SUM - Earnings call transcript Q3 2024

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Operator

Thank you for standing by. My name is Mandeep, and I'll be your operator today. At this time, I'd like to welcome everyone to the Summit Materials, Inc.

Third Quarter 2024 Earnings Call. [Operator Instructions]. to of call Investor like Larkin, to now President Vice Relations. would turn over the Andy I

You may begin.

Andy Larkin

a our forward-looking Hello, and call the Conference issued supplemental Results Third is Quarter release welcome to investor key the Call. Summit accompanied by workbook, Yesterday, presentation results. highlighting and operating materials financial and statements, our Materials Investor call Management's commentary an responses XXXX press and Today's detailing are questions outside and on may we financial by uncertain operating Relations of control. which found include data. the nature Summit can be All today's to these on and website. Materials

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

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

can measures in discussed historical and in non-GAAP workbook. find financial investor call press release our the today's reconciliations You and presentation supplemental of

we high-level me open then from will With Summit Anne discuss CEO, and the will for CFO, a detailed moving with are follow financial Scott on will Afterwards, Anne the quarter our Materials Summits and the view performance. provide Anderson. Scott our Noonan, business today highlights forward. questions. of review line

over in Noonan. queue have we the the possible Anne available. we we'll and other allotted, limit many the respect At and the now analysts turn have as we analysts can X so time then call I'll yourself please for to return time to accommodate as to question,

Anne Noonan

everyone you, joining to today's welcome Thank and call. Andy,

I'm resiliency strong what strategic our with proud our third manage incredibly agility, act results. difficult in in of we conditions. operating press financial tremendous deliver progress could saw you face and collective our to of As efforts very the demonstrated quarter release, and

strong record of we and EBITDA strategic quarter an and with high-quality the cost In safety all EBITDA at elevated XX.X% XX-month QX, for of values, year trailing focus. to margin a adjusted execution both we mindset. at our executed set endorsement XX.X%, our quarterly true at And a unwavering margin

imminent operations, and our employees. equipment the the resources and When prioritize our to safety health of faced of storms, people, dangerous and we securing with necessary ensure the closing well-being providing

the X affected we impact weather storms a in the is moment. detail important I'll most at events of But facilities. from safety hurricanes our of tropical had severe that through any what's incidents and all

Turning to Slide X. now

the provide strategically quarter, Let financially. for highlights me and both the

progress is First, our strategic on track.

We continue cement to integration move our with focus activities sharp platform. strengthening through a on

Recycling Green planning example, America Argos the legacy expansion for For USA underway at our plants. is

supplier our the critical that winter Roberta, and at during relationships our cement Alabama efforts establishing shutdown are can installation advancing capital We planning so begin we our plant. XXXX

A amplify to bolt-ons pursue market acquisitions important playbook. unlocking targeted our leadership of to Aggs-oriented disciplined action market to to taking leading and in returns. as Aggs optimization portfolio approach accretive nonstrategic as and value as growth ELEVATE substantial component X adding assets. well our With -- while robust geographies dispositions, overall fuel Through and principles, divesting Guided in also such X are asset-light remains QX, positions through while portfolio. completed liquidity position have greater we Phoenix strengthen our we market an by

drive the margin sustainable we taking actions decisive enterprise Financially, to growth. are across

our -- Agg's for focus footprint intense continues XXXX. double-digit in deliver We cement an in value opportunities results we pricing expected pricing identifying with initiatives. pricing and to operational strategy and attacking gains excellence also most on are organic mid-single-digit the productivity Our aggregates meaningful gains with across

should And the align current every business environment, volume with do. good to discretionary spend something finally, is team our adjusting our

we contended dilutive again, USA As translated on this for from this, we impacts factors inclusive lower year-to-date and transaction, Despite and the with outside severe on QX a margins basis. able trailing costs. an and weather a into basis were of XX-month higher that unprecedented grow EBITDA quarter, adjusted in Argos volumes control, our to

our operational to believe durable speaks relentless This on being focus we in execution underscores and markets. is and that portfolio commercial more a undervalued equity

will We be eventually our firmly ELEVATE our closely execution hold community. and by to Summit will investor sound awarded and believe the strategy recognized

ELEVATE we Summit our X, progress. Slide scorecard, present which our On highlights financial

portfolio Summit and improve geographies the margin playing for with is launch thesis of focus and the XX-month EBITDA of on turn the any flywheel cash reinvest margin-accretive our concentrate formula, resources out. I value in frame capabilities our ELEVATE is mentioned, As XX.X% platforms, of growth in starts Aggs a cement since operational in our time record the market-leading LTM on This which adjusted is This unlocks consistently and positions further jump commercial and to and XXXX. creation. enterprise.

plants, Argos This quarter legacy a cleared our live priorities. represents sufficient well Argos ROIC pursue target, concurrently and to between Net move providing improvements is legacy to return path the at down will cement leverage last target. USA our cement considerable X.Xx implemented in minimum capital highest is Summit below levels. as optionality X.X%, X.Xx with at allocation ROIC daylight at ROIC close from there our and on legacy

and our and business. measures, our the driving strategic outcomes are targeted financial for Across all desired actions priorities financial

impact Georgia lesser row we elevated most to Barrel, prominently and back Florida, the to Hurricanes Between specific in headwinds Houston, Virginia. from the events micro. incurred in Slide and Carolinas Debbie Western Northern QX. costs extent, and X and Now of a weather volume Helene, and estimates the the

feeds most rainfall Harleyville Charleston as Debbie the Debbie, can where flooded of was consequential the over dumped you cement event or quarry area. significant near plant the see, the As

to worst inaccessible for primary the rose of industry. the Our teams with our precipitation volume ramifications measures us lost million But and it approximately in EBITDA. mitigation equipment it, combined lost XXX,XXX resulted stood [indiscernible] on quickly across up headwind Debbie wet for but feedstock and of of the $XX customer-related overall when blunting footprint, In would and historic a isolation, quarter. any to tons

