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Vulcan Materials CO (VMC)·Q1 2025 Earnings Summary

Executive Summary

  • VMC delivered a quality Q1: Adjusted EBITDA rose 27% YoY to $410.9M with margin +420 bps to 25.1%, driven by 7% aggregates price growth (8.5% mix-adjusted) and a 3% decline in unit cash costs; adjusted EPS was $1.00 vs $0.80 last year .
  • Versus S&P Global consensus, VMC posted a clear EPS and EBITDA beat but a slight revenue miss: EPS $1.00 vs $0.76*, Adjusted EBITDA $410.9M vs $384.5M*, Revenue $1,634.6M vs $1,649.7M* .
  • Management reiterated FY25 Adjusted EBITDA guidance of $2.35–$2.55B, CapEx $750–$800M, SAG $550–$560M, aggregates price +5–7% and shipments +3–5%; downstream cash gross profit still ~ $360M .
  • Catalysts: sustained public infrastructure tailwinds (two-thirds of IIJA highway dollars yet to be spent), accelerating data-center demand in VMC markets, and continued execution of “Vulcan Way” pricing/operations; watch private end-markets and cost cadence (lumpiness) .

What Went Well and What Went Wrong

  • What Went Well
    • Pricing power and unit profitability: aggregates freight-adjusted price +7% YoY (8.5% mix-adjusted); aggregates cash GP/ton +20% to $10.63; Adjusted EBITDA margin +420 bps YoY to 25.1% .
    • Cost discipline and operations: aggregates unit cash costs declined 3% YoY, aided by plant efficiencies and some weather-related timing of spend; management emphasized ongoing “Vulcan Way of Operating” rollout across top operations .
    • Public/infrastructure demand strength: two-thirds of IIJA highway dollars still to be spent, healthy state budgets, and strong contract awards in VMC states; volumes outlook supported by public offsets to weaker private .
  • What Went Wrong
    • Slight revenue shortfall vs consensus: $1,634.6M actual vs $1,649.7M* consensus (driven by modest shipments -1% YoY and one fewer shipping day; weather challenges in February) .
    • Private markets softness: residential and rate-sensitive private non-resi remain challenged; some big commercial projects in “pause” pending macro clarity (though backlogs/booking trends constructive) .
    • Cost cadence will be lumpy: Q1 benefited from deferred stripping/maintenance; management guides to low-to-mid single-digit cost increase for the year and cautions quarter-to-quarter variability .

Financial Results

Actual vs S&P Global Consensus (Q1 2025)

MetricActual (Q1 2025)S&P Global ConsensusBeat/Miss
Revenue ($USD Millions)$1,634.6 $1,649.7*Miss (−$15.1M)
Adjusted EBITDA ($USD Millions)$410.9 $384.5*Bold Beat (+$26.4M)
EPS (Adjusted Diluted, $)$1.00 $0.76*Bold Beat (+$0.24)

Notes: Asterisks indicate S&P Global consensus values. Values retrieved from S&P Global.

Key Financials vs Prior Year and Prior Quarter

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$1,545.7 $1,853.6 $1,634.6
Adjusted EBITDA ($USD Millions)$323.5 $550.1 $410.9
Adjusted EBITDA Margin (%)20.9% 29.7% 25.1%
Diluted EPS – Continuing Ops ($)$0.78 $2.23 $0.98
Adjusted Diluted EPS – Continuing Ops ($)$0.80 $2.17 $1.00

Seasonality: QoQ declines from Q4 reflect normal seasonal patterns; YoY improvements reflect price/margin gains .

