SUMMIT MATERIALS, INC.

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Summit Materials : Second Quarter 2022 Earnings Call Presentation

08/04/2022 | 06:09am EDT

2Q 2022 Results Presentation

August 4, 2022

Forward-Looking Statements

This presentation 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," "outlook," "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 Materials, Inc.'s ("Summit Inc.") Annual Report on Form 10-K for the fiscal year ended January 1, 2022 as filed with the Securities and Exchange Commission (the "SEC"), and any factors discussed in the section entitled "Risk Factors" in any of our subsequently filed SEC filings; and the following: our dependence on the construction industry and the strength of the economies in which we operate; the cyclical nature of our industry; 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 with our existing operations and retain key employees of acquired businesses; our ability to implement and successfully execute on our Elevate Summit Strategy; our dependence on securing and permitting aggregate reserves in strategically located areas; the impact of the coronavirus ("COVID-19") pandemic, or any similar crisis declines in public infrastructure construction and delays or reductions in governmental funding; 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; costs associated with pending and future litigation; rising prices for, or more limited availability of, commodities, labor and other production and delivery inputs as a result of inflation, supply chain challenges, geopolitical events 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 substantial current level of indebtedness, including our exposure to variable interest rate risk; our dependence on our senior management team and our ability to retain and attract other qualified personnel; supply constraints or significant price fluctuations in the electricity and petroleum-based resources that we use, including diesel and liquid asphalt; climate change and climate change legislation or other regulations; unexpected operational difficulties; 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. 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 presentation. 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.

Non-GAAP Financial Measures

Included in this presentation are certain non-GAAP financial measures, such as Adjusted EBITDA, Adjusted EBITDA Margin, Return on Invested Capital, ROIC Margin, Net Debt, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Adjusted Diluted Net Income (Loss) and Net Leverage, designed to complement the financial information presented in accordance with U.S. GAAP because management believes such measures are useful to investors. These non-GAAP financial measures should be considered only as supplemental to, and not superior to, financial measures provided in accordance with GAAP. Please refer to the appendix of this presentation for a reconciliation of the historical non-GAAP financial measures included in this presentation to the most directly comparable financial measures prepared in accordance with GAAP.

Reconciliations of the non-GAAP measures used in this presentation are included or described in the tables attached to the appendix. 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-lookingnon-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.

2

Agenda

01

02

03

04

05

Safe Harbor Disclosure

Karli Anderson, EVP, Chief ESG Officer and Head of Investor Relations

Business Update

Anne Noonan, Chief Executive Officer

Financial Overview

Brian Harris, Chief Financial Officer

Management Outlook

Anne Noonan, Chief Executive Officer

Q&A

3

Q2 Led by Strong Pricing Growth

Record level of quarterly earnings

FINANCIAL RESULTS

Q2'22 $M

Q2'21 $M

• Net Revenue

$631.9M

$618.5M

• Net Income

$192.8M

$57.8M

• Adj. EBITDA(1)

$164.0M

$163.8M

• Adj. Cash Gross Profit(1)

$202.3M

$200.2M

• Adj. Diluted EPS(1,2)

$0.60

$0.49

% Chg vs PY

LINE OF BUSINESS RESULTS

Volume

Price

• Aggregates

(1.6)%

+4.7%

• Cement

(0.4)%

+7.5%

• Ready-Mix

(9.1)%

+9.7%

• Asphalt

(15.2)%

+18.9%

  1. See appendix for reconciliation of these non-GAAP metrics to the most comparable GAAP metrics
  2. Adjusted diluted share count includes all outstanding Class A common stock and LP Units not held by Summit Inc.
  • Growth across Net Revenue, Adjusted Cash Gross Profit, Adjusted EBITDA despite reductions due to divestitures
  • Solid pricing growth; Aggregates pricing to accelerate
  • Volume growth impacted by divestitures; underlying near term demand conditions remain healthy
  • Challenging cost environment persists, but currently within high- single-digit %

4

Segment Results

West and Cement Lead Growth in Q2

West Segment

Net Revenue of $352.5M, up 12.4%

Adj. EBITDA increased 7.5%

  • Net Revenue growth across all lines of business; robust pricing partially offset by lower downstream volumes
  • Adj. EBITDA increased due to aggregates volume growth and higher average selling price

East Segment

Net Revenue of $185.8M, down 15.2%

Adj. EBITDA decreased 18.5%

  • Divestitures negatively impacted Net Revenue and Adjusted EBITDA growth
  • Excluding Divestitures, lower aggregates volume in Kansas were mostly offset by growth in Georgia
  • Realized 6.6% aggregates pricing growth in Q2

Cement Segment

Net Revenue of $93.7M, up 9.1%

Adj. EBITDA increased 9.7%

  • Strong pricing growth with further pricing implemented July 1st
  • Pricing gains and lower demurrage costs drove Adj. EBITDA growth and EBITDA margin(1,2) gains of ~25bps versus the prior year period

(1)

See appendix for reconciliation of these non-GAAP metrics to the most comparable GAAP metrics

5

(2)

Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Net Revenue

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Summit Materials Inc. published this content on 04 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 August 2022 10:06:57 UTC.


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Net income 2022 262 M - -
Net Debt 2022 833 M - -
P/E ratio 2022 13,8x
Yield 2022 -
Capitalization 3 583 M 3 583 M -
EV / Sales 2022 1,94x
EV / Sales 2023 1,74x
Nbr of Employees 5 500
Free-Float 99,6%
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Managers and Directors
Anne P. Noonan President, Chief Executive Officer & Director
Brian J. Harris Chief Financial Officer & Executive Vice President
Howard L. Lance Independent Director
Anne K. Wade Independent Director
Joseph S. Cantie Independent Director
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