瑞银-全球建材：美国水泥下行但未出局-Global Building Materials：US cement：down,not out-20260922

a§

GlobalResearch

22September2026

GlobalBuildingMaterials

UScement:down,notout

HEI,CRHandAMRZbetterpositionedthansentimentassumes

InvestorsappearbearishontheUScementoutlook,andexposedheavysidestocks(AMRZ,CRH,HEI,BZU)havemeaningfullyde-rated.Wedissectalltherelevantdata(demand,supply,imports,prices,utilization)bystatesandregionstoshowthat(1)thedrivingforceofrecentvolumedeclinesandpriceweaknessispredominantlydrivenbyresidentialconstructionweaknessintheUSSouthandWestwhiletheMidwestandEastCoastappearmuchhealthier,(2)importshavestronglyincreasedinpreciselythoseregionsthatarealreadyunderpressure,and(3)CanadiancementimporttariffscouldfurtherimprovesupplyvsdemandinthealreadyhealthierNorthern&Easternregions.WeanalysecementproductioncapacityandlocationmixtofindthatHEI,CRHandAMRZareallbetterpositionedagainsttheseregionalandimportdynamicsthantheUSmarketonaverage,whileBZUismorechallenged.Andwithmoreaggregatesthancementexposureontop,wethinktheearningsgrowthoutlookinHEI'sandCRH's-andtoalesserdegreeAMRZ's-NAbusinessesmaybebetterthanassumed.

2marketsin1:demandbetter,importslowerandutilizationhigherintheNorth

TheUScementmarketsince2020hasreallybeen2marketsin1:whileconstructiondemandwasbettereverywherein2021-23thansince,thebiggestboomandsubsequentdeclineswereintheSouthandWest,whereresiconstruction(thebiggestsourceofcementdemand)hasfallen~30%inthepast2-3years.Thisattractedimportswhichhavenotdeclinedovertheseyears,leadingtoa14-18%ptsincreaseinimportshareintheseregionssince2018,vs8%ptsfortheUSoverallandevenadeclineintheMidwest,andwhat'sworse-withimportpricesatanearly50%discounttodomesticpricesvs20-35%before2018.Asaresult,SouthandWestcapacityutilizationisdown5-14%ptsoverthattimeframevstheUSdown4%ptsandtheMidwestupslightly.WeconcludethatanydemandimprovementintheregionsoutsidetheSouthandWestshouldtranslateintocementpricegrowth,andthisseemsfeasiblewithdatacentersdrivingLSD%cementdemandgrowthalone(UBSe),otherpartsofnon-resalsore-acceleratinginto2027,infraatleaststeadyinourview,withresithekeyheadwind.

PotentialCanadiancementtariffsapossibleaddedboosttoNorthernstates

Thisregionaldispersionwouldbefurtherreinforcedifa50%tariffonCanadiancement(Section338)cametopass(thisremainsinflux).WefindthatCanadianimportsrepresent30-35%ofconsumptionacross~10NorthernUSstates,and50-60%in4ofthem.Areduction/eliminationshouldthereforetightenregionalsupplyvsdemandanddrivehigherdomesticvolumes,utilizationandpossiblyprices.AndbecausethisdynamicimpactstheexactstatesthatarealreadyseeingrelativelyhealthierdemandthantheSouthandWest,wethinkthefundamentalmarketoutlookintheseregions(North,MidwestandNortheast)isevenbetter.Wethenlookatproducer-levelcementcapacityinCanadaandtheUStofindthatwhileAMRZ,CRHandHEIallhaveCanadiancapacitythat'slikelytocomeunderpressure,exposuretotheimport-affectedstatesoffsetstheeffectorinthecaseofHEIevenover-compensates,meaningitcouldbeanetwinner.

Zoomingout:thereisapathwayforUScementearningsgrowth

Takingastepback,whattheresearchinthisnoteaswellasourseparatereportondatacenterssuggestsisthatwhiletheheadlineslookgrim(cementPPInegative,volumesmixed,cementmarginsdown),thereisapathwayforearningsgrowthforsomeUScementproducersoverthenext12-18months,drivenbyregionalmix,datacenterandnon-resdemandgrowth,containedexposurestotheworstresiheadwinds,possiblebenefitsfromCanadiantariffs,andespeciallyforHEIandCRH,meaningfulaggregatesmixontop(wherepricingisstronger).WethinkBZUismorechallengedgivenhigherexposuretotheat-riskstatesand100%cement/concretemix.

