Construction Partners (ROAD) investor relations material

Company overview and strategy

• Operates as a family of companies in the Sun Belt, with eight platform companies across different states and 110 local markets.

• Focuses on road construction and maintenance, with vertical integration in aggregates and liquid asphalt.

• Growth is driven by both organic expansion and acquisitions, targeting markets where they can be the largest or second-largest player.

• Prefers to enter growing markets and form partnerships with local operators.

• Acquisition strategy includes buying competitors to capture market share and improve margins.

Market dynamics and competitive structure

• Asphalt's physical properties limit transport to 40-50 miles, creating localized markets with distinct competitive dynamics.

• Market structure typically features two to four players, depending on market size, preventing monopolies.

• Local teams build long-term relationships with public and private customers, adapting to market demand shifts.

• End market exposure is about 65% public and 35% commercial, with a focus on higher-margin, complex projects.

• Recurring revenue is supported by the need for regular road resurfacing, typically every 8-10 years.

Vertical integration and operations

• Owns aggregate facilities and liquid asphalt terminals to capture margin along the value chain.

• Liquid asphalt terminals in Florida, Alabama, and Texas enable wholesale purchasing and margin gains.

• Recycling is significant, with 30-40% of asphalt sourced from reclaimed road material.

• Projects are typically short in duration and size ($1-3 million), reducing estimation risk and supporting margin consistency.