Gcc Sab De Cv · BMV:GCC
Gcc Sab De Cv — Q4 2024 Earnings Presentation
45 slides from Gcc Sab De Cv's earnings presentation, February 2025
Slide 1: Corporate Presentation Q4 2024
CORPOR ATE PRESENTATION Q4 2024 FEBRUARY 2025
Slide 2: Safe Harbor Statement
This presentation has been prepared by GCC, S.A.B. de C.V. (together EBITDA with its subsidiaries, “GCC”). Nothing in this presentation is intended to We define EBITDA as consolidated net income after adding back or be taken by any person as investment advice, a recommendation to buy, subtracting, a
Slide 3: Reflection of the strategy execution since 2020
REFLECTION OF THE STRATEGY EXECUTION SINCE 2020 Deleveraging as soon as possible ONE OF THE Maintaining a healthy cash balance STRONGEST PLAYERS IN THE INDUSTRY Refinancing bank debt and notes, extending maturities and reducing the average cost of debt Debottlenecking project at the Samalayuca plant
Slide 4: Investment Highlights
INVESTMENT 1 Leading position in attractive U.S. regional markets and in Chihuahua, Mexico HIGHLIGHTS Mexico operations also provide a strong base, and add operational flexibility 2 with export capacity TICKER: BMV: GCC 3 Vertically integrated, with best in class production facilities and logistics
Slide 5: More than nine years of operational and financial transformation
MORE THAN NINE Disciplined expansion Prudent balance sheet YE ARS OF O PER ATIONAL management Customer focus AND F INANCIAL Increased shareholder Operational excellence value T R ANSFORMATION AS OF Cement EBITDA EBITDA Net Debt/ Share Price (02/28/24) Capacity Growth Margin EBITDA DECEMBER 2024 VS 2
Slide 6: GCC at a Glance: A Unique Market Presence
6 MMT1 cement production capacity 3.5 MMT in U.S. + 2.5 MMT in Mexico GCC AT A G L ANCE: #1 or #2 share in core markets CEMENT AND READY-MIX CONCRETE OPERATIONS Landlocked states, insulated from ACROSS THE “CENTER CUT“ OF NORTH AMERICA A UNIQUE MARKET seaborne competition PRESENCE 8 cement plants, 2
Slide 7: Regional Leader in U.S. Mid-Continent Markets
ALBERTA REGIONAL LEADER IN U.S. MID-CONTINENT MARKETS #2 #2 WELL-POSITIONED TO CAPTURE U.S. GROWTH AND CONSTRUCTION INDUSTRY RECOVERY MT ND MN #1 ID SD WI Leadership position in 14 contiguous states WY #2 CO, MN, MT, ND, NM, SD, UT and W.TX are our core markets, with 90% of U.S. sales IA NE UT #2 No
Slide 8: Markets with Demonstrated Volume and Price Recovery
GCC U.S. CEMENT SALES GCC U.S. CONCRETE SALES (’000 MT) 4yr CAGR (’000 M3 / YEAR) 4yr CAGR +0.2% -4.4% MARKETS WITH Continued operations 3,359 3,458 3,281 DEMONSTRATED 3,180 3,208 939 784 830 783 760 VOLUME AND PRICE RECOVERY 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 GCC U.S. CEMENT PRICES 4
Slide 9: Where GCC Faces Fragmented Competition and Has a Diversified Business Mix
WHERE GCC FACES FRAGMENTED COMPETITION AND HAS A DIVERSIFIED BUSINESS MIX GCC MARKET POSITION AND COMPETITORS IN CORE MARKETS COLORADO N. MEXICO N. DAKOTA S. DAKOTA W. TEXAS WYOMING MONTANA GCC market position #2 #1 #2 #1 #1 #2 #2 * Refers to West Texas only GCC cement plant in state — — ** Aprox. 1