Equities

Global

BuildingMaterials

JulianRadlinger,CFA

Analyst

julian.radlinger@

+44-20-79016558

StevenFisher,CFA

Analyst

steven.fisher@

+1-212-7138634

AmiGalla

Analyst

ami.galla@

+44-20-75673411

DiaRajpal

AssociateAnalyst

dia.rajpal@

+44-20-75670462

PatrickRafaisz,CFA,FRM

Analyst

patrick.rafaisz@

+41-44-2399066

ThisreporthasbeenpreparedbyUBSAG.ANALYSTCERTIFICATIONANDREQUIREDDISCLOSURES,iNcLuDiNGiNFoRmAtioNoNtHEQuANtitAtivEREsEARcHREviEwpuBLisHEDByUBS,BEGiNoNpAGE18.

GlobalBuildingMaterials22September2026a§2

GlobalBuildingMaterialsUBSResearch

oNEsummARyoFTHEFiNDiNGsiNTHisREpoRT

1)AverageUScementpricesareflattishorslightlydeclining,drivenbynegativedemandgrowthinthepast3-4yearsandarisingshareofimportsat(far)lowerpricesthandomesticallyproducedcement.

2)ThisdynamicappearssubstantiallydrivenbytheSouthernandWesternregionsoftheUSthough,andmuchlessbytheMidwestandEastCoast(withtheNortheastinbetween-healthiermarketbutalsoimportpressure).

3)Inascenarioofatleastroughlysteadydemand,theMidwest,EastCoastandNortheastoftheUSshouldthereforebeabletoseeslightlypositivecementpricegrowthoverthenext6-12monthsinourview(drivenbynormalcostinflationandtightenoughsupplyvsdemand),allelseequal,whiletheWestandespeciallySouthwillhighlylikelystaymorechallenged.

4)Importantly,whiledatacentersarelikelytosupportcementdemandtothetuneof1-2%ptsoverthenext1-2years(UBSbasecase),intheregionsmostaffectedbydeclininghousingconstruction,thereisarealriskthistailwindgetsoffsetentirelybylessresiconstructiondemandatthesametime(fromamuchsmaller%declinebutonasignificantlylargerbase).

5)AMRZ,CRHandHEIhavetheleastexposuretotheSouthandWest(~30-40%)whileBZUthemost(~50%)amongstthecementnamescoveredbyUBS,suggestingtheformer3playerscouldinfactseestabledemandandpricingconditionsfortheirUScementbusinessesoverall,whileBZUislikelytobemorechallengedinascenarioofnoimminentinterestratereliefandresi/non-resconstructionimprovement(seetablebelow).

6)FurtherreinforcingtherelativeattractivenessoftheMidwestandNortheastforcement,areductionoreliminationofCanadiancementimportsfromnewlyenactedtariffswould(meaningfully)tightensupplyvsdemandinaselectnumberofstates.HEIandBZUappeartobepossiblenetwinnersfromthis,whileAMRZandCRHaremoreneutralorpossiblymarginallynegativelyimpacted.

7)Addingitallup,wethinkHEIisinthebestpositionforcementpriceandvolumegrowthinto2027,followedbyCRHandAMRZ,withBZUmorechallengedfromitsSouthernexposure(especiallyTexas,whichgenerates30-35%ofBZU'sUSrevenueonourestimates),thoughpartlyoffsetbybeinganetbeneficiaryfromCanadiancementtariffs,iftheycametopass.It'sworthnotingthatthetariffsmaynotendupbeingimplemented(ongoingtradenegotiations).Withoutthetariffs,AMRZandCRHwouldbeinarelativelybettersituationandBZUinaclearlyworseone,inourview.

