surface you business a in you across our enabler characterized moment. Aggregates Cement lines growth I'll strongly unpack the primary at see and by for a and headline

profile the Fortunately, And weather in as is remain financial second goals confident impact such, our as that Anne XX the volume volume we dependent. isolates softness quarter. XXXX our mentioned, achieving this in primary year. Slide caused not

EBITDA. impact which roughly the of our in the Houston total us, of was brunt company's XX% business, For the felt comprises

year. an impacted us severity field. days the affected and electrical jobs produce, shut Flooding down for outages and our complete quarries totals mainly events plants Houston frequency ready-mix several of nearly XX% the in and sell increased precipitation period. our weather up XX% Here, ability to last negatively to in extended and versus year-on-year, forced were Northeast Precipitation

material feed further Thankfully, by access people. importantly, hampered were damage slowing wet to our swiftly limiting operations infrastructure, safeguard assets, to Operations our responded and including, our throughput. down most sites Houston our

And volume things weather As for a had delayed and million did EBITDA to note. incidents result, overall, alone Aggregates, Still, the accounted approximately incur in Cement. lost or we Ready-Mix safety in second during quarter. Two we $X.X estimate we headwinds Houston zero these across events. that

not Texas does this of Hurricane Beryl First, July. impact Southeastern estimate struck include in that the

and by Second, affected was Houston pricing market. not other in Ready-Mix on any Aggregates execution QX or weather

key in inclusion the cash of to Slide gross XX. and quarter USA substantially dollars Both now profit grew on to adjusted Turning metrics Argos the the adjusted EBITDA assets. due

year-on-year the quarterly account reasons, expected, quarter same back did second pull in Argos the For to and for reported as dilution. margins the

our note as cost basis in some of integrate more a And adjusted EBITDA seeing power at good we less chain-related year-to-date Importantly, and and earnings If was we margins up you gross points. like the estimate reflecting pro to portfolio that per performance favorable expense. basis, And $X.XX first EBITDA the we operating interest for like-for-like and cost, a year. day, and weather-affected a speaks ability [indiscernible] inflation outside and assets expanded areas margins of higher and this than diluted Adjusted seasonal profit maintenance relief $X.XX QX zoom forma, price by out, year-over-year our XXX are year-to-date, the mid-single-digit and six through the adjusted adjusted down in on feel you'll is supply prior both repair This expanded margin year. cash months the environment. On both calling of to markets, strong subcontracting. end the in QX about cost improve

the Carolinas By we Missouri. performance. Elsewhere, discussed impacted by lower offset part points private Aggregates as Moving British and more as impacted in volumes negatively quarter the was the Columbia, by estimates, just the in conditions growth Anne our well in line end than weather volumes to that Houston XXX Kansas basis demand Georgia of in subdued earlier. market weather negatively mentioned quarter. in by and relatively were business volumes

affected Kansas increased the increasing Carolinas. our in strong, followed let by closely QX Year-over-year remained gains, growth pricing however, and Houston, XX.X% and due benefits. and pricing, in and part Aggregates market, weather mix sequentially in Virginia X.X% Houston to double-digit adversely by profit Missouri per points by margin points consecutive Agg's XX% year-over-year quarter cash sequentially as profitability up the strong price/cost were or roughly but gross XX fourth favorability $X.XX year-on-year, XX year-on-year adjusted still we margin of ton basis basis persisted. expansion. Unit accelerated

profit is the basis million excellence is margin basis more initiatives side, expansion, dropping XXX this expansion an are which dollars for despite bottom up margin Aggregates since and $X This strongest year are we all, cash line gross achieved scope on helping cost the basis. adjusted points points XXX with volume on our In operational year-to-date LTM real plenty annual to in the XXXX. On softness, our already power and temporary for and pace XXXX.

quarter that in River by organic constraints negatively performance impacted Cement volume and softening For Southern Slide on markets. second demand volumes slightly XX, reduced weather, import were large prompted