Slide 10: A Clear Need for Increased Infrastructure Spending
AND A CLEAR NEED FOR INCREASED INFRASTRUCTURE SPENDING DEFICIENT ROADS 1 CEMENT FUNDAMENTALS 2 LANE MILES RATED ‘POOR’ BASED ON PCA SECTOR COMPOSITE AS A SHARE OF TOTAL LANE MILES RANKINGS* WA WA NH ME NH ME MT ND VT MT VT ND OR OR MN MN ID SD NY MA ID NY MA WII SD WI RI RI WY MI WY MI CT CT IA PA I
Slide 11: Leading to a Positive Outlook, Driven by Expected Infrastructure Spending
FORECAST CEMENT CONSUMPTION FORECAST HIGHWAYTOTAL BUDGETU.S.AUTHORIZATIONS CEMENT U.S CEMENT IN ALL GCC U.S. MARKETS (MMT) 1 CONSUMPTION (MMT) INCLUDED IN THE FAST ACT ($ BB) ² 4yr CAGR IMPORTS W 4yr CAGR -0.7% 0.1% 108.0 107.1 47.1 47.1 35.3 106.0 46.0 103.2 120 45.0 102.2 LEADING TO A 34.5 43.1 44
Slide 12: While in a Favorable Phase of the U.S. Cement Cycle
WHILE IN A FAVORABLE PHASE OF THE U.S. CEMENT CYCLE U.S. CEMENT PRODUCTION AND CONSUMPTION 140 120 -20% Consumption Actual 2003-2024 100 Estimated 2025-2028 Production 80 60 40 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026E 2028E Source: USGS, PCA 2024 U.S. apparent consumption is stil
Slide 13: With a Solid Outlook in Key States
PORTLAND CEMENT ASSOCIATION (PCA) FALL 2024 FORECAST AND MAIN CONSUMERS COLORADO TEXAS WITH A SOLID 3,000 20,000 OUTLOOK IN KEY 2,500 16,000 STATES 2,000 12,000 17.0% 4.7% 1,500 -2.2% 8,000 -3.9% -2.7% 1.3% -2.5% 1,000 -0.8% -8.1% 4,000 -7.1% 500 - - 2021 2022 2023 2024 2025E 2021 2022 2023 2024 202
Slide 14: U.S. Infrastructure Plan Will Boost the Cement Industry
U.S. INFRASTRUCTURE PLAN The Infrastructure Investment and Jobs Act is a $1.2 trillion infrastructure package. Included in the package is roughly $550 billion in new surface transportation spending. The plan will take 5-years and combines transformational efforts in roads, bridges, railroads, and do
Slide 15: GCC Is the Leading Producer in Chihuahua, with Significant Export Capacity
GCC IS THE LEADING PRODUCER IN THE STATE OF CHIHUAHUA, WITH SIGNIFICANT EXPORT CAPACITY Exports to U.S. GCC is sole producer of cement and the leading producer Juarez of ready-mix concrete in Chihuahua Samalayuca Close economic ties between Chihuahua and the U.S. Cyclical recovery benefit Chihuahua
Slide 16: Vertically Integrated Operations
Coal mine in Colorado provides a significant source of fuel FUEL for GCC cement plants, lowering costs and reducing price volatility GCC owns most of the limestone quarries needed to supply RAW MATERIALS cement, ready-mix and aggregates operations over the long-term VERTICALLY INTEGRATED CEMENT 8 pl
Slide 17: With State of the Art Production Facilities
Pueblo, CO 1.1 MMT WITH STATE 2008 startup Chihuahua, Chih. OF THE ART Rapid City, SD 1.1 MMT 1941 startup 1.1 MMT PRODUCTION 2009 modernized 2018 expansion FACILITIES Samalayuca, Chih. United States Tijeras, NM 0.4 MMT 6.0 MMT 1.2 MMT Mexico 3.5 MMT 2015 modernized Cement production 1995 startup 2.
