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

Good morning, and welcome. We are so excited to have you all with us at the exchange for our 2024 Investor Day. My name is Chris Gaskill, and I am the company's Chief Legal Officer, which means they give me the most exciting slides. So to start, we will be making some forward-looking statements today, which, by their nature, are subject to risks and uncertainty. You can find a description of those risks and uncertainties in our SEC filings. In addition, we'll be making use of some non-GAAP financial metrics, and you can find reconciliations to their GAAP counterparts at the end of this presentation. So with that thrill ride over, let's get into the meat of the day. It has been an incredible 2 years since we last had one of these meetings. And Anne Noonan, our CEO, is here today to catch you up on what's going on at Summit right now. As you'd expect, we'll also talk a lot about the Argos integration and the opportunities that it represents. You will also hear from our Chief Growth Officer and our Chief ESG Officer about our progress on those particular avenues. You'll then hear from our Construction Materials operations presidents about their businesses as well as our newly appointed Chief Operations Officer, Marshall Moore, who will describe to you his first impressions of the company as well as our path to continuous improvement. Finally, Scott Anderson, our CFO, will bring it all home for us with what I can only describe as a very compelling outlook for the company and our investors. And I'm the lawyer. I'm not supposed to get that excited about that stuff, so you know it's going to be very good. But before we get into all that, as all of you know, safety is a core value here at Summit Materials. And so I want to take a few moments to talk a little bit about safety, starting with safety for this meeting today. We are here at the New York Stock Exchange, which is a particularly sensitive piece of Manhattan geography. So if there is an emergency and you do hear an alarm, we have been asked to wait in this room until we are met by one of the security team here at the Stock Exchange, who will then lead us out of the building or to another muster point as appropriate. But in addition to hearing from me about safety today, we wanted you to hear a little bit from our employees and how we're leveraging technology in the safety space. So with that, if we can go ahead and play the video. [Presentation]

Well, I really can't add much to that. So without further ado, it is my pleasure to introduce to you the CEO of Summit Material, Anne Noonan.

