Martin Marietta reaches new heights in fourth quarter 2021

Martin Marietta offered details on its fourth-quarter and year-end 2021 performance Thursday, noting multiple record marks.

Martin Marietta’s building materials business reported record fourth-quarter products and services revenues of $1.3 billion. The mark is a 26.9 percent increase over the fourth quarter of 2020. Additionally, the company’s building materials business achieved a quarterly record product gross profit of $318.4 million – an increase of 6.6 percent over the final three months of 2020.

According to Martin Marietta, its building materials business experienced strong shipment levels across all product lines and primary end-use markets. The company says the business was aided, in part, by weather conditions that extended 2021 construction activity. Pricing also increased across all product lines.

“By nearly all measures, 2021 was a momentous period of growth for Martin Marietta,” says Ward Nye, chairman and CEO of Martin Marietta. “We made tremendous progress on our SOAR 2025 (Strategic Operating Analysis & Review) initiatives and delivered the most profitable and safest year in our company’s history. Notably, 2021 marked 10 years of consecutive growth for consolidated products and services revenues, adjusted gross profit, adjusted EBITDA (earnings before interest, tax, depreciation and amortization) and adjusted earnings per diluted share.”

Aggregates

Martin Marietta hit several high marks within its aggregate business in the fourth quarter of 2021. Photo: Alexandr Baranov/iStock / Getty Images Plus/Getty Images

Martin Marietta’s fourth-quarter organic aggregate shipments increased 9.3 percent, reflecting growing product demand that overcame continued contractor and transportation-related capacity constraints.

Organic pricing increased 2.8 percent, Martin Marietta says, in line with company management’s previously stated expectations.

Total aggregate shipments, including acquired operations, grew 19.7 percent. Acquired operations have selling prices below the company’s average, Martin Marietta says. That limited overall pricing growth to 1.4 percent.

According to Martin Marietta, total shipments in its East Group increased 13.8 percent. The group benefited from robust construction activity across all three of the company’s primary end-use markets and volume from the acquired Minnesota-based Tiller Corp. operations. Pricing, inclusive of acquisitions, decreased slightly.

Martin Marietta’s West Group, meanwhile, saw total shipments increase 30.5 percent from strong underlying demand in Texas and Colorado, as well as shipments from newly acquired operations.

Pricing increased 6.1 percent, or 2.6 percent on a mix-adjusted basis, in the West Group. Long-haul shipments from higher-priced distribution yards drove the aggregate pricing improvements, according to the company.

Outlook

Nye

As Nye looks ahead, he says Martin Marietta is poised to capitalize on favorable demand trends and market fundamentals across its key geographies.

“Building on attractive fourth-quarter momentum, we anticipate that both public and private construction activity will accelerate for the first time since our industry’s product shipment peak in 2005,” he says. “Enhanced federal- and state-level surface transportation investment, single-family housing strength and notable heavy industrial projects should drive robust product demand in 2022.

“These trends, combined with a light nonresidential recovery and incremental federal funding from the recently enacted Infrastructure Investment & Jobs Act, further support growing construction activity,” Nye adds. “Importantly, Martin Marietta has the ability and capacity to supply these needed products and, supported by our locally led pricing strategy, will do so in a manner that emphasizes value over volume.”

In 2021, Martin Marietta completed $3.1 billion in acquisitions that expanded its geographic footprint and product offerings in what Nye characterizes as “high-growth markets.” Key acquisitions Martin Marietta made last year were a cash purchase of Lehigh Hanson’s West Region business and the investment in Tiller. Martin Marietta also acquired Southern Crushed Concrete in 2021 from Ferrovial.

“These accomplishments are a testament to our team’s commitment to Martin Marietta’s vision and strategic priorities and further position our company for continued success in 2022 and beyond,” Nye says.