Vulcan’s Hill Sees Market Strength

Feb. 16, 2021 – Vulcan Materials, as part of its fourth-quarter and full-year 2020 report, looked into the crystal ball to see what is in store for the company in today’s aggregates market. Regarding the company’s outlook, Chairman and Chief Executive Officer Tom Hill stated, “We are encouraged by the continued strength in residential construction activity, particularly single-family housing. Our expectation is also supported by the recent improvement in highway awards and construction employment trends in key markets. Data centers, distribution centers and warehouses, which now comprise the largest share of new private nonresidential project awards, will continue to underpin demand in this end market. We believe these leading indicators, along with sustaining a positive pricing environment, can be a catalyst for further recovery in construction activity during 2021.”

Management expectations for 2021 include:

  • Aggregates shipments down 2% to up 2% versus 2020.
  • Year-over-year aggregates freight-adjusted price increase of 2% to 4%.
  • Asphalt, Concrete and Calcium gross profit up mid-to-high single digits.
  • SAG expenses of $365 to $375 million.
  • Interest expense of approximately $130 million.
  • Depreciation, depletion, accretion and amortization expense of approximately $400 million.
  • An effective tax rate of approximately 21%.
  • Earnings from continuing operations of $4.80 to $5.40 per diluted share.
  • Adjusted EBITDA of $1.340 to $1.440 billion.
  • No major changes in COVID shelter-in-place restrictions.

Hill concluded, “As we saw in 2020, demand for our products can be subject to market fluctuations outside of our control. That said, we remained focused on the factors within our control, including our pricing and cost actions, both of which contributed to further improvement in our industry-leading unit margins in 2020.  We will carry that determination through 2021 and beyond. Our operating plans are underpinned by our four strategic disciplines (Commercial and Operational Excellence, Logistics Innovation and Strategic Sourcing), a healthy balance sheet, strong liquidity and the engagement of our people.”

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