foundation transformation value - …files.shareholder.com/downloads/mlm/5952536828x0x... ·...
TRANSCRIPT
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FOUNDATION TRANSFORMATION VALUEAnalyst & Investor Day│ On Location
May 10, 2016Dallas, Texaswww.martinmarietta.com
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Disclaimer
Statement Regarding Safe Harbor for Forward-Looking StatementsThis presentation may contain forward-looking statements – that is, information related to future, not past,events. Like other businesses, Martin Marietta is subject to risks and uncertainties which could cause its actualresults to differ materially from its projections or that could cause forward-looking statements to prove incorrect,including the risks and uncertainties discussed in Martin Marietta’s most recent Annual Report on Form 10-K,quarterly reports on Form 10-Q and current reports on Form 8-K, which have been filed with the Securities andExchange Commission and are readily available on the Internet at www.sec.gov. Except as legally required,Martin Marietta undertakes no obligation to publicly update or revise any forward-looking statements, whetherresulting from new information, future developments or otherwise.
Non-GAAP Financial TermsThese slides contain certain “non-GAAP financial terms” which are defined in the Appendix. Reconciliations ofnon-GAAP terms to the closest GAAP term are also provided in the Appendix.
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AGENDA
Safety Update
Foundation. Transformation. Value.
Cement Division Foundation
Cement Transformation Process – Rock to Cement
Conclusion – Driving Value
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Safety Statistics – Cement Division
YTD 2016 1 2015 2014 2013 (TXI)
TIIR 0.7 1.6 2.6 2.4
LTIR 0.0 0.2 0.7 0.8
Lost Time Incidents 0 1 4 2
Reportable Incidents 1 12 15 12
1 As of April 30, 2016
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The right people with the right assets;
driving operational excellence against the right strategic plan;
with a relentless focus on driving shareholder value.
MARTIN MARIETTA
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AGENDA
Safety Update
Foundation. Transformation. Value.
Cement Division Foundation
Cement Transformation Process – Rock to Cement
Conclusion – Driving Value
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Drive Sustainable Shareholder
Value
Cement Division Foundation
Plants
People
Location
Reserves
Permits
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Cement Division Foundation | Midlothian Cement Plant
Midlothian Cement Shipments
Select Midlothian Metrics
Current Rated Clinker >2.1 mm tons
Permitted Clinker Capacity >2.5 mm tons
Owned Reserve Life >50 years
Plant Headcount 179 people
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Source: 2014 PCA Yearbook; annual shipments as a % of domestic Portland cement consumed .
108.8 million metric tons 86.5 million metric tons
2003 20141993
California12%
Texas 12%
Florida8%
Illinois 4%
Ohio3%
All Other61%
California10%
Texas 10%
Florida7%
Illinois 4%
Ohio4%
All Other65%
76.6 million metric tons
Texas significantly outperforming in cement consumption
Cement Division Foundation | Location
Texas 17%
California 10%
Florida 6%
Ohio4%Illinois
3%
All Others 60%
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AGENDA
Safety Update
Foundation. Transformation. Value.
