Vulcan Materials Q1 2025 Earnings Report

Vulcan Materials EPS Results

• Actual EPS: $1.00
• Consensus EPS: $0.80
• Beat/Miss: Beat by +$0.20
• One Year Ago EPS: $0.80

Vulcan Materials Revenue Results

• Actual Revenue: $1.63 billion
• Expected Revenue: $1.64 billion
• Beat/Miss: Missed by -$5.34 million
• YoY Revenue Growth: +5.80%

Vulcan Materials Announcement Details

• Quarter: Q1 2025
• Date: 4/30/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, April 30, 2025
• Conference Call Time: 10:00AM ET

Vulcan Materials (NYSE:VMC) Company, together with its subsidiaries, produces and supplies construction aggregates primarily in the United States. It operates through four segments: Aggregates, Asphalt, Concrete, and Calcium. The company provides crushed stones, sand and gravel, sand, and other aggregates; and related products and services that are applied in construction and maintenance of highways, streets, and other public works, as well as in the construction of housing and commercial, industrial, and other nonresidential facilities. It also offers asphalt mix and asphalt construction paving services; ready-mixed concrete; and calcium products for the animal feed, plastics, and water treatment industries. The company was formerly known as Virginia Holdco, Inc. and changed its name to Vulcan Materials Company. Vulcan Materials Company was founded in 1909 and is headquartered in Birmingham, Alabama.

Vulcan Materials Q1 2025 Earnings Call Transcript

Presentation

[Operator]

Good morning. Welcome everyone to the Vulcan Materials Company First Quarter twenty twenty five Earnings Call. My name is David, and I'll be your conference call coordinator today. Please be reminded that today's call is being recorded and will be available for replay later on the company's website. All lines have been placed in a listen only mode.

[Operator]

After the company's prepared remarks, there will be a question and answer session. Now, I will turn your call over to your host, Mr. Mark Warren, Vice President of Investor Relations for Vulcan Materials. Mr. Warren, you may begin.

[Mark Warren, VP, IR at Vulcan Materials Company]

Thank you, operator, and good morning, everyone. With me today are Tom Hill, Chairman and CEO and Mary Andrews Carlisle, Senior Vice President and Chief Financial Officer. Today's call is accompanied by a press release and a supplemental presentation posted to our website, vulcanmaterials.com. Please be reminded that today's discussion may include forward looking statements, which are subject to risks and uncertainties. These risks, along with other legal disclaimers, are described in detail in the company's earnings release and in other filings with the Securities and Exchange Commission.

[Mark Warren, VP, IR at Vulcan Materials Company]

Reconciliations of non GAAP financial measures are defined and reconciled in our earnings release, supplemental presentation and other SEC filings. During the Q and A, we ask that you limit your participation to one question. This will allow us to accommodate as many as possible during our time we have available. And with that, I'll turn the call over to Tom.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Thank you, Mark, and thank all of you for joining the Vulcan Materials earnings call this morning. Our first quarter results showcased the powerful combination of our two pronged growth strategy to improve earnings through compounding profitability in our organic business and adding strategic assets to our portfolio. Consistently expanding our cash gross profit per ton is key to successfully growing earnings through varied macroeconomic backdrops. In the first quarter, our teams delivered an impressive 20% year over year improvement. Complemented by the contribution from prior year acquisitions, the strong performance in our legacy business led to a 27% improvement in adjusted EBITDA and four twenty basis points of expansion in adjusted EBITDA margin.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

I'm pleased with how our teams are executing on our Vulcan Way of selling and Vulcan Way of operating disciplines regardless of the demand backdrop. Aggregates shipments in the first quarter were 1% lower than the prior year. Shipments from acquired aggregates facilities partially offset the impacts of extremely cold weather across many of our markets and one less shipping day in the quarter. Our commercial execution and commitment to January price increases yielded two ninety basis points of sequential price growth from the fourth quarter. And Aggregates' freight adjusted price improved 7% on a year over year basis.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

On a mix adjusted basis, Aggregates' freight adjusted price improved 8.5% over the prior year. Our operational execution and discipline in the quarter were noteworthy. Aggregates freight adjusted unit cash cost of sales declined 3% compared to the prior year. Moderating inflationary pressures, a relentless focus on plant efficiencies and some timing benefits of delayed expenditures due to weather conditions all contributed to the cost performance. Trailing twelve months, aggregates cash gross profit grew to $10.99 per ton within a penny of our 11 to $12 goal and a ninth consecutive quarter of double digit growth.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Our Aggregates business is performing well. Our downstream businesses are also performing well. Cash unit profitability in both asphalt and concrete expanded considerably by nineteen percent and seventy seven percent respectively. Total cash gross profit improved by over 50% through same store unit profitability improvement and the benefit of the prior year acquisitions. We delivered a strong start to the year and we're focused on carrying that momentum forward as we navigate increasing macroeconomic volatility driven by the uncertainty in trade policy and unclear trajectory of interest rates.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

