Page 5 - 2019 Annual Report
P. 5
LETTER TO SHAREHOLDERS
of our shareholders and other stakeholders. We advance our vision by adhering to seven key attributes that guide our
decision-making and actions: safety, ethics, customer focus, sustainability, operational excellence, cost discipline and innovation.
At the root of the how is our primary goal each and every day to operate our business safely. Employees are our most valuable
asset and their safety and well-being continues to be our
foremost consideration. This is not an empty commitment: Martin Marietta 2019 Performance Summary
I am proud to report that our 2019 lost-time incident
rate (LTIR) of 0.20 made your Company, for the third
consecutive year, “world-class” in this industry-wide Total revenues increased 12% to $4.7 billion
Net earnings attributable to Martin Marietta
measure. In actual terms, this means 98 percent of our
business units worked without a lost-time incident. Our increased 30% to $612 million
recently acquired operations also showed outstanding Adjusted earnings before interest, taxes,
depreciation, depletion and amortization (EBITDA)
safety progress in 2019, moving our Company closer to the
goal we fully believe is attainable: zero incidents. We believe margin as a percentage of total revenues
Martin Marietta is on the right track to realizing this goal. improved 80 basis points (bps) to 26.5%
Adjusted EBITDA rose 15% to $1.255 billion
A further look into the how demonstrates the breadth
Diluted earnings per share increased 31% to $9.74
and depth of our business resulting from the disciplined
Cash flow from operations increased 37% to $966
execution of SOAR. In terms of both geography and product
million
offerings, our industry-leading results clearly demonstrate
we are at the right place and time, and we are well-
positioned to take full advantage of the current and foreseeable macroeconomic environment that supports sustainable and
long-term construction growth. For example, Texas, North Carolina, Georgia and Florida, which account for 56 percent of our
Building Materials products and services revenues, are predicted to account for nearly half of the country’s population growth
over the next two decades. Why does this matter? Because notable population growth drives increased housing demand, which,
importantly, supports construction growth in the nonresidential and residential sectors. Private-sector strength also drives
related infrastructure expansion. That’s not serendipity. That’s SOAR.
Martin Marietta has always been, first and foremost, an aggregates leader. SOAR dictates this strategy. Aggregates,
namely, crushed stone, sand and gravel, is our largest product offering. In 2019, we shipped 191 million tons. While that’s
20 million more tons shipped than in the prior year, we
were nonetheless impacted by continuing contractor Martin Marietta Five-Year* Performance Summary
capacity constraints. That said, our aggregates results also
benefited from another year of improved pricing, helping Total revenues grew from $3.0 billion to $4.7 billion,
drive a $200 million, or 33-percent year-over-year
a compounded annual growth rate (CAGR) of 10%
improvement in aggregates gross profit.
Gross profit increased from $520 million to $1.2
While you can expect Martin Marietta to continue to be billion, an 18% CAGR
aggregates led, we also have a strategic and leading cement Net earnings attributable to Martin Marietta
business in Texas’ vibrant and expanding economy. More increased from $156 million to $612 million, a CAGR
specifically, our two cement plants set new records for of 32%
shipments and gross profit as they capitalized on the Adjusted EBITDA improved from $590 million to
continuing growth along the I-35 corridor, particularly in
$1.255 billion, a CAGR of 16%
Dallas/Fort Worth, San Antonio and Austin. Year-over-year
Diluted earnings per share grew from $2.71 to $9.74,
volumes increased 10 percent and gross profit increased 14
for a 29% CAGR
percent.
*Results since December 31, 2014
In addition to our aggregates-led and strategic cement
operations, we also benefit from two targeted downstream
businesses in the western United States that support our upstream materials (aggregates and cement) businesses. The first
is our ready mixed concrete operations in Texas and Colorado, which reported improved gross profit despite a slight decrease
in shipments. Our Colorado operations were challenged by more cold and wet weather than typical while our Texas business
Celebrating 25 Years as a Public Company Annual Report Page 3