Cement Division Foundation
Cement Transformation Process – Rock to Cement
Conclusion – Driving Value
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Transformational | Cement Chemistry 101 - Compounds
Compound Components Industry Shorthand
Tricalcium silicate (CaO)3 + SiO2 C3S
Dicalcium silicate (CaO)2 + SiO2 C2S
Tricalcium aluminate (CaO)3 + Al2O3 C3A
Tetracalcium aluminoferrite (CaO)4 + Al2O3 + Fe2O3 C4AF
Compound Mass % Industry Shorthand
Calcium oxide, CaO 61-67% C
Silicon dioxide, SiO2 19-23% S
Aluminum oxide, Al2O3 2.5-6% A
Ferric oxide, Fe2O3 0-6% F
Sulfur Trioxide, SO3 1.5-4.5% S
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Transformational | Cement Chemistry 101
Cement chemists use the oxide of an element when reporting a chemical analysis
Element Oxide
Calcium CaO
Silica SiO2
Aluminum Al2O3
Iron Fe2O3
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Transformational | Cement Production Process
Limestone and other raw materials are quarried
Raw materials are ground and blended
Raw materials are heated to 2,850° F in a kiln
Cement
1 Heat transforms the materials into pellets of “clinker”
Clinker is ground with gypsum into a fine gray powder to make cement
Cement is stored and shipped via truck, rail, or water
2
3
4
5
6
1 23 4 5 6
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Transformational | Raw Vertical Roller Mill
SEPARATOR DRIVE SHAFT
RARTM SEPARATOR
FEED CHUTE
TIRE
GRINDING ROLLER
GRINDING TABLE
MAIN DRIVE REDUCER
MILL OUTLET
SEPARATOR GUIDE VANES
SEPARATOR ROTOR
REJECTS CONE
MILL BODY
ROCKER ARM LEVER
ROCKER ARM FORT
REJECTS SCRAPER
ROLLER LOADING SYSTEM
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Transformational | Preheater Tower
• Pre-blended, powder-sized raw material is conveyed to the top of a 400-foot preheater tower.
• As the material falls through the tower, it increases in temperature from 70°F to 1650°F.
• From 1100°F to 1650°F, the limestone in the blend of raw materials is subjected to “calcination”.
Preheater n
Calcination
CaCO3 + heat → CaO + CO2Limestone Calcium Oxide Carbon Dioxide
Calcium Oxide (CaO) enters the kiln and Carbon Dioxide (CO2) exits the plant as “stack gas”.
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Transformational | Kiln
Outside a kiln
Inside a Kiln
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Transformational | Typical Clinker Cooler
Main Functions
• Heat recuperation
• Clinker transport
• Clinker cooling
• Clinker crushing
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Transformational | Clinker Cooler
Fuller Hybrid CIS/CFG
Clinker Cooler
14 grates wide by 82 rows long
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Transformational | Finish Mill
• The last step in the production process is to grind the clinker, gypsum, limestone and other materials to produce cement
Gypsum and Limestone (10%)
Cement
FinishMill Balls
Clinker (90%)
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Transformational | Storage and Distribution
85,000 Ton Cement Silos at Midlothian
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Transformational | Pollution Control Devices
• Main baghouse
• Alkali baghouse
• Sulphur scrubber
• RTOs
(Regenerative Thermal Oxidizers)
• Additional dust collectors
• Water sprays for fugitive dust
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Transformational | Control Room at Midlothian Cement Plant
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Raw Materials9%
Fuel16%
Power9%
Part, Supplies & Service26%
Labor14%
Depreciation19%
Other Fixed7%
Transformational | Cement Production Cost Profile
Tires
Rail Ties
Wood Chips
Process Engineered Fuels
(Non-recycled waste)
Note: Actual average production costs for Midlothian and Hunter plants in 2015.
Plant Fuels Used
Midlothian• Natural gas• Coal
• Liquid waste• Tires• Wood chips
Hunter• Natural gas• Coal
• Liquid waste
Typical Cost Structure of Producing CementAlternative Fuel Types
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Transformational | Alternative Fuels Example
Whole Tires Burning on a Skewer at Midlothian
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AGENDA
Safety Update
Foundation. Transformation. Value.
Cement Division Foundation
Cement Transformation Process – Rock to Cement
Conclusion – Driving Value
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Cement Division Financial Overview
Cement Net Sales11%
Non-Cement MLM Net
Sales89%
($ millions) 2015 Results*
Volume (000s) 3,793
Net Sales $367.4
Gross Profit $107.4
Gross Margin 29.2%
*2015: Results are based on external sales only and include the CA operation for 9 months of the year
2015 Cement Contribution to MLM
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Questions
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FOUNDATION TRANSFORMATION VALUEAnalyst & Investor Day│ On Location
May 10, 2016Dallas, Texaswww.martinmarietta.com