Gcc Sab De Cv · BMV:GCC
Gcc Sab De Cv — Q3 2024 Earnings Presentation
27 slides from Gcc Sab De Cv's earnings presentation, Oct 23, 2024
Slide 1: Q3 2024 Earnings Conference Call
Q3 2024 EARNINGS CONFERENCE CALL ENRIQUE ESCALANTE, CEO MAIK STRECKER, CFO OCTOBER 23, 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 2.3% EBITDA • Dynamic and complex demand environment • Success of the proactive cost and expense management • GCC’s 83rd anniversary 40.7% Record EBITDA margin • Commitment to GCC’s long-term vision remains strong • Continue to drive sustainable growth 2.6ppt EBITDA margin 3
Slide 4: People: Safety Strategic Plan
SAFETY STRATEGIC PLAN Vision • 1st phase delivering significant results Become a World Class Safety • Achieved a 25% reduction in recordable injuries Company PEOPLE • As of September, over the LTM vs 2023 • Further advanced the safety leadership training program Focus on our • Launched a company-wid
Slide 5: GCC Cement Training Institute and GCC Foundation
GCC CEMENT TRAINING INSTITUTE • Strengthen team’s technical capabilities • +9,000 hours of training through 36 courses • Including 17 different subjects led by five former GCC experts • Assessing training needs across all plants and preparing customized plans for next year GCC FOUNDATION • Engaging
Slide 6: Profit
• Focused on maintaining rigorous cost control • Implemented proactive measures to manage and reduce expenses in Q3 PROFIT • Respond swiftly to the evolving market dynamics • Enhancing profitability is a priority • Introduced key initiatives aimed at optimizing cost structure 6
Slide 7: Cost efficiencies and preventive maintenance
Identifying efficiencies in variable costs Focus on preventive maintenance • Streamline processes across operations • Reduce the likelihood of more costly corrective actions • Reduce fuel and energy consumption to lower production costs • Control costs • Flexible fuel strategy • Enhance long-term op
Slide 8: Planet
Significant Technical teams are progress in Implementing actively developing advancing infrastructure more sustainable sustainability changes to ensure PLANET initiatives products and processes performance and durability Exploring innovative materials like natural Key area is blended cement pozzolan
Slide 9: Alternative Fuels
ALTERNATIVE FUELS Exploring diverse Systems to process and utilize new 2.5% YTD fuel sources and CO2 gross emissions streams of making investments compared to 2023 alternative materials at 3 plants Visit GCC’s 2023 Increase fuel Integrated Report substitution rate for more detail 9
Slide 10: U.S. Overview
U.S. OVERVIEW • High interest rates in Q3 • Affected demand for residential and commercial projects across 76% the industry of sales • Adverse weather in northern region • Cement demand showed signs of stabilization in September Q3 24 vs. Q3 23 9M 24 vs. 9M 23 Volumes Prices Volumes Prices Cement -4
Slide 11: U.S. Overview
U.S. OVERVIEW U.S. Census Bureau Oil and gas sector • Building starts for residential projects were • Strong performer in the Permian Basin down 1% in September • Cement demand remains robust • U.S. housing market remains underbuilt • $15 per ston price increase on July 1 • Anticipate an uptick in a
Slide 12: U.S. infrastructure, agriculture and renewable energy
Infrastructure • Advanced several key projects: Restart of the • I-90 and Highway 18 in South Dakota SunZia Wind and Expect to drive Transmission • I-35 in Minnesota volumes through project Q4 and 2025 • Missouri River Bridge • Ellsworth Airforce Base in South Dakota • I-10 project in El Paso Larges
Slide 13: Infrastructure demand and Odessa expansion