Precipitation precipitation were underlying cited and storms. up quarter third events third of severity days XX% footprint, approximately in, QX quarter. discrete days up EBITDA the of 'XX, MSAs versus our our we In year-on-year. $XX totals -- All to amounted precipitation the X for estimate weather in increased were and XX% the XX% million foregone

Notably, this of good $X weather we much up the will Hurricane from which that make can, estimate to Milton, roughly quarter as does but to the close by affect as our not as getting stretch We'll include fourth work impact a will million. always, on depend we year.

and this million collective still are EBITDA EBITDA our XXXX, has yet headwind margins business to we areas focus for a for $XX our a year, Cumulatively, growth drive and positive of XXXX, weather-related stronger our control. within than positioned grow to to from and more testament portfolio dollars

We range is achieved, Having fully unique momentum Slide adjusted the represents -- [ business roughly XXXX pro and group top to and billion growth at EBITDA favorably end. opportunities have forma updated $XXX X. million in the being both events, X% -- incorporated underlines compares $X the the EBITDA outlook midpoint annual on the $XXX and ] to If basis, the these adjusted million at is the weather our we low end to growth and a which the peer Summit. on

implying tons aggregates We we be to volumes down expectations to quarter reduced year, flat our XXX,XXX for relatively tons XXX,XXX volume river XXXX. approximately now to prior Cement markets. outlook for This organic digits volumes volume -- which project million and this done mid-single in year, X.X Aggs have year. to market this Argos fourth translates be expectations recast in been to tons down roughly legacy

normal QX course, fourth Of performance. season swing that conditions, quarter our of for weather construction the outlook the knowing biggest factor the is assumes longevity

Offsetting markets environment we partially dry this sale to visibility recoup compensation. given in been impacts, like when and continue incentive storm-related adjustments we've trend the to will we more days restrained volume close potential to asset as are Houston, is opportunities Importantly, a hopeful able year.

calling And mid-single-digit average reiterating below we cost pricing are pricing the and G&A mid-single-digit Aggs organic with expenses and previous are exiting year year XXXX $XXX price at pricing, million. our in inflation for in On our we this outlook mid-XXXs. the cost cement double-digit with selling outlook reaffirming or

net spend we CapEx, commitment. capital our maintain XX% recalibrated revenue our of On have to

this As $XXX approximate we at expect CapEx midpoint. year will the million such, our for

are and as will a anticipated, achievement contemplated than summary, price our margins result, year In Argo's a of softer And recover team. this the fully first is self-help mean than fantastic is are integration, we positioned originally would volumes stronger pacing for XX%. dilution at well -- with growth we expectation, and for of when achieved, in least XXXX top-tier

next move XXXX. we year, our On refine detailed on our While execution, provide with and into XXXX high-level focused as framework more our as in for sights cycle we we we we planning customary, keep XXXX X, February. adjust Slide for will are well but into guidance presented firmly

we the In [indiscernible] think summary, that in growth Summit. margin for setting XXXX of

First, we businesses. enduring pricing across see upstream our growth

I As Aggs the pricing long-run will better do to average next and year. can we historical X% think than X% normalizes,

regional go-to-market plan approach X conditions we cement's For pricing with cement, demand harmonized while considered, be will January for have markets. all

reliable more fluid. alongside XXXX. market for XXXX. the elevated is poised profitable This will the end opportunistic appears much remain in the activity a growth On to hand, pricing On pricing lever midyears sustain demand, initial means picture public one in

growing. historic our states, top at our For DOT and budgets are levels

through pick hand, in ] move and formula dispersed geographies IIJA that like has is average Salt showing exposure North like City XXXX. of end outpacing the for Texas, to signs as heading Florida funding steady pairing are Mar to Salt Kansas Lake and -- -- view Utah our City are starting is be other XXXX. nearly public Counties more with locally view into significant remain next back markets, we a and subject activity of North yet to half Phoenix year. positions and up, as revaluation with private while well Kansas and reliable and commercial as source the lettings into Our other somewhat activity and subdued. Missouri, we We as advantaged infrastructure obligated promising , in [ they choppy, geographies national importantly, Lake Columbia on

key a for half-weighted consistent definitive our our On need the with we're influenced typical forecast. volume won't That making suggests XXXX, and witnessing balance growth before said, the profile approach, end prematurely. into largely -- We into volume budgeting hesitancy season by in construction private the perspective we lean visibility back more and markets. project current our pipeline and better

-- perspective, for full and opportunities taking provide a funnel footprint the our includes process and powerful and already opportunities our USA Argos optimization. areas evergreen portfolio business. of self-help These X synergies, enhancement for operational excellence unique an initiatives margin From across flight

