Summit Materials, Inc. (SUM) Earnings Call Transcript & Summary

Good morning, and welcome to Summit Materials 2022 Investor Day. I'm Karli Anderson, Chief ESG Officer and Head of Investor Relations. We're so happy that you can join us today either in person or virtually as we update you on our Elevate Summit strategy. Now we unveiled that strategy about 14 months ago. And when we did it, we were holed up in our offices in Denver, Colorado, in a makeshift studio. So to be here in person today in New York feels terrific, and we're so glad that you can join. Before we start, a couple of reminders. First, today's presentation is being recorded for replay, and it will be available along with all the other presentation materials on investors.summit-materials.com. Now today, we're going to be talking about our Elevate Summit strategy, our near-term and our long-term projections. So we're going to be making some forward-looking statements which, by their nature, are uncertain and outside of Summit Materials control. Now while today's discussion reflects our current expectations and beliefs, actual results may differ in a material way. So we encourage you to review our risk factors, which can be found in our 10-K filing. You can also find reconciliations of the non-GAAP measures we're going to discuss today at the Appendix at the end of the presentation. Now for the agenda. We're going to start today with a safety share from our EVP and General Counsel, Chris Gaskill. Then our CEO, Anne Noonan, will give you an update on our Elevate Summit strategy, our progress to date and her insights on our business and our industry. Then we're going to introduce you to our Chief People Officer, Deon MacMillan, who's going to update you on how we're raising the bar on talent. After a quick break, I'll return to the stage to discuss our ESG initiatives. And then I'll introduce you to our new Chief Strategy and Growth Officer, Kekin Ghelani, who will update you on Summit's plan for innovation and growth. Then you're going to get to meet our 5 regional presidents, who are all going to talk about their unique businesses and how they contribute to Summit's strategic direction. Brian Harris, our CFO, will then join us to discuss capital allocation priorities, our free cash flow projections and our 2022 outlook. Then Anne will return to the stage with summary concluding remarks, after which we'll take questions from the audience as well as from the webcast. If you're on the webcast, feel free to submit questions at any time during this presentation, and we'll do our best to address as many as we can at the end of the session. With that, I'm going to turn it over to Chris Gaskill, our EVP and General Counsel.

Thank you so much, Karli, for the introduction. As tempting as it is, I can assure you, I'm not up here to recite the risk factors to you. I am very pleased to be back here in New York. As you all can see, I started out here in New York at Simpson, Thacher. I've been at Summit Materials for 7 years now and have really been incredibly impressed over the last few years of where the company is going and where it's gone and our new strategy. I do want to talk to you a little bit about safety today. You will see that safety is our core -- one of our core values, and we start every meeting with a Safety Share no matter what the topic of the meeting is and no matter who's attending. So today is going to be no different. And I want to talk a little bit today about being careful about paying attention to your colleagues. We had a quarry worker a couple of weeks ago who noticed that his colleague was not looking right, was looking jaundice to the face, indicated that it was having pain in his right arm. And thankfully, that quarry worker had enough insight and forethought to think that, well, maybe this individual is having a heart attack. And so he did call 911, the ambulance arrived and ended up saving the guy's life. And so just a reminder that it's incredibly important to always be paying attention to those around you. A couple of safety notes for today, in particular. You'll see at the back of the room here, there's 2 doors that are marked exit. Those will be the doors that we take should we need to evacuate the room, these 2 doors up here actually don't open. So just bear that in mind. If we do need to evacuate the hotel, we will gather under the awning at the Peninsula across the street. We do ask that you do come to that gathering because it enables us to make sure that everyone made it out safely and soundly. I know it will be tempting for some of you to go back to your offices and things like that, but please do indulge us in that regard. You'll see here we are on a raise platform today with a couple of steps. Do want to remind everyone to use 3 points of contact, when coming up here, incredibly important. And with that, I just want to say that I am very pleased and very honored to be able to introduce my President and CEO, Anne Noonan.

Thanks, Chris, and good morning, everyone. Welcome to our 2022 Investor Day. Let me echo Karli's comments and say it's great to have so many of you in person, and also welcome to those of you who are on the webcast, and I hope to see you in person very soon. Before I go into what we're going to cover today, I do want to just thank you all for the candid feedback you've given us since we started our Elevate Summit strategy and continue to give us feedback, and we want to encourage that as we move forward. So what are we going to do today? We're going to talk about what we do, what we've accomplished and most importantly, what lies ahead. And to help me do that, we're going to have this -- you are now seeing the full senior leadership team of Summit Materials. I'm incredibly honored to work with this team every day. They're passionate about what they do. They've deep functional business and operational expertise. And most importantly, they're entrepreneurial and have a growth mindset, and that's something you'll see as you talk to our regional presidents. I'm particularly happy to say my senior leadership team is now full with the addition of Kekin Ghelani as our Chief Strategy and Growth Officer. And so we'll really be accelerating our execution even from here. And I know many of you have asked to talk to our regional presidents, and I hope what you'll walk away with today is a better understanding of the differences, the different strategies and market dynamics between our regions. So we're going to cover a lot of stuff today, okay? But what I hope you'll hear is the incremental details of our strategy that we have a clear and sound path to meeting our business, operational and ESG goals, and most importantly, to see the optimism that we have for our business. Now in the midst of all this information, I hope that you'll keep these 4 takeaways at the front of your mind as we go through a lot of the information. First of all, we are laser-focused on expanding our quality of earnings resulting in margin expansion. We are also have made substantial progress on our portfolio optimization and have reduced leverage. And thirdly, it's a great time to be in this industry. It's underpinned by very strong price and demand dynamics today. And finally, Summit Materials capital allocation position is the best that it's ever been in history. So please keep those in mind as we move forward. So what I won't tell you today is that we're changing our strategic direction. There's no strategic pivot here. We believe very strongly in our Elevate Summit strategy. This team has worked very hard for the last 14 months to drive execution, and we produced record results in 2021. So what you should hear as we go through the day is a doubling down on that strategy and really focusing on our 4 strategic priorities of market leadership, asset-light, sustainability and innovation. So let's shift to safety for a moment. As you saw, we start every meeting with safety. It's a core value at Summit. And I'm actually incredibly proud of our 5,500 employees because they not only take care of themselves and their colleagues at our locations every day, but they have a firm commitment to keeping our communities safe. Whether that's in the form of the roads that we laid the foundation on or the vehicles that we drive all over our communities every day. As you can see, our results, these are lagging results. Our recordable incident rate has more than half since 2010. We've improved our preventable vehicle incident rate also over that time frame. But what I will say to you that's different as we move forward, we're not happy with just getting better year-over-year. We are absolutely focused on a zero harm culture and developing that culture over time. And how we're doing that is becoming much more forward facing on our metrics. So looking at leading indices and looking at predictive data to actually analyze trends and prevent accidents before they happen. And one example I'll give that is actually in all of our short-term incentives is we do risk assessments on all nonroutine activities. We've added an extra layer that every manager has to review those risk assessments, so you get a double set of eyes on everything. And so this is much more forward leading. We've also doubled down on our 5S programs and improve the value of our quality discussions. So now that you're all feeling hopefully a little bit safer, we'll move into the next part of the agenda, what we do. So as many of you know, Summit Materials is a vertically integrated company that produces cement, aggregates, ready-mix concrete and paving mixtures. We provide services in paving and construction. The vertical integration model allows us the opportunity to be the single source of supply to many of our customers in many locations. It also allows us to pull through the value of our high-margin aggregates expanding margins at every point along the value chain. It's not only important for Summit, but our customers value this, and this is the critical part here. They get efficiency, reliability, and we see it as a competitive advantage. Now that being said, we are materials driven. 68% of our EBITDA was driven from aggregates and cement at the end of 2021. And as we think about growing the business moving forward, the quality of our reserves is very important to sustain organic growth. Today, we sit on 3.9 billion tons of proven and probable mineral reserves and 1.8 billion tons of indicated and measured reserves. Said another way, the average useful life of our aggregates is 55 years and our cement is 170 years. So the key takeaway from my comment here, we're in a great shape to sustain organic growth which many of you have asked me about as we think about the backdrop of an infrastructure bill. So where do our products go? If we think about our lines of business, end markets, commercial or nonresidential, residential and public. And our products go into all forms of life. So think of a single-family home. It takes up to about 400 tons of aggregates for every single-family home. In nonresidential, we play in industrial sites, we play on strip malls. And we also operate more recently and is a key advantage for us in wind farms and solar farms. And for context, each wind farm takes about 100,000 cubic yards of ready-mix concrete. In our public, it's driven largely by infrastructure. And again, for context, if you think about mile of highway, it takes up to about 40,000 tons of aggregates. So heavy aggregates-intensive businesses. As we think about the split of our business, we have 36% in public, 32% in residential and 32% nonresidential. Now I'll be going into a lot more detail on this later on in each segment. But suffice to say, we're very positive about the underlying demand dynamics that exist in all 3 of our end markets today. So let's talk about our geographies. Our top 5 states are Texas, Utah, Kansas, Missouri and Virginia, and they make up 65% of our revenue. Our top 8 states make up 75% of our revenue, but that will move over time because we are rapidly growing in Georgia and the Carolinas also. When we look at our lines of business, our products are ready-mix concrete and asphalt. Our services are paving and construction. And you see the big differential here on the margin of our lines of business in cement and aggregates. This is exactly why we are materials led, and we're shifting our portfolio to a more materials-based company over time. Now I do want to point out our 3 financial reporting segments. We have our East region, which makes up our East segment -- sorry, that makes up our Central region and our East region. Our West segment is made up of our South region and our West region. And our Cement is more a stand-alone business and region. Now that's important as the regional presidents present later so you understand exactly that they're talking on the regional basis. So where we operate is important. When you think of our business, we sell aggregates, ready-mix and asphalt in a 50-mile radius. Why is that? Because transportation costs are prohibitive to margins if you go beyond that. Also think about our business as being hyper local from a competitive perspective, and we have to be excellent at the customer base. We play in those rural and ex urban markets that are the connective tissue between the cities and the suburbs and rural regions. Now on top of that, we believe that we have actually got a geographically advantaged footprint. And why do I say that, because right now, there's the convergence of multiple megatrends that we believe are uniquely suited to supply growth and outsized growth for our footprint. And the first of those is migration. So even prior to the pandemic, urban costs were rising and many were moving to the suburbs and rural areas. That accelerated during the pandemic. And on top of that, now add flexible work hours, more space -- need for more space has continued the migration. We've seen that in all of our states. The other factor I will point you to is e-commerce. The reliance on e-commerce has driven the need for more warehousing, data centers and distribution centers. And that, again, is you don't put those up in the middle of a city, you put them in the rural and suburban areas. The other focus, the trend towards wind farms is another area where we are uniquely positioned with respect to that. So the message up here is we are in advantaged markets. And the data supports that. So one of the things we look at is population growth. In our top 20 MSAs in 2021, we grew at 9x the national average and it's forecasted to continue that way. So between 2021 and 2040, we're predicted to grow at 22% compared to 10% in other states. So we have that -- or 12%, we have that 10-point advantage. The other factor I would point you to is not how many are moving into our states, but who is moving to our states is a very important factor because it's forecasted that growth between up to 2040 will be largely driven by 25- to 40-year-olds. In our top 10 states, they'll grow at 3x the national average. So again, you've got this advantage. So why is that important? Because they're the prime age for home formation. And there's a historical linkage between housing starts and home formation. And if you look at pre the financial crisis, you could think that basically 1.2 starts were equivalent to 1 home formation. So there is a definite linkage over time, and it makes sense. 25- to 40-year-olds are amassing wealth, they're buying homes, they're setting down roots and with them comes economic development, which we believe is very significant in our states. And then finally, we talk about being #1 or #2 in rural in exurban markets. And 90% of our markets today since we've launched Elevate Summit, we are in our leading positions and we will continue to strengthen those and expand. And this, I couldn't have said a couple of years ago. So we really have driven that leading position over time. So we're advantaged by major megatrends and our states are very strong. So let me shift gears and deep dive a little bit into our 3 end markets at this point. And I'm starting with residential because that's the one we seem to be talking about a lot these days. And I would just say that the summary is we remain bullish for the long term on residential driven by key supply-demand dynamics, and the data is just there to support this. So let me start with demand. There's 4 factors that we'll turn to when we look at the demand dynamics with respect to residential. And the first one is I get that mortgage interest rates are rising, but for those of us who were old enough to be around for double-digit mortgage interest rates compared to historical levels, it did not stop people choosing home ownership. And that factor has continued over time. The other thing that makes it even more implicit this time is that rents are rising by about 20%. And actually, a recent study in Austin, where they looked over a 15-year period and compared the difference between homeownership and renting, they said that Americans amassed $140,000 in wealth. So bottom line is, we believe homeownership is still a viable alternative even with higher mortgage interest rates. The second factor I would point to you on demand is backlogs. There is huge pent-up of demand. And you've heard us talk right throughout the year that basically permits were outpacing starts. That moderated somewhat in April. But if you look at the difference between starts and completions, there's still a gap of 20%. And that's very significant because that work has to be made up. So something has to give there. The third thing that I would point to when we look at demand is the capitalization effect of Americans. So Americans are very well capitalized. Since 2021, there's been savings of $2.6 trillion. And millennials have doubled their wealth since 2019. Now why is that important? Millennials, again, they're the prime cohort for housing starts today. They are out in the market buying homes, amassing wealth and continuing to invest in their communities. And when we look at our states, we believe they're advantaged in that regard as well. The fourth factor that I will talk to on demand is around our -- is more specific to Summit's markets and that's the affordability factor you see up here. So even pre-pandemic, we have always had an advantage because of where we operate in that rural and exurban area. We have a better affordability rate in most of our businesses and our geographies, And that has continued through the pandemic. We believe that, that's a secular trend over time. So let's switch to supply. There's no doubt for decades we've been underbuilt in single-family homes. And in fact, since 2009, starts have basically -- home formation has outpaced starts by 100,000 a year. So what has this resulted in? We are now sitting at 1.6 months of inventory in this country. And if you look at the underbuilt situation, that's 1.7 million homes. So if you take these secular demand drivers, which we believe are durable and the tight supply chain, something has to give, and we believe that it will continue to grow moving forward. So again, bullish on residential. So let me switch to nonresidential for a moment. A year ago, when we were talking about nonresidential to many of you, we said, no, we're not seeing any growth. And this chart shows you the reason why we're seeing nonresidential accelerate as we speak. And if you look at the chart, you can see that up till 2019, residential pretty much tracked with nonresidential. But then this dislocation occurred where residential took off and you start seeing that 12- to 24-month lag of nonresidential. And so we're right in that period now and that -- we're seeing that in the indices that we watch. So the ABI index has been over 50 for the last 15 months. The Dodge Momentum Index was up 17% April year-over-year. And so we continue to see this growth accelerating. And most importantly, we didn't see projects last year when I was talking to many of you, but we're seeing a lot of nonresidential projects right now. So we're seeing it in our business. So in our Central region, we're seeing wind farms with big LNG projects in our Cement business. We've got warehouses in British Columbia and many warehouses along the East region. So nonresidential, we see that growing for quite a while to come. Then I switch to public. And public has never been better funded. And it's 36% of our revenue. And the one thing I'll say about public, it tends -- if you look at historically, it tends to be very reliable and less susceptible to economic cycles, which is an important factor. And as we look at our public spending, just for our business alone, what's driving the current state of public funding is COVID relief dollars and high tax revenues and they're very substantial. So I'll give you a rundown of our top 5 states. So in Texas, our lettings were up to $10.1 billion, which is the highest in 5 years. In Utah, the transportation budget is up to $1.8 billion, which is a 40% increase year-over-year. In Kansas, the budget is at $2.2 billion, which is up $300 million year-over-year. Missouri has a $3.2 billion budget and has an ongoing tax rate of $500 million of a year, so significant funding. And then finally, Virginia is up 8% to $7.2 billion. So very strong funding. And we're actually seeing that in the numbers. So if you look at the April year-to-date lettings, our contract and paving awards, on a national basis, they were up 21%. In our states, they were up 32%. So again, proving our strong position here. So all is well right now on public funding. But now you've got the impact of a $1.2 trillion infrastructure bill, which is badly needed in this country, as many of you know. That's going to add 5-year reauthorization of the FAST funding. It's going to add another $110 billion in funding for highways and then additional funding for rail, wind and energy. And when we step back and look at this, many of you have asked, well, when are you going to see this? Our best estimate is 2023. And then what impact will it have to our business. When we look at just the formula funding alone, we believe it will add $70 billion of funding to our top 8 states. Now if we look at national estimates, the PCA has estimated a 9% per year growth over 2020 levels. ARTBA has estimated on highways a 7% CAGR. So as we kind of step back and try and understand what that means for Summit Materials, at a minimum, we believe that we'll stay at least at the current exposure we have to public funding -- to our public sector. And we take the ARTBA number as that mid high single-digit number, and we look at our proportion, historical proportion, of public spending. And we look at that and we say, we are actually calling for low single-digit growth from the infrastructure bill with some upside. And we believe that may be conservative, but it's right in line with how we operate in our different states. And our regional presence will talk about their different level of public exposure as they go through to give you a better idea on that. So bottom line, public is very strong. So let me shift gears a little bit and move to more Summit and our culture and how we govern. So our governance starts with our Board of Directors. We are very fortunate to have a very engaged Board of Directors that are very diverse, have deep expertise in their various functional and business areas. And each one of them challenges us every day and supports our Elevate Summit strategy. From a governance perspective, we've made significant progress around declassifying our Board, eliminating supermajority voting and putting in an employee stock purchase plan. When we talk about diversity, we have 56% gender diversity on our Board, which matches our 50% at our executive team. And we recently added Tamla Oates-Forney to our Board. Tamla comes with a huge background in people management. She's currently the Chief People Officer in Waste Management and came from GE originally, where she was the first African-American female able to take an executive role. So we're delighted to have Tamla here at a time when we're actually really investing in people and have that support. The other thing I would say, our Board has really upped the game on our charters around ESG oversight. And as a result, our Compensation Committee is now the Human Capital and Compensation Committee. Our governance is sustainability and governance, and we've added additional charter items to our Audit Committee for ESG oversight. So from a governance perspective, we're in a really good shape as a company. So let me talk about our history, which does inform some of our future direction here. As many of you know, we started as Blackstone was -- backed us in 2009, we were formed as a private company and we grew over 11 years with 80 acquisitions. So very much a roll-up strategy. In 2015, it's public and that's when we acquired the Davenport assets and extended our position in cement. In 2016, Blackstone exited the stock, and between 2016 and 2019, we did another 29 deals and continued to invest in greenfields over time. And then at the end of 2020, that's when I joined the company and sat with this great group of individuals who work with me every day, and we developed the Elevate Summit strategy. And as you all know, that was a keen focus on portfolio optimization, which we've executed very well on the last 14 months. And as a result, we've generated $470 million in proceeds. Why is that important? It gives us the financial and strategic optionality that we have standing here today to move forward with a stronger company. And so with that, I'm going to switch to our Elevate Summit. So we've talked about what we do and now we'll talk about where we're going. As always, our strategy is ingrained in what we stand for as a company. So our mission is to lay the foundations to connect our communities and build a better tomorrow. Our vision is very important. Every word does matter and does count. So I'll kind of take a moment here. We will be the most socially responsible. That's an absolute commitment to social responsibility, you're going to hear a lot more about that from Karli today. Integrated construction material solution provider. I will talk about the value of our vertical integration. You will hear several of our regional presidents about that also. And that we've made a commitment to partner with stakeholders to actually develop our innovation agenda, and Kekin will give you his initial ideas all 2 weeks in of where he can lead to innovation moving forward. And then our values. We're a very values-based leadership team. I talked about safety. But integrity, sustainability and inclusivity is something we live every day. And I'm a firm believer that what a company does is extremely important, but even more important is how a company does it. And that's how we engage our employees and deliver results every day. So with that, let me turn to our strategy on a page, which should not be new to many of you who've been with our story here for a while. The foundation of everything we do is our people. And we have made significant investments in people and they are something that you will hear Deon MacMillan, our Chief People Officer, talk about how we're really upping our game on the people side. With this strong foundation of people and enabling capabilities around the culture of excellence and standardization, we believe that we can drive strong strategic execution on our 4 key strategic priorities. So our first one, just to remind you, is market leadership where we said we'll be #1 or #2 in rural and exurban markets. And as you know, that's required us cleaning up the portfolio a little bit and really making sure that we are leading in the markets that we serve. And we've made significant progress on that, that we'll talk about later on. From an asset-light perspective, we've become intensely focused as a team on return on invested capital. And I'm really very pleased with the progress. I would say this is the area we've made the most progress in because it's ingrained in the organization, it's part of our DNA. And I'd like to use a great example of when we were developing the tools to measure our returns on every asset and business. Jason Kilgore was in the meeting when we were developing our strategy, and we were looking at all these return on invested capital and we took a break. And he went out to our CFO and said, "Hey, you give me a list of all those returns on invested capital of our assets, et cetera." Within a week, he had a full list of what he was disposing of because we weren't returning value to our shareholders. We then put that in the incentive plans, and that's why you'll see a lot of progress as the regional presidents talk about the asset-light model. And just as a reminder, our asset-light model is where we partner with industry leaders or with customers to divest the downstream and then sign a long-term aggregates supply contract at market pricing, not at cost-plus, at market pricing to pull our aggregates through and we end up having a heavy materials-driven business and reducing our capital base from the downstream markets. And we'll give you many examples of that as we go through it today. Our social responsibility, Karli will talk about our 3 main areas of human capital, land reclamation and emissions reduction. She'll talk about the fact that we have a baseline in place. We've got specific targets and should give you real-life examples of how we're living sustainability in action at our company today. And then finally, innovation. As I said, Kekin is only 2 weeks in, so we'll give him a little bit of a buy here, but he's going to share his initial thoughts with you and I know several of you at the cocktail hour last night had some questions around this. So he will proactively address that. So with that, it's my pleasure to introduce you to our Chief People Officer, Deon MacMillan who's going to tell you how we're going to upgrade talent and invest in our people. Thank you.