Minnesota our quarter, largest and rain In second markets weather in with of XX% experienced fact, XX% QX record the import versus lower attributable up respectively two XXXX. is Iowa, river organic and nearly volumes in decline rainfall XX% days to and the of

experienced Mid-Atlantic the outside USA footprint, Notably, volume Summit quarter legacy markets the the second Argos and in growth. Southeast

remember, growth this calling forma QX. tons quarter-to-quarter noise, this traction mid-single-digit million materialize. despite organic inland the for volume improvement like year, we growth trends Memphis year. ease in a greater EV start In to fueling half, are an project of the anticipate For pricing cement in still growth in steel we X in equivalent as we markets, steam, comparisons gain project a roughly jobs back for pricing pro see year-on-year some to our South year-on-year nearly and selling large amount. Strong Carolina, others occurred XXXX in an amount all, And

taking commercial Our in hold, are currently markets. and approach customer excellence engaged we across Argos is constructive conversations

Argos foundational realization forward. Take successfully supported planned projects looking costs, the anticipated. growing as demand dilutive natural improve seasonality synergies. from a during profitability Here, are Meanwhile, cement cement Virginia our we the up Martinsburg, surfaced Similar USA are basis, of benefited approach. Reported points. Summit will the emissions the result, back a elements the reduced market million $XX plant, to margins profile quarter, outage all each segment towards EBITDA move example, we the from are are Mid-Atlantic EBITDA gas and as favorable operating Cement impacts more that the value-accretive enhance margins the fully cohesive But at took going that production the completed for actioning where underway West implement XXX on We're the position asset basis plant adjusted segment costs, a model. plant this region. more baghouse a project and adjusted early plant we we year-to-date the to improve pricing, and in step go-to-market quarter kiln levels, reduce better will Summit One as meet as in Cement

downstream businesses on volumes pressure weather both under XX Slide environment. for and [ from ] Lastly, on the longer our organic Slide higher remain (sic) ready-mix XX

weather our you the volumes cash negatively expect, largest As Houston, and of Ready-Mix adjusted markets would one in profit period. in gross impacted

margin was ready-mix Our portion QX. of driver was of EBITDA being volumes. Therefore, project towards volume of Asphalt declines lower the which specifically margins despite reported, primary remain USA based the the a healthy on and in a Florida. driver trending timing product lower Not which year-on-year but Atlanta, smaller is assets asphalt lower this of quarter, business, in Houston, primary inclusion margin the mix did Argos favorable Carolinas

will to goals. the to financial be Summit If operate, where achieve help not #X is or can the we Here, downstream markets selective highly need our and assets that it's #X in we compete. worth our or to that we repeating Elevate approach choose the achieve us we

portfolio. I'll optimize quickly record by steps near-term proactively to back take to to our priorities wrap on materials-led drawing strengthen our have up We everyone XX. Slide track and a demonstrated strong

We transforming integration. one through into high-performance are enterprise

We are over year-to-date basis margins accelerating up Aggregates XXX with growth points.

to our are that, provide and we and operator to that the ask delivering open We are for focused I commitments, superior I'll and instructions growth can and on your synergy our balance required line sheet questions. strengthening creation. With on way field value the on portfolio and so Anne the the

Operator

from Instructions] of with [Operator Trey line Grooms comes question first the Your Stephens.

Trey Grooms

off there, my a you related X synergies. on off, But that. is Slide I the not to first a execution did question detailing want give to did great of hats job the Well, very impressive. guys

So on Houston weather the question, hurricane though, But on early a XQ. we from in congrats you and color tropical the my July, Houston storm Maybe thanks now markets Southeast. moving through and a impacts hit on for in that. like mentioned, the other have

your a a a tough ago. competitors talking of One was of kind to about XQ start moment

you us far seen I'm on is and you've So -- off presumably, consideration whatever any taken starting could color into that give is XQ updated thus in might guide, guessing. how

Anne Noonan

QX in the people safe. started the rough now, safe doubt assets Thanks XXX% Yes. on Houston is honestly, going no a focus to storm our keeping for our our off with and And Absolutely, Trey. that's Beryl. question, right start through

one we We more. The I Houston these. learn these that are and is point in states make time -- on saw up will seasoned this These though, out, in hitting, thing we too. we some will are all update as where can these QX,

good got as with days, we back were strong backlog. a few soon As we

So it's are when the there. business back. the not backlogs comes It's if

up obviously -- impacts of [indiscernible] volume huge guide our have And those work. we'll assume did now, thing on will more right that We'll we from catch or most days. we one So assumes not loss.

