Summit Materials (SUM) Q4 2023 earnings summary

Executive summary

• FY23 net revenue rose 9.9% to $2,442.7M and Adjusted EBITDA rose 17.6% to $578.0M, setting annual records.

• Strong aggregates and cement pricing offset lower volumes; acquisitions supported growth while divestitures reduced revenue in some areas.

• Argos USA integration advanced; materials represented ~80% of pro forma 2023 Adjusted EBITDA, and year-end net leverage was 2.1x.

Financial highlights

• Q4 net revenue rose 19.8% to $613.1M and Adjusted EBITDA rose 14.5% to $136.5M; operating income rose 5.3% to $68.5M.

• FY23 Adjusted diluted EPS was $1.58 versus $1.27; free cash flow was $197.7M versus $32.7M in FY22.

• FY23 operating income rose 15.5% to $310.6M, with operating margin of 12.7% versus 12.1%.

• Q4 net income attributable was $3.0M, or $0.02/basic share, versus $29.8M and $0.25; adjusted diluted net income was $37.8M versus $38.3M.

Outlook and guidance

• FY24 Adjusted EBITDA guidance is $950M-$1,010M; capex guidance is $430M-$470M.

• 2024 assumptions include G&A of $330M-$370M, D&A of $300M-$350M and interest expense of $195M-$215M.

• Outlook cites strong pricing, moderating cost inflation, stronger aggregates margins, improving demand, commercial conditions and operational synergies; targeted synergies are at least $30M.