Good morning, everyone. Thank you, Anne, for the opportunity today as well as the ability to join Summit. I actually joined Summit just over 1 year ago and have had over 30 years building a career in that of HR and 20 of those years spent supporting and leading in operations and manufacturing organizations. A fun fact about myself is I was actually born and raised in Alaska. And even more interesting, my 3 daughters are fifth-generation Alaskans. One of my early career experiences was working in oil and gas at a refinery in North Pole, Alaska. Yes, every day when I drove to work, it was Christmas 365 days a year. Two of 3 of my daughters are choosing the more operational path within this industry. One is currently a construction manager and the other is finishing her Masters this next year in construction project management. So not only am I professionally invested in this industry, but I'm also personally invested in this industry and where that is heading. I'm passionate and challenged by working with organizations that are undergoing large transformations and are high growth. And my true gravitational pull professionally is to support an organization where the team members are largely boots on the ground and a no collar workforce. So the Summit opportunity checked all of those boxes for me. So very grateful to have the opportunity to join the team. Summit and its leadership has reflected thoughtfully on the type of culture we wanted as we began to transform our operating model. Our desired culture can have a tone that's set by the leadership here. It can actually be stewarded by the HR group. But culture must be lived and experienced by all 5,500 of our employees. Our employees are, hands down, the most valuable asset and we've set out to be an employer of choice within the industrial sector. Everyone by now has heard the phrases and even probably felt these phrases of the war on talent and the Great Resignation. There are many headwinds beyond just these items in our industry. As an example, high turnover, especially in first year employees. Struggles with diversity of our talent like women in operational roles or diverse talent in leadership positions. While we may share in these common challenges across our industry, it is a great time to be in our industry and it is even better time to be at Summit. As a leadership team, we are committed to leaning into these challenges and even more committed to change. But how do you do this practically? It was clear as I joined Summit that we were ready to approach supporting our employees in a very different way and make a strong investment in the talent. So we took quick action to signal this to our business in 2021. For our U.S. employees, we held our health benefit flat from '21 to '22, absorbing what have been 10-plus percent increases to our insurance premiums. To encourage ownership at Summit, we launched our first-ever employee stock purchase program, achieving greater than a 6% participation rate with over 30% of those participants being in hourly roles. And with every enrollment cycle, we're improving that. Like many of our operational and commercial parts of our business, we recognized a need to have a more standardized approach to the foundation of HR programs, practices and the ability to respond to our employees more quickly. And as such, we've invested in our functions of HR and communications by establishing areas of functional excellence in areas like talent acquisition, total rewards and HR operations, learning and development as well as engagement and culture. We published our first DEI report. This is notable as it states where we are at and it helps us to come to terms with the work that we need to do. Improving data and using analytics to help inform where our focus is will ensure that we don't dilute those results and those efforts. All of these changes occurred while we were supporting a business through a pandemic, leadership changes and very strong M&A activity. These immediate actions are all keenly focused on reducing turnover, improving diversity and enhancing engagement across our workforce. We are laying the foundation of how our teams will work and live. Moving forward, we continue to build on this momentum and continue our investment on talent. In 2022, we stood up a new talent acquisition aka recruiting organization to reduce our time to fill roles and to improve the quality of those candidates to be a fit within our industry. There's also a very strong emphasis on embedding leading diversity practices within those processes. Within each of our regions, we have a focused professional recruiting team engaged directly with our companies. We are also moving to a more standardized structure. As noted here, it's called job architecture. And some of you may ask what the heck is that, and why does it matter? This is core to building not only standards, but being able for us to be more innovative in practices like career progression, performance management, compensation and workforce planning. Some might kind of call that the kind of the foundation of a lot of our HR work. We're also standardizing policies and services to take a great advantage of our scale and more ease of operating, things like leave management, health and welfare offerings, et cetera. Simply put, by standardizing and creating efficiency across the foundation of people practices, this will free up our leaders to meet our employees where they are at, to build stronger relationships and a stronger purpose with our team members. Now is the time for novel solutions, not being kind of dragged down by bureaucracy or creating bureaucracy or not toiling on things that should be, quite frankly, easy to do. If you give people freedom, they will amaze you. But let's talk about those leaders for just a brief moment. We're also doing a very focused investment in supporting and building the best frontline leaders to touch the hearts and minds of our most important asset, our people. By focusing on our frontline leaders, we are able to impact more people faster. For approximately 500 existing and future leaders, we designed a leadership development journey that provides development in a personal effectiveness, fostering engagement and building strong and capable teams. We've also designed a program to identify and assess existing and emerging leaders to ensure we provide them meaningful experiences for their career, and they can see a career at Summit Materials for the long term. Bottom line, we are transforming Summit as a career destination. This is not just talk. Investing in people has been a top priority, as Anne noted, and we're backing it up with ambitious targets for turnover, engagement and diversity. So with that, I will turn it back over to Anne to discuss the structure that makes this operating model work. Thank you.