we pricing. I from confidence some point if with well. will in it of point, we've team we a it extremely and synergies lot a so done our to control. falls optimization guide will very The well on pricing. -- can make what better though, XXXX excellence. our our just to operational The has out, your are executed portfolio our our better well comes on continue And It's operate XXXX, ahead, into and of

see in guide play are today. that you So the controllables the in well

Operator

the Capital. comes question from with Shmois next of Our line Garik Loop

Garik Shmois

recognizing with could some back, if you but of the half pricing Aggregates help think strong quarter wondering of look comes second momentum. us that am this could assuming maybe did how have year, volumes have the maybe associated in second doesn't, and headwinds margins it of you I do

Aggregates help to end half up how of way year. any in contextualize margins could second Just the the expanding

Anne Noonan

the year-to-date. to about talked margins increased margins, for beginning, the question. beginning we Garik, of basis Aggs Scott our points have year saw our From said points Aggs commentary, by in at guide, Yes. to add thanks will in the so. do we his we'd we And the continue XXX the percentage

So as you can through. that the out goes year play expect

Star XX% this We are we've on out a a margin, versus North trailing that's adjusted North Our called XX-month cash objective. XX.X% XX% as Star margins, gross Aggs hit profit basis and quarter.

very exceptional throughout work, year. cost will $X So go landed cost OpEx doing accelerate our the from Moore we not We've price impact having about line as by cost is million continue the this from but to excellence, we're his that of to commercial the an continue price the team excellence encouraged been an on have to We'll op also and the front. which through year. job only -- accelerate bottom and net Marshall

add disappointed you we anything add? I to margin throughout be expansion the might as would our continue didn't So points to if we Aggs year. Scott, go very

Scott Anderson

No.

quarters in margin Four expansion. well. Agg it captures that a of row think I

building on. we're we're a track So to continue record here going that

Operator

Pettinari comes with next Our question from Citi. Anthony

Asher Sohnen

on Sohnen Asher is Anthony. This for

And the for kind of what price that XXXX? those? terms you In timing talk that in set contemplated or just forward kind guide, the of can like of your magnitude Aggregates of updated you carry in maybe maybe up midyear could about

Anne Noonan

of a XX% remarks we're we we over in was our look a how this pricing on you year. bag, delivering and year overall, mixed basis if at prepared XXXX. very a Aggs on did So as confident, That full bit for said

Missouri, strong came have I example, price there that increases for in very talk with we out double-digit region, if January So central carried forward. about Kansas, our

got They Aggs talked about on low would of the the entire So for to midyear, if I year we And those East end probably our and we example, mid-years increasing look finish of into the our getting more them, operations. mid-teens. traction as that, very have we'll until prices. X% region, for at started strong, we on network the X% midyears Georgia, but across on the been being

exit environment into overall, as confident we go as as So exit the continued the XX% and XX% XXXX. we year we're over see pricing in constructive we

Operator

next comes question Thompson with Thompson Kathryn from Our Research.

Kathryn Thompson

First one pricing focus and -- to you Cement on your And inland segment really, so Mississippi that drove noted on the River momentum. pricing.

you seen you're other for could terminals bringing -- what just of impacting If you with is what shift have market dynamics that South impacted, you Houston everything, and cement the pricing product rain any, changes, are import and terms with including sentiment how What a Texas, seeing has that the markets, seeing in to being market? in? in And And that couple to overall how question. your pricing? if with delays

Anne Noonan

So we point, would be -- pricing cement say overall, to your noisy I year. this anticipated for is us as would

inland your to our markets. point on So

realization the with definitely markets growth that organic legacy markets having strong Summit for the river X.X% price northern So our traditional very pricing drove markets.

if your go Houston. into Now question on then you

So deal. our out of a the the but pushed as market a an pricing into business, small has there, part for Houston cement mainly import of reminder is part of weather year. for us Argos it's because the And that been USA

part small the will Houston. weather case. Again, because that be our So of but delayed it's in will business, our be a pricing of the

Argos them value continue need our and legacy they to we and is try more adjustments get there, Now to perspective, market. pricing back where it's you be customer third to momentum. to the by from market Pricing assets a I'd gain point bucket

And basis, the mid-single-digit price for like the year, So guide at where basis year on growth to is our would at I that year-over-year. have overall, on on full the mid-XXXs look everyone enterprise. ending whole full year a a continuing

