Gcc Sab De Cv · BMV:GCC
Gcc Sab De Cv — Q4 2023 Earnings Presentation
28 slides from Gcc Sab De Cv's earnings presentation, Jan 31, 2024
Slide 1: Q4 2023 Earnings Conference Call
Q4 2023 EARNINGS CONFERENCE CALL ENRIQUE ESCALANTE, CEO MAIK STRECKER, CFO JANUARY 31, 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: 2023 Highlights
2023 HIGHLIGHTS 16.7% 30.6% Double-digit topline growth for the 11th consecutive quarter Revenue EBITDA vs 2022 vs 2022 Focused on the 2025 vision and on the strong execution of the pillars: people, planet and profit 3
Slide 4: People: Safety is GCC's Priority
SAFETY IS GCC’S PRIORITY • Implementation phase of the Safety Strategy Plan 2024 • Put in place a Serious Injury and Fatality Prevention System Further build • Resulting in: out the safety PEOPLE culture and • Increased safety awareness improve safety • Increased team’s proactive participation in sh
Slide 5: GCC Technical Training Institute
Teams have found new GCC TECHNICAL TRAINING INSTITUTE ways to increase equipment efficiency • Fostering a skilled workforce • Identified gaps within the operations • Built a customized training plan aligned with each Finalizing 2024 annual plant’s needs training plans • Dedicated 10,300+ hours train
Slide 6: Great Place to Work
Maintained a motivated and stable workforce Recognized as a Strengthening client Great Place to Work relationships certified company Ensure stable operations and Focused on identifying improvement deliver product areas and ensuring talent retention 6
Slide 7: Planet: Blended Cement and Flexible Fuel Strategy
BLENDED CEMENT STRATEGY • Doubled the share of blended cements within the portfolio • Represented 73% of cement sales PLANET FLEXIBLE FUEL STRATEGY • Embracing cleaner options: alternative fuels and natural gas • Increased the use of natural gas by 35% • U.S. plants increased their alternative fuel
Slide 8: Operational Efficiency Strategy
4.6% scope 1 CO2 emissions OPERATIONAL EFFICIENCY STRATEGY compared to 2022 Pueblo and Rapid City plants earned the EPA • Improved temperature controls Energy Star certification • Replaced equipment • Stabilized operations 7.8% • Reduced energy consumption scope 1 CO2 emissions Will focus on carbon
Slide 9: Profit: Commercial Strategy
COMMERCIAL STRATEGY • Pivoted the supply to infrastructure and oil and gas segments • Enabled by the flexibility of the operations PROFIT • Sustain EBITDA margins • Improved plant utilization • Leverage increased capacity to address demand • Execution of GCC’s commercial strategy 9
Slide 10: U.S. Overview
U.S. OVERVIEW • Favorable weather conditions • Sales increased by 19.6% in Q4 70% • Record concrete volumes during December of sales • Sales benefited from successful pricing • US$8 /ston increase for construction cement, effective January 1 Q4 23 vs. Q4 22 2023 vs. 2022 Volumes Prices Volumes Price
Slide 11: Infrastructure Investment and Jobs Act
INFRASTRUCTURE INVESTMENT AND JOBS ACT Strong activity levels for bidding work GCC was awarded infrastructure projects including: • The largest clean energy infrastructure project in U.S. history Further delays to project starts • Air force bases in Wyoming and Rapid City • The Energy Gateway transm
Slide 12: GCC's Network Connectivity
U.S. residential-sector demand showed signs of stabilizing GCC’S NETWORK CONNECTIVITY • Enabled to offset the closed border effect Cement impacted • Supplied 90,000 tons from the Pueblo plant to: by the shutdown of the border • Replace cement shipments from Samalayuca • Protect market share • Ensure
Slide 13: Mexico Overview
MEXICO OVERVIEW • Sales grew by 13.8% in Q4 30% of sales • Adverse effects on volumes due to: • Lack of energy infrastructure in Juarez • Permitting delays on industrial projects • Mining segment contraction • Positive outlook supported by the nearshoring trend • Industrial projects under constructi