Okay. So as many of you know, we developed Summit by growing for a roll-up strategy. And so when we developed our Elevate Summit strategy, we knew that there were 2 reasons that we had to recalibrate our organization. One was we're now a $2 billion company. We're on our next phase of growth and value creation so it's time to leverage the scale and size of Summit to drive enhanced execution. The second reason we were recalibrating our organization was actually from feedback from our investors. And that was where several of you in our first perception study said, "Hey, I don't like the inconsistency of some of your results. And the decentralized model is really not -- doesn't feel like it's the most efficient and effective model that's driving value for our shareholders." So to address that, we committed to their Centers of Excellence and to really drive commercial and operational excellence across our corporation Summit-wide. It wasn't that we weren't doing things well in certain regions, but we were doing them consistently across the region. So the overall goal of our Centers of Excellence is to share best practices, get a consistent way of doing things. But in addition to that, then up the game and set North Star objectives for every one of our lines of business from an operations and commercial perspective. To do that, we had to organize a little differently. So we went into an organizational design that basically kept our regional structure, which each one of the regional presidents will talk about. And that structure was designed to drive excellence, decision-making, keep it down to the lowest level and empowerment within our regions so that we were agile and quick and could execute better. The second thing we did was turn around and put Summit-wide roles in place. So to drive a line of business capability across Summit, we've asked each one of our leaders to put on their Summit hat. So an example, just real life is that I'll look at Jason first here. So Jason grew up in an asphalt and paving and formed his own company before it was acquired by Summit Materials. And so Jason leads our entire enterprise-wide Summit Materials asphalt and paving Center of Excellence. Bart Boyd has generational experience in agg, he's our aggs guy. We call him our aggs guy. And he's got the operational experience to drive that on a Summit-wide basis and really lift our performance over time. We've got Scott Anderson, who's -- he's a little different. He's got some financial background to him and some operational stuff, but he's a man on the numbers, and he's going to expand those margins in our ready-mix downstream. And then Jeff Perkins has a wealth of background in sales, so he leads our overall commercial excellence. And I've been incredibly proud of how we've set up these Centers of Excellence, and they're gaining momentum. And you'll hear them talk about them, and we'll talk about the explicit impact of these as we move forward. And then David, he's kind of the stand-alone guy. He's got the cement. So he's got commercial and operational excellence for cement, and he'll talk to that. Why I'm being very explicit on this as the guys are going through their presentation, they will talk about the regions, then they'll also talk to you about what they're doing in their Center of Excellence for Summit overall. So let me just bring us back to our financial glide path. When we first launched our Elevate Summit 14 months ago, we said we would do it over 3 horizons. We would commit to 30% EBITDA, over 10% ROIC and less than 3x leverage. And we would continually be transparent and report to you along the way. This next scorecard is one you've seen many times, we report every quarter on this. And even though it won't always be a linear path, we're going to be transparent with you along the way. And this shows exactly where we are as we stand here today. So on our leverage, by the end of 2021, we had achieved 2.5x leverage, which was 0.7 turns reduction from the year before. In Q1 of 2022, that went to 2.8x due to the seasonality of our business. And then ROIC by the end of 2021, we had achieved 8.8%, just shy of our 9% Horizon 1 target, and by the end of Q1 2022, that's out at 8.4%. Our EBITDA margins on an LTM basis at the end of 2021 were at 23.3%, an expansion of 70 basis points. Now that moderated somewhat in the first quarter as we lapped a very hard comp from the prior year, and we actually put costs in place to prepare ourselves for the season coming ahead. So bottom line is we're making progress. I will tell you the progress is further along, and we'll go into the specifics of this later on than I would have anticipated 14 months in. So the team is executing well. So let me go on to the next part of the agenda, and I'm going to go back a little bit to go forward here for a minute, so bear with me. I started by thanking you all for your feedback. If you recall, when I first became CEO, we did a perception study back in September, October of 2020 and you all participated and you gave us some very clear feedback. And I thank you for that because it was very consistent, too, is the other thing. It was -- were not a lot of doubt in our mind what you wanted. You said our leverage was too high. A lot of questions was our downstream value creating. And you said that our results were inconsistent. And we took those 3 things and we said, okay, we've now reduced leverage to 2.5x. We've proven we can do that. We feel we got that one checked and we're in good control. We've divested several underperforming downstream assets and delivered $470 million in proceeds to the portfolio. And we've recalibrated our organization with these cultures of excellence on commercial and operational excellence that are designed to drive sustainable results over time. So we feel like we've really got some momentum addressing those first 3. Now you were kind enough then at the end of 2021 to do another perception study for us. And we've got some clear messages back there. The message was very positive, like the Elevate Summit Strategy, like the execution and transparency. But there were a few areas you wanted more detail on. And one was the journey to 30% EBITDA margins and the journey to 10% ROIC. The second thing we heard from you was, hey, we like that you're most socially responsible in your ESG targets, but we want more detail. The other thing we heard was we're not sure about the power of your footprint. And then the final thing, you wanted more guardrails around our Horizons. So for the rest of the day, we're going to come back to this one slide, and this will be our agenda for the remainder of the day to try and address some of the open items that we had when we did our last perception study. And I'm going to start that straight away with our journey to 30%. So you can see from the slide here that, really, the journey to 30%, the big contributors are price net of cost inflation, market leadership and portfolio optimization. There's very little in that margin expansion from sustainability and innovation. So why do I say that? I say that because these -- this chart came from a complete roll-up from our forecast from all of our regions overlaid with some market and economic data. And so it's a bottoms-up roll-up. It's not something that we just put on a chart and said we'll get there sometimes. So this has real rigor and data to it. Now that being said, I didn't put timing in here because I don't want to give you some false sense of accuracy that we have here. We're really driving to show you a defensible and credible path to 30% margins. And you will see as the regional presidents go in their individual presentations how that is made up over time. So as we go through the rest of these, we'll go through each one of the elements and talk through them, and then we will deep dive into the regions later on. Now the path to ROIC is a little different. As all of you are keenly aware, companies that outperformed their peers on ROIC, drive better valuations and more value for the shareholders. As I said earlier, I think we've made significant progress here. It's now in every person's -- top 35 people in the company have this in their long-term incentive plan. And it's a way of being. It's a DNA in the company that all the ideas are bubbling up from the bottom on assets that are not returning value. And so when we look at our returns, and I'll give you a great example of one of the deals we did and the impact it had. So in Jeff's area, we had divested in asphalt and paving business. And it was actually destroying $4 million per year of value with the ROIC of 3%. And it was the team that kept identifying these opportunities and driving ROIC over time. Now as you look at our glide path here on ROIC, you'll see no doubt that portfolio optimization and asset light have a big needle movers as we move towards our 10% ROIC. The other point I would make is 10% is a floor number for us. So as our cost of capital is now in the high single digits, we'll continue to improve that and keep ahead of it over time. But I feel very confident that we've been moving the needle here very well, and you'll hear that in some of the regional presentations. So let me kind of pause now and go into each one of the key elements. So our cultures of excellence. You will see that they add about 0.5 to 4.5 percentage points across that bridge. And the thing I would like you to take away is it's really about having a price and cost mindset. And our commercial excellence programs are heavily driven on value pricing. I can tell you, I am more than pleased that we got ahead of pricing and had instilled some of this discipline prior to heavy inflation hitting us because, in 2021, we were really pushing on price earlier than inflation hit. And we're continually working at that every day. We've been focused on customer segmentation, improving the customer experience, but really do have momentum on pricing now. And traditionally, this industry has been a 1 price per year type of industry. We have been in multiple price increases. The team is known how to execute, treat our customers with respect and do this appropriate way, driving value wherever we can and keeping ahead of inflation. On the other side of the equation, though, we got to control what we can control. We got to do our costs. We've got to mitigate costs through our hedging programs. We've got to leverage that Summit scale, whether it's through setting up a centralized procurement organization, whether it's through our operational excellence initiatives, which each of these individuals are leading objectives to bring our cost down and improve our productivity. It also has helped overall our communication and agility by having these centers of excellence. Now when I think about what's the difference between 0.5 percentage point and 4.5 percentage points, it really will be the timing and pace at which we get these cost impacts, reductions and productivity improvements and get that pricing ahead of inflation. But I will tell you what we use as our North Star to see how we're progressing. So we've said we're going to be materials-led. The big needle movers on our progress will be -- our margin expansion will be cement and aggregate. So we've set North Star objectives that we will approach over the time period. For cement, it will be a 40-plus percent EBITDA margin. And for our aggregates, at the end of 2021, we had on an LTM basis, adjusted cash gross profit margin of 51.7%. We will be approaching and driving towards a 60-plus percent margin in that area. So there are the 2 things I would say you'll hear us talk about and look about to see how we're doing on our bridge to have this impact from our centers of excellence. I will also say we have included in that bridge our best estimates of inflation as we sit today. So they're pretty high rates of inflation. But the goal is always that we've talked many times, we keep that pricing ahead of the inflation and our regional presidents will talk about that also. So the next element of our bridge is market leadership. I've talked a lot about our advantaged geographical locations. We've talked about the strength of our end markets. So I'm going to focus more on our greenfields and optimizing portfolio M&A. So from a greenfield perspective, as we've talked many times, our greenfields are what are going to sustain our organic growth over time. We do have a depleting resource, so you have to invest in your greenfields. We have now done 8 out of -- we have 8 completed and 3 under development primarily in our Georgia, Kansas City and Carolinas. And since 2014, we've spent $230 million invested, and that will amount to about $50 million per year run rate basis by 2024. So we're starting to see the impact of that investment over time. This will add about 450 million tons of reserves to our total strength that we have already on reserves. And most importantly, our greenfields are designed to be in high-margin, high-growth markets. So as we think about approaching that 60% margin target, this is accretive to that and very important to have this investment over time. So let's turn to our portfolio and M&A. As you all know, we grew through a roll-up strategy. M&A is in our DNA, and I couldn't be more excited to say how happy we are to be through a lot of the portfolio optimization and divestitures and be pivoting towards a heavy growth focus at this point in time. We have a very active M&A pipeline. We have over 60 deals at different levels of discussion, whether they're proprietary or an auction phase. But we are very active. And our strategic priority around -- just to remind you, around M&A is, first of all, materials-led. Secondly, it's about being in locations that strengthen our current position or adjacencies and it's always where we can drive value and margin accretion, leading to our overall goals over time. And you'll hear various opportunities that the different regional presidents and how they're focusing their growth from a geographic and portfolio perspective as we move forward. But the message is as we move from Horizon 1 into Horizon 2, think about much less divestiture asset-light, much more M&A, so very much growth focused. So with that, I'll move to asset-light. As you saw, we announced our tenth divestiture last week. This was the divestiture of our Henkel business in Kentucky. And with the reason -- there was a strong strategic and financial rationale and going ahead with that divestiture. And the main reasons were it's in an isolated geography where we don't have any other parts of our footprint. It also tends to be a low-growth market. So it doesn't fit that market challenge that we have to be #1 or #2. So while we had a leading position, it wasn't high enough growth. And candidly, historically, it's had some inconsistency on public funding. The other thing it had was a heavy reliance on asphalt and paving, which meant that it was kind of counterintuitive to our goal to be more materials-led. And then from a financial perspective, the margins generated by that business were lower than our overall portfolio and didn't have a clear path to getting to a 30% EBITDA margins. So we believe that we did the right thing by selling this business. It's sold at over 10x multiple in a business that's largely downstream. So very value-creating for our shareholders. So if I step back and look at everything we've done from a divestiture perspective, we've now completed Horizon 1. We've done that 10 to 12 that we said we do. We said we'd generate over $200 million in proceeds. We've actually generated $470 million in proceeds, which leaves us with great flexibility moving forward. I think you'd agree that this is pretty sound execution by our team. They sold all of these assets at very high value, and now we're poised for better strategic and financial agility moving forward. The other thing I would say that 8 out of the 10 divestitures had an asset-light deal associated with it. So what did that mean? It meant that we were able to basically divest downstream assets to reduce our capital deployed, but we also put in place long-term aggregate supply agreements. And what that did was allow us to keep the aggregates volume that we had and allow us the potential to grow in a more materials-led business. So to show you a real example of that on the next slide here, I'll go through the criteria that we set. So when we do an asset-light deal, we're very strict on a set of criteria that has to be met. The first and most fundamental one is a foundation of trust because we're signing long-term deals here and we need to be with partners that we can trust over time. The second thing that's critically important is that we do deals with market leaders. And why is that important? It's important because if we're signing a long-term aggregates deal, we want to make sure they're growing and that we have the ability to expand our aggregates position by pulling it through their downstream market. So that's very important. Then we do our normal analysis, our business case and make sure that it strengthens our position strategically and is aligned from a financial perspective. A great example of this is in our Central region. We recently did a swap, which basically we swapped our asphalt and construction business for 5 aggregate quarries. And with that, we signed a long-term supply agreement at market pricing for our aggregates. So what that did was allow us to expand our position in our growing Kansas City area, which Scott will talk about in the Central region. But that deal alone gave us 150 basis points in margin improvement to the Central region. So I think it's very important to see that these can actually shift that portfolio mix to a materials-led business and allow Scott's business to grow more with a stronger base and a higher margin profile. There's been a lot of investor interest around vertical integration, so I thought I'd cover it here briefly. As you know, we are vertically integrated. We sell our aggregates both externally and we sell them into our ready-mix and asphalt businesses, which are then sold on into some of our paving businesses. And it's important to understand how we operate in both the upstream and downstream here. Bottom line is where it's done right in the right market dynamics, it's very value-creating for our shareholders. And so if you think about aggregates, we're investing in reserves. We're investing for multi-decades. The return is a little slower to come in, but you're investing for the margin and the quality of that business over time and the fact that you're going to drive towards that 60% margin accretion through your greenfield investments. So high margin, maybe at slightly lower ROIC. On the downstream business, you've got a completely different dynamic. You're investing in plants and equipment, lower capital base. So it might have half the margin, but it has doubled the ROIC. And when you see this play out, it really does strengthen the value of our portfolio over time. A great example of this, which Jason will go through is our Kilgore, we show the example here. They have the best return on invested capital in our entire portfolio and command really strong margins in our Utah business. So when you think about vertical integration, here's what I would leave you with. Number one, we're really good in the downstream at Summit Materials. I have to say we are the best in the industry in the downstream. And I say that objectively because I'm new to the business. Secondly, I would say where it's underperforming and we're not #1 or #2 position, as we've proven, we will divest the assets and replace it with long-term aggs deals. But then finally, the point I will leave with you is that we will be unapologetic about being vertically integrated in the markets where it works. And those markets have the following characteristics: first of all, they're moderate- to high-growth markets; secondly, they're largely consolidated; third, we compete with the same competitors along the value chain; and most importantly, we invest in those markets with leading positions and our customers value the downstream. And the Kilgore company is a great example of that exact dynamic. So we believe that there's continued value and unlocking value for our shareholders through this vertically integrated model. Now I've talked a lot about market leadership. I've talked about our greenfields, I've talked about our asset light, we've talked about vertical integration. And all of the work that we've done so far, results in something. And I'm really excited about this next slide just so you all know. So -- okay. So we have reach in the mix and we will continue to reach in the mix over time. So in 2020, we had 63% of our EBITDA from cement and aggregates. In 2021, we had 68%. We are very much on track that by the end of Horizon 1 to over 75% of our EBITDA from cement and aggregates. And I want to make a point here. It's not by just divesting our way and getting smaller. This 75% is 75% of a larger pie that's driven by the organic growth that we talked about in our leading positions, our investment in greenfields. Yes, some of our portfolio-optimizing moves, but also our optimizing portfolio M&A. So overall, we believe that we are really driving the composition of our portfolio to a materials-led business, which should show you that margin accretion over time as well. So I'm not going to spend a lot of time on social responsibility because Karli has got a tremendous amount of information, and she's much more knowledgeable than I am on that topic. So -- but what I will say between social responsibility and innovation, we've only added 1 percentage point of margin expansion. So I would say, a very conservative approach to innovation there as well. All of our bridge is built primarily of the things that are already in play, which is our price net of cost inflation, market leadership and portfolio optimization. Karli will talk about where we are in the baseline targets and give you real-life examples of where we are in social responsibility. And as I said, Kekin will give you his idea on innovation and show you where we're going over time. So with that, the good news is that I'm going to give you a break and you don't have to listen to me for a while, okay? So when you come back, what I want you to expect is Karli will go in detail on ESG, which addresses the second concern that you had in your last perception study. Then you will hear from each of our regional presidents the power of our footprint. And as I said at the beginning, you will walk away with a better understanding of the differential strategies that we have and the market dynamics. And then finally, I'll come back up, talk a little bit about Horizon specificity and we'll move from there. So thank you, everyone. We will take 10 minutes break and then we'll come back promptly and talk about sustainability. [Break]