We believe that private demand will continue to face challenges this year, while public demand remains a healthy offset. Affordability issues and elevated interest rates persist as headwinds in residential construction activity. Single family starts and permits have been declining recently, and multifamily activity remains weak as anticipated. However, overall, single family inventory levels, particularly in Vulcan states, are below average historic levels, and mortgage performance measures do not point to distress in housing markets. Demographics in Vulcan markets support a consistent need for additional housing, So we continue to believe that the timing of additional interest rate reductions and overall improvement in affordability will dictate when residential construction activity returns to growth.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

While the trends in private nonresidential demand vary across categories, the interest rate environment and macroeconomic uncertainty seem to be delaying the timing of a recovery in starts. Importantly, warehouse activity, the largest category in private nonresidential construction appears to be stabilizing after multiple years of declines and data center activity in our markets continues to accelerate. On the public side, IIJ related spending remains a catalyst with two thirds of the highway dollars yet to be spent. Public construction is poised for continued steady demand growth. Trading twelve month contract awards in Vulcan states continue to outpace other markets.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Capital plans in nine of our top 10 states are up and voters passed $45,000,000,000 transportation spending ballot initiatives in the November election cycle in 12 of our key states. And as I said, public demand is healthy and remains an important offset to private demand challenges in 2025. Our teams are closely monitoring the local market conditions and are well positioned to respond to an ever evolving environment by controlling what we can control, that is how we perform on the commercial and operational sides of our business. By staying focused on our disciplines, I am confident in our ability to execute. We continue to expect to deliver between $2,350,000,000 and $2,550,000,000 of adjusted EBITDA in 2025.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Now I'll turn the call over to Mary Andrews for some additional commentary on our first quarter. Mary Andrews?

[Mary Carlisle, Senior VP & CFO at Vulcan Materials Company]

Thanks, Tom, and good morning. Our consistent success and compounding results in our aggregates led business is translating to attractive free cash flow. Over the last twelve months, we have generated $869,000,000 of free cash flow, a 93% conversion of net earnings. We have allocated this capital to grow our business and return cash to shareholders. We have deployed $2,200,000,000 for strategic acquisitions and returned $336,000,000 to shareholders, while generating a return on invested capital of 16.2% and maintaining debt to adjusted EBITDA leverage within our target range of two to 2.5 times.

[Mary Carlisle, Senior VP & CFO at Vulcan Materials Company]

At

[Mary Carlisle, Senior VP & CFO at Vulcan Materials Company]

the end

[Mary Carlisle, Senior VP & CFO at Vulcan Materials Company]

of the first quarter and following the March redemption of our twenty twenty five senior notes for $400,000,000 our net debt to adjusted EBITDA leverage was 2.2 times with over $190,000,000 of cash on hand. A disciplined approach to capital allocation and a well positioned balance sheet are fundamental to our long term success. Our liquidity position and financial flexibility, our competitive strength as we navigate an uncertain macro economy, evaluate strategic growth opportunities and continue to create value for our shareholders. Our first quarter results provided an outstanding start to 2025. Our organic business delivered strong results in all three segments, and the operations acquired in 2024 are performing well.

[Mary Carlisle, Senior VP & CFO at Vulcan Materials Company]

We continue to evaluate the potential direct and indirect impacts of tariffs to our business. While we may experience some tariff related inflationary pressures in our operating costs, we do not currently anticipate these impacts to have a material effect on earnings. Importantly, we have a proven business model that has successfully navigated a variety of external disruptions in recent history. We remain focused on what we can control and expanding our aggregates cash gross profit per ton regardless of the macro backdrop. Capital expenditures in the quarter were $105,000,000 and we continue to expect to spend between $750,000,000 and $800,000,000 for the full year.

[Mary Carlisle, Senior VP & CFO at Vulcan Materials Company]

SAG expenses in the quarter were in line with our expectations, and we continue to expect full year SAG expense of between $550,000,000 and $560,000,000 I'll now turn the call back over to Tom to provide a few closing remarks.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Thank you, Mary Andrews. I want to thank the men and women of Vulcan Materials for their hard work in the first quarter that translated to an outstanding safety and financial performance. Most importantly, they stayed focused on keeping each other safe. And their commitment to executing each day is showing up in our bottom line. Our focus is on what is ahead, maintaining our solid momentum and continuing to leverage our Vulcan Way of selling and Vulcan Way of operating disciplines to compound profitability in our legacy business, capture synergies from acquisitions and deliver value for our shareholders.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

And now, Mary Andrews and I will be happy to take your questions.

[Operator]

We'll take our first question from Jerry Revich with Goldman Sachs. Please go ahead. Your line is open.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Good morning, Jerry.