Segment Revenue and Gross Profit

SegmentQ1 2024Q4 2024Q1 2025
Aggregates Revenue ($M)$1,291.3 $1,472.3 $1,335.9
Asphalt Revenue ($M)$186.2 $327.1 $208.7
Concrete Revenue ($M)$148.3 $163.5 $177.0
Aggregates Gross Profit ($M)$303.3 $486.5 $357.3
Asphalt Gross Profit ($M)$4.7 $46.1 $4.8
Concrete Gross Profit ($M)$(3.1) $4.6 $3.2

KPIs

KPIQ1 2024Q4 2024Q1 2025
Aggregates Shipments (mm tons)48.1 53.9 47.8
Freight-Adjusted Sales Price ($/ton)$20.59 $21.41 $22.03
Aggregates Gross Profit per ton ($)$6.30 $9.02 $7.48
Aggregates Cash Gross Profit per ton ($)$8.86 $11.50 $10.63
SAG Expense ($M)$129.7 $138.1 $138.3
CapEx ($M)$152.8 $236.0 $105.0
ROIC (TTM, %)16.3% 16.2% 16.2%
Net Debt / TTM Adj. EBITDA (x)1.5x 2.3x 2.2x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDAFY 2025$2.35–$2.55B $2.35–$2.55B reiterated Maintained
Aggregates Shipments GrowthFY 2025+3% to +5% Reaffirmed on call Maintained
Aggregates Price (Freight-Adj.)FY 2025+5% to +7% “Keep guidance at 5–7%” Maintained
Aggregates Unit Cash CostFY 2025Low–mid single-digit increase Guide reiterated; costs to be lumpy Maintained
Downstream Cash GP (Asphalt+Concrete)FY 2025≈ $360M Reaffirmed Maintained
SAG ExpenseFY 2025$550–$560M Reaffirmed Maintained
CapExFY 2025$750–$800M Reiterated Maintained
Dividend (Quarterly)Payable 6/6/25N/A$0.49 declared 5/9/25 Declared

Items like interest expense (~$245M) and tax rate (22–23%) were provided in February but not updated in Q1 materials .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3’24 and Q4’24)Current Period (Q1’25)Trend
Public infrastructure/IIJAQ3: Weather constrained but long-term backdrop intact . Q4: Public construction strength into 2025 .“2/3 of IIJA highway dollars yet to be spent”; state budgets supportive; public steady offset to private .Improving/steady tailwind
Pricing disciplineQ3: +10% YoY price . Q4: +11% YoY price; unit profitability at $11.50/ton .+7% (8.5% mix-adj.) YoY; 5–7% FY guide reiterated .Steady positive
Volume outlookQ3: Weather/volumes down; 2025 to improve . Q4: Expect 3–5% shipments growth in 2025 .Q1 shipments −1% YoY; back-half loaded; public up, private challenged .Gradual improvement 2H
Data centers & power generationQ3: Not highlighted. Q4: Not highlighted.Data centers accelerating; 80% of proposed DCs within 30 miles of a VMC quarry; power gen projects likely ’26–’27+ .Accelerating
Costs/operationsQ3: Cost pressure moderating; impairment in concrete . Q4: Moderating costs; strong ops .Unit cash cost −3% YoY; cost cadence lumpy; instrumentation/automation ramping across top 100–120 plants .Improving, with lumpiness
M&A integration (Wake Stone, SRM)Q3: Wake Stone deal announced . Q4: Completed acquisitions; balance sheet strong .~$150M FY25 contribution affirmed; synergy capture ongoing .On track
Tariffs/macroQ3/Q4: Limited commentary.Minimal direct impact expected; watch indirect effects on private costs .Watch item
Downstream (Asphalt/Concrete)Q3: Asphalt +12% cash GP; concrete mixed . Q4: Asphalt strong; concrete stabilized .Asphalt cash GP +24% helped by ~$3M liquid savings; downstream FY cash GP ≈$360M reiterated .Stable/positive

Management Commentary

  • Strategy and execution: “Adjusted EBITDA increased 27 percent, and Adjusted EBITDA margin expanded 420 basis points over the prior year… Our commercial and operational execution support our full-year outlook to deliver another year of earnings growth in 2025.” (Tom Hill, press release) .
  • Pricing and costs: “Aggregates freight-adjusted unit cash cost of sales declined 3%… moderating inflationary pressures, a relentless focus on plant efficiencies and some timing benefits of delayed expenditures due to weather conditions, all contributed to the cost performance.” (Tom Hill) .
  • Demand mix: “We believe that private demand will continue to face challenges this year, while public demand remains a healthy offset.” (Tom Hill) .
  • Guidance posture: “We continue to expect to deliver between $2.35 billion and $2.55 billion of adjusted EBITDA in 2025.” (Tom Hill) .
  • Capital allocation: “Over the last 12 months, we have generated $869 million of free cash flow… net debt to adjusted EBITDA leverage was 2.2x… CapEx $750–$800 million for the full year.” (Mary Carlisle) .

