Executive Summary / Key Takeaways

• Amrize Ltd. (NYSE:AMRZ) has emerged as a focused North American building solutions leader, strategically positioned to capitalize on robust long-term demand drivers like infrastructure modernization, onshoring, and data center expansion in its $200 billion addressable market.
• The company delivered strong Q3 2025 revenue growth of 6.6%, driven by higher volumes and pricing, with its Building Envelope segment achieving substantial 190 basis point margin expansion due to operational efficiencies and lower raw material costs.
• Despite a temporary equipment outage impacting its Building Materials segment's profitability in Q3 2025 and ongoing market uncertainties, Amrize is investing heavily in organic growth projects and its ASPIRE synergy program, targeting 50 basis points of margin expansion by 2026.
• Amrize maintains a healthy balance sheet with a net leverage ratio under 1.7x as of September 30, 2025, providing flexibility for value-accretive M&A, which remains a key part of its growth strategy.
• Management has raised its 2025 revenue guidance to $11.7 billion to $12 billion, while confirming Adjusted EBITDA guidance of $2.9 billion to $3.1 billion and a net leverage ratio below 1.5x, signaling cautious optimism for continued demand momentum.

Amrize's North American Blueprint and Strategic Foundation

Amrize Ltd. (NYSE:AMRZ) has rapidly established itself as a dedicated building solutions powerhouse, exclusively focused on the expansive North American market. Spun off from Holcim Ltd on June 23, 2025, Amrize now operates as an independent public company, offering a comprehensive suite of advanced building solutions, from foundational materials like cement and aggregates to sophisticated roofing and wall systems. This strategic focus positions the company to tap into a substantial $200 billion addressable market, serving diverse customers across infrastructure, commercial, and residential construction.

The company's strategic trajectory is deeply informed by its history of targeted acquisitions and a clear vision for growth. Prior to its independence, Amrize bolstered its Building Envelope segment through the acquisitions of Herbert Malarkey Roofing Company in 2022 and Duro-Last, LLC, along with its related entities, in 2023. These moves significantly enhanced its roofing system offerings, preparing the company for increasing demand in both new construction and repair and refurbishment (RR) markets, which accounted for 44% of its overall revenues in 2024. The company's market leadership is evident, as it stands as the largest provider of cement in the United States and Canada by revenues and production volume, the second-largest commercial roofing company in North America by revenues, and a leader in advanced wall systems. It is also among the two largest aggregates companies in 85% of its operating markets.

Amrize's overarching strategy is firmly anchored in capitalizing on powerful megatrends shaping the North American construction landscape. These include extensive infrastructure modernization, the burgeoning trend of onshoring manufacturing, the rapid expansion of data centers, and the persistent need to address the housing gap. The North American construction market is projected to grow by 3.6% in 2025 and 4.4% in 2026, with civil engineering benefiting significantly from the Infrastructure Investment and Jobs Act. Data center floor space is "rocketing," and energy and utility construction is buoyed by substantial grid-hardening outlays. Amrize's balanced exposure across infrastructure, commercial, and residential sectors, with an even split between new builds and repair and refurbishment, provides a resilient foundation to leverage these long-term demand drivers.

Technological Edge and Innovation Pipeline

Amrize's commitment to innovation forms a critical competitive moat, driving both product differentiation and operational efficiency. The company actively invests in research and development, fostering cutting-edge innovation to meet evolving customer needs. This includes empowering smart design and deploying new building technologies. Amrize also strategically partners with leading construction sector startups to scale new technologies across its operations.

