Amrize 2026 Q3 Earnings Call

Thank you and good morning. This is Dillon Cumming, Vice President of Investor Relations for Amrize. Welcome to Amrize's third quarter 2026 earnings conference call. We released our third quarter financial results yesterday after the market closed. You can find both our earnings release and presentation for today's call in the investor relations section of our website at investors.amrize.com. On the call with me today is Jan Jenisch, Chairman and CEO, and Sam Poletti, CFO. Before we begin, during the call and in our slide presentation, we reference certain non-GAAP financial measures.

Our 2026 revenue and EBITDA guidance. We now expect revenues of $12.2 billion-$12.4 billion and EBITDA of $2.95 billion-$3.05 billion. These updated targets reflect ranges that we view as achievable under a variety of scenarios for the fourth quarter. With that, I will pass the call back to the operator to begin the Q&A portion of the call.

Thank you and good morning. This is Dillon Cumming, Vice President of Investor Relations for Amrize. Welcome to Amrize's third quarter 2026 earnings conference call. We released our third quarter financial results yesterday after the market closed. You can find both our earnings release and presentation for today's call in the investor relations section of our website at investors.amrize.com. On the call with me today is Jan Jenisch, Chairman and CEO, and Sam Poletti, CFO. Before we begin, during the call and in our slide presentation, we reference certain non-GAAP financial measures which we believe provide useful information for investors. We include reconciliations of non-GAAP financial measures to US GAAP in our earnings release and slide presentation. As a reminder, today's call is being webcast live and recorded. The transcript and recording of this conference call will be posted to our website.

Any statements made about future results and performance, plans, expectations and objectives are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those presented during the call due to various factors, including, but not limited to, those discussed in our 2025 Form 10-K and in other reports filed with the SEC. The company undertakes no obligation to publicly update or revise any forward-looking statements. Please also note that in today's presentation, certain prior period financial information includes revisions that were not material to any previously issued consolidated financial statements. Additional information regarding these revisions can be found in our Form 8-K filed with the SEC yesterday after the U.S. market close. With that, I will now turn the call over to Jan.

Thank you, Dillon, and thank you all for joining us today. I will begin with our top highlights and takeaways. We made important progress across our business in the third quarter. We increased revenue 2.2% on strong pricing and contributions from our recent acquisitions. This demonstrate the strength of our network and strategic footprint to deliver resilient results, even with weather patterns affecting volumes across construction markets. We grew net income 3.3% to $558 million and increased adjusted EBITDA to $1.1 billion. Diluted earnings per share increased 4.1% to $1.02. Importantly, we expanded our margins in building materials by 30 basis points. This was thanks to strong pricing growth in cement and aggregates, and solid traction with our energy, fuel, and freight surcharges to offset oil price-driven cost inflation. As well, an excellent progress with our ASPIRE Savings program.

These results demonstrate our strong market position and our commitment to operational efficiency. Our building envelope business continued to see strong commercial roofing momentum led by expanded system sales, large scale data centers, and industrial projects. While residential roofing was soft due to lower sales of both new and existing homes, as well as softer reroofing activity. Segment profitability was affected by higher freight, raw material costs, and the lower shingles volumes. We are proactively managing what we can control. Our pricing improved sequentially and year over year, and we had solid traction with our fuel and freight surcharges. We continued to successfully execute on our capital allocation strategy of investing for profitable growth through CapEx and M&A while returning cash to our shareholders. We executed on $262 million of CapEx in the quarter, focused on attractive growth projects to expand production and improve efficiency and best serve our customers.

Our recent acquisitions, PB Materials and Rapid Redi-Mix, have been excellent additions to Amrize, both positively contributing to our results and further strengthening our footprint in the Texas market. Through the third quarter, we have delivered $1.1 billion of cash to shareholders with our dividends and share repurchases. As of October 28, yesterday, we successfully completed our $1 billion share repurchase authorization, and our board has declared a third quarter dividend of $0.11 per share. Let's now look at our market environment. In this quarter, we saw weather patterns impact construction volumes. In commercial construction, which makes up half of our business, we continue to see a strong pipeline of mega projects leading the way for both materials and roofing systems. Building materials projects that broke ground in the third and fourth quarter of last year are now converting into building envelope demand.