For those of you that are participating on the webcast, I also want to put a reprompt out there. We've gotten a few questions in already. So thank you for sending those in. As you are on the webcast, feel free to continue to submit those questions and we'll do our best to address those at the end of the session in addition to fielding questions here from the audience in the room. So going back to where Anne kind of left us off, she told you about the components of our Elevate strategy, our success to date as well as where the contribution to that -- to the margin and our journey to 30% will come from over time. Now each of our business leaders is going to share some specifics about how we're advancing the Summit Elevate Strategy. Effectively, we're going to show you how we bring that journey to 30% to life. So a little about me. I joined Summit about 3 years ago. And my career until then had been in the global mining business. So gold, copper and silver mines. Had a great experience visiting operations all over the world and getting to know that business extremely well in a number of financial roles. But I joined Summit for 2 reasons. The first one is the entrepreneurial spirit. You're going to hear this more from our regional presidents, but each of our companies is run either by a founder or somebody that has worked with a founder for most of their career or by a founder. And that entrepreneurial spirit means that you can really marry the near-term objectives with the long-term sustainability of your business in a way that you just don't see in a big company, and that's really special. The second reason I joined is the compelling value just of this industry. So coming from a mining background, where your commodity price is subject to the whims of the macroeconomy and your economics are beholden to the grade of a deposit, this business is local. It's special. It has pricing power. And service and relationships matter, and that's really exciting. Finally, as Anne mentioned, we have a continuous feedback loop really well established with our customers, our investors, our stakeholders and our employees. And that means a lot. It helps us develop a strategy where we have a good deal of alignment, and we work really hard to continue to stay aligned. That provided the underpinning for the Elevate Strategy and also for our emphasis on social responsibility. So what are we doing with social responsibility? It's a key pillar of our strategy because sustaining our business is critical to the future for our customers and for our stakeholders. And we need to go where they need to be. And our approach is informed by 3 priorities because there's a lot you could do under the rubric of ESG. And so prioritizing is really important. So these are our objectives. We want to do things that are driven by the best available technology, that are customer driven and that are value enhancing. So those are our criteria. And those resonate, not just with us sitting at a support center, but within our individual businesses. And so what I'm really delighted about is that I have the smallest head count within Summit, but we accomplish a lot because we have exceptional engagement from the business. For example, I'll bring an initiative forward to our regional business leaders and just as often they bring something to me that can both lower emissions, reduce costs and sometimes even drive our top line higher through various initiatives that can help us from an ESG perspective. Now from a longer-term perspective, some of these things are in the future column. Those future opportunities need to mature probably a little bit before the value-creation picture is more clear. But that doesn't stop us from analyzing and piloting some of those opportunities today. Because from a social responsibility perspective, Summit size is an asset. We're an entrepreneurial company. Our structure is flat. We can and do move quickly to pilot new technologies. And we know we must move in a more sustainable direction to extend the long-term value of our business, serve our customers and be an employer of choice. So on the next few slides, I'm going to give you some clear specific examples of sustainability in action. What exactly are we doing? Well, in each line of business, we have specific initiatives that are driving value. From our aggregates business, I'm going to start with 2 examples. First, we have a lot of diesel-powered equipment. As we engage in routine repair and maintenance, we're replacing the diesel-powered equipment with electrical where we can, for example, in our dredges. And we've also begun bringing line power out to sites that previously ran on costly and high-emitting diesel-powered gen sets. Moving to line power will help us accelerate our transition to renewables as many of our utility partners are already making that transition. Our second involves fuel efficiency. We've worked with our fleet telematics provider to develop the reporting capacity to drill down to each vehicle safety performance, understand its fuel efficiency and its carbon emissions, not just in our transport vehicles but also in our yellow iron. We believe there is a clear link between safety and efficiency that yields benefits in terms of lowering injuries, lowering costs and reducing emissions. From a sustainability perspective, we also could not ask for a better partner in that journey than the Continental Cement Company. They have been sustainably reusing waste materials for fuel in the cement manufacturing process for 30 years. They replace over 40% of their kiln fuels with alternative energies instead of coal, which is far ahead of the U.S. industry benchmark. Continental has worked with customers to accelerate the adoption of lower-emitting Portland Limestone Cement. And they've also begun to work towards applying for DOE funding to support the piloting of carbon sequestration advanced research. They've even created a technical report that outlines the path to reducing and ultimately eliminating the emissions from our cement plants. Our ready-mix business has a big opportunity to address emissions and lower costs across the value chain. This picture shows the control room at our Columbia ready-mix plant in Missouri, where they are injecting food-grade CO2 into the concrete mix. Once injected, the CO2 undergoes a chemical reaction where it transforms into a mineral, thus, increasing the compressive strength of the concrete, reducing the need for as much cement in the mix and then also reducing our costs while we are also piloting artificial intelligence solutions that will reduce the cost of materials and additives to lower total emissions and boost the economics. In our asphalt and paving business, we're working with our National Industry Association to develop environmental product declarations for our asphalt plants. These EPDs illustrate exactly what our environmental exposure is on each load of asphalt that we produce. We're also using EPDs in our ready-mix business. In Utah, we were the first to be awarded a ready-mix job recently because the EPD supported specific upper limits to the global warming potential that the customer required. We were able to design mixes to meet each concrete requirement and win business along the way. Another central component of our sustainability strategy is diversity, equity and inclusion. Under Deon's leadership and with alignment throughout our business, we are committed to making our employee base more closely resemble the communities that we serve. It's imperative that we demonstrate that anyone can build a fulfilling career in construction materials. This includes a focus in 4 areas: first, identifying opportunities. As Deon mentioned, we just conducted our first employee engagement survey and so we're using that data to better understand the experience of our people. Our D&I report, we published our EEO-1 data, so we showed where we start today as a baseline and as a benchmark. Today, Summit stands at about 28% people of color and 11% female. We need to be able to be transparent about where we are in order to provide you progress on where we're going and where we want to be. We're elevating equity. So we will be completing our first ever pay equity study in 2022. And we're activating diversity with a frontline leadership program, which is going to effectively develop our frontline leaders and employees and also having them to understand unconscious bias, learn new perspectives and build relationships. And finally, we're leading with inclusivity. That's why it's one of Summit's key values. We're standardizing DE&I across the business and developing employee resource groups to better support our people. As part of the Elevate Summit strategy, we've aligned on 3 North Star pillars, each of which was most important to our employees, our customers, our stakeholders and our community leaders. Through that materiality assessment, we identified that they are most interested in social impact, land use and carbon emissions. In 2021, we established our baseline for performance across these 3 pillars. And in 2022, we established our 2030 and our 2050 targets in close consultation with the same cohort of stakeholders. What I want you to take away is that we will report on our progress along the way, and that we'll use the same lens that I talked about in my opening remarks. When we look at ESG, we will look at it in terms of using best available technology, what is customer driven and what is value enhancing. A lot of our sustainability opportunities are also innovations. So that provides the perfect segue to introduce our new Chief Strategy and Growth Officer, Kekin Ghelani.

Thanks, Karli. What a great time to join Summit, isn't it. So I'm Kekin Ghelani, the new Chief Strategy and Growth Officer. I've been here for 4 weeks. So if this doesn't qualify as hazing, I don't know what does. Since I'm new, I thought I'd tell you a little bit about what gets me up in the morning. I've been so fortunate, since the beginning of my career I've worked with really talented people on some really interesting large-scale opportunities. My first job out of undergrad, I worked with the team at General Motors that use massive Monte Carlo simulations to redesign their global spare parts, warehousing and distribution operations from a blank sheet of paper. During my 8 years at Honeywell, I was fortunate enough to have a medical and health care materials team that was open-minded enough to question every aspect of our business. We went and studied our entire value chain all the way down to our end users, did a number of interviews to understand why they chose our solutions versus other alternatives that they had. And boy, did we learn a lot. We used those learnings to not only completely rewrite our value proposition, target new market segments, redo our pricing strategy, but also completely changed how we sold and who we sold to. My 6 years at Celanese began with a 6-month strategy deep dive on our businesses as well as our industries, which resulted in the 2 core operating model that they continue to use today to differentiate and outperform their peers. And most recently, I'm coming here from DuPont, where I worked with an incredibly visionary team. Together, we took several of our single-product technology businesses and transformed them into complete solutions providers for those market segments that valued it. But you know enough about the past, let's talk about something much more interesting: the future. Here at Summit, I'm going to be focused on 4 things: strategy and strategic marketing, M&A, digital, and of course, innovation. In terms of corporate development, as Anne mentioned, with the portfolio optimization work largely behind us, my corporate development team is really looking forward to reading more sims than they've been writing. Not only are we going to accelerate straight down the fairway bolt-on acquisitions that this organization has already -- has so much experience with and are so successful with, but also we're going to widen the aperture a little bit to include new material solutions and sustainability technologies that not only add new growth vectors to the company, but also elevate and fortify our core businesses through differentiation. In terms of digital, I've been so impressed with our IT and data analytics team. They're incredibly business oriented. They think about the business opportunity first and then the right technology and analytics to bring to bear for the solution. And now let me spend a little bit more time talking about innovation. How I think about innovation has really been shaped by my past. I've seen all sorts of innovation over the course of my career from the factory floor to the business back office to, of course, entirely new product technologies. And so here at Summit, we're going to take an expansive approach to innovation. Every leader in the company and all 5,500 of our people are going to have an important role to play. Innovation is going to be a driver, a competitive, sustainable advantage for us. Let me give you one real quick statistic. Over the past 2 decades, productivity in the manufacturing sector has almost doubled. And in building and construction industry, it's only increased by 20%, and we're going to address that starting with ourselves. We're going to leverage factory automation, advanced data analytics and digital technologies to modernize our operations to not only increase productivity, but also significantly improve the customer experience. Sustainability. We know at this point in time that sustainability is going to be a huge driver of change in our industry. And thanks to Karli, we're already ahead of the curve. You saw a couple of examples of technologies we've already deployed within our operations to start to improve our carbon footprint. But there's a lot more to do here. And so we're evaluating many more technologies in partnership with the public, private and academic sectors because there's just -- there's going to be a lot more to come here regarding sustainability. And again, we're ahead of the curve. And lastly, who here hasn't been impacted by the challenges in the building and construction industry from labor shortages and the increase in building materials and affordable housing crisis delaying projects, making projects much more costly than they had originally been. The world needs us to innovate new solutions that are not only easier to install, but also can be installed with less labor and in a broader range of weather conditions: when it's raining, when it's freezing or when is scorching hot out. The world needs us to innovate new solutions that are not only lower in-body carbon, but also more resilient durable at the exact same time. So with that, I would say this is my definition of a target-rich environment not only in terms of innovation, but also relative to M&A, digital and strategic marketing. And with that, we're going to pivot the discussion over to our operating presidents who are probably even more excited about growth than I am, and they're going to bring a lot of these innovation and growth examples to life through real examples. So let's start with David Loomes, the President of our Cement division.

Good morning, everybody. It's great to be with you. Very proud to be before you talking about Continental Cement and leading the Cement business in Summit Materials. I've been in the business for some 29 years. I started in South Africa. I've worked in different countries, different roles, spent time not only in South Africa, other short stints in Africa itself, in some short time in Europe, Canada and obviously now the U.S. So a consequence of that career is that I'm proud to say I've got 4 passports. I'm a big James Bond fan. The only thing I've got in common with him is -- Sean Connery is my favorite, by the way. Anyway, so I've worked with some fantastic people. I'm passionate about the industry. We do -- what we deliver and what we leave behind is tangible and it's there for generations. So I'm very proud when I drive around and I'm able to point out to family and friends buildings, structures, schools, hospitals, et cetera, that our product has been part of. It's something unique to this industry. The people are great. The culture is great. And particularly at Summit, very proud to be part of Summit with the culture that Summit has and the values. There's a complete alignment of values in the organization to the way I -- sort of my own moral compass. Sorry, it just moved. There we go. So I think just looking at what the values do for the organization, having a values-based organization to me is critical. It empowers the employees. Within Summit, people are encouraged to act and think like owners. And that's really important because it frees up that entrepreneurial spirit, you heard a lot of reference to that. And it also allows their creativity. And that accountability, people become more accountable because they see the benefit of the actions. So very happy to stand before you today to talk about my role and where Summit is in the cement space. We have 2 cement plants, 1 in Missouri, 1 in Iowa. Davenport, Iowa; Hannibal, Missouri. We've got 9 distribution terminals. We're up and down the river. Our markets are mid-single digit at the moment, benefiting from the factors that Anne spoke of, a lot of industrial activity in Louisiana in some of the LNG plants and such like. Our river-based distribution network and our terminal infrastructure gives us a competitive low-cost, low-carbon and safe mode of transport to market. Barge is the most competitive and the safest way to get your product to market. We've optimized the logistics. We've got a robust S&OP process. We've done a lot of work in compressing costs. Our terminals, we're able to scale, particularly in Louisiana, where we've won a lot of big work. We have 3 terminals there so we can leverage imports selectively and scale and be able to provide solutions to customers. We're differentiated by our culture. I spoke about that, our agility in how we make decisions and how we go to market and how quickly we can turn around solutions to our customers. Dependability, fundamentally, we do what we said we're going to do. Our logistics capability and also Green America, we'll talk more about that. But really, the cost advantage, the ES&G advantage and the uniqueness of Green America in our business is compelling and distinct differentiator for us. Where are we going? You heard Anne talk about the plus 40% EBITDA margin. That's our North Star. We have a team committed to achieving that and a key plan that's well underway, and we'll give you more specifics on that. It's underpinned by 3 -- really 3 key aspects: number one, customers. We're continually working with customers to make sure we understand their needs, to be looking around corners to see where their demand is headed to be able to fulfill that. And then we optimize as well. We're continuing that customer optimization, using data, using margins and making sure that we're harvesting and positioning ourselves optimally with customers. We do a lot of value-based pricing. We do a lot of margin work to make sure that our customer base is enhanced. Operations. We have a culture of continuous improvement. We're in a low-cost business in this industry, generally across all products. We have to continually turn over rocks, identify each lever of cost that we can, improve efficiency and make sure that every year, regardless of what we did the prior year, we've got to do better this year. And that's the accountability the team has to continuous improvement, that's the culture we have. Green America, good competitive advantage, as I said. We need to keep optimizing that. We need to look for expansion opportunities. And it provides, as Karli mentioned, a fantastic ES&G opportunity for us. Supply chain. A lot of good work done there. We can't rest on our laurels. We've got some good barge contracts, which we locked in for 3 years at really, really good rates compared to where the market is today. So but we need to keep optimizing that, again, through the culture of continuous improvement. And then being proactive. How do we -- still looking behind us, how do we keep looking forward? How do we be anticipatory of challenges, problems, opportunities that come our way. And then again, managing all performance levels. We -- it's a game of interest, this business. We've got to make sure we manage, measure and improve on all the key metrics that we -- that drive our business and our performance. Karli mentioned about our green projects, our spotlight on those. We are committed to reducing our carbon footprint at Continental Cement and Summit Materials overall. Cement is a big part of that commitment. We participate in and we seek out attractive green energy projects, and I've given some examples. PLC is a big part of that. We do work in [ saw ] stabilization as well down in Louisiana. There's a big LNG plant that we're part of with more work behind them in the backlog. And we also supply wind farms. So our customers come to us because they know of our agility, our responsiveness. We've done great work on port and limestone cement. Davenport is fully converted. Hannibal will be converted in the summer. So we will sell this year in excess of 1 million tons of PLC and next year, our entire production base will be port and limestone cement. So it's a great success story there. And our Senior Technical Director in Continental Cement, he collaborates with Karli and her team and obviously will do with Kekin as well on innovation opportunities to further our innovation pipeline and progress. So we have a plan. We have a strategy. It is consistent with the Summit Materials Elevate Strategy. We have a North Star, which is the 40%. And it really has 3 pillars to it: it's market leadership; it's commercial excellence, I spoke about that; and it's innovation. I believe I've covered all 3 of those points, and I'll be happy to take questions after if there's any more clarification needed on those. I also, as Anne mentioned, lead up the Cement Center of Excellence, which fits obviously with the Cement business. And we've got a lot of initiatives underway for the reasons I mentioned, as I've been talking to you today. I've listed 3 key ones. This is not obviously the end of the list. There's many others beneath us. But the Davenport Dome, we're investing somewhere in the order of $27 million in Davenport, building 125,000-ton storage dome. That brings us a safer operation, more efficient operation, and it also achieves us -- gives us a step change cost reduction in what would otherwise be winter barges sitting on the river, costing us in the order of $4 million a year. So a great investment in the Cement business, a vote of confidence for the Cement team. And obviously, we are executing the plan. PLC, I mentioned that. A lot of great success story there. The team has done an excellent job in taking that to market, working with our customers and the supply chain. And then cement grinding. We need to optimize and further continue to sweat our assets to make sure we get the output from them that we need. And we've got plans in place and underway to further improve our cement grinding performance. So again, 3 good examples. There are more -- and we -- once these -- these 3 are done, they're accomplished, we move on to the next one and we keep just refreshing that pipeline of continuous improvement. So I'll leave you 3 key takeaways. Again, our North Star objective is underpinned by these 3 key takeaways. It's 40% plus. We have a plan. We are working the plan. We've got momentum. The pricing is solid in the market. We've got good tailwinds on pricing. We're focused on value-based pricing and margin to drive the bottom line improvement. We're focused on driving continuous improvement operationally. And on the reinvestment economics, we need to get to the point of reinvestment economics that justify long-term expansion opportunities for Continental Cement and Summit Materials. Green America optimization is just a part of that. And then, of course, ES&G innovation are part of that path forward as well. So thank you very much. I'm going to hand it over to Scott, who leads our Central region.

