J. Thomas Hill
Chairman & Chief Executive Officer at Vulcan Materials
Thank you, Mark, and thank all of you for your interest in Vulcan Materials Company.
Our teams delivered an outstanding year in 2023 and achieved two significant milestones. We generated over $2 billion in adjusted EBITDA, and we surpassed $9.00 of aggregates cash gross profit per ton. We remain focused on continued growth, consistent execution and value creation for our shareholders. Our fourth quarter results again demonstrated the benefits of that focus and our aggregates-led business. We delivered a 27% year-over-year improvement in adjusted EBITDA, margin expansion in each of our three primary product lines, and another 90 basis points of sequential improvement in our trailing 12 months return on invested capital. In the Aggregates segment, continued pricing momentum, coupled with moderating inflationary costs resulted in $9.92 of aggregate cash gross profit per ton, a 21% improvement over the prior year.
Our Vulcan Way of Selling and Vulcan Way of Operating disciplines continued to contribute to our commercial and operational results. The fourth quarter performance marks 19 of 20 quarters over the past five years of sequential improvement in trailing 12-month aggregate unit profitability, a clear example of our consistent execution and the durability of our business. Aggregate shipments in the fourth quarter increased 2% compared to a weak prior year quarter that was impacted by abnormally wet and cold weather. Aggregate's freight-adjusted price improved 14% in the quarter, pushing the year-to-date average selling price to $19.00 per ton, a $2.60 per ton increase over prior year.
Freight-adjusted unit cash cost of sales increased 7%, compared to the prior year quarter. This marks a third consecutive quarter of trailing 12-month deceleration in year-over-year cost. As we move into 2024, we are determined to continue controlling what we can control, most notably, the expansion of our aggregates unit profitability. Pricing momentum remains healthy, and we expect freight-adjusted aggregate price to grow from 10% to 12% for the full-year. Inflationary cost pressures continue to moderate, and we expect freight-adjusted unit cash costs to increase mid-single-digit in 2024, resulting in an attractive mid-teens improvement in cash gross profit per ton.
On the demand side, we continue to expect a moderate decline in 2024 with aggregate shipments forecast to land within a range of flat-to-down 4% for the full year. Much like 2023, we see varying dynamics across different end uses. So let me provide some commentary on each end-use. I'll start with residential, which has quickly entered recovery mode. Single-family housing permits and starts returned to growth in the second half of last year and momentum is accelerating across our footprint. We expect the strength in single-family construction activity to be offset by weaker multifamily starts as they pulled back from historically high levels. Overall, the underlying fundamentals for residential construction activity remain firmly in place. Vulcan markets have low housing inventory levels and favorable demographics, driving the need for additional housing.
We continue to see distinct trends across various categories of private non-residential construction which we anticipate will result in a year-over-year decline in shipments to this end-market. Moderating warehouse starts from recent historical high levels are expected to be the biggest headwind to private non-residential construction. Light commercial activity is expected to remain weak as uncertainty in the macro-economy and higher interest rates persist. Manufacturing activity, however, remains a catalyst for non-residential shipments and is concentrated in Vulcan states. We continue to ship on numerous large manufacturing projects which we offer customers a differentiated solution with our advantaged footprint and logistics capabilities.
On the public side, demand backdrop is developing as expected. We began seeing modest growth in the second half of '23 and project accelerating demand in 2024. Trailing 12-month highway starts have now surpassed $100 billion. 2024 state budgets are at record levels and strong upcoming lendings are anticipated in many Vulcan states. We continue to foresee growth in both highways and infrastructure activities for the next several years. Coupling our anticipated unit profitability growth with the demand backdrop I just described, at midpoint of our guidance, we project delivering a fourth consecutive year of double-digit growth in adjusted EBITDA. I'm very proud of our teams what they have and will achieve.
Now I will turn the call over to Mary Andrews for some additional commentary on our 2023 performance, and some more details around our 2024 outlook. Mary Andrews?
