Release Date: February 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you discuss the timing and success of aggregates pricing increases and how we should think about the cadence of pricing this year? A: (J. Thomas Hill, CEO) Our Q4 and total year pricing was up 11%, providing strong momentum into this year. Our guidance is 5% to 7%, negatively impacted by over 100 basis points due to acquisitions. January 1 price increases and our backlog support this guidance. We expect consistent pricing improvement, with low double-digit cash gross profit per ton improvement each quarter.
Q: What is the expectation for organic aggregates volume growth, and how do you see the cadence throughout the year? A: (J. Thomas Hill, CEO) We expect organic volumes to be flat, with public construction growth offsetting challenges in private construction. The first half may see declines due to weather and private sector weakness, but we anticipate improvement in the second half with easier comps and potential recovery in single-family and nonresidential construction.
Q: Can you elaborate on the record gross margins in Q4 and how they relate to the Vulcan Way of operating? A: (J. Thomas Hill, CEO) Our cost increase was much improved due to better weather, volumes, and efficiencies from the Vulcan Way of operating. We expect low to mid-single-digit cost increases in 2025, a substantial improvement over previous years, driven by our operational efficiencies.
Q: How do you view the impact of administrative policies and tariffs on your business, particularly regarding IIJA and tariffs? A: (J. Thomas Hill, CEO) We see no impact from policy on public demand, as IIJA funding is protected. We expect government support for infrastructure. Tariffs have minimal direct impact on aggregates, and we are confident in navigating any challenges, as demonstrated by our consistent growth despite external pressures.
Q: What is the outlook for private nonresidential construction, and what gives you confidence in a potential rebound in the second half of the year? A: (J. Thomas Hill, CEO) While nonresidential construction will be down in 2025, we see positive signs, such as data centers and warehouse activity stabilizing. Quoting activity suggests pent-up demand, and we expect gradual improvement, setting up a more positive outlook for 2026.
Q: How do you view the downstream portion of recent acquisitions, and what is included in the guidance regarding these businesses? A: (Mary Carlisle, CFO) The acquisitions are new, and we will evaluate their fit within our portfolio. The guidance assumes we own these businesses, with $150 million of EBITDA contribution expected, 60% from aggregates and 40% from downstream businesses.
Q: What is the M&A landscape like after recent acquisitions, and any updates on the Mexico situation? A: (J. Thomas Hill, CEO) The M&A pipeline remains healthy, and we are working on several projects. Regarding Mexico, we are awaiting a tribunal decision, which we expect this year, and we feel confident about our case.
Q: How do you view pricing opportunities and the potential for midyear price increases? A: (J. Thomas Hill, CEO) We plan to announce midyear price increases, which will impact 2026 more than 2025. The success of these increases will depend on customer conversations, but they are not included in our current guidance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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