A prime example of this technological foresight is its investment in Sublime Systems, a disruptive cement technology startup. This partnership aims to advance cement production using renewable electricity and carbon-free raw materials, addressing the increasing pressure to reduce embodied carbon in the construction industry. Such initiatives are crucial as the industry seeks new alternatives to traditional materials to enhance resource efficiency, durability, and sustainability. Furthermore, Amrize has partnered with Meta (META) to develop a first-of-its-kind, AI-optimized concrete mix tailored for data centers, demonstrating its material engineering expertise and ability to meet high-performance, speed, and sustainability targets for specialized infrastructure projects. The AI in construction market is growing at a compound annual growth rate (CAGR) of 24.6% and is expected to reach $22.68 billion by 2032. This focus on advanced materials and AI integration provides Amrize with a tangible advantage, potentially leading to stronger customer loyalty and superior margins through premium pricing for specialized, high-performance solutions.

Competitive Arena: Amrize's Position Among Giants

In the highly competitive North American building materials market, Amrize operates alongside established global and regional players. While precise, directly comparable market share figures for all niche competitors are not publicly detailed, Amrize's strong performance in key segments suggests a robust competitive standing. The company positions itself as the largest cement provider in the U.S. and Canada and the second-largest commercial roofing company in North America. Its extensive network of over 1,000 sites and facilities across the U.S. and Canada, combined with its inland footprint in hard-to-reach markets, provides a significant logistical advantage.

Compared to global giants like Holcim AG (HCMLY), Amrize, as a newer independent entity, exhibits greater strategic agility tailored to North American opportunities, particularly in high-growth areas such as data center construction. This allows Amrize to offer materials that are more adaptable and innovative in performance, such as its AI-optimized concrete mixes. While Holcim benefits from extensive global distribution and brand recognition, Amrize's focused approach enables faster innovation cycles and potentially more customized solutions, helping it differentiate. Similarly, against CEMEX S.A.B. de C.V. (CX), Amrize's emphasis on performance-enhanced materials for modern construction, including those for data centers, provides a qualitative edge in product differentiation. CEMEX's broader market positioning and established supply chains offer cost structure advantages, but Amrize's independence allows for a more targeted strategy.

Against aggregates-focused players like Vulcan Materials Company (VMC) and Martin Marietta Materials, Inc. (MLM), Amrize's diversified portfolio across both Building Materials and Building Envelope segments provides a broader revenue base and reduces reliance on any single product line. Amrize's technological integration, such as materials suited for high-tech infrastructure, could give it a lead in product performance for emerging applications. While these competitors boast significant scale and distribution networks, Amrize's agility and innovation focus allow it to capture market share in niche, high-growth areas. The company's management emphasizes that customers recognize the value of a local producer like Amrize, providing consistent high-quality products, local service, and reliable supply chains. Furthermore, the company does not perceive consolidation in the distribution space as a negative impact, viewing distributors as partners in efficiently delivering products. The entry of new greenfield roofing businesses in the U.S. is considered very limited, with the market tending towards consolidation.

Q3 2025 Performance: A Mixed Yet Resilient Picture

Amrize's third quarter 2025 results, its first full quarter as an independent entity, showcased a mixed but resilient financial performance, reflecting both operational strengths and temporary challenges. Total revenues for the three months ended September 30, 2025, reached $3,675 million, marking a robust 6.6% increase from $3,446 million in the prior year period. This growth was primarily fueled by a $165 million increase in sales volume, particularly in the Building Materials segment (cement, aggregates, ready-mix concrete), contributions from recent acquisitions, and $42 million in price increases, notably in aggregates and residential roofing. However, unfavorable foreign currency movements partially offset these gains by $16 million. For the nine months ended September 30, 2025, revenues grew 1.4% to $8,976 million.

Profitability metrics, however, presented a more nuanced picture. Net income for Q3 2025 was $543 million, a slight decrease from $552 million in Q3 2024, resulting in a net income margin of 14.8% (down from 16%). Adjusted EBITDA also saw a decline, reaching $1,067 million compared to $1,103 million in the prior year, with the Adjusted EBITDA Margin contracting to 29% from 32%. This decrease was primarily attributed to the absence of significant gains on land sales and other one-time transactions that boosted Q3 2024 results, higher corporate costs, and crucially, approximately $50 million in elevated manufacturing and distribution costs due to a temporary equipment outage in the cement network within the Building Materials segment.

