Amrize Aktie

Hello, and welcome to the Amrize Q1 2026 Earnings Conference Call. [Operator Instructions] Also, as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. I will now turn the call over to Aroon Amarnani, Vice President of Investor Relations.

Thank you, and good morning. Welcome to Amrize's First Quarter 2026 Earnings Conference Call. We released our first 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 are Jan Jenisch, our Chairman and CEO; and Baris Oran, our CFO.

Jan will open today's call with highlights from the first quarter. Baris will then review our financial performance before turning the call back to Jan to discuss our outlook for 2026. We will then take your questions. 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 U.S. GAAP in our earnings release and slide presentation. As a reminder, today's call is being webcast live and recorded. A transcript and any 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. With that, I'll now turn the call over to Jan.

Thank you, Aroon, and thank you all for joining us today. We had a strong start to the year. While this is a seasonally small quarter for Amrize, we are encouraged by our progress and the acceleration of customer demand driven by our Building Materials segment. For the first quarter, Amrize delivered revenue growth of 4.7%. We had an excellent start in Q1 for Building Materials.

With growing new project starts and multiyear supply agreements for mega projects, we achieved double-digit volume growth in both cement and aggregates and increased revenues by 12.9% to $1.5 billion. We also grew Building Materials adjusted EBITDA by 42% and expanded margin by 230 basis points. This was driven by accelerating growth in volumes, continued aggregates pricing, operational efficiency and gains from our ASPIRE program.

With aggregates and U.S. cement price increases put in place in April and strong volumes continuing, our Building Materials business is well positioned for 2026. In our Building Envelope segment, revenue was affected by softer roofing demand and pricing. Adjusted EBITDA was impacted by lower volumes, price cost and temporary plant disruption. Commercial roofing repair and refurbishment remained resilient, while new construction remained soft in the first quarter.

We expect the strong commercial new starts we are seeing within Building Materials to convert to new roofing demand as those projects progress through construction. We implemented price increases beginning in April, and we expect price costs to improve as we move through the year. At the total company level, we grew revenues by 4.7% to $2.2 billion with $192 million in adjusted EBITDA. We operated on a stand-alone basis in the first quarter of 2026 compared to a carve-out basis in the first quarter of 2025.

Excluding the unallocated corporate costs, our total adjusted EBITDA was up 1.6% in the first quarter of 2026. For future growth, we are investing in our operations and executing value-accretive M&A. We invested $272 million in capital expenditure and are on track to invest $900 million in 2026 to expand production, increase operational efficiency and best serve customers in the most attractive markets. We also completed the acquisition of PB Materials on February 18.

This was a great acquisition, and PB Materials already started to positively contribute to our results in the first quarter. Delivering shareholder return, our Board has declared Amrize's first quarterly dividend of $0.11 per share, and we plan to begin our share repurchase program after Q1 earnings results. Overall, we are off to a good start to the year and are well positioned to deliver on our 2026 guidance.

Looking to the market environment. We are seeing accelerating customer demand in commercial construction, which makes up half of our business. Strong data center demand and energy projects are accelerating growth. We also saw an increase in new project starts in the quarter, and we're able to secure multi-year supply agreements supporting several mega projects.

Within infrastructure, we expect steady spending on the federal, state and local level with ongoing modernization of North America's aging infrastructure. We see increasingly domestic-focused agendas in both the United States and Canada. Each country is prioritizing national investments to build strong futures and Amrize is positioned exceptionally well for this. Within residential, new construction and repair and refurbishment demand remained soft in the first quarter.

We expect that seasonal trends will support weather-related demand in the second half of the year with new construction recovery expected in 2027. Overall, we are seeing growth trends from infrastructure modernization and onshoring of manufacturing to data center expansion and the digital economy taking shape on the ground. And these projects have significant size and scale for Amrize. Let me share some of our project highlights as we see increased new starts and mega projects.

In Colorado, we are a key supplier of Building Materials for the highest dam raise in the U.S., which will triple capacity to reliably serve water supply to Denver. In New York City, Amrize is delivering significant volumes of Building Materials to a major river ground stabilization program. We are a key supplier to projects supporting the digital economy, including an Amazon distribution facility in New York and multiple data centers, including 2 large new builds in Texas.

Our Elevate roofing system, which is ideally suited to support data center projects is also serving other mega projects like Northwestern University's new Ryan Field, one of the nation's most significant new stadium builds. These are just some examples of our projects and new ones are kicking off every month. While we support our customers, we are also driving synergies and operational excellence with our ASPIRE program. We continued to make good progress in the first quarter.

We have now onboarded over 650 new logistics and service providers, optimizing our third-party spend. With our ASPIRE program, we are on track to achieve 70 basis points of margin expansion in 2026 and $250 million in synergies through 2028. Let's look at our capital allocation. We are executing on our capital allocation strategy for growth and shareholder return.

We invested $272 million in capital expenditures in the first quarter and are on track to invest $900 million in 2026. We are progressing well on our key organic growth projects. This includes our flagship cement plant expansions in attractive markets from Texas to Calgary, investments to expand our quarries and the building of our new Malarkey shingle plant in Indiana. A key highlight of the first quarter was the close of the acquisition of PB Materials, the aggregates leader in high-growth West Texas.

This acquisition strengthens our aggregates business, adding 50 years of aggregate reserves and 26 operational sites throughout West Texas. With just 6 weeks as part of Amrize in the first quarter, PB Materials has started to contribute to our revenues, and we see significant growth and synergy opportunities ahead. We expect the acquisition of PB Materials to be EPS and cash accretive in 2026.

Following this acquisition, we have a strong pipeline of aggregates-led M&A opportunities to grow our footprint in the most attractive markets. We are delivering on our priority to return cash to our shareholders. The special one-time dividend for 2025 of $0.44 per share will be paid on May 4 to shareholders. In addition, the Amrize Board has declared the first quarterly dividend of $0.11 per share to be paid on May 20.

Both dividends will be paid out of capital contribution reserves and are not subject to Swiss withholding tax. The previously announced $1 billion share repurchase program with a 12-month authorization is planned to begin after Q1 earnings results. We continue to focus on delivering for our customers, investing for growth and returning cash to our shareholders. Before discussing our 2026 guidance, I will turn over to Baris, who will review our quarterly financial results in more detail.

Thank you, Jan. I'll begin with our results by segment, starting with Building Materials. We saw another quarter of margin expansion and accelerating customer demand in our Building Materials segment. Revenues were $1.5 billion in the quarter, an increase of 12.9%. This increase in revenue reflects double-digit volume growth, both in our cement and aggregates business, driven by new starts and multi-year mega projects.

During the quarter, cement volumes increased 13.9% and aggregates grew 14.1%. It's worth noting that volume growth for both cement and aggregates accelerated on a year-over-year basis and on a 2-year stack basis. This trend gives us confidence that underlying demand has growing momentum. Cement pricing for Q1 was down 2.4% on a constant currency basis, but up sequentially.

Recall that last year, cement pricing in both the U.S. and Canada was in place in early January, while this year, U.S. cement pricing returned to its normal historical cadence in the spring, which created a tougher year-over-year comparison for Q1. Also, cement pricing during Q1 saw an unfavorable mix impact from a large customer project. While this project was a modest headwind to pricing, it benefited our cement margins during the quarter.

Overall, we continue to see favorable pricing dynamics across our network, supported by our inland positions in high-growth and attractive markets. With Canada cement price increases in place during Q1, we implemented U.S. cement price increases in April. Turning to aggregates. Pricing on a freight-adjusted and constant currency basis increased 1% in the quarter and was up 3.6%, including freight.

Aggregates pricing in the first quarter was impacted by mix effects from large projects, geography and acquisition. Aggregates price increases were implemented in April with the full-ranging rate now in place. Across both cement and aggregates, additional fuel surcharges are also being implemented. So far, we have seen solid traction for these price increases.

We expect slightly positive cement pricing in Q2 and stronger year-over-year pricing trends as we move through 2026. On top, for aggregates, we expect mid-single-digit pricing growth in Q2. Building Materials adjusted EBITDA was $170 million in the first quarter, up 41.7% compared to prior year. We saw solid margin expansion of 230 basis points.

The increase in adjusted EBITDA and improvement in margin was primarily due to continued volume growth, coupled with aggregates pricing, operational efficiency and ASPIRE savings. As we look out to Q2 and the rest of the year, we are monitoring the dynamic geopolitical environment and recent spike in energy prices.

We have and we plan to take additional pricing actions as needed to address cost inflation. Our goal is to continue expanding margins. Along the same lines and given the momentum we have seen across our cement and aggregates businesses since Q3 of last year, we continue to expand volume growth for both businesses to be positive this year.

Turning to Building Envelope. First quarter revenues were $678 million, a decrease of 9.8% compared to prior year. The decline was largely driven by soft industry volumes and pricing. On the commercial side, we saw resilient demand for repair and refurbishment activity, while new construction remained soft in the quarter. As a reminder, new commercial roofing demand typically lags broader commercial construction activity by 12 to 18 months.

With accelerating new commercial construction in our Building Materials segment, we expect that to support an improvement in new commercial roofing demand as we move into second half and seasonally stronger roofing quarters. Turning to residential. Demand was soft in Q1. More seasonal trends should support stronger weather-related repair and refurbishment demand later this year.

Looking ahead, we continue to expect flat volumes for the full year with improvement in the second half of 2026. Building Envelope adjusted EBITDA was down double digits year-over-year due to lower volumes and price cost. Price cost was down low-single digits as a percentage of revenues during the quarter. Adjusted EBITDA was also impacted by a temporary plant disruption in our residential shingles business.

This disruption was short term and was resolved in Q1. With respect to recent volatility in energy markets, we moved quickly to put price increases in place during April and are implementing fuel surcharges across our roofing brands. In addition, we have announced a second round of pricing actions across select brands in Q2 to further address ongoing cost pressures to address any further risks. Our approach remains disciplined and focused on the levers within our control.

We expect adjusted EBITDA to be improved by pricing and ASPIRE savings as we move through the year. We have a strong balance sheet. As of March 31, we had approximately $1.1 billion of cash and cash equivalents with $4.3 billion of total available liquidity. This financial strength, coupled with our investment-grade balance sheet gives us significant liquidity to deploy capital for growth investments and return cash to shareholders.

Our net interest expense is lower year-over-year, and we expect our net interest expense to be roughly $340 million for the full year. Our track record of generating high free cash flow, coupled with a strong balance sheet puts us in an excellent position to return cash to shareholders. With that, I'll pass it back to Jan to cover our 2026 outlook.

Thank you, Baris. As we look ahead, the key drivers supporting our 2026 guidance are consistent. Our footprint is well positioned to take advantage of the accelerating demand we are seeing with our commercial and infrastructure customers. Building Materials had an excellent start to the year, and we expect this accelerated customer demand to drive our growth and margin expansion in 2026.

We continue to expect cement pricing to be up low single digits and aggregates pricing to be up mid-single digits on a freight-adjusted basis for the full year. Aggregates and U.S. cement price increases were put in place in April and fuel surcharges are being implemented to offset cost inflation. So far, we have seen solid traction for these increases and customer demand is remaining strong.

Building Materials delivered strong first quarter and is well positioned for accelerated profitable growth in 2026. In Building Envelope, we expect low single-digit growth in commercial roofing volumes, and we see flat volumes in residential roofing. We implemented price actions in April across our commercial and residential roofing brands, including fuel surcharges.

We have also announced price increases for select brands effective in May and June. As pricing actions are realized in Q2, we expect price cost to improve as we move through the year. Finally, the ASPIRE program remains a key priority, and we are making good progress towards our saving targets.

Based on these drivers, we are reaffirming our 2026 guidance. For the full year 2026, we expect revenues to grow 4% to 6%, and we expect adjusted EBITDA to grow 8% to 11%, which includes contribution from our PB Materials acquisition. With that, I pass it back to Aroon to open our Q&A session.

Thank you, Jan. Operator, we are now ready to begin the question-and-answer session.

[Operator Instructions] Our first question comes from Anthony Pettinari from Citi.

Jan, just big picture, given a pretty volatile macro environment and obviously, some higher costs in the economy. I'm just wondering if you could talk a little bit more about what gives you sort of confidence in reiterating the '26 guide given kind of events in the last couple of months.

Yes, I think we had a good start to the year. I mean, look, we have -- Q1 for Amrize is a very small quarter. However, I think we have all the basics and all the initiatives we need for 2026 in place. I'm especially very happy to see the increasing demand from our customers. You have seen the double-digit volume growth we had in Q1 for both the cement and aggregates, very encouraging, especially as you see that we had already in Q3 and Q4 last year volume growth in Building Materials.

So -- and we talked about this last year, I think, quite a lot that we see our commercial customers and the commercial projects now to start. And we have seen a lot of new project starts for Amrize in beginning of the year with long-term supply agreements for mega projects from data centers, energy projects, warehousing to logistics. Infrastructure continues with a good solid demand for us, and we see a good backlog now for the remaining of the year.

If you talk about, yes, well, the volatile environment and probably addressing the energy cost, I'd like to give you a bit of background. So we have at Amrize, like what we showed, I think, at our last conference, we had last year, 9% of our total spend was direct energy spend, which is about $650 million. And out of that, 60% is linked to natural gas. So either natural gas directly used in our factories or natural gas as used for electric power.