While elevated interest rates could affect the timing of some projects, we expect continued strong long-term demand for these projects, particularly data centers, advanced manufacturing plants, and energy projects. These carry multi-year runtimes, and our footprint, scale, and distribution network with over 1,000 sites across North America is uniquely positioned to serve customers for these attractive projects. In addition to the commercial projects, the required infrastructure upgrades associated with these projects offer a variety of opportunities for our business. Turning to infrastructure. State and federally funded projects continue to support steady demand. The recent infrastructure funding extension should continue to offer near-term support for infrastructure activity in the U.S., and we expect the successive bill to drive a long-term infrastructure tailwind for our business. The Draft BUILD America 250 Act includes strong funding for cement and aggregates intensive projects.

In Canada, the federal and provincial governments are committing substantial funding to infrastructure. This includes their Build Communities Strong Fund and Ontario's 10-Year Capital Plan with investments in national infrastructure, energy, public transportation, healthcare, and housing. These programs are expected to support long-term demand for cement, aggregates, and concrete in Canada. Within the residential sector, interest rates and affordability challenges continued to limit new construction in the quarter. Re-roofing remained pressured by a lack of significant storms and lower levels of existing home turnover. We expect this environment to continue through at least the fourth quarter, with normal seasonal de-stocking trends likely to weigh on Q4 shingle demand. We expect an eventual return to normal weather patterns and the structural housing shortage to eventually drive a return to industry growth over the long term. Overall, we see mega projects continuing to lead the way for Amrize.

Underlying growth trends, including onshoring of manufacturing, AI, energy infrastructure, and population growth are resilient, growing, and long-term in nature, and these projects have significant size and scale for Amrize. Let me share some examples of our customer projects underway. In North Dakota, we are supplying both building materials and our Elevate MAX PVC roofing system for a new data center project. In Hubbard, Texas, we are supplying cement, aggregates, and ready-mix concrete for a new 5-gigawatt campus that represents the second-largest data center under construction in Texas. In Louisiana, we are supplying high-performance cement and slag for a new 12-mile-long water infrastructure channel that will divert excess floodwaters to protect nearby communities. In the Toronto area, we are supplying aggregates and concrete for a large highway infrastructure modernization.

On the Building Envelope side, we are supplying our Elevate UltraPly TPO system for a new cold storage facility in the Pacific Northwest. Both our Duro-Last and Elevate brands are supplying multiple education and school construction projects across North America. These are just some examples of our current projects, and our pipeline continues to grow. Let us turn to our ASPIRE program. As we continue to deliver for our customers, we are also driving synergies and operational excellence with ASPIRE. Our team has been successful in executing hundreds of projects across raw materials, services, logistics, and equipment. We have an ongoing focus on strategic sourcing initiatives as well. For example, we have onboarded about 1,000 new suppliers. We have now achieved year-to-date savings of $73 million, which has proven especially important in the current inflationary environment.

This gives us a high degree of confidence in our full-year target of $80 million, and we are on track for our long-term goal of $250 million in savings through 2028. Let us review our growth investments. We spent $262 million in CapEx in the third quarter. This includes production expansion and debottlenecking initiatives across several of our cement plants. These initiatives are focused in attractive markets like Texas, Alberta, and Quebec, where we expect population and economic growth to drive customer demand for our solutions in the years to come. Cement terminal expansions in Memphis, Kansas City, Cincinnati, Columbus, and Lubbock, Texas, represent further growth projects that will continue to strengthen our distribution network in attractive growth markets. Our teams continue to execute six major aggregates quarry expansions aimed at adding more than 150 million tons of reserves to support our growth.