Hey, good morning, everyone. Thank you, David. Appreciate that. It's good to see everyone this morning. I'm Scott Anderson. I actually joined Summit Materials back in 2009. I was actually with their very first acquisition of the Hamm Company. So those of you who've been around a while, I've been around a while. And I've actually -- I started out as a CFO at Hamm. And after Summit acquired us, they said, you know what, we're going to put you in the operations. So they made me the COO of the Hamm companies, which I served in that role for about 5 years, and then later became the President of Hamm. And now I'm the Central Region President across the Central region. The -- also, I live in Topeka, Kansas and I have the privilege to serve as an adviser to the KDOT Secretary as well as I serve as the Board President for the Kansas Contractors Association. So both of those roles actually give me some good insight. And I'm actually kind of proud -- I'm going to share with you a little more. I'm proud of what we've done in Kansas on the public funding picture and really got KDOT going in a good direction. But we'll share more of that. Right now, I'd like to take you to the next slide and really give you an introduction into the Central region. So when you look at the Central region, you're looking at Kansas and Missouri. And the one thing I want to point out is location, location, location. For our business in Kansas and Missouri, we've got over 100 aggregate locations. And those of you that know, we want to be close to our market when you're hauling aggs. And so we have that, we have the ability to really be the market leader across that region. And so we're taking advantage of all these locations. We're also in the downstream. We do have ready-mix. We have asphalt. But really, we're focusing more our portfolio mix on the aggs, which I'll talk to a little more. But I want to talk to you a little bit about the funding structure in Kansas and Missouri. I think most of you know, Kansas learned some hard lessons years ago. And they said, you know what, we've got to fix this and get the state fiscally on good footing. And so over the last year or 2 here, they passed that new program, the IKE Program, which is a $10 billion 10-year program that's really solid funding for the future and really heating up the pipeline in Kansas. But what I really like about it is they put guardrails on it this time. They said, you know what, it's not going to be as easy just to sweep the money out of KDOT whenever we need it for the general operating budget. They actually put some protection in place. So now you've got to have legislative approval. There's a lot more steps involved. So they've learned some from the past lessons. And so we're taking that into the future. Missouri, on the other hand, you probably heard just last year, they passed that fuel tax, which $0.025 a year for the next 5 years. It just keeps incrementally climbing, which is really going to fuel, I think, their program as well. So Kansas and Missouri, good public funding. It also goes down to the municipalities, the counties, the township. We're seeing it across the whole gamut. But really, what I want to point to on this slide before I go on is really that far right pie chart where it really shows our product mix. If you look back in '21, our product mix was 65% aggs. This is where we're reshaping the business. So I'm going to go to the next slide, and this will show you kind of where we're heading. So what we've done in the Central region, Anne has already talked to it somewhat, is we really said, hey, let's take a hard look at our portfolio and say, you know what, maybe we don't belong in some of these businesses and some of these underperforming businesses. And we took and we identified 6 divestitures that we've done in the last year just in the Central region. Anne highlighted the one where we swapped the asphalt and construction for 5 quarries. That's a huge move for us when you think about it. You're swapping a business that's making low single-digit returns for a business with EBITDA -- for 5 quarries with EBITDA margins up in that 35% to 40%. We've done that 6 times. And all of these deals, they're backed by supply agreements. Long-term supply agreements, 5, 10, 15 years at market pricing. Really good reshaping of the Central region and really increasing that 65% of the product mix to up to 80%. Really moving the needle on that. But we didn't stop there. We said, you know what, we've got to be focused on M&A as well. And so during the last year, we not only got rid of the 6 businesses, but we added 3 pure agg bolt-on acquisitions. So when you start doing that, you're really sweetening your mix. And that's what we're doing in the Central region. So when I look at that 27% to 29% in Horizon 3, I'm going, we're going to get there. Just last year, we were at 22%. We're already in the mid-20s in the Central region. And we're not done yet. We've still got more optimization to do. So pretty excited about the strategy and where we're heading. But what it's done for us though is getting rid of some of that downstream complexity in our business. It's really simplified our business and allowed us to focus more on operational excellence. You'll hear more coming from Bart, our aggs leader, that we're rolling out initiatives to really get good on operational excellence and get those productivity gains that we're looking for to be operationally sound. Not only that, it's on the commercial side. We're really focused on the commercial, moving the price, making sure we're getting that value pricing across our markets and capturing that value. And then, lastly, I really think it's positioned us. We're more of a streamlined operation in Central. We're positioned for that organic growth, which really takes me to the next slide, which I wanted to spotlight Kansas City. I think everybody's familiar with Kansas City. Large rail network, also interstate highways. Actually, Kansas City has the most interstate lane miles per capita of any of the metros. So you're talking a city here that I think is well positioned for build-out. And we're already seeing warehouses, data warehouses coming up all over the place in distribution, just with the major highway corridors that come through Kansas City. So I think we're well positioned for the nonresidential market there in Kansas City, but we want to build out more in Kansas City. Right now, we have locations just across the south half of Kansas City, which we entered about 4 years ago. And wow, it's been a great success. A matter of fact, one of them, we sited a greenfield 2 years ago there. And I know when we modeled it out, we said, let's try to get to 700,000 tons, and we'll get a good payback on this investment. Last year, we hit 1 million tons. So really excited about what's going on in Kansas City. But what's next for us? We want to get on the north side. So we're going to be looking at a greenfield on that north side of Kansas City, so we can open up the whole market and really tap into those additional opportunities. One last thing about Kansas City before I move on, they are finishing a brand-new airport. So a $2.5 billion airport that's going to open next spring. We really think that's just going to bring additional build-out opportunities there. So when you look at strategy in action, I just think of in action in the Central region. Since we've introduced the Elevate Summit Strategy, we've really made a lot of strong action steps. It's not a strategy of just talk. We're really doing stuff. We're divesting these businesses that are low single digit and we're getting into more agg-centric. So we're actually taking this strategy and we're putting in action. Think about on the commercial side. I think about the pricing strategy that we're doing, really trying to capture that value pricing. We came out January 1 across all of our markets with that mid- to single upper-digit price increase. We're also -- we're looking at July 1 coming out again. So we're going to capture those pricing increases. And we're disciplined to stay ahead of that inflation that everybody is talking about. So key takeaways. Number one, it's pretty simple in the Central. We've got solid public funding. We've got a great outlook. We got Kansas, Missouri, going in a great direction for years to come, good cash reserves. We have a backdrop of a Fed infrastructure coming behind that to even support that state funding even further. So we're pretty excited about that. That's my #1 takeaway. Number 2 is really our strength in portfolio mix, just moving it to more aggs and really taking the complexity out of the business and focusing on our streamlined operations. And then the third one is just really now we're going to really dive into our commercial excellence and our operational excellence in the business and really getting those productivity gains, really pushing out those pricing opportunities across our business. That's our 3 takeaways in Kansas. Now when I think of -- when I put my hat on for Summit-wide, Anne kind of mentioned, we're all a center of excellence leader. My area is ready-mix. And so when I think of ready-mix across our business, Summit already benchmarks very favorably in the ready-mix industry, but we're not finished there. We're really disciplined around our pricing and focusing on that margin expansion. So any time we get a cement increase or a material increase, we want to pass that through and make sure that gets through so we continue to have that margin expansion. I did list out just 3 of the initiatives we have on the operational excellence side. I won't spend a lot of time on these, but probably worth noting wash water stabilization. You go, what is that? Really, it's real simple. It's an agg mixture at the end of the shift that you -- that we introduce into the drum to reduce the buildup of the concrete in the drum. It's actually a real time saver. And not only does it save us hard cost of chipping out the drums and everything. But the big saving is time. At the end of the shift, instead of having to wash out the drum, you insert this and boom, you're done. So I think we all know time is money. So anytime we can save some time at the end of the shift, that's what we want to do. So we're rolling that out across all the business. Secondly, CarbonCure. Karli already mentioned the CarbonCure, really just taking the CO2 and injecting into the mix. It actually lowers our cost of the mix while reducing our carbon footprint. What a great play, and we've got these going in all of our major locations. And then the last one is concrete mix optimization. This is where we were taking a specialized software and really going through our mix just to look to optimize the mix and see where we can use substitutionary products and just lower the cost of that mix. I'm really excited about that technology that's going to continue to roll out over this next year. And with that, I'd like to introduce Bart Boyd and hand it off to him. He's the other half of the East segment in the East region.

