Cemex SAB de CV Cert Part Ord Repr 2 ShsA & 1 ShsB · BMV:CEMEX/CPO
Cemex SAB de CV Cert Part Ord Repr 2 ShsA & 1 ShsB — Cemex — Q3 2023 Earnings Presentation
48 slides from Cemex SAB de CV Cert Part Ord Repr 2 ShsA & 1 ShsB's earnings presentation, October 2023
Slide 1: CEMEX Presentation As of 3Q23
CEMEX Presentation As of 3Q23 High Performance Sports Complex, Jalpa de Méndez, Mexico UDEM - Roberto Garza Sada Center, Santa Catarina, Mexico
Slide 2: Forward-looking statements disclaimer
Except as the context otherwise may require, references in this presentation to “Cemex,” “we,” “us,” or “our,” refer to Cemex, S.A.B. de C.V. (NYSE: CX) and its consolidated entities. The information included in this presentation contains forward-looking statements within the meaning of the U.S. fed
Slide 3: Our Core Businesses and Purpose
Our Core Businesses A binding agent, when mixed with aggregates and water, Cement produces either ready-mix concrete or mortar. Ready Mix A combination of cement, aggregates, admixtures, and Concrete water. Our Purpose Inert granular materials, such as stone, sand, and gravel, We aim to help solve t
Slide 4: A history of growth and innovation
A history of growth and innovation 1906 1965 1976 1992 1999 2005 2017 2019 2020 2023 Our history We began the Cemex lists on We started our Cemex lists on We established a With the launch We launched We launched Cemex renewed began in 1906 consolidation the Mexican international the New York global
Slide 5: Global presence with strong position in the Americas
Global presence with strong position in the Americas 9M23 Sales 9M23 EBITDA ~$13.2 B ~$2.6 B by product1 by region2 by region2 Mexico US US 25% 29% 28% Cement 33% Ready-mix 31% 33% Mexico 41% 41% 11% 10% 10% SCAC4 14% 32% 30% 11% 3 SCAC4 20% Aggregates EMEA Urbanization EMEA3 Solutions 1) Percentage
Slide 6: Strategic Priorities
Strategic Priorities Salvio Apartments, Bogotá, Colombia
Slide 7: Reaffirming our strategic priorities
Reaffirming our strategic priorities Advance Grow EBITDA Achieve Optimize our sustainability through margin investment portfolio agenda enhancement grade rating for growth (<430 kgs/ton of CO2 (>20%) by 20301) • 12% reduction since 2020 • Margin of 19.8% • Fitch: BB+ Positive outlook • Growth pipeli
Slide 8: Financial and Operational Results as of 3Q23
Financial and Operational Results as of 3Q23 411 Tower, Monterrey, Mexico
Slide 9: 3Q23 Key highlights
3Q23 Key highlights • A record third quarter1, with EBITDA growing 32% • EBITDA margin expanding 3.5pp • EBITDA margin above our goal of recovering 2021 level for the first time • 4th straight quarter of decelerating cost inflation • Growth investments contributing 11% of incremental EBITDA • 31% in
Slide 10: 3Q23: Strong performance on all fronts
3Q23: Strong performance on all fronts Operating Operating FCF after Net Sales EBITDA EBITDA Maint. Capex Margin +9% l-t-l +32% l-t-l +160% +3.5pp +16% +40% 475 4,571 910 19.9% 16.4% 649 3,956 182 3Q22 3Q23 3Q22 3Q23 3Q22 3Q23 3Q22 3Q23 10 Millions of U.S. dollars High Performance Sports Complex, Ja
Slide 11: Improved volume performance versus 1H23
Improved volume performance versus 1H23 3Q23 YoY CONSOLIDATED VOLUMES Volume change (YoY) 2% 3Q23 0% USA -8% EMEA -13% EUROPE 14% -4% -4% -13% -12% -9% -8% -8% 10% 10% -16% 7% MEX 1H23 AMEA 1% -1% 0% -5% 9% -8% SCAC 1% Cement1 -2% Ready-mix Aggregates 11 1) Domestic gray cement
Slide 12: Strong pricing momentum across our portfolio
Strong pricing momentum across our portfolio 3Q23 YoY and QoQ CONSOLIDATED PRICES Price change (l-t-l) 16% 10% 14% 9% 13% USA 21% 9% 11% 9% 6% 11% EMEA EUROPE 7% QoQ: 2% 4% -1% 26% 25% -5% -2% -1% 10% - 0% -2% -1% MEX 8% -1 % 1% -1% AMEA 5% -0% 2% 5% 2% Sequential (2Q23 to 3Q23) 20% -4% 2% 0% Cement
