管理層發言
Welcome to Amrize's Second Quarter 2026 Earnings Conference Call. 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 Baris Oran.
Thank you, and good morning. Welcome to Amrize's Second Quarter 2026 Earnings Conference Call. We released our second 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 is Jan Jenisch, Chairman and CEO. 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 reconciliation 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 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. Please also note that in today's presentation, certain prior period financial information includes revisions that were not material to any previously issued consolidated financial statements. Additional information regarding these revisions can be found in our Form 8-K filed with the SEC yesterday after the U.S. market close. With that, I will now turn the call over to Jan.
Thank you, Baris, and thank you all for joining us today. I will begin with our highlights and takeaways of the second quarter. We delivered strong revenue growth of 8.6%, driven by increased mega project demand from data centers and energy to advanced manufacturing plants and infrastructure modernization. With the strength of our network and strategic footprint in the most attractive markets, we were able to achieve industry-leading organic growth of 6.7%. We also grew net income by 14.4% and adjusted EBITDA by 5.8% with this strong customer demand as well as leading aggregates pricing and excellent progress in our ASPIRE program. Diluted earnings per share increased 14.7% and adjusted diluted earnings per share grew 8.6%. Oil price-driven cost inflation drove higher freight, diesel and raw materials costs, which we are proactively managing with pricing, fuel surcharges and ASPIRE. In our Building Materials business, we had a strong quarter with above-market volume growth, premium cement pricing and leading aggregates pricing growth. Our Building Envelope business achieved above-market sales momentum, driven by a strong pipeline of large-scale commercial projects and growth in residential roofing. Segment pricing improved sequentially as increases phased in throughout the quarter. We are also successfully executing on our capital allocation strategy of investing for growth through CapEx and M&A while returning cash to our shareholders. We invested $241 million in CapEx in the quarter as we expand production and improve efficiency to best serve customers. We had excellent contributions from PB Materials, our recently acquired aggregates business in West Texas. And in July, we acquired Rapid Redi-Mix, bringing significant synergies to our cement and aggregates network in Texas. In the second quarter, we also returned $502 million to shareholders through dividends and our share repurchase program. Our Board has also declared a second quarter dividend of $0.11 per share. Let's now look to our market environment. We have a strong order backlog led by commercial and infrastructure demand, and we are actively quoting new projects. In commercial construction, which makes up half of our business, the momentum with mega projects continues to drive demand for Building Materials. As we said last quarter, we are seeing the strong commercial new starts from Building Materials convert into new commercial roofing demand. The new AI-driven economy in North America not only needs data centers, but also energy, water and transport infrastructure. Many of these projects have a significant run time that drive consistent long-term demand for our solutions. The Dodge Construction Index shows there are more than 300 new data centers planned across North America, and our leading footprint and distribution network positions us to serve over 90% of these projects. Within infrastructure, demand continues to be strong across all levels of government and provides us with a steady multiyear running projects. The Infrastructure Act still has significant funding to be spent, and we are encouraged by its successor bill, which should extend the infrastructure tailwind. The Build America 250 Act includes strong funding for cement and aggregates intensive projects that are well aligned to our footprint. The overall policy environment supports locally made materials for infrastructure. America and Canada are prioritizing domestic materials and Amrize is positioned exceptionally well for this with our local-to-local model and Made in America and Product of Canada offerings. As I discussed last quarter, our strategy is not to import, but to invest domestically to expand production in local markets to serve local builders. Within the residential sector, new construction remained soft in the second quarter. However, within this environment, we were able to grow residential roofing market share and gain volumes. We expect that seasonal patterns will support stable roofing demand in the second half of the year and over the long term. The need for housing in the U.S. will drive significant growth opportunity. Overall, we see mega projects leading the way. Growth trends from infrastructure modernization and onshoring of manufacturing to data center expansion and the digital economy are taking shape on the ground. And these projects have