Investor Relations Presentation June 2017 Legal Disclaimer - - PowerPoint PPT Presentation

Investor Relations Presentation

June 2017

1

Legal Disclaimer

Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the federal securities laws, which involve risks and uncertainties. Forward-looking statements include all statements that do not relate solely to historical or current facts, and you can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “trends,” “plans,” “estimates,” “projects” or “anticipates” or similar expressions that concern our strategy, plans, expectations or intentions. Any and all statements made relating to the macroeconomic outlook for our markets, potential acquisition activity, our estimated and projected earnings, margins, costs, expenditures, cash flows, sales volumes and financial results are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those

• expected. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While

we believe that our assumptions are reasonable, it is very difficult to predict the impact of known factors, and, of course, it is impossible to anticipate all factors that could affect our actual results. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. Important factors could affect our results and could cause results to differ materially from those expressed in our forward-looking statements, including but not limited to the factors discussed in the section entitled “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on February 28, 2017. Such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as

• therwise required by law.

Non-GAAP Financial Measures Included in this presentation are certain non-GAAP financial measures, such as Adjusted EBITDA, Further Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted EPS, Gross Profit, Net Debt, Net Leverage and Free Cash Flow designed to complement the financial information presented in accordance with U.S. GAAP because management believes such measures are useful to investors. These non-GAAP financial measures should be considered only as supplemental to, and not superior to, financial measures provided in accordance with GAAP. Please refer to the appendix of this presentation for a reconciliation of the historical non-GAAP financial measures included in this presentation to the most directly comparable financial measures prepared in accordance with GAAP. Reconciliations of non-GAAP measures referenced herein are available in exhibits 4, 5, 6, 7, 8 and 9 of the Company’s First Quarter 2017 conference call presentation issued on May 3, 2017, which is available in the investor relations section of our corporate website. Because GAAP financial measures on a forward- looking basis are not accessible, and reconciling information is not available without unreasonable effort, we have not provided reconciliations for forward-looking non-GAAP measures.

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SECTION ONE Corporate Overview

3

Summit Materials Overview

Pure-Play, Vertically-Integrated Heavy Materials Business

Leading Positions In Early-Cycle Markets

Top 5 Market By Net Revenue (2016) Market Exposure

12 PLATFORM COMPANIES Completed 53 acquisitions since 2009 21 STATES + VANCOUVER, B.C. Geographically diverse portfolio TOP 5 STATES By net revenue: TX, UT, KS, MO, VA

Our Value Proposition

– Materials-based positions in well-structured, early-cycle markets

Integrated supplier of construction materials (aggregates, cement), products (ready-mix concrete, asphalt) and paving services

– Favorable long-term industry dynamics within private and public end-markets

2/3 of net revenue = early cycle residential/non-residential end markets; 1/3 of net revenue = state public infrastructure spending

– Exceptional record of financial growth and operational execution

Since IPO (2015), generated significant growth in net revenue, adjusted EBITDA, net income, all while reducing net leverage

– Unique acquisition strategy with proven integration experience

Invested $2.5 billion in 53 acquisitions since 2009; focused on acquiring/integrating/improving assets in well-structured markets

– Proven management team with decades of industry experience

Founded by Tom Hill (current CEO) and former CEO of OldCastle Materials

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Decentralized, Materials-Based Model

Local Leadership, Diversified End-Markets

SUM is #1 market player across 50% of the platform markets served Estimated market share by platform

Adjusted EBITDA By Line of Business (FY16) Net Revenue By End-Market (FY16) Net Revenue By Geography (FY16)

Diversified Exposure Across Lines of Business, End-Market and Geography

Top 3 position Top 3 position Top 3 position Top 3 position Top 2 position Top 2 position #1 position #1 position #1 position #1 position #1 position #1 position Sal Lake City, Utah Austin, Texas Central, Kentucky Mississippi River Corridor Midland/Odessa, Texas Wichita, Kansas Northern Texas West Houston Texas Vancouver, B.C. Northeast Kansas Columbia, Missouri West-Central, Virginia