X organic drive And cash Aggs-led view to CapEx bolt-ons capable These balance XX% elements blocks. will sheet, XXXX year. next and finally, range XX%. elements the a us believe building they X growth on alongside adjusted with hand inorganic and nearly high-quality execution EBITDA in Horizon these enabled push $XXX We of and are accretive as the into we million margin to growth pathway

in working. -- playbook closing, And our is

our executing, close we is as commitments further and make XXXX team and Our are inroads ELEVATE Summit financial poised XXXX. we to into enter

me -- walk through financial We Scott detail. our more you to let with that, in invite results

Scott Anderson

remained to Slide Anne. up prior on different where a other subdued. trends relatively up remains remain the from relatively consistent Pricing I'll on portfolio. quarters. hand pick at Volumes digits and across XX, and healthy, roughly mid-single our Thanks, degrees, high robust level,

the initiatives. several magnitude and margin [indiscernible]. Slide self-help markets, of EBITDA reported durability the more On approximately basis performance a and our a XX, attractiveness XXX including points pro the basis basis on forma and of underscores adjusted XX gross basis year-on-year the the profit increased than on XX portfolio, points cash of power increased of Adjusted our factors, price points profitability

is year-to-date the noncash XXX well margins increased pro Bottom earnings basis prior Adjusted are margins reflecting higher year the to well Similarly, $X.XX XX%. have than of land and reported adjusted points. EBITDA year, positioned higher as interest points DD&A expense. that we per and quality by XX was above is forma basis adjusted primarily more improving, lower EBITDA earnings as line share diluted with $X.XX year of our versus prior period have increased comparable than

considering in Slide is we is QX, which on expectations. our period, Aggregate along West Lake detailed environment comparisons, timing like Missouri performance from in most growth below weather-impacted British and of the as and year Volume markets aggregates, easy prominent up more previous XX. X.X% but Key segment sold XX.X million offset in Columbia segment Salt East In respectable, volumes than organically with tons a ago project was Houston.

in Year-on-year, favorability versus price The if -- certain the was pricing somewhat ASP and pricing second that increased double-digit Carolinas, in markets QX you last actions. Average benefited QX up quarter selling Kansas impact led X.X% recall, by was from $XX.XX, of the Arizona versus mix and in growth Texas. up year midyear QX XXXX. $X.XX muted Sequentially, and and

in to accelerated XX.X%, in we in individual part to market. has commercial $X.XX value unit principles XX% but Adjusted Nevertheless, storm-related margin decreased each bring XXXX profit execution basis points sequentially gross been up cash as our over profitability and one-off strong to XXXX. is -- aggregates due costs, and XX pricing per

adjusted will On of on a we business full XXXX XX Operational achieve key excellence margin cash course operational achieved setting feeds expanded us in is in amount enhancer, we've a XXXX. expansion basis nearly for to confidence a sharp line year-to-date eclipsing year date, our million this especially basis, substantial profit and our savings, productivity points, on have aggregate a for gross margins our going thanks that Aggs excellence. focus XXX and and value creation value To part greater forward.

to by and volumes reflecting with Volumes Carolinas Turning year-over-year it. river decreased down in prioritizing volumes impacted in Anne domestic Organic moderating the in Southeast when our performance. excessive earlier. over XX markets volumes imports cement Slide consistent mentioned Mid-Atlantic were We the and our for call in and QX. than conditions volumes. imported XX% Import pullback that rainfall. XX.X%, advantaged in more a particularly demand margin were

than Southeast, river full markets, year, digits the be in exhibiting better with mid-single-digit comparative we to our volumes double For the and Mid-Atlantic decline volume the trends forma to XXXX. now the the which expect in range, expected are down pro collectively

We -- for a synergies positive very Pricing combined and story. have margin

Sequentially, USA a with with commanding and increased third mix our price geographic of quarter to For geographies average greater growth markets growth. synergies has cement pricing, remained Argos inland commercial per reflecting pricing selling healthy cement $X.XX year-over-year ton, fueling $XXX.XX volumes. organic higher-priced favorable proportion primarily

year-to-date third Cement's basis XXX points margin EBITDA a quarter year-over-year and XXX on increased adjusted basis points basis.

deleverage mix Here, the cost synergies, not greater volume fuels a kiln the from and impact it's and powering combined expansion. is lower domestic volumes of with dilution, actually offsetting of Argos margin only

benefit the we enhancement will that seasonal Texas. continue cement QX, our footprint further anticipate from to less in as and all-season trend with margin Southeast more For exposures

third end activity. Lastly, as XX. performance sluggish Organic ready-mix weighed environment Downstream impacts volumes on soft the market is remained private weather on Slide and quarter

offset volume timing Intermountain in of unfavorable the Asphalt's and of gains in activity British X.X% volume organic growth volumes encompasses West in double-digit mostly lower North Texas, by Columbia.

by gross cash by more margins ready-mix adjusted well pricing the as mostly our Florida. in and Houston, construction Argos Carolinas and margin in Services asphalt generation, a margin healthy but offset in synergy Products inclusion markets. reflecting profit lower the period for environment Atlanta, than as aided businesses year-on-year, of positive was asphalt grew ready-mix the

it's ELEVATE approach back, to downstream. the Stepping important reinforce our to

Summit downstream. help our We Otherwise, ELEVATE portfolio. goals. and We downstream materials highly a achieve in are market the have the continually around our and demonstrated leaders proficiency compete led must optimizing led where materials must of selective us about we be we

it our to Let back conclude prepared over turn me to Anne remarks. now

Anne Noonan

I'd the press disclosing the Thanks, week to we nonbinding that acquisition issued we like briefly proposal Scott. release address received. last

and we release, best discussions the company Board has with interested evaluate our in the party As interest our its act and the and Summit proposal advisers, with initial said in the in of will the consultation carefully held shareholders.

