Summit Materials, Inc.

Thank you for standing by. My name is Christina and I will be your conference operator today. At this time, I would like to welcome everyone to the summit materials fourth quarter of 2023 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, please press star 1. Thank you. I will now turn the call over to Andy Larkin, Vice President of Investor Relations. Andy, you may begin your conference.

Hello and welcome to the Summit Materials Fourth Quarter and Full Year 2023 Results Conference Call. Yesterday afternoon, we issued a press release detailing our financial and operating results. Today's call is accompanied by an investor presentation and supplemental workbook highlighting key financial and operating data. All of these materials will be found on our investor relations website. Management's commentary and responses to questions on today's call may include forward-looking statements, which by the nature are uncertain and outside of summit materials control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results may differ in a material way. For discussion of some of the factors that could cause actual results to differ, please see the risk factors section of summit materials' latest annual report on Form 10-K and quarterly report on Form 10-Q, as updated from time to time, and our subsequent filings with the SEC. You can find reconciliations of the historical non-GAAP financial measures discussed in today's call in our press release. Today, Ann Noonan, Summit CEO, will begin with high-level commentary. Scott Anderson, our Chief Financial Officer, will then review our financial performance. Ann will return to close our prepared remarks with a more detailed discussion on our outlook for 2024. After that, we open the line for questions. Out of respect for other analysts and the time we have allotted, please limit yourself to one question and then return to the queue so we can accommodate as many analysts as possible in time we have available. With that, let me turn the call over to Anne.

Thanks, Andy, and welcome to everyone joining the call today. Summit stands at a very exciting and pivotal point in our company's history. Our team achieved record financial performance in 2023, accelerated our Elevate Summit strategy across all dimensions, and is embarking on integrating the Argos USA assets into the Summit family. Scott and I will take you through specifics here shortly, But we have a lot to be proud of, not the least of which is our emphasis on safety. The combined enterprise has a shared commitment to being an industry leader in safety. We are investing in people, processes, and tools. And as a result, we are putting the health and well-being of our employees and our communities at the forefront of everything we do. I want to turn to slide four to highlight three areas of tremendous progress, starting first with how we've effectively undertaken a materials-led portfolio transformation. Since the beginning of 2023, we've entered into the high-growth Phoenix market, completed bolt-on aggregates acquisitions in targeted geographies, continued to optimize the portfolio via non-core divestitures, and completed the transformational Argos USA combination. As a result, our business is now materials dominant, with roughly 8 out of every 10 EBITDA dollars coming from either aggregates or cement. And if you recall, only 63% of our adjusted EBITDA came from material lines of business when we initially launched Elevate Summit. This intentional shift towards high margin upstream businesses has given us significant scale in our industry. As the fourth largest cement and the sixth largest aggregates producer in the US, we can leverage our collective spend to achieve scale synergies, tap into deeper talent pools, and amongst other things, deploy best practice knowledge sharing across the whole of our enterprise. Second, thanks to excellent and widespread commercial execution, solid contributions from every reporting segment, and a growing focus on operational excellence, we were able to grow Summit's adjusted EBITDA margins by 160 basis points in 2023. Our team has adeptly navigated inflationary pressures and dynamic demand conditions to improve the quality of our earnings and put us on solid footing to deliver continued margin expansion in the year ahead. And lastly, with an organizational focus on portfolio optimization and a well-equipped balance sheet, we can continue our aggressive pursuit of aggregates-oriented M&A. We have a robust and promising deal pipeline as we endeavor to build an even more materials-led higher growth business. This isn't just talk. A week ago, we completed a strategically attractive bolt-on acquisition in our new Phoenix platform, a proprietary aggregate-centered deal that builds our reserve base, extends our presence along a major growth corridor, and we expect will become immediately accretive to our margin profile. It's a deal that checks all the boxes and provides a template for our future M&A ambitions. Furthermore, in Q4, we completed two divestitures of subscale, mostly downstream assets in non-strategic markets. These transactions, executed at attractive multiples, generated $75 million in proceeds. fortifying an already strong balance sheet and providing additional dry powder for future ags opportunities. Our overall progress is more evident when considering our Elevate Summit scorecard on slide five. For Summit Standalone at 2.1 times net debt to EBITDA, we've effectively employed a disciplined and growth-oriented approach to capital allocation. And critically, on a pro forma basis, our net leverage remains well below the three times target. which gives our balance sheet ample flexibility for further portfolio enhancing acquisitions and to fully fund organic growth opportunities. Heroic, at 10.4%, we established a new high watermark, adding 10 basis points sequentially and 130 basis points in 2023 by taking a total portfolio approach, one that scrutinizes every asset against our return and margin criteria. And if there isn't a clear and achievable path to reaching elevate financial hurdles, then we've demonstrated a proficiency at finding better owners for these assets. Adjusted EBITDA margin for 2023 was 23.7%, an all-time summit record, and 160 basis points higher than the year-ago period. Scott will walk you through the mechanics, but in short, we have strong profitability performance across the portfolio. despite challenging cost dynamics and a slowdown in residential demand. All the credit goes to the teams across our footprint who stayed focused, executed with incredible agility, and delivered admirably on each one of our 2023 financial and strategic commitments. Before I hand it to Scott, I do want to extend our gratitude to our shareholders who voted earlier this year to overwhelmingly approve the Argos transaction. While we believe the merits of the deal stand on their own, Having a resounding endorsement from our shareholders is a vote of confidence as we begin our integration. We do not take your support for granted, and we continuously aim to earn your trust each and every day. With that, I'll turn it over to Scott to walk you through the financials, and then I'll come back to discuss our 2024 outlook. Scott.