And those 60% natural gas, they have actually seen a downward trend. This year, we are at the moment on a 12-month low in natural gas prices, so was not impacted by the current geopolitical instability in the Middle East. And this is, I would say, very confirming for us. We have 40% of diesel and other fuels we are using. Here, we have 40% of that diesel and fuel is pre bought already for '26.

And the remainder of those, of course, have an increase, and this is what we currently, I would say, tackle with fuel surcharges for our deliveries and also with the price increases we see now for our segments, Building Envelope and Building Materials. So overall, Anthony, I'm -- I would say we have our basics right for the full year.

And I'm especially happy to see that the volumes picked up so significantly beginning of the year. We see this also continued into April. So we believe we have quite a healthy demand from our customers. And now we do everything which is in our control to make sure we deliver not only growth, but also the bottom line as promised in our guidance.

Our next question comes from Keith Hughes with Truist.

Yes. Can you hear me?

Yes.

Okay. I had a lot of problems with the webcast. Let me ask my question. You made some positive comments on cement pricing for the rest of the year. It looks like you're anticipating the guidance to be accelerating into the positive categories. How strong do you think you can get in the second half? And what's causing the turnaround from what's been some fairly weakish numbers for about a year or so in cement?

Yes. Look, we are happy how the year has started, especially considering the double-digit volume growth we see in cement. I think as Baris mentioned in his presentation, we had a rather high comparison prices in Q1 last year. So we are down now. But I think this is how we plan to do it. We have a bit of a mix effect. We have one very large customer project where we supply a lot of cement and which lowers a bit the price, but of course, increases the margin and the EBITDA significantly.

So that mix impact, I would estimate is around 1% for Q1. But nevertheless, of course, with a significant increase in EBITDA. Now going forward, we have the pricing now in place for April. Let's see. I think the prices are sticking. We have the fuel surcharges additionally for deliveries in place. And I will -- I think we're going to see positive pricing throughout the year now.

Baris mentioned, we believe that Q2 already will show a positive price compared to last year, and this is all good. Very similar important is the aggregates pricing. Here also, we have some mix impact here from geographies to the PB Materials acquisition and also some large-scale projects.

So if I do a mix adjusted price, prices are up in Q1, 3% in aggregates. And as Baris mentioned, we target to see a 5% price increase for Q2. So I believe we are in very good territory on the pricing, especially when you see that in combination with the significant volume increase, which will help us to be much more efficient in our supply chains and in our factories.

Our next question comes from Pujarini Ghosh with Bernstein.

Can you hear me?

Yes.

So on Building Envelope, what are you expecting in terms of the pricing growth for the full year? And like how much are you trying to pass through? And just one clarification from the previous question. So on cement pricing, you mentioned the mix effect is around 1%. So like of the minus 2.4% pricing impact, like can you disaggregate that between like how much of that is...

That's correct. Yes, that's correct.

Okay.

So look, I think on Building Envelope, our target for the year is to be positive price over cost. Of course, we had a tough start to the year. The pricing was under pressure, coming basically from the soft demand in Q4, if you remember, and now we have to turn this around. We are positive.

We put price increases in place for April, fuel surcharges in place, and we have also more pricing for selected brands coming up in May and June. So we believe -- so our target is to be price over cost positive for the year and to make this a successful year for Building Envelope.

Our next question comes from Cedar Ekblom with Morgan Stanley.

I'd like to dig a little bit more into the Building Envelope division because it was clearly the laggard in the group, pulling down a bit of the good performance in Materials. You talked to an outage at your residential roofing facility. Can you give us some color on what happened there, the potential impact to numbers, whether it's fully resolved or not and give us some confidence that we're not going to see this operating headwind repeat in quarters going forward?

Yes, I mean, as always, we report very transparently. And again, I don't want to sugarcoat Q1 was not where we wanted to be with Building Envelope, not on sales, not on EBITDA. And I think while we had the volume decline and also some softer pricing, we had -- in addition, we had 1 of our 3 shingle factories was out for a 4-week period due to some error or some failure in the production line, and this has been solved and rectified and is running, but that has quite influenced us in the first quarter.

Could you put some numbers around what the operating cost headwind or not?

No, it was quite significant. You can imagine if one of your 3 factories is down for 4 weeks, that has a significant impact. We don't want to provide a number to this, but that wasn't a good number.

Our next question comes from Trey Grooms with Stephens.

This is Ethan on for Trey. I wanted to ask on the aggregates business specifically. You've got the April price increase effective. And you mentioned that you're implementing fuel surcharges where necessary to mitigate the impact of higher diesel costs. So I wanted to ask about your philosophy around potentially incremental pricing or midyear base price increases aside from just fuel surcharges. So any color on that would be very helpful.

Look, first of all, we are really -- nothing you would like to see, again, our mix price increase or mix net increase of 3% in the first quarter with this very, very good supply or high volumes we have. Now going into the second quarter, we have more price increases and fuel surcharges. I think this will be very positive for us. Baris mentioned this will be 5% or we expect a 5% price increase against second quarter of last year.

So this is very good. What is the philosophy? I think we did well in the pricing in aggregates for the last couple of years. And I think now this year, we enter into a season where our customers have a higher demand, which is very helpful both from operational efficiency, but then also will support the pricing. So let's see how the year turns. So at the moment, we are focusing everything now April and May to make this all happen, and then we see for the next steps later this year.

Our next question comes from Michael Dudas with Vertical Research.

Welcome, Baris. Well, looking at the Building Envelope side and your commercial business, maybe you could give a sense of order activity, the confidence level you're seeing on that commercial front. And you talk about the larger projects that have been started in the last several quarters that will flow through into maybe backlog opportunities later this year. So how confident level do you see given the order activity from the customer base on that front?

Yes, look, again, Q1 was a tough quarter for Building Envelope. It was better than Q4 last year, but of course, not where we want to be. Now for the next 3 quarters to complete the year, we are confident we're going to see much more demand from our customers.

So we expect, for example, the commercial projects that broke ground in 2025, which led to a significant increase in volumes for Building Materials. They are expected to convert into roofing volumes in the second half of '26. So in addition, we have the reroofing, reroofing was on a low activity level in Q1 and in '25, also due to a very -- to no storm seasons really happening.

And if we normalize the weather seasons this year, we expect a more significant reroofing business for us for this year. So again, after you have 2 soft quarters, it's not always easy to make a big confident announcement. But what we see now in April and the trends I talked about, I think we're going to see now different demand levels for our roofing business.

Our next question comes from Julian Radlinger with UBS.

Back to this large customer in -- that negatively impacted cement prices, but positively impacted margins, presumably through the volume leverage. For you to call out one specific customer, I assume that really is quite a sizable one. And so can you help us understand maybe how much that contributed to volumes as well, even just roughly? And then also, are prices for this specific customer, that's a new one, also going up now in April? Or is that different?

I'm afraid I cannot answer all the details to your question. But first of all, we have to see we had a 14% volume growth in cement in Q1. We are very excited about this, right? And this is the third consecutive quarter of cement increase, and now it's really, really significant. So this is based on many customers and many projects. And then we have one large customer, one large customer project, which is super attractive with very high-volume deliveries.

And there is a special project price in place, and this is why we have a softening of the average cement price. But overall, this is a very good thing. This we expect will continue throughout the year, and I don't want to comment so much on the volume. Again, we have 14% volume growth in cement, and the larger part is outside of this special project.

Our next question comes from Martin Husler with ZKB.

Yes. I hope you can hear me. My question is about your sales outlook. And I'm just wondering because you foresee 4% to 6%, which looks rather conservative, taking into account the very strong start to the year and now even more pricing to kick in for the rest of the next quarters. Would you agree that this guidance looks rather cautious? Or what is the main risk that sales should not grow faster?

I'm afraid I will not adjust the guidance now based on your comments, but it's -- when we talked about beginning of the year for the guidance for the year, I think it took a bit of courage to say we're going to grow this year 4% to 6% because obviously, we didn't grow like that in the last 2 years. So we came out. And now we just want to be a bit cautious.

I think if the math works out, we're going to see a very good year. We have the pricing coming. We have the PB Materials acquisition, by the way, has started phenomenal. If you just take the sales of 6 weeks in the lower Q1 season, you can imagine that we're going to have very strong contribution from that acquisition in West Texas. Now having said that, we don't want to bet on the overall economy. This is why we are cautious.

We believe the 4% to 6% are sufficient for us to deliver on the more important KPI of 8% to 11% EBITDA. And this is what we focus on. So all the pricing, the fuel surcharges, the efficiencies we put in place now, they should deliver that result based on the growth. And then we -- I think we're going to talk after Q2 how the momentum is curving and maybe we have a different discussion. But for now, I think we have a pretty sharp guidance for 2026.

[Operator Instructions] Our next question comes from Will Jones with Redburn.

Perhaps I could just come back to cement pricing again, please. There's some talk of regional differences. I just wonder what you may be seeing coastal versus inland or maybe U.S. versus Canada? And then just whether you think the wider cost environment at the moment has any impact on import economics for the industry?

Look, I don't think we -- I don't want to make any new announcement on the pricing. I think you saw beginning of the year, we reported earlier, we have already implemented a 3% price increase for entire Canada. You also saw some regional price increases in the U.S. However, remember that we had a higher sales price increase in Q1 2025.

So now looking forward to the year, I hear comments from people with fuel surcharges or energy costs given reason for extra price increases. Also people talk about significant cost increases for import cement and all that. And we're going to see that, I think, in Q2, how this turns out. But for the moment, we are, I think, confident what we just announced in pricing and volumes, what we want to do now for this year.

Our next question comes from Yassine Touahri with On Field Research.

It would be on your import strategy. I think that you imported approximately 10% of your cement volume in 2025, about 2 million tons. And I can imagine that now that you're commissioning your grinding mill in Ste. Genevieve, you will replace some of these imports by local production. Could you give us an idea of where you would see imports landing in 2026? Could it, let's say, for example, half to only 1 million tons and 5% of your cement shipments? It would be great to get a sense of the strategy there in midterm as well. Could we...

The strategy of Amrize is not built on importing cement. And we are now upgrading our cement plants, our cement network to basically go almost to 0 in imports. So the very low volumes of imports at the moment for some specific coastal area. Besides that, we are supplying everything from domestic production.

As you rightly said, we commissioned the planned expansion in the largest North American cement plant at Ste. Genevieve next to St. Louis, and this will enable us now to have a couple of hundred thousand of extra volumes available for us. We also have continued now capacity projects in Texas, in Alberta province, in Montreal, Quebec province.

So you can expect from us that import will not play a significant role for us in the future, will be already -- I don't have a number for you for the outlook. I'm not sure this year, but it will be in the low hundred thousands or something. This will not play a role for us and will only be limited to a specific coastal area and will not play a role within our network.

Our next question comes from Arnaud Lehmann with Bank of America.

So just on acquisitions, do you have more acquisitions equivalent to PB Materials in the pipeline? And also on PB Materials, is it fair to say that the valuation multiple was, let's say, high single digit or maybe low double-digit EBITDA based on the acquisition spending that you published today?

No, good -- first of all, PB Materials was a great acquisition. You will see, I think, throughout the year when we report more details, you will -- I expect them to really overdeliver of our business plan. You remember, I think we announced last year sales was around $185 million with very good margins.

And we expect this to significantly grow already in the first year with Amrize. So very, very exciting. You will also see when the 10-Q comes out, you will see the acquisition price for the business. And your estimate is not so wrong. With synergies, I think, yes, maybe 12x EBITDA or something for the business.

So we could buy them, I think, at a very reasonable multiple and the synergies and the business going forward will be very -- is a very attractive acquisition for us. And I look very much forward to report more details as the year progresses. Of course, we want to do more acquisitions like that, and we have a good pipeline. And I hope we can announce a few or a couple more deals throughout this year.

This concludes our Q&A session. I will now turn the call back over to Aroon Amarnani for closing remarks.

Thank you all for joining us for our first quarter 2026 earnings call. We look forward to speaking to you after we report second quarter 2026 results in August. Thank you.

This concludes the Amrize Q1 2026 Earnings Conference Call. You may now disconnect.

Hello, and welcome to the Amrize Q4 2025 Earnings Conference Call.

[Operator Instructions]

Also, as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. I will now turn the call over to Aroon Amarnani, Vice President of Investor Relations.

Great. Thank you so much, and good morning, everyone. Welcome to Amrize's Fourth Quarter 2025 Earnings Conference Call. We released our fourth quarter and full year 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 are Jan Jenisch, our Chairman and CEO; and Ian Johnston, our CFO. Jan will open today's call with highlights from the full year and the fourth quarter as well as the growth investments we're making in our business. Ian will then review our financial performance for the quarter before turning the call back to Jan to discuss our outlook for 2026. We will then take your questions.

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 U.S. GAAP in our earnings release and slide presentation. As a reminder, today's call is being webcast live and recorded. A transcript and recording of this conference call will be posted to our website. Any statement made about the 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 to various factors, including, but not limited to, those discussed in our Form 10 filings and in other reports filed with the SEC. The company undertakes no obligation to publicly update or revise any forward-looking statements.

With that, I will now turn the call over to Jan.

Thank you, Aroon, and thanks to everyone for joining us today. 2025 was a very important year for Amrize as we did our successful spin-off and launch in June of the company. I have focused my time at our operations and projects across North America to see our work in action, meet with customers and hear from our people. What I see is a market-leading footprint and a performance-driven team. Together, we are delivering for our customers as the partner of choice for their most important building projects. For the full year 2025, we increased revenues by 0.9% to $11.8 billion with $3 billion in adjusted EBITDA. We generated a strong cash flow of $1.5 billion, and our cash conversion rate was 49%. Overall, we completed the year with a net leverage ratio of 1.1x. Our strong cash conversion and balance sheet provide the flexibility and firepower to fuel our growth and return cash to our shareholders.