Well, good morning, everyone, and welcome. And thank you for taking your valuable time to spend some time with us today either in the room or on the phone. We have a lot to unpack. And what we'll start with today is I'll start talking about our great business, what we do and how we operate. We'll then move to talk about Elevate Summit and our strategy and where we stand on that. And then we'll pivot to the path forward, our growth ambitions and most importantly, how we're going to get there. And then I will lead us into the integration but then hand over to our integration leaders. But before we do that, I want to talk about 4 key areas and 4 messages that I'd like you to keep in mind as we go through our presentation today. First of all, when we look at our business overall, we are a powerful earnings algorithm, and that's driven by our materials-led portfolio. It's also driven by very strong industry tailwinds and self-help opportunities. Secondly, one of those self-help opportunities is particularly powerful, and that's our integration playbook, where we will drive meaningful synergies. The other thing I'd point to you is the third message, is that we're a growth company. And we have an invest to grow capital allocation mentality that is completely fulfilled by our ability to manage cash, have a strong balance sheet and free cash flow. And finally, with the strong balance sheet and the profitability glide path that we'll talk about today, we are absolutely convinced that we will drive sustainable long-term shareholder value. So with those 4 messages, keep them in mind as we move throughout the day. We always start with our mission, vision and values. Our vision is to be the most socially responsible integrated construction materials solution provider. And that's underpinned by our values. One thing that we always talk to our shareholders about is what we do, but the message I want to give here is our values is how we turn up as a company every single day. And our values of safety, integrity, sustainability and inclusivity is something that we live by every day. But it is a journey, and it's something that we're constantly challenging ourselves towards. So from a safety perspective, as an example, we're not at 0 harm yet. We want to be at 0 harm, as Karli will talk about later. And some of our businesses actually reached that goal this year, which was very rewarding. But we will not end until we have not one employee injured as a company. On integrity, we've got to constantly remain very vigilant. On sustainability, we are leading there, but we have a responsibility to continue to do more. And innovation is something we do from end to end in our business from our quarries right to our customer interface. So when we talk about inclusivity, we've set a foundation for our business, and inclusivity, that foundation is strong, but we actually have to improve on our gender diversity. So it's a journey on our values. Let me switch there and go to our leadership team. I'm incredibly privileged and honored to work alongside this team that you see here today, and you'll hear from all of them instead of hearing from me all the time, which is the good news today. And we have this dedicated diverse team that really do challenge each other and collaborate at a very high level, and as you -- we talk about the execution on Elevate Summit, that will become evident. And most importantly, this team was in the room when we put our strategy together. So they're all bought in, and they've been executing extremely effectively. And then the other point I would make is it's not obvious from this slide, but we work very much in a matrix environment at Summit, and we collaborate very, very effectively. But that's not always agreeing with each other. That's challenging the status quo and making sure that we're constantly pushing to drive superior value for our shareholders. And you'll see that today in the integration management office, which is a very matrix group. Tim Zynda will talk about that. He's our leader there. However, he's joined by members of Argos and Summit, also joined by our regional teams, our functional teams, and then we've really dedicated resources to drive execution. So this team really are ambassadors for our mission, vision and values and live our values every day. And that will bring me to Elevate. As you recall, many of you -- I hope you're sick of looking at this slide actually. That's my goal in life, that you get sick of looking at our strategy slide because then I know I'll have achieved that everyone knows what we're doing all the time and why we're doing it. But you will all recall, many of you were part of our perception study when we put Elevate together and launched back in March of 2021. The input from our customers, our suppliers, our shareholders and our Board and many more stakeholders is what developed Elevate Summit. And it really launches into 4 key strategic priorities. First of all, market leadership, this is a core tenet of our strategy, and that is to be #1 or #2 in rural and exurban and suburban markets, and we have achieved that. Today, as I stand here, we're about 90% of our markets we're in #1 or #2 positions. You might ask, "Well, why not 100%, Anne?" Well, it's because we're constantly growing. And so for example, we're growing into our new platforms in Arizona and Florida, and we're growing out on those, so we probably always will be a little below 100% for a growth company. The next part of our strategic priorities is asset light. We adopt an asset-light model, which really makes us focus on return on invested capital and our margin profile. We have financial targets that we've set as part of Elevate Summit. And our team really looks at every part of our business, particularly the downstream. And we say, is it meeting those targets of ROIC and margin, and if it's not, we decide to divest it. And a key part of that divestiture thesis is to actually divest it to a leader in the downstream market. Why is that important? It's important because we then sign long-term aggregate supply agreements to pull through the aggregates, so a low capital intensity business, but high margin from the aggregates. And then we'll talk about sustainability where we're very, very forward facing. And I won't steal Karli's thunder, but the message she will leave you with, we're very value generative and anything we do from a sustainability perspective. Kekin Ghelani, our Chief Growth Officer, will talk about innovation. And we really have a focus here from our quarries right to our customer interface, and he'll give a lot more color about how we progress there also. But all of this happens through the enabling capabilities that you've heard us talk about many, many times, and that's commercial excellence and operational excellence. You'll hear a lot about that today, and we've made a lot of progress in those areas. The other thing particularly now that we're integrating Argos USA, you'll see an absolute focus on standardization and simplification. And that's a key focus area for us, and you'll hear that in David's presentation and in Tim's. And then nothing happens at our company or any company, frankly, without your people. We have a motivated and dedicated group of people who are developing all the time. So let's talk a little bit about the progress we've made on Elevate so far. And the point I would start with, which is by far the big highlight, is that we really have focused on this portfolio optimization, so being #1 or 2 in our markets, doing the asset-light model. And to date, we've divested 15 assets or businesses at over $600 million, at greater than 10x valuation. And what has that resulted in? And you'll hear me say this multiple times today. It has resulted in a powerful materials-led portfolio. So if you wind back to 2020, 63% of our EBITDA came from aggregates and cement. The end of 2023 pro forma, we're at 75%. So we've really achieved that powerful materials-led portfolio. The other thing we've done is really focused on people. We have invested in employee retention, employee development and succession planning. It is our job as a leadership team to have an organization for decades to come to drive this company's growth. We also have focused on the customer interface and really talked about commercial excellence and put people's processes and tools in place and really have made great progress there. The other thing that we've done more recently is we've completely -- we've actually exchanged all of our LP units and eliminated our Up-C structure, which I know a lot of shareholders would like to hear this. It has now a streamlined and more standard and simplified structure at the corporate level. And all of those things have resulted in double-digit shareholder value creation. And we're not done. And you'll hear a lot about that today. You're going to hear about the Summit of tomorrow and what we're going to continue to do and what we'll do a little differently moving forward. Let's first of all talk about all the things that we've done over the last 3 years have been to create a stronger portfolio. And you'll hear us talk today about strengthening -- even further strengthening a very powerful portfolio. And let's start here with talking about our diverse customer base. So we have, as we stand now today in a combined company, 35% of our -- 34% of our business will go into the public markets, and we'll talk about those end markets. And that's mainly state DOTs. 34% (sic) [ 35% ] of our business will go into residential (sic) [ nonresidential ] or commercial markets, and 31% will be in residential. So we have a very nice mix across the end markets and a very diverse customer base. Then when you think about where we play, we have service areas that are very advantaged. We operate in 20 states and British Columbia. And as you see this chart, you'll see that we have 20% of our revenue from the high-growth Texas area. And so we'll talk a lot more about that geographic footprint today and what that means for us. And then you'll get sick of me talking about materials today. We're at 76% materials, so 76% of our EBITDA is generated from aggregates and cement. And I'll spend some time talking about why we think that's such a powerful combination for us moving forward in the current dynamic. But before doing that, I'd like to spend some time going into a few of our end markets. So let's start with residential. You've heard me and many in the industry talk about us being woefully underbuilt as a country and in the U.S. And this chart shows it. So if you look on the left-hand side of the chart, these are housing starts. And if you go back to 1960 to 2007, housing starts were averaging 1.5 million a year, and that has plummeted to less than 1 million per year. And so as a result, there's a real supply issue. Now what you see on the right-hand side of the chart, demand has not moderated at all. And in fact, we've got 90 million young Americans in the age of 25 to 44 who are in prime buying age looking for houses. And really, a statistic that I was quite shocked by when we looked at this is the average age of the first-time homebuyer has risen to 36 years of age. That's a new record. And so fundamentally, we believe that housing has to increase in the future. And there's 3 main factors that support that. First of all, 60% of current homeowners are locked in at less than 4% interest rates. Secondly, you've got an inventory of housing out there that's aging that has to be rebuilt. And finally, you got these 90 million people over here that's generational growth that's only going to get bigger. So we remain bullish on residential is the message that I would like to leave you with, and we believe that that's going to turn up and continue to grow for many years to come. So let's talk now about nonresidential and commercial. And really, what's happening here is really a new renaissance in manufacturing that has a multiyear tailwind of growth for the industry. Driven by the CHIPS and IRA Act, we're going to see manufacturing explode in the U.S. And already, the CHIPS Act alone is adding $53 billion of funding over 5 years. The IRA Act, over 149 projects, has already awarded over $100 billion. And when you look at that, that's going to be multi-years of growth. But it's also important where those funds are going. They're not going equally across all of the U.S. For example, Arizona is the semiconductor hub, and we're really happy that Summit has now a strong position that continues to grow in that area and realize that funding. Secondly, I would point you to the Southeast exposure that we have at Summit. And that's where you've got the battery belt and the EV battery factories coming up. So the message I would leave you with is when we look at 60% of the funds that have already been awarded from the CHIPS and IRA funding, they are all in Summit's top 8 states. So we are in the right place with advantaged markets and really strong tailwinds coming from this renaissance in fundamentally improving our manufacturing. So let's turn to public, which is extremely robust. And we're in the early to middle innings of a historic $1.2 trillion infrastructure bill. We look at 3 things at Summit when we look to see the dollars are flowing. Now I got asked this question last night. You'll hear a lot of noise around this. And with respect, I'm going to refute it. A lot of noise out there about inflation has eaten up all the dollars from the infrastructure bill. That's not a fact. Yes, inflation was there. It's moderating off. We see the volume going through our business, and we look at 3 things. We look at state DOTs. And for our state DOTs, you'll see that they're up 16% year-over-year. And on top of that, they're up 4 percentage points above the national average. If we look at our contract highway and paving awards, they're up 11%, which represents 5 percentage points above the national average. And so overall, we then step back and we say, well, what's in our backlogs for our public markets. And we use at Summit our -- Texas as our bellwether because it's 40% of our asphalt production, and there, we have extremely healthy backlogs. So the message here is we see multi-years of continued funding to build America's infrastructure, so great growth across all 3 end markets. Now I'd like to pivot to where we play, which is extremely important. And there's 2 factors here that I'd like to talk that have been a real result of how Summit has evolved our footprint since we launched Elevate in 2021. The first thing we said we would do was to grow out our existing legacy Summit geographical areas. And an example I'd give you there is Texas. So in Texas, we've added multiple bolt-ons. And now with the Argos acquisition, we're integrating a ready-mix business into an already strong ready-mix foothold that we have in Houston. The second thing that we said we would do as part of Elevate is to grow into new strategic high-growth MSAs. And what we've now accomplished is we've grown in Arizona. That's a new platform. We have a new platform in Florida. And now we've significantly increased our exposure in the Southeast. So when you step back and look at it, we are now participating in 9 out of the top 10 in-migration MSAs. So the message I'd like to leave you with here is we have a much strengthened geographic footprint as well with high growth, and we feel very confident that we can deliver above-market growth for our shareholders. Let's kind of take a moment now to talk about our portfolio ambitions. And you will hear us say many times, we want to be a materials-dominant portfolio. And what does that mean? We want to be heavy in ags and cement. And why is that important? So when you look -- there are some fundamentals about aggregates and cement that they have in common. First of all, they go into every part of the construction materials. Second, aggregates go into everything. Cement goes into every -- is the largest used material in the world. And then if you look at the supply dynamics, they're very strong for both aggregates and cement, and they have limited portability. And in fact, in the case of cement, demand way outstrips supply in the U.S. So it's a scarce resource as we move forward. And then the other thing we'd look at is the high barriers to entry that both have. And for both aggregates and cement, you have high barriers to entry from permitting. And in the case of cement, you also have a very high barrier. When you want to put a new cement in the plant in the ground, that's a very capital-intensive decision. The other factor that we often talk about is the low-cost end use, marketing 101. You want to be in a business that's a low cost of the total project. And aggregates and cement absolutely have that dynamic. In the case of aggregates, we often joke that you can buy a ton of rock for the Starbucks $1 of coffee you bought this morning. In the case of cement, think about a single-family home. That ready-mix concrete that goes into the slab in the home is a fractional cost of the total construction. So that's a great dynamic. And then the final factor I would give you, which is very important, and a lot of the time underrated, frankly, is the fact that you have to earn your right to be in these markets. You have to know the regulatory environment. You have to be able to permit. These are depleting resources. So you have to have the firepower to continue to invest in the quarries as you go ahead. And there are local brands that are valued. So you have to work at the customer interface. All in all, the message I would say is we believe that being strong in these materials lines of business will continue to drive significant value for our shareholders. And that's borne out by some historic data. So let's go into the favorite topic for everyone, ags pricing and volume. And in this case, you see up into the right, and that's the message I'd leave you with here. Let's think about pricing. Pricing, 70 out of the last 75 years, ags pricing has gone up, and that's irrespective of what has happened to costs. What industry can you say that about? So that dynamic will continue. Additionally, on the volume side, if you look at the amount of ags per capita that have been used, they've actually been going down as pricing has been going up. And think of all the dynamics that we just talked about for the use of ags in all 3 end markets. That, up into the right, will persist, and we believe there will be strong volume and pricing power in aggregates moving forward. Now let's think about the cement side of the business. Cement, let's talk about demand. So cement is very intensive in that heavy nonresidential side, which we just talked about a new renaissance of manufacturing. And if we look at cement, the PCA has actually calculated that of the 42 projects that have been announced, and that's just what has been announced to date, that, that will add 2 million tons per year for the next 2 years, '24 and '25. And that will continue. So we believe there will be persistent and multiyear demand for cement moving forward. The other thing we love about that heavy nonresidential side is the fact that it's the gift that keeps on giving. So you put a manufacturing plant in. Now you create jobs. Now you've got residential build-out. Now you've got light nonresidential build-out. So multi-years of demand. And we believe with that supply-demand dynamics because the U.S. will always be short in supply versus demand and the fact that you've got this new renaissance of manufacturing that we will have strong pricing power and demand in cement moving forward. We also have been very forward facing about saying we needed some more scale in these materials lines of business. And with the Argos acquisition, we now are the fourth largest cement producer in the U.S. and actually the largest U.S. domiciled cement producer. And that, we found, is very important to our customers, which I'm sure David will talk about later on. We're also #6 in aggregates and have a very strong ambition to get to #5. And you'll hear a lot from our team today about the organic and inorganic opportunities that we have in our pipeline to achieve that with the firepower that we have, and Scott will talk about that in the balance sheet. So I've talked a lot about materials at this point, and we are -- definitely want to be a materials-led business. However, you will hear us also talk about selective vertical integration. And the word selective is very persistent here. We've talked a lot about asset light. We've talked a lot about what makes a good downstream business. Well, here's what makes a good downstream business. You have a leading position. You are able to have a low capital intensity. You're able to drag aggregates through every part of that downstream, so you're pulling dollars of EBITDA and creating margin. And when you get to the downstream, you're adding differentiation at your customer interface. When you have that dynamic, you can have a really strong margin and ROIC profile in the downstream business. Our job is to optimize margin and ROIC for our shareholders to create value. So we made some tough decisions around -- let's start with the ones we weren't leading in. So 8 out of the 15 divestitures we've done to date have been downstream businesses. And there, we adopted our asset-light model that I went through earlier. And we have essentially shed 20% of the aggregates that we pulled through, through internal channels out of our business because they weren't in leading positions, and they weren't delivering the margin and ROIC to our profile. On the other hand, we will be unapologetic about our strong markets that you see here to the right, which are Houston, Salt Lake City and North Texas. Here, we command industry-leading ROICs, and we lead in margins. And that is the right thing we should do for our shareholders. And they have high growth potential as well. And so here, we would pull through about 60% of our aggregates that are sold internally into those 3 markets alone. So the message here hasn't changed from what we said from day 1, strong materials focus with selective vertical integration because that will drive the right return profiles and margin profiles for our business. We've also evolved how we operate as a company. From day 1 of Elevate, we said we were going to focus in some areas. And you'll hear a thread today that we're going to continue to modernize, continue to accelerate these things. Kekin will talk a lot about commercial excellence, and he'll talk about we're in the later innings of commercial excellence but a lot of opportunity, as David gets in, to talk about the legacy Argos and how we apply those people's processes and tools to really drive some strong synergies. We'll talk about operational excellence with Marshall Moore in our fireside chat. And there, you'll hear us talk about upping our game, putting significant resources and really doubling down on operational excellence to drop dollars to the bottom line. And then this theme of standardization and simplification will thread through everything that we talk about today, and you'll see multiple examples of that. And then finally, innovation is the other thing we'll continue to talk about and think about that in terms of automation, increased automation and digitization at the customer interface. So we've made some progress in these 4 key areas, and you'll see us continue to accelerate on some of those moving forward. So let's switch for a minute to our targets. And these are the same 3 -- the message I'd like you to take from this. These were the 3 targets, financial targets we put in front of you when we launched in March of '21. I'm reaffirming. We're not changing those. So let's talk a little bit about the next scorecard. Again, I want you to be bored with the scorecard because this is the one we show every quarter. We have an absolute commitment to transparency, to really measure our progress as a management team, as a Board to our shareholders. When we say we're going to do something, we're going to measure against it and we're going to execute against it. And that's our commitment to all of our stakeholders. One thing we heard from our shareholders when we did our initial perception study, there is a bright line at less than 3x leverage. And we have really focused on that as a business with all of the things I've talked about to date. And I'm happy to report, for the last 10 consecutive quarters, we'd be less than 3x leverage. So we feel we've really got it in our DNA now to really manage that balance sheet and manage our debt. And that's through, what we talked about, our asset-light model. It's through operating our business better. It's through the operation, all the operating elements that I've spoken about to date. I'm particularly proud of our ROIC progress to date. We have increased our ROIC, our return on invested capital, by 30% since 2020. And we've done this through having tools where we look at every single asset and business and we say, what's the ROIC profile of that, what's the margin profile of it in the short and medium term. And our team will say, if they can't meet the Elevate target, we got to shed it. And then we take that cash and we reinvest it back to better opportunities with higher returns. And you see that as a consistent theme. And the thing I'm actually most proud of with our team here is this is not a top-down exercise. You would not -- I would not have predicted we'd be this far along at this point. What happens in our organization is, every month, every quarter, the teams will get together, the operating teams, and they'll say put this on what we call our Tier 1 divestiture list. So we're constantly operating and optimizing that portfolio. And my personal opinion is good businesses do that all the time. And we currently have it in our DNA, and we will continue to drive over 10% ROIC for our shareholders. Now let's get to the margin profile. And this is the financial metric that we're going to really hone in on moving forward. I feel that we've really nailed the leverage and how we operate every day. We really got it in our DNA to manage ROIC. Now we've got to really accelerate our margin profile. And you will be able to measure us moving forward by 3 North Star targets that we've put out there. So let's start on the left-hand side with aggregates. And here, we measure adjusted cash gross profit margin. And if you look at the 2023 pro forma, where we ended up, really, we were at about bumping up on 50%. We're committing in our North Star targets to add 10 percentage points to that to get to 60%. For cement, we're upping the game a little bit. So we're starting at a base in the combined company now of 36% EBITDA, and we're saying we're going to go to 45%. For those of you familiar with the story, we had a 40% target here. Why are we doing this? We're doing this because we have better scale, and we've got a better line to synergies, which you'll hear about later on. And then the other target that we've upped our game on as well is around this materials contribution, so the aggregates and cement contribution to EBITDA. If you recall in our original Summit model and Elevate model, we said we'd be really happy to get over 75%. Now we're saying over 80% because we've already achieved 76%. We believe that these 3 things, so that materials lines of businesses will drive us to that North Star of 30% EBITDA margin. And I know now all of you are asking for, well, what are the details behind that [ app ]. I'm going to start and give you some detail with our journey to 30 here. And let's start on the left-hand side, where we've got aggregates. Here, we're saying we're going to add -- we're starting at a base of 22.2% and we're going to add 2 percentage points on to that. And how we're going to do that is actually by a proven playbook that we've started already. It's commercial excellence, accelerating that price net of cost. We have more to do there, and we'll continue to grow ags. Operational excellence, you'll hear us talk a lot about the opportunity. We're in the early innings. We have opportunity to drop more dollars to the bottom line by standardizing and improving our best practices. And then you'll see more contribution from green fields. So the message I'd leave with you on ags, it's a journey. We're just accelerating that journey, and we'll add 2 more percentage points from that. On cement, we're saying 3 percentage points. And what's that coming from? Well, that's largely coming from the synergies you'll hear David talk about later on. And those synergies are real and doable, and we have a standard playbook for it. He'll also be talking about price net of cost. So we'll continue on that strong price journey that his team has developed 2 years of double-digit price increases. There's a proven playbook here as well, and then continued contributions from Green America. So the message I'd leave with you on the ags and cement part, these are things we know how to do, we're already doing, and it's further moving on the journey and accelerating some. The next block here, as you see, is 0.2%, and this is a small 1. It's -- you say, "Well, that's not much from your downstream, Anne." Well, all we have in there is the Argos downstream, and that's the contribution from just the synergies that Tim will talk about later on. There is some upside here. Because of the strong downstream markets that we currently are in, they have shown a ton of resiliency. As our ready-mix volumes were down 20%, we kept our margins. That's a testament that we're in the right markets. So think about an upside where residential comes back. We will have some upside on margins in the downstream, but we're not including that here. The next 2 buckets are really around portfolio optimization. So the first is acquisitions. You'll hear our business leaders and Kekin talk about rich M&A pipeline that we have. We've been adding bolt-on acquisitions in a year where we did a transformative acquisition as well. And so we are very confident. It's in Summit's DNA. We continue to do that -- those acquisitions, and we have a rich pipeline. As I said, portfolio optimization will add another 0.6 percentage points here. We just do that. That's just managing your business well. It's addition by subtraction because you're basically taking the low-margin business out of your portfolio and adding some basis points back into the overall enterprise. And then finally, you'll see 1% from sustainability and innovation. Karli will talk you through some real numbers that we're doing on sustainability and our ability to be value generative moving forward, and Kekin will talk about innovation. So we have a clear path to 30% EBITDA. The other point I'd like to make is 2 points on this. If you look at the first 2 blocks, the aggregates and cement, where I've said we have ongoing and very clear playbooks, those 2 alone will get us to 27% EBITDA, which I believe is industry leading, but we're saying we want to get to 30%. And we -- the message there is there's a number of initiatives that are diverse enough that get us there. So we're not a 1-trick pony in getting to that 30%. So I know the next question. Everyone's mind is, well, how fast are you going to do it. I can see you already. Okay. [ Taylor's ] giving me that look. So what you'll see here is a little different for those of you who are used to our Horizon slide. In the past, we would have put on ROIC, leverage and margin. What we're seeing now, moving forward, because of the progress we've made on leverage and ROIC, we're going to put a bright light on the margin, and we're going to measure ourselves against that margin moving forward. So you will be able to see this every quarter just like we have on our scorecard. And we're very confident in achieving this. The thing that I'd point you back to is most of this margin gain is in that aggregates and cement. And most of it is driven on these synergies. And we put the Argos integration across a 5-year model if you all recall. And so what we're very confident in saying is we can deliver 30% within 5 years. So that's the time line. We'll update you as we go. It won't always be a linear process. Sometimes we'll be moving faster than slower, but we will shine a light on margin moving forward. So that provides us a nice segue for me to go into the Argos integration. And again, I'm just going to make a few high-level comments here. And let me start with what we'll talk about today. So I'll do a quick talk about the scale and synergies, but the vast majority of our discussion today will be by David and Tim, who will talk about our cement and our ready-mix synergies and the integration and where we are on that to date. But before we do that, I want to reaffirm why we did this. We are absolutely convinced 45 days in after closing that we are culturally, strategically and financially stronger together. Culturally, we have an absolute focus on 0 harm. We are a diverse talented group who are absolutely fired up by growing this business and continuing to focus on innovation and sustainability. From a strategic perspective, we are aligned on this powerful materials-based portfolio. We have a better and stronger geographic footprint. We're less seasonal, and we're able to drive power of earnings moving forward. And then from a financial perspective, with this glide path to 30% EBITDA, with a stronger balance sheet, which had better cash generative portfolio, we believe that we will be able to continue to drive consistent growth in our business, and Scott Anderson will talk about our capital allocation priorities. Bottom line is we're stronger together. We're only 45 days into the post close, which you'll hear a lot of positivity from our team, really good results so far. We have an integration management office that Tim Zynda here leads. And that office has been put together. I won't go into all the details here. The message I want to leave you with the shareholders were all over this. This thing was put together way before we close the deal. Every initiative is in a value tracker. Every initiative is being measured so that we can assure we'll get that synergy. We have a team put together, as I mentioned earlier, that's very cross-functional. We have dedicated third-party resources. So this team is laser focused on execution, and you'll hear that from both Tim and David. The other thing I just want to do is set some baseline for our synergies. So as you recall, when we came out in September, we said we have over $100 million in operational synergies. And we said they were coming from a small portion from SG&A and procurement, so scale synergies. Some would come from ready-mix, and then about 60% to 70% of that $100 million would come from cement. We're 45 days in. The team has been under the hood, working together. We've gotten our commercial teams together. And we are very confident in adding another $30 million of synergy to that to say that we are at least $130 million in synergies. And that's now a mix of commercial and some of those are operational. And every day, I hear more opportunity. And so what I'd leave you with, because I know we gave you some numbers out there within first 24 months, if you recall, we said, look, on the $100 million, we deliver half of those, so $50 million within the first 24 months. Now we're confident to tell you that we will deliver $80 million within the first 24 months. And David and Tim will talk in detail on why we have the confidence to do that. So message here, no nasty surprises on this deal, great results so far and a lot of upside. I'm going to just briefly touch on the scale synergies before I hand over to the 2 guys here, and we basically have $2 billion of addressable spend. And the teams have been very focused, as Marshall will talk about later, in getting our procurement teams together. We have people, processes and tools upgraded there, going after working with our suppliers, tightening up our contracts. We will deliver those results. With the help of Karli's team, we've been slimlining our organization, making it a group that will be agile in decision-making but be effective. And our goal is to get to 7% of SG&A. We are very confident in our ability to deliver the scale synergies and already have made significant progress, as you'll hear from some of our leaders. So with that, I'm going to hand over to a man who is uniquely capable of making me feel even smaller than I am and shorter. David Loomes, our President of Cement.

