Reiterates and Provides Pathway to Elevate Summit Margin Target
Upgrades Argos Synergy Target to at Least $130 Million
Eliminates Up-C Structure
DENVER, March 13, 2024 /PRNewswire/ -- Summit Materials, Inc. (NYSE: SUM) ("Summit," "Summit Materials," "Summit Inc." or the "Company"), a market-leading construction materials company, announces highlights that are being presented at its Investor Day today in New York City.
"Since the introduction of our Elevate Summit Strategy in March 2021, it has been the cornerstone of our decision-making process, shaping our actions and providing a clear roadmap for our future," said Anne Noonan, CEO of Summit Materials. "Today, we are excited to share further insights into our strategic achievements and outline a detailed plan for reaching our Elevate Summit financial goals. We are confident in the attractiveness of the markets we operate in, the quality of our assets, and, importantly, our unique operational opportunities to drive profitable and sustainable growth, which, coupled with our ability to generate material synergies and our strong financial position, will drive ongoing growth and value creation for Summit shareholders."
Six key themes for today's presentation include:
- Consistent Strategic Priorities: Enabled by our people and our culture, we maintain relentlessly focused on our four strategic priorities of Market Leadership, Asset Light, Sustainability, and Innovation.
- Reaffirming our Path to Achieve Elevate Summit Financial Targets: Anchored by North Star profitability targets, an intentional shift towards a more materials-led organization, and an invest-to-grow mindset, we aim to maintain leverage below 3x, achieve ROIC of at least 10%, and reach Adjusted EBITDA margins of 30% or greater.
- Recommitment to being the Most Socially Responsible: Our Sustainability Roadmap, which includes our goals for reducing carbon emissions, is deeply embedded in our organizational DNA. We are dedicated to benefiting communities and driving greater value through these initiatives.
- Unlocking Value by Leveraging a Proven Integration Playbook: We'll rely on deep expertise and a long track record as we safely integrate Argos USA, fulfill synergy commitments, and enhance enterprise-wide profitability and cash flow.
- Strengthening the Materials-led Portfolio: Ongoing portfolio optimization together with aggregates-oriented acquisitions will further our materials-led portfolio strategy.
- Capital Allocation Priorities Aligned with Growth Objectives: Prioritizing above-market growth, our deployment of capital will be growth-oriented and directed towards the highest return opportunities.
"We are also pleased to announce the elimination of our Up-C corporate structure," added Summit CFO Scott Anderson. "By completing the exchange of all outstanding LP units, we have streamlined our structure significantly, reducing corporate complexity. We are focusing on eliminating the associated TRA liability in a value-accretive manner, as we have successfully done in the past."
Investors and other interested parties can watch the webcast of the event, which will begin at 9:00 a.m. ET today, at the Company's website, https://investors.summit-materials.com/corporate-profile/default.aspx. The event will be recorded and available for replay shortly after its conclusion.
2024 Guidance
For the full year 2024, Summit is reiterating all guidance items. The Company currently projects Adjusted EBITDA of approximately $950 million to $1,010 million, and continues to expect 2024 capital expenditure of approximately $430 million to $470 million.
Adjusted EBITDA is a non-GAAP measure. Refer to the "Non-GAAP Financial Measures" section for more information. Because GAAP financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort, we have not provided reconciliations for forward-looking non-GAAP measures. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results.
Investor Day Webcast Information
Summit Materials will conduct a conference call on Wednesday, March 13, 2024 beginning at 9:00am eastern time (7:00am mountain time).
Chief Executive Officer Anne Noonan and her executive leadership team will lead an investor presentation and Q&A session that will focus on the Elevate Summit Strategy, growth drivers, integration plans, ESG initiatives, as well as the Company's capital allocation priorities.
A live webcast of the investor day presentation, along with supporting materials, will be available on the day of the event at the following link: https://app.webinar.net/d0y198kr4b6
A replay of the webcast and accompanying presentation materials will be available in the Investors section of Summit's website at investors.summit-materials.com shortly following the conclusion of the event.
Contact:
Andy Larkin
VP, Investor Relations
andy.larkin@summit-materials.com
720-618-6013
About Summit Materials
Summit Materials is a market-leading producer of aggregates and cement with vertically integrated operations that supply ready-mix concrete and asphalt in select markets. Summit is a geographically diverse, materials-led business of scale that offers customers in the United States and British Columbia, Canada high quality products and services for the public infrastructure, residential and non-residential end markets. Summit has a strong track record of successful acquisitions since its founding and continues to pursue high-return growth opportunities in new and existing markets. For more information about Summit Materials, please visit www.summit-materials.com.