[Jerry Revich, Senior Investment Leader & Head of US Machinery, Infrastructure, Sustainable Tech franchise at Goldman Sachs]

Hi. Good morning, Hi, Tom. Mary Andrews, Mark. Really impressive price cost spread you folks put up in the quarter.

[Jerry Revich, Senior Investment Leader & Head of US Machinery, Infrastructure, Sustainable Tech franchise at Goldman Sachs]

Tom, I'm wondering if you could just talk how you're thinking about mid year price increases and cost cadence given the strong performance and the spread?

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Yes. I guess as it goes to price, I would tell you as expected, we carried really good momentum into the year with prices up 7%, mix adjusted up 8.5%. I think it was a combination of two things. January 1 price increases pretty much went as expected. And then we had really good pricing in our backlog and we continue to have good pricing in our backlog.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

So I thought the first quarter started the year off really good, keep our guidance at five to 7%, remembering that we have to turn that price into profit. And you saw the Vulcan was selling, a couple of Vulcan operating do that in Q1 with unit margins up some 20%. So, really good start to the year. And I think what that is, is simply the bulk way of selling a bulk way of operating at work. As it goes to mid years, we started those discussions now.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

We'll have those talks about mid year in all of our markets. I would expect a range of outcomes by market and by product line much like the last couple of years. In those discussions, as we always say, the mid years will impact 26 more than they will 25. So a really good start to the year and pleased with the performance and pleased with the execution of the Vocal Wave selling and Vocal Wave operating.

[Jerry Revich, Senior Investment Leader & Head of US Machinery, Infrastructure, Sustainable Tech franchise at Goldman Sachs]

Congratulations to the team. Thanks.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Thank you.

[Operator]

We'll take our next question from Tyler Brown with Raymond James. Please go ahead. Your

[Operator]

line

[Tyler Brown, Financial Advisor at Raymond James Financial]

Hey, good morning. Hey, look, Tom, there's a lot of hand wringing Hey, about the outlook for volumes, maybe more so on the private side. You guys kind of mentioned that front, but obviously the ten years in the housing market has been a little bit stubborn. But just in broad strokes, can you kind of give us an update on how you would kind of characterize the organic rock volumes in 'twenty five if you kind of parse them between resi, nonresi and public? Just kind of how do you get to that flattish organic volume?

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Yes. So I think what we're saying is our guidance of three to five with the acquisitions, keep that guidance. We think as we said, you said, we got challenges on the private side, but we see continued really healthy growth on the public side, both in highway and in non highway infrastructure. The non highway infrastructure is really going well. Q1 shipments were down 1%, but that's it wasn't linear.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

January and February were 7%, really driven by the extremely cold weather that we saw in the winter. And then we got to March, shipments grew by 9%. It's aided that was aided by acquisitions and a little bit easier weather comps. So at this point, I think we stick to our guide of 3% to 5%, challenged private, stronger public. Now remember, that's probably going to be back half loaded.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

And if you remember last year, we had a really weather challenged back half of the year, so a lot easier comps going into it. I think if you kind of look at what's going on in the market right now, project people ask all the time, are you getting projects canceled or held? Projects that have started or go, they're not held or not canceled. Now we're bidding a lot of big projects that people seem to be on the pause button. You couple that with importantly, I think if you look at our bookings, they're up substantially on the public side.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

They're up slightly on private work. If you look at total backlogs, they're up year over year. So we're starting to see some water build behind the dam. The challenges, I think, will be on probably the fixed concrete plant side driven by challenges in private demand. A mixed bag, a decent start to the year, but again, I'd point you to back half loaded for volumes.

[Tyler Brown, Financial Advisor at Raymond James Financial]

Yes. Great color. Mixed bag. Got it. Thank you.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Thank you.

[Operator]

We'll take our next question from Anthony Pettinari with Citigroup. Please go ahead. Your line is open.

[Asher Sohnen, Analyst at Citigroup]

Hi, Hi. This is actually Ashra Sondant on for Anthony. Thanks for taking my question. I wanted to ask for maybe update around kind of your thoughts on administrative policy. Like have you seen any kind of pressure on the pace of IJA rollout, project starts or maybe IRA related projects from any of the policy attitudes or kind of executive orders we've seen?

[Asher Sohnen, Analyst at Citigroup]

I think last quarter, there really wasn't much of an impact. So just wanted an update.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

No. Really no impact to us. I think when it comes to the highway work or public demand, there's no uncertainty of highway funding at the federal level. IIJ funds are flowing, I'd say, as expected. Actually, the states right now are working on their new budgets.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

It appears that we'll see in our states growth over the next fiscal year, which starts kind of mid summer. You got to remember, obviously, there was also four local road excuse me, 40 local road and bridge measures in last year's election, which was an additional $45,000,000,000 So short story is no impact from as far as funding for infrastructure. We actually see growth in federal, state and local funding probably for the next couple of years in our markets, including 2025. As I said in my opening comments, you still got two thirds of the IJ funding yet to be spent. So we feel really good about the public side.