Slide 13: Pricing, decelerating inflation, and growth investments drive EBITDA increase
Pricing, decelerating inflation, and growth investments drive EBITDA increase 3Q23 Operating EBITDA Variation +32% +40% 910 -210 859 51 31 15 29 424 649 -79 3Q22 Volume Price Costs Growth Urbanization Other 3Q23 FX 3Q23 Investments Solutions l-t-l reported Operating EBITDA margin 16.4% +3.5pp 19.9%
Slide 14: Achieving goal of recovering 2021 margin
Achieving goal of recovering 2021 margin Consolidated Operating EBITDA Margin 21.2% 21.1% 20.1% 19.7% FY 2021 19.8% YTD 3Q23 19.6% 19.9% 18.4% 17.8% 18.2% 18.1% 18.0% 17.2% FY 2022 16.4% 16.3% 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 COGS as % of Sales 68.8% 67.6% 66.4% 67.7% 69.8
Slide 15: Pricing efforts reflecting input cost inflation
Pricing efforts reflecting input cost inflation Cement YoY percent change in USD/ton 21% 22% 21% Unitary costs 20% 19% 19% Prices 18% 14% 18% 13% 17% 11% 14% 12% 12% 11% 10% 10% 4% 8% 7% 0% 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 Energy cost per ton1 1% 16% 21% 27% 37% 43% 51% 35% 25%
Slide 16: 2023 Outlook
2023 Outlook Gilbert Chabroux School, Lyon France Built with Insularis, part of our Vertua family of sustainable products
Slide 17: 2023 guidance
2023 guidance1 Operating EBITDA2 >$3.3 billion Energy cost/ton of cement produced ~10% increase ~$1.35 billion total Capital expenditures ~$900 million Maintenance, ~$450 million Strategic Investment in working capital ~$100 million Cash taxes ~$550 million Cost of debt3 Increase of ~$100 million 1)
Slide 18: 2023 expected volume outlook: selected countries/regions
2023 expected volume outlook1: selected countries/regions Cement Ready-mix Aggregates CEMEX Mid single digit decline Mid single digit decline Flat Mexico Low single digit increase High single digit increase High single digit increase USA ~12% decline High single digit decline Low single digit declin
Slide 19: Climate Action Strategy
Climate Action Strategy
Slide 20: Setting the most ambitious goals in the industry
Setting the most ambitious goals in the industry 2030 roadmap with goal verified by SBTi under 1.5°C scenario 2030 Goals Well below 2°C 1.5°C Kgs of CO2/ton of cementitious scenario scenario 31% -12% 620 Scope 1 <475 kgs <430 kgs of CO2 in cement of CO2 in cement3 591 562 548 520 Scope 2 55% 65% cle
Slide 21: And advancing on our Future in Action agenda
And advancing on our Future in Action agenda Record low CO2 emissions1 Environmental Impact Disclosure -3% Scope 1 567 Scope 2 • 1st in industry to provide climate impact disclosure globally • For all core products in main markets -4% • Third-party validated 53 548 51 • Including CO2 emissions Enhan
Slide 22: Levers in cement business to reduce CO2 emissions
Levers in cement business to reduce CO2 emissions Percentage of CO2 emissions in 57% 35% 8% Cement Decarbonation Fuels Electricity process of limestone consumption CO2 CO2 Cement kiln Grinding mill Power sources Scope 1 Scope 2 emissions emissions • Blended cements with SCM’s1 • Increase alternative
Slide 23: Our 2030 roadmap – a 47% CO2 reduction
Our 2030 roadmap – a 47% CO2 reduction Net Kg of CO2 per ton of cementitious 800 Developed a detailed plant by plant roadmap 620 Existing and proven technology that we have been using in Europe 591 Main levers include increasing alternative 562 fuels with high biomass content and 548 optimization of
Slide 24: R&D for breakthrough technology to reach Net Zero
R&D for breakthrough technology to reach Net Zero Now – 2030 2030 – 2050 Decisive decade Completing Net Zero transition Carbon capture utilization Solar & electric- and driven manufacture storage Novel chemistry – CO2 emissions Innovative uses cementitious & of CO2 admixtures • Maximize contribution