Materials 61% Products 33% Services 6% Private 63% Public 37% “Top 5” States 68% All Other States 32%

5

We Have Operations In More Than 20 States

Top 5 States Represent ~70% of Net Revenue

State Net Revenue as %

• f Total Net Revenue(1)

Public vs. Private (%)(1) Public Outlook (Positive/Neutral/Negative) Private Market Cycle Position(2) (Early/Mid/Late)

Texas Kansas Utah Missouri

(1) For the full-year 2016 (2) Estimated cycle position reflects exposure to specific MSAs in the state in which Summit Materials currently has operations Early Early Early Early Early Late Late Late Late Late 27% 22% 21%

Virginia

25% 14% 12% 12%

6%

Public Private

43% 57% 49% 51% 21% 79% 28% 72% 20% 80%

Private Outlook (Positive/Neutral/Negative)

= +

Early cycle Early cycle Early/mid cycle Early cycle

++ + + + = ++ +

Very early cycle

++

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Key Financial Metrics

Growth In Net Revenue, Gross Profit, Adjusted EBITDA

Net Revenue ($MM) Gross Profit ($MM) & Margin (%)(1) Adjusted Net Income/Loss ($MM) Adjusted EBITDA ($MM) & Margin (%)

(1) Gross profit margin defined as gross profit divided by net revenue (2) Adjusted EBITDA margin defined as Adjusted EBITDA divided by net revenue (2)

$208.0 $259.0 $1,322.9 $1,539.3 1Q16 1Q17 LTM 1Q16 LTM 1Q17 $51.6 $66.7 $457.9 $569.4 1Q16 1Q17 LTM 1Q16 LTM 1Q17 24.8% 25.8% 34.6% 37.0% $8.4 $13.6 $297.3 $376.6 1Q16 1Q17 LTM 1Q16 LTM 1Q17 4.0% 5.3% 22.5% 24.5%

• $42.5
• $54.8

$81.1 $85.9 1Q16 1Q17 LTM 1Q16 LTM 1Q17

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Price and Volume Analysis

Y/Y Organic Growth In Materials Price and Volume

Average Selling Price, Excluding Acquisitions (y/y % change) Average Selling Price, Including Acquisitions (y/y % change) Sales Volume, Excluding Acquisitions (y/y % change) Sales Volume, Including Acquisitions (y/y % change)

Aggregates Cement Aggregates Cement Ready-Mix Concrete Asphalt Aggregates Cement Ready-Mix Concrete Asphalt 1Q16 1Q17 9.4% 2.9% 6.3% Aggregates Cement 6.0% 6.3%

• 29.4%

0.6% 17.6%

• 11.4%

64.5% 14.3% 142.7% 10.0%

• 26.7%

14.4% 27.5% 18.9% 66.8% 8.6% 6.7% 5.4% 7.3%

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Gross Margin Scorecard

Sustained Y/Y Growth In Materials Margins

Aggregates Business Gross Margin (%) Cement Segment Gross Margin (%) Products Business Gross Margin (%) Services Business Gross Margin (%)

42.9% 43.6% 59.4% 62.0% 1Q16 1Q17 2015 2016 23.1% 21.2% 24.7% 26.6% 1Q16 1Q17 2015 2016 8.4% 21.7% 26.5% 28.0% 1Q16 1Q17 2015 2016 12.8% 14.3% 43.1% 45.2% 1Q16 1Q17 2015 2016

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Sustained Growth In Adj. EBITDA Margin

~900 Basis Point Increase Since 2013

Targeting Continued Increase In Adjusted EBITDA Margin By Mid-Cycle (%)(1)

(1) Adjusted EBITDA margin defined as Adjusted EBITDA divided by net revenue

15.8% 17.7% 22.3% 22.5% 24.5% 27.0% 2013 2014 2015 LTM 1Q16 LTM 1Q17 Mid-Cycle Target