Thanks, Anne. Good morning, everyone. Anne is always a hard act to follow. So it's wonderful to be here. I'm very excited, very proud, very humbled to be leading the combined Cement business of the new organization. First of all, I just wanted to talk a little bit about this One Summit Cement operating model that Anne referred to. And it starts with people. And it'd be remiss of me not to thank and congratulate the 2 teams coming together so quickly and really galvanizing the entire commitment, the entire energy behind what's ahead of us. We -- one of the first workshops we had was a technical workshop in Alpharetta, and we got all the manufacturing teams together talk about what's ahead of us. And Marshall, who had been with the company for a very short while, was in that meeting. And afterwards, we chatted. And he said, you know what, you couldn't distinguish was who was from what company, legacy company. It was that harmonious that quickly, so very early trust, very early support. It's a meritocracy. There's great ideas on both sides of the table. The best ideas will win. We are in the process of implementing quick wins. We -- this is going to be defined by processes that are simplified, consistent and scalable, supported by the people, by the processes and tools that follow. We're a 9 million ton a year cement plant business -- cement business rather. We've got 6 plants. We've got 2 grinding stations. We have to have consistency of process, and we will, and we are moving very quickly in that regard. So standardization is a very key part of it, not in a bureaucratic way but in a very agile, effective, execution way. That way, there's transferability. There's portability, there's consistency and appropriate benchmarking that can follow. So very excited about how quickly we've come together and the opportunities ahead of us, and I'm going to talk more about the synergies as we go forward. But really, as we build this model, it's really anchored on 5 key tenets. Number one is plant performance. That is our biggest value driver. That's OEE, which I'll talk more about, but we've got significant opportunity there. It's the biggest leverage of performance in the group. Cost excellence, as an industry, as a company, we always have to be completely focused on cost. We've got to be lean. We've got to be cost competitive every day, every week, every month and so on. That's what defines the business model we're in, our culture and our behavior. Customers, commercial excellence, I'm very, very passionate about customers. I've got very, very good relationships through my time in the industry. And without the customers, clearly, we do not have an effective business. So we've developed a very strong bond with customers' trust, dependability and reliance on both -- from both legacy companies. There's a lot of excitement from our customers about this transaction. There's a lot of really good traction on what Anne mentioned, is the largest U.S.-domiciled cement producer. That's really important to our customers, and frankly, it's important to our employees as well. And logistics excellence is another tenet of the model. Under Marshall's leadership, having one integrated S&OP process that looks at the network and maximizes margin, not parochially to any given territory, any given cement plant, but for the network as a whole, so enterprise-wide financial objectives are in play. And of course, meeting customer demand. And then Green America, I'm extraordinarily passionate about Green America. I love the business. So I can talk for hours on it, but it really is a very, very unique business. It's entrepreneurial. It's different. We take waste material, hazardous and nonhazardous material. That replaces our fossil fuel consumption in our cement plants. There's an extraordinary compelling environmental story. There's an extraordinary compelling community story. It obviously has strong financial gains to our business, and it provides to the waste generators a value proposition that we can differentiate ourselves on that their material is being used to substitute fossil fuels as opposed to being landfilled or incinerated. And of course, it gives us a stronger value proposition with our customers and key differentiation point as well. We manage it as a stand-alone business. It has its own P&L. It is accretive on every single financial measure to the overall continental Summit-Argos Cement results and really generates a lot of value for us. And we're growing it. We're going to be growing it in every Argos cement plant as we move forward. And we're about to commission our new FuelFlex facility in Davenport, Iowa, so a wonderful, wonderful business. As you can hear, I can keep going, but I do have to move on. Out of this program, out of this framework emerges the vision of the best building materials company in the industry, period. And when I say the best, it's the safest. It has the highest employee engagement and fulfillment, financial performance and customer engagement and retention and loyalty. So the team has galvanized quickly to this vision and mission and very, very supportive with good momentum. Our network, Anne mentioned a lot about the network in terms of the Southeast and the flattening of the seasonality curve but also fundamentally the growth, the inbound in-state migration and what that means ultimately for demand for our product. Population is the #1 driver of cement consumption that's highly correlated, and the states that we play in are very, very well positioned. We are also able to supplement strategically with imports and very selectively with imports. We will import roughly 1 million tons a year to supplement domestic production and to supplement domestic production is the key phrase. Domestic production will always be more competitive. And so the import ton gives us optionality, gives us flexibility of growth. So a very exciting add with the assets, particularly going on the southeast element and then the added scale of further import capability. The U.S., Anne mentioned this, too, but just to repeat it, structurally, it's a deficit market of production versus demand. Roughly [indiscernible] 110 million, 120 million tons of demand growing at low single digit as PCA forecast, and this is a deficit of production, which is met by imports. This Canadian imports, which I regard is more structural. But then there are other imports that grow -- and sourcing of imports really vary. They vary based on wherever excess cement is in the world at any given point in the cycle. Right now, it's Vietnam and it's Turkey. So there's roughly 20-odd million tons to 30 million tons of imports for the foreseeable future, which, to me, strategically just enhances the competitive positioning, the strategic value of domestic capacity. So it's a business that we've committed to, clearly, with this transaction that we remain committed to the investment and aiming for leadership in all markets. The imports themselves a little bit more about that. Generally, the import structure, it's market by market, of course, but generally, the verticals comprise most of the imports into our key markets. So there's limited impact on independent importers into our markets. There certainly is some impact, but it's muted by the fact that most imports come in through the vertical business. And if you look at the Southeast and Mid-Atlantic, you've got some 80% of the imports into those markets come through the verticals themselves. Footprint concentration. This is where we participate in the states. And you can see by virtue of these top 4 states, in excess of 50% of our revenue comes from those top 4. And those correlate well with what Anne showed earlier, those high-population growth states. So being well positioned in these states, availing ourselves of the assets we have and the growth in demand in those states is a very, very strong position for us to be in. Okay. This here, it's a little bit of an end-market segmentation. You got the 3 sections on the right 3 end-market segments. Public, it's the infrastructure, it's the IIJA, which there's going to be a more significant back end of second half of '24 in terms of demand. It's already, we're already feeling it. We're already seeing it. Charles will talk about a couple of infrastructure projects in his area. Residential, woefully underbuilt. We are seeing signs of more growth in residential. There's more optimism today when I talk to customers than they were 3 months ago than they were 6 months ago. So the sense is '24 is lining up to be a much more solid year than we would have got from customers or would have felt again, 3 to 6 months ago. It gives us optimism going into '24. We already see it and feeling it in our business activity, and we know more to come. And then there's commercial. This is the onshoring, reshoring and manufacturing and spoke about that. We're participating in some very, very large projects in this regard. We have some good differentiation points. We have a great commercial excellent story about how we got to be the cement supplier for a project in Louisiana. That relationship that was an LNG project, that relationship, we leveraged that secured through trust with that customer has brought us new opportunities in other markets in these what we would say is the traditional Argos footprint. So we're already starting to see some of these relationships. So some of these commercial synergies start to take hold and be able to bring value to us in the new market footprint consolidated. Now a little bit about the operational playbook, which Ann mentioned. And we've got a track record here of delivering on this operational playbook, which we will clearly deploy and are already deploying in the Argos plant network itself. OEE, this is the overall equipment effectiveness. This is a measure of plant availability and throughput simplistically. World-class is typically 85%. In the Continental Cement legacy operations, we're in the order of low 80s, mid-80s. And we want to keep pushing that. But importantly, there's big opportunity in the Argos plants as you'll see in a few minutes, in terms of OEE at all the key plants. And that, again, is our primary value driver. That is the compression of cost, the increase in throughput and efficiency at the plants. Then we have alternate fuels. We have an industry-leading 47% in Continental Cement which we are taking those facilities and deploying them into that technology, that expertise, deploying them into the Argos plants. The facility I mentioned in Davenport, Iowa, which will be commissioned in April. That is the world's first commercial installation of a technology called FuelFlex. There was a pre-commercial installation in Ireland. We sent the team over there, spent a lot of time at the plant working with the plant itself, working with the manufacturers, brought that technology back to Iowa. It's gone well, the project is right on schedule and again in April commissioning. That project, once successful, will increase the TSR, which is the really the fossil fuel replacement ratio at Davenport too in the order of 50% to 55%. Obviously, we've got to iron out some kinks. We'll operationalize it, stabilize it and then deploy it elsewhere. So wonderful accomplishment by the Green America team working closely in conjunction with the Cement team as well. But those are the kinds of stories. Those are the kinds of expertise that we have. We also have strong customer relationships in the Green America side. And that's more of a commercial synergy, but there's vast opportunity with customers in other markets to use their services to help us increase the performance of the Green America facilities elsewhere too. And then, of course, there's Portland Limestone cement, which is the third piece. This is the progressive replacement of more limestone and less clinker, which obviously, there's a carbon benefit and there's also a cost benefit as well. We were the first U.S.-based company to move to 100% PLC production in all plants. So we have 1 product in the U.S. from the Continental Cement side. And we achieved that working very, very closely with our customers, which is really important when you deploy a new product, you've got to test it, make sure it performs and work with your customers on the transition. And there's opportunity there with the Argos plants as well. So these are the 4 cement plants in the Argos network. And before I get into these plants, I just wanted to make sure it's clear that the rigor, the process and the improvement potential that we're bringing to these plants exist back with Hannibal and Davenport, the legacy Summit plants as well. So every plant is going to be subject to the same process, the same scrutiny and the same performance improvement criteria. Martinsburg is the first one, Martinsburg, West Virginia. It has the largest opportunity in terms of OEE, as you can see by the slide, 67%, moving on to 85%. There's a list of capital projects, and this is important. Every plant has a list of capital projects identified with project plans, with our cost adapt. We've got the capital made available. We've got the critical spares identified. We've got detailed project plans for every key initiative that are prioritized in the right sequence and we resourced accordingly as well. So I'm not going to go through every one of them, but just I wanted to make sure that the execution focus is top of mind in my messaging. Obviously, the theory is fine. It all hits the ground in execution. And I wanted to thank the plants because we've got really good governance on this at a very early stage. At every plant, we have a plant champion responsible for coordinating and tracking the execution of synergies at every plant. And then through the facilitation of the IMO process, we -- that rolls up into more of an executive summary and then there's the corporate summary on top of that. So every measure, at every step of the process, there's accountability, there's governance and there's metrics to measure success. And the prize is enormous. There's a lot of hard work to get here. This is a multiyear journey, but we've got the teams. We've got the passion, we've got the process and we've got the support of the Summit Board to enable this and be very successful. So I'm very, very excited about the path ahead of us. You can see OEE is the first column. And then you got the Green America piece down the middle and you look at some of those opportunities from the AFR perspective. Roberta is the one that you may say, well, they're already really high OEE, what happens to that plant. That's a very well plant, very good plant manager, a very good team. we're going to focus there on stronger AFR faster. They have some assets in place. They have the infrastructure in place where we can more readily deliver those -- that ramp up of the AFR rate. In 2024, there's about a 5% increment in AFR planned for Roberta. So those are the kinds of things we're working at. We're working in parallel. There's a lot of focus. And these teams are dedicated teams because what we've got to remember, too, we still have a day-to-day business to run, whilst all of this is going on. So again, with the engagement of the teams, the passion, the commitment that everybody is bringing, we've got off to a really good start. It's wonderfully exciting to be part of this. As a leadership group, we've committed to be visible at the plants, both from a safety perspective, employee engagement, but also tracking the synergies. So a lot of time is going to be spent visiting the plant and also visiting key customers as well in forging and improving those relationships. How this plays out in terms of tying it all back to the Elevate strategy. We have -- this is an example of a market out of Martinsburg where we have cost curves, which I'm sure you're all familiar at. If you take where Martinsburg is today and where it is post synergies, you can see we moved from a #4 in the market to #2 in the market. And in so doing fulfill the Elevate Summit positioning of being #1 or 2 in all key markets. So we do this for every market. And when we look at new markets, we go through the same process where we look at markets where we may not be able to get to that #1 or 2 position. We go through the same thought process, as Anne just mentioned. Are we in that market? Can we win? Should we be playing in this market? Or should we be looking elsewhere? And this is an active part of the leadership process that we have. There's lots of synergies available in Cement. Clearly, it's the lion's share as it should be, and that's great. That's very exciting. We've got a phased delivery plan, which I mentioned earlier. When we did due diligence, we had the world's best come out and visit the plants. We had our internal team, visit plants. We developed what our findings were, and you can really get a good sense of plant performance when you look at certain key metrics. When you walk the plant, you feel, you look at the equipment and you can get a sense of the employee sort of culture too and the level of employee engagement. So we developed a long list of opportunities from that due diligence. It was validated by the consultants when we got the technical teams together, it was validated again, and we had some adds to it. We adjusted some of the priorities. And then we've brought back some consultants to make sure, again, we're doing this in the right sequence. What we want to do is be efficient in how we deploy the capital, how we deploy the projects that they tie to a master plan. Every plant has a 5-year master plan. So where do we want to end up in 5 years? And how would that end in mind, you back up in terms of all the projects being done in the right sequence to deliver that master plan. And then beyond the synergies themselves, there's more opportunity. There's commercial opportunity. There's added logistics opportunity and sourcing. The internal pull-through, which Jason and Charles will talk more about earlier, the 3 of us as the 3 segment leaders are focused on enterprise-wide value creation. We don't have silos. We work together as a team. We make decisions that benefit the enterprise. And that's our fiduciary responsibility as leaders, which we embrace and are working towards a fulfilling. Customers, I mentioned my passion for the customers, fundamentally important, really critical for us to leverage this trust, this reliability from our customers. They got to be able to depend on us, and we got to be able to deliver. We got to do what we said we're going to do. And without fail, every morning, every day, every delivery has to reflect that promise to our customers. And in Summit, Continental Cement, we delivered significant value in excess of inflation in 2023. So we're able to take that playbook, as Ann mentioned, and replicate it through the Argos network. But there's also a really strong people. This is not about Summit showing up with all the answers. There's really strong people in Argos too, which, again, we get the best ideas, the meritocracy concept and we deploy those rapidly into the market. On the commercial excellence side, strongly supported by Kekin and his commercial excellence team as well. So we go to market with a proven playbook, and upskilled sales force, a broader footprint a more compelling value proposition, which, again, really, really resonates with customers. A lot of our customers are very excited about this because they now see this broader network of plants and the ability to build a stronger partnership with Summit on a broader basis. So that offers a good opportunity for us. We're also very data focused, Anne mentioned this, too. A lot of our decisions are databased. So whether it's profitability by product, by segment, by customer, by market, there's a lot of rigor to the analytics process that we follow. We're very focused on margin. It's not just top line, but the margin component is very critical as well. And we incentivize our sales folks on the sales incentive plan that reflects our strategic objectives and drives the behavior that supports those objectives. So I wanted to leave you again with this last slide before I hand over to Tim. I'm incredibly excited about the 45% that Anne mentioned, right? It's great to have a stretch target. It's what drives performance improvement. It's continuous improvement. So I embrace fully the 45% the team does and we can get there. We've got a pathway. We've got a list of opportunities. We've got the team, we've got the organizational support and we've got the commitment to make this happen. So I couldn't be more excited. I look forward to coming back and showing progress to that 45% goal. And obviously, I look forward to questions at the end. With that, I'll hand it over to Tim.