Operator

next Our with question Philip comes Jefferies. from Ng

Philip Ng

Scott. a Congrats quarter environment. a on guess, in a for really question I choppy strong

Your for I and heard year down full think you the Aggregates correctly, mid-single Cement guidance, low to back I digits. half if both

So sounds like nicely actually in half. the pretty up things back it pick

you a cautious because this think on Southeast or guess, more how much the is to And was to your storm competitor outlook I I a better that's fourth XQ latest trying about versus of get in declines hitting just have handle volume what So perhaps quarter? demand. assuming increases, baked

So it's saw of that incorporated elevated I to XQ make weather, just over you some in calibrated. want properly then in kind the you wet have perhaps of And any sure spilling is cost from XQ? that

Scott Anderson

start -- some think just with already When pent-up touched let have with Anne Philip, have on backlogs. And we volume profile. the really that. do the about you has half, back strong me demand weather. on Yes, we

at that when QX, In So in. see look an we of we've little half, we uptick bit Aggs. a in back do forecasted got the

Some of that reliant into a on definitely volumes, really may push step-up. QX, we'd but slight not but heavily

if from X.X% was And in you look it down prior comparable our year, last over the year. QX,

little So prior the comp gets a bit easier the on year.

Aggs pattern. of So we we definitely out this do get But see on. believe Philip, it's coming achievable. to definitely We've got weather

Anne on there. talked and markets actually, Cement our are our we have do good Mid-Atlantic side, the conditions other about Southeast Now demand

likewise, on to that, to much get growth there need the we there see that path, don't growth side. digits So we low-single that

Philip Ng

volume cost with of XQ you headwinds the to What about moderate the in XQ? in some versus XQ saw [indiscernible]

Scott Anderson

Yes.

us this. and got cost, categorize in cost. really on we on line. Philip, position. million Really, cost. the for We've bottom And $X It's like first let this So we're well that's the is one the it Diesel hedged already savings about buckets fuel, worked a me year. our to dropped outright good three favorable, energy

we're hedged through back half continue that back We half. the the as through do will to XX%

XX% energy on. hedged that We're as on have through on on as to we'll the we So savings will natural side as well natural flow gas well savings the gas. have kilns that

cost. second the cost to would say favorable. I is moderate we're R&M This your and year. So subcontractor energy be is going the bucket is throughout moderating seeing that your

on So weighted heavier half that front was inflation.

the that bucket back You'll labor. your ease see are that's cost, and third then half. And off this sticky

through labor do lot still off us, But latter the you're know in us. That's tight bucket. most go still see we as a that For about tight. sticky our hearing coming is market year. I we of the probably the but for part it's labor,

more with on we're side, the of still half. cost less back good So range in mid-single digits that front-weighted, the our

Anne Noonan

add I'd we discretionary volume. thing only that our spend The according adjusting to to Phil, are is that, our

I've as prepared by discretionary the quickly adjusting been execution incredibly adapt as been our team So that in challenging comments as well. we out impressed our they volumes they've spend had to called have

Operator

Our Thielman Brent D.A. next with from Davidson. comes question

Brent Thielman

Is expectations Anne, year, costs run any deferral mean structural the Scott, ultimately does we potentially we need rate this that a realized reset be of as in for year? sort just into this about or beyond that G&A to sort can in think revision go XXXX? certain this of

Anne Noonan

in understand what start Scott, SG&A if people to you an talent I'll didn't we This you it. no those the the purely what should, want at into to do-no-harm needed to we Yes. No, we -- markets heavily is a beginning. we We we add as as anything we and very what cut there's number took were one. and perspective. Brent, had integration, deferrals, just a truly serve approach on, come And integration wanted serving from markets. to

look were SG&A so to what our at quickly was. and And we able adapt run rate

discretionary to rate at at second half, and many point that got we buckets. in we our we we're where continue into bring our a SG&A said, now we're can down of as this run okay, So spend

scale So run for you. targeted the the SG&A rate on come company on the with have we couch for would way overall that would coming it's that in down size. should the a to couch it it really our the we're synergies is And little That's just getting I that faster more side. way I you

Scott Anderson

talking on touch X%. thing The we would is percentages a just Yes. only add, Anne were I about, Brent, over that

this Now we're quarter -- X.X%.

those going We're scale synergies. attack down. trending we're So to

Operator

Our comes Tanners Research. Timna Wolfe next question with from

Timna Tanners

to wanted cement question. up I the follow pricing on

this looking really kind volumes broadly up of We a hearing that are cement cement and little prices yet softer year holding nicely.