significant size and scale for Amrize. Let me share some examples of these mega projects underway. Our Elevate roofing system, which is ideally suited to support data centers, is being installed at a massive new data center in West Texas, an area where we are also well positioned with our aggregates network. In Illinois, we are delivering aggregates and cement for a new data center build, and we have projects underway in virtually every region of our footprint. Advanced manufacturing and onshoring is also driving growth. In Arizona, we are supplying Building Materials to a large-scale semiconductor manufacturing plant now under construction. In Louisiana, we are delivering materials to multiple LNG facilities as energy infrastructure builds up. Alongside these, we are supporting key transportation infrastructure projects across North America. In Canada, we are delivering to a massive multiyear modernization of Montreal's Airport. And in New York, we are providing high-performance materials for the Hudson River Tunnel. These are just some examples of our projects and new ones are kicking off every month. Mega projects require highest performing materials, manufacturing scale and the distribution network to deliver reliably. This is Amrize's strength and a key part of how we were able to achieve market-leading organic growth in the quarter. We are excited about the opportunities ahead to keep winning and delivering on new mega projects. Let's talk about our ASPIRE program. As we deliver for our customers, we are also driving synergies and operational excellence with our ASPIRE program. We delivered $29 million of savings in the second quarter. We have hundreds of projects underway across raw materials, services, logistics and equipment and have now onboarded over 650 new suppliers, optimizing our third-party spend with competition and scale. We are on track with our savings for this year of $80 million as well as for our goal of $250 million through 2028. Let's talk about our growth investments. We invested $241 million in CapEx projects in the second quarter to expand production and to improve efficiency to best serve customers in the most attractive markets. We have completed a 660,000 ton capacity expansion at our flagship cement plant in Missouri, the largest market-leading plant in North America. With cement demand accelerating, this expansion comes online at the ideal time for us. We also broke ground on the modernization of our Saint-Constant cement plant in Quebec to expand production by 300,000 tons and improve efficiencies. In Texas, work is underway to add 100,000 tons of additional production capacity at our Midlothian cement plant near Dallas. In Alberta, we are adding 50,000 tons of capacity to our Exshaw cement plant outside of Calgary, where we are seeing growth driven by energy projects and new data center demand. In addition to our cement network, we are expanding and developing greenfield aggregate quarries across our footprint, where we currently have five quarry projects in multiple attractive markets across North America, adding more than 150 million tons of reserves. In Building Envelope, we are making progress on our new Malarkey Shingles Plant in Indiana. This new plant will be state-of-the-art and will allow us to expand our footprint into highly attractive Midwest and Eastern markets. Looking to our M&A, we are executing on our strategy with a strong focus on synergies and growth markets. In July, we closed the acquisition of Rapid Redi-Mix, a fast-growing concrete producer in Dallas-Fort Worth. This acquisition is expected to be EPS value accretive this year. Rapid Redi-Mix has a network of modern batch plants and mixer fleets and brings significant synergies with our aggregates operations and cement network in the region, complementing the planned expansion of our Midlothian cement plant. Our acquisition of PB Materials, the aggregates leader in West Texas, is proving to be an excellent addition and is exceeding our initial expectations. These actions show how we coordinate our M&A and CapEx investments to connect our network and focus on high-growth markets such as Texas, where data centers, energy projects, infrastructure spending and population growth are driving demand. We are also delivering cash to our shareholders and returned $502 million to shareholders in the second quarter alone. We launched our $1 billion share repurchase program and repurchased $197 million worth of Amrize shares in the second quarter. Our dividend program is also running well. We paid $305 million of dividends, including the special dividend for 2025 and the first quarter dividend of $0.11 per share earlier this year. Adding to this, the Amrize Board of Directors has declared a dividend of $0.11 per share for the second quarter to be paid on August 26. Importantly, these dividends are paid out of capital contribution reserves and are not subject to Swiss withholding tax. I'm very pleased that our shareholder return program is executing well. We will continue delivering for our customers, investing for growth and returning cash to our shareholders. Now I'd like to turn it to Baris to review our quarterly financial results in more detail and discuss our full year guidance.