Slide 18: Operating at Near-Optimal Capacity Utilization Levels
OPERATING AT NEAR-OPTIMAL CAPACITY UTILIZATION LEVELS 90% 89% 89% 86% 86% 86% 84% 83% U.S. industry 79% estimated average 75% 74% 77% 77% 71% 71% 73% 69% 65% 64% 50% 2023 2024 Chihuahua Samalayuca Juarez Tijeras Rapid City Pueblo Odessa Trident MX US GCC MEXICO UNITED STATES 18
Slide 19: Linked by Sophisticated Distribution Network
ROBUST LOGISTICS PLATFORM STRETCHES FROM NORTHERN MEXICO TO THE U.S. BORDER WITH CANADA ALBERTA LINKED BY Operational flexibility SOPHISTICATED Cost efficiency DISTRIBUTION Faster delivery time ID ND WI NETWORK THAT Advanced logistics MT MN LEVERAGES Reduced supply disruption risk WI SD CONTIGUOUS H
Slide 20: Recent Developments Enhance GCC's Value Proposition
EBITDA Cement Capacity Debt Falling Increased free Growing Growing and float and RECENT Refinancing liquidity DEVELOPMENTS +62.4% +514k mt -0.67x 46% ENHANCE Odessa in 2016 Net leverage of total shares EBITDA growth GCC’S VALUE since 2020 acquisition on BMV PROPOSITION 36.6% +440k mt BBB +23% 2024 m
Slide 21: Bond and Bank Debt Refinancing Strengthen Financial Position
REDUCTION OF INTEREST COUPON BY 1.636 PERCENTAGE POINTS MATURITY PROFILE (US$ million) Fitch and S&P upgraded GCC’s rating to investment grade (Q1-21) 500 BOND AND Bond interest coupon decreased to 3.614% from 5.250% (January 2022) BANK DEBT Undrawn ~US$270mm revolving credit facility to support liq
Slide 22: Sustainability Linked Bond US$500 MM BBB-
SUSTAINABILITY LINKED BOND FIRST ISSUANCE AS AN INVESTMENT GRADE COMPANY 2.8x oversubscribed orderbook Drove a 25bps compression from IPTs to launch US$500 MM GCC hosted conference calls with over 75 accounts, over a 4-day marketing exercise, while simultaneously leveraging an electronic roadshow th
Slide 23: Sustainability Linked Bond
SUSTAINABILITY LINKED BOND REINFORCING GCC’S COMMITMENT TO DECARBONIZATION First SLB from a cement company in the Americas, positioning GCC 770 767 Actuals at the forefront of the industry’s decarbonization strategy 754 754 755 746 741 740 SUSTAINABILITY PERFORMANCE TARGET 710 706 689 Carbon Intensi
Slide 24: Debt and Capital Efficiency Indicators Steadily Improving
DEBT AND CAPITAL EFFICIENCY INDICATORS STEADILY IMPROVING EBITDA MARGIN EBITDA MARGIN FREE CASH FLOW FREE CASH FLOW (US$ million) (US$ million) 36.6% 36.6% 64.3% 64.3% 31.4% 31.4% 322 322 279 279 +19.3 ppt +19.3 ppt 246 244 246 244 234 234 138 138 17.3% 107 112 106 107 112 106 17.3% 63 68 63 68 36 3
Slide 25: Strengthened Margins and Lower Indebtedness Than Most Peers
STRENGTHENED MARGINS AND LOWER INDEBTEDNESS THAN MOST OF OUR PEERS 2024 Net Debt/EBITDA multiples* 5.1x LatAm Average 1.5x U.S. Average 1.3x 1.1x 1.8x 2.4x 1.5x 1.4x 0.8x 0.9x -0.8x EXP VMC MLM SUM Cemex Argos GCC 2024 EBITDA margins* U.S. Average 31.1% LatAm Average 21% 35.0% 35.4% 33.9% 32.8% 22.1
Slide 26: Capital Markets Transactions Increased Share Float and Liquidity; Valuation Remains Attractive
CAPITAL MARKETS TRANSACTIONS INCREASED SHARE FLOAT AND LIQUIDITY; VALUATION REMAINS ATTRACTIVE TRANSACTIONS BENEFIT PUBLIC 2024 ESTIMATED EV/EBITDA MULTIPLES 1 MARKET SHAREHOLDERS Transparent control group shareholdings Float increased to 49% of shares Increased liquidity U.S. Average 12.4x LatAm Pe