Thank you, Scott. Leadership is getting shorter as we go here. Thank you. So my name is Bart Boyd. I'm the East Region President. I wanted to start this off by giving a special thanks to Karli, Anne and Brian for giving me the opportunity to do some -- 2 of the things that I get most excited about, that's putting on a suit and speaking publicly. So bear with me through this. But I'm a third-generation aggs guy. I've been 29 years in the industry, first 20 years with one of our peers. In 2016, I was co-founder there at Georgia Stone Products, subsequently sold 13 months later to Summit Materials company. They gave me the opportunity to stick around as the President and grow that business with an incredible team here at Summit. And then 13 months ago, Anne gave me the opportunity to lead the East. And it's been a really exciting time, a lot to do. Going to tell you a little bit about the East region here. We operate under 3 local brands. We've got Boxley that is up in Virginia. It happens to be the oldest business under the Summit umbrella. AMC, which covers both Carolinas. And then Georgia Stone, which happens to be the youngest company under the Georgia umbrella. But really, really cool mix of companies with Boxley being so mature and using -- leveraging a lot of that talent across the rest of the platform to really elevate our performance. A couple of things I want to point out here. If we look to the far right here, this sort of tells a cool story. These are year-end 2021 numbers. And this sort of supports Anne's comments around our movement toward an increasingly materials-led business. So again, you can see at the end of 2021, we were at 69% of our cash gross profit originating from aggs. The first part of 2022, shortly after another portfolio optimization move that we made in Virginia, it got another bump. And you heard about the Henkel divestiture which has now taken the East region to 90% of our cash gross profit originating from aggs. So really moving to a pure aggs play in the East. Additionally, you can see that we're in -- we are in positions 1 or 2 in 80% of the markets where we participate. We are in the process, through some of our greenfielding activity, of -- we're in the process of moving that other 20% into a position 1 or 2. That is in motion as we speak. So in the East, we have 3 focuses that we're really focusing on our way to this 35% EBITDA margin in Horizon 3. First is optimizing our position. We're growing this business through acquisitions and greenfielding. There was a lot of conversation questions last night with this team about that. In many of the markets where we are growing and tend to grow into, greenfielding is really the only option a lot of times. And frankly, we've gotten really good at it, not just the acquisition side of the business, but the greenfielding as well. We're doing this in high-growth markets and building in capacity into these plants that go along with these greenfields, flexibility, capacity, and again, the ability to change with changing market conditions. Second, a focus on commercial excellence. We've got an incredible sales team in the East that leverages their relationships and market knowledge, that does a great job of monitoring the market for changing market dynamics and trying to get ahead of that, whether it is inflation or changing demand, changing product mix, our team does a really good job there. And then differentiating and adding to the value proposition for our customers through superior service and quality of materials. All these things give us an opportunity to really maximize our value pricing opportunity. Lastly, we're continually working to maximize productivity. Through our plant upgrades and a focus on continuous improvement, we're finding ways to improve our efficiencies and cost structure. Additionally, these activities are untapping additional capacity at many of our sites. And this is extra important at this time where we've got really high demand in certain markets, and it's really starting to push toward the edge of capacity. So finding that extra capacity through continuous improvement is important. A little spotlight on Georgia. I wonder why I picked that. Well, we're really excited about Georgia. It's an area where we're probably growing at the fastest pace in the East. It is the area. We've got lots of M&A activity not just in Georgia, but in the Carolinas and adjacent states, to be honest. But right now, Georgia is where we found a lot of success here recently. We've got 3 relatively new within the last few years operating sites in the state, all of which have brand-new state-of-the-art processing facilities on them now. One site that's currently under construction that complements the existing footprint. And then one site that we opted to idle. It was proximal enough to one of our other sites that we opted to idle that, hold on to those reserves and scale up the location that was close. Two major areas that we're looking at for opportunities. One I just mentioned, so the Carnesville site is the one that is currently under construction and complements our existing Georgia footprint. And the other is the I-75 corridor. So I-85 stretches between Atlanta and Greenville, South Carolina where we play. And then I-75 is a market that we're not currently operating in, but we are at various stages of diligence on multiple sites. That is an area for us that is very exciting to expand into. It's a high-growth area. The competitive dynamics are really good and very appealing to us. Overall, we've got a lot of confidence in the strength of the Georgia market. We've got strong growing population, strong residential with low inventories right now, which is going to support growth in that sector going forward and a healthy public funding in Georgia. For anybody that followed House Bill 180 a few years back, it put an extra $1 billion in the transportation fund in Georgia, in addition to low unemployment. There's obviously a lot of excitement across the company around the Elevate Strategy. I've talked a little bit about market leadership and commercial excellence in the East region, but I wanted to touch on something here on the innovation front that we're doing that sort of relates to our greenfielding strategy. Again, had questions on that last night, so I wanted to sort of bolster this conversation a little bit. If you look at this top bullet, in the East, we're working on a proprietary greenfield playbook. This playbook is a tool that our team has developed that employs geospatial technology that contemplates market data, including population, population growth, housing starts, DOT funding as well as available geologic information, parcel sizes, zoning data that really gives us insight into political will in the areas that we're trying to expand into. And lastly, the tool also has competitive data points like competitor locations, next best options and distance to market. So we're super excited about this particular tool. It's something that we're using to really isolate the areas that we should be seeking greenfield opportunities, and it's something that we can use in any market. So that's something that's going to save us a lot of time going forward. So key takeaways, just to sort of reiterate here. We're on a third horizon mission to get to 35-plus EBITDA margins. We're going to do that through growing into desirable markets through greenfielding and acquisition, number one. We're going to leverage our commercial talent for delivering superior service and products. And we're going to continue to optimize our facilities and achieve lower costs through continuous improvement. Lastly, as Anne mentioned, I am the aggs guy. I have been in aggs, as I said, in my entire career. Something I didn't mention is it started all the way back at my internship with the Georgia Mining Association. I had a little bit of an inside track on that. But as such, I've landed as the leader here of the Aggs Center of Excellence. As you've heard, the North Star for this center of excellence is to lead our aggs business to a 60%-plus cash gross profit margins for the entire Summit aggregates platform. This is a lofty goal, but it's achievable. We have many individual sites that are currently at that level of margin or better. How are we going to make this happen? We're going to leverage the expertise and talent across the company. Over the last 10 to 11 months, we've assembled a really nice leadership team for the CoE who leads a committee that's made up of the aggs VPs from across the country. And it's the mission of this team to develop those initiatives and execute on the initiatives that make us better in many ways. And that's through standardization of processes where it makes sense; to deliver tools to our front line that helps them succeed, including standardized reporting and training on how to use that information to manage their sites better; and then additionally, resources to train on productive and preventive maintenance, which is critical to gain the availability and improve the productivity at every one of these sites; lastly and most importantly, working with our teams to make sure that continuous improvement becomes part of our DNA. This effort is currently underway, and we've already done several cross-region CI events that have been very successful, coming up with benefits to that site and the company, including safety improvements, customer experience improvements debottlenecking leading to improved capacity and other efficiencies that have led to lower costs. So with that, I'm going to introduce my friend, my colleague and aspiring cowboy, Jeff Perkins.

Well, thank you, Bart. Good morning, or as we say in Texas, howdy. I'm Jeff Perkins, and I lead the South region. 28 years ago, I left the aerospace industry to join what I think is the best industry in the country: the construction materials business. I actually had 2 jobs the first 28 years in my career, as I served in the U.S. Army reserves. So on weekends, when I was on the rifle range, I had a great time, but also on my day job selling rock during the week was spectacular. Before moving to Texas in the last 13 months, I worked at Boxley for the last 20 years in my career. I joined Summit in 2016 when Summit acquired Boxley. I'm the sales guy where Bart's the aggs guy. And at Boxley, I was -- grew up in the sales career path. But as we integrated into ready-mix, asphalt construction, I was given the opportunity to move into more operational and leadership roles. Boxley is known for their strong customer relations, their delivery expertise as well as commercial and operational excellence. And I feel like I've been able to bring those traits and leadership skills to the South region in the last year. Sorry, I didn't move the slide. So that's me. The South region has 75 locations, primarily in Texas, but also in Southern Oklahoma and Southwest Arkansas. We trade in the Houston and Austin markets as Alleyton and we trade in the North Texas Panhandle and West Texas regions as RK Hall. As most of you have talked about last night, the region has very strong fundamentals in migration. It's estimated that over 1,500 people per day are moving to Texas. We have economic diversification, not just oil and gas as in the years past, but now very high-tech industries moving into the region. And we have a very business-friendly climate. Our employees particularly like the fact that they pay no state income tax. Also, the state coffers are full and the DOT budgets are growing. As you can see, our public segment leads our business in the region followed quickly by our residential segment. We do not see a residential slowdown in the Texas market at this point. With in-migration and low inventory levels, the residential segment is very robust. Also, we have the public segment TxDOT budget going from $8 billion to, as Anne mentioned, $10.1 billion with the passing of the infrastructure bill. We're positioned perfectly to take advantage of those dollars as we have multiple mobile plants that we can move to rural markets to where those jobs are bid, primarily focused on bringing aggregate pull-through as we win those projects. So where are we headed in the South? We're going to be an aggregate-led market leader in urban and ex-urban high-growth metro markets with integrated downstream products and services. We are going to grow our business organically, particularly in the aggregates business with opportunistic ready-mix expansion. We're currently looking at multiple reserve expansions so that we can capture this growth. Our team is also focused on commercial and operational excellence. Just like the other regions, our commercial team has already integrated and executed multiple price increases across multiple business lines in the region this year. And we continue to see future growth in pricing throughout the rest of this year. We're looking to grow our aggregate reserves and increase our materials contribution. And as Deon mentioned earlier, we're specifically focused on employees and hiring and training the best employees in the region. And in this particularly, we're looking at our aggregate operations team where we've made some recent additions to the team that we've already seen benefits in our production and efficiencies and our capital deployment in these operations, so that we're putting more volume on the ground, more materials on the ground and growing our top line. So let's focus on South and Central Texas. As most of you know, in fact, I talked to one of your cohorts here that we talked about the triangle last night. Houston, Austin and Dallas, Fort Worth, are one of the 3 highest growing MSAs in the country. As I mentioned, diversifying economy. Tesla moving to Austin with 5,000 employees, Samsung building a $17 billion chip factory north of Austin. Hewlett-Packard and many other Fortune 500 companies moving to the Texas region. It's estimated that Texas population will grow from 30 million people today to 50 million people by 2050. And if you think about that, you basically have to rebuild those 3 MSAs in the next 25 years. Our operations are strategically located to capitalize on this growth. We are the market leader in the agg and ready-mix businesses in the Houston MSA. We're deploying capital to our Austin region so that we can grow organically. And we're using greenfields and Bart's proprietary playbook to identify potential greenfield opportunities in high-growth corridors across the state. It's a great time to be in Texas. So what's our strategy? We want to be the market leader in the high-growth MSAs. We want to continue to solidify our positions. We demonstrated that recently back in 2021 as we acquired the Multisource Sand and Gravel operation, propelling us to the #1 agg supplier in Houston. We also, as Anne mentioned, divested Austin Materials in 2021, a paving and construction business that was dilutive to our Horizon 1 goals. But I want to make clear, we kept the aggregate locations in Austin with long-term supply agreements with our customer. And I'm excited about sustainability. I won't go into CarbonCure except to let you know that we've installed it at 5 of our largest volume ready-mix plants in Houston. We have moved multiple locations to line power off our gen sets, which will help reduce our carbon footprint. And we, being in the sand and gravel business, have the great opportunity to have world-class reclamation. Our goal is to make sure that we leave the mine in better shape before -- than before we started mining the property. So my key takeaways are easy. We're in a robust economy. And we need to focus on all 3: organic, inorganic and greenfield opportunities to be able to take advantage of that growth. We want to be the most socially responsible, integrated construction materials business in the Texas, Oklahoma and Arkansas markets as we drive towards our Horizon 3 goals. And as I said, I am the sales guy in the group. So I have the pleasure of leading the commercial COE business across Summit. We have many initiatives that we've already implemented. And primarily, our immediate focus has been supporting our sales teams and implementing these multiple price increases that we've already executed in all the regions as well as preparing them for the midyear increases that we're currently announcing and moving forward with today. Other examples of where our team is focused is using data and analytics to segment our customers so that we can work with Bart's team and also drive our margins by looking at customers by product, by location, to see where we can drive those margins higher. And we're integrating technology to increase the customer experience. With that, I'd like to introduce Jason Kilgore for our West region.

Thank you, Jeff. Good morning, everybody. My name is Jason Kilgore. And I've been in the aggregate and materials industry for basically most of my life. I started as a 13-year-old boy on an asphalt paving crew shoveling asphalt and being around 285-degree asphalt. So it's been quite the experience. I've grown up in the industry, I've learned. My education has been through here. But I also received a finance degree from the University of Utah. In the year 2000, I started Kilgore Paving. And I started with a pickup truck and a 600-gallon tank on a trailer. And me and my brother and a brother in-law went around and we seal coat driveways and parking lots. That's how Kilgore started. And we eventually became a full-service asphalt paving business with aggregates, also construction underground. And then 10 years later, I sold to Summit Materials. So over the past 12 years, I've been here and Anne has promoted me to be the West Region President. It's been an exciting time to be part of such a great company. But I've also just love this industry and there's such a great opportunity to create value within Summit Materials. The West region is comprised of approximately 1,700 employees. Hard-working, dedicated people who love their job and love what they do. And that is at 82 sites that we have. We operate in 5 states, Utah, Colorado, Nevada, Idaho and Wyoming. Those 5 states are what's called Kilgore Companies. And then we also operate in Vancouver, British Columbia, which is Mainland. We are a top 3 player in virtually all the markets that we serve. And as you can see, 73% of our net revenue comes from Utah, followed by in Vancouver, 15%; and then Colorado was at 14%. By choice, I want to make sure I reemphasize that, by choice, we're well diversified in the end markets we play in. One interesting fact about who we are and where we play is our facilities, equipment and people are agile. And we can pivot to capitalize on end market opportunities. If residential slow down, our people are ready to move and go to more public work. 94% of our cash gross profit is derived from aggregates and products. Anne mentioned earlier that because we are vertically integrated in many of our locations, we are in a unique position to be the single-source provider for construction materials to our customers. The primary responsibility, okay, of our products and service lines of business is to pull the aggregates through to capture value at each stage of the value chain. So where are we going? Where are we headed? When the West arrives at Horizon 3, we will be at 26% to 28% EBITDA margin. We will do this by continuing to expand our aggregates volume by pursuing work that brings aggregate pull-through. We are focused on expanding our reserves and plant capabilities. Our organic growth will be enhanced through value pricing and our strategic relationships with our customers. We are very disciplined in our pricing approach, delivering continued growth and value. And the focus of our center of excellence will continue to reduce costs, enhance our pricing and profitability. So from a strategic standpoint, what are we doing? So we are consistently preparing the organization for opportunities. We are focused on securing new aggregate reserves, invest in assets to support our growth in the future, but more importantly, we're investing in our people. Our people truly are the future of our business and we focus on them by hiring the right people, retaining them and training them so we can develop them for our future. When I look at the potential for the West, I see many opportunities. We can see opportunities to grow our market leadership. We have more synergies that we can leverage between Mainland and also the Kilgore Companies. And we can grow our margins through data-driven customer segmentation. As we look to grow, we have a rich pipeline of M&A to expand our geographic footprint. The growth will be aggregate-centric and will drive margin expansion. Our ready-mix business in the West is very robust, drives valuable aggregate pull-through and we'll use our expertise to expand our presence in adjacent markets. One example of our ready-mix business of what we've done is we've created an app or we've implemented an app for our customers. They can order online, they can see where their trucks are online, on their phone and they know right where things are to make them more efficient, more profitable. It helps them stay off the phone waiting to talk to a dispatcher at our office. Earlier, you saw that 73% of the West net revenue comes from Utah. I'd like to talk a little bit about the state. We, along with our competition, I just want to emphasize that our competition as well is vertically integrated and it's where we capture value through the entire value chain through the vertical integration in this state and really in the West region. We focus on jobs that are aggregate-rich as our downstream businesses drive value as they pull the aggregate through. Utah is a high-growth state. It is in the top 5 for population growth with an unemployment rate of 2.1%. We find 2.1% in the books and online, but it really -- it feels like it's about 0 with trying to find people. The Utah Department of Transportation in the state is a well-run organization that partners with contractors for the success of projects, contractors and the state. And Utah spending is up 40% year-over-year. The Utah housing market has been extremely hot. The last 2 years, Utah has had over 40,000 housing permits. There is a short of housing supply across the state. Normally, there are 9,000 homes on the MLS. Today, there are less than 5,000 homes on the MLS. And in the month of April, the average home was on the market for 16 days. And this shortage is predicted to continue for a few more years. We have capitalized on this opportunity as a company, and our growth rate for the last several years has been mid- to high single digits. So we will continue to invest in our business in this high-growth state as we continue to see opportunities. So what does our strategy and action look like in the West? From a market leadership standpoint, we have successfully acquired and integrated over 20 businesses. Our development team is focused on finding and obtaining strategic aggregate reserves. And our geographical footprint gives us an advantage to grow in adjacent markets. In commercial excellence, we drive value through our pricing strategy supported by strong market conditions. And in operational excellence, this is an interesting statistic for the West. 34% of the aggregate in the West is pulled through utilizing our products and service businesses. The aggregates are priced internally at market rates. We do not use our aggregates as an opportunity to go capture work in the downstream. We make sure that the downstream has to stand on its own and they price the aggregates at market rates. Our vertically integrated business provides us some protection from significant demand swings. And given our expertise in the downstream business as market demand changes, our business is agile and we can pivot very quickly to where the value is in the market. For example, in 2019, the public work that we did in Utah, we had 37% of our end market was in public work. Today, it's at 18%, capitalizing on the opportunity in the residential market. If residential slows and the infrastructure package comes, we just pivot right back into the public market and we continue to move forward. So key takeaways for the West region. We will continue to capture value and expand our EBITDA margins through aggregate pull-through. As a reminder, the market is vertically integrated and 34% of our aggregate is pulled through in our products and service businesses and priced at market rates. With our rich M&A pipeline, we will expand our geographical footprint in businesses that drive our Elevate Summit Strategy. And we will continue to drive operational excellence throughout the entire region to achieve our Horizon 3 objective of 26% to 28% EBITDA margin. So I have the responsibility of the Asphalt and Paving Center of Excellence for Summit. And here are some of the items that we have been working on and that create value for Summit and for you as investors. One way to improve our ROIC is to make sure that underutilized assets are either utilized or disposed of. We have created a list of these assets and each region then takes action to sell them. Another item we have done, we've also created a tool that each estimating department uses to help determine what is the right job to pursue for the business. This tool magnifies how we should approach margin to bidding a construction job. We will focus on aggregate pull-through and a total margin to the company. Doing that shape's behavior, discipline and creates value. And last, we have implemented a computerized maintenance program that helps our crews maintain the plants, limiting downtime and increasing our opportunity to operate. So through the Asphalt and Paving Center of Excellence, we will improve incremental adjusted margins by 1% to 3%, driving value to our aggregates-led business. And with that, I will now turn the time over to Brian Harris.