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Sustained Growth In Cash Flows

LTM Operating Cash Flow and FCF Grew Significantly Y/Y

(1) Summit Materials defines free cash flow, a non-GAAP measure, as net cash flow from operations less net capital expenditures

LTM Operating Cash Flow More Than Doubled Y/Y ($MM)

Net CAPEX $136.6 million Net CAPEX $75.8 Net CAPEX $62.8 $68 $118 $241 LTM 1Q15 LTM 1Q16 LTM 1Q17

LTM Free Cash Flow Increased By Nearly 4x Y/Y ($MM)(1)

$8 $24 $91 LTM 1Q15 LTM 1Q16 LTM 1Q17

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Net Leverage Reduction

Targeting Net Leverage of 3.0x By Year-End 2017

Net leverage declined for four consecutive quarters, ratio at lowest level since IPO(1)

(1) Calculation uses “Further Adjusted EBITDA”, which includes full LTM benefit of all acquisitions in a given year (2) Summit had full revolver availability of $215.4 million as of 4/1/17

Cash and available liquidity increased more than 20% Y/Y ($MM)(2)

4.0 x 4.4 x 3.9 x 4.5 x 4.5 x 4.3 x 3.9 x 3.7 x 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

$157.4 $156.1 $395.9 $301.8 $203.6 $223.6 $352.8 $371.5 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 Cash Revolver Capacity

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SECTION TWO Growth Opportunities

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Long-Term Growth In Aggregates Demand

Consumption Well Below Prior Peak Levels

Higher Value Domestic Crushed Stone Consumption ~15% Below Prior Peak, While ASPs Are ~35% Higher(1,2)

500 1,000 1,500 2,000 $6.00 $8.00 $10.00 $12.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Crushed Stone Consumption (Millions of Metric Tons) Crushed Stone ($ Per Metric Ton)

(1) Source: U.S. Geological Survey (2017), Company estimates

Lower Value Domestic Sand and Gravel Consumption ~23% Below Prior Peak, While ASPs Are ~35% Higher(1,2)

500 1,000 1,500 $6.00 $7.00 $8.00 $9.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sand and Gravel Consumption (Millions of Metric Tons) Sand and Gravel ($ Per Metric Ton)

14

Positive Demographic Trends In Key Markets

Rising Housing Starts, Lower Rental Vacancy

Single Family Housing Starts in SUM’s Top 5 State Markets 40% Below Prior Peak AND Below 30-Year Average(1,2) Indexed Rental Vacancy Rates In SUM’s Top 5 State Markets Trending Lower(1,2)

50,000 100,000 150,000 200,000 250,000 300,000

30-Year Average (1) Source: Moody’s Analytics, U.S. Department of Labor (BLS) (2) States include Texas, Missouri, Utah, Kansas and Virginia

• 40%
• 25%
• 10%

5%

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Positive Demographic Trends In Key Markets

Higher Tax Receipts, Declining Unemployment

Indexed Gross Tax Receipts in SUM’s Top 5 State Markets Well Exceeding National Average(1,3)

0% 50% 100% 150% 200% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Indexed Gross Tax Receipts - SUM's Top 5 States Indexed Gross Tax Receipts - Rest of U.S.

Unemployment in SUM’s Top 5 State Markets Below National Average 29 of The Last 30 Years(2,3)

2.0% 4.0% 6.0% 8.0% 10.0% 12.0% Unemployment Rate - SUM's Top 5 States Unemployment Rate - National

(1) Source: U.S. Census Bureau (2) Source: Moody’s Analytics, U.S. Department of Labor (BLS) (3) States include Texas, Missouri, Utah, Kansas and Virginia

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Public Infrastructure Opportunity

FAST Act Drives Long-Term Visibility On Federal Funding

% Federal Funds Supporting DOT Outlays By State Federal Funding as % State DOY Budgets(1) Federally-Funded “FAST” Act and Industry Proposals Stand To Provide Multi-Year Support For State DOT Budgets

Fixing America’s Surface Transportation (“FAST”) Act Building Our Legacy & Destiny (“BOLD”) Act Purpose Status Funding Impact

(1) Federal funding percentages are from an ARTBA analysis of FHWA Highway Statistics data. The percent is the ratio of federal aid reimbursements to the state and total state capital outlays and is indicative of the importance of the federal aid program to state capital spending for highways and bridges. Does not include local capital spending.