[Asher Sohnen, Analyst at Citigroup]

Got it. Thanks. That's good to hear. I'll turn it over.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Thank you.

[Operator]

We will take our next question from Keith Hughes with Truvist. Please go ahead. Your line is Hey,

[Keith Hughes, Managing Director at Truist Securities]

Hey, how

[Keith Hughes, Managing Director at Truist Securities]

are you doing? Thanks for the question and great quarter here. I guess question is on cost. Costs were down. Could you just talk about specifically what happened in the quarter and what your outlook on the cost side is for the rest of the year?

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Yes. I would tell you I would take you back to our original guide on costs. While the quarter was it was a great quarter. Look, we're down 3%, excellent performance for our operating teams. We got costs down 3% with slightly lower volumes in very, very cold conditions in January, February.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

I'm proud of our operators. But I attribute the performance to three things. One, as I said, improving operating efficiencies. The Vulcan way of operating is starting to kick in. We should see that get better as we progress through the year and really get that technology to work in those quarries.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Second, I thought we I thought our folks did a really good job controlling spending matched to diminished ability to operate in the cold weather. And the third is we simply had some cost pushback. I mean, we had some projects because of the bad weather stripping and other things that we just couldn't do in the quarter. So cost, as we always say, it's going to it's lumpy quarter to quarter by nature. Take the full year, we take you back to our guide, which is kind of that low to mid single digit.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Now we'll do our best to beat that, and we got the Vulcan way of operating, executing. And so I think we got a shot at beating it. But at this point, too early to call. I'd take you back to guidance.

[Keith Hughes, Managing Director at Truist Securities]

Okay, great. Thank you.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Thank you.

[Operator]

We'll take our next question from Kathryn Thompson with Thompson Research Group. Please go ahead. Your line Kathryn.

[Kathryn Thompson, Founding Partner & CEO at Thompson Research Group]

Good morning, and thank you for taking my question today. Wanted to circle back just on two different things that tie into your Vulcan Way of operating selling and the outlook. So contacts that we speak to in the heavy material space and we're finding that there just have and have not seen the construction industrial value chain. But what strikes us is on the heavy material side, things are maybe not quite as bad as some of the headlines show. Could you, Mary, also first, are you seeing any type of significant project either cancellations or delays?

[Kathryn Thompson, Founding Partner & CEO at Thompson Research Group]

And how does your Vulcan way of operating selling help differentiate yourself as you deal with a more uncertain environment? Thank you.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Yes. So on project delays or cancellations, what we started seems to be going. Nothing is canceling. Once it started, nothing is put on hold. As I said a minute ago, we are seeing we're bidding a lot of work, Catherine, and it's just not going right away.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

I think that is good news a little bit frustrating, but good news because people are assessing projects. I think they just are not willing to pull a trigger until we get rid of some of the macro volatility. And as I said, if I look at our bookings, both on public and private, they're doing very well. Backlogs are healthy. So I think there is some pent up demand out there that will go later on once the world gets a little clearer.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

As it comes to the Vulcan Way of selling and Vulcan Way of operating, I attribute the consistency and improvement in unit margins over the last two plus years. That's what I attribute that to because it just gives us a lot of clarity and forward looking information to our sales group and our operators of how we run our business. We're a little bit further ahead of what we're selling, and you're seeing that in price and you're seeing that in execution of how we run our markets and ability to see forward in those markets. Both way of operating, good quarter, but one quarter does not a trend make. So we got we have proved that out.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

I am pleased with the technology that is now being put to work in our 01/2025, '1 hundred and '20 largest operations, very early stages of that. So I think we'll again, we'll have to a lot of hard work for our operators throughout 2025 and beginning of twenty twenty six, but it is paying off and we are seeing improved efficiencies. You put all that together and it just gives us a model that is able to take advantage of tailwinds and offset headwinds of how we consistently execute.

[Kathryn Thompson, Founding Partner & CEO at Thompson Research Group]

Great. Thank you very much.

[Kathryn Thompson, Founding Partner & CEO at Thompson Research Group]

Thank you.

[Operator]

We'll take our next question from Trey Grooms with Stephens. Please go ahead.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Thanks, Trey.

[Trey Grooms, Managing Director at Stephens Inc]

Hey, good morning, Tom. Good morning, Mary Andrews, Mark.

[Mary Carlisle, Senior VP & CFO at Vulcan Materials Company]

Good morning.

[Trey Grooms, Managing Director at Stephens Inc]

And congrats on the good quarter.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Thank you.

[Trey Grooms, Managing Director at Stephens Inc]

So,

[Trey Grooms, Managing Director at Stephens Inc]

I get the profitability has been touched on several times here, but 20% cash gross profit improvement, that's per unit, that's about as strong as we've seen. And I know there has been some puts and takes. And it sounded like the moderating inflation, of course, the productivity improvements. But I guess the one piece that I want to try to get my head around on as far as kind of thinking about the cadence as we move through the year would be on the things you pointed out, Tom, around some maybe delayed expenditures with stripping and things like that, that I understand are hard to call when that's going to happen, especially when weather is not your friend in a given quarter. But is there anything that you could give us on how to think about maybe the cadence of that?