Thank you, Jan. As noted earlier, we delivered strong revenue growth of 8.6% in the quarter as we saw increased mega project demand, particularly from data centers and energy-related projects. At Amrize's level, 6.7% organic growth drove the majority of the top line performance in the quarter. Volume growth was above industry trends for cement, aggregates and roofing, driven by our unique position in high-growth markets and successful commercial initiatives during the quarter. In addition to volume, we began seeing the benefit of price increases flow through during the quarter across our business segments. We saw strong aggregates pricing growth broadly supported throughout our geographies. Our premium cement price in Q2 of more than $171 per short ton improved sequentially from Q1. Finally, PB Materials also contributed nicely to the results in the quarter, driven by solid demand in the high-growth West Texas region. Now review our adjusted EBITDA performance. In the second quarter, we grew adjusted EBITDA by 5.8% to $986 million. Volume growth was the key driver of our adjusted EBITDA performance in the quarter as well as strong cement and aggregates pricing within our Building Materials segment. The strength of our sales volumes and pricing was particularly offset by higher-than-expected freight, diesel and raw material costs. This relates to two factors. First, oil price-driven inflation has resulted in a persistently higher cost environment. Additionally, we have seen a significant spike in U.S. freight rates over the past few months as capacity tightened in the transport industry. While we have increased prices and added fuel surcharges, there has been a timing difference between price realization and oil price-driven cost inflation across our businesses in Q2. As realization of previous price increases reached full run rate and additional price increases take effect, we would expect better net price realization in the second half. Overall, we expect the price over cost gap to improve in the second half and turn positive in Q4 with improving trends as we enter 2027. Meanwhile, our ASPIRE program continues to gain momentum as we entered a seasonally stronger quarter. $29 million of savings in Q2 partially offset the cost headwinds we experienced. Finally, our adjusted EBITDA performance in the quarter was impacted by $17 million of higher net insurance proceeds in the prior year. Turning now to our results by segment. For Building Materials, we saw another quarter of strong cement and aggregates volumes, driven by increasing activity across commercial end markets, particularly data centers and energy projects as well as steady infrastructure activity. Revenues were $2.4 billion in the quarter, an increase of 8.2%. This increase in revenues was driven by organic growth of 5.6%. We saw above-market volume growth across our key product lines, demonstrating our unique exposure to the most attractive regions and end markets. Contributions from the PB Materials acquisition and industry-leading aggregates pricing growth also nicely contributed to the revenue. During the quarter, cement volumes increased 5%, driven by healthy demand in our U.S. markets. We saw double-digit volume growth in our supplementary cementitious materials during the quarter as we continue to invest in these raw material alternatives and cement additives. Aggregates volumes grew by 6.5%, driven by continued demand for aggregate-intensive, commercial and infrastructure projects. It's worth noting that the volume growth for aggregates accelerated on a two-year stack basis for the second quarter in a row. Cement pricing for Q2 was down 0.2% on a constant currency basis and grew 2.1% compared to Q1 as U.S. cement increases were put in place in April. Overall, we continue to see favorable pricing dynamics across our network, supported by our inland positions in high-growth and attractive markets. We had strong aggregates pricing growth of 4% on a freight-adjusted basis during the quarter. In April, aggregates price increases were successfully implemented, and we saw broad-based pricing growth throughout our geographies. Across both cement and aggregates, fuel surcharges were implemented in Q2 and partially offset the impact of oil price-driven cost inflation. Building Materials adjusted EBITDA was $793 million in the second quarter, up 5.2% compared to prior year. The increase in adjusted EBITDA was primarily due to continued volume growth, aggregate price increases, contributions from PB Materials and ASPIRE savings. Our adjusted EBITDA performance in the quarter was impacted by higher freight and diesel costs. We also had a tougher comparison as we lapped $17 million of higher insurance proceeds in Q2 of last year, which were primarily related to claims in 2024. As we look out to Q3, we expect to realize the full quarterly impact of price increases and fuel surcharges put in place during Q2 to continue expanding our