be all say will a said, As be That's won't any assurance reached at the has further there comment on agreement conclusion. making until we this Board matter we that can we no any can and this really time. be definitive reached

questions concurrent performance. that long-term on with if reassure are our opportunities. and ELEVATE strong our laser-focused it and evaluation, steadfast strategy remain I our could appreciate executing on keep our that vision to would focused I you we today want in conviction your you So about

valuation, and of portfolio and superior and a our to synergies dedicated XX, strengthening to and optimizing creation. high-performance fair are executing in both in efforts achieving As complete Argos realizing value into you can to the and one market scope, aim to growth unchanged. our see Accelerating transform balance Slide sheet Integration we aggregates are set crucial Summit support on remains organization. priorities growth

I'll to instructions line the operator turn for it the to that, questions. over With now the provide open and

Operator

Instructions]. [Operator

comes of question the Ng first from Our Jefferies. Philip with line

Philip Ng

strong in kudos Congrats so really environment, the uneven an results team. on to

XXXX. you year, framework for volumes demand of but laying in kind moving you're and appreciating, weighted back appreciate for Anne, you half help of through up? is So next the groundwork be have be guys your price, framework and think more us to expectation the provided peers of at Can out least the of pieces, demand to some expecting terms some your

And any better Argo cement. things unlock How some efforts increases of How you've of more color be would And coming of on big? kind through? price on know that's opportunities I on the side helpful. pricing? announced the commercial

Anne Noonan

Yes.

there's Phil. congrats lot the there, on in a So packed Thanks for the quarter.

with and by of back best. kind is about the me and it step line do business we're Let what respect of pricing, first all, talk I'll of to thinking

from Aggs' momentum, X and board according consistent that vary to some So January will what that we've increases on geographies. obviously, price perspective, with the did we an in we nice have across done XXXX,

between Kansas year So the for last this other strong more midyear the on out it was we really actually, hand, example, went January moderate. Phil, with Virginia, in increase. price a year, X. was -- balanced

expect pricing if range XXXX very So pricing. extremely the we be will weren't much in very to strong, value to mentality in Aggs on be do into and a it disappointed pricing X% but would of XXXX, it dynamic I we X%

fact the second an that particularly addition price actually And in strong January pricing to strong maybe demand in increase comments, And my second cement. the in that in in half, opportunity a get we to our cement. even expect at of increases. look year I pricing I another said as drive price would see we Cement, there, prepared does

So think X cement increases. about approach a board across harmonized more as we January and go price the

that, That as of market consistent top to them that where up we're our combat some in we working intend be we with with back in customers our off pricing. contracts price have still but this rolling get on leader marketplace. to through, hand-to-hand Then position the market, be to market, will below a go are we

value efforts our pricing cement then in finally, overall. single digit environment, excellence pricing to we're commercial and constructive mid- the more will all place that upgrade putting and [indiscernible] in high drive to And continued Aggs people, processes strength that tools

perspective XXXX, with That has our go in just our That demand out volumes. their a on in From year, cautious planning we team stance. Phil. very this That's keeps played focused controllables.

think go I if private an that about on in we'd it strong, public then line a perspective, from perspective, business basis, And a volumes more flattish little Aggs, drive choppy. a year-to-year from will but end market with of performance. So much

that's bag Aggs. And mixed of It's a kind divergent. very on

have we Florida, in more example, additional so coming capacity we'll for So grow there. on,

in at On our residential the if look I is and hand, are ups recovering. Phoenix, tilt other XXXX down XX%

into better now. right our So that don't much give planning a on we'll stance but as in get view you volume, February, we into lean we

the For single second you look half cement, in looking the be of should that if low at additional PCA price now flat to mid-years. with we're supportive at right digit recovery [indiscernible]

that color this gave So need the hopefully, to that at point. you you

Philip Ng

Appreciate helpful. really That's it.

Operator

next of comes the Our Stephens. Trey from question with Grooms line

Trey Grooms

done. the quarter. on Yes, to the I'll Nicely have congrats echo

next to progressing any on expect you there margin give prepared maybe improvement? in be remarks, And additional maybe inflation how the end thinking the how the year? cost you around could more And X year. may work on the next about Horizon you mentioned see solid us you're into specifics Is color of by you hit So margins.

you how year solid I be get margin any give of next know But of additional and it think the would maybe to take expansion you see that touched us into color can where on on to fruit and that kind range? what kind to low-hanging continue. us for about Scott may expectations

Anne Noonan

Yes.