[Trey Grooms, Managing Director at Stephens Inc]

Is it going to be lumpy in a quarter here or there? We should think about just the profitability as we kind of go through the quarters here?

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Sure. I'll take that kind of in pieces. First of all, volume, as we said, it will be back half loaded, both from a timing and a comp perspective. I think that's how I'd look at volume. On pricing, I think we'll be pretty consistent.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

I would guide you to percent that 5% to 7% quarter to quarter. I think we'll be pretty consistent as we operate through the year with price. Cost, it's a harder call. As I always say, that cost is going to be lumpy. But as an investor, you want it that way because we need to spend the money when we need to spend the money and proactively not try to time it or you'll have unpredicted maintenance and higher maintenance costs.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

So again, back half loaded, price pretty consistent 5% to seven cost a little bit lumpy. Look, we had a great start to the year on cost. I would love to tell you we're going to beat the guide of low to mid, but we just need to see a few more quarters before we go there. Obviously, operators, that is their goal. That's what they want to do.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

But we got to play that out for a while.

[Trey Grooms, Managing Director at Stephens Inc]

Yes. Understood. And I guess just with that, if you could maybe touch to the downstream segments, because you're expecting, I think, some improvement there as well, which we saw some in the quarter. Is that kind of still the thought around downstream?

[Mary Carlisle, Senior VP & CFO at Vulcan Materials Company]

Yes, Trey. Our downstream businesses are performing really well. We still expect them to contribute cash gross profit of about $360,000,000 for the year, two thirds asphalt, probably one third ready mix. And importantly, like you said, that's really a combination of strong unit profitability growth in legacy operations coupled with the contribution from the acquisition. So both asphalt and ready mix got off to a good start and we still expect that level of profitability for the year.

[Trey Grooms, Managing Director at Stephens Inc]

Yes. Got it. Thank you. I'll pass it on. Good luck.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Thank you.

[Operator]

We'll take our next question from Garik Shmois with Loop Capital. Please go ahead. Good morning.

[Garik Shmois, Managing Director at Loop Capital Markets LLC]

Hi, thanks. Hey, good morning and congrats on the quarter. I was hoping you could speak to pricing in a little bit more detail. First, if you could maybe help us understand where you are on integrating Wake Stone and getting pricing there up to the average? And then secondly, just on

[Garik Shmois, Managing Director at Loop Capital Markets LLC]

the mid years, I know

[Garik Shmois, Managing Director at Loop Capital Markets LLC]

it's early days and you mentioned traction should be similar to prior years. But just curious if you're getting any pushback or what kind of feedback you're getting considering the private construction slowdown from your ready mix customers? Or are you seeing perhaps some more understanding given the expectations for inflation moving forward?

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Yes. So I think that I would call like I said, I would call pricing as expected. Our January ones went well. Mid years, we're just starting those conversations, so to be seen. Pricing is always easier with growing demand and we're seeing that where we got some challenges on the private side.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

We're seeing good growth on the public side, which is always helpful. That's also a lot more predictable. So I would I guess, would call it as expected from a pricing perspective and to be seen kind of with mid years.

[Mary Carlisle, Senior VP & CFO at Vulcan Materials Company]

Yes. And then just overall, Gerrick, I think as it relates to the acquisitions, same as expected. Performance was good in the first quarter. We continue to expect approximately $150,000,000 of contribution for the full year and working hard to capitalize on our Vulcan Wave selling and Vulcan Wave operating disciplines to capture synergies with the acquisition as well as improving the legacy business.

[Garik Shmois, Managing Director at Loop Capital Markets LLC]

Okay. Makes sense. Thank you.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Thank you.

[Operator]

We'll take our next question from Steven Fisher with UBS. Please go ahead. Your line is open.

[Steven Fisher, Managing Director & Equity Research Analyst at UBS Group]

Good morning. Thanks much. Congrats on the profit performance. Just wanted to follow-up a question on the bidding, which you've addressed a couple of times, where you said some things are paused, which sounds like it's really on the private side. But within those pauses, how broad would you say those are?

[Steven Fisher, Managing Director & Equity Research Analyst at UBS Group]

Is that mainly kind of very interest rate sensitive commercial type projects? Or is it also on things that are more perhaps structural in nature, things like the data centers or semiconductors or pharma, bio or overseeing these bigger projects that seem to have good momentum? I'm just curious how broad you're seeing that hesitancy on the decision making that move right ahead?