margins. Additionally, our other operations will also put further price increases in the second half. We expect all these price increases to partially offset freight and diesel inflation in the back half of the year. As a result, we would expect better price over cost performance in second half compared to the first half. Meanwhile, given the momentum we have seen across our cement and aggregates volumes since Q3 of last year, we continue to expect strong volume growth for both businesses this year. However, given a tougher comparison, we expect year-over-year volume growth to moderate in the second half relative to the first half. Turning to Building Envelope. Second quarter revenues were $1 billion, an increase of 9.4% compared to the prior year. The increase was largely driven by above-market volume growth. We saw strong commercial roofing volumes driven by increased system selling and large-scale projects, including data centers and warehousing. We also continue to see resilient demand for commercial reroofing activity. As we said last quarter, new commercial roofing demand typically lags broader commercial construction activity by 12 to 18 months. With strong 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 we have begun seeing that trend in the early months of Q3. Turning to residential. We saw above-market shingles growth driven by investments in our commercial sales teams as well as distributor inventory stocking. It's worth noting that the second quarter was the highest revenue quarter for our residential roofing business in our company history. We expect seasonal trends to support stable reroofing activity in the back half of the year. And given the significant volume growth in Q2, we now expect our residential roofing volumes will be up high single digits this year. Strong commercial and residential volumes were partially offset by softer demand for weatherproofing products as they are more driven by new residential construction, which is down year-over-year. It's worth noting that these products represent about 10% of our Building Envelope business today. Building Envelope adjusted EBITDA was down 5.2%, representing a material improvement in a year-over-year trend compared to Q1. Year-over-year adjusted EBITDA performance was impacted by the timing differences between price realization and raw material costs. This was partially offset by stronger volumes. We put price increases in place during April, May and June, including several rounds for certain brands. We have also announced additional price increases that took effect in July and others that will be effective in August. These price increases affect new projects we are quoting on with a natural timing difference until they take full effect across the business. Pricing improved sequentially throughout the quarter, but still remains down year-over-year. We expect better price realization in the back half of the year as price increases continue to be realized on new projects. As a result, we expect better price over cost performance compared to the first half of this year. We have a strong balance sheet and investment-grade credit rating. As of June 30, 2026, our leverage ratio was 1.7x. We had approximately $729 million of cash and cash equivalents with $4 billion of total available liquidity. This financial strength, coupled with our investment-grade balance sheet gives us significant liquidity to deploy capital for growth projects, acquisitions and return cash to shareholders. Our net interest expense is lower year-over-year, and we continue to 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. Moving to our full year guidance. Let's review our key drivers. From a demand perspective, we are well positioned across our markets and in both business segments. Within Building Materials, we had a good first half of the year with strong revenue growth and 8.4% growth in adjusted EBITDA. For the full year, we continue to expect durable volume growth in cement and aggregates. We now expect cement pricing to be flat or up low single digits, and we continue to expect aggregates pricing to be up mid-single digits on a freight-adjusted basis. In Building Envelope, we improved revenue and operational performance as the first half of the year progressed. We continue to expect low single-digit growth in commercial roofing volumes and now expect high single-digit volume growth in residential roofing for the full year. As discussed earlier, price increases are phasing in across the Building Envelope portfolio. Finally, the ASPIRE program remains a key priority, and we are making excellent progress. We are on track with our targets and expect further savings in the second half despite a demanding procurement environment. Let's look at how these drivers will now play out in the second half of the year to reach our adjusted EBITDA range. The headline here is that while we expect stronger price momentum in the second half, the timing differences