the margin the at improvement, a key what of Scott, high level. So cost are the I'll question. drivers address part maybe you'll the And cover [indiscernible] then

a team, as very been So we've see, obviously And level. of you real trades is doing. continuation the can executing high what at

about from ] to those phenomenal doing that improvement continued accelerated So the Aggs margin if a job Aggs, going continue with organically in nearly really in point and to I [ both portfolio team the think inflation has assessing work is strong been then the at pricing, optimization, which and operational this we're cost inorganically. investing come doing excellence,

on cement, about it's all a there which And excellence delivering then track forward continued from move pricing we're also well on. commercial perspective. on as we synergies, about it's the And

portfolio, drive accretive margin. overall, this continue has optimize So very our been we'll margin continue which And to they to business. will that to

question. Scott, cost the maybe the you'd address part of inflation

Scott Anderson

been just the inflation our normalizing, pointed making cost, year. as So cut on really Trey, mid-single digits. improvements, kind to Anne We've year, this you cost moderating OpEx when into we're progress at look of starting that out, And we're the inflation. all

had cost because this barely year So inflation you in had any of we improvements. operational offsets the

on. the got And yellow a that's optimization. on, going momentum at side, look carry inventory iron Aggs well you especially of when lot as and that's the as then on around planning going We've mine to the that

around products. So critical our

building on believe the more on we're next our see as Aggs to side. getting drive really Chief to frontline Moore the a year, cost cost. you're culture having Operations this But Officer, of really the in We focus carry our on out in that and actually efficiencies to team, even going he's Marshall training

is what were one. big key inflationary, this year. fuel seeing next a for hedged hedged like already just of than And buckets at for less actually XX% the diesel were we some we're we're and year on

So I a at think at gallon. hedged $X.XX we're XX%

looked $X.XX. it at year, was this you If

now. right at hedge So some up to We're diesel on that we got favorability the side. on looking increasing XX%

and separate do of that we're and single improvements look we're would those that you next go doing categories, cement And bucket we there. synergies the to some year, cost be more in of will believe -- through to inflation on as continue mid- the year low we see the the the going a you're side So the of digit that which building business. from at subcontracting help when R&M a the in then to momentum moderation continue

Trey Grooms

it. Got

Okay.

sure make kind just you guys bad or sure to to the anything, I'm the take on into -- anything? way. right down are we that I'm Is not of any it be account front and Just making thinking need I'm cost more there sure or trying pin there to about to

Because on to it just put kind the you there the have LTM that need able Is that like to cost looking momentum thinking seems front, bad that the were it pricing into up with the Or have seems of XX.X% growth the even about EBITDA EBITDA that like you with that maybe of? at we be year. am aware and get guys be wrong? -- of I to margin you able ought deceleration range full kind we to the for in any place, guys

Scott Anderson

and Trey, to XX% we've only coal. like the gas X kiln compare that bit this but locked some usage it gas, next X-X-X, a MMBtu. $X.XX little at use this offset that more was to of out, just the per higher MMbtU. And our our the It's stands alternative, fuel year, of coal per it's than $X natural into still year's that in about on natural we year coming cheaper next

the alternative also the to on project. Roberta we're gas the plants but next fuels. just have process usage, across, . a a in And little more headwind we'll more do we the the So with introducing natural talked into alternative about fuels of feedstock year bringing there as well. be Ann bit

Anne Noonan

we'll Yes. that to to full be Trey, year. year next we just XX% confirm, XX% range confident are in

Trey Grooms

Anne, rate I for run the that Okay. if a because Thank slide you that in it don't says know the here or deck, in, year. was full for about

that. confirming for you thank helpful. super So That's

Operator

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

Garik Shmois

you want I the talk your cement. in price ask to and Maybe footprint. you what little to and little in a midyears get bit wondering demand if across cited order a would increases to as seeing in on the bit your January side conditions see I prepared your expectations more remarks? that you supply speak need occur around on to what to could detail you're .

Anne Noonan

Thanks for for look continues We at demand us. ones just It's And rate choppy. a a geography robust little public, already that if when And more seeing question, strong markets, Garik. the driven will our by some and really overall in being then be back matter which geographies. we see you are which supply the markets the We're more look private in residential very they'll they being are at and come come nonresidential of second half. some probably those in. so recovery interest dependent, of to

green back, if a very strong and But loaded that comes that, back-end with a the that you're look seeing shoots going do to X.X% PCA forecast, to it's I that. at you get and very midyear, we XXXX it's XXXX. in of recovery believe both as we're light plausible see residential the nonresidential, and

might that uptick. And a the that would British one they took June, recovering in impact right you work now you at We're board took if you month. decrease they come across where of rate to give now. start bigger and Central And some an looking Canadian the where first one Bank, Columbia cement. the see I'd that's we're this out at example currently look seeing

second you'd follows how midyear. Fed as positive and look same That's we the upside of that's in that it do the of plausible look the time it's always line, our but be If half, thinking built kind in in, would recovery our same not into a see very environment at that we that recovery. coming that kind And should very for budgeting, right in now we midyear. for

on market, geography, January it's hard. but dependent the price dependent It's increase is strong board. team were the on across pushing

so. we and value cement, against leaders to price in We are will continue be

Operator

Pettinari comes Citigroup. next the Our question of with Anthony from line

Asher Sohnen

Asher is for Anthony. on This Sohnen

point Just first of clarification. for

the there Your growth midyear? and where does guide historical that between midyears, for are markets Aggs price especially more in January rate, the above balanced include

And my think discretionary your then I I guide. And you question, for demand. spend trimmed also you of talked CapEx think with then sort align just about trimming to

where maybe a pulling more if So that you you're could on I'm talk just investment. about little then bit and wondering that back

Anne Noonan

Okay.