Thank you, David. Good morning, everyone. My name is Tim Zynda. I'm the Senior Vice President for the Integration Management Office. Previously, my responsibilities included both the ready-mix business in the central region as well as the ready-mix center of excellence across the enterprise. As we move through the next few slides, my goal is to outline the ready-mix value creation opportunities that lie ahead of us. Our value creation thesis is really underscored by 2 levers. First, these are high-potential assets in strategically located high-growth areas. And secondly, we have an opportunity to apply Summit's operational and commercial expertise and really drive performance and profitability. The legacy Argos footprint offers several strategic advantages. There's a significant vertical integration, not only in cement today, but also we have an opportunity to leverage the existing Aggregates business and pull through rock and sand and feed those newly acquired ready-mix plants. The footprint also offers reduced seasonality relative to our existing legacy Summit footprint. And we expect the velocity of this business to have a little bit of an uptick given the more metropolitan areas that we service. We also see a real strong opportunity to drive value with our strong technical capabilities, those will be enhanced by long-standing customer relationships. We want to take that to the next level with our ready-mix operational excellence model. If you look off to the left here on the slide, those are operational metrics that really drive ready-mix businesses. You'll see the variation between the 2 legacy businesses. That demonstrates a measurable terms, what operational grid looks like. It's our intent to apply the Summit operating model against the legacy Argos footprint and given the strategic advantages that the footprint has, we expect to either meet or exceed the operational performance that we've delivered in the legacy Summit footprint. So as I mentioned, the footprint, we believe the legacy Argos footprint presents a significant opportunity for growth. The footprint is highly concentrated in some of the fastest-growing cities across the Southeast, including Charlotte, Tampa and Atlanta. These markets are highly complementary against our existing Summit footprint and really position us further into the Southeast in a really attractive fashion. So taking these markets 1 by 1 -- in Georgia, we have a well-positioned plant network with extensive coverage across the Metro Atlanta area. In Florida, we have an excellent competitive position with broad access to the high-growth North Florida markets and in Houston, 2 complementary plant networks that we're working quickly to merge and really position that business to supply both the residential and commercial segment and the Carolinas, we see an opportunity to enhance their go-to-market strategy, their customer service strategy and really improve operational performance while evaluating the overall network of assets. Bottom line is we come into these markets with varying positions of strength. Atlanta and Florida, we have leadership positions and strong fundamental tailwinds. In Houston, we're moving fast to integrate, consolidate and improve that business. And in the Carolinas, we're pursuing a rapid path to enhance the competitive position in each of those markets. In each case, we'll be relying on our Summit experiences to deliver against our commitment on our synergies. One such example is our end-to-end excellence on our delivery cycle. Our delivery cycle, when you think about that, when you think about the benefits of modernizing the fleet, we expect repair and maintenance to go down, truck availability to go up and overall improvement in fleet utilization. Now to take advantage of that investment, that commitment, we really need to focus on each segment within the delivery cycle itself. In introducing load-and-go's, we're able to reduce the time the truck is in the yard after the load, eliminate safety exposures through associated with the drivers, getting in and out of the cab and really minimize the water we're using through the truck wash down process. It's really a win-win-win. And when we think about the opportunities to centralize our dispatch, we're just trying to bring everybody together, collaborate in real time and really leverage these plant networks and the scale of the fleet to really support our cross-shipping activities. That's enabled by in-cab GPS technology that allows real-time status updates of every ready-mix truck in the fleet. What that does is it allows the dispatchers to continuously adjust the schedule throughout a given day. Now the ready-mix business, it's really a minutes business. And we all know time is money. So we can think about it this way, excuse me. The average ready-mix truck costs $90 an hour to operate. In a legacy business that produce 5.2 million tons and loaded 612,000 loads. If we shave 8 minutes a load, the net financial impact is north of $7 million. The other opportunity there, we need to remember, we have efficiencies that extend well past just managing the delivery cycle. Summit Materials is an expert in mix optimization. We leverage vertically integrated softwares that allow us real-time capability to mix optimize, whether we're responding to seasonality or changing raw material availability. And moving forward, we're looking to leverage the power of artificial intelligence in our QC program. AI is already enabling us to move a lot quicker in evaluating raw material combinations and the net result has been more robust products and reduced mix costs. Let me tie this back to the ready-mix synergy targets. I did talk a lot about the delivery cycle, but there are 2 other primary opportunities that will get us to between $25 million and $30 million of synergies. The first is cost reduction through consolidation and really pulling those third-party fleet maintenance style service agreements back in-house. And the second is asset optimization. Particularly in Houston, we have a great opportunity to consolidate and optimize the plant network, rightsize the fleet and not sacrifice product quality or service. These 3 opportunities allow us to say with conviction that we will deliver $25 million of ready-mix synergies. And a couple of additional opportunities that we've uncovered through the early days of the integration, our mix optimization and Aggregate pull-through. Neither of those opportunities were contemplated through the diligence process. As we get more comfortable in these markets with the raw materials that are available to us, we're growing more convicted that we'll realize financial benefit when we institute the Summit mix optimization program. And with more time spent in the operations. Again, we're really growing convinced in our ability to pull rock and sand through the existing Ag business, resulting in a strong benefit with the Ag pull-through dollars. Mix optimization and Ag pull-through represent up to $10 million in upside savings neither of which were contemplated during diligence and both of which we expect to materialize relatively quickly. So in closing, today's upgrade to our all-in synergy target really reflects the confidence that the group has in all of the opportunities across the business. And the playbook is one we know well. We expect to reach our full annualized run rate on synergy targets of at least $130 million over 5 years. and at least $80 million within 24 months. I appreciate your time, and I'll now pass it to Kekin.