Figure1:HeavysideUSrevenueexposuresplitbystate(2025)

AMRZ

BZU

CRH

CX

EXP

GCC

HEI

Inland

16%

26%

28%

5%

38%

26%

4%

Midwest

27%

23%

17%

0%

14%

28%

14%

North

3%

0%

1%

0%

0%

8%

0%

Northeast

12%

1%

11%

0%

2%

0%

26%

EastCoast

11%

0%

10%

2%

4%

0%

16%

West

6%

0%

6%

19%

14%

0%

9%

South

25%

50%

27%

75%

28%

39%

31%

South&West

31%

50%

33%

94%

42%

39%

39%

RestofUS

69%

50%

67%

6%

58%

61%

61%

Source:Companydata,UBSEvidenceLab,Cemnet,UBSresearch

GlobalBuildingMaterials22September2026a§3

StateoftheunionandoutlookforUScement

Themarkethasturned(very)bearishontheUScementoutlookoverthepast6-

9months,andUSheavysidestockshavemeaningfullyde-rated.What'sgoing

on,andwhat'sgoingtochangeit?

UScementprices(PPI)aretrendingdown~1%y/yandhavebeenforseveralmonthsnow,makingthisthelongeststretchofnegativepricingforUScementsincetheGFC.Cementvolumegrowth(industrialproduction)turnedpositiveinlate2025/early2026butwithoutmeaningfulfollow-throughsofar.

Figure2:UScementPPIy/y

20%

18%

16%

14%

12%

10%

8%

6%

4%

2%

0%

-2%

-4%

Source:USCensus

Figure3:UScementproductiony/y

30%

25%

20%

15%

10%

5%

0%

-5%

-10%-15%

-20%

Source:USFed

Infact,UScementpricegrowthiscurrentlytheweakestonaglobalcomparison,withtheexceptionofChina,whichisnotincludedinthetablebelow:

