Martin Marietta Materials, Inc. (NYSE:MLM) Q4 2022 Earnings Call Transcript

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Jim Nickolas: Yes. So if you’re holding energy aside, which I think you did in your question, it’s high single digits is the cost inflation we’re expecting for 2023. It’s pretty broad based across personnel, supplies, repairs, contract services, et-cetera. So obviously that’s all contemplated in our guide. We just are happy to see our ASP outstripping that growth and leading to the margin expansion. Does that answer your question, Garik?

Garik Shmois: Yes, it does. Thanks for that and others.

Jim Nickolas: Thank you.

Operator: Thank you. Our next question comes from David MacGregor with Longbow Research. Your line is now open.

Joe Nolan: Hi, good morning this is Joe Nolan on for David. So. I guess first, just wondering transportation seemed to be pretty problematic throughout 2022. Just wondering how you’re thinking about transportation heading into 2023 and how that might have factored into your guidance?

Ward Nye: That’s a great question and what I would tell you is we were waiting all year for it to get better and it did get better. As we were seeing the year ramp up, we were certainly seeing rail activities going better than they had for a while. So we’re heartened by that. But I think the other thing that I was really comforted by was really after what was a pretty challenging half one for trucking, trucking got better in the second half of the year. So as trucking clearly got better in half two, we just in wetter and obviously the railroads had a difficult time for much of 2022. Service picked up pretty notably as we got towards the end of the year and that’s both in the East and the West. And your question, such a good one.

Joe, because you’ll recall, we shipped more stone by rail than any other aggregates producer in the United States, probably two x our closest competitor. So there’s a sense in which rails performance in 2022 combined with what was a pretty tough half one on trucking, was going to serve to be a more meaningful impediment to us than it wants to others. So as rail continues to get better and as trucking gets better, I think we will certainly feel the benefit of that perhaps in ways that others won’t, Joe.

Joe Nolan: That’s great, thank you. And if I could one quick a follow-up. You mentioned earlier on a question that you do not have any midyear pricing actions factored into the guidance. Was that strictly for aggregates or was that for other segments as well.

Ward Nye: That was for everything.

Operator: Thank you. Our next question comes from the line of Rohit Seth with Seaport Research Partners. Your line is now open.

Rohit Seth: Thanks for taking my question. So my question is on aggregate prices, you mentioned the 13% to 15% increase does not include a second half increase and there has been broad acceptance of an increase. Being early in the year, I’m just curious, is the confidence on realizing the increase is a reflection of your internal downstream operations stepping in increase or is this the market competition is going along with it. And then the second part of that is, is there any mix in your footprint that might be helping Martin versus say the broader market, I’m thinking about North Carolina here?

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