Q&A Highlights

  • Midyear pricing: Discussions underway; outcomes vary by market/product; impact more 2026 than 2025; FY price +5–7% maintained .
  • Volume cadence: FY volume growth back-half loaded; public up, private still mixed; bookings/backlog healthy; March shipments +9% aided by acquisitions and easier weather comps .
  • Cost trajectory: Great Q1 with −3% unit cash cost; costs will be “lumpy” given timing of stripping/maintenance; full-year low-to-mid single-digit cost increase baseline .
  • Downstream profit: Asphalt/ready-mix on track to deliver ≈$360M cash GP in 2025 (≈2/3 asphalt, 1/3 ready-mix) .
  • Data centers/power: DCs a current bright spot; most proposed DCs near VMC quarries; expect significant aggregates-intensive power generation builds from late ’26 onward .
  • Tariffs: Minimal direct earnings impact expected; remain vigilant on potential indirect private cost pressures .
  • Plant automation: Instrumentation in top ~100–120 plants; ~20–30% fully benefitting; throughput/efficiency gains expected over 2025–26 .

Estimates Context

  • Q1 2025 vs S&P Global consensus: EPS beat ($1.00 vs $0.76*), Adjusted EBITDA beat ($410.9M vs $384.5M*), slight revenue miss ($1,634.6M vs $1,649.7M*) .
  • Implications: Expect upward revisions to FY25 EBITDA/EPS models given unit profitability momentum, downstream contribution reaffirmation, and unchanged FY EBITDA range; revenue models may be fine-tuned for volume cadence and mix. Pricing guide (5–7%) and public pipeline commentary underpin estimate stability .

Notes: Asterisks indicate S&P Global consensus values. Values retrieved from S&P Global.

Key Takeaways for Investors

  • Aggregates-led margin story intact: Unit pricing and cost discipline expanded Adjusted EBITDA margin +420 bps YoY to 25.1%, with aggregates cash GP/ton +20% YoY .
  • Quality beat: EPS and EBITDA beats outweigh a modest revenue miss; execution offsets softer private markets and weather headwinds .
  • Guide confidence: FY25 Adjusted EBITDA $2.35–$2.55B reiterated; price +5–7% and shipments +3–5% maintained; downstream ~$360M cash GP reaffirmed .
  • Demand mix: Public infrastructure to carry 2025 volumes; private non-resi stabilizing (warehouses bottoming) with accelerating data-center work; residential constrained by rates/affordability .
  • Watch cost cadence: Q1 benefited from timing of spend; expect quarterly lumpiness even as full-year cost guide holds; ongoing automation should support structural efficiency gains .
  • Balance sheet flexibility: Net debt/EBITDA 2.2x after $400M note redemption; continued dividends ($0.49/quarter) and selective buybacks underpin TSR while funding CapEx/M&A .
  • Trading setup: Narrative supports estimate resilience and multiple support via public tailwinds and data-center adjacency; near-term prints could be sensitive to volume cadence and cost lumpiness disclosures on intra-quarter updates .

Additional Primary Source Details (for reference)

  • Q1 2025 8-K/Press Release: Total revenue $1,634.6M; Adjusted EBITDA $410.9M; Adjusted EPS $1.00; aggregates shipments 47.8Mt; price $22.03/ton; cash GP/ton $10.63 .
  • Q4 2024 (prior quarter): Revenue $1,853.6M; Adjusted EBITDA $550.1M; Adjusted EPS $2.17; FY25 guidance quantified .
  • Q3 2024 (two quarters back): Weather-disrupted quarter; pricing +10% YoY; EBITDA margin 29.0% .
  • Q1 2025 dividend PR: $0.49/share payable June 6, 2025 .

Non-GAAP considerations: Adjusted EBITDA excludes items (e.g., acquisition charges); Adjusted diluted EPS for continuing ops was $1.00 vs GAAP diluted EPS continuing ops $0.98; see reconciliations in 8‑K Exhibit tables .