So we're cost and then and let midyears sitting the CapEx about the talk and me the can on where that. Scott address

we when dependent -- we we you, from So strong may our price increases. approach some really range digit make year. why X% price that's we double January then we very next moderate markets, it I And much to Aggs, tell our a In pricing. both X% look will would I and confident midyear by is and X but go geography that's you markets tell how with at go January. moderate markets, board, a will that In will the all in we're with I'm have other get across increase, consistent. in

Scott, want discretionary trimming maybe of a about to little and talk spend had. CapEx the we type bit pullback you

Scott Anderson

Yes.

of you'll year. where So the going synergy the going that. part when of guide it the We it coming same after that below and on end accelerating at $XXX scale for see the is off. the give you'll million year, we're look we really the that, synergies the And but see to come left and out we're at the SG&A, you that at in probably report

those are So rent really well.

controlling spend. just And our we're

million. to million now though, the to $XXX $XXX to side, On disciplined really, million We've million. $XXX the XX%. And lowered we're you $XXX guide, staying our to CapEx that previous saw

and the that down. we and able year list impacting the purchases defer some that some on through to fuel without into could went we land were projects reserves bring we that So found next actually defer operations,

point. So in you'll a CapEx, continue though come good $XXX within XX% going that we to and -- We're guide like see this the we're that's at on beat to stay revenue our of good even threshold costs. going And a watch our we're us feel and in to million place.

Asher Sohnen

Great. turn over. helpful. very That's I'll it

Operator

Our with Research of line next Thompson Group. from comes Kathryn the question Thompson

Katherine Curtis

Thompson. is Kathryn for Curtis calling This Katherine in

margins weather last With in the impact quarters, year be comps to we few for how cement the should about forward? . next going thinking

Anne Noonan

Weather impact.

about So of out be weather, so million when -- to had that detail impact numbers did and we rough at $XX what use we've just look got here. we

got the things think forward, some recovery Houston. the of is there factors. that I'll is give you moving in-year One X of there's volume. example to on One you And about

number out And and adverse update recover Milton on the I and and February contingencies quarter Katherine, million, really scrappy that And group we'll year, their a that that start the caution, So we last cylinders has go firing our $XX on $X.X don't eat then quite but it of in at with other to very a would to you you So Houston, gave $X.X got from effect. these high about go since the they've case we all with executed . then, into all to million million of been team through pencil that XXXX doing that we and is that, proven be X here take with $XX that in I for Summit, because hope a the don't continue million some level hurricanes we position team a the agile. teams is penciling in be to contingencies. very at of rest of as work would thing

Operator

Castillo Angel comes Our Morgan line Stanley. from with next the question of

Angel Castillo Malpica

results. strong quarter, the on congrats second, again, And

you from unpack bit activity are mentioned. of back are activity? go project green hearing or in rate? to to coming that commercial certainty gave shoots elections some for maybe commentary be to be of the of green extent seems wanted on what greater messages? that maybe to front, little of more some Just down potential the you holding projects? the the of you you the up And it may elections? Like terms that just it in maybe great kind a what Or kind Could from markets to contractors certainty what shoots relates as seeing and unlocking around interest Is you the what's or some Anne

Anne Noonan

Yes, Angel.

the me most in here. impacted that that markets are let X unpack of So kind

this a for sidelines we're commercial that, waiting seeing largely quite for in interest seeing, pattern on perspective, it's nonresidential come the in come We're But energy are vertical, holding . against from Columbia. the Salt contrasting the seeing, but British are strength and sluggish seeing, as in Phoenix example, our we're where us. in recovery is continued example, in rates in Virginia and heavy So to we for down. -- and City sitting markets still Lake

some Canadian be Now the in my of line the were the I the if hope we kind there'd as and time would comments would follow same bank, recovery that recovery second did to half second expect that we Fed quote earlier half in that.

shoots funding fact We're also in heaviest participate and Now and British we very are by states heaviest seeing seeing Columbia. green is the is encouraged that in where the the we where investment.

So heavy a for billion the chips $XX position there's side. The example, $XXX states billion. we funding the Arizona, on Georgia, over there's IRA top X that there, and are participating are big investment, were in Carolina the South and in Carolina where investment North

side, of on a And chain that would to where we're the that Columbia, of hopefully rates from So starting then similar happened in resiliency we support on hope come perspective, would moving private kind continued [indiscernible] give down, British continue some bipartisans the green what interest seeing to political manufacturing that, supply shoots. funding forward.

rates, below our side, in hovering Now a to really of around that got got We you've around is impact there. see being on of movement the any residential interest some markets. still feel get X%. kind different It to you've X.X%

the and and You've and point, whole your around got Angel, lock-in got political impact. uncertainty the the to hesitancy effect, macroeconomic you've

leading see they That pressure our to improving little off permits, low markets, and very into starting demand XXXX, in some single-family a operating were if we're being pent-up said, And easing double specific X indicators to in those. the differently. they you then click end are residential are

you permitting. high permit market a solid the got in there, [indiscernible] in-migration XXXX. good So trends, seeing really #X economy, There XX,XXX got Houston And is at good family -- single we're

permits The we area in of are in County. that Fort these days the is post and portion really we Bend a the where operating get actually lot South at running are, our weather, southwest region strong, so

and point. West recovered employment is CHiPsAct, the second the still market of continued in of at XX,XXX part permits, Phoenix and part our there, in there located -- from best the in recovery They have best actually as the we're Phoenix. high this we'll recovery, see

sluggish, And be They it's and and us. market profitable a the that's most great high one market. for Lake XXXX that's but typical half by happy if versus second when we'll X,XXX ROIC of rate, only X,XXX to X,XXX recovers, a far that City at very that hopefully, then though the is most Salt finally, are the are permits

as we into are leaning positive stance. just So volume this We're about part of back. not now right our coming planning that

Operator

comes line from Tanners the Our of Research. next with question Wolf Timna

Timna Tanners

the offsets or preliminary perhaps recall to comments, the I divest offsets few were you cited the the some several In that of saying a you to that more challenges incentive possible one those in on of [indiscernible] opportunities assets detail were could -- to you further there, adjustments Can particular, those of course, each look comp. Any underperforming some please? of divestitures, and bit the and on what like?