Thanks, Jason, and thanks to everybody who joined in person and on the WebEx. We really appreciate you being with us today to hear our story. I've got 3 key topics that I'm going to cover with you today. First is the investor proposition, and I will include in that cash flow and our capital allocation priorities. Then I'll cover how we're going to manage through the cycle. It's a slide we've shown before, but I think it's apropos this year to talk again about that. And then I'll talk a little bit about the 2022 outlook. So let's get started straight away with why Summit is a compelling investor proposition. Well, of course, firstly, we really believe we're undervalued. And I think maybe for those of you who've typically done some of the parts calculations in the past, you maybe want to take another look at your models as we've shifted more to this aggregate-centric business and away from some of the lower-return downstream. I think it's worth revisiting those models. But I think also there are 4 primary drivers of the value proposition here. One is we have a unique operating model. You've heard from our presidents about that model, and I'll go into a little bit more detail on each of these in a moment. We're executing on our Elevate Strategy. We haven't waited to get started on this. We're already getting results. We've heard about the positive industry outlook that we have. And then we have many high-return capital allocation projects. I think the combination of all 4 of these factors is what's going to drive superior shareholder returns. So let me go into each 1 of them in a little bit more detail. And this might be slightly repetitive, but we do have a unique business model. Many people describe this industry as the ultimate local business because the product only ships 45 miles. And in a local business, which is extractive, the brands really matter. In many cases, we have a multigenerational presence in a lot of the markets that we operate in. And that really comes into play. It's really important for getting your permits, for your approvals. We are big employers. We have a bigger social responsibility in many of those local markets. And it oftentimes will get us last look on jobs. That strong historic market presence and the brands that we have that support that really make a difference. You've seen and heard from the presidents about strategy in action. Let me just kind of summarize 1 or 2 of those things. In the East region, it's all about our aggregates greenfield growth. That's already dominated by aggregates. It will continue to be even more so in the future. Scott talked about the central region, how strong Kansas is and how fast that is actually growing and what historically has been considered to be perhaps a sleepier part of the country is very robust from a public standpoint. And the way we've leaned out the business with the divestiture of the underperforming businesses and gone more ag-centric will also enhance the margins. In the West region, Jason talked about how important that vertical integration is. It really makes a big difference. And they're one of the highest return on invested capital businesses that we have in the portfolio. So we know it works, and we know it works well in the right circumstances. In the South, well, gosh, you've got the fastest-growing state in the country, robust public spending, great market position and full of opportunity in the future. And then you heard from David, Cement, we've got some of the best pricing momentum that we've seen in many, many years. We've got a strong demand and we've got opportunities for operational excellence. When you think about the overlay of the shared services that we provide, they are the kicker that gives you the benefits of scale. Kekin mentioned our business development team. They're turning their focus now to M&A. We've got a vast pipeline of targets right now, and they will work very closely with our presidents. In many ways, they're the hunters and gatherers for us. They know their local markets better than anybody. And they really make a difference working closely with business development to find those opportunities, not only to acquire, but to acquire targets that we can then improve. Standardization is something that we do where it makes sense. We're not going to standardize for the sake of standardization. But in the areas of procurement, in the areas of IT, finance, HR, these are the things where we can really standardize and get the benefits of scale. And then you heard from each of the presidents about their centers of excellence. I think of the centers of excellence a bit like the connecting rods. The connecting rods that ensure that we deploy best practice across the whole of the enterprise, not just in silos within a business unit or an operating company or a location, but enterprise-wide, and that's what we're getting traction on. And then we have a leveraged P&L account. We've built a management team with tremendous capabilities to support a substantially larger organization than the one we have today. The second key element of our compelling investor proposition is the enhanced quality of earnings. We're already getting results. In the short time since we've launched Elevate Summit just 14 months, you can already see the progress that we've made. So this is not something that's on to come. This is something that's happening now. And we've identified a clear, clear pathway to 30% EBITDA margin. If I were to summarize the key elements of that, obviously, it depends on a positive price cost relationship. It depends on market leadership. We already have that in a number of places, and we'll build out those positions. And it depends on portfolio optimization. Those are the big drivers. But then on top of that, as I mentioned, we've got that leveraged P&L account. We'll get margin enhancement by growing the top line as we grow the scale of the business and drive margin improvement that way. And then on top of that, of course, we have the kickers from sustainability and innovation. And the action that we're taking today is going to lead to great things tomorrow. The other thing we have in our favor here is that we've set North Star targets. These are the things that will guide us in the future. By way of reminder, it's that 60% adjusted cash gross margin on aggregates, 40% EBITDA margin and we hope to get to over 75% of an EBITDA contribution from our materials businesses. Third element, and you heard from Anne about this a little bit, was our view of the end markets. So I'm not going to repeat what she already said, but I do think some of them are linked to where we are in the cycle. And I'll talk a little bit more about that in a moment or two. But there are just 1 or 2 other thoughts I want you to keep in mind. The national trends that you read about almost daily now in residential are not representative necessarily of what's happening in a specific local market. So for example, you've heard how we've got shortages of inventory in Houston. The builders have had difficulties with their supply chain in completions. So there's still an acute shortage of housing in many of the most popular places for relocations and employment, and that's what will drive the need for residential. So I think we have to be careful not to over assume something from a national statistic. In the nonresidential private end market, this is really, for us, low-rise commercial. You think about the growth that you've seen in residential over the past several years, well the infrastructure to support that residential growth lags the residential by maybe 12, 18, 24 months. But as these really large subdivisions get built out, they then need all a low-rise commercial that follows that. It's the strip malls, the schools, the hospitals, medical centers and so on. And so we still see a lot of momentum in that sector of the end market. And then public, you've heard a few anecdotes about public. Public probably has never been in a better funding position than it is today. They came through COVID with better revenues than we expected, they've got higher property taxes, income taxes, fuel taxes. So they're really in a strong place right now. And keep in mind that 38% of our revenue, 36%, 38%, it's that ballpark, comes from the public end market. The fourth element of the investor proposition is the capital allocation. But before I get to our priorities, let me just give you a high-level view of our cash flow. We're expecting to be approximately about $150 million of operating cash flow. You know what the big drivers are in terms of interest and our CapEx forecast for this year is about $280 million. So when you think about that cash flow and then you add to it the $380 million that we had at the beginning of the year, and then you can see it's not too difficult with the proceeds from our divestitures to get to cash position at the end of the year close to $900 million. That's a pretty good number. And then when you overlay that with an undrawn revolver, we've got liquidity in excess of $1 billion. So this is a business that throws off significant cash, and even more so, with our debt reduction activities. Let me just take a quick look here at the capital structure. The one thing that you'll notice very clearly is that it's very clean. We don't have any near-term debt maturities. And we're going to use some of the divestiture proceeds from the Henkel sale to pay down our term loan debt or a portion of it at the end of this week. If you were to extrapolate our EBITDA midpoint and the net debt to the end of the year, you would get to a number that will probably be below 2x. That's a very good position and a very -- gives us a very strong balance sheet with which to pursue those capital allocation opportunities. So what are the priorities for us? Well, first of all, of course, we've talked about leverage, and we've said we want to maintain our leverage below 3x. Greenfields, that may be perhaps the purest form of organic growth in our business today. And then M&A, inorganic. And it's not for us a question of whether we spend on greenfield or M&A. We can do both. And aggregates is still a fragmented industry. A lot of the businesses are still held in private hands. And there's a broad, broad universe of targets, whether they be bolt-ons, platforms or transformational. Our ongoing CapEx is approximately 8% of net revenue, a little higher in some years, a little lower in others. And about 70% of that is sustaining and 30% for growth capacity expansion and the like. And now we have the added optionality of a share repurchase program, of which we've already spent $47.5 million, add an authority for $250 million. There are 2 questions that we get asked about perhaps more than any others. Our first one, of course, is dealing with inflation. It's become a very common question this year. And the second one is about where we are in the cycle. Let me start with the question on inflation. And on the left-hand chart here, you can see the makeup of our cost of sales. We have approximately $1.4 billion of spend. The biggest proportion is clearly material, that's about 37%. Then labor is about 13%. We spent a significant amount on third-party haulage rates -- third-party haulers, and then about 7% on repair and maintenance. This is an industry, keeping our plants running at over 3,500 pieces of mobile equipment running, requires a lot of repair and maintenance. And then a smaller component is fuel at about 3% and 2% for energy. So how do we manage these key cost buckets? Well, we control what we can control, and we take steps to programmatically hedge our diesel Currently, for the balance of the year, we have about 52% of our estimated usage already pre-purchased. That doesn't necessarily give us the lowest cost, but it does give us certainty over quite a big portion of our spend. We also buy forward for coal, for pet coke, natural gas. So we're controlling the things that we can control. But that's not enough. We have to be maniacally focused on all the other things that we can do right now. All the tools in our kit bag to try to contain what really is pervasive and almost runaway inflation right now. So those things include our standardization, simplification utilizing our assets to the best possible advantage that we can right now, pressing for even greater operational efficiencies and, of course, commercial excellence. And when we look out to the horizon on inflation, obviously, it's running already at high single digits, and we'd probably expect it to be at that kind of rate for the rest of the year. But we do think there are some factors that will ultimately help to drive that down over time. The first, of course, being the Fed is maniacally focused on this. They're going to drive up the interest rate at a pace, I think, that will help contain inflation. The second thing is that we do believe that eventually the supply chain issues that have plagued us for the past several months will finally abate. And thirdly, we should sunset some of the -- all of the stimulus money that went into keeping things afloat during the pandemic. So the second question that I get asked a lot about is where we are in the cycle. One could argue that every end market is at a different stage. But this is our kind of high-level view of where we are. Let's start with the easy one. That's the public. We don't think that is cyclical. Well, in fact, it's noncyclical. It tends to grow over time. And they've just had the biggest funding package ever. So maybe this is the spark that's going to finally kickstart a greener, cleaner American infrastructure. And what would that mean for the construction industry? Well, when demand is high for the materials, then pricing tends to be sustained for the long term, they produce great paying jobs and this is a long horizon infrastructure build that we have right now. As I say, we don't even think of that as being cyclical. Proportion of our business that's in public end markets is in the mid-30s, and so we think that, that one as being really robust for now and for the long term. The residential, I'll jump to that one. Clearly, that's later. But we know that it's not always at the end game right now in every market. It's more volatile, and there's no doubt that it could be impacted by higher interest rates and affordability. But many of the markets that we are in today still remain very, very strong. So we have a positive outlook on the residential markets. And then the non-resi, as I said, that lags. I think it lags, but it was -- it is growing. Some of the subsectors were probably beaten down significantly during COVID, areas like leisure and travel, and offices, motels, schools, universities and the like. But with a return to work, I think many of those may recover. And in the meantime, we did see big spending on warehouse, logistics, data centers, distribution centers and the like. And then on top of that, we play in the alternative energy sector. So we get exposure to solar farms and wind farms. If I were to summarize it, I'd say that Summit will be resilient through the cycle. We're not dependent on any 1 product, any 1 market or any 1 geography. So last slide I have today is our guidance, which for 2022. We have just reduced as a result of the divestiture, but only the result of the divestiture. So we're now $500 million to $530 million range. If we were to pro forma that, and you can see in the middle of the chart here -- the middle bar of the chart, if we were to pro forma the divestiture, I think, going 2021, we'd still be showing mid- to high single-digit growth at the midpoint of our guidance. Big factors that could influence the outcome in the balance of the year would obviously be pricing in that price cost relationship, demand overall and managing our cost base. And so with that, I'm going to hand the podium back to Anne for summary and closing remarks. Thank you.

Okay. So we're right at the end here. There's only 3 more slides, bear with me. I'm going to talk a little bit about our time line, and then end with some key takeaways. So when we first put our Elevate Summit strategy in front of you, we had our financial path that we show here. We said it would happen over 3 horizons. We gave you our financial targets. We did say the horizons would overlap. And because of this, we said that we won't fall neatly on progress into fiscal quarters or calendar years. What I can tell you is we're still sticking to the time line we said when we came out that this would happen over a 3- to 5-year period. And as I said earlier, we're actually ahead. And if you go to the next slide here, you'll see how we're tracking our progress over time. And so what you can see is our 4 strategic priorities backtracked over the 3 horizons. And first and foremost, our market leadership. We're actually in Horizon 2, and we've done this through our leading positions in our markets, which we've grown; we've had organic growth through our greenfield investments; we have had some portfolio divestiture moves; and we continue now to pivot to more portfolio optimizing M&A. Our asset light is the furthest along. And as we think about the progress that we've had there, we've divested -- we've made our 10 to 12 divestitures. We said we'd do over $200 million in proceeds. We've done $470 million. So as we think about moving forward on asset light, think about it being more opportunistic, just that continuous improvement in the portfolio, but much of our focus will be more on optimizing our portfolio through M&A. And then sustainability, there's another safety share, by the way, there. Sustainability is in Horizon 2. As Karli talked about, we've done our baseline, we've got our targets and we've got real tangible momentum on our most socially responsible agenda. And then finally, innovation is still in Horizon 1, and we will continue to accelerate that now with the addition of Kekin, so that he can basically add on to our quick wins over time. From a financial target perspective, we've met our leverage target that we said we would do, and we've exceeded our divestiture proceeds target. We're still working on our ROIC and 30% EBITDA margin. So we know we have a lot more work to do. But I hope by what you heard today, you walk away with confidence that we will achieve our targets of 30% EBITDA, greater than 10% ROIC and keep our leverage at less than 3x. So hopefully, you're walking away with the sense of enthusiasm that our future as we feel. You heard from our regional presidents what they feel about our industry. I will tell you, at this point in time, we've strengthened the quality of our earnings, and we've reduced our debt. We've optimized both our portfolio and our balance sheet, and we're in a great industry at a great time to leverage price and demand over time. So with that, I'm going to turn the message over to Q&A, but I will leave you with Summit plus the strength in our industry makes us a very strong value proposition for investors. So we'll turn to Andy, who will talk about how we'll handle Q&A.