Figure4:Globalregionalcementpricesm/mandy/y

Jan25

Feb25

Mar25

Apr25

May25

Jun25

Jul25

Aug25

Sep25

Oct25

Nov25

Dec25

Jan26

Feb26

Mar26

Apr26

May26

Jun26

Jul26

Cementpricesm/m

Europe

2.0%

0.2%

-0.3%

0.5%

-0.2%

-0.3%

-0.3%

-0.2%

0.0%

-0.1%

0.0%

-0.6%

2.8%

0.5%

0.2%

0.3%

0.3%

0.3%

France

4.8%

-0.9%

-1.8%

1.5%

-0.3%

-0.1%

-1.1%

-0.8%

0.5%

-0.2%

0.2%

0.0%

5.1%

-0.9%

0.1%

-0.1%

1.6%

0.2%

Germany

1.0%

1.5%

-0.5%

0.5%

-0.5%

-1.1%

0.1%

0.2%

0.4%

-0.1%

0.1%

-0.6%

1.2%

-0.6%

-0.7%

1.1%

0.5%

0.0%

-0.3%

Italy

-1.3%

0.1%

1.4%

0.4%

-0.2%

0.4%

-1.2%

-0.1%

-0.4%

-0.1%

0.0%

-0.9%

0.7%

3.8%

2.0%

0.0%

-1.0%

0.3%

Spain

0.3%

1.5%

0.6%

-0.2%

0.6%

-0.1%

1.3%

-0.2%

-1.1%

0.5%

-0.2%

-0.3%

2.0%

2.8%

0.5%

0.2%

-0.4%

0.6%

UK

0.1%

0.0%

0.0%

-0.2%

0.2%

1.5%

0.0%

0.0%

-0.3%

0.0%

0.0%

0.0%

0.0%

0.0%

0.9%

0.0%

2.5%

0.6%

0.0%

Switzerland

0.0%

-0.3%

0.0%

0.0%

0.4%

0.0%

0.0%

-0.5%

0.0%

0.0%

-0.6%

0.0%

0.0%

0.2%

0.0%

0.0%

0.9%

0.0%

0.0%

Greece

4.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

5.9%

CzechRep

3.8%

0.6%

-0.1%

-0.1%

-0.3%

0.1%

-0.1%

0.4%

0.8%

-0.3%

0.3%

-2.5%

3.2%

0.8%

0.5%

0.2%

0.5%

0.2%

0.2%

Hungary

-0.1%

-0.4%

1.1%

-0.3%

0.5%

-1.9%

2.4%

-1.0%

-1.2%

-0.1%

-0.4%

0.1%

1.4%

0.7%

-1.1%

0.3%

2.2%

-2.0%

US

1.1%

-0.1%

0.5%

0.1%

0.4%

0.0%

0.0%

0.0%

0.1%

-0.7%

-0.5%

-0.1%

-0.1%

0.2%

0.0%

0.6%

-0.1%

0.1%

-0.1%

Canada

0.7%

1.3%

-0.7%

0.3%

-0.5%

0.1%

-1.0%

1.2%

-1.1%

1.8%

-2.2%

0.4%

2.4%

-2.6%

0.0%

1.6%

1.5%

1.0%

0.3%

Mexico

1.3%

1.4%

0.1%

0.8%

0.3%

0.4%

0.1%

0.3%

0.2%

0.2%

0.3%

0.2%

1.3%

1.3%

0.7%

0.5%

-0.1%

0.5%

0.6%

Turkey

0.2%

2.3%

0.4%

-0.6%

2.2%

2.7%

0.6%

2.1%

0.9%

1.6%

1.1%

2.4%

3.3%

0.9%

0.7%

2.2%

2.9%

5.9%

2.1%

India

-0.1%

0.2%

0.1%

1.3%

0.8%

-0.2%

-0.7%

-0.5%

-0.5%

-0.8%

-0.1%

-0.3%

0.2%

0.0%

0.9%

1.5%

-0.1%

0.1%

-0.2%

Japan

0.0%

0.0%

0.0%

6.2%

1.4%

0.3%

2.0%

0.0%

0.0%

2.3%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

Philippines

-0.2%

0.0%

-0.3%

-0.1%

0.0%

-0.2%

-0.2%

0.0%

0.1%

-0.5%

-0.1%

-0.1%

-0.4%

-0.6%

0.5%

0.9%

0.8%

0.8%

0.6%

SaudiArabia

0.2%

0.6%

0.3%

0.2%

-0.5%

0.1%

-0.7%

-0.4%

0.1%

-0.1%

0.3%

1.0%

0.1%

-0.1%

0.2%

-0.2%

0.1%

-0.3%

-0.6%

Thailand

-0.7%

0.2%

2.8%

2.2%

0.4%

-0.1%

0.3%

0.4%

-0.2%

1.1%

-0.9%

0.0%

-0.3%

-0.2%

-0.3%

2.6%

0.0%

-1.1%

-0.9%

Cementpricesy/y

Europe

0.5%

0.0%