Provide long-term funding for surface transportation planning and investment Signed into law on December 4, 2015 Authorizes $305 billion over FY16-FY20, including ~70% for highway investment Minimal impact on 2016 State DOT budgets; anticipate material benefits beginning in late 2017-2020 Provide a cohesive long-term plan re/ federal infrastructure funding “FAST Act 2.0” – more spending, more projects Seeks to provide new sources of revenue for more than $85-90 billion/yr of potential infrastructure funding Subject to prioritization by incoming presidential administration and legislative review process

60% Federally Funded

State DOT Budgets Are 60% Federally Funded In Our Markets Federal vs. State Funding Sources(1)

40% State Funded 0% 20% 40% 60% 80% 100% Utah Texas Kentucky North Carolina Louisiana Kansas Nebraska Nevada Wisconsin Iowa Indiana Oklahoma Arkansas Tennessee Minnesota Virginia Idaho Missouri Wyoming Colorado South Carolina

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FAST Act Remains Key Federal Funding Vehicle

SUM Well-Positioned To Capitalize On Funding Growth

FAST Act Provides More Than $225 Billion in Federal Highway Program Funding Thru 2020(1)

(1) Source: American Road & Transportation Builders Association (2016) – denotes highway program funding under the FAST Act

Texas Kansas Utah Missouri Virginia

The FAST Act Expected To Drive Multi-Year Infrastructure Spending Growth In SUM’s State Markets(1)

SUM’s Top Five State Markets Expected To Receive a combined ~$30 billion of FAST Act Highway Funding (2016-2020) SUM State Markets Expected To Receive 40% of FAST Act Highway Funding, or More Than $80 billion (2016-2020)

$18.3 billion 8.8%

• f total

$5.4 billion 2.6%

• f total

$5.0 billion 2.4%

• f total

$2.0 billion 1.0%

• f total

$1.8 billion 1.0%

• f total

$41.0 $43.1 $44.0 $45.0 $46.0 $47.1 2015 2016 2017 2018 2019 2020

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States Seeking To Match Federal Funding

State Funding Initiatives in Texas, Utah and Iowa

Texas Utah

Legislation Date Passed Date Effective Annual Proceeds For Roads & Highways Legislative Overview

Proposition 7 November 2015 September 2017 (Fiscal 2018) Up to ~$5 billion annually Proposition 7 creates a constitutional amendment to dedicate portions of revenue from the state’s general sales and use tax, as well as from the motor vehicle sales and rental tax to the State Highway Fund, for use

• n

the construction, maintenance, rehabilitation

• f non-tolled public roads. Prop 7 stands

to dedicate up to $5 billion in biennial sales tax revenue to the State Highway Fund starting in Sept 2017 (for the 2018-19 fiscal year). S.B. 277 March 2017 July 2017 Up to ~$1 billion

• ver four years

SB 277 allows the Utah Transportation Commission to accelerate several previously approved highway projects at a maximum spend of $1 billion over the next four years. Prior to the passage of SB 277, Utah was budgeting $1.9 billion for FY17 on “all state building construction, highway construction and maintenance and state-wide administrative functions”.

*Company estimate

Iowa S.F. 257 February 2015 March 2015 ~$200 million annually SF 257 increased the fuel tax by 10 cents per-gallon. SF 257 also established (1) a variable tax rate for ethanol blended fuels until June 30, 2020; (2) increased the jet fuel tax by 2 cents-per-gallon (from 3 cpg to 5 cpg); a variable tax rate of diesel fuel effective July 1, 2015; and increased some oversize/overweight permit fees effective January 1, 2015.