The Building Materials segment reported revenues of $2,774 million, an 8.7% increase, driven by a $173 million rise in sales volumes and $53 million in aggregates price growth. Cement volumes, excluding trading, increased by 6%, and aggregates volumes by 3.3%, largely due to strong demand from public infrastructure, data centers, and energy-related projects. Despite this volume growth, cement pricing saw a slight 0.6% decrease in Q3 2025, while aggregates pricing surged by 10.1%. The segment's Adjusted EBITDA, however, decreased by 4.2% to $902 million, primarily due to the aforementioned cement network outage and lower cement pricing.

In contrast, the Building Envelope segment demonstrated significant margin expansion. Revenues for the segment increased modestly by 0.7% to $901 million. This growth was supported by acquisitions, such as OX Engineered Products contributing $26 million, and strong commercial roofing repair and refurbishment activity, which saw market share gains. However, residential volumes were softer due to new construction activity and a milder storm season. Critically, the segment's Adjusted EBITDA increased by a robust 9% to $217 million, with the Adjusted EBITDA Margin expanding by 190 basis points to 24.1%. This impressive margin improvement was driven by operational efficiencies, lower raw material costs, and higher residential shingles pricing, showcasing the segment's effective cost management and strategic execution.

Financial Health and Capital Allocation for Growth

Amrize maintains a healthy financial position, providing a solid foundation for its growth ambitions. As of September 30, 2025, the company's net debt stood at approximately $5 billion, a reduction of $612 million from the end of Q2 2025. This led to a net leverage ratio declining to under 1.7x, well within its covenant of no more than 3.75 to 1. This strong balance sheet and investment-grade credit rating offer significant flexibility for future strategic initiatives.

Cash flow generation, while showing some shifts, remains a key focus. For the nine months ended September 30, 2025, net cash provided by operating activities was $404 million, a decrease from $555 million in the prior year. This was primarily influenced by an increase in accounts receivable related to revenue timing and collection efforts, and payments to related parties post-spin-off, partially offset by decreased vendor payments and higher inventory balances. Cash used in investing activities decreased significantly to $211 million from $856 million, largely due to the settlement of the cash pooling program prior to the spin-off, though partially offset by increased capital expenditures and acquisitions. Cash used in financing activities increased to $978 million, driven by substantial repayments of related-party debt, balanced by proceeds from new long-term third-party debt issuances, the Commercial Paper Program, and the debt-for-debt exchange.

Amrize's capital allocation strategy is balanced, prioritizing investments in its business for sustainable growth, pursuing strategic mergers and acquisitions, and potentially returning capital to shareholders. The company invested $631 million in capital expenditure projects for the nine months ended September 30, 2025, an increase from $558 million in the prior year, reflecting its commitment to organic growth. It completed three acquisitions for $86 million (net of cash acquired) during this period, including Northstar Concrete, Langley Concrete, and Jamaica Aggregates Limited, further expanding its footprint and diversifying its offerings. The company believes its existing cash reserves and financing activities, including a $2 billion revolving credit facility and a $2 billion commercial paper program, will adequately fund its short- and long-term capital requirements for at least the next twelve months.

Strategic Initiatives: ASPIRE and Capacity Expansion

Amrize is actively executing on several strategic initiatives designed to enhance operational efficiency, drive profitable growth, and solidify its market leadership. The ASPIRE program is a cornerstone of this strategy, aiming to accelerate synergies and achieve 50 basis points of margin expansion starting in 2026. This program, which began in late April/early May 2025, focuses on optimizing third-party spend and driving synergies across raw materials, services, logistics, and equipment. Management expects to begin realizing savings from ASPIRE in the fourth quarter of 2025, demonstrating a clear path to improved profitability.