Non-GAAP Financial Measures
The Securities and Exchange Commission ("SEC") regulates the use of "non-GAAP financial measures," such as Adjusted EBITDA and Adjusted EBITDA margin, which are derived on the basis of methodologies other than in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). We have provided these measures because, among other things, we believe that they provide investors with additional information to measure our performance, evaluate our ability to service our debt and evaluate certain flexibility under our restrictive covenants. Our Adjusted EBITDA and Adjusted EBITDA margin may vary from the use of such terms by others and should not be considered as alternatives to or more important than net income (loss), operating income (loss), revenue or any other performance measures derived in accordance with U.S. GAAP as measures of operating performance or to cash flows as measures of liquidity.
Adjusted EBITDA, Adjusted EBITDA margin, and other non-GAAP measures have important limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under U.S. GAAP. Some of the limitations of Adjusted EBITDA are that these measures do not reflect: (i) our cash expenditures or future requirements for capital expenditures or contractual commitments; (ii) changes in, or cash requirements for, our working capital needs; (iii) interest expense or cash requirements necessary to service interest and principal payments on our debt; and (iv) income tax payments we are required to make. Because of these limitations, we rely primarily on our U.S. GAAP results and use Adjusted EBITDA, Adjusted EBITDA margin and other non-GAAP measures on a supplemental basis.
Adjusted EBITDA and Adjusted EBITDA margin reflect additional ways of viewing aspects of our business that, when viewed with our GAAP results and the accompanying reconciliations to U.S. GAAP financial measures included in the tables attached to this press release, may provide a more complete understanding of factors and trends affecting our business. We strongly encourage investors to review our consolidated financial statements in their entirety and not rely on any single financial measure.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the federal securities laws, which involve risks and uncertainties. Forward-looking statements include all statements that do not relate solely to historical or current facts, and you can identify forward-looking statements because they contain words such as "believes," "expects," "may," "will," "should," "seeks," "intends," "trends," "plans," "estimates," "projects" or "anticipates" or similar expressions that concern our strategy, plans, expectations or intentions. All statements made relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results are forward-looking statements. These forward-looking statements are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, it is very difficult to predict the effect of known factors, and, of course, it is impossible to anticipate all factors that could affect our actual results. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be realized. Important factors could affect our results and could cause results to differ materially from those expressed in our forward-looking statements, including but not limited to the factors discussed in the section entitled "Risk Factors" in Summit Inc.'s Annual Report on Form 10-K for the fiscal year ended December 30, 2023, as filed with the SEC, and any factors discussed in the section entitled "Risk Factors" in any of our subsequently filed SEC filings.
- our dependence on the construction industry and the strength of the local economies in which we operate;
- the cyclical nature of our business;
- risks related to weather and seasonality;
- risks associated with our capital-intensive business;
- competition within our local markets;
- our ability to execute on our acquisition and portfolio optimization strategy, successfully integrate acquisitions, including the integration of Argos USA, with our existing operations and retain key employees of acquired businesses;
- our dependence on securing and permitting aggregate reserves in strategically located areas;
- the impact of rising interest rates, and diminished liquidity and credit availability in the market generally;
- declines in public infrastructure construction and delays or reductions in governmental funding, including the funding by transportation authorities, the federal government and other state agencies particularly;
- our reliance on private investment in infrastructure, which may be adversely affected by periods of economic stagnation and recession;
- environmental, health, safety and climate change laws or governmental requirements or policies concerning zoning and land use;
- rising prices for, or more limited availability of, commodities, labor and other production and delivery inputs as a result of inflation, supply chain challenges or otherwise;
- conditions in the credit markets;
- our ability to accurately estimate the overall risks, requirements or costs when we bid on or negotiate contracts that are ultimately awarded to us;
- material costs and losses as a result of claims that our products do not meet regulatory requirements or contractual specifications;
- cancellation of a significant number of contracts or our disqualification from bidding for new contracts;
- special hazards related to our operations that may cause personal injury or property damage not covered by insurance;
- unexpected factors affecting self-insurance claims and reserve estimates;
- our current level of indebtedness, including our exposure to variable interest rate risk;
- our dependence on senior management and other key personnel, and our ability to retain qualified personnel;
- supply constraints or significant price fluctuations in the electricity and petroleum-based resources that we use, including coal, petcoke, diesel and liquid asphalt;
- climate change and climate change legislation or other regulations;
- unexpected operational difficulties;
- costs associated with pending and future litigation;
- interruptions in our information technology systems and infrastructure; including cybersecurity and data leakage risks; and
- potential labor disputes, strikes, other forms of work stoppage or other union activities; and
- material or adverse effects related to the Argos USA combination.
All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements. Any forward-looking statement that we make herein speaks only as of the date of this press release. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law.
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SOURCE Summit Materials, Inc.
