Vulcan Materials Company Q2 FY2025 earnings call

• Safety performance was outstanding despite challenging weather.
• Adjusted EBITDA improved 16%, margins expanded 260 basis points, and cash gross profit per ton grew 13%.
• Weather in the Southeast, like record rainfall, disrupted aggregates and asphalt, but teams executed Vulcan Way of Operating disciplines to drive efficiencies.
• Residential construction (20% of shipments) weak but multifamily starts improving; private non-residential showing recovery with data centers and public infrastructure funding from IIJA.
• Backlogs and booking pace accelerating, supporting full-year guidance.

In the second quarter, Vulcan Materials saw adjusted EBITDA of $660 million, a 9% improvement over the prior year despite lower aggregate shipments. Cash gross profit per ton grew 13%. Aggregates cash gross profit per ton was $11.25, over 50% higher than 3 years ago. Rainfall in the Southeast disrupted aggregates and asphalt businesses, but reported cash gross profit per ton still expanded 9%. Freight adjusted unit cash cost of sales increased 1.5% while freight-adjusted average selling prices improved 5% and mix-adjusted average selling prices improved 8%.

• Reaffirmed full-year adjusted EBITDA guidance of $2.35 billion to $2.55 billion.
• Expect full-year maintenance and gross capital expenditures of approximately $700 million, with acceleration in the second half.
• July shipments were double-digit up, indicating catch-up and support for the guidance.

• Extreme weather in the Southeast, including record rainfall, disrupted aggregates and asphalt businesses, impacting shipments.
• Unfavorable geographic mix due to weather-impacted shipments in attractive Southeast markets.

Q: Trey Grooms asked about confidence in reaffirming EBITDA guide despite weather.

A: Tom Hill said ex-rain, strong first half performance, backlogs and booking pace up, underlying demand improving.

Q: Anthony Pettinari asked about bid to bookings conversions.

A: James Thomas Hill said bids are greenlighting, turning, building backlogs.

Q: Kathryn Thompson asked about infrastructure dollars.

A: James Thomas Hill said highway contract awards up, IIJA funding continuing.

Q: Andrew F. Maser asked about CapEx.

A: Mary Andrews Carlisle said CapEx step down due to weather, full-year expected $700 million.

Q: Steven Michael Fisher asked about cash gross profit per ton in Q3.

A: James Thomas Hill and Mary Andrews Carlisle said momentum continuing, price to bottom line.

Q: Keith Brian Hughes asked about non-residential turning to volumes.

A: James Thomas Hill said more 2026, but seeing backlogs and starts.

Q: Ivan Yi asked about rail merger impact.

A: James Thomas Hill said no impact on Aggregates shipments.

Q: Angel Castillo asked about bid to bookings and deferrals.

A: James Thomas Hill said deferrals/delays passed, bids starting, backlogs building.

Q: Philip H. Ng asked about infrastructure growth.

A: James Thomas Hill said growth accelerating, more in 2026 and beyond.

Q: Garik Shmois asked about aggregates pricing and mix.

A: James Thomas Hill and Mary Andrews Carlisle said mix impact, confidence in second half momentum.

Q: Michael Dudas asked about Big Beautiful Bill and IIJA 2.0.

A: Mary Andrews Carlisle said tax legislation benefits, James Thomas Hill said new highway bill likely higher funding.

Q: David MacGregor asked about recoverable tonnage and backlog.

A: James Thomas Hill said weather impact spread in second half, backlogs up in most sectors.

Q: Michael Feniger asked about 2026 growth and free cash flow.

A: Mary Andrews Carlisle said capital allocation priorities unchanged, James Thomas Hill said encouraged by M&A.