We increased our investments to $788 million during 2025 to expand production, improve efficiencies and best serve our customers in the most attractive markets. Last month, we were excited to announce our agreement to acquire PB Materials, the aggregates leader in West Texas, significantly expanding our position in this high-growth region. Delivering shareholder return, the Board has approved a $1 billion share repurchase program and is proposing a special onetime dividend of $0.44 per share payable following the Annual General Meeting. The Board is also proposing an annual ordinary dividend of $0.44 per share to be paid in quarterly installments.

These dividends will be paid out of legal capital reserves from tax capital contributions and are not subject to Swiss withholding tax. The dividend and share program are subject to customary shareholder approvals at our AGM in April.

Looking to the future, we are well positioned in our $200 billion addressable market, and we have set our 2026 guidance, reflecting accelerating customer demand and profitable growth. This includes 4% to 6% growth in revenues and 8% to 11% growth in adjusted EBITDA. Let us look at some of the highlights of the fourth quarter. We saw growth -- continued growth in Building Materials. The segment's revenues grew 3.9% and more important, we expanded our adjusted EBITDA margins by 60 basis points. Both cement and aggregates volumes were up, and we had strong aggregates pricing growth in addition to production efficiency gains and first savings from our ASPIRE program. Within our Building Envelope business, our results were affected by soft residential roofing volumes, and we expect residential demand to gradually return in this year.

Our commercial roofing margins were up, driven by resilient repair and refurbishment. At the total company level, revenues were slightly lower, 0.4% in the fourth quarter. Let us look at some of the market trends at Amrize. We see continued infrastructure demand and an improving commercial landscape. In the commercial market, which makes up half of our business, demand is improving, led by new data centers. Data center construction has been and continues to be a significant bright spot as hyperscalers rapidly build out the infrastructure that will power the AI economy. This is the largest infrastructure expansion in recent history and the United States is at the center. In fact, over 40% of global data center infrastructure investment is expected to be spent in the United States through 2030.

Speed, efficiency, innovation and reliability are key in this market, making it a space where Amrize building solutions and unparalleled footprint offer strong competitive advantages. In 2025 alone, we supported and supplied more than 30 data center projects, and we will see that work accelerating into this year. For us, we have just as much opportunity to supply the data centers as we do to support the infrastructure surrounding them. In 2026, we expect the commercial market to pick up as interest rates continue to move lower and as customers accelerate their investments in advanced manufacturing, warehousing and logistics.

In infrastructure, demand continues to be steady with federal, state and local authorities prioritizing modernization projects. We see increasingly domestic focused agendas of our customers in both the United States and Canada. Each country is prioritizing national investments to build strong futures. Within residential, new construction remains soft. We expect demand to gradually return later this year. As the U.S. continues to have a significant housing shortage that will drive longer-term growth. As interest rates continue to decline, we expect pent-up demand to unwind and construction activity to accelerate across all sectors.

If we turn to Slide 7, you can see our strong pipeline of key projects into 2026, which are directly aligned to these growth trends. We are supplying advanced building materials to new data center campuses like in Louisiana. We're supplying water infrastructure projects like in Dallas, airport modernizations like in Colorado and a new Amazon distribution facility in New York City. We are seeing increasing demand for our high-performance Elevate MAX PVC roofing systems and are supporting a new industrial warehouse in Ontario and a significant data center project in North Dakota. We see increasing data center demand for the MAX PVC roofing system going forward. These are just a few of our project highlights, and they reflect the megatrends underpinning long-term growth in the North American market. As we move into 2026, we have a big pipeline of projects and new ones are kicking off every month.

If we move to Slide 8, you can see some of our important expansion projects. Our -- we completed our Ste. Gen. plant expansion to support growing demand and increase our efficiency. In December, we commissioned the production expansion of our flagship cement plant in Missouri, adding 660,000 tons of production capacity per year and increasing the plant's total capacity to 5.5 million tons annually. Our Ste. Gen. plant is North America's largest market-leading plant, setting the standard for high performance.

If you turn to Slide 9, you can see that we are on track with key organic growth projects for this year and beyond. So building on the success of our Ste. Gen. plant expansion, we are on track with key growth projects for 2026 and beyond. To serve the booming Texas region, we are investing in our Midlothian cement plant to expand production capacity by 100,000 tons, modernize logistics and increase operational efficiency at the same time. In Alberta, Canada, we are investing in our Exshaw cement plant to add 50,000 tonnes of cement production capacity, supporting the growing Calgary market. In Quebec, we are investing to expand our St. Constant cement plant by 300,000 tonnes and further strengthening our position in Canada and increasing efficiency of these facilities.

If we turn to Slide 10 now, we see more growth projects. In Virginia, we are progressing with our new fly ash facility to enable the use of recycled landfill as a high-quality supplementary material. We are progressing with our greenfield aggregates quarry in Oklahoma, adding about 200 million tonnes of reserves to serve the fast-growing Dallas-Fort Worth market. On the building envelope side, we are progressing with our new state-of-the-art Malarkey Shingles plant to expand our market share to the attractive Midwest and Eastern markets. We expect this plant to be commissioned at the end of 2026, putting us in a strong position to deliver more volumes for when residential demand picks up.

If we move to Slide 11, let me talk about our latest acquisition, PB Materials, which strengthens our aggregates footprint in West Texas. We announced the acquisition early this year. This will strengthen our aggregates business, add over $180 million in annual revenue, adding 50 years of aggregates reserves and 26 operational sites in West Texas to serve long-term demand as infrastructure, data centers and commercial investments drive construction growth. This acquisition will be EPS and cash accretive already this year. We just received antitrust clearance from the Federal Trade Commission and now expect this acquisition to close in the first quarter of 2026. Looking beyond PB Materials, we have a strong M&A pipeline and plan to continue making smart deals to accelerate our profitable growth.

Let us move to Slide 12, our ASPIRE program, which is on track to drive value through scale and focus. We made good progress here in the fourth quarter. We have now onboarded over 450 new logistics and service providers to optimize third-party spend, and we launched more than 400 projects to leverage our scale and drive synergies across raw materials, services, logistics and equipment. We started realizing savings in the fourth quarter last year, and we are now targeting a 70 basis points of margin expansion in 2026 and $250 million of total synergies by 2028.

Let us talk about allocating capital. On Slide 13, you see our priorities, increasing investments and returning cash to shareholders. We are committed to a capital allocation strategy that invests for growth and delivers value to our shareholders. We raised our CapEx investments last year by 23%. And this year, we plan to increase our investments further to $900 million. We are on track with our M&A strategy, and we have a strong pipeline of targets, led by aggregates and with additional opportunities in Building Envelope. Our strong cash conversion and balance sheet allows us to also return cash to our shareholders. The Board has just approved a $1 billion share repurchase and is proposing a special onetime dividend of $0.44 per share payable following the AGM in April. The Board also proposing an annual ordinary dividend of $0.44 per share to be paid in quarterly installments. Both dividends will be paid out of legal capital reserves and are not subject to Swiss withholding tax.

I'm very pleased to have established a strong balance sheet and platform for growth that enables us to return value to our shareholders while further increasing our growth investments through CapEx and M&A.

Before discussing our guidance for this year in more detail, I turn over to Ian, and he gives us more details on our financial results.

Thank you, Jan. I'll begin on Slide 15 with our results by segment, starting with Building Materials. The strong volume and revenue performance in Q3, we saw continued momentum and margin expansion in our Building Materials segment during the fourth quarter as new infrastructure and data centers and commercial projects broke ground. Revenues were approximately $2.2 billion in the quarter, an increase of 3.9%, driven primarily by higher volumes across both our cement and aggregates businesses, combined with continued aggregates pricing growth. Cement volumes increased 3.6% and aggregates grew 3%. We continue to see steady support from federal, state and local infrastructure spending as well as growth in select commercial markets, particularly in data centers and warehousing and logistics, which we expect to continue in 2026.

Cement pricing for the quarter was down 0.8%, while full year 2025 was up 30 basis points on a constant currency basis. As we mentioned last quarter, we have announced price increases in 2026 across our markets, driven by the positive volume trend we have seen across our cement business over the last 2 quarters and into the new year.

Pricing has been phasing in since the start of the year with full run rate in place soon by April 1. As a reminder, our markets are driven by local demand varying by geographic region. That said, we continue to see favorable pricing dynamics across our network, supported by our inland positions in high-growth attractive markets. Meanwhile, aggregates pricing on a freight-adjusted constant currency basis increased 3.8% in the quarter, including freight, pricing was up 7.3%. We continue to see healthy aggregates pricing supported by strong local market fundamentals and ongoing infrastructure con.

Building Materials adjusted EBITDA was $705 million in the fourth quarter, up 4.9% compared to the prior year, while adjusted EBITDA margin was 32.6%, up 60 basis points. The increase in adjusted EBITDA was primarily due to volume growth, aggregates pricing, production efficiency and early or savings. Moving forward, we expect cement pricing to be up low single digits and aggregates pricing to be up mid-single digits on a freight-adjusted basis in 2026. Given the positive customer demand we see across these businesses, we expect volumes for both cement and aggregates to be positive this year. Before we move to Building Envelope results, it's worth noting that the first quarter is typically a seasonally slower quarter for Building Materials as we perform annual maintenance and build inventory ahead of the peak selling season.

Moving to Slide 16. Turning to the Building Envelope. Fourth quarter results were $678 million, a decrease of 11.8% compared to the prior year. The decline was largely driven by softer residential roofing demand. That said, when we look across our business, commercial reroofing activity remains strong with revenues up during the quarter as this type of spend is often nondiscretionary for our customers. In commercial new construction, we continue to see robust data center demand. As Jan mentioned earlier, our MAX PVC product line at Elevate is addressing the higher performance specifications that many of our data center customers require. So far, we have been pleased with the traction and expect this product will continue driving growth for us in the future. Meanwhile, we have also started to see a recovery in warehousing, distribution and logistics end markets.

As interest rates and cost of capital move lower, we expect further improvements across commercial new construction. Building envelope adjusted EBITDA was down year-over-year, largely due to softer residential roofing demand and an $8 million increase in warranty provisions to reflect claims activity in our residential roofing business. We continue to see pressure on residential demand from higher interest rates and affordability concerns. These headwinds were partially offset by an increase in commercial roofing margins driven by resilient repair and refurbishment demand.

Going into 2026, we are focused on what we can control. We launched ASPIRE to improve our third-party cost base, significant progress and expect additional savings to materialize in 2026. While residential demand remains soft, we expect strong demand for commercial R&R to continue and lower interest rates to support a broader recovery across new commercial roofing. As a result, we expect low single-digit volume growth in commercial roofing. In residential, we expect flat volumes for the year, the second half being better than the first half. So far, Q1 customer demand has improved compared to Q4.

Looking out further, we continue to see a long tailwind of growth in commercial R&R activity driven by aging commercial roofing stock that needs to be replaced. We are also encouraged by recent policy developments that aim to address affordability, which can support new construction and help bridge the housing -- and as I mentioned earlier, our focus is on operations and efficiently running the business through different economic environments. We continue to see a path towards best-in-class EBITDA margins.

Moving to Slide 17. We had a strong cash flow performance during the year. We generated approximately $1.5 billion, representing a 49% cash conversion rate on adjusted EBITDA. This is in line with our historical average cash conversion of approximately 50%. 2025 free cash flow was lower due to net income and increased organic CapEx growth. Cash flow is a key performance indicator for all of the P&L leaders across our business. Our free cash flow performance in 2025 demonstrates the strength of our working capital management and resilient underlying cash generation of our business. Turn to Slide 18. We are very pleased with the progress we made post spin to further strengthen our financial position during our first year at Amrize. At the end of the year, our net leverage ratio was 1.1x, delivering on our commitment of less than 1.5x by year-end. Net debt at the end of the year was approximately $3.3 billion, down over $1.5 billion from the end of the third quarter as we generated strong cash flow at the end of the year.

Turning to Slide 19. In 2025, we established a solid foundation to deliver growth and return capital to shareholders in 2026. As of December 31, we had $5.3 billion in senior notes, nearly $6 billion of available liquidity and a low leverage ratio, providing us with ample firepower to accelerate growth this year. We are also effectively managing our interest expense and expect run rate to come down in 2026 compared to 2025 as we continue to optimize our capital structure. We expect our effective tax rate to stabilize in the range of 21% to 23% in 2026 and corporate costs are expected to be approximately $200 million this year, a modest step down from 2025. This efficient capital structure and operating model allows us to continue generating significant cash in 2026 and drive profitability.

This model also lays the foundation for our capital allocation strategy, putting us in an excellent position to announce our shareholder return plan, all while continuing to invest in organic growth projects and pursue value-accretive M&A. This speaks to our financial firepower and our business and flexibility of our balance sheet. With that said, I will pass it back to Ian to cover our 2026 outlook.

Thank you, Ian. When we look at the guidance for 2026, I'm confident that this will be a year of accelerating demand from our customers. The commercial market will continue its improving trends as lower interest rates support new products, adding to already strong demand for data centers, but also for other projects in logistics and manufacturing facilities where we have a lot of sidelined projects. We have a good demand here, which will unfold throughout this year. In infrastructure, the demand will continue to be strong as governments prioritize modernization. Only in the residential market, we will remain soft with improvements rather towards the end of the year.