Alongside these efficiency gains, Amrize is making significant organic growth investments to expand its production capacity and improve efficiency across its network. Key projects include:

• Ste. Gen Plant Expansion: The expansion of its flagship Ste. Gen cement plant, North America's largest, is on track, with the fifth mill expected to commence production for sale in November 2025.
• Malarkey Shingles Factory: A new state-of-the-art Malarkey Shingles factory in Indiana is progressing, bolstering its Building Envelope capabilities.
• Cement Plant Expansions: Expansions are underway at the St. Constant cement plant in Quebec, the Midlothian, Texas cement plant (to serve the Dallas-Fort Worth market), and the Exshaw plant in Canada (to serve Calgary and Western Canada).
• Aggregates Production: The company is expanding its aggregates production in the Great Lakes region to meet growing customer demand.

These investments are strategically aligned with the long-term megatrends, ensuring Amrize is well-equipped to meet the increasing demand from infrastructure, commercial, and residential sectors. Recent project highlights underscore this, including supplying 100,000 tons of cement for a data center project in Louisiana (one of 25 data center projects in 2025), delivering ready-mix concrete and aggregates for a new battery plant in Ontario, and providing over 75,000 tons of cement and 1 million tons of aggregates for a new LNG plant in Louisiana.

Outlook and Risks: Cautious Optimism Amidst Uncertainty

Amrize's outlook for the remainder of 2025 and beyond is characterized by cautious optimism, balancing strong underlying demand with persistent market uncertainties. Building on its Q3 performance, the company has raised its 2025 revenue guidance to a range of $11.7 billion to $12 billion. It has also confirmed its Adjusted EBITDA guidance of $2.9 billion to $3.1 billion and expects to finish the year with a net leverage ratio below 1.5x.

Management acknowledges that forecasting for Q4 2025 remains "tricky" due to customer uncertainties regarding tariff politics and future interest rates. While no project cancellations have occurred, a "significant number of projects" in the commercial market segment are currently sidelined, awaiting a more stable market environment. Despite this near-term caution, the long-term outlook is robust, with management anticipating that as interest rates decline, pent-up demand will unwind, accelerating construction activity across commercial and residential sectors. The North American construction market is expected to improve in 2026. Cement pricing is expected to be flat for the full year 2025 but is anticipated to improve in 2026 as demand increases, while healthy aggregates pricing growth is expected to continue into Q4 2025.

However, investors must consider several key risks. The company has identified a material weakness in its internal control over financial reporting, specifically related to insufficient accounting and supervisory personnel with appropriate U.S. GAAP technical accounting experience. While remediation efforts are underway, including recruiting qualified personnel and establishing new committees, this weakness will not be considered remediated until enhanced controls operate effectively for a sufficient period. Furthermore, the construction industry is inherently cyclical and sensitive to economic conditions, interest rate fluctuations, and adverse weather, which can lead to project delays and impact demand. The company also faces ongoing "Spin-off and separation-related costs" through fiscal year 2026 as it fully transitions to a standalone public entity.

Conclusion

Amrize Ltd. stands at a pivotal juncture, having successfully spun off to become a focused North American building solutions leader. Its core investment thesis is underpinned by a strategic alignment with powerful megatrends driving demand across infrastructure, commercial, and residential construction, supported by a robust and diversified product portfolio. The company's commitment to technological differentiation, exemplified by its investments in sustainable cement production and AI-optimized concrete, provides a critical competitive advantage in an evolving industry increasingly prioritizing efficiency and environmental impact.

Despite facing near-term headwinds from market uncertainties and temporary operational challenges, Amrize's Q3 2025 performance demonstrated resilience, particularly the significant margin expansion in its Building Envelope segment. The ongoing ASPIRE program and substantial organic growth investments are poised to drive future profitability and capacity, while a strong balance sheet offers strategic flexibility for further value-accretive M&A. While a material weakness in internal controls and broader market volatility present risks, Amrize's leadership in key North American building materials segments, coupled with its proactive strategic initiatives and long-term market tailwinds, positions it as a compelling opportunity for discerning investors seeking exposure to the foundational elements of North America's evolving construction landscape.