Anne Noonan

the for Yes. Thanks, question. Timna,

has team So the of things offsets, constantly will improve team our the of DNA our the capital on I invested -- return the in business. say is X the it's to of

contingencies we so year, every sales, on, ELEVATE, this of set can ever a your did has and asset question, we since being launched do they our those to X from vary And team a of businesses of we report which year.

of contingencies one of of the our can much the some of and built land us regions would do for the those And those and we improve as those are and to sell would into move as the forward. up drive be really, of the trying then come are XXXX increased margin more We And we we've our the right And what end into list some form But of number off got those. ROIC know their sales. each has we asset midpoint. of into improve year offsets where equipment. in

always we're depending we comp where adjusting incentive on Also, land.

there offset some of so some decline. volume And is opportunity the that

Timna, keep guidance So would right us and of up of kind that's look just refinement it would the be you So that river a midpoint, how colder we that extra markets. versus were big XXX drive [indiscernible] our if to in in And believe, do guidance, we what able a to of the reduction. days at our

And think level The team the their so about a very on offset. that's how at executing has you should contingencies. high really been

Operator

comes with question Seth Rohit of Our next Seaport from the Research line Partners.

Rohit Seth

quarter. Great

what year executed you couple far. made markets and question, sort actually this just kind mentioned deals. front, of had in a You the a moves you elaborate the on -- of markets? you great M&A those of dynamics into what so on Maybe

Anne Noonan

Yes.

acquisitions we forward is were Phoenix. the growth cash our X both Florida which into And other inorganic there redeploy continue did growth. So our that the Aggs with platforms. One was to to X and Aggs are strategy deals moving in our in consistent was

X will divestitures with our at we oriented. redeploy So that's from X acquisitions but just how cash we consistent and all year-to-date, Aggs did what divestitures we've said,

Rohit Seth

they contribute. on sense can can volume a like impact Any you provide

Anne Noonan

Phoenix, And targets Aggs position very that underpinned as in was bolt-on areas, by we going You these we if -- we an first should with we're Aggs more go as as we've strong more just think into when into them out we there of probably grows ready-mix the part an recall, X acquisition did went a Phoenix. our volume. position of aggregates went position you after

in the further that. increase of and market this the one that Similarly, had we was targets Florida, to consolidate

disclose more that the to growing our platforms. don't will -- about we X that competitive So as in the position expand think I volumes -- bolt-ons but exact continue on these reasons,; for growing

Rohit Seth

can provide status All synergies, the right. And on much maybe another update. what's How year? XQ XXXX? this And realize I of cement a squeeze if in on X you just

Anne Noonan

Yes.

team is really the well So executing synergies. on cement the

I for procurement think and much but by some Aggs so pull-through. largely or of very Scott that above at being our the synergies, referred driven we're these, SG&A XXXX, $XX very and confident also cement to and by synergies, they're by of and but then are operational both -- commercial million which scale

and deliver become we're to to we've much of into that commercial over we and operational over continued the on XXXX As with go oriented we're target time. XXXX in we confident as very into synergies well our million synergies shareholders delivering million regard. to to committed cement Expect and planning, $XX go our and XXXX, that more the $XXX 'XX,

Operator

of comes the line Hughes Our Securities. Keith with Truist from next question

Keith Hughes

range of you for market pricing talk about is the is with cement that how Argos harmonization much Can of gave earlier you products? that XXXX. and The this how much us

Anne Noonan

Yes.

we half when had million was about below at this to $XX million started commercial said think about market. is were the of out $XX when Argos So on journey, that what synergies, we've that overall you contracts we

as progress some most we're journey, And trying below-market know, convert contracts have closed there. so Keith, we and in mid-January And has been that of frankly, since progress. making you we on these good to been up

Some is just drive we the we away are pricing marketplace, will down low pricing the and too we've volume from walked in pricing leaders. because not value

is a That would high part. pricing half into up work to to but up being January in enough approach 'XX, about our with work existing of say pricing done continuing and think it May And that around good and go about about in commercial we've that -- more harmonized April. bunch you gone. I as didn't January, go really the now went

exact that say would -- I million I but cement, around can't give numbers, $X probably we're commercial, you synergies mark year-to-date. on on on

definitely that. So keep on making we would we progress thought the

Operator

comes next line Thalhimer Our question from Adam Davis of Thompson with & the Co.

Adam Thalhimer

is. what's services I that great the know it's driving and your having is business, curious and a smallest outlook but just I'm year, what

Anne Noonan

to want Scott? You do that,

Scott Anderson

our out. called North out our is really you look you really Texas Services when really And construction our demand seeing is we're with well. Adam, it aligns activities. business, construction Sure. And there. -- booming it public the it's at

So pipeline, backlogs. good good really

going see continue, too. that You're to

North Texas West, been the projects is Intermountain the lumpy, construction quite through flown as a or that that little it really hasn't have through but services. so Now driving strong, shown

Operator

Jerry comes with of Goldman Revich Our next line from question the Sachs.