We expect pricing and volumes in building materials to be key growth contributors in 2026. Cement pricing is expected to increase low single-digit percentage range, while aggregates pricing is expected to increase mid-single-digit percentage range. The market trends and increasing customer demand will drive volume growth in both cement and aggregates. Building Envelope, we expect low single-digit growth in commercial roofing volumes, while we see flat volumes in residential roofing with demand improving in the second half of the year. Very important for us, the ASPIRE program is a key priority and will deliver significant results in 2026. We are now targeting a margin expansion of 70 basis points and are on track with our goal of $250 million in synergies through 2028.

Based on this momentum from our customers to all the programs under our control, we have set our 2026 guidelines or guidance with 4% to 6% revenue growth and 8% to 11% EBITDA growth. Both numbers includes the contribution from our recent PB Materials acquisition. With that, I'll now pass back to Aroon and to open up our question-and-answer session.

Thank you, Jan. Operator, we're now ready to begin the question-and-answer session.

[Operator Instructions]

Our first question is from Adrian Huerta from JPMorgan.

Congrats on the results. My question has to do with the cement prices. I want to understand a little bit better why this confidence on getting a low single-digit price increase for the year? I mean just from comments from other companies, it seems like traction on price increases at the beginning of the year is not going as expected. What are you seeing on your own markets and where you see better pricing traction? And where do you think it might be a bit more difficult to get the increases that you're looking for?

No, look, we are confident and we're going to see a price increase for our Amrize products this year. I think we make good progress in this, and we have -- I have nothing negative really to report here.

And if I may ask just a follow-up question, thank you for that. On the ASPIRE program, good to see a larger target on savings this year than the run rate of 50 basis points now with a target of 70 basis points. Any more color on where these savings, which should be or somewhere around $100 million between SG&A or by segment within envelope or materials, where are most of these savings coming...

Great. A good question. Look, I mean, I'm very excited. As you know, we have over $7 billion of cost with third party, and we haven't done really the synergies. So we have doubled the company in the past few years from $6 billion to $12 billion, and we have not really run that synergy program. So very exciting now to have savings. Of course, we have it in logistics. We have it in raw materials, and we have a lot of services which are provided to us for maintenance, for equipment and other things. So we make great progress. You can see already in the fourth quarter results in Building Materials that we had quite a significant impact from the ASPIRE program, and this is just the start. So we are very confident to see a significant contribution this year from ASPIRE, and that's why I also guide this to be fully margin accretive.

Our next question is from Anthony Pettinari from Citigroup.

This is Asher Sohnen on for Anthony. And just in terms of comparing and contrasting the way you're looking at 2026 versus maybe how you're thinking 3 months ago, what are you seeing in terms of project backlogs, cancellations, et cetera? And then on top of that, your positive volume growth outlook for '26, how does that break out between your different end markets between commercial, infrastructure and residential?

Look, I'm very happy how our things are accelerating with our customers. You have to see that the strongest market segment in last year was infrastructure, where we have these programs running, and we are very happy to supply a lot of those projects. However, at Amrize, we do 50% of sales we do with our commercial customers, and that's really key. And that market has really picked up from mid last year, and you can see it from some indexes like [ Dodge ] where we have increasing the number of starting projects, and we can literally see it with our customers.

They have a backlog of projects not only for data centers, but for logistics, for infrastructure around logistics centers for manufacturing facilities, and this will unfold. We have no canceled projects, a lot of sidelines and slowed down, and now we see that coming. The 2 cuts in interest rates has helped a lot. Many people -- most people always speak about the mortgage rates and the interest cuts. But actually for us, the interest rate is more important for our commercial customers. And this is why I'm very excited for this year, and we will see an accelerating demand and number of projects for our commercial customers.

Our next question is from Trey Grooms from Stephens.

Okay. Sorry for that. Yes, just on the acquisition, maybe if we could touch on that. PB Materials, aggregates-led business with some ready mix. It's included -- I believe it's included in the full year guide. It's doing $180 million in annual revenue. Any other details maybe you could give us there around PB, I understand it's in West Texas and geographically where it stands. But anything around the -- maybe the annual production or tonnage or how much it's adding to the overall volume being positive this year in aggregates? Any other details that maybe you could give us?

No, thank you. Great question. And look, we have a great slide on the Slide 11. And I think what's key here for me is, first of all, the size of the acquisition, over $180 million. We're going to close that very soon now in Q1. So very excited now when the season really starts that we have this business with us. It's already a very well margin product business, which has now significant synergies. I like -- we bought a little map there where you can see how well that fits with our footprint in Texas, especially also how our cement terminals can now fully service all those sites. We have about 26 sites, operating sites and 13 are quarries and another 13 are ready-mix sites. So it's a well-balanced business, and they are the market leader around 30% of market share. So I'm very happy we can onboard now them with our very successful business in Texas.

Our next question is from Bryan Blair from Oppenheimer.

You offered pretty good color on the visibility in commercial and infrastructure project outlook. I was hoping we could drill down a little bit on the residential side. And we know that there's weakness anticipated and understandably so over the near term. Looking to the back half, there's some degree of recovery. against the relatively weak comps. If we look at the low versus high end of your guidance, are you willing to quantify what is baked in specific to residential market activity as we look to the back half?

No, I wish I could share with you. But I think what's exciting about residential, while it's only around 20% of our business, 50% of that is repair and refurbishment. And this gives us this resilient demand from the residential customers. And that was slowed down last year. We had much less storm impacts like we had in years before, but this has really slowed us down, especially in Q4, but we believe this will normalize this year again. So to the question, I'm quite confident that repair and refurbishment, we will see significant growth for us in 2026. New residential, you know that needs to be seen if that sees a recovery towards the end of the year or let's say, a start of recovery. But in our numbers, we are not planning for any growth in new construction residential, but very confident about repair and refurbishment.

Our next question comes from Pujarini Ghosh from Bernstein.

One follow-up on the guidance. Please can you confirm that you have not baked in any future potential acquisitions in the revenue and EBITDA growth guidance for 2026? And could you give some color around the CapEx spend that you are going to do in 2026? And how much new capacity addition in terms of the overall portfolio does these new projects bring in?

Thank you for the question. So the guidance of 4% to 6% revenue growth and 8% to 11% EBITDA growth is organic, including the PB Materials acquisition. We are very confident about these numbers. You have to see we have now this accelerating demand from our customers and our order books, which are on a good level. And then we have a lot of self-help. So we're going to see the pricing this year. We have the ASPIRE program, and we have the first impact our new growth CapEx programs. So very excited to start to run our flagship cement plant in St. Louis at higher volumes and then the other CapEx will come.

I think we -- at this point, we don't give a break, which is maintenance CapEx and growth CapEx, but you can see as we come somewhere from below $600 million to $900 million this year, you see already that we are more than doubling our growth CapEx. And this is a good thing. We have a lot of low-hanging fruits to debottleneck to expand in new markets. Is it a new plant of May to enter the Eastern markets? Or is it new terminals to distribute our cement and aggregates. And of course, we are excited to debottleneck some of our best-performing cement plants to increase the volumes, but also to further improve the efficiencies.

Our next question is from Yassine Touahri from On Field Research.

Just one question regarding your building of business. We see that QXO has acquired Beacon and is aiming to substantially increase its margin and also double its EBITDA. And I think one of the levers is to work on changing the relationship with roofing product suppliers, including Amrize. Could you give us some color on what has happened over the past year in terms of your relationship? And what has been the impact of this development so far on your commercial strategy and potentially even your overall strategy as a group.

Look, we are partnering with the distributors in roofing, and they are very good companies, the company you mentioned, there are another 2 big nationwide roofing distributors. And then there are many local businesses in roofing distribution. I think what is important for us is that we are not focusing on the distributor itself. We are focusing on the end customer. So we have the ambition to build the best roofs. So all what we do is we focus on innovation, providing the best systems, brand everything. We are offering the training for the roofing contractor. We're offering the warranty, we're offering the roofing inspection.

So when you look at our business, the distributor has an important function to make sure our product is on time on the construction side. But beyond that, we just focus on the best roof, the best service, the best warranty for the end customer. And we do -- I think we do about 30% of the roofing business is direct, about 70% goes through distribution. So I have nothing to report here. I know there are some distributors I like to talk a lot about their future, but I can just tell you, we partner with all of them, and we make decisions who is our partner in a certain geographic market. So I think we're in a very good spot here to further increase our market share and expand our systems for roofing.

Our next question is from Arnaud Lehmann from Bank of America.

My question is regarding your Q4 free cash flow generation, very impressive, around $1.7 billion, I believe. Is it the normal inflow in your view, considering seasonality? Or were there any specific effect related to the merger or to accounting that we need to consider?

No, I think it's nothing special, Arnaud. I think we have -- I mean, our cash flow conversion from EBITDA is around 50%. This is what we also target for the future. So I'm very happy in this first year of MRS. We just started the company in June last year. So we're very happy to -- that we were able to deliver also considering our significant increase in CapEx spend, very happy to nevertheless deliver such strong cash flow. So you, I think, should expect from us that this will continue in the years to come.

Our next question is from Julian Radlinger from UBS.

Any color you can give investors on Building Envelope earnings in 2026. I know you're guiding to overall positive volumes, Commercial up a little bit, resi more flat. But what about margins? If resi roofing volumes are as you expect in commercial as well, should we expect Building Envelope EBITDA to be up as well in 2026?

Yes. I mean, look, when you look at our guidance that we want to grow the EBITDA 8% to 11% this year, you can imagine that this is true for both segments, for Building Materials and for Building Envelope. And we have strong programs in place also with ASPIRE to increase our efficiencies in Building Envelope as well. We have pricing in place and our target is to increase price over cost in Building Envelope in 2026.

Our next question is from Tom from Barclays.

Could you maybe just elaborate a little bit on the volume in materials? I think you said volume will be a growth contributor for the materials business, both cement and aggregates. Is that a sort of low single-digit, mid-single-digit number? And is that predominantly driven by the self-help and organic growth that you have as you ramp Ste. Gen.? Or do you think that's more a sort of market growth number? And I guess maybe just slightly linked to that, can you talk a little bit about how you plan to approach the Ste. Gen. ramp-up? Obviously, it sounds like commercial and infra demand is okay, resi a little bit weaker, but it's still a decent amount of capacity to try and bring to the market. If you can just talk about the strategy of how you'll introduce those volumes?

I think it's important if you run Amrize and you guide the year and you give the targets to your sales force to all the people responsible. I very much like to focus on ourselves. I don't make a big market prediction. So like the Ste. Genevieve expansion is based on our customers demanding the product. And this is how we work. And this is why we come up that we believe our volumes will increase in 2026. And this is all I can say at this point. We make this all for the customers, and we have good order books. And again, nothing negative to report here.

Our next question is from Carlos Caburrasi from Kepler Cheuvreux.

Just wondering on CapEx, if you could give us some color regarding the expected investments during the rest of the decade. I'm just wondering if we should expect a further acceleration from the 900 million in 2026? Or is it going to be kind of flat or a front-loaded performance that will normalize as we get closer to 2030?

I'm very happy to invest in the business. So I was happy that we have the opportunity, a lot of low-hanging fruits on the CapEx side, and we are doing all the good projects. So that adds up to around $900 million CapEx spend this year. I think this is already a significant increase, especially when you focus on the growth CapEx. This means we more than double the growth CapEx this year. And I think this is in a good spot. And then we will take it from here. Those projects we also introduced here, I think we have 2 slides on like 6 of the most important projects for us. And that also keeps us busy because you not only have to execute this and commission the plant or whatever the CapEx is about, you also have to commercialize the volumes into the market.

So I think we are on a great track to fully support our growth ambition for 2026. And then we will see later this year what the CapEx is for the years to come. But I think $900 million is a good number for us.

Our next question is from Keith Hughes from Truist.

A question on pricing on the roofing markets. Can you talk about in the fourth quarter what pricing was like in residential and commercial and what you're expecting in your guidance for calendar '26 on pricing?

For us, in Roofing, it's a bit an aggregate cement, we like to talk straightforward about price. In roofing, it's a bit different. We like to talk about price over cost. And I think as we shared a bit in the presentation, we were very satisfied with the commercial roofing margins. They increased. So we had a positive price over cost in commercial roofing, and we had quite a disruption in the residential market, which I think will be fully stabilized already in the first months of this year. But nevertheless, was quite a big disruption you saw in the fourth quarter and also maybe a bit softer pricing. I think that pricing even will come back now faster this year. So for the full year, I mentioned this before, we are targeting a positive price over cost growth in the Building and Group segment.

We have no further questions at this time. I will now turn the call back over to Aroon Amarnani for closing remarks.

Thank you, operator. Thank you all for joining us for our fourth quarter and full year '25 earnings call. We look forward to speaking with you after we report our first quarter '26 results in the coming months. Thanks, everybody.

This concludes the Arise Q4 2025 Earnings Conference Call. You may now disconnect.

Hello, and welcome to Amrize Q3 2025 Earnings Conference Call. [Operator Instructions] Also, as a reminder, this conference is being recorded today. [Operator Instructions]

I will now turn the call over to Scott Einberger, Investor Relations Officer for Amrize.

