Gcc Sab De Cv · BMV:GCC
Gcc Sab De Cv — Q1 2021 Earnings Presentation
24 slides from Gcc Sab De Cv's earnings presentation, Apr 28, 2021
Slide 1: Q1 2021 Earnings Conference Call
Q1 2021 EARNINGS CONFERENCE CALL ENRIQUE ESCALANTE, CEO LUIS CARLOS ARIAS, CFO APRIL 28, 2021
Slide 2: Safe Harbor Statement
This presentation has been prepared by Grupo Cementos de Chihuahua, risks, including, but not limited to, broad trends in business and finance, S.A.B. de C.V. (together with its subsidiaries, “GCC”). Nothing in this legislation affecting our securities, exchange rates, interest rates, presentation i
Slide 3: Highlights
HIGHLIGHTS • Encouraging backlog and market trends • GCC’s results reflect • Positive momentum in our industry • Early signs of a new phase of the industry’s cycle GCC steps into 2021 construction • Focused on producing and supplying for pent-up season even stronger demand • Experience gained • Fina
Slide 4: Q1 2021 Highlights
Q1 2021 HIGHLIGHTS • US$49.5M Q1 volumes are not a strong indicator of the full-year shipments 9% • Less than 20% of full-year volumes EBITDA • 1:3 ratio against Q3 volumes • Full-year backlog is encouraging in every sector 27.7% • Q1 2020 2.2 ppt EBITDA Margin • No COVID-19 economic effects • Stron
Slide 5: U.S. Overview
U.S. OVERVIEW • Challenging weather conditions • Gas and electricity outages in Texas • Cement volumes grew 6%, excluding oil well cement Q1 21 vs. Q1 20 • Bidding new projects and shipping at strong levels Volumes Prices • U.S. competitors suffered from cement shortages Cement -8% 3% • Markets gain
Slide 6: U.S. Overview: Infrastructure
INFRASTRUCTURE • Projects running at a steady pace with more in the pipeline • Upside in the short and mid-term U.S. OVERVIEW • Economic stimulus package • Limited information on the infrastructure bill for roads and bridges • Incremental funding of 30% to 50% over Fast Act • Increase in cement dema
Slide 7: U.S. Overview: Residential and Non-Residential
RESIDENTIAL • Home-buying surge • Limited housing supply, favorable demographics and low interest rates support positive trends U.S. OVERVIEW • Supply and demand imbalance will not be rectified before 2022 • Fed’s comments to keep interest rates low • Strong outlook for the mid-term NON-RESIDENTIAL
Slide 8: U.S. Overview: Oil Well Cement and Pricing
OIL WELL CEMENT • Competitors exiting the West Texas market to supply the shortage in the Texas triangle U.S. OVERVIEW • Equipment failure at a competitor cement plant • Deep freeze in mid-February • Opportunity to increase market share • Captured by Odessa and Chihuahua cement plants PRICING • US$8
Slide 9: Mexico Overview
• The State of Chihuahua continues a V-shaped recovery MEXICO • Sales in Mexico division increased almost 8% OVERVIEW • Industrial warehouse construction • Mining & self-construction projects • Reactivation of public works projects in Juarez • 2021 began with a strong demand for cement and ready mix
Slide 10: Financial Results
FINANCIAL RESULTS LUIS CARLOS ARIAS, CFO
Slide 11: Consolidated Net Sales
CONSOLIDATED NET SALES -2% Q1 21 vs. Q1 20 181 179 Volumes Prices* Cement 62 66 United States -8% 3% Mexico 6% -1% Concrete 120 112 United States -33% 6% Mexico 8% 3% Q1 20 Q1 21 (US$ Million) United States Mexico * Prices in local currency 11
Slide 12: Cost of Sales and SG&A
COST OF SALES SG&A % of sales % of sales 76.6% 74.4% 12.0% 11.3% - 220 BPS - 70 BPS 139 133 22 20 Q1 20 Q1 21 Q1 20 Q1 21 (US$ Million) (US$ Million) 12