Slide 25: 2030 to 2050 Roadmap to Net Zero CO2 Concrete
2030 to 2050 Roadmap to Net Zero CO2 Concrete Net kg CO2 per m3 11 ~35 Electricity, 25 Supplies & Transport 86 Cement 150 net direct emissions 28 in concrete 11 24 2030 Cement levers Concrete Carbon Recarbonation Clean Supplies & 2050 levers Capture Electricity Transportation Net-Zero CO2 concrete 2
Slide 26: Focused on CCUS projects
Focused on 5 CCUS projects CCUS technologies 5 industrial scale pilot, <100 KT/yr. of CO2 captured Rüdersdorf plant net zero by 2030 • Amines 2 additional plants in Europe to reach large-scale execution • Cryogenic • Direct Separation Conducting a study on CO2 storage availability for (LEILAC) sever
Slide 27: Urbanization Solutions
Urbanization Solutions Happy Residence for Seniors, Montpellier, France Built with Insularis, part of our Vertua family of sustainable products
Slide 28: Urbanization Solutions, our fastest growing business
Urbanization Solutions, our fastest growing business Building sustainable cities while focusing on 4 verticals Performance Industrialized Related Circularity Materials Construction Services Chemical admixtures & Advanced concrete production, Fastest growing business, Construction materials retail, m
Slide 29: Urbanization Solutions: >20% EBITDA CAGR since 2019
Urbanization Solutions: >20% EBITDA CAGR since 2019 Net Sales Operating EBITDA Organic Growth +10% l-t-l +30% l-t-l 16% 35% 24 Investments 1,804 225 12% 10% +US$57 M 15% 167 19% Steady-state EBITDA Circularity 1,556 Industrialized 14% 10% 17% 5% 4 yr. payback 50% IRR Construction 29% Related 53% 39%
Slide 30: 2030 target to increase managed waste by 80%
2030 target to increase managed waste by 80% 2030 targets by waste stream 41 M tons Double municipal and industrial waste managed, achieving 50% of fossil fuel substitution ~27 M tons ~33% of Municipal waste not managed Recycle 14 M tons per year of construction and in an environmentally safe manner
Slide 31: Debt and Funding Frameworks
Debt and Funding Frameworks Crédit Agricole Building, Nimes, France Built with Vertua Concrete, part of our Vertua family of sustainable products
Slide 32: Further strengthening our capital structure in a volatile environment
Further strengthening our capital structure in a volatile environment • Reduction in net debt of $655 M from 4Q22 to 3Q23 • Leverage ratio at 2.16x1 in 3Q23, lowest level since we started measuring this metric in connection with our main bank debt agreements • Issued 6 B peso-denominated sustainabil
Slide 33: Continued leverage reduction, with eyes on investment grade
Continued leverage reduction, with eyes on investment grade Consolidated Leverage Ratio1 • Operating performance driven by pricing evolution strategy, growth investments and 4.17x 4.13x Urbanization Solutions • Last 12 months EBITDA of ~$3.2 B, highest since 2009, third consecutive quarter of declin
Slide 34: Proforma debt maturity profile as of September 30, 2023
Proforma1 debt maturity profile as of September 30, 2023 Currency Interest rate3 Total debt proforma1 as of September 30, 2023: $7,492 million denomination2 Average life of debt: MXN 5% 5.0 years Other 5% Variable Main bank debt agreements Euro 31% Other bank debt 15% Fixed Income U.S. Fixed Leases
Slide 35: Green Financing and Sustainability Linked Financing Frameworks
Green Financing and Sustainability Linked Financing Frameworks Green Financing Sustainability Linked Framework1 Financing Framework1 • Issued $1 B of green subordinated perpetual • Based on three Climate Action KPIs2, which are notes in 1Q23, under Green financing core, relevant and material to our