Thanks, Anne. Hello, everyone. I'm Andy Larkin, VP of Investor Relations for Summit Materials. So what I'll do now is I'll ask Karli, Anne and Brian to join me on stage, and we'll conduct Q&A. I'll be walking around with the mic. For those who are participating via the webcast, please continue to send your questions in, and I'll try to get to as many of them as possible. If the question ends up in the lapse of our regional presence, they will have a mic as well. So feel free to ask questions towards the 3 sitting up here or our regional presidents that are in front of us. Sounds good? Great. Thank you. So if you just want to raise your hand if you have a question, and I'll come find you. And if you could just give your name and where you are from, that would be great.

Phil Ng from Jefferies. You talked about how you're going to pivot from -- to more of a growth philosophy going forward, and it was helpful that CapEx was mostly unchanged. On the M&A side, talk about some of the change in strategy going forward, how you're approaching it a little differently now versus before. And just threading the needle in terms of the valuation, right? I think we can appreciate quality assets do trade at a big multiple, pretty sporting multiple. How do you kind of maximize that whether it's leveraging your relationships, platform deals versus a big transformation deal? So help us unpack the strategy going forward from an M&A standpoint? And how do you see yourself creating value in that backdrop?

Sure. Thanks for the question, Phil. So when we look at our M&A, when we came out with our Elevate Summit strategy, we were very clear that we were going to target geographies that we would strengthen our existing footprint, but also do adjacencies. In addition to that, we said we were going to be very disciplined about being materials led. And so it would be a very unusual thing to have us go into a new geography in a downstream market. So that's a big difference. When you asked about the difference. And we're being very, very strict on having a market position that is #1 or #2. We may enter a market, and we may not be #1 or 2 immediately, but we have to see a path to that in the near to medium-term time frame. So I would say there's more strategic discipline around what we're doing today. I would also say our approach to M&A is a little different with respect to how we're organized around it. And I think Brian talked a little bit about this. But today, we have our corporate development group, but augmenting that and actually the forefront of a lot of our prospecting is in our region. So we've assigned people within the regions that are very focused on accelerating the M&A pipeline for the team. And that is really working because all these presidents have all the local relationships, and they're working those bolt-ons, which we've always been good at, but they're working to bolt-on proprietary acquisitions. You heard Scott talk about 3 done in his region. That was through his relationships. And that's what we will continue to do. That's what's in our M&A -- or in our DNA. Now as we think about where we're trading today and how we'll bring value to our shareholders, as you know, multiples can be a little bit fleeting. So I'll remind you, we were trading at 11x at the end of '21, 7.5% now. So if you make all your M&A decisions based on that, that's not a good process. What we look at is where we can bring strategic value, meet our margin targets, be accretive over time. So it's generally where we have synergies and it's an adjacency or an existing market over time. So we can pay up for multiples provided we can get that value accretion to our shareholders in a short period of time.

Garik Shmois Loop Capital. Thanks for all the information today. Two questions. First, could you provide a pro forma of the EBITDA margin after the divestiture so we have a baseline for a starting point moving forward? And then secondly, just to be clear, are you done with the divestiture program considering you've blown through your initial Horizon 1 target? And if so, livestock considering valuation multiples are heading, you were able to get over 10x EBITDA for all the divestitures that you did pursue.

So I'll let Brian give you the pro forma. But we are largely stopped with divestitures. However, I will say, we have 3 in the pipeline right now. They're small. And that's our commitment to any good business constantly manages their portfolio and optimizes and keeps it aligned with their strategy. But you'll hear us talk much less about that, Garik, than you will M&A in the future. Brian, do you want to deal with the pro forma?

Yes. I can't give you a pro forma margin, off the top of my head, Garik. But what you will see in the reconciliations that we do at the end of every quarter is a bridge to show the acquisitions and divestitures to get to a normalized number, if you will. So look out for that in the Q2 reconciliation tables.

I think the other part of your question was the multiple we got for the assets disposed. We had a wide range of assets, Garik, that range from very underperforming assets that we sold at book value to a full business such as our Henkel business. But if you look in aggregate collectively, we got over 10x multiple. So I think the team did a phenomenal job in executing against these.

[ Anna Bos ] here with JPMorgan. I have 2 questions. What are the easy gains or low-hanging fruits to improve margins? And then the second one is on your margin improvement target. How much will come from pricing and how much from cost efficiencies?

Yes. So if you look at that bridge, let me answer the latter part of your question because these guys would tell me there's no low-hanging fruit or easy in the world. So I think I've got the answer to that one. But if you recall the bridge, Anna, while we went from pricing, net of inflation, our cost improvement, operational improvements were 2 percentage points, I believe. Correct me if I'm wrong, Andy. And then if you looked at what we put, we put 11% for cost inflation, that only had 11.5% on pricing. And that's reflective of high single-digit 2022, mid-single-digit and low single-digit inflation assumptions in our model over time. So our goal is always to be pushing the price on one end, reducing the cost on the other and mitigating costs, as Brian spoke about through some of the hedging processes we have.

I have a question coming in around ESG. It seems like you're spending a lot of resources and time in this space. The question is around the metrics you're applying and the type of rigor in determining what projects you choose, as well as is it a prerequisite that it's going to be margin enhancing for you to pursue an ESG-related project?

Yes, it's a great question. It's such a big and emerging space. It's so important to our customers, and there's a lot of different paths you can take. Within the context of Summit, we've really chosen to focus on things where we can use the best available technology, it's customer-driven and it's value enhancing. So when we look at the things we can do and how we can track those, it's things like we can readily track our fuel efficiency, our vehicle emissions. We can track how our fixed plans are doing. We can track how much we're spending on diesel. We can track how much water we're using. These are things for which we can show a really clear ROI. And we do what most of the opportunities that we pursue to be value accretive. It's just like when Anne showed the chart on the path to 30%. We have a burden within the social responsibility realm along with innovation to be accretive to that margin profile. And so we're tracking it through a value creation model that we've created internally, and we're actually looking at it on a monthly basis through our broader center of excellence issues. So it's getting managed just like any other line of business would probably be managed. And we approach it that way because we know it's important to our customers that we be sustainable. And also important to us and our shareholders that we're doing right by our investors in terms of being smart about how we pursue ESG and high-returning opportunities.

Guys back here. Adam Seiden from Barclays. Just could you guys talk a little bit about the Horizon 3 targets in the Central versus the West? And I bring it up because the Central has about, it looked like from your slides around 2/3, 65% aggregates exposure with a March target of 28%. But then if you look at the West, it has a much lower percentage of aggregates at around 47%, but a similar margin target of around 27%. So could you help maybe walk through for us where are you coming from in each of those segments? And what distinguishes those are those markets? And I know there are subsegments of segments in some cases.

Yes, absolutely, Adam. I'm going to turn to our regional presidents to explain that because it's very specific. Scott, would you like to address the central question and how you're getting to that 27% to 28%? And what are the key elements?

Yes, I'd be glad to. And Adam, just so you know, I'm not stopping at 27% to 28%. I'm going to 30% in Central. And really, and it's more ag-centric in the Central. You've already picked up on the 65%, that's actually in the rear view. We're actually moving towards 80%. And so we're really going to drive that value. And we're going to hit the ROIC as well. So we're well on our way. The 27% to 29%, that was illustrated for Horizon 3, but we're already pushing that direction.

Jason, would you like to explain the West?

That is very similar to what Scott said. Our focus is going to continue to be driving the aggregate piece of it is because of the vertical integration, we have to pull those aggregates through with 34% of the aggregates we move within the entire West. It has to be driven through those downstream businesses because that's the only way we can move it. And so that may be a little bit lower margin from that standpoint, but our aggregate margin price -- at market pricing is actually much higher. And it's a little dilutive on the downstream is what it is.

Adam, hopefully, that answers your question. Okay. Great.

David MacGregor from Longbow Research. I guess, 2 questions. First of all, Kekin, in your presentation, you refreshed widening the aperture. And then you elaborate -- you referenced new material solutions and sustainability solutions. So any clarity around new material solutions? What you mean by that would be helpful. But really on sustainability solutions, I'm thinking about things like Green America Recycling and some of these other things you've got going on that maybe aren't as much of the focus on the story. Are those scalable? And if so, how would those contribute to the EPS margin? And then my second question, just while I've got the mic, you deals with the greenfield strategy. And it seems like at this point, you're probably developing a core competency in sort of navigating the zoning and the permitting process in these various locations, which given the growing political pressure around infrastructure spending is sort of puts you in a good position. I'm wondering if this creates any acceleration in your greenfield strategy or whether maybe that's getting a little too ahead of ourselves here.

Okay. So let's try and answer your question, David, in a couple of forms. So I'll have Kekin answer it on a broad scale, I'd like David to maybe address the Green America Recycling expandability, and then Bart, if you would talk a little bit about the question on greenfielding, that would be great.

Absolutely. David. So to address your question in terms of new material solutions, we already have a great example. So we have a product line called Buildex, which is the lightweight aggregate. It's a great example. But by the way, we're sold out on that product line. New material solutions, not only in the aggregate side. In the Cement, there's a lot of innovation happening on the Cement side as well to change its properties to sell a number of different customer opportunities, as well as on the ready-mix side as well. There's a lot of opportunity there in terms of innovation from a material's point of view. More broadly in terms of sustainability, Karli can address that more. But most of these technologies are very scalable. The technologies that we've already implemented to reduce our carbon footprint are fully scalable across our platform, as well as new sustainable kind of materials technologies that are under development.

David, on Green America, that's a good question. It's a fantastic business. It's a key part of our ESG strategy. It gives us a heck of a competitive advantage, too. So you saw what Karli threw up. We've got about a 42% replacement ratio of natural -- of Green America products versus fuel, coal, pet coke, et cetera. So we are optimizing at Hannibal. Hannibal has our largest Green America operation, and we we're bringing continuous improvement, manufacturing processes, lean manufacturing to that business to make it yet more efficient and looking to expand it at Davenport. Your question, is it scalable beyond Continental Cement? Yes, it is in time. So we've spoken about it. We haven't done anything about it, but it's something that is going to be part of the path forward and that more carefully and figuring out what the strategy is.

Okay. Thank you, David.

David, addressing your question about greenfielding. First and foremost, we have set the pace of that and where we're going by the markets that are appealing to us, again, using the greenfielding playbook that we put together has driven a lot of a lot of opportunities that we've now identified. In terms of whether or not it will be accelerated because of increased funding, I don't really see that happening because that zoning decision is made at the county and municipality levels. And could there be pressure from the states and the Feds to develop more sources of aggregates to supply that work. I doubt it. I doubt it. I don't see that. But in terms of the pace at which we're doing it, it'd be hard to do it any quicker than we're doing it now. We're really -- we've got our foot on the gas trying to identify all the opportunities we can.

David, I would just add that our focus on social responsibility and on land reclamation is a key proactive measure to try and make sure that when we go into these greenfields and look for zoning and permitting that we're in the best possible shape that we're proper stewards for the environment.

I've got a capital allocation question coming from the webcast, it's with your leverage profile, where it is and the growth that you're expecting, why aren't you preferencing asset proceeds to go towards stock buyback rather than debt pay down?

Will you take that, Brian?

Yes, sure. Well, actually, we have already spent $47.5 million of the $250 million authority that we have on share buybacks. We did that quite quickly in Q1 after the Board approved that amount. The term loan paydown that we will have at the end of this week is actually mandated as a result of triggering the volume of proceeds that we've already received this year, there's a mechanism within the credit agreement that we have that provides a calculation of what that term loan repayment should be. We issued the payback instruction to the authorities yesterday. And we'll know by the end of the day how many of our debt holders actually take us up on that or some decline. But that one is a mandated requirement to pay some debt back. So it wasn't really an either/or in that particular case.

Brian Biros from Thompson Research. Question on the end market exposure in the South region specifically. It's mostly public and residential exposure, 15% non-res. Are you looking to adjust that exposure at all down there? Or maybe that will change naturally over time as population growth drags the non-res activity down there? Maybe just speak to the exposure mix in the South, and if that brings any benefits or challenges given where it's at.

Yes, I'll let Jeff answer that because I think he's got a good model around that.

Yes. Thanks for the question. Great question. We're already acting on changing our segment bids today, looking forward to potential downturns in res and non-res growing. So we're actively already pursuing aggressive bid strategies that will help offset any potential downturn in those markets.

We have particular strength in the public markets and a unique brand advantage with where we play in North Texas that really helps us leverage off of that for any public work. So really good shape there.

And then I can give you -- just 1 example is just in the Houston market already, with the public sector, we're aggressively bidding our sand and gravel products into those highway projects, as well as change in our portfolio of our ready-mix bids on a go-forward basis to be more aggressive in the non-res segment.

This is Noah Merkousko with Stephens. I was wondering how much of a role does the cycle play in achieving Horizon 2 and 1 -- or 2 and 3? And maybe put it another way, which levers in your strategy can you pull irrespective of where we are in the cycle and where it may be going?

I'll kind of start that, and let Brian jump in if he wants. So if you remember the journey to 30, I think one of the things that is key in there is that our net pricing versus cost inflation. So our operational excellence initiatives are self-help initiatives. Our pricing is controlling what we can control. We have assumed a pretty heavy inflationary environment in that model. And we gave you our assumptions around inflation over time. Now if that was to get worse, well, our goal, we have good momentum on pricing, and we have strong demand. So I believe pricing, we will have that price leverage over time. But the thing we truly control, Noah, is our cost out and our operational excellence initiatives. They're self-help. And so over time, irrespective of cycle, we're going to be working on those cost inflationary items. And then if you look at the other parts of the portfolio, it's market leadership and portfolio optimization to reach to that 30% ultimately, we've done a lot of the portfolio optimization. And you'll note that we don't have -- we only have 1 percentage point on that chart from acquisitions. So we're not heavily reliant on acquisitions. And if anything, it should be looked as upside, which, frankly, in a down cycle, we'd probably get better multiples on some of our acquisitions. So over the long run, we believe that these are built up with pretty rigorous controls. And we didn't give exact timing. But over 3 to 5 years, we should be able to accomplish those Horizon goals.