Slide 14: Strong growth and margins; strengthening competitive advantages
GCC’s performance driven by strong growth and margins Strengthening meaningful competitive advantages 14
Slide 15: Financial Results
FINANCIAL RESULTS MAIK STRECKER, CFO
Slide 16: Consolidated Net Sales
CONSOLIDATED NET SALES +16.7% Q4 23 vs. Q4 22 2023 vs. 2022 1,364 Volumes Prices* Volumes Prices* 1,168 426 Cement 328 United States 5.3% 8.4% -5.1% 14.1% Mexico -7.2% 8.2% 2.2% 10.0% +17.8% Concrete 938 340 841 United States 7.8% 9.6% 5.9% 13.7% 289 103 90 Mexico -4.2% 12.5% 5.2% 13.5% 198 237 Q4 2
Slide 17: Cost of Sales
COST OF SALES % of sales STRONG PERFORMANCE 67.2% 61.8% 68.8% 63.2% • Driven by: - 540 BPS - 560 BPS • Successful pricing strategy • Enhanced operational stability • Favorable effect of continued optimization • Lower energy costs 861 804 194 210 Q4 22 Q4 23 2022 2023 (US$ Million) 17
Slide 18: SG&A and EBITDA
SG&A EBITDA % of sales EBITDA margin 9.2% 9.2% 8.2% 8.8% 31.2% 34.8% 30.9% 34.6% 0 BPS + 50 BPS + 350 BPS + 370 BPS +30.6% 472 119 +31.0% 96 362 26 31 118 90 Q4 22 Q4 23 2022 2023 Q4 22 Q4 23 2022 2023 (US$ Million) (US$ Million) 18
Slide 19: Net Financial Income and Net Income
NET FINANCIAL US$7.4M US$25.3M INCOME Q4 2023 FY 2023 NET INCOME Net income as % of sales Q4 2022 4 EPS = US$0.0136 1.6% + 20.5 PPT Q4 2023 75 EPS = US$0.2294 22.1% (US$ Million) 2022 140 EPS = US$0.4251 12% + 9.6 PPT 2023 295 EPS = US$0.9029 21.7% (US$ Million) 19
Slide 20: Cash Flow
CASH FLOW US$ million Q4 23 Q4 22 Var 2023 2022 Var EBITDA 118.2 90.2 31.0% 472.4 361.6 30.6% Interest income (Expense) 6.3 (6.3) n.m. 36.9 (5.2) n.m. Decrease (Increase) in Working Capital 30.0 47.4 -36.8% (63.0) 25.2 n.m. Taxes (14.7) (9.6) 51.9% (73.5) (19.9) 269.1% Prepaid expenses (3.1) 1.9 n.m
Slide 21: Cash, Debt and Net Leverage Ratio
US$958.7M cash and equivalents NET LEVERAGE RATIO Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 -0.69x US$500M -0.93x -0.86x -0.82x -0.99x total debt 21
Slide 22: 2023 Capital Allocation
2023 CAPITAL ALLOCATION • Completed the new terminal north of Minneapolis • Strengthen GCC’s position in the Minneapolis-Saint Paul Odessa plant expansion area • Secure an outlet for Rapid City’s expanded capacity Maintenance CapEx Sustainability projects Share buyback Dividend program payment Samal
Slide 23: 2024 Capital Allocation Priorities
Invest in existing Allocate CapEx assets with a focus Further the towards ESG-related 2024 on aggregates distribution network initiatives 23
Slide 24: 2024 Guidance
United States Consolidated Volumes EBITDA growth Mid-single digit Cement FCF Conversion Rate > 60% Low-single digit 2024 Prices Concrete Total CapEx US$470M GUIDANCE Cement Strategic & growth US$400M Mid-single digit Maintenance US$70M Concrete Mexico Net Debt/EBITDA year-end Negative Volumes Cement
Slide 25: Questions
QUESTIONS CONTACT: Maik Strecker, Chief Financial and Planning Officer mstrecker@gcc.com WWW.GCC.COM Sahory Ogushi, Head of Investor Relations soguship@gcc.com +52 (614) 442 3176 + 1 (303) 739 5943 2 5
Slide 26: Appendix
APPENDIX ccc
Slide 27: Income Statement
INCOME STATEMENT US$ million Q4 23 Q4 22 Var 2023 2022 Var Net sales 339.9 288.6 17.8% 1,363.9 1,168.3 16.7% Cost of sales 210.1 194.0 8.3% 861.4 803.8 7.2% SG&A 31.3 26.4 18.5% 119.4 96.1 24.2% Other expenses, net 2.3 50.1 -95.4% 6.6 50.6 -86.9% Operating income 96.1 18.0 433.1% 376.5 217.7 72.9% O
Slide 28: Balance Sheet
BALANCE SHEET December 2023 December 2022 Variation Total assets 2,780.7 2,433.8 14.3% Current assets 1,299.7 1,107.4 17.4% Cash and equivalents 958.7 826.2 16.0% Other current assets 340.9 281.2 21.3% Non-current assets 1,481.0 1,326.5 11.7% Plant, property and equipment 1,148.7 1,002.3 14.6% Goodw