-0.9%

-0.2%

0.3%

0.8%

0.5%

0.4%

0.3%

0.5%

1.1%

0.7%

1.6%

1.8%

2.4%

2.1%

2.7%

3.3%

France

1.7%

1.6%

0.1%

1.6%

1.6%

2.3%

1.1%

0.2%

1.3%

0.5%

2.7%

1.7%

2.0%

2.0%

4.0%

2.3%

4.3%

4.6%

Germany

-0.1%

-0.5%

-1.5%

-0.3%

0.4%

0.5%

0.8%

1.1%

0.6%

0.7%

0.8%

0.9%

1.1%

-1.0%

-1.2%

-0.6%

0.4%

1.6%

1.2%

Italy

0.4%

-1.0%

-1.8%

-2.2%

-2.0%

-0.8%

-2.3%

-2.5%

-2.2%

-1.7%

-1.4%

-1.9%

0.1%

3.8%

4.4%

3.9%

3.1%

3.0%

Spain

0.8%

0.8%

0.8%

0.5%

1.2%

1.7%

3.0%

3.0%

1.4%

3.2%

2.9%

2.7%

4.4%

5.7%

5.7%

6.1%

5.1%

5.9%

UK

1.6%

0.1%

-0.3%

-0.7%

-0.5%

1.2%

1.6%

1.6%

1.2%

1.2%

1.3%

1.2%

1.2%

1.2%

2.0%

2.2%

4.6%

3.7%

3.7%

Switzerland

0.3%

-0.5%

-0.5%

-0.5%

0.1%

0.1%

0.1%

0.0%

0.0%

0.0%

-1.0%

-1.0%

-1.0%

-0.5%

-0.5%

-0.5%

0.0%

0.0%

0.0%

Greece

5.2%

5.2%

5.4%

4.3%

4.3%

4.3%

4.3%

4.3%

4.3%

4.3%

4.0%

4.0%

0.0%

0.0%

0.0%

0.0%

0.0%

5.9%

CzechRep

1.7%

2.1%

1.8%

2.8%

1.6%

3.0%

3.3%

3.0%

3.9%

3.7%

3.0%

2.4%

1.9%

2.1%

2.8%

3.0%

3.9%

4.1%

4.4%

Hungary

4.2%

0.1%

0.4%

0.2%

0.8%

-0.9%

1.4%

0.4%

0.5%

-0.7%

-1.5%

-1.4%

0.2%

1.2%

-1.0%

-0.4%

1.2%

1.2%

US

2.3%

2.1%

1.9%

1.6%

1.6%

1.8%

1.6%

1.7%

1.9%

1.3%

0.8%

0.8%

-0.4%

-0.1%

-0.7%

-0.2%

-0.7%

-0.6%

-0.7%

Canada

15.7%

14.9%

12.8%

7.7%

2.7%

3.0%

2.4%

3.7%

2.1%

3.8%

1.4%

0.1%

1.8%

-2.2%

-1.5%

-0.1%

1.9%

2.9%

4.3%

Mexico

5.7%

5.8%

5.1%

6.0%

6.0%

6.1%

6.2%

6.0%

6.5%

6.2%

6.0%

5.9%

5.9%

5.8%

6.4%

6.0%

5.7%

5.7%

6.2%

Turkey

32.4%

33.3%

30.0%

14.9%

12.4%

14.9%

11.4%

12.9%

15.6%

16.1%

17.0%

17.1%

20.7%

18.9%

19.3%

22.7%

23.5%

27.4%

29.2%

India

-3.9%

-3.0%

-1.3%

0.4%

2.0%

2.8%

4.1%

4.5%

1.1%

0.6%

1.0%

-1.0%

-0.6%

-0.8%

-0.1%

0.1%

-0.8%

-0.5%

0.0%

Japan

0.0%

0.0%

0.0%

6.2%

7.7%

8.1%

10.2%

10.2%

10.2%

12.8%

12.8%

12.8%

12.8%

12.8%

12.8%

6.1%

4.7%

4.3%

2.3%

Philippines

-1.1%

-1.0%

-1.3%

-1.4%

-1.5%

-1.5%

-1.2%

-1.3%

-1.2%

-1.6%

-1.4%

-1.5%

-1.7%

-2.3%

-1.5%

-0.6%

0.2%

1.2%

1.9%

SaudiArabia

2.1%

1.6%

1.2%

1.0%

0.6%

0.0%

-0.8%

-1.4%

0.0%

-0.1%

0.0%

1.0%

0.8%

0.1%

0.1%

-0.3%

0.2%

-0.2%

-0.1%

Thailand

-1.7%

-1.5%

1.2%

4.2%

4.7%

4.5%

4.8%

5.1%

5.4%

6.7%

5.6%

5.6%

6.0%

5.6%

2.5%

2.8%

2.4%

1.3%

0.2%

Source:Haver

Unsurprisingly,thisismirroredbythemajorcementcompaniesintheUS,whichhavebeenreportingflattishornegativepricegrowthsinceQ3/Q425.VolumeshavelookedbetterbutQ1washelpedpartlybyaneasybase,andQ2wasslower.