Thank you, and good morning. Welcome to Amrize's Third Quarter 2025 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 are Jan Jenisch, our Chairman and CEO; and Ian Johnston, our CFO. Jan will open today's call with highlights from our third quarter results and the growth investments we are making in our business. Ian will then review our financial performance for the quarter and provide an update on our Project ASPIRE synergy program before turning the call back to Jan to discuss our outlook for the remainder of the year. We will then take your questions.

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 GAAP in our earnings release and slide presentation. As a reminder, today's call is being webcast live and recorded. A 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 Form 10 filings and in other reports filed with the SEC. The company disclaims any undertaking to publicly update or revise any forward-looking statements.

With that, I will now turn the call over to Jan.

Thank you, Scott, and thank you all for joining us today for our third quarter earnings call. It is our first full quarter operating as Amrize and we made progress across our businesses, and I'd like to thank our 19,000 teammates who are serving our customers across all of our markets. Together, we delivered strong revenue growth of 6.6%, driven by continued infrastructure demand and an improving commercial market.

Our Building Materials business had strong volumes and positive -- and we achieved very positive aggregates pricing, while a temporary equipment outage in our cement network resulted in higher costs for the quarter.

Our Building Envelope business delivered substantial margin expansion driven by operational efficiencies and lower raw material costs. We generated strong free cash flow of $674 million, up $221 million from prior year. Building on our progress in the third quarter, we are raising our revenue guidance for 2025, and we are confirming our EBITDA and net leverage ratio guidance.

Let's turn to the financials. We had strong revenue performance driven by volume growth across the business from cement, aggregates and ready-mix concrete to commercial roofing. Several positive developments contributed to our margins, including operational efficiencies in Building Envelope and strong aggregates and residential roofing pricing.

Within Building Materials, the temporary equipment outage in our cement network affected our margins. During this time, we leveraged the strength of our footprint and network to continue serving our customers without disruption, which resulted in higher costs. We've now completed the equipment repair and all of our plants are operating as normal. We also had a material asset sale in the third quarter of last year, which impacted the year-over-year adjusted EBITDA comparison.

Looking to the market environment. Our commercial customers have shown early signs of improvement. It's led by strong demand for data centers and energy projects. This is also reflected in the latest Dodge construction starts report, which shows new commercial construction starts are up 6.8% over the last 12 months.

In infrastructure, demand continues to be steady with federal, state and local authorities prioritizing modernization projects.

Within residential, new construction remains soft and a milestone season affected repair and refurbishment demand negatively.

Looking to the future, we see strong long-term demand ahead of Amrize. As interest rates decline, we expect pent-up demand to unwind and construction activity to accelerate in both the commercial and the residential sectors. Megatrends, including infrastructure, modernization, onshoring of manufacturing, data center expansion and the need to bridge the housing gap will drive our long-term growth. We are uniquely positioned across infrastructure, commercial and residential construction with around and even split between new build and repair and refurbishment.

Let's look at our investments. We continue to invest and execute on our key organic growth projects. In the fourth quarter, we will complete the expansion of our flagship Ste. Gen plant adding production capacity and improving efficiency at North America's largest and market leader cement plant. We are on track with our new state-of-the-art Malarkey Shingles factory, in Indiana, and we are progressing with the expansion of our St. Constant cement plant in Quebec.

In the third quarter, we kicked off several additional projects in key markets. In the Great Lakes region, we are expanding our aggregates production to meet customer demand. And we are increasing production and improving efficiencies at our cement plant in Midlothian, Texas, to serve the Dallas-Forth Worth market. In Exshaw, Canada, we are expanding to serve the Calgary and Western Canada market. We will continue accelerating our organic growth investments to build on our market-leading positions and best serve our customers.

I'd like to share some project highlights from the third quarter. In Louisiana, we won another data center project to supply 100,000 tons of cement. This is just one of 25 data center projects we have underway in 2025 as the AI boom continues to fuel construction growth.

In Ontario, we are delivering ready-mix concrete and aggregates to help build a new battery plant, one of many examples of our advanced manufacturing and onshoring trends are driving construction growth.

Our roofing team completed a large project for a new school outside of Houston, and we have many similar projects across Building Envelope, helping to build strong communities.

To support a massive new LNG plant in Louisiana, we are providing over 75,000 tons of cement and over 1 million tons of aggregates as energy projects continue to drive demand. All these strong commercial projects reflect the megatrends underpinning long-term growth in the North American construction market.

Our growth -- the growth of Amrize is directly connected to these trends. We have a few big pipeline of projects and new ones are kicking off each quarter. The actions we are taking from investing in our business to driving synergies are positioning Amrize to capitalize on the significant long-term demand in our $200 billion addressable market.

I'd like now to turn the call over to Ian to discuss our third quarter financials in more detail.

Thank you, Jan. I'll begin on Slide 11 with our results by segment, starting with Building Materials. Building Materials' third quarter revenue was approximately $2.8 billion, an increase of 8.7%. During the quarter, we saw strong volume growth in both our cement and aggregates businesses with cement volumes increasing 6% and aggregates volumes increasing 3.3%.

We continue to see new infrastructure projects breaking ground, along with spending on data centers and energy-related projects. While there is still some uncertainty in the market, conversations with our customers are encouraging and our pipeline continues to grow.

Cement pricing for the quarter was down 0.6%, while year-to-date, it remains up 0.6%. Over the last several years, we've seen consecutive cement gains, which are stabilizing this year with softer demand. We expect pricing to be flat on a full year basis and anticipate pricing to improve in 2026 as demand increases.

Total aggregates pricing, including distribution revenue increased 10.1%. We continue to see healthy pricing growth in our aggregates business supported by strong market fundamentals and ongoing infrastructure demand.

Adjusted EBITDA for the quarter was $902 million, and our adjusted EBITDA margin was 32.5%. The strong volume and aggregates pricing growth that I just spoke about were positive contributors to adjusted EBITDA in the quarter. These were offset by a temporary equipment outage in our cement network that lasted for several weeks during the quarter.

With demand high, we leveraged the strength of our footprint and logistics network to move products from other plants to serve our customers. This resulted in approximately $50 million of higher manufacturing and distribution costs in the quarter, including the impact that lower production volumes had on fixed cost absorption.

Through the combined efforts of our team, we were able to continue serving our customers without disruption. We have now completed the necessary repairs and our plants are operating as normal. In the fourth quarter, we expect to recover some of this lost production.

Additionally, during the third quarter of 2025, we recorded $4 million of asset gains as compared to $43 million in the third quarter of 2024. Prior year included a $31 million gain on an asset sale specifically related to 1 transaction in Canada. While asset sales are a routine part of our business, the specific transaction from last year was large and we do not have a similar sized transaction this year.

Moving to our Building Envelope segment. Third quarter revenue was $901 million, an increase of 0.7% compared to the prior year. Commercial roofing revenue increased in the quarter, supported by repair and refurbishment activity and system sales. Residential volumes were down in the quarter due to soft new construction activity and a milder storm season.

Based on recent industry data from SPRI, we outperformed the market in commercial roofing in the quarter. Our Elevate business is performing well, and our system offering continues to resonate with customers.

Last November, we closed the OX Engineered Products acquisition, which contributed $26 million to revenue in the quarter. As a reminder, we will begin lapping the benefits of this acquisition in the fourth quarter.

Adjusted EBITDA was $217 million, and our adjusted EBITDA margin was 24.1% representing a margin increase of 190 basis points from the prior year. The increase in adjusted EBITDA was driven by several factors, including operational efficiencies, lower raw material costs, and higher residential shingles pricing. In the quarter, we saw improved operating performance in our Elevate business as the team executed well, driving efficiencies at the plant [indiscernible].

Price over cost in the quarter was down slightly versus prior year, but improved sequentially versus the second quarter. That's favorable raw material costs and higher residential shingles pricing, partially offset lower pricing in our commercial roofing business. Our team continues to drive synergies and effectively managed our cost base, resulting in an improved performance compared to the prior year.

Moving to cash flow in the quarter. We generated $674 million of free cash flow, an increase of $221 million versus the third quarter of 2024. The increase was primarily driven by a net benefit in working capital. Taking a closer look at working capital, September was a strong revenue month, resulting in an increase in our accounts receivable and a modest use of cash, we expect to turn these into cash in the fourth quarter.

In addition, as part of our project ASPIRE, we are working on vendor payment terms and to the benefit of the cash in the quarter. We also reduced inventory levels as a result of higher demand and lower production volumes. Finally, the timing of cash tax payments was a small benefit to cash in the quarter.

As a reminder, we typically generate the majority of cash flow in the second half of the year, with the fourth quarter being our highest cash flow quarter of the year. Fourth quarter of 2024 was an above-average cash flow quarter. And while we also expect strong cash flow in the fourth quarter this year, cash flow for full year '25 is expected to be below 2024. This is primarily a result of lower net income on a full year basis and higher CapEx spend as we continue to invest in organic growth opportunities across our network.

Turning to Slide 14. During the third quarter, we successfully reduced our net debt and strengthen our balance sheet. Net debt at the end of the third quarter was approximately $5 billion, down $612 million from the end of the second quarter and our net leverage ratio declined to under 1.7x, both benefiting from the strong cash flow we generated in the quarter. Our healthy balance sheet and investment-grade credit rating allows us to operate from a position of strength with the flexibility to pursue value-accretive acquisitions and allocate capital to growth projects.

Lastly, I would like to provide a brief update on our ASPIRE program where we are leveraging our scale across 1,000 sites and 2 business segments to accelerate synergies. We made excellent progress in the third quarter. We have onboarded over 300 new logistics and service providers to optimize third-party spend, and we launched more than 100 projects to drive synergies across raw materials, services, logistics and equipment. This continues to be a top priority for all our teams, and we expect to begin realizing savings from our ASPIRE program in the fourth quarter. We are on pace to deliver the full 50 basis points of margin expansion beginning in 2026.

I'll now turn the call back over to Jan to discuss our 2025 guidance.

Yes. Thank you, Ian. When we look at our guidance, I think I'm very satisfied with the good demand we saw with our customers in Q3, our first full quarter as Amrize and we see markets now have begun to stabilize, and we see significant pent-up demand backed by long-term megatrends. There are some uncertainties remaining with our customers. However, we are cautiously optimistic about our demand momentum to continue from now on.

Building on our third quarter revenue, we are raising our 2025 revenue guidance, and we are confirming our EBITDA and net leverage ratio guidance. So for the full year, we now expect revenues to be in the range of $11.7 billion to $12 billion, adjusted EBITDA to be in the range of $2.9 billion to $3.1 billion and we expect to finish the year with a net leverage ratio below 1.5x.

With this, I think we will now begin the Q&A process, and I turn over to Scott.

Thank you, operator. We're ready to begin a Q&A process. Can you please explain the instructions?

[Operator Instructions] Our first question is from Keith Hughes from Truist.

The midpoint of the guidance implies flattish year-over-year EBITDA, I believe. Could you talk about some of the puts and takes that could be coming in the fourth quarter? It does sound like cement is going to have some positive carryover, but there must be some other things going against you.

We have a difficult time to understand the question. Would you mind to repeat the question?

Your guidance seems to imply for the fourth quarter around flattish at the midpoint EBITDA year-over-year. Could you talk about what will be the positives and what will be the negatives you expect in the fourth quarter?

Yes. Thank you, Keith, for the question. Look, I think we -- again, we are very satisfied with the demand from our customers and the increasing number of projects we deliver and very happy to have the 6.6% sales growth in Q3.

Now going forward, it's a bit tricky for Q4 to give guidance as we still have some uncertainties among our customers regarding tariff politics and also regarding future interest rates. So as you know, we do about half of our business is in the commercial market segment.

So we have no project cancellations, but we have still a couple of -- or a significant number of projects sidelined, and they will be kicked off in our view as soon as the market environment is stabilizing. So it's not easy for us to forecast Q4. We are obviously very optimistic for the long term, but Q4 is not easy. So that's why we gave this guidance, which is, I would say, maybe a bit cautious overall to make sure we deliver what we promise.

Okay. Just one final thing. It does appear from your previous comments that the production issues you had in cement, those are fixed and will not play a role in -- not play a negative role in the fourth quarter. Is that correct?

Yes. We are happy with our operational performance. It's basically for 2 items. We have this land sale in Q3 last year, and then we have this production outage, which is resolved. So we're looking forward to have solid margins in Q4 and in the coming quarters.

Our next question is from [Anthony Pettinari] from Cementir Holding.

Good morning. I'm wondering if you could talk about cement market dynamics in a little bit more detail. And specifically, in terms of the confidence and potential price improvement in 2026, are you seeing specific things in your backlogs or the market or import dynamics that would give you kind of confidence in pricing momentum in '26? And as a follow-up, I'm just wondering if you could talk a little bit more about Ste. Genevieve in terms of the ramp-up and what -- how that's going?

And yes, we previously reported -- we come from challenging maybe past 2 years where we had lower demand for cement, which made it difficult or more challenging for us on the pricing. We are -- nevertheless, I think we are under the circumstances, we have almost stable cement prices for the year. I think that's not a bad achievement. And now we believe that this will change for next year.

And we will -- especially with the volume growth we saw now in cement, which we believe will continue into next year, we will be -- it will be healthy pricing dynamics, especially in our inland markets, and we believe we are well positioned now to execute this. We are also here. We made very, I would say, focused investments here. So in Ste. Gen, the fifth mill to further increase our production, but also to further increase our efficiencies is on track, and we are planning to have the first production, which we are selling in November, so next month.

