Asher Sohnen

Asher Sohnen inquired about Amrize's updated 2026 outlook compared to three months prior, focusing on project backlogs, cancellations, and how the positive volume growth outlook for 2026 breaks down across commercial, infrastructure, and residential end markets.

Answer

Jan Jenisch, Chairman and CEO, noted accelerating customer demand, particularly in the commercial market, which accounts for 50% of sales, driven by data centers, logistics, and manufacturing. He confirmed no project cancellations, only sidelined or slowed projects now resuming due to interest rate cuts, and expects accelerating demand from commercial customers.

Asher Sohnen asked about the confidence in achieving low single-digit cost inflation in 2026, driven by underlying inflation or 'Vulcan Way of Operating' (VWO) and cost takeout. He also inquired if there's a mix impact from base stone baked into that cost guidance.

Answer

Ronnie Pruitt, Chief Executive Officer, attributed confidence in cost control primarily to the 'Vulcan Way of Operating' (VWO), focusing on process intelligence, labor scheduling, and critical size production across 120+ plants. He noted that while base stone can be a drag on pricing, it benefits plant operations and yield, contributing positively to cost control. He highlighted strong management of inventory and costs despite muted demand over the past three years.

Asher Sohnen asked about the confidence in achieving low single-digit cost inflation in 2026, specifically whether it's driven by underlying inflation trends or the 'Vulcan Way of Operating' and if there's a mix impact from Base Stone on costs.

Answer

Ronnie Pruitt, SVP and COO, attributed confidence in cost control primarily to the 'Vulcan Way of Operating' disciplines, which have matured across 120+ plants, focusing on process intelligence, labor scheduling, and critical size production. He noted that labor control is a key part of this initiative. Pruitt also explained that while Base Stone projects can drag on pricing, they offer a benefit to plant operations and yield, helping manage costs effectively, especially after three years of muted demand without significant inventory build-up.

Asher Sohnen inquired about the outlook for natural gas costs for wallboard and cement in fiscal Q4, given recent price increases, and the estimated portion and trends of the wallboard business derived from repair and remodel.

Answer

CFO Craig Kesler clarified that natural gas costs primarily impact wallboard, where a hedging program (over 50% hedged through winter) mitigates spikes from winter storms, with expectations for prices to normalize. He stated that repair and remodel constitutes about a third of wallboard demand, is a meaningful and growing market, and is expected to see low single-digit growth.

Asher Sohnen, representing Anthony Pettinari from Citigroup, inquired about the outlook for natural gas costs for wallboard and cement in the fiscal fourth quarter and the proportion and trends of the repair and remodel segment within the wallboard business.

Answer

Craig Kesler, CFO, clarified that natural gas costs primarily impact wallboard, where a hedging program is in place to mitigate winter spikes, and no structural change is expected. He estimated that repair and remodel constitutes about a third of wallboard demand, describing it as a steadier market with low single-digit growth.

Asher Sohnen asked which product groups are most exposed to residential end markets and if the anticipated residential slowdown in the second half of 2025 would drive any shifts in product mix or inventory strategy.

Answer

CEO Mark Witkowski clarified that most product categories have a standard mix across end markets, with fire protection being more non-residential focused. He explained that resource allocation is adjusted based on market conditions, shifting headcount and resources from softer residential areas to growth areas.