Gcc Sab De Cv · BMV:GCC
Gcc Sab De Cv — Q1 2024 Earnings Presentation
27 slides from Gcc Sab De Cv's earnings presentation, Apr 24, 2024
Slide 1: Q1 2024 Earnings Conference Call
Q1 2024 EARNINGS CONFERENCE CALL ENRIQUE ESCALANTE, CEO MAIK STRECKER, CFO APRIL 24, 2024
Slide 2: Safe Harbor Statement
This presentation has been prepared by GCC, S.A.B. de C.V. (together with other results to be materially different from the results expressed or its subsidiaries, “GCC”). Nothing within this presentation is intended to be implied by said projections. taken by any person as investment advice, a recom
Slide 3: Highlights
HIGHLIGHTS 11.9% • Outstanding quarter Revenue vs Q1 2023 • Revenue • Increase driven by strong U.S. volumes • Company record 30.4% EBITDA margin • Strong profitability led by: • Commercial excellence • Operational stability Focus on GCC’s strategic pillars: • Continued cost improvement people, prof
Slide 4: People Goal
PEOPLE Focused on strengthening Continuous training on safety safety culture Safety strategy plan leadership capabilities and practices to proactively control exposures That every employee and others that interact with our GOAL operations return home safe to their families 4
Slide 5: GCC Cement Training Institute
GCC CEMENT TRAINING MEXICAN INSTITUTE FOR INSTITUTE CEMENT AND CONCRETE • Develop the team’s technical capabilities • Partnered in Q1 • Further build out the program through year-end • Ensure teams have a thorough understanding of the value chain • Deepen into the overall execution • Improve employe
Slide 6: Profit
• Continue delivering improved margins • Executing on the strategy • PROFIT Goal: 36% EBITDA margin by 2025 • Driven by: • Cost improvement opportunities • Operational efficiency initiatives • Low power and gas prices 66
Slide 7: Flexible Fuel Strategy
FLEXIBLE FUEL STRATEGY • GCC’s competitive advantage • Enables to stabilize fuel expenses • Proactively leverage hedging options • Rely on natural gas and alternative fuels • Reduce the use of coal Closely aligned with the planet pillar 7
Slide 8: A focus on organic initiatives to maximize plant efficiency
A focus on organic initiatives to maximize plant efficiency The Tijeras plant and output received permitting approval for a Improved plant debottlenecking project utilization enhanced operational stability To increase finished mill capacity and add Optimized plant storage performance strengthens pro
Slide 9: Planet
PLANET Continued progress on projects includes: Production and commercialization of blended cement Increase the alternative fuels substitution capacity GCC’s first solar project in the U.S. Completion of phase 1 of the solar project in Montana Phase 1 Phase 2 offset 11% of offset 22% of total electr
Slide 10: U.S. Overview
U.S. OVERVIEW • Strong first quarter 64% • Robust demand of sales • Sales increased by 17% in Q1 • Record volumes in February • Plenty of additional projects Q1 24 vs. Q1 23 Volumes Prices Cement 8.3% 5.7% Concrete 5.6% 12.0% 10
Slide 11: U.S. Overview: Oil and Gas
OIL AND GAS U.S. OVERVIEW • Clients were extremely busy during Q1 • Bullish on the Permian Basin • The most cost-effective oil field in the U.S. • The Odessa plant is sold out for the rest of the year • First price increase of US$15 per ton for oil-well cement • Effective July 1 11 11
Slide 12: U.S. Residential and Infrastructure Investment and Jobs Act
U.S. RESIDENTIAL • Seeing signs of recovery • Increased demand for residential projects • Activity above last year INFRASTRUCTURE INVESTMENT AND JOBS ACT • Projects directly linked remain backlogged • States are using funds to expand or improve existing projects • Strong project quote level and soli