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Texas Public Funding Rising Materially

More Than 20% Est. Y/Y Increase In Fiscal 2018

Texas DOT Statewide Transportation Improvement Program FY2017-FY2020 TXDOT Estimates(1)

(1) Source: Texas Department of Transportation FY17-FY20 Forecast. Note that TXDOT fiscal year 2018 begins in September 2017. (2) Proposition 7 becomes effective in fiscal year 2018 (September 2017).

FY17 FY18 FY19 FY20 Federal Funding State Funding

$9.7 billion $11.9 billion $11.9 billion $12.6 billion

Proposition 1 and Proposition 7 Revenues Drive State Level Highway Funding Growth Proposition 7 Adds $2.5 billion Per Year Beginning In FY2018(1,2)

$594 million $740 million $875 million $875 million $2.5 billion $2.5 billion $2.9 billion FY17 FY18 FY19 FY20 Proposition 1 Proposition 7

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Cement Imports Provide Incremental Supply

Import Shipping Costs Could Push Cement ASPs Higher

5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000

(1) Source: Portland Cement Association, company research and estimates

Greece, Turkey & China Supply ~45% of All Cement Imported To The United States(1)

18% Greece 13% Turkey 13% China 56% Rest of World

Cement Imports Currently 60% Below Prior Peak (In Thousands of Metrics Tons)(1) U.S. Nearing Domestic Cement Production Capacity Project Domestic Supply Surpassed Before 2020(1)

25,000 50,000 75,000 100,000 125,000 150,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E 2018E 2019E 2020E

Portland Cement Consumption By Year (Thousands of Metric Tons) Domestic Clinker Capacity By Year (Thousands of MetricTons)

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Cement Pricing Poised To Rise In Out Years

Could We See Another Multi-Year Pricing Spike?

Tracking Historical Spikes In National Average Selling Prices for Portland Cement ($ Per Metric Ton)(1)

(1) Source: USGS, PCA, company research and estimates

$40.00 $50.00 $60.00 $70.00 $80.00 $90.00 $100.00 $110.00 $120.00

1993-1995 ASPs +21.5% 2004-2006 ASPs +27.7%

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Invested ~$180 million In 6 Acquisitions YTD 2017

Recently Completed Transactions(1)

Geographic Markets Asset Base Line(s) of Business(2) End Markets(2) Rationale HANNA’S BEND AGGREGATE CAROLINA SAND WINVAN PAVING SANDIDGE CONCRETE

NE Houston, Texas One sand & gravel pit with permitted reserves

Aggregates Ready-Mixed Concrete 100% Private Public 16% 84%

Aggregates expansion into NE Houston; increased public and non-residential market exposure NE South Carolina Three sand & gravel pits pits; permitted reserves

100% 100%

High-synergy aggregates bolt-on to existing Carolinas business Downstream bolt-on to existing aggregates-only business in B.C. Strategic bolt-on to our existing platform in Missouri Vancouver, B.C. Asphalt plant and paving assets

Asphalt and Paving 100% 50% 50%

Central Missouri Three ready-mix concrete plants

100% 30% 70% (1) As of May 3, 2017 (2) Sourced from internal management research and estimates 100%

EVERIST MATERIALS RAZORBACK CONCRETE

West-Central Colorado Two aggregates pits; Five ready-mix concrete plants; Two asphalt plants; one landfill Vertically integrated, materials-based business that expands existing Colorado presence Northeast Arkansas Four sand/gravel pits; 19 ready-mix concrete plants Expansion in Arkansas; strong fit with existing Summit businesses

40% 40% 20% 60% 40% 25% 75% 80% 20%

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SECTION THREE Outlook & Conclusion

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2017 Financial Guidance

Improved Full-Year Outlook

Increasing Full-Year 2017 Adjusted EBITDA Guidance ($MM)(1) Increasing Full-Year 2017 Gross Capital Expenditure Guidance ($MM)(1)