between price realization and oil price-driven cost inflation will be a headwind to our full year 2026 earnings. For the full year, we are expecting a positive contribution from strong volumes of $150 million to $170 million and on top from the price increases we are putting in place throughout the year, $60 million to $80 million in price. Due primarily to the rapid escalation and persistence of oil price-driven cost inflation, we are now expecting approximately $140 million to $170 million in higher cost. This shows up in high freight, diesel and raw material costs. In both businesses, while additional price increases and fuel surcharges are expected to be realized in the second half and improved pricing over cost compared to the first half, the timing of price realization and surcharges will affect our overall profitability for the year. We expect both business segments to have a better price over cost performance in the second half compared to the first half and turn price over cost positive in the fourth quarter with improving trends as we enter 2027. Our structural savings program, ASPIRE will contribute approximately $80 million of ASPIRE savings and M&A will be another $30 million to $50 million on top of that. Lastly, this year, we are also lapping two significant insurance recoveries in the second and fourth quarter of 2025 that create a net headwind of approximately $55 million. With all these factors combined, let's review our updated full year 2026 guidance. Given the strong demand and pricing environment, we are increasing our revenue guidance to $12.5 billion to $12.7 billion. As discussed, we are revising our adjusted EBITDA guidance to $3.1 billion to $3.2 billion. Overall, our business is in strong position. Cement and aggregates are in high demand. Our Building Envelope brands are improving performance as the year progresses. Pricing increases are building momentum. ASPIRE is kicking in, and we are strengthening operational efficiency. With that, we look forward to your questions, and I will pass the mic over to our operator.
分析師問答
Our first question will come from Anthony Pettinari with Citi.
Your full year outlook indicates cement prices should rise in the second half. I'm wondering if you could talk a little bit more about the confidence driving that given the lack of traction in the first half. And just to clarify, are these new hikes that are going out? Or are these existing first half hikes that are just being implemented more slowly?
Anthony, yes, it was our target to have traction on cement pricing this year. We had a slow start to the year, and you remember that we have the majority of price increases executing on April 1, and we see traction. While on Q2 year-over-year, we are slightly down, I think, 0.2%, we have a 2.1% increase in prices over Q1. So that makes me quite confident that we will see good and improved pricing in the second half of the year. We also noticed when you follow some peer reports that the 0.2% decrease in pricing in Q2 year-over-year is the best mark in the industry, with many others reporting minus 1% to minus 3%. We are not happy with this. Now we have a sequential price increase of 2.1%, and I believe we will — we are guiding now for flat to low single-digit pricing, but I'm confident we will have low single-digit cement pricing in the second half of the year.
Our next question will come from Adrian Huerta with JPMorgan.
Thank you for the additional color you brought into the quarter. My question is around the M&A outlook. Are you guys already working on something? How do you see the pipeline over the next six to 12 months on M&A?
Yes, Adrian, thanks for the question. We're always working on potential transactions. I'm happy to see that there's quite some M&A activity in the sector. Our pipeline is healthy and growing across both Building Materials and Building Envelope, and I expect more M&A to come. We bought two great companies. We have PB Materials from earlier in the year, a fantastic market leader in West Texas, growing above expectations and already with a significant contribution to this year's results. And we closed the deal with Rapid Redi-Mix on July 31 in Dallas-Fort Worth, complementing our network when it comes to cement and aggregates. As you know, our deals are very value accretive. I'm very happy with these two deals and expect we are working on more deals to come.
Our next question will come from Trey Grooms with Stephens.
My question is on Building Envelope. The residential side looks like it's performing very well. First, what are the drivers of the volume there — is it share wins or other drivers? Second, you've talked about price realization in April, May and June and additional increases in July and August. At what point do you think you'll get to price-cost neutral in Building Envelope? I know earlier you targeted Q3; it sounds like it might be pushed out. Could you talk about both demand and price-cost timing?