Slide 36: Regional Highlights as of 3Q23
Regional Highlights as of 3Q23 Farmacias del Ahorro Corporate Offices, Monterrey, Mexico
Slide 37: Mexico: Double-digit growth across all products
Mexico: Double-digit growth across all products • Strong 3Q23 results, with double-digit increase in Sales and EBITDA (growing for fourth consecutive quarter) Cement industry demand1 • EBITDA margin increased on the back of strong pricing and volumes, coupled with lower fuel costs, posting the fourt
Slide 38: US: Delivering record results despite lower volumes
US: Delivering record results despite lower volumes • Record third quarter with a 36% growth in EBITDA and 4.4pp margin expansion, Cement industry benefiting from our pricing strategy, recent growth investments and decelerating costs demand1 • Cement and ready-mix pricing rose double-digits while ag
Slide 39: EMEA: Strong results in a challenging demand environment
EMEA: Strong results in a challenging demand environment • Low-single digit top line growth despite challenging demand backdrop, mainly driven Cement industry by disciplined pricing demand1 • Performance largely anchored by Europe I&C Residential • 8th consecutive quarterly like-to-like YoY EBITDA g
Slide 40: SCAC: Double digit growth in Sales and EBITDA
SCAC: Double digit growth in Sales and EBITDA • Sales and EBITDA grew double-digit driven by a strong pricing contribution and Cement industry slowing energy inflation demand1 I&C • Despite continued pressure in bagged cement in the region, volumes grew for the first 12% Residential time in two year
Slide 41: Leading the industry in Digital Innovation
Leading the industry in Digital Innovation Voltaire College, Remoulins, France Built with Vertua Concrete, part of our Vertua family of sustainable products
Slide 42: Delivering the best customer experience empowered by digital
Delivering the best customer experience empowered by digital 010101 010101010 01010110 Commercial Production/Supply Chain Admin. & Support Services • 44 to 73 NPS from 2018 to 3Q23 • AI to optimize production, costs, energy • Digitalizing global administrative services • Best digital platform in the
Slide 43: Evolving CEMEX Go to fully automated customer experience
Evolving CEMEX Go to fully automated customer experience Enhancing Commercial Customer Experience •Full digital integration within our supply chain network Digital Automation Data & AI to offer real-time options to our customers COMMERCIAL PRODUCTION •Automated digital confirmations to customers Sma
Slide 44: Balanced Capital Allocation
Balanced Capital Allocation La Mexicana Park, Mexico City, Mexico Built with Vertua Concrete, part of our Vertua family of sustainable products
Slide 45: Balanced capital allocation between growth and deleveraging
Balanced capital allocation between growth and deleveraging Accretive bolt-on and Deleveraging to achieve Return capital to Climate Action Investment Grade shareholders investments Dividends linked to investment grade rating 45
Slide 46: Appendix
Appendix Panorama High Rise, Miami, United States
Slide 47: Relevant ESG indicators
Relevant ESG indicators YTD YTD Customers and suppliers 3Q23 3Q22 2022 Carbon strategy 2022 3Q23 3Q22 Kg of CO2 per ton of Net Promoter Score (NPS) 73 66 66 548 567 562 cementitious % of sales using CX Go 66% 56% 59% Alternative fuels (%) 36.8% 34.2% 35.0% Clinker factor 73.2% 74.5% 73.7% YTD YTD YT
Slide 48: Contact Information
Contact Information Investors Relations Stock Information In the United States: NYSE (ADS): +1 877 7CX NYSE CX In Mexico: Mexican Stock Exchange +52 81 8888 4292 (CPO): CEMEX.CPO ir@cemex.com Ratio of CPO to ADS: 10 to 1