Jerry Revich

didn't cash the XQ this really I year this wanted to ask then year. last to in as sequentially got on the you had more yet it is profit, that that get year XQ performance And was sequential similar aggregates pricing me Nice challenging. quarter. versus in you sequentially last gross what operationally, you growth uplift year,

a to well, towards markets? sequential just some maybe mix pieces performance and margin there moving that us as understand And any was but lower-priced if about help other cadence similar talk you please? pricing Can business

Anne Noonan

Yes.

in feel Scott, to any on color with So this. please come I'd free just this, then address and

QX, positive QX. Aggs had at mix strong So look in Jerry, we particularly you when we very on and so had just a mix, that,

be -- was we little sequential we a were knew muted. going to So more

you're had high increases we lapping last where price year very midyear a Also, year.

on funky in comps little as well. a one the that's that So

So QX on up I coming would but X.X%. say, Aggs, volume-wise, we did into well quite

been has the we I-XX that first our had and and and they driven So in in really the half. the weather then have with project some was strong south after strong coming big central by very British Columbia Virginia recovery back largely region

Scott, want So color maybe on that? to add little more you a

Scott Anderson

much to more Anne. not Yes, add,

certain You've just called margins it, geographic really kind are mix. of it's higher. areas related in The to

And more had so a we've favorable mix. geographic

Jerry Revich

pricing an extra past of Are years into in inflation the been thinking volatile? can mentioned in that commitments about the for in couple terms aggregates you folks think range. your your you And trying the achieve XXXX. you you pricing Anne cushion to Super. has I thinking How that as the you're price gap over ask, of about cushion that pretty be you have would business? above considering build you beyond targeted are cost historical to need

Anne Noonan

has been of there's Scott here. Well, a Yes. -- couple factors

we're incentive that. And a done to always on driving in team their continuing of they've So nice expand and really net price job cost. our

price always cost We've become that as off moderate dislocation costs price between said and has favorable. even that more -- is

kind about in X think it we Now of buckets.

disappointed very a as I not net Jerry. by -- pricing, we'll X%. And said some go the my and in I we'll January increases, X% would midyears, here, we vary with have value to little be So bit but to we're bucket at comments is will have first We'll have carryover. geography, if

after referred going costs, disciplined Scott is Now to our counteracting but off in we're OpEx having both to [indiscernible] that the very side. moderate earlier, also what

within as this the we'll is control. to why right XX% from momentum get we have so growth, go we're would in XXXX. the XX% A I a talk -- continued That's it really now frankly, really here. rate confident, attacking business our as really, into execution X So overall which that think that to. to very our fronts about margins is push

Scott Anderson

in on impacts, about look weather try profile, the the Jerry, The went cost going Aggs. Aggs despite this to would inflation, thing it's I the the to in into only X%. Yes. were we our inflation is came at with the hold And line our up year year cost saying we add, only if you offsets,

good done of . lot holding we've job. So towards We're those a progress a costs. making

Jerry Revich

Well done.

Operator

of next with Mike question RBC comes Our line from Dahl Markets. Capital

Michael Dahl

I here you when just guess weather, the level quarter fourth understanding weather from normal or about normal on kind out. seasonality assuming a on of talk set

that you been the of in not can in What look and impact And assume you not parts footprint, of have markets of as resume million the kind which about, able you of shipping talk some storm to normal $XX have assume and lost specifically terms operations? your at actually in does or EBITDA? recapture of

Anne Noonan

Mike. QX our flat we've weather? QX, with So this that question QX. just more just Well, and to normalized you'll our is all-season to consistent What's are address for essentially, see overall, markets. normal you, assumes seasonal said uptick trying for which year-on-year. Aggs a slight example, Cement,

normalized kind about . What that's of our we when would resumed We've of right now. So not pattern. -- markets down in not a say -- have I think any is we production we have slowed nearly. in

weather all in October. been $X.X We're October we are have recouping example, I customers. lines days, our delivering they tell million our across region, that and had would resilient. an into to Our South business. you use as team good of And very I'd out When of we strong are that's we eaten our we're Houston, where has there. a

we And and if can midpoint. can the about upside will good so Kansas, extend, in if of we're positive what quite get river And we go markets, we're and get to days October. Utah we we've seen more in our the weather --

over side, say isn't the hurricane November. On until the I would season other

we why that's kind So of stayed flat.

based the we're the midpoint of range the the disappointed some be our in on execution executing. and is had. teams rate would way but Milton recover I So team We couldn't confident

all it's resumed. that of million going recapture impact. now, a we're had performing this of level high to We're are So everything do that at and our -- markets some right can to we've really $XX on we in we year

Operator

I Anne back Q&A will for now remarks. over our That to turn concludes session. the call closing Noonan

Anne Noonan

navigated that operating and to Thank environment, a year this of XXXX. the position we Having close my sharing from team. with strength leave for been have opportunity you message successfully with a difficult momentum to building you I've for joining like very with I'd today's call, the

for value our Summit Our great all you challenge for your that, Summit we in laser to and will We continued time, strategic hope has Materials. on position priorities you controllables, And commitments. doing been we day. focused our appreciate creation. superior our We have support of and achieve thank deliver a on your

Operator

concludes call. This today's

may You disconnect. now

Summit Materials (SUM) 31 Oct 242024 Q3 Earnings call transcript