Slide 13: Mexico border crossing
Mexico border crossing Resumed product challenges delivery through El Paso softened Ability to quickly and nimbly adapt Consistently meet when needed the customers’ Supplying the needs Return to source Odessa market from products from the Samalayuca, freeing lowest-cost point product from the Pueblo
Slide 14: Mexico Overview
MEXICO OVERVIEW • Successful pricing and favorable fuel costs 36% of sales • Solid first quarter margins • Infrastructure projects in Juarez: • Decelerated due to power supply limitations • Expected to be resolved in 2024 • Nearshoring momentum remains Q1 24 vs. Q1 23 • A pipeline of 26 industrial p
Slide 15: GCC delivered a very solid start to 2024
GCC delivered a very solid start to 2024 Expect continued success due substantial backlog, cost efficiency and commercial strategy 15
Slide 16: Financial Results
FINANCIAL RESULTS MAIK STRECKER, CFO
Slide 17: Consolidated Net Sales
CONSOLIDATED NET SALES +11.9% Q1 24 vs. Q1 23 Volumes Prices* 273 Cement 244 United States 8.3% 5.7% 99 96 Mexico -9.5% 4.9% Concrete 148 173 United States 5.6% 12.0% Mexico -14.5% 8.6% Q1 23 Q1 24 (US$ Million) United States Mexico * Prices in local currency 17
Slide 18: Cost of Sales
COST OF SALES % of sales 72.2% 66.8% STRONG PERFORMANCE - 5.4 PPT • Lower fuel and production costs • Favorable operating leverage • Favorable selling prices • Decreased freight costs 176 182 Q1 23 Q1 24 (US$ Million) 18
Slide 19: SG&A and EBITDA
SG&A EBITDA % of sales EBITDA margin 11.4% 11.8% 25.8% 30.4% + 40 BPS + 460 BPS +16.0% +31.6% 83 32 28 63 Q1 23 Q1 24 Q1 23 Q1 24 (US$ Million) (US$ Million) 19
Slide 20: Net Financial Income and Net Income
NET FINANCIAL US$10.2M US$3.7M INCOME (173%) Q1 2024 Q1 2023 NET INCOME (51.1%) Net income as % of sales Q1 2023 32 EPS = US$0.0988 13.3% + 460 BPS Q1 2024 49 EPS = US$0.1496 17.9% (US$ Million) 20
Slide 21: Cash Flow
CASH FLOW US$ million Q1 24 Q1 23 Var EBITDA 82.9 63.0 31.6% Interest income (expense) 17.3 11.8 46.1% Decrease (increase) in working capital (16.9) (19.6) -14.0% Taxes (5.3) (0.7) n.m. Prepaid expenses 2.6 2.4 9.9% Accruals and other accounts (24.8) (55.7) -55.4% Operating leases (IFRS 16 effect) (
Slide 22: Cash and Net Leverage Ratio
US$980.5M cash and equivalents NET LEVERAGE RATIO Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 -0.69x US$500M -0.86x -0.82x -0.99x -0.99x total debt 22
Slide 23: Capital Allocation
CAPITAL ALLOCATION Continue executing on the Odessa plant 2024 PRIORITIES expansion as planned • Focusing on general maintenance Identifying new sources of growth organically and reinvesting in GCC’s plants and through acquisitions • Enhancing the efficiency of the Looking into attractive opportunit
Slide 24: Questions
QUESTIONS CONTACT: Maik Strecker, Chief Financial and Planning Officer mstrecker@gcc.com WWW.GCC.COM Sahory Ogushi, Head of Investor Relations soguship@gcc.com +52 (614) 442 3176 + 1 (303) 739 5943 2 4
Slide 25: Appendix
APPENDIX ccc
Slide 26: Income Statement
INCOME STATEMENT US$ million Q1 24 Q1 23 Var Net sales 272.8 243.9 11.9% Cost of sales 182.2 176.0 3.6% SG&A 32.2 27.7 16.0% Other expenses, net 1.7 0.3 n.m. Operating income 56.7 39.9 42.2% Operating margin 20.8% 16.4% Net financing expenses 10.2 3.7 173.0% Earnings in associates (0.0) 0.3 n.m. Inc
Slide 27: Balance Sheet
BALANCE SHEET March 2024 March 2023 Variation Total assets 2,886.8 2,505.7 15.2% Current assets 1,372.5 1,149.8 19.4% Cash and equivalents 980.5 807.7 21.4% Other current assets 392.0 342.1 14.6% Non-current assets 1,514.3 1,355.9 11.7% Plant, property and equipment 1,181.9 1,031.9 14.5% Goodwill an