Slide 27: Liquidity Enhancing Events
LIQUIDITY HAS INCREASED SIGNIFICANTLY AS A RESULT OF CORPORATE DEVELOPMENTS AND STOCK MARKET POSITIONING AVERAGE DAILY TRADING VOLUME, SHARES1 “Re-IPO,” February 2017 425,000 IPC Index inclusion, September 2018 FTSE Index inclusion, March 2019 LIQUIDITY 278,000 ENHANCING 64,000 EVENTS Coverage Ratin
Slide 28: Sustainable Development Performance Targets
GCC IS MEMBER OF THE GLOBAL CEMENT AND CONCRETE ASSOCIATION MAIN GOALS SUSTAINABLE DEVELOPMENT GOALS 2020 ✓ HOW? REDUCE NET CO2 Climate & Energy EMISSIONS BY 9% Sustainable Development Performance Targets Energy efficiency Circular Economy 2030 Alternative fuels REDUCE NET CO2 EMISSIONS BY 30.7% Hea
Slide 29: Sustainability Initiatives: Alternative Fuels
SUPPORTED BY SUSTAINABILITY INITIATIVES RESULTING IN DIRECT ECONOMIC AND ENVIRONMENTAL BENEFITS ALTERNATIVE FUELS (AF) USAGE AF USAGE BY PLANT 11.5% 9.7% 10.2% 9.1% 9.1% 8.9% 7.7% 7.1% 49% 44% 38% 31% 28% 26% 24% 50k 81k 78k 78k 88k 84k 64k 55k 72k 18% 19% 18% 16% 10% 7% 7% 4% 2% 2% 3% 2015 2017 201
Slide 30: Sustainability Initiatives: Clinker Factor and Blended Cement
SUPPORTED BY SUSTAINABILITY INITIATIVES RESULTING IN DIRECT ECONOMIC AND ENVIRONMENTAL BENEFITS % CLINKER FACTOR LOWER CLINKER FACTOR TRANSLATES INTO LOWER CO2 EMISSIONS 92.0% 91.0% 91.0% 91.2% 91.0% 90.6% GCC reduced clinker factor to 83.7% in 2024 89.7% 89.0% 88.9% 87.9% 88.1% 88.0% Blended cement
Slide 31: Latest ESG Achievements
GCC’s CO2 emissions decreased to 689kg CO2 in 2023 from 706kg CO2 in 2023; a 2.4% record reduction 100%, 42% and 12% of the electricity consumed at the Odessa, Rapid City and Montana plants, respectively, came from renewable sources in 2024 LATEST ESG Rapid City cement plant earned the 2024 EPA Ener
Slide 32: Experienced Management Team, with Sound Corporate Governance
EXPERIENCED MANAGEMENT TEAM, WITH SOUND CORPORATE GOVERNANCE ENRIQUE ESCALANTE, CEO 49.1% 50.9% GCC since 1999; 25 years in the industry Free float CAMCEM MAIK STRECKER, CFO GCC since 2020; 24 years in the industry RON HENLEY, U.S. DIVISION PRESIDENT GCC since 2012; 38 years in the industry Propriet
Slide 33: Compensation Plan
COMPENSATION PLAN GOAL: CLOSELY ALIGN PAY WITH PERFORMANCE AND VALUE CREATION OVER THE SHORT AND LONG-TERM FIXED PAY VARIABLE PAY BASE SALARY ANNUAL INCENTIVE Smallest component of target TDC Based on EBITDA: CEO: 34% Budgeted growth Key executives: 40% - 62% EBITDA margin TOTAL DIRECT Pays out betw
Slide 34: Disciplined Approach to Acquisition and Growth Investments
WITH A DISCIPLINED APPROACH TO ACQUISITION AND GROWTH INVESTMENTS GROWTH FRAMEWORK STRATEGIC PRIORIZATION AND EVALUATION OF ALTERNATIVES Seek out Increase market share Cement opportunities 1 Increase presence in existing markets Vertical integration Cement Value-added products Case (U.S.) by case Ag
Slide 35: Reinforcing a Positive 2025 Outlook