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

I'd tell you, it's not real broad. You're seeing some big commercial projects that people are taking bids on that pull the trigger. As far as public work, it's a go and nothing's being paused there. I don't think it's that wide out there. As far as data centers, that is a bright spot for us.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

We're doing a lot of data center work right now. 6% of the data centers that are under construction are in our footprint. If you look at what's coming up in data centers, 80% of the proposed data centers are within 30 miles of Vulcan Quarry. So that will be a really bright spot for us and one that is a go. I think it would be interesting to watch the data center over the next few years because that's going to lead to substantial power generation construction, which will be very aggregate intensive for us over the next three to five years.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

And so that will too will be a bright spot coming on nonresidential. So it's the pause is big commercial work. I don't think it's that widespread. It's just interesting that you see some of those big projects will bid it and doesn't the timing is just pushed back. I think for me, it's good news because sooner or later it's going to go.

[Steven Fisher, Managing Director & Equity Research Analyst at UBS Group]

Terrific. Thank you.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Thank you.

[Operator]

We'll take our next question from Timna Tanners with Wolfe Research. Please go ahead.

[Timna Tanners, Managing Director - Equity Research at Wolfe Research, LLC]

Hey, good morning. Wanted to about not the direct impact of tariffs. I recognize you said those were limited, but the impact of the tariff related uncertainty perhaps on your customers and acquisition candidates. Just wondering if there's anything incremental you can touch on there, please.

[Timna Tanners, Managing Director - Equity Research at Wolfe Research, LLC]

Yes.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

So to be clear on tariffs, we're constantly evaluating the possibilities of our impact on our business. I think our model really limits the direct impact for Vulcan. At this point, we don't think tariffs move the needle on our cost outlook. You got to remember, we own our largest cost, which is cost component, which is the rock in the ground. And then you also got to remember, our model allows us to rapidly offset any cost volatility.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

And because you saw that when we had breakneck inflation, which is probably a lot bigger impact than the tariffs. A watch as you said, a watch for us on tariffs is the cost impact of private construction. I think that was a little early to call, but it is something that everybody that I think we need to be thoughtful of.

[Timna Tanners, Managing Director - Equity Research at Wolfe Research, LLC]

Okay. But regarding M and A candidates, are they acting differently because of the uncertainty? Or can you speak to your customers' impact? Again, recognize that the minimal impact direct is great.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Yes. On the heavy construction business like ready mix and asphalt, I don't see a big impact at this point as far as customers are concerned. As far as M and A, we call out some smaller deals that we're talking about right now. I don't think tariffs are having a big impact. What I do think is with M and A, it typically slows in times of volatility, and you're seeing that right now.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

So we may have to let the wool spin a little bit before you see substantial M and A, but I think that's a temporary pause.

[Mary Carlisle, Senior VP & CFO at Vulcan Materials Company]

Yes. And I think, Timna, importantly for us, we have the balance sheet obviously very well positioned for future growth as M and A opportunities do arise. The key for us is obviously to continue to be disciplined as we evaluate those so that we can deliver attractive returns on capital over time and continue to grow our leading aggregates positions. But we like our position and are well prepared to act in the M and A market if any of this uncertainty does impact that.

[Timna Tanners, Managing Director - Equity Research at Wolfe Research, LLC]

Got it. Okay. Thanks again.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Thank you. We'll take

[Operator]

our next question from Genevieve with D. A. Davidson. Please go ahead.

[Analyst]

Hi. Congrats on the quarter and thank you. Thank you. Good morning. Good morning.

[Analyst]

I was you mentioned that on the private bookings was up slightly. Could you do you mind commenting a little bit about what kind of works are you seeing that are picking up slightly through your bookings?

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Yes. I think the bright spot on the private side is data centers. And it's majority of those are in our footprints. I think on the public side, it's obviously highway work is up. But a really bright spot for us is infrastructure.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

The non highway work, which is water ports and airports. Those bookings are up substantially and again a bright spot. But on the private side, I think two things is that data centers are up and we're starting to see kind of the bottom of warehouses. We think we hit the bottom of that. So it's not as big a drag as it was maybe a year ago.

[Analyst]

And with the common owned warehouses, does that offset some of the residential? Or is this just a nice pickup that you hope to carry on through 2026 into 2026?

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

I think the offset on single family is really on the public side, is really highways and non highway infrastructure. Mean that has helped a little bit, but the real offset is the public demand.

[Analyst]

All right. Great. Thank you so much.

[Operator]

We'll take our next question from Michael Feniger with Bank of America. Please go ahead. Your line is open.

[Michael Feniger, Analyst at Bank of America]

Hey, guys.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Good morning.

[Michael Feniger, Analyst at Bank of America]

Good morning, Tom. Good morning, everyone. Thanks for having me in.

[Michael Feniger, Analyst at Bank of America]

I just wanted to ask Tom with the conversation around tariffs, if in terms of just your own price cost. I mean, if contractors out there are bracing for higher input costs for materials, equipment, other areas, does this give you cover to be able to raise pricing even if your own costs, it looks like, are actually trending lower. You know, when we see what's happening with oil prices today and diesel. So I'm just wondering with the amount of aggregates that is in these projects, if all these other items are seeing inflationary and your customers are bracing for that, how do you kind of think about that when it comes to pricing relative to your costs that might not be going up to that degree?