Thanks, Tim. It's great to see many of you again. I'm Kekin Ghelani. I have responsibility for strategy, corporate development, commercial excellence and innovation for the company. I'm really honored to be able to present our growth strategy to you today because growth is really embraced by everybody in our entire corporation. So I'm really presenting on their behalf. Let me start with providing an overview of our growth strategy. It really starts with playing in the right places, both regionally as well as across the value chain. Lastly, we look for leadership positions across everywhere that we play. Our incredibly strong balance sheet is going to enable us to continue to invest in organic growth programs through both OpEx and CapEx, and we'll talk more about that. Some of those investments include our growth enhancement programs such as commercial excellence and innovation. Lastly, we'll continue to be active managers of our portfolio, divesting those businesses that they are better owners of as well as continuing to add to our portfolio through acquisitions, greenfields and asset-light partnerships. Anne and David already covered the attractiveness of where we play. Many of the states that we operate in. So let me focus on how we make those decisions. We have a few strict criteria. The regions must have predictable high demand growth with low volatility and low seasonality, combined with attractive industry structure as well as attractive supply-demand dynamics. We must also have a line of sight to leadership in these positions together with the ability to add value and maintain sustainable competitive advantage over a long period of time, and we've applied this formula. Though Argos stole a little spotlight since last year. I'll remind you that we closed 5 bolt-on acquisitions since 2023. We added a new platform in Phoenix last year and bolted onto it just as past February. We added to our vertically integrated Salt Lake City platform as well as closed on 4 limestone quarry acquisitions across North Texas and Missouri. We have incredible organic growth opportunities. David already highlighted many of the investments that we're making in the cement business. So let me focus on the Aggregate side of things. When you look at just the states where we operate today, they will require an additional 250 million ton of aggregate supply just to meet demand growth within our states. That's a huge number. And so we're going to need to continue to invest in capacity expansions at our existing Aggregate sites as well as continuing to add greenfields. And we've had incredible success applying our very disciplined greenfield playbook. If you look at just the contribution from the greenfields alone, last year, they contributed $42 million of our EBITDA. And the greenfields collectively have already achieved 13% ROIC, which is a 300 basis point premium to our Elevate targets. So we're doing very well here and there is an incredible growth opportunity for us just from an organic point of view. Commercial excellence is another area where we've had tremendous success. In fact, last year, our commercial teams delivered $130 million of pricing expansion above cost. I couldn't be more proud, thanks to our commercial teams as well as our business leaders. I mean that is an incredible result. But with our expanded footprint gives us even more opportunity to continue to invest in this area across people, processes and tools. In particular, as David had pointed out earlier, we'll continue to invest in our market and competitive intelligence. We'll continue to invest in our salespeople training, particularly around value selling as well as upgrading the tools that we give our sellers. So I'm really excited about what's to come in this area, even though we've done a lot already. Innovation in our industry, there is a long runway for innovation in our industry, as Anne pointed out, in every aspect of our business from the quarry to the customer interface. I'll let Karli give you more examples about the investments that we're making in workplace safety as well as further decarbonizing our operations. So let me focus on a couple more things. In addition to the lean manufacturing program that Marshall will be deploying. Production automization and digitization are going to be key enablers to our operational excellence program. And we've already had some great success here. In fact, our cement plant already utilized AI/ML-based process controls that have already delivered value. As many of the examples that Tim mentioned relative to AI/ML-based mix optimization technology is also delivering value. And lastly, as we all know, time is money in construction, and we've committed ourselves to making it easier for our customers to do business with us, saving them time and making it easier for them to buy products and services from us. How do we approach innovation at Summit? We really take an entrepreneurial approach. We've empowered our teams and encouraged them to make small investments in small experiments. Many of the examples that Tim pointed out, such as the load-and-go system was actually started at a single site by a single individual and we've now started to scale those up across the entire enterprise, and that's the formula. Small investments. We take the most successful investments and scale them up. I'm really excited about what we have going on in innovation across the company. The original Elevate strategy contemplated a need for portfolio rationalization, and we've had incredible success here. Since the launch of Elevate, we've completed 15 divestitures, raising $600 million of gross proceeds. Those divestitures were completed at an average 10x multiple, which is a 0.5 term premium to where we trade today. Those transactions also resulted in 8 asset-light partnerships. In fact, 1 million tons of Aggregate sales last year came from those asset-light partnerships. We use those gross proceeds to drive Aggregates-led bolt-on transactions. And over the last 5 years, we've completed 22 Aggregates-led bolt-on transactions, which have added 12 million tons of aggregate sales to our portfolio. So a lot of success here as well. And lastly, the culture of M&A has really been embedded in our company since the beginning. I mean it's part of our DNA. It's what we do. There's an incredible opportunity here though in front of us, just within the states where we operate there's over 330 independently operated aggregates mines that are doing over 1 million-ton a year of sales. There's another 800 independently operated mines that are doing over 250,000 ton of year of sales. So we really view our opportunity universe just within our states as well over 1,000. That's a lot of opportunity. So how do we chase this? Well, we take a centrally coordinated approach with a decentralized model. So most of our bolt-on acquisitions are, in fact, cultivated by our business teams out in the regions as well as our business leaders. In fact, today, our team is tracking 150 targets that we're actively cultivating across the enterprise. So a tremendous amount of growth opportunity here to continue to do bolt-on acquisitions. So let me close with 3 things. First, we're going to continue to be disciplined about where we play regionally across the value chain and where we have leadership positions as well as being selective in the downstream. Second, the strength of our balance sheet is going to enable us to continue to invest in organic growth opportunities with the additional volume growth that's available to us, commercial excellence as well as innovation. And lastly, you can expect us to continue to do a high volume of aggregates led, midsized bolt-on deals. Thank you very much. And let me hand it off to Karli to go through the ESG road map.

Thanks, Kekin. A key part of our Elevate strategy is to be the most socially responsible integrated construction materials solution provider. Today, I'd like to give you a brief update on the strategy for ESG that we presented at our last Investor Day back in 2022. Our guardrails have not changed. We continue to focus on initiatives that are technology leading that are customer-driven and most importantly, value creating. This function more than pays for itself. It differentiates Summit amongst our customers and with our investors, and it extends our social license to operate. We have 2030 and 2050 targets that are aligned with our 3 North Stars. Basically, it's about people, it's about land and it's about carbon reduction. With the additional scale presented by the addition of the Argos assets, we're excited about the ability to potentially accelerate our path towards our 2030 and 2050 targets with the addition of those businesses. The Role in Journey to 30% adjusted EBITDA margins, ESG plays a role. When we presented last year, we talked 2 years ago, we talked about a 1 percentage point contribution from ESG to our 30% adjusted EBITDA margin goals and we are well on our way. When we reduce our fuel consumption and spend less money on fuel, when we reduce our employee turnover. And when we convert our yellow iron from current diesel power to line power, we are already realizing low single-digit millions per year. With the expansion of our alternative fuel usage through our Green America program, which is currently only located at our 2 legacy Continental Cement plants and is set to be expanded to our Argos plants that we've now put into the portfolio with 4 additional cement plants. We have tremendous opportunity for additional margin activity because that Green America business is margin accretive. We have conviction that as we expand all of these programs across the portfolio, it not only will drive the sustainability of our business, but it will also help have a compounding effect on our margin profile. When we talked about our 3 North Stars a moment ago, we talked about human social impact, basically people being sort of #1 in those 3 North Stars. And we've done a lot of work to really understand how to lower our turnover because the opportunities here for us are huge. We can save up to $0.5 million per year for every single percentage point decrease in our turnover rate. We save that money because we'll be spending less on talent acquisition, on training, on development, and we'll also have less productivity loss. We spent a lot of time trying to understand the data, trying to understand our feedback from our employees, and we developed a custom index of 7 key elements that help drive our employee satisfaction rates up and our turnover down. That's what we're focused on in terms of moving the needle. So this arrow that's on the slide gives you an indication of where we were in 2022, and we call that our inclusion index versus where we are in 2023. We will continue to focus on moving the needle on this number. We believe this provides the key to unlock the opportunity to reduce our turnover, lower our costs and improve our productivity. Now we're still in a voluntary disclosure environment on ESG for now. And as a result, we have to make sure that we are using third parties to really validate the success of our efforts. We've been involved with the Wildlife Habitat Council for over a decade. They have been a huge partner in helping us extend our biodiversity goals and extend our social license to operate. We're delighted that the Argos portfolio brings with it 13 additional Wildlife Habitat Council-certified sites, and we'll continue to pursue that program because it's a very important part of being a good corporate citizen in our communities. Additionally, in 2023, we were very excited to be awarded an MSCI score of AAA for the second year in a row. That puts us in the top 5% of global issuers relative to our ESG performance, which is very exciting. Finally, we completed a TCFD study in 2023. That's a climate change scenario analysis that will probably be part of our long-term process and plans in terms of climate change and strategy, risks and opportunities, we will be presenting and publishing that study later this year. When you look at the ESG value creation landscape, it's evolving daily with new technologies and new opportunities. There's a lot of places we could invest labor or capital. Our commitment to you is that we will only pursue opportunities that have a positive rate of return just like any other project, ESG has got a hurdle. We understand that we have to deliver results and performance to our shareholders, and we are aligned accordingly. When we talk about strategic agility, we look at leading the way on carbon reduction. We've got some very interesting opportunities that we've already achieved as well as ones in the future. For example, as David mentioned, we were the first company in the U.S. to achieve 100% PLC adoption exclusively, replacing clinker with limestone, which helps lower our costs and lower our emissions. We're very excited to have almost a best-in-class alternative fuel substitution rate in our cement business. This is amongst the legacy Continental Cement plants. And you see that at 47%, it is amongst the highest in the business. It's very exciting, and it helps drive further EBITDA accretion to our business. We're excited about being able to transition that into the rest of the Argos portfolio. And at the same time, we're also implementing the FuelFlex program that David mentioned starting in April, which helps us further expand our alternative fuel usage. It's very exciting. So from an alternative fuel usage standpoint, we're still on the steep end of our growth curve. However, we believe that there is a ceiling on how much we can achieve with alternative fuel usage. It's probably about 60% of what is required to get a kiln to the appropriate heating value in order to make clicker. We think hydrogen may offer an interesting opportunity for us to look at another option to supplement our alternative fuels usage. We've recently entered into an agreement with PCC Hydrogen that will help us understand the opportunity presented by hydrogen derived by ethanol, which we think could be very interesting for our cement plants that are located in the U.S. Heartland. Turning to our ready-mix business. We've also got some really great early track record of success. We have driven more miles in 2023. We, on the same fleet as we did in 2022. However, we also got a coaching and monitoring system in place for our drivers. What we did is that we coached our drivers to drive at a more consistent speed, idle less frequently, brake less hard and drive safer overall. The result in doing so allowed us to do more jobs in 2023 than 2022 with the same fleet and we utilized less fuel. We reduced our consumption and significantly reduced our fuel cost by almost 3% year-over-year on a volume-adjusted basis. We also continue to use carbon care, which is another great opportunity for us in terms of being a very good proponent of ESG. Carbon care allows us to take food-grade CO2. We inject it into ready-mix concrete, which both increases the compressive strength of the concrete as well as permanently removes the CO2 from the atmosphere. And best of all, we get a carbon credit we get to monetize another value-creating activity. If you're looking at our long-term view from our ESG perspective from Summit, here's what you can expect to see. We will continue to focus on people. We'll continue to focus on the land. We'll continue to focus on our emissions. And whatever we do, we will make sure it has a positive rate of return for our shareholders and drives us towards that journey to 30% adjusted EBITDA. With that, I would like to invite you all to take a brief 15-minute break. For those of you both in the room and on the webcast, we will reconvene at 10:45 a.m. Eastern Time. [Break]

