Martin Marietta Materials, Inc. · NYSE:MLM
Martin Marietta Materials — Investor Presentation (2006)
37 slides from Martin Marietta Materials's investor presentation, Oct 30, 2006
Slide 1: Martin Marietta Materials
Martin Marietta Materials
Slide 2: Key Investment Considerations
Key Investment Considerations • Great locations serving high growth areas • Scarcity of aggregate supply • Step function change in value of mineral reserves • Accumulation of key strategic assets complete • Free cash flow returned to shareholders
Slide 3: Our Strategy – From Plan to Execution
Our Strategy – From Plan to Execution
Slide 4: Strategy
Strategy • Assemble leading set of assets in high growth Southeast and Southwest areas • Focus on long haul transportation to build competitive advantage • Focus on best practices and information systems to drive cost performance
Slide 5: Asset Accumulation - 1994
Asset Accumulation - 1994 Aggregates Production and Sales
Slide 6: Asset Accumulation - 1995
Asset Accumulation - 1995 $159 million capital invested in acquisitions Aggregates Production and Sales Dravo and Offshore Acquisition
Slide 7: Asset Accumulation - 1997
Asset Accumulation - 1997 $279 million capital invested in acquisitions Aggregates Production and Sales American Aggregates Acquisition
Slide 8: Asset Accumulation - 1998
Asset Accumulation - 1998 $348 million capital invested in acquisitions Aggregates Production and Sales Redland Acquisition
Slide 9: Asset Accumulation - 2001
Asset Accumulation - 2001 $222 million capital invested in acquisitions (1) Aggregates Production and Sales Meridian Acquisition (1) Excludes initial 19% Meridian investment made in 1998
Slide 10: Company Profile – 2005
Company Profile – 2005 70% of 2005 net sales from Southeast/Southwest Aggregates Production and Sales
Slide 11: Scarcity of Aggregate Supply
Scarcity of Aggregate Supply Limestone Hard Rock Information from the Department of Interior
Slide 12: Population Movement
Population Movement NC 18% Rank – #7 TX 18% GA 8% Rank - #4 Rank – #8 FL 5% Rank – #3 Percentage of 2005 net sales Rank of percent change – population 2000 to 2030 (source: Census Bureau)
Slide 13: Transportation Mode
Transportation Mode 7% 10% Rail Water 16% Rail 93% 74% Truck Truck 1994 2005 (71.2 million tons) (203.2 millions tons)
Slide 14: Transportation Costs
Transportation Costs Transportation Mode – Cost Per Ton Mile 20 tons per truck 12 - 18 Cents / Ton Mile 100 tons per rail car 4 - 8 Cents / Ton Mile 1,800 tons per barge 1 - 2 Cents / Ton Mile 45,000 tons per ship .4 - 1.2 Cents / Ton Mile 0 50 135 500 1,000
Slide 15: Maturing Distribution Network – Water Markets
Maturing Distribution Network – Water Markets Prince Edward Island Nova Scotia New York City Linden Philadelphia Wilmington, DE Kaskaskia Sparrows Pt. Cave-In-Rock Three Rivers Wilmington, NC Lake Charles Mobile Pensacola Charleston Savannah Producing Locations Beaumont Brunswick Houston Panama City
Slide 16: Local Market – Louisiana
Local Market – Louisiana Sources Barge Limestone Vicksburg Offshore Limestone Offshore Granite Local Gravel Natchez Beaumont
Slide 17: Scarcity = Increased Pricing
Scarcity = Increased Pricing 11%-12.5% 250 10.0% 9.0% 8.2% 225 8.0% (Millions of Tons) 209-211 7.0% 203 200 192 189 192 190 6.0% 5.0% 3.7% 175 3.2% 4.0% 2.4% 3.0% 150 1.3% 2.0% 1.0% 125 0.0% 2001 2002 2003 2004 2005 2006 Tons Based on latest guidance Percent increase in ASP (1) of 3% - 4% volume inc
Slide 18: Demand Segments
Demand Segments 2005 2006 Residential Infrastructure 20% Commercial Residential Other Infrastructure Commercial 45% 26% Other 9%
Slide 19: Cost Reduction Initiatives
Cost Reduction Initiatives Martin Marietta Materials AA
Slide 20: Cost Reduction Initiatives
Cost Reduction Initiatives • Excellent Best Practices Program • Increased Plant Automation • Overhead Reduction • Better Information Systems • Effective Management of Benefits Cost
Slide 21: Headcount Reduction
Headcount Reduction 7200 8000 6900 6400 7000 5900 5800 6000 5000 4000 3000 2000 1000 0 2001 2002 2003 2004 2005 Hourly Sales per employee up 45% over five years Salary
Slide 22: Capital Initiatives
Capital Initiatives Bahama Rock
Slide 23: Growth and Efficiency Improvement
Growth and Efficiency Improvement Long Haul Network Truck Quarries Nova Scotia Berkeley (SC) Bahamas Weeping Water (NE) Beckmann (TX) Burning Springs (WV) Three Rivers (KY) Lemon Springs (NC) N. Columbia (SC) Ruby (GA)
Slide 24: Aggregates Financials ($M)
Aggregates Financials ($M) Quarter Ended Percent March 31, Change 2006(1) 2005(1) Net Sales $ 383 $ 308 25% Operating Earnings $ 44 $ 17 161% Operating Margin 11.6% 5.5% (1) All amounts presented are from continuing operations.