Our next question is from Timna Tanners from Wells Fargo. Please go ahead.

Okay. Great. Just wanted to follow up on the cement question and ask about pricing and if you're seeing any impact on -- from imports. So we've been hearing that there may be some price hikes announced and if you're seeing the impact from the tariffs reducing competitiveness of some of those overseas tons.

So in principle, we -- our customers largely recognize the value of a local producer like Amrize providing consistent high-quality products, local service and full reliability of supply chain and the logistics. In addition, our inland footprint in the hard end markets will make us very strong going forward. I think there's a lot of information at the moment in the market about price increases, about increasing import costs from tariffs and so on. I prefer not to comment on this. We're going to focus on ourselves, and we believe we have the right action plan in place to improve pricing for next year.

Our next question is from Pujarini Ghosh from Bernstein.

So on the building products side, could you provide some color on the volume and pricing that you saw in Q3 and specifically commenting around the market share gains that you were referring to on the commercial side? Also, could you give some color around the 190 basis points of margin expansion we saw seems to be in sharp contrast with what some of your peers have been saying. So how are you getting this margin expansion?

Yes. Thank you for the question. So first of all, we're very happy we had a good commercial roofing business in Q3, with increasing volumes, but also with market share gains. So very happy to report that, that we have been very successful here with our customers to provide our systems with all the different membranes we are offering.

In contrast to this, the shingle market is difficult. I think we shared the information with you. We have a very soft new construction market in residential. And also we have -- I think we see a softer storm season or something. So residential is a bit challenged. But overall, I think we are -- we have flat sales, which I think is quite a success in this market. And I'm especially pleased with the market share gains for commercial roofing.

We have on the operational efficiencies, very happy that our teams put all the plans in excellent conditions. You always sometimes have hiccups. We have around 40 manufacturing facilities in Building Envelope, and we had a few we were walking on the last 12 months or so, and this all comes now to a very positive results basically with lowered cost and leading to then a significant increase in this EBITDA margin of 190 basis points.

Our next question is from Cedar Ekblom from Morgan Stanley.

I just wanted to ask a question on the commercial landscape as it relates to your Building Envelope and roofing business. We've obviously seen quite a lot of change on the distributor channel. We've had a lot of assets change hands, SRAs going to Home Depot and obviously a new entrant in QXO acquiring Beacon. I'd like to hear how you are seeing this play out for your business because there does seem to be at least some commentary from the distribution players that there might be a desire to be a little bit more aggressive on pricing with their OEM suppliers. Are you seeing that in the market at all?

How would you respond to one of your distributors looking to sort of negotiate price and then linked question, can you comment on some of the new entrants actually on the sort of manufacturing side of things, if you have a perspective on, for example, Kingspan looking to add capacity?

All right. Cedar, thank you for the questions. I mean, look, we are -- first of all, we are not in competition with any distributor, we are partnering with distributors to make our products efficiently available for all the roofing jobs. You can see in our Q3 results that obviously, we don't see any impact from any consolidation in the distribution space. And it's important, I think, to note that all our efforts in building envelope and in roofing systems is to provide the best, most innovative systems for our customers, which are the building owners, which are the specifiers and are the roofing contractors.

And we are focusing to make the best possible roofs and the most easy and efficiently installing roofs. This is all our focus. We do this with our innovation. We do this with our workforce for specification of roofing, inspecting roofs and then providing warranty for the roofs. This is our focus, and this is all underpinned by our strong branding of our strong brands. So -- and then we go direct, I think, in our roofing sales at the moment, we do about 30% direct and 70% goes through distribution. And these are just partners for us.

We don't see any negative impact. And just important to understand that we focus on the end customer, and we have no real opinion on the distributors. However, if you want me to comment on the distributors, I think we have very good and very efficient distributors in roofing from the companies you have mentioned. So we're very happy to partner with them. They provide a great service.

And again, we are not able to deliver every roof on overnight on time for the roofing jobs. This is why we have these very competent roofing distributors in the North American market. The question on new entrants in the roofing market is really -- we didn't have that in the last 30 years. The market is actually consolidating.

And we believe it's very challenging to come in and start with a greenfield roofing business in the U.S. We haven't seen that in many, many years. And so we cannot comment. We have -- we are focusing on some of our other peers as we compete for this full nationwide distribution we are having, and that's our real focus. So we see any impact from greenfield, new entrants, very, very limited. We rather see roofing going for more consolidation.

Our next question is from Adrian Huerta from JPMorgan.

Jan, if you can share with us how do you see the M&A environment over the next 12 months and potential opportunities within the different segments that you're in. Do you think there will be opportunities for Amrize to expand through M&A over the next 12 months?

Adrian, yes, look, we made it clear that part of our strategy is, of course, organic growth. We believe we will invest more into the business compared to recent years. But then in addition, we are very open of M&A. I mean, story of Amrize has been very much also driven by M&A. And we have a -- I think I would say we have a healthy pipeline here of targets and projects. And hopefully, we have some news for you in the months to come.

Our next question is from Yassine Touahri from On Field Research.

Just a short follow-up on the volume in the fourth quarter. Do you have any view on what's happening in the cement business in October? And maybe a question on strategy. When you look at your Building Envelope business, it's mostly roofing, but you call that Building Envelope.

And I think in your Form 10, you were mentioning wall solution. How do you think about the business in the next 5 to 10 years? Do you see any opportunity in the next 12 to 24 months to do a big platform deal? And if you see an attractive platform deal to complete this business line, what kind of maximum leverage you would be happy to go to in terms of net debt to EBITDA?

Good question. Look, first of all, to your pricing and volume question, first of all, I think the cement and aggregates pricing is set for the remainder of 2025, and we now shifted our focus for the pricing for next year. So for the fourth quarter, we expect the cement pricing to continue as we have seen it in Q3, but also then our strong aggregates pricing up 10%. We also expect this to continue into the fourth quarter.

So demand is good in Q3. We have to just make the comment that our customers are still with certain uncertainties regarding tariffs regarding interest rates. But besides that, we believe there's a strong underlying demand makes it a bit more difficult to really guide the Q4, but we are very optimistic for next year.

And also with that, we're going to have, we believe, healthy volumes and healthy pricing in 2026. So on Building Envelope -- I have to ask the other question. So on Building Envelope, I think you point out that we call the segment building Envelope and not roofing systems. And I think this is -- just gives us more opportunities into the future as we could expand in complementary applications and technologies.

However, I asked my teams to focus on our core businesses as it is today, as we have this $200 billion addressable market in front of us. So that means we don't need to necessarily enter new segments to grow Amrize. We believe we have plenty of to grow. And then the Envelope gives us a little bit of extra vision and strategy for the years to come.

In terms of leverage, the maximum leverage that you would be happy to go to if you see interesting platform deal?

Look, I think, first of all, we are happy to have the balance sheet we are having. You see we're making progress now in Q3, further progress. Very happy to close the year where in the balance sheet, how we guided it. If we have attractive M&A transactions, and you remember, we have an excellent track record of value-accretive deals, we can go well above this. I think it's just important always you have a clear plan to further -- to go down again in the leverage. But we are not afraid to go up in the leverage for the right transaction.

Our next question is from Tom Zhang from Barclays.

Just housekeeping ones for me at this stage. Could you maybe just give a little bit of color around litigation, the $40 million that is not in the adjusted EBITDA. Could you just give us a bit of color on what that is about and which division it was booked in? And then also just on the guided corporate costs, I see it's come in quite a bit below the $75 million to $80 million number that you spoke about at the Q2 prints. Any color on why that's better? And is $75 million to $80 million the right number into Q4? Is there a bit of catch-up? Just a bit of help there for the modeling.

Sure. Tom, thanks for the question. I think just to begin with the litigation, we're quite happy with the outcome during the quarter we were able to reach final settlement on several long-standing commercial litigation items. As you would expect, we cannot provide details related to specific litigation items, but we're quite happy with the conclusion on those particular matters.

Regarding the corporate costs, we did guide at a little bit higher range. We do think we're making good progress. This was our first quarter as a fully independent Amrize. So we're quite pleased with our numbers being a little bit below what we expected. Our previous estimate was at the high end of what we'd expect. It's going to continue to evolve. We do think that the result in the third quarter was quite positive. We had some delays in terms of our assumptions on staffing and so forth. So it was a good outcome, and we think that we'll continue to refine that as we go forward.

Okay. Maybe just to confirm, sorry, on the litigation that it wasn't sort of one major case. There was a few different outcomes. And so it's sort of spread across different segments. It's not like all in Building Envelope or in Building Materials.

5 That's correct. There were some long-standing items that we were able to resolve in the quarter as conclusive and it was a quite a good outcome from our perspective.

Our next question is from Martin Hüsler from ZKB. Please go ahead, Martin.

Yes. I hope you can hear me. I have a question. Can you give us a bit more background on the nature of this outage you were mentioning, if this was kind of maintenance driven or just about when and where this happened?

Thanks, Martin, for the question. Yes, it happened in our Mountain region. It was a temporary equipment outage. We were down for approximately 6 weeks to repair the equipment, which resulted in reduced production. We also had increased distribution costs. The challenge here is that it was a very temporary in nature.

However, given our extensive footprint and our network, we're able to leverage other opportunities to be able to supply and keep our customers satisfied. We were able to move product into the market and be able to meet the demand that was there. The equipment at the plant was repaired. Plant is now operating normal, and we expect that we'll be able to recover some of this production in the fourth quarter.

That's helpful. And then maybe on volumes, because you had such a stellar growth in cement. However, pricing were down. I just want to double check if you think that's kind of are you chasing volumes and maybe give some price rebates? Or is this a different functions there?

Martin, no, we didn't really do this. I think we just had our customers starting more projects as reported, especially in this most important market segment of commercial projects. So very happy to see that. So the demand was not driven by us making any concessions on pricing. You will probably see in the market that we probably had the best pricing or we're going to be among the best pricing this year or something. And this is something also we couldn't change within the Q3 time span. So what makes us, I think, confident for the future.

Our next question is from Juilan Radlinger from UBS.

Two for me, please. So first of all, in building envelope, can you talk to what drove the positive pricing in resi shingles when volumes were negative? And was that both a year-on-year and a sequential comment on pricing, i.e., is pricing holding up? Or is it declining in line with the resi and reroofing weakness? That's number one.

And then number two, in Building Materials, obviously, your volumes were very strong in Q3 and now based on your guidance for Q4, you're guiding to lower sales growth in Q4 than what we saw in Q3 implied. And I remember that Q3 last year was a very wet quarter for the industry in some states. So is it fair to say that easy comps played some role in the strength in cement and aggregates volumes in Q3 and Q4 will be a bit tougher just on a comps basis? Or is that something we shouldn't be thinking about?

No, I think to your last question, I don't think we should speculate about this at this point. As we talked about before, it's just difficult to guide now. We are happy with the project starts of our customers in Q3, and we believe this will be continuing from here. However, there are still uncertainties in the market, which makes it difficult to predict. So just have to take our guidance as a cautious guidance now for Q4. On the pricing side, I think we did a good step on the pricing on the shingles. So this is something we do early in the year, and this has continued successfully despite the decline in volumes in the market.

Our next question is from Will James from Redburn.

Please could I just explore a little bit more on the confidence around pricing for next year in Building Materials. I guess on the cement side, just wondering your view on the extent to which it would rely on volumes being up next year? Or do you think price could make some progress even if volumes were flat? And then in aggregates, would you be willing to offer a view on what you might achieve potentially next year? Could it be another kind of mid- to high single-digit year on price?

I think it's the wrong time now to talk specifics about next year guidance or something. I think you should -- that we provide already a lot of comments on market dynamics and on our action plan to position ourselves well for next year, and this is what we are working on at the moment. But I don't want to give any more guidance regarding volume or pricing. I think we talked already quite extensively around it.

Okay. I might just ask a different one then please, which is just around your kind of demand views and whether there's any difference between how you see Canada and the U.S. in the mix?

No. We're seeing -- when you look at our results, we made good progress in Q3 in Canada and also in the U.S.

Our next question is from Glynis Johnson from Jefferies.

Just a follow-up on the ASPIRE program because obviously you saw margin improvements coming through on the Envelope side, you have reported lower nonallocated costs as well. So I'm wondering how much of that actually is part of the ASPIRE program? Or is the everything for ASPIRE going to come from sort of the Q4 onwards?

Yes. Thanks for the question. We do reference a little bit in the presentation deck. For instance, we had over 300 suppliers added to our portfolio. We have over 100 projects that have been kicked off. And we do expect to have some positive impact in our fourth quarter, but really all of this will begin to materialize into the 2026 season. We're on pace for our 50 points of margin expansion beginning in 2026. We had a number of actions within the quarter. We're quite happy with the way things are progressing, and we think that, that will continue into the fourth quarter.

Okay. But there was nothing in the Q3 in terms of the margin expansion or the lower corporate costs that you would say a part of ASPIRE?

No. Very limited. Q3, we began this project in late April, early May. That's continuing. We have our teams mobilized. There's several hundred projects underway, but very limited in Q3.

Our next question is from Arnaud Lehmann from Bank of America.

Just to confirm one thing on capital allocation. Can you confirm that you've not done any buybacks so far? And is it -- is share buyback something that could be possible in 2026? And maybe just in terms of just the idea of the model, you guide for D&A depreciation, $850 million, but the run rate is probably a bit closer to $900 million for the full year. Is there any reason why depreciation will be smaller in Q4?

