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Investing.com -- Amrize AG (NYSE:AMRZ) (SIX:AMRZ) saw its shares slump more than 10% in premarket trading Thursday after it reported weaker-than-expected second-quarter results, and issued an annual outlook that fell meaningfully below consensus.
Group revenue declined 1% year-on-year, while EBITDA dropped 6%, with margins contracting by 150 basis points. The company said margins would have been flat if not for higher corporate costs.
"Clearly we need to understand whether these are recurring, which is not clear from the release," Morgan Stanley (NYSE:MS) analysts commented.
The Building Materials division posted a 1% drop in revenue and a 2% decline in EBITDA, with margins slipping 20bps.
Volumes fell 6%, lagging rivals like CRH (NYSE:CRH), Heidelberg (ETR:HDDG), and Vulcan Materials (NYSE:VMC), all of which reported margin expansion in heavyside businesses.
Pricing was up just 0.5%. Management attributed the volume weakness to weather and delayed project starts in commercial and residential markets.
In the Building Envelope unit, revenue was flat year-on-year, while EBITDA fell 1% and margins contracted by 20bps. The division saw a 3% revenue boost from the Ox acquisition, but still trailed competitors like Carlisle, Morgan Stanley analysts said.
Cash flow was a notable weak spot. Amrize recorded a $450 million operating cash outflow in the first half, compared to a smaller outflow a year earlier. Morgan Stanley noted a “big build in receivables."
"No explanation in the release for cash trends, clarity needed, key to understand if some of this is down to the spin," analyst Cedar Ekblom added.
Amrize introduced full-year 2025 guidance with revenue and EBITDA midpoint forecasts sitting 3% and 8% below Visible Alpha consensus, respectively. According to Ekblom, these results “weaken our thesis,” and the firm expects “meaningful downgrades.”
Analysts still see potential in Amrize’s longer-term strategy—highlighting the company’s ambition to drive growth through M&A in a fragmented market—but for now, sentiment may be cautious.
“The market probably takes a ‘show me’ approach,” the analyst said.
Amrize trades at 9.8x FY25e EBITDA, but Ekblom cautioned that “this does have some downside risk.”