Is my mic on? Okay. I thought I'd loud enough mouth to [indiscernible] that. But anyway, we're now going to turn the tables a little bit, and I get to ask a few tough questions of our business leaders here, and they were very nice to me coming up to this meeting for a reason. But anyway. Let's go ahead and do a few introductions first, and I'll start with the newcomer to the group who doesn't come from the industry, but has deep expertise, and that's Marshall Moore, our new Chief Operations Officer. So Marshall has over 40 years experience in the chemical industry and has deep expertise in innovation, operations, he's run IT, pretty much run everything. I've had the pleasure of working with him for many years in the past. And now he's over all of our IT integration management office, supply chain, he'll talk a little about that. But the big focus, you'll hear Marshall talk about today and which we'd like to pull a few more threads on is operational excellence. And we're really looking forward to him being able to lead and accelerate us in operational excellence moving forward. So welcome, Marshall. Next, we'll talk to Jason Kilgore, who many of you have met before. Jason is our West Segment Construction Materials President. And Jason has a wealth of knowledge in the industry. His business runs basically from British Columbia down to Houston. He is in some of our major markets like Salt Lake City, Phoenix and Houston. And he comes with a wealth of industry knowledge to the industry over 30 years. He founded his original Kilgore companies in 2000, and actually, [ Autozone ] asphalt truck is starting out in the industry. So if you want to go to someone who's been there from day 1, Jason's it, it's been a pleasure working with Jason from my perspective he's been at the table right through the development of Elevate Summit and has been fully engaged throughout that process and a great leader for us. His counterpart is Charles DePriest, who is our new East Segment Construction Materials President and Charles' geographies go from Kansas City to Virginia and then all down the Eastern Seaboard to Southern Florida. Charles, again, is a prior owner and founder. He was part of founding Georgia Stone products that was sold to Summit in 2017. Charles brings a wealth of financial and operational expertise to this leadership role and I can't tell you what a joy it is to work with these 3 individuals every day. So let's start maybe by -- before we dig into questions, and we'll start with you, Jason. Let's give an overview for those who may not be as familiar with your business of the West Segment and your strategic priorities?

Yes. The way to think about the West Segment is we operate in 4 primary geographical areas with leading positions. I'll start in the north, and I'll walk our way to the south. So starting with British Columbia, we operate a very high-quality reserve that is located with an advantage logistically right on the Fraser River. And the reserve is a very clean stone and it produces some of our highest margins within the West Segment. Next, we move into Salt Lake City. You hear us talk a lot about Salt Lake City. You saw some slides that had Salt Lake City mentioned on it as well. Salt Lake City is the cornerstone of the Intermountain West region, and it is one of our most highly profitable markets within the company. Now Salt Lake City is also the blueprint for how we do vertically integrated businesses. If you think about where we're at, we have vertically integrated businesses, but we run the business really well. We have high profits -- and that's what helped drive the formula for the success within that vertical integration. Now if we move from Salt Lake, we move into our new platform, which is Phoenix. Keep in mind, we bought the Phoenix assets a year ago. And we are actively pursuing. We're actively growing that market, right now as we speak. Now if we fast forward a few years from now, and we look down the road, we can see that the Phoenix market could resemble that of the Salt Lake City market when we talk about profitability and return on invested capital. Now we move to the south, and we look at Texas. Texas is our largest market that we operate in. We have our Houston operations, and we also have our North Texas operations. In Houston, we operate in a market that is relatively fragmented, it's a relatively fragmented ready-mix market. However, we are advantaged within that market because of our high-quality aggregates and our positions within Houston. Those aggregates are very critical to our customers. They rely on our quality, our service and our dependability in order for them to compete as well. Now if we move to the North Texas. In North Texas, we lead with our aggregates that feed our asphalt, really, it's our strong performing asphalt business there. And that market has benefited greatly from the increased TxDOT spending. So in general, Texas is a fast-growth market, and it is also aggregate intensive. And we feel that the Houston and North Texas markets really are well positioned to continue to capture the growth and the margin opportunities that exist. Now if I step back and overall, we look at the West Segment. The West Segment aggregates, we have improved our position with those aggregates. The profitability has gone from 45% to approximately 52% of the West Segment's portfolio. Now also in 2023, our EBITDA grew by 18% within the West Segment.

Yes. So several years of very nice growth in our West region, and now really leveraging off that Texas high-growth market. Charles, why don't you talk a little bit about your strategic priorities?

Yes. So in the East Segment, we operate out of 2 regions, the Central region and the East region. And the businesses that we play in primarily are the aggregates businesses, we do have some downstream businesses. And obviously, with the addition of the Argos acquisition, we just added a big ready-mix play there as well. So I want to start from the West and talk a little bit about the Central region. Central region is supported by the Kansas and Missouri. And there, our strategy has been to grow the aggregates business intentionally with a focus on the Kansas City market. And we've grown that market through M&A activity as well as greenfielding activity. Our other strategic focus there has also been divesting some of the underperforming downstream businesses, at least by Summit standards, and we focus there on some of the rural markets where we played in Arkansas. Also, we divested a construction and asphalt business in Wichita. As a result of that, we have increased our profitability mix in aggregates by 10 points since 2020. So now we're at 78%. And we're well on our way to hitting that 30% EBITDA margin rate that you heard Anne talk about earlier. We will be sorely disappointed if we don't hit that 30% mark by the end of the year. So really excited about that. Now let's go back to the East side and talk about our strategic priorities there. And generally speaking, our priority is to grow the aggregates business in Georgia and in the Carolinas. And you heard David and Tim both talk about the growth tailwinds that we see there with regards to population as well as onshoring investment. So we plan to grow in Georgia and the Carolinas organically and also by greenfield. Our second priority there is to grow the aggregates business in Florida. As many of you know, we entered the Florida market last year through an acquisition in Ocala, Florida. And when you think about the Argos acquisition, we've got a growing presence now in the Southeast part of the United States, where we're really ready to leverage an extensive network of assets to quickly scale and grow as the market is growing there.

Great. Thank you, both. Let's bring Marshall into the equation here for a few minutes. Marshall, you're the newcomer with a lot of external expertise. Give us your initial impressions of Summit?

Well, my initial impression is that we have a lot of opportunities for self-help type margin improvement opportunities through operational efficiencies. First, I think as everyone knows Summit has grown very rapidly through acquisitions, over 90 acquisitions without a strong focus on integrating and standardizing how we run those sites, how we run those quarries, which means that there are a lot of opportunities for standardized -- identifying and standardizing on best practices that are really yet to be tapped. So those are opportunities for us. More recently, there has been some efforts in operational excellence initiatives, which we have an opportunity to leverage across sites more than we've been doing in 2023, $15 million worth of savings from those opportunities are really site level improvements that we can take a look at translating those and leveraging those across the other sites to really accelerate and amplify the benefit of those. One example that I saw in one of my earlier visits to our quarries -- our Forsyth quarry that operates in the East region, Charles' region in Georgia. The team there through a continuous improvement event identified an opportunity to improve throughout through that site by up to 30%, just by diverting the flow of the material through the processing equipment, eliminating non-value-added processing of waste material, which opened up capacity to make more product. So that was a great example that we could translate. You've heard a lot about energy efficiency. We are very heavily equipped -- costs are very heavily dependent on equipment, operations. So maintenance excellence and energy efficiency are areas that we'll be able to drive much more improvement in cost savings. And then I just also want to say I'm really encouraged by the enthusiasm in the teams that I've met at the quarries to participate in continuous improvement initiatives -- it's -- obviously, there's a lot of ideas there and a real can-do attitude to get them done. So bottom line is that it looks like there's a lot to go after out there and the organization is motivated and it's really just going to take a more, I think, structured strategically focused approach to really kind of amplify that and accelerate those benefits.

I know I can speak on behalf of our shareholders to say that you're only 2 months in, but they'll quickly want to know exactly what that a lot is to go after, right?

Let's switch gears to the aggs profitability model and start on pricing, which has obviously been very strong. But I think it might be helpful for our shareholders and Charles will start with you. Maybe you've talked about your market-to-market approach in your region and segment.

Yes. So for us, in the East segment, the pricing approach is really fairly simple. But we do utilize a standardized approach in the way we look at it. And the first thing that we do is we use our local expertise in the market, which is our sales force for their market knowledge to really start those pricing conversations. Second, you heard Kekin talk about the processes, the tools and the training that we're providing our sales force. And we're using that. We're using data more effectively than we ever have. I've been in this business for over 20 years, more on the aggregate side, and we've never used data like we're using that today. And we're using that really to primarily help refine our initial thoughts. And then the third thing that we've done is we've built governance into the approval process and that kind of gives us a last chance look to really test and stress what we think the market will bear.

Charles, how about you talking a little bit about the specific pricing components that you're leveraging in your markets?

Yes. So today, there are 2 emerging components that we're seeing in the pricing equation that we're really thinking about and making sure is in the pricing equation itself. First, in my segment, and I think I can speak for Jason zoning and permitting is becoming ever more increasingly difficult to obtain. So the reserves that we currently own and we're leasing, we know are more valuable. So we really, really stress that, and we think about that more now than we ever have when we're talking about pricing. The second thing that I would point to is we're seeing pricing differentials in end market segments. And we're using real-time data to figure out what drivers are driving those in market segments to really test where the ceiling is in pricing.

That's great. Jason, are you seeing the same thing in your markets? And maybe talk about why you may have more traction in one market versus another in your segment?

Yes. I would agree with Charles. There's definitely pricing opportunity. In the West Segment, we are seeing mid- to high single digits. It really -- it starting to feel like it's the norm. And what really encourages me is the frequency of price. It used to be -- when you look back a couple of years, it was a springtime event, and it was a one-and-done pricing effect. That was it. You are done. And now we have this opportunity where we're actually able to price as we go and sure cost of that had somewhat to do with that. But when I talk to our customers and we see what's happening, our customers, they not only anticipate a second price increase, they're now expecting a second price increase. Now one thing that has changed as Charles has touched upon was data. The power of data within pricing has really given us a really nice lever to pull. It used to be -- if you look back a few years ago, you'd say, okay, we're going to go out with a price increase. So let's just say, for example, 3% to 7%. And you'd put that across your price list and you would send it out and it was done. Well, today, it's much different with the power of data. We get the data, we look at our demand, we look at our backlog. We look at our inventory, and then we don't just apply it across the price sheet. We actually take it to the product level. And with that, we're able to squeeze more margin at the product level rather than just a generic price increase. Now one thing that really has changed over -- just over the last couple of years with us. And what I'm really intrigued by is how well our customers are becoming accustomed to this and how well our sales team are actually deploying what we do.

Yes, it's been great progress. And as we said, the commercial excellence has really evolved and more and more in the further innings of that as we think about our journey to 30%. So let's switch gears to the other side of the margin equation. Clearly, we've had a lot of progress on price and let's talk about the cost part -- and Marshall, maybe you could talk a little bit about what are your priorities and what are we doing differently as we enter into 2024 to accelerate that?