So want the in And seeing I disciplined. a all if being pricing the the in hear on little earlier on color just bit the on what get to cement more imports. question are broadly players answer I terms more more of power the you're didn't

talking any about do threat? domestic import in wouldn't think So down with mind you imports any weakness you come demand? if Or

Anne Noonan

little all. about a first pricing bit talk me So power, let of

the supply digits So our to very as just our pass confident said, long-term pricing through dynamics just you and constructive believe we all chain have conversations going the in at our with we this back been as will few throughout a price and power stats And XXXX, mid-single to everything customers it support where Summit. But reiterate, give into we to to be supply-demand that. get year. go should we're around

last it XX look I pricing Aggs time talk power, has over over of by because Aggs XX% you the mid-single we Cement went only digit about increased pricing down other time -- look is Timna, XX% last over but the of the a And sometimes, years, If X% X%. under-realized you on if the the think lot back average. by

part forward. for you're case the in on for So net import a are really been historic power the there cyclicality support, thesis it dynamics, seeing a question moving I you has mid-single-digit seeing importer here the is was pricing that and take we're in invested in Houston. not overstated your top support our cement imports, obviously, moving Cement of that, it as cement that heavily when there's the today. we're that of structural numbers exposed, being on good you we And at we On U.S. forward. really that in presenting supply/demand persistent Argos. To the pricing believe And consider

pushing way that's Aggs pricing it there, back. weather seeing and more the we're at With it's this call weather -- would out more the I Timna, is point really imports the

import everywhere, heavily a great so not our exposed to of are business. We not impact on seeing imports we're

Operator

Jerry from comes with question Goldman next Revich Sachs. Our

Jerry Revich

on to wanted Argos. I ask

contractual So of in quarter, it headwind. the on us had And I'm those place? was if assuming a had agreements indeed pricing longer-term what's impact agreements. update they the they've some you in timing are when just roll on Can still agreements historically, what those off

Anne Noonan

bag. bit a they're a Well, of mixed

pricing. As going noisy, be on we said, Jerry, to it's cement

called have mid-single-digit the out contracts off mid-XXXs throughout. I in XX to we the to by that up months end the year all we'll Others contained we've get come in go the will XX and our year. that of of repricing. price up in pricing those for That's that Some as market that increase spoke think bulk were we gotten pricing. rolled And the discussions to I as

drive dynamics going be higher. -- there'll are more pricing some the honestly that believe will even Now constructive to XXXX. And in that supply/demand more I be XXXX in

mid-single-digit we expect So as forward. pricing you should plus go

Jerry Revich

results still to the earning you're the as for on actually you're reason the as Well, relative under good what just based question, -- have been, market-based pricing you've inherited.

$XX about So Argos how we're that another just $X have today, was mark contracts of higher, give construct? higher? these underearning we be Can help appreciation pricing market of to didn't because you I'm wondering if that will us much just we an talking and we

Anne Noonan

we ton talked pricing. there was that we $XX a first when came to about about out $XX Well, under

our So that believe to I to the We if that's synergies recall, brought bucket. Jerry, million commercial why $XX targets go we point. you up in like at as $XXX million $XX the million that after increased,

So we're that still going target. after

drive to, kind months of price continue up next and think catch of that you the say, So the from should XX XX we'll on to over that's that there.