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Well, I think, first of all, we don't price on cost. We price on earning it with our customers. Think when you look at tariffs, you've also got to put a little bit in perspective of what we saw with inflation over the last two or three years, which was breakneck. And the market absorbed it. I think the tariff thing will shake out.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

I think that I don't think it will have an impact on pricing when it comes to aggregates.

[Michael Feniger, Analyst at Bank of America]

Thank you.

[Operator]

We'll take our next question from Philip Ng with Jefferies. Please go ahead.

[Jesse Barone, VP - Equity Research at Jefferies]

Hey, good morning. It's Jesse Barron on for Phil. Just a question on asphalt. Obviously, oil has come down here in the first quarter and then taken another step down in 2Q. Just curious kind of how that kind of translates into your own pricing and then on the cost side, kind of what the lags are there?

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

So I thought asphalt had a good performance in the quarter despite the cold weather. The cash gross profit was up 24%. We did have some savings with liquid, which is about $3,000,000 but that product line continues to perform extremely well. And I think that with the public demand growth that we're seeing, it's a good story for the asphalt business and a good story for aggregate component of the asphalt business, so a real support for us.

[Jesse Barone, VP - Equity Research at Jefferies]

All right. Thanks. I'll turn it over.

[Operator]

We'll take our next question from Michael Dudas with Vertical Research. Please go ahead.

[Michael Dudas, Equity Research Analyst at Vertical Research Partners]

Thank you, operator. Good morning, Tom, Mary Andrews and Mark.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Good morning.

[Michael Dudas, Equity Research Analyst at Vertical Research Partners]

For Mary Andrews, you highlighted in your prepared remarks your cash conversion, which is very solid. Maybe you can talk about for the next several quarters how that looks, any meaningful changes from what we've seen in history. And as you think about CapEx, growth versus maintenance and this deferred or maybe delay in M and A, given the volatility that we've seen, maybe we'll see more in stock prices, and you did buy back some stock, but you had the debt repayment. Is that something that's certainly on the table maybe in near term if we still get that volatility on the repurchase side? Thank you.

[Mary Carlisle, Senior VP & CFO at Vulcan Materials Company]

Yes. So I think first, as it relates to cash conversion, we've that has stayed at an attractive level. We would expect that to continue going forward. From a CapEx perspective, for 2025, we still plan to spend the $750,000,000 to $800,000,000 that we had communicated. As you know, that's a bit higher than last year, primarily due to some spending on some large plant rebuild projects.

[Mary Carlisle, Senior VP & CFO at Vulcan Materials Company]

But I would tell you, we've been consistently reinvesting at what we believe to be appropriate levels for the needs of the business. So I wouldn't anticipate any big changes there. We are always evaluating lots of different growth CapEx opportunities. And to the extent that we believe those can deliver good growth and attractive returns over time, we'll evaluate those as they come up. And it could be a good use of capital going forward depending on what the other opportunities are, but really no changes to our approach to capital allocation at this point.

[Michael Dudas, Equity Research Analyst at Vertical Research Partners]

Thank you.

[Operator]

We'll take our next question from Angel Castillo with Morgan Stanley. Please go ahead. Your line is open.

[Angel Castillo, Executive Director at Morgan Stanley]

Hi, good morning. Thank you for taking my question and congrats on the strong quarter. Thank two quick ones for me. Just first on the power generation opportunity, Tom, that you mentioned. Can you just give a sense of kind of the order of magnitude of how much more kind of intensity in terms of aggregates power generation might be?

[Angel Castillo, Executive Director at Morgan Stanley]

And just to clarify, is that kind of just the nuclear side? Or is there broader kind of power generation being more aggregates intensive? And then maybe one last one on price would just be you talked a lot about it from the VMC side, but curious if you're seeing anything in terms of competitors' discipline or mom and pops and kind of trends in how they're going about mid years?

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

I'd take the pricing question first. On the mid years, it's a little early on those as we're just beginning those conversations. I think that when it comes to mid years, we have those conversations every year and have those have had that probably for the last four years. So I guess no surprise and to be expected and nothing has changed as far as timing or the conversations on mid years. As far as power generation, I would tell you it's probably going to be more of a late 'twenty six, 'twenty seven play and go on for probably about five years.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Those will be extremely agri tenses. Those are big, big projects. I expect more gas generation power projects than nuclear early on, maybe nuclear later, but too early to call on that one. But those will be and they'll be in the markets like Texas, Georgia, Virginia, Arizona, Illinois where the big data center projects are, as where I expect a lot of those and even some in other states. But there's just a lack of power generation that we're seeing right now.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

So and if you talk to the power generation companies, they're just going to have to expand. And I think we'll see that over the next five years.