Trey, thank you. I'm very happy that we achieved more than 9% sales growth in the second quarter in Building Envelope. As you know, we had a tough Q4 and a tough Q1 with negative volumes. Our people, through commercial initiatives, returned us to growth and even gained market share. That was important. We are working very hard to be price over cost positive. It's an uphill battle when you have very steep oil-related inflation so suddenly. We feel it in transportation heavily, and also raw material input costs. We already have a few price increases out there, more to come, plus transportation surcharges. We saw a sequential improvement in our prices from Q1 to Q2. With the further announced price increases in July and August, we expect a positive trajectory in price versus cost to continue into the second half.
Our next question will come from Bryan Blair with Oppenheimer.
I'd like to level set on price-cost assumptions versus your prior guidance. How much of the incremental headwind is driven by lower price realization versus higher cost? And how should we think about the impact by segment going forward?
Bryan, Baris made a very good analysis on the bridge for margins. Baris, do you want to take the question and give us more detail on the segments and overall Amrize?
Sure, Jan. Our guidance change is entirely related to the duration and magnitude of oil-driven cost inflation and timing of price realization. This impacts all segments. What gives us confidence is the strong volume momentum and the price increases we began realizing in Q2. If you look at our guidance change, three factors drive it. First, the lag between Building Envelope pricing and cost inflation of both raw materials and freight was more pronounced than we initially expected — roughly one-third of the guidance change. Second, in Building Materials, our cement pricing expectations for the full year were a bit lower than previously expected — another one-third of the guidance change. We had a geographic mix impact in Q2 that resulted in a slight year-over-year effect, but we believe our pricing is strong. Third, fuel surcharges in Building Materials have helped offset diesel, but they haven't fully offset the incremental impact from substantially higher freight rates — the final one-third of the guidance change. While we expect strong price momentum in the second half, the timing differences between price realization and cost inflation will be a headwind to our 2026 earnings. Overall, approximately one-third of the impact is from Building Envelope and two-thirds from Building Materials.
Our next question will come from Keith Hughes with Truist.
Your guidance seems to imply a kind of flattish revenue number in the second half. With good residential performance in Q2, would we expect volumes to be lighter in the second half after such a good second quarter?
Keith, to be precise, in commercial we expect some growth from our project pipeline and backlog to continue. Commercial projects that broke ground in 2025 will lead to increased roofing volumes in H2. Our full year guidance remains low single-digit growth in commercial roofing volumes. In residential, we have momentum and expect a normal seasonal pattern to support stable reroofing in the second half. We now expect residential volumes to be up high single digits for the full year, compared to the earlier flat forecast.
Our next question will come from Martin Hüsler with ZKB.
I hope you can hear me. My question is about the volume trend, which seems better than expected at the end of April, but margin trend is more negative. Do you see any mix deterioration as you take on larger projects that could impact margins, mainly for Building Materials?
Martin, we are very excited by the organic growth rate of 6.7% in Q2. The backlog and active quoting give us great confidence. We do not see a negative mix effect. Our pricing is stable year-over-year for cement, and we had a sequential 2.1% price increase from Q1 to Q2. Aggregates price growth was 4% in Q2 year-over-year, and we maintain our mid-single-digit full year aggregates guidance. The reason EBITDA didn't grow proportionally to sales is the oil-driven cost inflation. If we didn't have that geopolitical disturbance starting in March, we would have very healthy EBITDA margins in Q2.
Our next question will come from Pujarini Ghosh with Bernstein.
Can you talk about the one-off insurance proceeds you highlighted as a headwind this year? Should we think 2025 EBITDA was artificially inflated by those proceeds? Also, what's your cement pricing expectation for the next three to five years?
Pujarini, on cement volumes, I'm pleased — cement is in high demand. Our strategy to invest in existing plants, including the 660,000 ton capacity expansion at our flagship Missouri plant, comes at the right time. We are getting traction on cement pricing and are positive for the years to come. Cement is essential for large projects, and our footprint of 18 cement plants and 141 cement terminals positions us well for superior margins going forward. On insurance, we try to be fully transparent: you have insurance payments, land sales and similar items that create lumpiness across quarters. Baris can add detail on the insurance proceeds.