Arnaud, with regards to the buyback and dividends, that's a policy -- those are policy questions that we still have to work through the Board, and that would come up in early 2026. We haven't provided a framework for that yet, but that will be coming in due course once we have alignment with the Board and then going to shareholders.

Regarding the D&A, thank you, the question. We do expect a little bit of reduction in the fourth quarter where we would have traditional equipment that would phase off in terms of their depreciation expense. So that should help us into the fourth quarter.

Our last question is from Pujarini Ghosh.

One follow-up on the Building Materials margins. So on the face of it, we saw a sharp decline in the margin on the Building Material side. But even if we take off and adjust for the one-off outage this year and the higher land sales proceeds last year, we still see around 100 basis points of decrease in the margin. So what is causing this decrease? And do you expect to kind of recover this maybe next year?

Obviously, we outlined in the presentation, the biggest factor being the plant outage that we had. We had basically 6 weeks to repair that equipment. That cost us $50 million. We had the significant variance in asset sales year-over-year.

The other impact that's affecting us is lower pricing in cement. There's another decline of 0.6% in the quarter. And then there's some cost inflation that went along with that. But those would be the main items. We do expect to be able to recover some of that production volume going into the fourth quarter. That should help lift margins a little bit in the fourth quarter. But right now, all of that temporary nature of those shutdown issues are behind us.

So in terms of price cost, so you would say there's like probably more negative than the 0.6% pricing decrease in cement?

Price cost in cement was negative. That's correct, because of those temporary cost increases in the -- in our Mountain region.

Thank you. We have no more -- we have no further questions at this time. I will turn the call back over to Scott Einberger, Investor Relations Officer, for closing remarks.

Thank you all for joining us today for our third quarter earnings call. We look forward to speaking with you in February for our fourth quarter call. Have a nice day.

Hello, and welcome to the Amrize Q2 2025 Earnings Conference Call. [Operator Instructions] Also, as a reminder, this conference call is being recorded. [Operator Instructions]

I will now turn the call over to Scott Einberger, Investor Relations Officer for Amrize.

Thank you, and good morning, everyone. Welcome to Amrize's Second Quarter 2025 Earnings Call. Amrize spun off from Holcim and listed on the New York Stock Exchange on June 23, and we are very excited to be with you today for our first earnings call. We released our second quarter 2025 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 are Jan Jenisch, our Chairman and CEO; and Ian Johnston, our CFO. Jan will open today's call with highlights of our second quarter results and how Amrize is uniquely positioned to capture growth in a more than $200 billion addressable market. Ian will then review our financial performance before turning the call back to Jan for our outlook. We will then be ready to take your questions.

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 GAAP in our earnings release and slide presentation. As a reminder, today's call is being webcast live and recorded. A 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 Form 10 and other reports filed with the SEC. The company disclaims any undertaking to publicly update or revise any forward-looking statements.

With that, I will now turn the call over to Jan.

Thank you, Scott, and thank you, everyone, for joining us today for our first earnings call as Amrize. Just about 6 weeks ago, we had an excellent start with our spin-off and our listing on the New York Stock Exchange and the Swiss Exchange. With the execution of our spin-off, we are ready to begin our next chapter as the partner of choice for the professional builders of North America. In the second quarter, we successfully navigated a challenging environment, generating stable returns and strong margins. This shows the resilience and the strength of our business and our market positions. With a growing order book, we delivered for our customers to advance projects across infrastructure, commercial and residential sectors and from new build to repair and refurbishment.

While supporting our customers, we launched our ASPIRE program to drive synergies across our business, improve efficiency and expand our margins. And we continue to invest in our growth through both CapEx and value-accretive M&A. We successfully established an investment-grade balance sheet with substantial firepower to fuel our next chapter of growth. The steps we are taking from investing to driving synergies across the business provide the foundation for us to capitalize on the strong long-term demand across our $200 billion addressable market.

Let's look at Slide 5, the Q2 financial results. We generated stable revenue and strong margins. Our 2 business segments delivered strong performance and our consolidated view now includes stand-alone corporate costs as Amrize. These resilient results in a challenging market demonstrate the strength of our market positions, our disciplined pricing and our focus on execution.

Let's move to Slide 6, the market trends. Turning to the markets. Uncertainty and weather impacted construction activity in the second quarter. In commercial, data center expansion was a bright spot and commercial spending on mega projects like energy plans continue to be strong. However, market uncertainty and high interest rates impacted the timing of capital spending and new project starts. In the infrastructure end market, the market has proven resilient as federal, state and local governments continue to prioritize these projects. In the residential sector, high interest rates and affordability concerns are limiting new construction. While second quarter activity was soft, there is substantial pent-up demand ahead of us. We are not seeing projects being canceled. The current environment is simply affecting timing. As uncertainty subsides and the interest rate environment improves, we see significant upside potential for Amrize.

Infrastructure modernization, onshoring of manufacturing and the need to bridge the housing gap will drive strong long-term growth across our markets. Data center expansion, in particular, continues to be an area of growth for us with new projects kicking off across North America to support AI. It is estimated that the U.S. alone will build about 600 new data centers through 2027. For Amrize, that brings opportunity not just in the foundation of the data center, but in the rooftop, the wall systems and to support all of the infrastructure surrounding the data center to make it work. Looking forward, we are well positioned for long-term growth.

Let's look at Slide 7 and our key investments in the second quarter. We continue to invest through CapEx and value-accretive M&A. In June, we acquired the operations of Langley Concrete, expanding our precast concrete footprint with 2 state-of-the-art facilities in British Columbia and strengthening our market position in Canada's rapidly growing infrastructure sector. In Oklahoma, we opened a greenfield quarry with 200 million tons of reserves, expanding our aggregates business in the fast-growing Dallas-Fort Worth market. In Virginia, we broke ground on a new fly ash facility to enable the use of recycled landfill ash as a high-quality supplementary material. We expect to produce 8 million tons of fly ash from this facility in the coming years.

We are also on track with organic growth projects on Slide 8. We are making progress with those projects, which are key for our growth in the future. We will add significant capacity and further improve manufacturing efficiency at our flagship Ste. Gen (Ste. Genevieve) plant, North America's largest and market-leading cement plant. For our Malarkey shingles, we will open a new state-of-the-art factory in Indiana to increase production capacity by over 50% and expand our market share in the attractive Midwest and Eastern markets. At St. Constant in Quebec, we are expanding to increase capacity, improve manufacturing efficiency and to strengthen Amrize market position in Canada. Overall, now as a stand-alone company, we are fully focused on the attractive North American market, and we will accelerate our growth investments into the future.

Let's talk about our customers on Slide 9. We are delivering for our customers on their most important projects in every U.S. state and Canadian province. In the quarter 2, we announced a partnership with Meta to deliver AI optimized concrete for their new data center in Minnesota, and we are working on data centers built across the U.S. for several hyperscalers. In Canada, we are supporting the upgrade of the Vancouver International Airport. And with infrastructure modernization continuing, we have important work supporting airport upgrades from Vancouver and Calgary to New Orleans, Charlotte and New York. We also play a role in extending the life of critical national assets like the USS Gerald Ford, where our advanced [indiscernible] coatings were used to repair its [ carrier ] deck.

Our Elevate team completed a new stadium in North Dakota with our high-performance EPDM roofing system. Across our markets, we have a strong pipeline of such projects from bridges and tunnels to data centers, schools, offices and homes, our solutions are inside all of the essential buildings and infrastructure that connect people and advance how we live.

On Slide 10, we inform you about the launch of our new ASPIRE program. To accelerate synergies and profitable growth, we have launched this ASPIRE program where we leverage our scale across 1,000 sites and our 2 business segments to optimize third-party spending and drive efficiencies in our operational footprint and logistics network. We have formally launched the program and have already started making progress across raw materials, services, logistics and equipment. We target to achieve $250 million in cost savings by 2028, delivering over 50 basis points of margin improvement per year. We expect to begin achieving incremental savings in the second half of this year with the full annual savings run rate starting in 2026 as we build momentum.

Taking a step back and looking across the enterprise and the markets we serve, we are confident in our future as Amrize. With our spin-off and listing on June 23, we are starting our journey from a position of strength with market-leading operation, advanced solutions, a strong balance sheet and growing markets.

With that, I will turn it over to Ian to review our financials.

Thank you, Jan. It's great to be with all of you for our first earnings call. Amrize's journey as an independent company is just beginning, and I'm excited for the opportunities we have to grow our business and drive shareholder value in the years to come. On Slide 13, you'll see a consolidated view of our financial results. Our Q2 financial results were stable in light of market uncertainty and inclement weather, which is impacting the timing of new construction projects. Second quarter consolidated revenue of $3.2 billion was in line with prior year, with acquisitions contributing 1.3% to revenue growth. Volumes improved as the quarter progressed and weather conditions became more favorable. Our customers continue to report a healthy backlog of projects, particularly in the infrastructure and commercial end markets. We expect this backlog of projects to be a tailwind to volumes later this year and into 2026.

Adjusted EBITDA for the quarter was $947 million, including $42 million of stand-alone corporate costs. Excluding the impact of these additional corporate costs, our second quarter adjusted EBITDA margin was 30.7% compared to 30.9% in the prior year. Our scale and local P&L ownership model are a competitive advantage and allow us to effectively manage costs during periods of time when the industry is experiencing lower demand. As we build the corporate structure needed to operate Amrize as an independent company, we expect to incur additional costs that are not reflected in our 2024 financial results. Full year 2025, we expect approximately $115 million of additional costs compared to full year 2024. If we apply these additional corporate costs, our financial results would have been approximately $3.07 billion in 2024. For comparison purposes, we have provided a quarterly view of 2024 adjusted EBITDA in the appendix of our deck.

Turning to Slide 14. Moving to our results by segment. Building Materials reported second quarter revenue of approximately $2.3 billion, in line with the prior year. We are seeing a healthy level of activity in the public infrastructure sector supported by both federal and state spending packages. We estimate that approximately 50% of IIJA funds have been allocated to date and only roughly 40% of these funds have been deployed, providing a runway for growth well into the future. In the commercial market, we are seeing strong demand for data centers and other [indiscernible] while capital spending on warehouse and manufacturing facilities has been slower to deploy. Fundamentals in the commercial market are positive, and we continue to see long-term demand from onshoring trends and an increase in domestic manufacturing.

In the residential market, new construction activity remains below historical levels. Construction gap in the U.S. is close to 5 million homes and will need to be addressed in the coming years. We believe this will act as a catalyst for new construction activity as the interest rate environment becomes more accommodate. Adjusted EBITDA margin for the quarter was 33.7% versus 33.9% in the prior year. Disciplined pricing and our highly cost-efficient distribution and logistics network resulted in strong margins in a softer volume environment. Pricing gains helped to offset the impact of lower volumes in the quarter with positive year-over-year pricing for both cement and aggregates, speaking to the strong pricing fundamentals in these markets.

In our Building Envelope segment, second quarter revenue was $970 million, in line with prior year. The OX Engineered Products acquisition contributed $33 million to revenue in the quarter. Solid demand in the commercial repair and refurbishment market and the revenue contribution from OX is offsetting the impact of market uncertainty and higher interest rate impacts on new construction sites. Weather events and the increasing age of many roofs have been key drivers of repair and refurbishment demand, and we expect these will continue to be key drivers of growth in the coming years.

Adjusted EBITDA margin for the quarter was 26.9% compared to 27.1% in the prior year. Our disciplined pricing strategy and effective management of our cost base in a challenging market environment resulted in price over cost being stable for the quarter. As Jan mentioned, we have launched our ASPIRE program and expect the synergies we generate from this program will have a benefit to margins in the future. I'm pleased to report that during the quarter, we successfully closed a $3.4 billion note offering and a $1.9 billion bond exchange. Our capital structure also includes a $2 billion commercial paper program and a $2 billion revolving credit facility. At the end of the second quarter, we have not drawn on the revolving credit facility and had $930 million drawn on the commercial paper.

We finished the second quarter with a net leverage ratio of 1.8x. We are beginning our journey as Amrize in a position of strength with a healthy balance sheet and investment-grade credit ratings from both Moody's and S&P. As a reminder, we typically generate the majority of our cash flow in the second half of the year. We expect to finish the year with a net leverage ratio below 1.5x, leaving us well positioned to invest in both organic growth opportunities and pursue value-accretive M&A. Strong cash flow generation of our business allows us to pursue a growth-focused capital allocation strategy. As Jan highlighted, we are investing in several projects that we expect will drive future organic growth, and we have a number of additional projects in our pipeline. We also expect to deploy available cash towards M&A opportunities, similar to the recent closed acquisition of Langley Concrete Products. An excellent example of our bolt-on acquisition strategy at work.

Our M&A pipeline remains healthy, and our management team has a track record of executing a disciplined value-accretive M&A strategy. We expect to begin returning capital to shareholders in 2026, and we'll be working with our Board of Directors in the coming months on a dividend and share repurchase program.

I'll now turn this over to Jan to close.

Thank you, Ian. On Slide 18, we are providing our 2025 financial targets. For the full year, we expect revenues to be in the range of $11.4 billion to $11.8 billion, adjusted EBITDA to be in the range of $2.9 billion to $3.1 billion and a net leverage ratio below 1.5x. While the first half of the year has been soft, and we are forecasting a modestly better second half. We are beginning to see early positive indicators and July was a good month with improved volumes. We see significant pent-up demand. And once interest rates are lowered and the environment stabilizes, this will serve as a big trigger point to unleash growth. However, today it's difficult to predict the exact timing of the inflection point. But in our view, it is a question of when and not if.