(1) Full-year 2017 Adjusted EBITDA guidance excludes any contributions from any acquisitions that have not been announced and may be completed during 2017

$425 million to $445 million Prior FY17 Guidance New FY17 Guidance $430 million to $445 million $410 million to $425 million Prior FY17 Guidance New FY17 Guidance $140 million to $160 million $135 million to $155 million

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Conclusion

Strong Market Fundamentals, Improved Demand/Pricing, Upwardly Revised Outlook

– Organic materials volumes and ASPs are trending positively – Combination of FAST Act and state-level funding measures support strong outlook for public markets – Select mid-continent private markets experiencing a “residential renaissance” (e.g., Utah) – Robust acquisition pipeline – several attractive materials bolt-on deals in late stage diligence – Continued growth in Adjusted EBITDA, continued reduction in net leverage – Increased full-year 2017 Adjusted EBITDA guidance reflects continued business momentum – Recent ratings agency upgrades at S&P and Moody’s Investor Services

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APPENDIX

EXHIBIT 1 Capital Structure Overview

27 (1) 1Q17 pro-forma cash position excludes transaction-related fees tied to the $300 million 5.125% notes due 2025 (2) Revolver Capacity post-usage for (undrawn) Letters of Credit is $215.4 million as of 3/31/17 and $218.9 million as of May 2017 (3) Net leverage is a metric used to test compliance with our debt agreements

($ in Millions) 2Q16 3Q16 4Q16 1Q17 1Q17 Pro-Forma Interest Rates Maturities Cash1 $8.2 $14.2 $142.7 $156.1 $452.4 1.05% n/a Debt: Revolver2 $14.0

• 4.39%

Mar-2020 Senior Secured Term Loans $643.5 $641.9 $640.3 $638.6 $638.6 3.73% Jul-2022 Capital Leases and Other $41.4 $41.3 $39.3 $40.9 $40.9 3.50% Various Senior Secured Debt $698.9 $683.1 $679.6 $679.6 $679.6 3.72% Acq.-related Liab. $40.8 $43.6 $46.8 $43.8 $43.8 11.00% Various 5.125% Senior Notes

• $300.0

5.125% June-2025 8.5% Senior Notes $250.0 $250.0 $250.0 $250.0 $250.0 8.50% Apr-2022 6.125% Senior Notes $650.0 $650.0 $650.0 $650.0 $650.0 6.125% Jul-2023 Senior Unsecured Debt $940.8 $943.6 $946.8 $943.8 $1,243.8 6.53% Total Debt $1,639.7 $1,626.8 $1,626.4 $1,623.4 $1,923.4 5.54% Net Debt $1,631.6 $1,612.6 $1,483.7 $1,467.3 $1,471.0 LTM Further Adj. EBITDA $360.0 $379.1 $382.4 $398.0 $398.0 Net Senior Secured Leverage 1.9x 1.8x 1.4x 1.3x 0.6x Total Net Leverage3 4.5x 4.3x 3.9x 3.7x 3.7x

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EXHIBIT 2 Production Process

Cement Aggregates Ready-Mixed Concrete Asphalt Raw Material Extracted Raw Materials Transported to Plant Stone Crushed in Multi- Stage Process Crushed Rock Sorted and Stored by Size Finished Product Loaded onto Trucks Production Process Raw Material Extracted Raw Materials Crushed & Chemicals Added Heated in Large, Tilted, Rotating Kiln (~2700o F) Gypsum & Minerals Added Cement Packaged & Shipped Aggregates, Cement, Water and Chemicals Combined Transferred into Mixing Trucks Product Continues to Mix in Transit Delivery to Job Site Crude Petroleum Distilled & Processed Asphalt Mixed with Aggregates & Cement Heated, Proportioned & Mixed to Desired Specs Delivery to Job Site or Storage Materials Products

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INVESTOR RELATIONS CONTACT

Noel Ryan VP, Investor Relations noel.ryan@summit-materials.com