Okay. Yes. Maybe I'll address the second part of that first in terms of what we do in -- what will we be doing differently. One of the main things we're doing is actually going to be putting dedicated resources and going after structured operational excellence, continuous improvement initiatives, dedicated resources aligned to each one of the business segments that have very clear responsibility and the skill sets to help introduce drive lean principles, Six Sigma capabilities and that sort of thing. So -- and then to really ensure that we've got the right focus of those resources that basically our #1 priority will be driving cost efficiencies to help that margin equation to augment the pricing place. But basically to drive that, we're going to be putting together an operational excellence framework that aligns with the Elevate strategy focused on, number one, building that culture of excellence, but also with a very strong focus on driving the key metrics on that elevated scorecard with a focus on EBITDA. But the levers that are evident that we're going to be putting into that, one, operational efficiency, so everything from throughput, yield, quality in the plants. And then maintenance excellence. So I mentioned the reliance on the equipment, so a more structured maintenance excellence, I think, is going to give us a real significant opportunity, energy efficiency and then planning, a lot of what Jason alluded to is in our sales and operations planning, our planning of how we're going to do the quarry. So there's opportunities to increase our level of rigor and excellence in those areas. And collectively, all of those we'll be able to drive efficiency improvements and then standardization that I talked about earlier. Then once we identify an opportunity or an improvement, we standardize that across the enterprise.

Great. So we look forward to that. We talked a little bit about greenfields being a key part of our aggregates margin expansion. Charles, you've had a lot of those in your segment. How would you elaborate and kind of let our shareholders know where we stand today on our greenfields?

Yes. So greenfielding for us, especially in the Southeast is one of our key strategies and the way that we'll grow our market leadership there. And quite frankly, when you look at the M&A opportunities in the Southeast, as many of you know, they're very, very limited. In Georgia, where we've got most of our greenfielding activity right now, it's practically the only way we can enter that market. And when we look at our greenfields, we have found that they can be very, very profitable. Case in point is the Jefferson quarry. I know some of you were there with us a couple of years ago. But in 2023, you saw the 60% gross margin Northstar target. The Jefferson quarry just [ blew ] right past that in 2023. So we're at a steady state there now, and the results are really, really showing, and we're really, really profitable at that particular location.

So just to double down on that a little bit, what were the key success factors that Jefferson to get to those margins so quickly?

Yes. I think with anything you do in business and especially our business is it all starts with the talent. You've got to be able to attract the right talent in those particular markets. And our model -- and in our model, we believe and we have proven that we can attract the right talent to actually run those operations. The second point would be our location. Location certainly matters. Many of you know that. But location compounded with what we've done with other greenfield activities in that specific market has enabled us to become the #1 market leader in Northeast Georgia. So we're really excited about that. And then the third thing that I would point to is innovation. We applied innovation in the design of that plant. So for the products that we are selling now, we can produce higher yields of those products while reducing costly byproducts and lowering the yields on that. And it just so happened, if you reflect back on the Elevate strategy, those 3 key points really fold into that strategy.

Absolutely. I often get a question from our shareholders around the time line to get these greenfields in place and how long it takes to get to steady state. Maybe you could talk a little bit about that.

Yes, I've read up a little bit about that and the way some of our competitors talk about that. We have a really good track record, several examples of where we can start the greenfielding process and be at steady state within 4 years. Generally speaking, when you're successful there, it takes you about 12 to 18 months to get the zoning and the permitting process done. While you're doing that, obviously, you're making plans to build your plant. So when you break ground, we're looking at somewhere between a 12- and 18-month time line to have the plant ready. And then another 12 months, I would say, to start penetrating the market, get our operations in a great place, so we can be at a steady state. So we can hit ROIC targets at 4 years. And we saw the example, I believe, on Kekin's slide on those greenfields where we've done that.

Absolutely. Let's switch a little bit to demand here. So we're hearing a lot more optimism about demand, and we've started the spring selling season now. So it might be helpful for you guys to talk about what you're seeing on the ground. Jason, maybe you'll take this one first.

Why don't I start with the residential market first. As we're talking with many of the homebuilders throughout our segments, throughout the markets that we play in, many of them, if not most of them, are very optimistic about 2024. If we look back a year ago, a lot of the projects were put on hold or even canceled for new subdivisions. We're now starting to see these homebuilders breaking ground on these subdivisions that were canceled. We're also seeing at the municipality level within our cities and our counties where they're approving more subdivisions to be built. And then we're seeing that the homebuilders are starting new subdivisions -- and they're also starting new phases within existing subdivisions in anticipation of having a rate decrease. They seem to be thinking that the second half of 2024 will be very strong. Now if we pivot to our public markets, as you know, the states that we compete in have healthy budgets from the DOT standpoint. Just for example, in Texas, Texas has increased by $3.5 billion to $18.5 billion for 2024. Utah is up over $3 billion and Colorado has increased their budget by 12%. Now I'm going to say something here that it's early on in the game, okay? So remember that it's just March. But if I look at March of 2023 compared to March of 2024, the West Segment's backlog is up 8% over last year, if that's an indication of things to come.

Absolutely. And it's great to see those leading indicators in Salt Lake City on the residential side. Charles, how about you talk a little bit about your demand dynamics?

Yes. If you look at the slide here behind me, you can see our end market segmentation is a heavy lane on the non-res side in the East Segment. And that's really being driven by heavy manufacturing as well as green energy projects. In fact, I can think of several solar farms, wind farms, biodiesel projects that's occurring just in Kansas alone, and when you compound that with what we saw with the CHIPS Act, we got an Integra CHIPS plant that is on the table just outside of Wichita, Kansas, so we're really excited about that. When we head back East, when we get back to green energy, we're chasing 13 solar farms from Virginia all the way back down to Georgia. On the heavy manufacturing side, we've got EV projects. We've got battery plants that are being built to complement those EV plants. And then looking at specific projects, we've got an Amazon project that's taking off in Roanoke, Virginia. We've got a Google project that's taking off in Charleston, South Carolina. So encouraged by the activity that we're seeing there that will actually replace some of that warehousing activity that we've seen in prior years. But I think for all of us, Jason, David, we're really excited about the public sector here. It seems like there is a central theme that's occurring in many of our markets. And for me, it's the I-70 project in Missouri. This project is a $2.8 billion project. That will improve 200 miles of I-70 from Kansas City back to St. Louis. And Phase 1 of that project has been let and awarded and we found out yesterday that we were just awarded 1.7 million tons on Phase 1 alone that will ship starting later this year through the next 3 years. So we're really, really excited about that, Anne. It's definitely going to prop us up towards the last half of this year and well into the future.

Yes. A great example of the multiyear and actually, a great example of the collaboration between our 2 segments here because cement also got awarded that project, and so did our aggregates and there was a collaborative effort working with downstream partners to make that happen. So the power of the combined. Let's talk about vertical integration for a minute. And Jason, let's go to you first. You have run extensive, very successful vertical integration businesses. You've also divested some. So how about you kind of give your view on what -- how you make those decisions in your segment and give a few examples of what we've done to date in the West Segment?

Yes, you bet. So I don't want to come across it is over simplified. But through my experience, it really is pretty straightforward. We'll take a look at the market, see what the market demands look like, see what the competitive set is and really see if there's a path forward to market leadership. Now if you have a leading position in a market with a good market, really, it's a pretty nice formula for success with a vertically integrated business. It can help deliver some of the highest ROICs in margins that really help us achieve our Elevate Summit strategy. Let's take, for example, the Las Vegas business that we divested. It was a downstream business. It was a good business. Please keep that in mind. It was a good business. It made us a $7 million EBITDA annually. However, it was a stranded asphalt -- sorry, it was a stranded asset in Las Vegas. We had no path forward to becoming the leader, and it also was not helpful for us in achieving our elevated goals. We did not see a path forward to hitting our EBITDA margins nor our ROIC. Now -- let's look at Salt Lake City. Salt Lake City is a prime example of an integrated market. We have a leading position. There's long-term demand, and we have competitive advantage. When you take those 3 ingredients and you put them in a good market, what ended up happening is you kick off some serious return on invested capital like we do in Salt Lake. Salt Lake kicks off some of the highest ROICs within the business. Now I don't want it to sound simple because it's not. We have to measure, we have to focus, and then we have to execute on the things that we pay attention to in our portfolio. And what's really important, and this is -- and I've heard this throughout the morning is this is part of our DNA. This is who we are. This is what we do. This isn't something that we've just come up with over the last year or so. As you've seen us consistently demonstrate, we will continue to work on our portfolio and continue to improve it.

Great. Great examples of those 2. So let's switch to integration. You've all had a role in the integration. And obviously, we're all very involved in the integration right now. Why don't you kind of give an idea of what your role is in the integration and what your first perceptions are. Maybe we'll start with you, Charles.

Yes. So I'm the executive sponsor for the integration for the East segment. And really, my job is just to knock down barriers for our integration team and make sure that we are coming through on our synergy commitments. So that's my primary focus. My first impression of how it's going, it's going really well. Really pleased with the way the 2 teams have come together to work quickly to resolve issues and problems as a team. That's really, really important. We talked about that. And then the one thing that really excites me about this, I'm an aggregates guy, right? So taking a look at the aggregates pool through the ready-mix business, specifically in Georgia and the Carolinas really gets me jazzed up. We've got a lot of opportunity there. We're in the early innings. But again, a lot of promise with regards to that. And then certainly, as we look at the Elevate strategy and to be consistent with that, we're still looking at our assets to make sure that we are the rightful owners of those assets. And that certainly holds true for these new ready-mix assets that we just brought into the portfolio.

Okay. Great. Jason.

Yes. In Houston, we are integrating the legacy Argos ready-mix business with the Legacy Summit Allied Concrete business, bringing those 2 together. The team in Houston is moving extremely quick. Maybe just a few examples of what we've done in a short period of time. We've optimized the footprint within the Houston market, and we've actually shut down 8 ready-mix plants. We're now pulling through our own aggregate. And that is happening within all of the Legacy Argos plants today, except for one. We're also analyzing our underutilized assets, and we're redeploying those assets to other parts of the business or we're actually disposing of them. For example, we have identified over 50 ready-mix trucks that we're selling at this time right now. And the other thing that we are doing is we are increasing our internal cement supply through our Houston terminal.

A great example of validating what Tim said earlier about how we're moving very fast on some of these synergies, and that's how it gave us the confidence that $30 million more within 45 days of closing the deal.

We're moving fast.

Yes, we are. Marshall. You've got the operations team, the integration management office. How about you share some of your early perspective?

Yes. As you say, my accountability cuts across everything operations related. One of the first areas there from an operational excellence standpoint that we talked about is supporting David and the cement manufacturing team to achieve those OEE, improvement initiatives are so important for the synergies, direct responsibility for supply chain, which includes logistics, procurement, our sales and operations planning functions. As you -- I'm sure you can imagine in the IMO work list, lots of opportunities that we're looking at in terms of procurement and logistics opportunities, services, materials, and we have some headwind in the -- some tailwind in the procurement area with implementation, translation of some commercial excellence practices that have been already implemented in Legacy Summit that actually overdelivered its cost savings in 2023. So taking those and translating those across the teams. And then one of the things that we did to really start out is to make sure that we have the team, the full supply chain team integrated under single leadership, which has now been integrated into one team under leadership [ John Venegas ], who came over from Argos as our SVP of Supply Chain. So there's no learning curve there, and it really enables the team to really start getting after these. And then in the sales and operations planning area, also consolidating those teams and putting those business processes together to get the best optimization of the utilization of the combined assets. So a lot of work there. And of course, as you mentioned, working with Tim and the IMO primarily just making sure to provide the support there from a prioritization, making sure the resources are there and helping to take down barriers if they get in the way.

Great. So great progress on the integration so far. Let's switch to portfolio and wrap up some of our comments here. Jason, you've been very busy in the West Segment, both buying and adding bolt-ons on recent platforms. How about you talk a little bit about how you go about cultivating deals and what your pipeline looks like?

Yes. Our deal cultivation is very strong at the time. If I think about how most of our very good deals have happened, it's come through deal cultivation and long-standing relationships with business owners. Our pipeline with proprietary deals is extremely robust right now. We're talking with lots of owners. And really, by cultivating those relationships when they decide to sell, we usually have a seat at the table in order to purchase our businesses. If I look at the Arizona platform that we just created a year ago, the way that happened is very similar to what Kekin explained in his presentation. We're continually cultivating relationships, talking with people, the business development team, operations teams up with and we cultivate these deals over years. Arizona materials took us over 5 years to cultivate that deal. But when they were -- when the owners are ready to sell, we received that phone call. They called us. And then the other piece, as Anne mentioned earlier, is we have -- I'm excited to announce we have bolted on our very first business within Arizona. We did that last month. And I'm very pleased to announce that we have several more acquisitions that we are working on that are aggregate rich focused.