During this period of softer demand, we are taking all of the right steps and focusing on what we can control to outperform and position for the future. Our portfolio is well positioned. Our footprint is unparalleled. We have a strong pipeline of CapEx projects and M&A and the markets we serve have strong underlying growth fundamentals. We are well positioned for long-term growth, and we are confident in our midterm targets.

With that, I will pass it back to Scott to begin the Q&A.

Thank you, Jan. [ Sophie ] we are now ready to begin Q&A. Can you please explain the process for asking a question.

[Operator Instructions]

We take our first question from Adrian Huerta from JPMorgan.

My question has to be -- is related to the guidance. Definitely, you're expecting a better second half marginally on revenues with revenues somewhat flat for the second half, but with a much better improvement on the EBITDA side with EBITDA just down a little bit. How much of that improvement in the second half is basically coming from the ASPIRE program that you have? What is the size of savings that we could already see in the second half from this program that you have?

Thank you for the question. Yes, we are very happy how we started with the ASPIRE program in June, and we see already quite some improvements there. And this will be a contributor already for H2. We don't disclose how much it will be for the second half of this year, but it will be on the way then to achieve full run rates for 2026. Overall, I think as I explained a bit in the outlook, we expect that the volume trends have been encouraging already in July. And while there is still a fair amount of uncertainty in the market, the backlog of projects gives us confidence that the second half of the year will be stronger and better than the first half of the year.

Our next question comes from Cedar Ekblom from Morgan Stanley.

I just wanted to come back on your cash generation and the net debt at the end of the first half. The cash generation seems to have been quite disappointing in the first half. I see you've had quite a big build in receivables. Can you talk about why that is? I know that there is seasonality in the business, but it seems that the build is even in excess of that. And then if I look at the change in cash during the first half, I'm struggling to get back to what the pro forma balance sheet was in the Form 10 at the end of 2024. And I know that the Form 10 was never a hard and fast starting capital structure for Amrize, but there seems to be quite a big deviation like over $1 billion relative to that pro forma structure at the end of 2024. So maybe you can just help me understand why the net debt at the end of '24 for Amrize seems to be so much different to what we were sort of looking at in the Form 10 and sort of talk to cash generation for the rest of the year.

Cedar, thanks for your questions. Maybe a couple of comments as we go through. I'll start with the free cash flow. You're correct. Free cash flow is down versus same period this time last year on a year-to-date basis. Combination of a couple of factors. First off, on the working capital, obviously, a little bit of an increase in later part of Q2 revenue that drove some of our increase in AR build, which will become due and collectible at the early part of Q3. That has a slight impact. We also have an increased amount of inventory somewhat due to the lower volumes in the quarter. So we would expect that our big sales season is ahead of us and production buildup on inventory. The other issues to note, our cash taxes are somewhat out of step with Q4 of last year. We had a timing delay in terms of cash taxes. So that slipped over into 2025. And then lastly, we have increased CapEx that Jan mentioned in the earlier comments at the beginning, we continue to have investments in our St. Genevieve expansion in our Malarkey plant, and our CapEx is up in the quarter and on a year-to-date basis.

Regarding the pro forma financials, our net debt, we reported at the end of Q2. This is now a fully independent balance sheet. We have the restructuring and the issue of our corporate bonds at the beginning of April and then our net debt bond exchange in the latter part of Q2. Financial statements today are reflective of a fully independent position. And obviously, there's a seasonality to our business in terms of our net cash. The end of the year 2024 with the same view as we would have at the end of this year, our cash balances would be much higher than they are at the midpoint of the year. So that's possibly the difference.

Would it be possible -- I don't know if you can give these numbers, but would it be possible to tell us what the 2024 net debt number was for Amrize as a stand-alone entity rather than the numbers we had in the pro forma, just so we have a clean base because we still don't have the sort of 2024 net debt number, I don't think.

The pro forma was what we said .

Yes.

Yes. That's your best figure. 2025, we're guiding towards a net debt figure below 1.5x on our guidance.

Okay. So the 2024 number is going to be materially different than that $3 billion that was in the Form 10. So I think the number pro forma was about $3 billion at the end of '24. That could be wrong. So that's what I remember seeing.

I think we'll -- the net debt position that we have right now is around $5.3 billion, and we're guiding towards the $1.5 billion by the end of this year.

Our next question comes from Pujarini Ghosh from Bernstein.

Yes. So I wanted to talk about the Envelope business. So as you mentioned, the results are largely flat on the top line versus last year, but a lot of that has been driven by the OX acquisition. So if we were to exclude this scope impact, could you give an indication of the underlying pricing volumes in the Envelope business. And also one quick question on the Malarkey expansion. So you were saying that it's a 50% expansion for the site, but could you also specify how much it would mean for your overall residential roofing capacity?

Ian, do you want to maybe address the organic versus the total sales number, and I can talk about the market a bit.

Sure. So in the quarter, our organic growth on revenue was down about 3% on our Building Envelope segment, and we were basically flat on organic growth on absolute growth. We are now -- and overall, Q2 started a little slower due to adverse weather conditions. And then as weather conditions improved later in Q2, we saw a meaningful rebound in volumes in late May and in June, especially at the commercial roofing applications, where we finished in volumes ahead of last year. And we are very excited now to start with the new fourth plant next year that gives us enormous momentum here to really improve and expand market shares in very attractive markets. We are only present today by deliveries and not by local manufacturing.

Our next question comes from Will Jones with Redburn Atlantic.

Could I ask, please, about the stand-alone costs relative to your prior expectation and just understanding the different numbers. I think for last year, there's a $115 million figure for the carve-out. I think in Q2, the run rate was about $40 million. Should we take that $40 million x4? Is that the new stand-alone, I guess, as we think on an annualized basis going forward or not? And just if it was -- if it's more than you thought before, why? And is there anything you can do in time to drive that or the central costs lower?

I'll take that question. I think maybe I start at the tail end of your question. Absolutely, we will be continuing to refine those forecasts as we go forward. We think this is at the high end of the guidance that we would be issuing in terms of corporate costs. We provided some feedback in pro forma statements in 2024 and Q1 2025. The second quarter, $42 million is a little bit high. We would expect that, that could phase out a little bit in the following quarters to come. The $115 million that we guide is for the full year and included in our overall guidance.

Our next question comes from Marcus Cole with UBS.

One question as well. So on cement, your pricing was only marginally up in the quarter. Is there anything that you can tell us in terms of is there some mix impact going on there, some regional trends that we need to be aware of on an underlying basis, was it high because looking at the peer cement pricing was a little bit higher from some of your -- the read across some of your peers. So any color you can give on mix or regional trends or an underlying basis would be helpful.

Yes. No, thank you. I think we believe in North America, we have the strongest pricing for cement, the highest pricing. And also, we made some gains this year, even it was difficult in a challenging market. You see our volumes were down 6% in Q2. and the market is soft. So we were focusing very much on value for the customers. We didn't have any volume strategy. And we believe the pricing will come back or will improve further with the volumes coming back also in the quarter and years to come as we have -- expect a strong rebound in volumes. On this side, we have -- on the other side, we are very happy with our aggregates pricing, which was over 6% in North America on average, very strong market conditions in our local markets were slightly better than for the cement markets as we were supplying a couple of infrastructure projects with higher demand, and we could also here continue our very positive pricing here in the aggregate side.

Our next question comes from Jonathan Bettenhausen with Truist.

Jon on for Keith this morning. On the Building Envelope business, was reroofing activity, was that positive for both commercial and resi? And then also, how did your total shingle shipments compared to the ARMA numbers this quarter?

What numbers? The shingle volumes?

Yes, the shingle shipments, how did that compare to the industry shipment numbers?

Okay. All right. We see, first of all, in the Building Envelope, we are very excited. I mean, we have talked a bit about the factors now influencing the demand in quarter 2 with high interest rates, some weather effects. And so we saw a bit of softness. However, we are seeing positive momentum in commercial roofing markets. Our volumes were roughly flat through May, while our Elevate volumes outpaced the market, and we were up low single digits in quarter 2. For commercial new construction, it's mixed with pockets of strength. We talked about data centers and stabilizing trends in warehousing, while in repair and refurbishment, it continues to be a bright spot and driving growth within our commercial roofing market.

The shingle production was in line with ARMA. Here, we have a continued residential repair and refurbishment market impacted by weather-related events and a little bit lighter hail season so far this year, but we are very positive also here for the second half of the year.

Our next question comes from Yassine Touahri from On Field Research.

It could be a question on capital allocation. How do you think about the group midterm? Have you -- when will you decide about a dividend payout policy and share buyback? I'm not sure maybe after our Board meeting. And when you're talking about the $200 billion addressable market, what is it composed of? Does it include insulated panel, wall system, all the liquid applied roofing, adhesives? It would be great to get a little bit of color on what this addressable market is to get a sense of where the Building of division could go in the next decade.

Thank you. Great question. Let me answer the question first on the market. And then I think, Ian, you can give us more color on the capital allocation. So the addressable market, the $200 billion, this is the available market for our products and technologies, which we own and where we can expand our footprint. We know our market shares. We are the leader in cement, while we are a strong, I would say, follower in aggregates, where we [indiscernible] and then we have a strong position in commercial roofing, while in shingles, we are having a huge growth path ahead of us compared with our low single-digit market share. So the market is -- the $200 billion doesn't require new technologies and new products. This is really what we can deliver to our customers today. This will include opportunities for bolt-on acquisitions, other acquisitions. But here, we are very, very confident that this market is available and addressable for us.

For the capital allocation before Ian talks a bit more details for us, we are, first of all, driving what is within our control. So cash generation and profitable growth is our #1 focus at Amrize to generate the cash to be allocated.

And Ian, if you can talk a bit about how our priorities are and what the next Board decisions are or the next steps.

Thanks, Jan. Thanks, for your question. I think we just had our first Board meeting earlier this week. And of course, the focus remains very aligned with what we shared with investors at our Capital Markets Day back in March. Priorities for the business remain investing in capital, first and foremost, that's going to continue to be an area where we have significant organic opportunities to invest and grow our business. Secondly would be on M&A. We actually closed a deal this quarter and have lots in the pipeline to pursue. That will continue to be an area of priority. With regards to return of capital to shareholders, we obviously have to engage with our Board and get aligned.

The starting point will be a discussion on what the dividend could look like. We've indicated that, that would be most probably U.S. market specific. And we would need to ensure that we have alignment with the Board and bring that to shareholders in the beginning part of 2026. And that's when we would be able to start issuing a dividend and a possible return to shareholders in the form of share buyback would come at a later date as we align with our shareholders and our Board.

And maybe just a follow-up. If there is an amazing opportunity, a large strategic acquisition, would you consider issuing equity if it creates value for our shareholders?

I would say equity is the last resort. It's expensive. And we -- in the past, we have been always very mindful to rather reduce the share count with share buybacks. So to generate new equity is the last on my list.

Our next question comes from Jon Bell with Deutsche Bank.

Question for me is on the Quikrete's Summit deal. Any changes to industry dynamics that you want to flag? Has this impacted you in any way?

Jon, that's an interesting question. I'm not sure if I'm competent to answer your question. But obviously, I think what I always see in the industry is you see consolidation. And this is another, if you want to say, consolidation where this one player took over Summit and then they make some equity or some asset swaps and so on. I think in principle, it's probably good for the industry structure or something. And other than that, we have to wait and see how this will play out in the market.

Our next question comes from [indiscernible] from Zürcher Kantonalbank.

I think we've seen an adverse share price reaction because you probably didn't reiterate the 2028 targets. Can you confirm that you are still sticking to those and confirming those?

Yes. Look, I think I talked briefly about it in the outlook. While at the moment, we have softer demand than expected. However, we see demand coming up with those inflection points of potentially lower interest rates and also a stabilized environment. So difficult for us now to forecast when exactly this will happen. That's not in our control. However, we expect our markets will accelerate, and we are preparing for this. So I think we are well positioned for our long-term growth targets, and we are confident to confirm our midterm targets or midterm guidance, which we gave in March at our Investor Day.

So you would say 5% to 8% top line growth on average, but not using it as a guidance for the current year?

No. I mean, look, I think everyone sees the current year, the market, the demand is just in a different ballpark. So we have to focus on what is under our control at Amrize. So we're focusing on the pricing. We're focusing on delivering all the CapEx project opportunities. We are working on our M&A pipeline. So we are preparing. We now will increase our efficiency with the ASPIRE program. So we are working very hard to make our company ready for growth, but at the same time for expanding our margins. And when the markets will start to improve, this is what we expect, we are ready. And I think the midterm guidance is excellent midterm targets for us.

Okay. And as I'm limited to one question. So the second half of the question is, can you quantify the cost of the ASPIRE program?

That's a good question. We have -- I mean, we do that with our own people, right? So we have a strong program. We changed. We adapted the organization a bit. We have some great leader who actually came over from the Building Envelope side and now takes over the whole supply -- has taken over the whole supply chain for Amrize. And this is the base move and then he has a very strong program now to deliver, but with the people in our operations. So we don't have extra costs to do this.

We have no further questions at this time. I will turn the call back over to Scott Einberger, Investor Relations Officer, for closing remarks.

Thank you all for joining us for our second quarter earnings call. We look forward to speaking with you all next quarter.