Martin Marietta President and CEO Ward Nye noted that 2019 was another record-breaking year for revenues and profits. He attributed it to the company’s strategic priorities: safety, ethics, cost discipline, and operational excellence.
In its 25th year as a publicly held business, Martin Marietta reported strong results for 2019. “Throughout our history, we’ve positioned our business to outperform through the disciplined execution of a proven strategy and a keen, shared commitment to the world-class attributes of our business, including safety, ethics, cost discipline, and operational excellence,” said Ward Nye, president and CEO of Martin Marietta during an earnings conference call.
2019 annual results “clearly validate the importance of these strategic priorities,” he added. “We reported a much improved year-over-year fourth quarter that capped off a 12-month period of record-setting financial performance. In 2019, we once again established new records for revenues, profits, and adjusted EBITDA from improved shipments, pricing, and cost management across most of our building materials business.”
For the year, consolidated total revenues increased 12 percent to $4.7 billion. Consolidated gross profit increased 22 percent to $1.2 billion. Adjusted EBITDA increased 15 percent to nearly $1.3 billion. Diluted earnings per share were $9.74 per share, a 31-percent improvement.
“Our 2019 results mark the eighth consecutive year of growth in these financial metrics,” Nye said. “Martin Marietta’s repeated ability to translate revenue growth into increased profitability has been, and continues to be, a differentiator, as strong earnings growth drove a total shareholder return of 64 percent in 2019, more than double the S&P 500.”
Nye underscored the numerous benefits of the company’s commitment to safety. “Safety is a core principal and the foundation of our strong financial performance,” he said. “We are proud to have achieved world-class lost-time incident rates company wide for the third consecutive year. Additionally, we’ve meaningfully improved safety performance at our legacy Bluegrass Materials operations acquired in 2018 – our company’s second-largest acquisition.
“From the boardroom to site operations, our teams have embraced our Guardian Angel and Wingman-branded safety culture. This continued commitment has elevated safety awareness across the company, reducing downtime from workplace incidents and leading to higher revenues and profitability,” he said. “Most importantly, working safely protects our employees and the more than 400 communities in which we live and work.”
Build materials results
For the full year, aggregates shipments increased 12 percent to 191 million tons and aggregates pricing rose by 4 percent. “Notably, for the first time in four years, aggregates shipments to all three primary end-use markets increased, reflecting improved strength in public and private sector spending in our markets,” Nye said.
Cement operations established new full-year records for volumes and gross profits. Shipments increased 10 percent to nearly 3.9 million tons. Pricing increased by 3 percent.
Ready-mixed concrete shipments decreased 2 percent due to weather challenges in the Southwest and Rocky Mountain regions. Prices increased “modestly.”
Asphalt shipments improved 7.5 percent, while pricing increased nearly 4 percent.
“We are excited to build our momentum,” Nye said, noting the company plans to capitalize on attractive fundamentals that support sustainable and long-term construction growth in its markets. “This underscores the importance of a notion we have long articulated: Where you are matters.”
The company has positioned its business through aggregates-led expansion in high-growth mega regions.”These mega regions exhibit attractive market fundamentals, including population growth, business and employment diversity, and superior state fiscal position,” he explained. “Notably, Texas, North Carolina, Georgia and Florida will account for nearly half of our nation’s population growth between now and 2040. That is a staggering statistic in four of our top 10 states by revenue. These states are experiencing, and will likely continue to experience, a significant influx of people requiring homes, schools, offices, restaurants, and roads. In short, population growth will drive increased consumption of heavy-side building materials in key Martin Marietta-served markets for the next two decades.
“With that in mind, we are confident that construction activity in our top 10 states will continue to outpace growth nationwide,” Nye said. “The combination of strong infrastructure funding levels and healthy private sector activity is expected to drive both increased shipments and better pricing, resulting in record-level profitability for our company in 2020.
“We’re proud of our 2019 record financial results and industry-leading safety performance. We’re equally optimistic about the future of Martin Marietta. As we move forward, Martin Marietta remains committed to positioning our business to be aggregates led in high-growth geographies and aligning our product offerings to leverage strategic cement and targeted downstream opportunities,” he said. “We will continue to be disciplined in our solid strategic plan, in our team’s commitment to the world-class attributes of our business: safety, ethics, cost discipline, and operational excellence. We look forward to continuing our strong momentum in 2020 and further strengthening our foundation for long-term success.”
See the full results here.