Operator

Hughes Our next question comes Truist from with Securities. Keith

Keith Hughes

the on give consistent? -- based as the detail be buckets of will be future pacing Can synergies? you you future it synergy of projects? the us it work Will on Or kind on any

Anne Noonan

would one? that you address like to Scott,

Scott Anderson

to X made Keith, what the $XX you kind of progress we already years. this actually we've Sure. synergies, but committed when was about $XXX total talked grand of over year. Yes. million million we at look when at to we've you But $XX year, this the committed million look

we we shift time. So is the $XX our at planned over really, those for what's million we will the lessen Cement. more on in as side have this got gate, scale And out year scale time to synergies happening point next of the another

see -- our improvement you're putting plans just access spares. to compounding. place start around preventive the projects synergies recall, of maintenance in you'll going and OEE primary is what capital the mover. is share And As going you're to what critical is the here. is you see the Cement And we're And the that to then that now the really right lion's see there

months to going mover. come, that's next you're So as see the those to really see and what year a start growing I big being in

Keith Hughes

$XX again, next that correct? year, But is it's million

Scott Anderson

yes. -- That's

Anne Noonan

X ]. $XX years Said [ over $XXX million we do million within and

Keith Hughes

it's that. my about fair do be more a PP&E that be like what Is would ]. seems It question, on right consistent? off-season, given at particularly [ talking lumpy. Is look you're the and it guess to that way particularly better to I time that in the will the Or it?

Scott Anderson

I And time, dropping $XX we'll to be yes, to right. the projects But extra the get see CapEx mean, during mean doubt you're year. the bottom no going projects next some million there's to it. though, these you'll lumpiness line. to dollars the to there's I got we've Over shutdowns. plan

X elements But got So around. are the see definitely, the there work $XX we longer that the million term, you'll to timing on years. some over

Anne Noonan

is putting Yes. in. be Keith. what Green specific, just the capital America That's lumpiness, about The to we'd in talking you're where be

to plants We because have that running do we flat down out. when our shut are

and last commercial because So the into scale get at lumpiness. the $XX Cement million as that a synergies of rate excellence lump we with then year continue and the first per America run drive on, But X then Green you'll big will synergies. year you $XX the within of out into the be good this million coming the and the continue

Operator

with today final comes David Research. MacGregor from question Our for Longbow

Joseph Nolan

on David. outlook, in volume just you for within I Nolan what's infrastructure? can is Aggregates just for us that Joe embedded was within on This update hoping, non-res your residential,

Anne Noonan

Yes.

and year. digit what we're And hesitant. looking talk down at mean think more put it the little residential we down flat overall. our markets, I the the way we're end mid-single called if low about down And I would -- people that, to to a being residential, going are jobs So all just I Aggregates, there's to strong Houston, actually rate, and on And Houston. a they're from markets, looking Lake our keeping buying very a higher City. effect, in pent-up lock-in out That of the have by hesitant fact said, interest markets reports we Phoenix for Salt houses. longer demand there's the end of presidential X election and

backlogs strong have back come a slowly. be 'XX. 'XX recovery Salt We very has than Lake right more might Phoenix now.

there. we're worth it's lot counting So But our Aggs highest that's not in one markets. on a residential margin waiting for because of of

of of if, It's a back. matter when. come will it's matter a not that So

And markets. public we're then in our on assuming markets, public strength continued

they markets double probably overall, state by got already. of Texas continued In our than are think their DOTs are finish They'll other up time markets, timing estimates. more up public We've North some it up Our be about growth. on strong issues public but our as digits. X% that some the

our Specific you the over above tons XX per XX%. and Joe, now, we Our to points at paving X which if is it up contract over in and backlog backlog. national were our seeing average, Aggs, we're up right highway awards million look are year X.X%,

those markets. Our XX% backlogs are at up into of public go

So strength in real public.

nonresidential And as mixed got prepared a comments, is I said in you've where bag. the my

called commercial your So that we're you've Columbia. got and City, I some Phoenix But Lake energy there. is and British positives manufacturing, data in centers, on out seeing then Salt the which verticals against weakness that your nice growth

So that's overall. that recommendation what's Aggs driving volume really

Operator

turn to it back going closing right. for All remarks. over Summit's I'm to Anne Noonan, CEO,

Anne Noonan

call, you final with messages. joining for leave you today's I'll and Thank three

has demonstrated backdrop execution and dynamic set the team strong expectations in a externally. of continuing First, we've meeting our high-quality business our record a beating or

strong our are drive the within and control and year. supremely margin Two, levers that confident growth will EBITDA this we can

allocation chief we and our to long-term value. strategic three, materials led promote capital that strengthen and And priority will portfolio a one goals continually know shareholder approach our as superior

and We your time your appreciate all you a you of support for We day. thank Materials, today. we Summit have hope great continued

Summit Materials (SUM) 6 Aug 242024 Q2 Earnings call transcript