We had about $55 million of proceeds in the prior year. Of that, $17 million was in Q2 and related to an event from 2024, with collection in Q2 of 2025. We'll have another lumpiness in Q4. Land sales and insurance proceeds do happen in our industry and create lumpiness across quarters. As a public company, we'll continue to refine our disclosure and share appropriate details to help with modeling.
Our next question will come from Timna Tanners with Wells Fargo.
I want to probe more on M&A trends. PB Materials was aggregates-focused, Rapid Redi-Mix is more downstream. Going forward, is this cadence of M&A a good pace? Should we expect more aggregates-led deals or a broader strategy?
Timna, we are ready to do M&A and our balance sheet is strong, but we remain value-focused. PB Materials was a great strategic fit in West Texas with synergies across cement, aggregates and Ready-Mix. Rapid Redi-Mix is important in Dallas-Fort Worth where network integration matters. You should not expect a nationwide flurry of Ready-Mix deals, but we will pursue specific opportunities where we see significant synergies and value creation.
Our next question will come from Will Jones with Rothschild & Co Redburn.
Can you comment on regional variations in pricing and volume within the U.S. and with Canada compared to the U.S.?
Will, pricing is broad-based across our regions. Some markets are more attractive or growing faster, but overall pricing strength is widespread. We see strength in Canada — energy projects and data centers — and throughout the U.S. our footprint is benefiting from the key projects where we can reach about 90% of planned data centers.
Our next question will come from Cedar Ekblom with Morgan Stanley.
In H1 you had strong top-line volumes but lower incremental margins — you made less money on those volumes. Your guidance implies margins swing to roughly flat year-over-year. Given the continued Q3 negative price-cost, how do we reconcile the math to get to flat margins for the year? Are you assuming more price increases from here despite moderating volume growth and an uncertain inflation outlook?
I understand the concern. First, we have very high customer demand across large projects — data centers, infrastructure and energy. Second, pricing we put in place is building: 4% aggregates pricing in Q2 and mid-single-digit full year guidance for aggregates. In cement, we turned positive in Q2 over Q1. Building Envelope was hit by sudden oil-driven inflation for transportation and raw materials; we are covering that with price increases and surcharges. Additionally, ASPIRE delivered $29 million in Q2 and is on track for $80 million this year. These drivers together support our ability to reach guidance and improve margins in H2.
On pricing mechanisms and realization: Building Envelope pricing is often quoted in advance and may experience a 30- to 90-day lag. Building Materials also uses quoted mechanisms but for a smaller portion of its business. Price increases are realized over time as new purchase orders are placed at new rates. Fuel surcharges across both segments have about a 30-day lag. We expect the benefit of Q2 pricing actions to continue building into Q3, and additional July and August pricing will help Q3 and Q4. For costs, our assumption is that elevated raw material, diesel and freight costs continue through Q3 and moderately improve in Q4; that's the base of our cost assumptions for the year.
Our next question will come from Yassine Touahri with On Field Investment Research.
On cost inflation guidance: In Q2 you had a $75 million negative impact from cost, but full-year you're expecting $140 million to $170 million. That implies a sharp deceleration in cost inflation in H2 versus H1. Can you explain that?
Thanks for the question. Baris mentioned we expect some easing in cost inflation into Q4. Baris, please explain the assumptions.
In Q2 we saw very escalated cost levels across raw materials, diesel and freight. Freight rates in the U.S. tightened as capacity left the market. We expect those conditions to continue at elevated levels in Q3 and moderately improve in Q4, and that's the base case of our assumptions for the year's cost outlook.
This concludes our Q&A session for today. I will turn the call back over to Jan Jenisch for closing remarks.
Thank you all for joining us today for the second quarter 2026 earnings call. I look very much forward to speaking with you soon, especially after reporting the third quarter. Thank you.
This concludes the Amrize Q2 2026 Earnings Conference Call. You may now disconnect.