Yes. A lot of opportunity there. The Kilgore Machine in the West region was our first machine for really adding a lot of acquisitions. So it's very much in their DNA. Charles, you entered into North Florida market with aggs and now you've got this whole cement and ready-mix from Argos. Talk a little bit about what you see for that opportunity for growth and getting more of a foothold in your segment?

Yes. So the North Florida market is a heavy residential market for us. And the greatest predictor of residential growth is migratory patterns. And so over the last 4 years, what we've seen in Ocala's population growth has exceeded 2% there. Now why that's important is because that's 4x the national average. So we see trends where residential is going to continue to grow. We're seeing the same type trends in Jacksonville, Florida. So when we enter a market with a new platform, our intention is to continue to bolt on to that platform to obtain a #1 or a #2 leading position as stated in our Elevate strategy. So we go in there with the purpose. Now with the Argos acquisition, we've got more boots on the ground. We've got more ears to the ground, and we'll try to figure out exactly how we're growing that -- we will grow that business in the future, which will be through M&A activity, greenfielding as well as logistics.

Great. Again, a lot of that opportunity is the message we should be taking from this. Before we switch to Scott to close us out on some of our prepared presentation, Charles and Jason, maybe you kind of summarize what you'd like to leave as key messages with our shareholders. Charles, why don't you kick off?

Yes. So I want to leave you with 2 things. I'm trying to keep it very, very simple. Number one, in the East segment, the one you can think about us is that we're going to come through on our commitments. That's number one. And you saw some pretty lofty goes up there when we looked at our Northstar, and I want you to remember this, a 30% EBITDA margin, we're going to achieve that this year in the central region. So we'll be the first construction materials region to eclipse that mark. . The second thing I want to leave you with is the East segment is the growth engine for Summit Materials, and we'll focus on growing our aggregates business as the population trends continue in the Southeast as well as some of those manufacturing trends that we talked about.

Jason?

Did you know that he threw down the garland, he wants to have a challenge here. He's anybody catch that? Yes, good healthy competition right there. So in the West, we operate in high-growth markets with leading positions. And we are very selective on where we play in vertical integration. However, at the same time, we capture margin along the entire value stream. Now our return on invested capital is extremely attractive, and we will continue to play and operate in areas and markets, we will continue to deliver shareholder value to all of our investors.

Great. Thank you. All 3 of you, Marshall, Jason and Charles for your comments. Today, they will be available when we open it to Q&A later for discussion. But for now, we're going to have our Chief Financial Officer, Scott Anderson, take us from here.

All right. Thank you, Anne. Good morning, everyone. Good to see a lot of familiar faces out there. Most of you know me, I'm Scott Anderson, been the CFO now for 12 months, been an exciting 12 months for the year. It's been great to be a part of it. Most of you know, before that, I have been with Summit for over a decade, served in operational and financial leadership roles in the central region. But I still remember back in 2020, where we started, Elevate Summit. And Anne invited me to join that table and sit and really develop that strategy of Elevate. And what I really like about it is the team took to that strategy, and we've executed. So it's been great to be a part of that. Unfortunately, I've got to show you the scorecard from Elevate one more time. So bear with me, I'll be quick on it. I just want to point out with the combined combination of Argos, I just want to let you know where we sit at on all 3 targets. So I'll be quick. Across the top, you see our leverage, still below 3x even after the acquisition of Argos, we're 2.6x on a pro forma basis. So still some headroom there. Now we have that increased cash generation. So we have the optionality if we want to further delever. Across the middle is our return on invested capital. We did -- as part of the combination, we did reset below our minimum of 10%. We're in the 9s. However, we've got an active plan that's going to take us back above that 10% within 2 years. And then on the bottom is the EBITDA margin that Anne's talked about in our new starting point, 22.2%. On the journey to that 30%, Anne mentioned the Northstars that get us there. And it really -- it looks like a big gap, but when you break it down into the pieces that we did, it's very achievable within 5 years. So I want to take you now to our 2024 outlook. And if you take a look we're going to just reiterate all the components of our full year guide, starting with EBITDA, $950 million to $1.01 billion. CapEx, the range is still $430 million to $470 million, and I'll talk about -- more about that later. And really, the key drivers when you look at it is synergies, $30 million in synergies. It's improving demand conditions, although we remain guarded in our outlook right now on volumes at this point in the year. And then as you go down you've got moderating costs, you've got enduring price. You've got our operational excellence initiatives. All of those are coming together to really strengthen the margins. And what we expect this year is that starting point, 22.2%, we expect to move that to 23% to 24% this year. And a big part of that is the moderating cost. I know you guys were all watching costs, what are costs doing? And what they're doing is they are starting to ease. We're seeing easing across the cost categories. One exception, though, is in logistics, our barging rates, we're passing on higher barging rates in our river markets in cement. Outside of that, all the other cost categories are easing. So when you take -- especially like energy, the energy category, when you take like diesel, for example, if you look at this, you can see we've hedged 50% of our diesel for this year at $0.40 per gallon less than our average cost last year. Another category I want to highlight is natural gas. On natural gas, the Argos plants are much more reliant to natural gas to fuel the accounts. So instead of the legacy at 12%, we're moving up to 30% on natural gas this year as a usage. And as you know, the current price in natural gas, that's definitely going to be a favorable tailwind for us. I do want to underscore, though, our approach to energy hasn't changed. We're still going to use a systematic and flexible model on our energy. Unlike our peers, we are going to participate in forward-looking fixed-price contracts. What we believe that does for us for a portion of our energy, it locks in that pricing, takes out some of that volatility and really just gives us that cost visibility going forward. That's a strategy that's worked for us, and we're going to continue to do that. All right. Let's turn our attention to the balance sheet. When you look at the balance sheet, since we launched Elevate Summit, we've created a lot of headroom there on that net leverage from that 3x. And it's really allowed us to pursue our capital allocation priorities. I have been asked occasionally is, hey, are you going to come out with a lower limit or are you going to stick with the 3x? And what I always say to that is we view ourselves as a growth story. And we want to make sure that we are in a position to attack those growth opportunities, as they come along. So no, we're not planning to do a reset. We're going to stick with 3x. It gives us a healthy balance sheet and also it gives us the ability to really go after those opportunities to grow the business. Moving to the right side of the page, as you'll see our debt stack where -- the way to look at that is 2/3 of it -- we have $2.8 billion after the Argos transaction. And 2/3 of that is fixed and then 1/3 of that's floating that gives us that flexibility. And if you look at the average cost of our debt, it's running about 6.8%. So we're in a good position on our credit. We don't have any near-term significant maturities. I think our first maturity is in 2027. So we've got plenty of time. We're in a good place on our credit size. And 1 other thing we did as part of the transaction is we upsized our revolver. So we've got an undrawn revolver out there as a backstop for $625 million. So a good place on the credit side. Now I want to talk about CapEx. As we've talked so many projects that we want to focus on that we're targeting. David talked about them. Tim talked about them, really get in there and get these plants performing and put those dollars to work in these plants. So we're going to maintain that 10% level -- 10% of net revenue for the first couple of years of the integration. And it really -- it's no different than where we're coming from. If you look at Summit for the past 5 years, we've averaged about that 10%. So we're going to hold that line at that 10% of net revenue. And then you're going to see it come off years 3, 4 and 5. And what we want to do is we want to get back to our target of 8% and when you think of 8%, you think, okay, really, the makeup of that is about 2/3 maintenance CapEx and 1/3 growth CapEx. We're still going to keep that growth CapEx in there. And you'll see, it's going to be phased. David talked about sequencing around the plant operating efficiency, the capacity expansion. Tim talked about the fleet modernization. This is where the early dollars are going to go. And then you're going to see us really get focused in on that green America recycling and bringing that technology into those plants. And then ongoing, Charles and Jason have talked about the green fielding. You'll see that continue on our capital program. All right. I want to step back here. This is a good slide, it's about cash generation. This is really what the story. This is a core component of our value thesis on the Argos deal. So stay with me on this one, because you're going to see Summit is emerging as a very powerful cash machine. And if you look on the left there, that 59%, what that represents is from 2019, we took Summit Materials and we excluded the cement business. And we said, okay, what's the cash generation? What's that cash generation percentage by taking EBITDA less CapEx divided by EBITDA. And we came up with that 59%, take the same metric in the middle and apply just to the cement business for Summit Materials from that same time period. And you can see that conversion rate go up to 74%. That's a big step change. That's that capital intensity that we've been talking about that's really going to fire the engine and give us that firepower we need to go after acquisitions, these ag acquisitions, which really takes me to the next slide, our portfolio transformation. When you look at our portfolio and what we've done since Elevate Summit, it's been a clear plan of execution. Look on the left, and you see the multiples that we're buying platform deals on. We're buying bolt-ons. And it's really these relationship deals that Jason talked about, these proprietary deals. We're getting good deals on our acquisitions. And then if you look to the left on the Argos, look at the multiple there, 7x on a transformational deal. So we're buying on the buy side, we're buying deals at multiple less than our current trading multiple. Then you move to the right, what are we selling? We're selling 15 assets, mostly downstream at a multiple of 10x, which is higher than our trading multiple. So the combination of this, we're reaching our portfolio mix. The composition of our business is getting better. And what that's going to do for us, it's going to provide that firepower. And that's where I want to kind of just go through our capital allocation priorities. They're pretty straightforward, really. They're aligned to enhance growth of the business, while managing the balance sheet below 3x leverage. And we believe we have the cash firepower now to really accelerate that. And so on the growth enabling CapEx, it's really going to center on those profit improvement projects that I've already talked about. And then moving across on the M&A, Kekin kind of went through it. But really what it boils down to, it boils down to ag centered M&A. We're going to be looking for those ag deals. And we're going to have the firepower to go after them. And then on the far right, you will see a share purchase authorization that we still have out there of $150 million, not a high priority right now, but it is a lever. It's a lever for us that we have out there at our disposal. All right. So I'm going to conclude with 2 slides. These are investor-specific slides. So you'll want to stay with me on this. And I know every management team probably feels that their company is undervalued and we're no different. But I do want to present you with some objective data just for your consideration, okay? So what we've done is we've actually provided the sum of the parts. So we provided EBITDA by percentage. We used our 2023 pro forma EBITDA. And we broke it down by line of business across the top and then down below, you're going to see the representative multiples. And these are all recent transactions that we took these multiples from, so they're supported. And if you do the math, you come out with a rating of 11x for Summit Materials. Currently, we're trading in the 9, definitely a value there. So what we're going to do with that information, we're going to continue to execute and progress the Argos transaction. And then we're going to work to close that margin gap to 30%. And we're confident if we continue to do that, that the market's going to acknowledge it, and they're going to reward our execution. So then I'm going to finish with our investor proposition, very simple, very compelling. We're a materials led company, and we operate in leading positions that are in markets that are poised for growth. Secondly, Marshall talked about it. We have meaningful self-help initiatives in the form of synergies and operational excellence initiatives. And lastly, let me leave you with this. We're a more powerful cash-generating machine now, and we have a fortified balance sheet. We believe that this is a combination that will allow us to deliver those superior returns for our business and you, our shareholders. So with that, I will ask Anne to come back up for the Q&A and we'll go from there. Thank you.

You're not going away just yet, Scott.

All right.

Before we jump into Q&A, I did want to just ask those on the webcast that if you do have Q&A, please submit them, and we'll try to get them outlied. I think I saw some hands first in the room, so we will do that. We have a mic coming around through the back. So maybe Keith Hughes from Truist on the left here.

So you raised your synergy number from the deal in year 1, but you didn't raise your guidance for the year. Is there some implicit message there? Is this a conservative view? Just could please give some color on that?

Yes. Let me grab that one, Keith. So if you recall, our guidance was $950 million to $1010 million. It was $30 million in synergies. No one plays that message meant. Even if I took half of that in year 1 and put $15 million, we wouldn't reach the top part of our scale -- of our guide scale. So we're still sticking. We didn't see a reason to change that guidance based on that.

Just one other, I have a microphone. You talked about aggregate led deals moving forward. Does this mean there's not going to be an Argos 2.0 or some other just cement focused that would fit what you're trying to do with Argos?