Slide 25: Aggregates Financials ($M)
Aggregates Financials ($M) Year Ended Percent December 31, Change 2005(1) 2004(1) Net Sales $1,625 $1,411 15% Operating Earnings $ 299 $ 223 34% Operating Margin 18.4% 15.8% (1) All amounts presented are from continuing operations.
Slide 26: Magnesia Specialties Financials ($M)
Magnesia Specialties Financials ($M) Quarter Ended Percent March 31, Change 2006 2005 Net Sales $ 37 $ 30 24% Operating Earnings $ 8 $ 5 63% Operating Margin 22.3% 16.9%
Slide 27: Magnesia Specialties Financials ($M)
Magnesia Specialties Financials ($M) Year Ended December 31, 2005 2004 2003 Net Sales $ 123 $ 106 $ 86 Operating Earnings $ 24 $ 17 $ 6 Operating Margin 19.4% 16.6% 7.0%
Slide 28: Restructured Magnesia Specialties
Restructured Magnesia Specialties 2000 2005 Lime 21% Chemicals Refractories 65% 44% Chemicals 35% Lime 35%
Slide 29: Composites – Change in Focus
Composites – Change in Focus From To Commercial Military Truck Trailers Panel Products
Slide 30: Composites – Change in Focus
Composites – Change in Focus
Slide 31: Financial Information
Financial Information Pensacola Yard
Slide 32: Selected Balance Sheet Data
Selected Balance Sheet Data $1,000 90% $802 $800 $745 $718 $715 $710 $706 60% ($ Millions) $600 44% 41% 34% 34% 36% $400 32% 30% $200 152 114 69 20 $0 0% 2001 2002 2003 2004 2005 At 3/31/06 Debt Net Cash in Banks Net Debt to Capitalization (1) (1) The calculation of net debt to capitalization is ava
Slide 33: Materials Financials ($M)
Materials Financials ($M) Quarter Ended Percent March 31, Change 2006 2005 Net Sales(1) $ 424 $ 338 25.5% Operating Earnings(1) $ 51 $ 20 163.7% Net Earnings $ 31 $ 7 338.1% Earnings per Diluted Share(1) $ 0.66 $ 0.15 340.0% (1) Net sales, operating earnings, and earnings per diluted share are from
Slide 34: Materials Financials ($M)
Materials Financials ($M) Year Ended Percent December 31, Change 2005 2004 Net Sales(1) $1,755 $1,521 15.4% Operating Earnings(1) $ 309 $ 230 34.0% Net Earnings $ 193 $ 129 49.2% Earnings per Diluted Share(1) $ 4.08 $ 2.66 53.4% (1) Net sales, operating earnings, and earnings per diluted share are f
Slide 35: Cash Flow from Operations
Cash Flow from Operations Quarter Ended March 31, 2006 2005 Capital investment $ 74 $ 47 Share repurchase $ 40 $ 41 Dividends $ 11 $ 9 No plan to delever
Slide 36: Return to Shareholders
Return to Shareholders $216 225 200 175 In millions 150 125 $111 100 75 $49 50 $28 $20 25 Dividends 0 Share 2001 2002 2003 2004 2005 Repurchases
Slide 37: Presentation notice and investor relations contact
The document attached represents one part of a presentation which has been or will be made. It is not a complete record of the presentation because it does not reflect the lengthy oral comments which will be part of the presentation. This document is not intended to be a substitute for our Form 10-K
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