[Angel Castillo, Executive Director at Morgan Stanley]

Very helpful. Thank you.

[Operator]

We'll take our next question from David MacGregor with Longbow Research. Please go ahead.

[David Macgregor, President at Longbow Research]

Yes. Thanks for taking the questions and congrats on the strong quarter.

[Steven Fisher, Managing Director & Equity Research Analyst at UBS Group]

Thank you.

[David Macgregor, President at Longbow Research]

I guess I wanted to just follow-up on the discussion around tariffs and you're noting that it's not going to be very impactful to the business, but I'm just wondering about the downstream and ready mix. And you've got tariffs that are likely to hit Mediterranean, Southeast Asian imports as well as port levies on many of these cement carrying vessels. I'm just wondering how you expect that to come into play in terms of the ready mix market and how you manage your margins through that? And then just secondly, if I could just ask about the cost performance, which was really impressive. But obviously, petroleum, liquid asphalt, you're getting a break there.

[David Macgregor, President at Longbow Research]

But anything going on in terms of maintenance and repair, subcontracting services or parts? Any kind of moderation inflation in those boxes as well?

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

So on the cost piece first, we have seen some moderation on inflation and it's not coming down. It's just not going up as fast as it was

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

a

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

year or two So that is helpful. I think operating efficiencies has helped that too. And then as I said, we actually just pushed some costs back in the year because we was too cold to do some projects that we wanted to do. As far as tariffs, I don't see a big impact on our business or our the ready mix or the asphalt business on tariffs at this point. Obviously, that could change, but at this point, we don't see a big impact on it.

[David Macgregor, President at Longbow Research]

Thank you.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Thank you.

[Operator]

We'll take our next question from Brian Brophy with Stifel. Please go ahead. Your line is open.

[Andrew Maser, Associate Vice President at Stifel Financial Corp]

Hello. This is Andrew Mazer on for Brian. Thank you for taking my question. I just wanted to ask another on the plant automation journey. I think earlier in the call you said that these tools are now implemented in 01/2025 locations or 75% of volumes.

[Andrew Maser, Associate Vice President at Stifel Financial Corp]

I was wondering where you expect these numbers to be by the end of this year or next year? And then is there any way to frame the benefits that you're beginning to see from these initiatives either from a volume throughput or unit cash cost savings perspective? Thank you.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Yes. So what I would let me be clear, we put the instrumentation in those the top 100, one hundred and 20 plants. We have not fully implemented that instrumentation at this point, probably maybe 20%, thirty % of the plants are we getting the full efficiencies out of. And I think it will take this year a little bit into next year before we can match the technology to the operating abilities and the production. And what you're trying to do there is maximize throughput, minimize downtime and maximize throughput of critical sizes, whether it's asphalt rock or concrete rock.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

That's where the efficiencies come in. Again, early stages of getting the full benefit out of that. Too early to call what that means except for degrees of good. But each plant, when you look at these, you may get 4% out of one plant, 10%, twelve % efficiencies out of another plant, way too early to call about what that means from a tons per hour, tons per critical size hour or dollars per ton benefit. But it sure is going to help.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

So that then that's why we do it.

[Operator]

And there are no further questions on the line at this time. I'll turn the program back to Tom Hill for any additional or closing remarks.

[J. Thomas Hill, Chair & CEO at Vulcan Materials Company]

Thank you for your time this morning. Thank you for your interest in Vulcan Materials Companies. We hope that you and your families stay safe and healthy, and we look forward to talking to you throughout the quarter. Good morning.

[Operator]

And this does conclude today's program. Thank you for your participation and you may now disconnect.

Participants

Executives

• Mark Warren, VP, IR
• J. Thomas Hill, Chair & CEO
• Mary Carlisle, Senior VP & CFO

Analysts

• Jerry Revich, Senior Investment Leader & Head of US Machinery, Infrastructure, Sustainable Tech franchise at Goldman Sachs
• Tyler Brown, Financial Advisor at Raymond James Financial
• Asher Sohnen, Analyst at Citigroup
• Keith Hughes, Managing Director at Truist Securities
• Kathryn Thompson, Founding Partner & CEO at Thompson Research Group
• Trey Grooms, Managing Director at Stephens Inc
• Garik Shmois, Managing Director at Loop Capital Markets LLC
• Steven Fisher, Managing Director & Equity Research Analyst at UBS Group
• Timna Tanners, Managing Director - Equity Research at Wolfe Research, LLC
• Analyst
• Michael Feniger, Analyst at Bank of America
• Jesse Barone, VP - Equity Research at Jefferies
• Michael Dudas, Equity Research Analyst at Vertical Research Partners
• Angel Castillo, Executive Director at Morgan Stanley
• David Macgregor, President at Longbow Research
• Andrew Maser, Associate Vice President at Stifel Financial Corp