GlobalBuildingMaterials22September2026a§4

Figure5:KeyUSheavysidecompanyreportedcementpricesandvolumesy/y

UScementprice

Q122

Q222

Q322

Q422

Q123

Q223

Q323

Q423

Q124

Q224

Q324

Q424

Q125

Q225

Q325

Q425

Q126

Q226

AMRZ

10%

14%

19%

8%

14%

14%

9%

13%

7%

7%

5%

5%

1%

1%

-1%

0%

-2%

0%

BZU

13%

17%

21%

16%

30%

22%

18%

25%

7%

4%

4%

5%

0%

0%

-1%

-3%

-3%

-3%

CRH

11%

11%

14%

12%

17%

17%

13%

13%

9%

8%

9%

8%

4%

2%

1%

0%

-1%

-1%

CX

10%

15%

19%

21%

22%

15%

10%

10%

4%

4%

2%

0%

-1%

-2%

-3%

-3%

-3%

-2%

EXP

12%

10%

12%

13%

16%

15%

15%

13%

5%

6%

3%

4%

2%

0%

-1%

-1%

-2%

-2%

GCC

10%

10%

12%

16%

21%

17%

12%

8%

6%

5%

6%

6%

3%

1%

-3%

-4%

-3%

-3%

Average

11%

13%

16%

15%

20%

17%

13%

14%

6%

6%

5%

4%

2%

0%

-1%

-2%

-2%

-2%

UScementPPI

8%

7%

11%

13%

16%

14%

11%

9%

7%

7%

6%

5%

2%

2%

2%

1%

-1%

-1%

UScementvolumes

Q122

Q222

Q322

Q422

Q123

Q223

Q323

Q423

Q124

Q224

Q324

Q424

Q125

Q225

Q325

Q425

Q126

Q226

AMRZ

7%

6%

7%

-2%

5%

0%

0%

-5%

-8%

-10%

-10%

-8%

-10%

-6%

6%

4%

14%

5%

BZU

3%

-6%

-10%

-12%

-10%

-8%

-6%

-7%

-11%

-7%

-6%

3%

0%

3%

1%

0%

9%

-3%

CRH

-1%

0%

-5%

-7%

-7%

-7%

-6%

1%

5%

-5%

-7%

-10%

-7%

-5%

0%

-1%

9%

1%

CX

9%

-1%

2%

-7%

-19%

-8%

-13%

-13%

-9%

-7%

-6%

-3%

-3%

-6%

-1%

-3%

-1%

-2%

EXP

-2%

-3%

0%

-13%

-4%

2%

-1%

9%

2%

2%

-3%

-5%

-7%

-4%

7%

9%

8%

7%

GCC

10%

6%

2%

-5%

-10%

-12%

-4%

5%

8%

-7%

-5%

-1%

-4%

4%

6%

1%

11%

11%

Average

4%

0%

-1%

-8%

-7%

-5%

-5%

-2%

-2%

-5%

-6%

-4%

-5%

-2%

3%

2%

8%

3%

UScementIP

18%

21%

25%

6%

2%

-2%

-8%

-4%

-9%

-8%

-6%

-4%

-6%

-2%

4%

1%

10%

2%

Cementvol2ystack

Q122

Q222

Q322

Q422

Q123

Q223

Q323

Q423

Q124

Q224

Q324

Q424

Q125

Q225

Q325

Q425

Q126

Q226

AMRZ

1%

12%

7%

4%

12%

5%

7%

-8%

-4%

-10%

-10%

-13%

-17%

-15%

-5%

-5%

2%

-2%

BZU

5%

-4%

-8%

-11%

-7%

-13%

-15%

-19%

-20%

-14%

-12%

-4%

-10%

-4%

-5%

3%

9%

0%

CRH

-4%

4%

-6%

-1%

-8%

-7%

-11%

-5%

-2%

-11%

-12%

-9%

-3%

-10%

-7%

-11%

1%

-5%

CX

13%

8%

8%

-6%

-12%

-9%

-11%

-19%

-26%

-14%

-18%

-16%

-12%

-13%

-7%

-6%

-4%

-8%

EXP

-4%

-3%

2%

-6%

-5%

0%

-1%

-5%

-2%

5%

-4%

4%

-5%

-2%

3%

4%

1%

2%

GCC

2%

17%

12%

0%

0%

-6%

-2%

0%

-2%

-18%

-9%

4%

4%

-3%

2%

1%

6%

15%

Average

2%

6%

3%

-3%

-3%

-5%

-6%

-9%

-9%

-10%

-11%

-6%

-7%

-8%

-3%

-2%

3%

0%

Source:Companydata,USCensus,USFed

It'salsonotablethatcementpriceshavedivergedfromaggregatesandconcretepricesinawaythat'sunusualfromahistoricalperspective,asshownbelow:

Figure6:USheavysideaveragereportedcement,concreteandaggregatesprices(y/y)

