Summit Materials saw volume and prices increase across most lines of business in 2015, with revenue rising by 20.5 per cent led by its West and Cement segments, the company said in a statement.
Tom Hill, CEO of Summit, stated: “2015 marked a significant year of progress for our company, in which we meaningfully enhanced our materials exposure, improved our capital position and met or exceeded nearly all our core operating metrics. During the year, we increased our Adjusted EBITDA margin by approximately 460 basis points primarily driven by organic price improvement in each of our lines of business and the successful integration of our accretive acquisitions, especially in cement. In our core aggregates business we finished strong with fourth quarter volume up eight per cent and organic price up 6.9 per cent, representing the fourth straight quarter of improved pricing.
"In cement, we more than doubled our shipments in the fourth quarter and capitalised on positive pricing opportunities in our markets, while further solidifying our strategic position in the upper Midwest.
"In our ready-mix and asphalt businesses our fourth-quarter gross margin improved 500 basis points reflecting the benefits of our vertically integrated businesses. This collective improvement demonstrates the strength of our materials based-strategy, which focusses on securing attractively positioned reserves in well-structured markets, with selective downstream exposure.”
In the fourth quarter of 2015 alone, aggregates volume and pricing were up eight and 7.3 per cent, respectively, with organic pricing up 6.9 per cent. Cement volumes rose 129.3 per cent while prices increased by 24.7 per cent. Consolidated net revenues advanced by 22.3 per cent, with growth in all segments, primarily from acquisitions.
After the close of full year 2015, in February 2016, Summit acquired American Materials Co (AMC), an aggregates company headquartered in Wilmington, NC. The acquisition expanded Summit’s geographic reach into the high-growth coastal North and South Carolina markets through five strategically positioned sand and gravel operations, with an estimated 40.5Mt of combined aggregates reserves.
Going forward, Mr Hill said that the fundamentals in the company's markets remain quite positive for private construction activity, and believes US construction activity is still in the early stages of recovery. Additionally, its infrastructure end markets are poised to potentially benefit from the recent passage of the five-year highway bill, the FAST Act, in December 2015.
"The enhanced visibility of the FAST Act provides a catalyst for states to embark on larger scale and more material-intensive projects. Specifically in Texas, our markets continue to exhibit positive economic growth, population influxes and increased spending on infrastructure. As we move forward in 2016 we believe we are on firm footing to execute on our growth, price and cost initiatives to deliver on our adjusted EBITDA expectations,” he noted.