Slide 13: EBITDA
EBITDA EBITDA 25.0% 27.7% margin • Focused on increasing profitability +270 BPS • Compensate for US$14 million of cost and expenses +9% saved in 2020 • 2020 cost and expenses reduction plan • Totaled US$24 million • Expect to maintain US$10 million 49 45 • Sweet spot between short- and long-term pro
Slide 14: Net Financial Expenses and Net Income
NET FINANCIAL US$5.4M US$0.2M Q1 2021 VS. Q1 2020 EXPENSES Expenses Income NET INCOME (7%) Net income as % of sales Q1 2020 16 EPS = US$0.0495 9.1% - 50 BPS 15 8.6% Q1 2021 EPS = US$0.0463 (US$ Million) 14
Slide 15: Cash Flow
CASH FLOW Million US$ Q1 21 Q1 20 Var EBITDA 49 45 9% Interest (Expense) (1) (2) -53% (Increase) Decrease in Working Capital (8) (11) -29% Taxes (1) (3) -58% Prepaid expenses 3 1 127% Accruals and other accounts (15) (6) 154% Operating Leases (IFRS 16 effect) (5) (5) -4% Operating Cash Flow 23 20 16
Slide 16: Balance Sheet Net Leverage Ratio
BALANCE SHEET NET LEVERAGE RATIO • Reduced working capital days from 59 to 47 • Cash and equivalents totaled US$557M 1.12x Fitch and S&P Global Ratings recognized our operating 0.96x performance and solid financial results 0.61x 0.24x 0.22x • Credit rating raised to BBB- Q1 20 Q2 20 Q3 20 Q4 20 Q1 2
Slide 17: Capital Allocation
CAPITAL ALLOCATION • Professional team fully dedicated and actively looking for growth opportunities, both organic or inorganic • Focused on cement plants that could be plugged into our system • Expanding to adjacent markets where synergies can be generated • Maintain our prudent capital allocation
Slide 18: 2021 Guidance
2021 GUIDANCE • Expect positive momentum to continue • Underlying trends remain very solid • Temporary market supply shortage • Short-term visibility improved substantially • Projected COVID death rates are declining • U.S. government stimulus measures boost the economic recovery • U.S. vaccine roll
Slide 19: 2021 Guidance
2021 GUIDANCE United States Consolidated Volumes EBITDA growth 4% - 9% Cement 2% - 4% Concrete (10%) - (13%) FCF Conversion Rate > 60% Prices Total CapEx US$ 75M Cement 4% - 5% Concrete Maintenance US$ 60M Mexico 2020 carry over US$ 15M Volumes Cement 2% - 4% Net Debt/EBITDA Negative Year end Concre
Slide 20: Corporate Name and 2025 Vision
CORPORATE NAME Grupo Cementos de Chihuahua GCC 2025 VISION To be the best cement company in North America with the proper balance of people, profit and the planet 20
Slide 21: Questions
QUESTIONS CONTACT: Luis Carlos Arias, Chief Financial Officer larias@gcc.com WWW.GCC.COM Ricardo Martinez, Head of Investor Relations rmartinezg@gcc.com +52 (614) 442 3176 + 1 (303) 739 5943 2 1
Slide 22: Appendix
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Slide 23: Income Statement
INCOME STATEMENT Million dollars Q1 21 Q1 20 Var Net Sales 178.8 181.4 -1.5% Cost of sales 133.0 139.0 -4.3% SG&A 20.2 21.7 -6.9% Other expenses, net 0.0 0.2 -87.5% Operating Income 25.5 20.4 24.8% Operating margin 14.3% 11.3% Net financing (expense) (5.4) 0.2 n.m. Earnings in associates 0.5 0.5 -10
Slide 24: Balance Sheet
BALANCE SHEET Million dollars March 2021 March 2020 Var Total Assets 2,116.6 1,968.2 7.5% Current Assets 824.5 627.0 31.5% Cash and equivalents 556.9 338.7 64.4% Other current assets 267.6 288.4 -7.2% Non-current assets 1,292.1 1,341.1 -3.7% Plant, property & equipment 943.5 962.9 -2.0% Goodwill and
Grupo Cementos de Chihuahua, S.A.B. de C.V. (GCC) — Q1 2021 Earnings Presentation on 6ix