24%

22%

20%

18%

16%

14%

12%

10%

8%

6%

4%

2%

0%

-2%

-4%

Q2Q4Q2Q4Q2Q4Q2Q4Q2Q4Q2Q4Q2Q4Q2Q4Q2Q4Q2Q4Q2Q4Q2Q4Q2Q41414151516161717181819192020212122222323242425252626

UScementUSaggregatesUSRMC

Source:Companydata

AggregatingUScementrevenuesbythosecompaniesthatreportit(forAMRZ,weuseBuildingMaterialswhichis50-60%cementandaggregates/concretefortherest,andwedon'tuseCRHgivencementistoosmallaportionofthoserevenues),it'sevidentthatwhilerevenueshavereturnedtosomegrowthfollowingasofter2024/2025,EBITDAhasstagnatedandevendeclinedforsomeplayersinQ2...

GlobalBuildingMaterials22September2026a§5

Figure7:USheavysideaggregatedcementsales($m)-trailing12m

25000

20000

15000

10000

5000

0

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2222222222323232324242424252525252626

AMRZBZUCXEXPGCCHEI

Source:Companydata,AMRZ=BuildingMaterialssegment

Figure8:USheavysidecementaggregatedEBITDA($m)-trailing12m

7000

6000

5000

4000

3000

2000

1000

0

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2

222222222323232324242424252525252626

AMRZBZUCXEXPGCCHEI

Source:Companydata,AMRZ=BuildingMaterialssegment

…andaccordinglymarginshavebeenindeclineforoverayearnow.

Figure9:USheavysidecementweightedaverageEBITDAmargin-trailing12m…

35.0%

30.0%29.2%27.2%

25.0%22.1%

20.0%

15.0%

10.0%

5.0%

0.0%

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2222222222323232324242424252525252626

Source:Companydata,AMRZ=BuildingMaterialssegment

Figure10:…andy/y

-0.3%-0.3%-1.1%-1.2%

-1.7%-1.9%-2.5%-2.5%-2.3%

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2

222222222323232324242424252525252626

2.9%2.9%2.8%

0.3%

5.4%5.5%

2.2%

4.5%

1.4%

Source:Companydata,AMRZ=BuildingMaterialssegment

Sowhat'sgoingon?InterestratesremainelevatedandhavemovedevenhighersincetheIranconflict,andthishaspressuredresidentialconstruction,whichisn'ttheonlyend-marketforcementbutrepresentsatleast1/3rdofdemand,ifnotmore.Thechartbelowshowstheareaofbuildingconstruction(starts)intheUS,andmakesitabundantlyclearhowimportantresiistobuildingmaterialsthatareconsumedacrossverticals.Thechartdoesn'tincludeinfrastructure,whichalsorepresents20-30%ofdemand,becauseinfraconstructionisn'tmeasuredinareaterms.Thechartalsolikelyoverstatesresiintermsofcementdemand,becausemanynon-ressegmentsaremorecementintensivethanhouses,butthemessageshouldbeclear-resimattersalot.(We'vehighlighteddatacentersjusttoshowhowsmallthissegmentstillisinareatermsonarelativebasis,andwhythedatacenterconstructionboomishighlyunlikelybigenoughtooffsetweaknessacrosstherestofconstruction,especiallyresidential).

Figure11:USbuildingconstructionstartsbysqftarea(green=resi,blue&grey=non-res)

GlobalBuildingMaterials22September2026a§6

100%

90%

80%

70%

ManufacturingSchools&Labs

ParkingWarehouses

60%

OfficesDatacenters

50%

40%

30%

20%

10%

0%

2007200820092010201120122013201420152016201720182019202020212022202320242025

Residential

Source:DodgeAnalytics

Plottedinabsolutesqft,thechartbelowillustratesjusthowsupportivethedemandenvironmentwasinthe2010-2021period,andhowdifficultsincethen.