REINFORCING A POSITIVE 2025 OUTLOOK UNITED STATES CONSOLIDATED Volumes EBITDA growth Mid-single digit Cement Low-single digit Concrete Mid-single digit FCF Conversion Rate > 60% Prices Total CAPEX US$470 million Cement Growth US$400 million Mid-single digit Maintenance US$70 million Concrete MEXICO
Slide 36: Enrique Escalante, CEO Q4 2024 Quote
ENRIQUE Enrique Escalante, GCC’s Chief Executive Officer, commented: “GCC delivered exceptional results once again in 2024. Despite navigating a challenging economic environment, ESCALANTE we achieved record-breaking sales, EBITDA, margins and net income. These results CEO Q4 2024 QUOTE underscore o
Slide 37: Appendix
05 APPENDIX
Slide 38: Q4 & FY 2024 Results
Q4 & FY 2024 RESULTS SALES (US$ MILLION) EBITDA & EBITDA MARGIN (US$ MILLION) FREE CASH FLOW (US$ MILLION) 1,367 34.5% 36.3% 34.6% 36.6% 1,364 322 501 +0.2% 472 234 +6.2% +37.7% 130 107 340 335 +21.2% 117 122 -1.3% +3.7% Q4-23 Q4-24 2023 2024 Q4-23 Q4-24 2023 2024 Q4-23 Q4-24 2023 2024 NET SALES BY
Slide 39: Q4 2024 Results Highlights
Q4 2024 RESULTS HIGHLIGHTS Millions of dollars Q4-24 Q4-23 Var 2024 2023 Var Net sales 335.3 339.9 -1.3% 1,366.7 1,363.9 0.2% Operating income before other expenses 94.3 97.6 -3.3% 399.5 382.3 4.5% EBITDA 121.6 117.3 3.7% 500.6 471.5 6.2% EBITDA Margin 36.3% 34.5% 36.6% 34.6% Consolidated net income
Slide 40: Sales Volumes and Prices
SALES VOLUMES AND PRICES Q4-24 vs Q4-23 2024 vs 2023 Cement volumes U.S. -0.8% -2.2% Favorable price environment in both countries Mexico -9.5% -8.7% The most dynamic U.S. market segments during the quarter were agricultural and Concrete volumes renewable energy U.S. 4.5% -5.6% Mexico sales during t
Slide 41: Sales
SALES Million dollars Q4-24 Q4-23 Var 2024 2023 Var Consolidated 335.3 339.9 -1.3% 1,366.7 1,363.9 0.2% U.S. 246.9 237.2 4.1% 974.8 938.3 3.9% Mexico 88.4 102.7 -13.9% 391.9 425.6 -7.9% U.S. SALES MEXICO SALES Pricing growth across product lines Successful pricing strategy and favorable fuel costs R
Slide 42: Income Statement (Million Dollars)
INCOME STATEMENT (MILLION DOLLARS) Q4-24 Q4-23 Var 2024 2023 Var Net Sales 335.3 339.9 -1.3% 1,366.7 1,363.9 0.2% U.S. 246.9 237.2 4.1% 974.8 938.3 3.9% Mexico 88.4 102.7 -13.9% 391.9 425.6 -7.9% Cost of sales 214.6 211.0 1.7% 848.8 862.2 -1.6% SG&A expenses 26.4 31.3 -15.9% 118.3 119.4 -0.9% Other
Slide 43: Free Cash Flow (Million Dollars)
FREE CASH FLOW (MILLION DOLLARS) Q4-24 Q4-23 Var 2024 2023 Var Operating income before other expenses 94.3 97.6 -3.3% 399.5 382.3 4.5% Depreciation and amortization 27.3 19.7 38.3% 101.0 89.2 13.2% EBITDA 121.6 117.3 3.7% 500.6 471.5 6.2% Increased free cash flow in Q4-24 reflects: Lower working cap
Slide 44: Balance Sheet (Million Dollars)
BALANCE SHEET (MILLION DOLLARS) December December Var 2024 2023 Total Assets 3,004.5 2,813.1 6.8% Current Assets 1,206.2 1,331.2 -9.4% Net leverage (net debt/EBITDA) ratio totaled Cash 830.6 958.7 -13.4% -0.67x as of December 2024 Other current assets 375.6 372.5 0.8% Cash and equivalents totaled US
Slide 45: Contact
CONTACT: Maik Strecker, Chief Financial and Planning Officer mstrecker@gcc.com WWW.GCC.COM Sahory Ogushi, Head of Investor Relations soguship@gcc.com +52 (614) 442 3176 + 1 (303) 739 5943