Infrastructure demand remained consistent Anticipate federal funding with normal levels in Q3 will align well with the Infrastructure expanded capacity at the Investment and Jobs Odessa plant Act (IIJA) Have not yet seen the demand increase initially expected The Odessa expansion is set to come onli
Slide 14: Mexico Overview
MEXICO OVERVIEW • Industrial segment continued to be affected 24% of sales • Lack of electric infrastructure in Juarez in Q3 • Uncertainty from elections in Mexico and U.S. • Construction of the Terranova substation in Juarez completed in Q3 • Signed two new projects set to begin in Q4 • Demand in h
Slide 15: Expected demand recovery
Encouraged by the signs of stabilization and recovery across U.S. markets Expect demand recovery and a favorable environment for growth in the coming months 15
Slide 16: Financial Results
FINANCIAL RESULTS MAIK STRECKER, CFO
Slide 17: Consolidated Net Sales
CONSOLIDATED NET SALES +0.7% Q3 24 vs. Q3 23 9M 24 vs. 9M 23 1,031 Volumes Prices* Volumes Prices* 1,024 Cement 323 304 -4.3% United States -4.6% 5.7% -2.7% 5.5% Mexico -8.9% 5.5% -8.5% 4.3% 416 398 Concrete 117 97 701 728 United States -9.0% 8.2% -8.8% 8.3% 299 302 Mexico -15.2% 5.4% -14.0% 6.7% Q3
Slide 18: Cost of Sales
COST OF SALES % of sales STRONG PERFORMANCE 59.9% 58.4% 63.6% 61.5% -160 BPS - 210 BPS • Lowest level in over 20 years • Success of the commercial excellence work • Effective cost management in fuel, production and freight 651 634 249 232 Q3 23 Q3 24 9M 23 9M 24 (US$ Million) 18
Slide 19: SG&A and EBITDA
SG&A EBITDA % of sales EBITDA margin 7.5% 7.1% 8.6% 8.9% 38.1% 40.7% 34.6% 36.7% - 40 BPS + 30 BPS + 260 BPS + 210 BPS +7.0% +2.3% 88 92 379 354 31 28 159 162 Q3 23 Q3 24 9M 23 9M 24 Q3 23 Q3 24 9M 23 9M 24 (US$ Million) (US$ Million) 19
Slide 20: Net Financial Income and Net Income
NET FINANCIAL US$11.2M US$9.6M INCOME Q3 2024 Q3 2023 NET INCOME Net income as % of sales Q3 23 106 EPS = US$0.3238 25.4% + 1.5 PPT Q3 24 107 EPS = US$0.3276 27.0% (US$ Million) 9M 23 220 EPS = US$0.6735 21.5% + 2.3 PPT 9M 24 246 EPS = US$0.7512 23.8% (US$ Million) 20
Slide 21: Cash Flow
CASH FLOW US$ million Q3 24 Q3 23 Var 9M 24 9M 23 Var EBITDA 162.1 158.5 2.3% 378.9 354.2 7.0% Interest income (Expense) 15.2 15.1 0.6% 39.5 30.6 29.1% Decrease (Increase) in Working Capital (5.1) (8.8) -42.0% (81.0) (94.4) -14.2% Taxes (27.1) (25.5) 6.3% (58.7) (58.9) -0.3% Prepaid expenses (7.0) (
Slide 22: Cash, Debt and Net Leverage Ratio
US$897M NET LEVERAGE RATIO cash and equivalents Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 US$500M -0.82x -0.99x -0.99x -0.78x -0.81x total debt 22
Slide 23: M&A Strategy
M&A strategy Hard work and • Actively pursuing value-creating M&A dedication of the Strong focus on opportunities team employee safety • Engaging in discussions with potential targets and development in cement and aggregates • Refined criteria to acquisitions in aggregates Significant strides • Iden
Slide 24: Questions
QUESTIONS CONTACT: Maik Strecker, Chief Financial and Planning Officer mstrecker@gcc.com WWW.GCC.COM Sahory Ogushi, Head of Investor Relations soguship@gcc.com +52 (614) 442 3176 + 1 (303) 739 5943 2 4
Slide 25: Appendix
APPENDIX &}ccc
Slide 26: Income Statement
INCOME STATEMENT US$ million Q3 24 Q3 23 Var 9M 24 9M 23 Var Net sales 398.2 416.1 -4.3% 1,031.4 1,024.1 0.7% Cost of sales 232.5 249.4 -6.8% 634.2 651.3 -2.6% SG&A 28.3 31.2 -9.4% 92.0 88.1 4.4% Other expenses, net 3.4 2.2 59.1% 7.5 4.3 72.7% Operating income 134.0 133.3 0.5% 297.7 280.4 6.2% Opera
Slide 27: Balance Sheet
BALANCE SHEET September 2024 September 2023 Variation Total assets 2,955.1 2,685.9 10.0% Current assets 1,329.5 1,253.2 6.1% Cash and equivalents 897.2 857.3 4.7% Other current assets 432.3 395.9 9.2% Non-current assets 1,625.6 1,432.7 13.5% Plant, property, and equipment 1,283.2 1,096.6 17.0% Goodw