Rock Products

OCT 2016

Rock Products is the aggregates industry's leading source for market analysis and technology solutions, delivering critical content focusing on aggregates-processing equipment; operational efficiencies; management best practices; comprehensive market

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28 • ROCK products • October 2016 www.rockproducts.com Aggregate Materials Index - Company Spotlight International and domestic aggregates providers experi- enced growth in revenue and margins in Q2 2016. Buzzi Unicem is an Italian cement and aggregate producer with operations in central Europe, Russia, Algeria, Mexico and the U.S. In the first six months of 2016, the company reported a 2.7 percent increase in cement sales and a 0.6 percent decline in ready-mix concrete versus the same period in 2015. In December 2015, Buzzi Unicem increased its stake in Mexican cement and ready mixed concrete producer, Cor- poracion Moctezuma, SAB de CV and in 2016 the company has been investing heavily in a new kiln line at its cement plant in Maryneal, Texas. Headwaters MB Aggregates Market Report In This Updated Analysis Prepared for Rock Products, Headwaters MB Looks At Second-Quarter 2016 Aggregates-Industry Trends Such As Mergers, Stone Production and Pricing. By Brian Krehbiel Figure 1: Public Valuation Multiples All $'s in Millions EBITDA Company Name TEV Revenue EBITDA Margin Revenue EBITDA LafargeHolcim Ltd. 48,279 28,953 7,323 25.3% 1.67x 6.6x CRH Plc 32,526 29,924 3,250 10.9% 1.09x 10.0x Cemex SAB de CV 25,584 13,730 2,610 19.0% 1.86x 9.8x HeidelbergCement AG 21,827 14,865 2,466 16.6% 1.47x 8.9x MDU Resources Group, Inc. 6,614 4,247 560 13.2% 1.56x 11.8x Vulcan Materials Company 18,187 3,607 975 27.0% 5.04x 18.7x Martin Marietta Materials, Inc. 14,011 3,693 863 23.4% 3.79x 16.2x Buzzi Unicem S.p.A. 4,725 2,979 538 18.1% 1.59x 8.8x Summit Materials, Inc. 2,582 1,547 306 19.8% 1.67x 8.4x Eagle Materials Inc. 4,233 1,156 335 29.0% 3.66x 12.6x Headwaters Incorporated 1,836 956 172 18.0% 1.92x 10.7x U.S. Concrete, Inc. 1,249 1,079 129 11.9% 1.16x 9.7x Mean 15,138 8,895 1,627 19.3% 2.2x 11.0x Median 10,312 3,650 711 18.5% 1.7x 9.9x *TEV = Total Enterprise Value (Market Capitalization + Net Debt) Enterprise Value/ I n Q2 2016, average valuation multiples for the publicly traded aggregates industry declined 2.3 percent and aver- age EBITDA margins during the period increased from 18.9 percent to 19.3 percent compared to Q1 2016 (Figure 1, includes the constituents of Headwaters Aggregates Materials Index). Year over year, valuation multiples decreased by 8.4 percent while EBITDA margins widened to 19.3 percent from 17.2 percent. The aggregates industry as a whole was trading at an average EBITDA multiple of 11.0x at the end of Q2 2016. However, the median multiple of 9.9x is the more relevant valuation metric for Q2 due to outlier multiples from Vulcan Materials and Martin Marietta of 18.7x and 16.2x, respectively. Source: FactSet Aggregates Market Report

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