Figure12:USbuildingconstructionstartsbyarea(green=resi,blue&grey=non-res)-trailing12monthsinksqft

--

2007200820092010201120122013201420152016201720182019202020212022202320242025

6,000

5,000

4,000

3,000

2,000

1,000

Datacenters

Source:DodgeAnalytics

Interestrateshavebeenlessofanissueformostofnon-resbuildings(commercialnon-resperhapsaside);herethestoryismoreoneofverystronggrowthin2022-24(drivenbystimulus,thepandemiceconomy,warehouseoverbuild,etc),andanormalizationsincethen.Constructionspendingdatadoesn'tlookparticularyalarmingandifanythingcouldindicatearebound(inlinewithofficialUBSforecastsfornominalspending),buttheunderlyingvolumedataintheformofareaofstartshasmorerecentlyslowedfurtherafteranapparenttroughlastyear.Fornow,westillthinknon-resremainsinalongandchoppybottomingprocess,andsomesegmentslookmoreencouragingthanothers(egmanufacturingstarts),butthereisclearlynomeaningfulimpulsefromthisbroadercategoryforvolumegrowthin2027sofar.

GlobalBuildingMaterials22September2026a§7

Figure13:USnon-resbuildingconstructionspending($valueSAAR)vsstarts

(area,trailing12m)

900,000

800,000

700,000

600,000

500,000

400,000

300,000

200,000

100,000

--

1,700

1,500

1,300

1,100

900

700

500

Spending(value)Starts(area)

Inflation

Source:DodgeAnalytics,USCensus

Infrastructurespendingisthehealthiestoftheend-markets,relativelysteadyandevenslightlyacceleratingmorerecently.Thechartbelowisnominalandsoincludesinflation,butthisshouldn'tmeaningfullychangethepicture(thereisnocementpriceinflationafterall).WediscussedinourglobalmarketupdatefromJune(Constructionrecoverytaking(K-)shape)whywethinkUSinfracouldsurprisemorepositivelyoverthecourseof2026.

Figure14:USinfrastructureconstructionspending($valueSAAR)

450,000

400,000

350,000

300,000

250,000

200,000

150,000

100,000

50,000

--

2014201520162017201820192020202120222023202420252026

uPoweruHighway&StreetuSewage&WasteDisposaluWaterSupply

Source:USCensus

Bottomline,notwithstandingadebatearoundtheexacttimingofanon-resbuildingreacceleration,thepointisthatoverallcementdemandhasbeennegativefor~3yearsandremainsonasidewaystrendcurrently.Withresithesinglebiggestend-market,andthemost"short-cycle"ofalltheconstructionsegments(iemostreactivetochangesininterestrates),weanalysethismarketmorecloselybelow.Thechartontheleftshowsthenumberofresidentialunitsunderconstruction,andindicatesabottomingprocess.ThechartontherightmakesitcleartheSouthandWestoftheUShavebyfarbeenthebiggestdriverofboththe2021-23spikeinconstructionactivityaswellasthemorerecentnormalization.TheMidwestandNortheasthavebeenrelativelysteadyincomparison.

GlobalBuildingMaterials22September2026a§8

Figure15:Resiunitsunderconstruction(kSAAR)

1,800

1,600

1,400

1,200

1,000

800

600

2017201820192020202120222023202420252026

Source:USCensus

Figure16:…byregion

1,400

1,200

1,000

800

600

400

200

--

2017201820192020202120222023202420252026

South&WestMidwest&Northeast

Source:USCensus

Lookingatthemoreleadingsignalfromhousingstarts,thedatapaintasimilarpicturehere:overallstartsaredownfroma2021/22peakandcontinuetrendingslightlylower,andthishasbeenmostlydrivenbytheSouthandWest,wherethelateststartsdatahasbeenonamoremeaningfuldowntrend.

Figure17:Resistarts(kSAAR)

2,000

1,800

1,600

1,400

1,200

1,000

800

600

2017201820192020202120222023202420252026

Source:USCensus

Figure18:Figure19:…byregion

1,200

1,000

800

600

400

200

--

2017201820192020202120222023202420252026

South&WestMidwest&Northeast

Source:USCensus

LookingatsoftsurveydataliketheNAHBHousingmarketsurveyandsplittingthisbyregionillustratesonefactorthat'slikelybeendrivingthis:affordabilityhasclearlydeterioratedmoreintheSouthandWestthantheMidwestandNortheast.

Figure20:NAHBHousingsurvey

100

90

80

70

60

50

40

30

20

2017201820192020202120222023202420252026

Source:NationalAssociationofRealtors

Figure21:Figure22:…byregion

100

90

80

70

60

50

40

30

20

2017201820192020202120222023202420252026

South&WestMidwest&Northeast

Source:NationalAssociation