Vulcan Materials Company (VMC) Earnings

Management highlights

• Core Business & Operational Performance - Operating teams delivered adjusted EBITDA growth and expanded aggregates cash gross profit per ton in the first half of 2026, despite wet weather-related lower-than-expected volumes in many regions and inflationary energy headwinds - Vulcanwave operating disciplines and the Vulcan way of selling disciplines are driving operational efficiencies, cost control, and value capture for products across the portfolio - Trailing 12-month return on invested capital improved 20 basis points year-over-year to 16.1% at quarter end; year-to-date SAG expenses are 2% lower than the prior year • Strategic Portfolio Activity - Completed divestitures of California concrete operations and non-core U.S. Virgin Islands operations, generating cash proceeds to redeploy for aggregates business growth - Acquired an aggregate operation from Brannon Sand & Gravel in early June 2026, expanding presence in Southern Colorado and strengthening the Dallas-Fort Worth distribution network; synergy capture is already underway - Active acquisition and greenfield growth pipelines, with multiple deals expected to close in 2026; the company's strong balance sheet provides flexibility to pursue high-value opportunities • Demand Environment - Public infrastructure demand remains strong: trailing 12-month highway and total public infrastructure awards are up double digits and 20% respectively year-over-year in Vulcan markets, outperforming non-Vulcan markets, creating a multi-year demand backlog with clear visibility for stable pricing - Private large project demand is improving, led by strong activity in data centers, LNG projects, power infrastructure expansion, and manufacturing; Vulcan's footprint and scale position it well to serve these large complex projects - Residential construction continues to struggle due to ongoing affordability issues, but long-term fundamental housing demand exists, and Vulcan is positioned to benefit from an eventual recovery • Federal Infrastructure Policy Update - The House Transportation and Infrastructure Committee passed the bipartisan Build America 250 Act; the bill increases focus on aggregate-intensive construction and adopts a formula-first funding distribution, both changes that benefit Vulcan relative to the prior Infrastructure Investment and Jobs Act - A continuing resolution for federal highway funding is expected during the August congressional recess, but unspent IIJA funds will support ongoing activity, and management expects a smooth transition to the new program

Guidance

• Full-year 2026 adjusted EBITDA guidance is maintained at $2.4 to $2.6 billion, with management expecting modest year-over-year aggregate shipment growth • Full-year 2026 capital expenditure guidance is maintained at $750 to $800 million • Full-year 2026 SAG expenses are now expected to be $10 million to $15 million lower than the initial February guidance range of $580 million to $590 million • Cost performance is expected to improve in the second half of 2026, driven by lapping unusual concentrated repair and insurance costs from the second half of 2025, and seasonally higher tonnage; gross margin expansion is expected in the fourth quarter of 2026, with overall gross margins up in the second half of the year relative to the first half • Pricing: Mid-year price increases were pulled forward to June 2026 and performed better than 2025 results; management will remain disciplined on pricing, and will consider additional price increases in the second half of 2026 if energy prices remain elevated to protect margins

Segment performance

Full Q2 2026 company adjusted EBITDA was $654 million, roughly flat year-over-year even after facing $40 million in energy headwinds. Mix-adjusted average selling prices across all segments increased 5% year-over-year, with broad geographic improvement. Excluding diesel, aggregates freight-adjusted unit cash cost of sales increased 3% year-over-year. The company does not break out separate financial performance (absolute amounts or revenue contribution percentages) for individual product segments in this call transcript.

Risks & headwinds

• Unusually wet weather can disrupt production and volumes, creating cost pressures • Elevated and volatile energy (diesel) prices create significant margin headwinds; Q2 2026 faced a $26 million diesel headwind • Ongoing high mortgage rates and housing affordability issues continue to pressure single-family residential construction demand • Uncertainty around the final text and timing of the new federal infrastructure bill, though management expects no material disruption to near-term activity from a continuing resolution • The NAFTA arbitration against Mexico resulted in an unfavorable damages award: while all three arbitrators ruled Mexico's actions were arbitrary, unfair, unjust, and in violation of NAFTA, the majority awarded only immaterial damages to Vulcan

Analyst Q&A

• Q: What gives management confidence in meeting full-year 2026 volume guidance for the second half? /

  A: Demand is tracking in line with management expectations, with ongoing healthy backlogs and robust quoting activity. Public infrastructure, highway, data center, manufacturing, LNG and power projects all show positive trends, while only single-family residential demand remains weak. Management notes its advantaged geographic footprint will allow it to capture upside when residential demand eventually recovers.

• Q: What is the latest update on the NAFTA arbitration against Mexico, and how is it impacting Gulf Coast operations? /

  A: The ruling was disconcerting: all arbitrators confirmed Mexico violated NAFTA, but only immaterial damages were awarded. Since Mexico's 2022 seizure of the Calica operation, Vulcan has adjusted to continue serving Gulf Coast customers successfully, and the company's EBITDA has grown over 50% in four years. Vulcan still owns the land and port adjacent property, retaining valuable assets in the region.

• Q: Can management elaborate on the advantages of the Build America 250 Act relative to the IIJA for Vulcan? /

  A: Build America 250 focuses more heavily on highway and bridge projects, which are far more aggregate-intensive than the broad range of non-construction green projects included in the IIJA. It also returns to a formula-based funding distribution that allocates more funding to states based on highway mileage, which aligns perfectly with Vulcan's existing advantaged footprint, making it more beneficial for the company than the prior IIJA framework.

• Q: What is the outlook for M&A, and does the pipeline include larger transformative deals? /

  A: Vulcan maintains a healthy M&A pipeline, with multiple transactions expected to close in the second half of 2026. All pipeline transactions are focused squarely on the core aggregates business, aligned with the company's longstanding disciplined growth strategy. No transformative or out-of-strategy deals are in the pipeline, and all future activity will align with the company's existing aggregates-focused strategy.