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 SAB DE CV — Q2 2018 Earnings Presentation
37 slides from Cemex SAB de CV Cert Part Ord Repr 2 ShsA & 1 ShsB's earnings presentation, Jul 26, 2018
Slide 1: 2018 Second Quarter Results
2018 Second Quarter Results Exupery International School and Kindergarten, Latvia 1
Slide 2: Forward-looking statements disclaimer
This presentation contains forward-looking statements within the meaning of the U.S. federal securities laws. CEMEX, S.A.B. de C.V. and its direct and indirect subsidiaries (‘CEMEX‘) intends, but are not limited to, these forward-looking statements to be covered by the safe harbor provisions for for
Slide 3: 2Q18: first quarter since 4Q16 with increase in both reported and like-to-like EBITDA
2Q18: first quarter since 4Q16 with increase in both reported and like-to-like EBITDA EBITDA variation +2% +4% 100 64 696 724 714 105 31 10 2Q17 Vol. Price Var. cost Fixed 2Q18 l-t-l FX 2Q18 & distr. cost & other Consolidated volumes for cement, ready-mix and aggregates increased by 4%, 5% a
Slide 4: Increase of 32% in net income during the quarter
Increase of 32% in net income during the quarter Free cash flow Controlling interest net income 714 -34% +32% 626 382 160 288 96 416 64 260 97 37 231 30 EBITDA Net fin. Maint. WC Taxes Other1 FCF Stra- FCF 6M17 6M18 2Q17 2Q18 2Q18 Exp CapEx after tegic 2Q18 maint. CapEx CapEx Millions of U.S. dollar
Slide 5: Total debt plus perpetuals has declined by US$459M year to date
Total debt plus perpetuals has declined by US$459M year to date Total debt plus perpetuals variation -4% 11,349 396 106 121 10,890 78 4Q17 Cash balance Debt FX effect FCF after Other 2Q18 variation strategic CapEx Millions of U.S. dollars 5
Slide 6: Second Quarter 2018 Regional Highlights
Second Quarter 2018 Regional Highlights Therapeutic pools for the school La Esperanza, Puerto Rico 6
Slide 7: Mexico
Mexico l-t-l l-t-l Domestic gray cement, ready-mix and 6M18 6M17 % var % var 2Q18 2Q17 % var % var Net Sales 1,669 1,533 9% 8% 867 810 7% 13% aggregates volumes increased 3%, 15% and 14%, respectively, during the quarter Op. EBITDA 610 567 7% 7% 311 302 3% 8% reflecting positive activity in the form
Slide 8: United States
United States l-t-l l-t-l EBITDA margin increased by 0.5 percentage 6M18 6M17 % var % var 2Q18 2Q17 % var % var points, muted by increased transportation Net Sales 1,844 1,731 7% 8% 989 916 8% 9% costs, higher imports and the continued Op. EBITDA 298 287 4% 5% 189 170 11% 11% drawdown of inventories
Slide 9: South, Central America and the Caribbean
South, Central America and the Caribbean l-t-l l-t-l 6M18 6M17 % var % var 2Q18 2Q17 % var % var Net Sales 916 942 (3%) (3%) 461 470 (2%) 0% Op. EBITDA 214 254 (16%) (17%) 110 120 (9%) (9%) as % net sales 23.4% 27.0% (3.6pp) 23.7% 25.6% (1.9pp) Millions of U.S. dollars 6M18 vs. 6M17 2Q18 vs. 2Q17 2Q
Slide 10: Europe
Europe l-t-l l-t-l 6M18 6M17 % var % var 2Q18 2Q17 % var % var Net Sales 1,851 1,666 11% 1% 1,040 934 11% 6% Op. EBITDA 140 139 0% (9%) 121 109 11% 5% as % net sales 7.5% 8.4% (0.9pp) 11.7% 11.7% 0.0pp Millions of U.S. dollars 6M18 vs. 6M17 2Q18 vs. 2Q17 2Q18 vs. 1Q18 Cement 2% 5% 48% Volume Ready m
Slide 11: Asia, Middle East and Africa
Asia, Middle East and Africa l-t-l l-t-l 6M18 6M17 % var % var 2Q18 2Q17 % var % var Net Sales 728 653 11% 12% 353 327 8% 10% Op. EBITDA 114 113 1% 1% 52 49 6% 8% as % net sales 15.7% 17.3% (1.6pp) 14.8% 15.0% (0.2pp) Millions of U.S. dollars 6M18 vs. 6M17 2Q18 vs. 2Q17 2Q18 vs. 1Q18 Cement 13% 6% (
Slide 12: Second Quarter 2018 2Q18 Results
Second Quarter 2018 2Q18 Results Lumina, USA 12
Slide 13: Operating EBITDA, cost of sales and operating expenses
Operating EBITDA, cost of sales and operating expenses January—June Second Quarter l-t-l l-t-l 2018 2017 % var % var 2018 2017 % var % var Net sales 7,185 6,687 7% 5% 3,805 3,568 7% 7% Operating EBITDA 1,252 1,249 0% 0% 714 696 2% 4% as % net sales 17.4% 18.7% (1.3pp) 18.8% 19.5% (0.7pp) Cost of sal
Slide 14: Free cash flow
Free cash flow January—June Second Quarter 2018 2017 % var 2018 2017 % var Operating EBITDA 1,252 1,249 0% 714 696 2% —Net Financial Expense 332 438 160 213 —Maintenance Capex 174 156 96 99 —Change in Working Capital 417 298 64 (90) —Taxes Paid 148 162 97 115 —Other Cash Items (net) 64 21 38 9 —Free
Slide 15: Other income statement items during 2Q18
Other income statement items during 2Q18 Other expenses, net, of US$36 million, mainly due to impairment of assets and severance payments Gain on financial instruments of US$25 million mainly resulting from derivatives related to GCC shares Foreign-exchange gain of US$102 million resulting primarily
Slide 16: CEMEX consolidated debt maturity profile
CEMEX consolidated debt maturity profile Total debt excluding perpetual notes as of June 30, 2018: US$10,444 million Credit Agreement Other bank debt Fixed Income Avg. life of debt: 4.9 years Convertible Subordinated Notes1 2,443 1,970 1,551 1,141 1,204 998 643 452 42 2018 2019 2020 2021 2022 2023 2
Slide 17: CEMEX consolidated debt maturity profile - proforma
CEMEX consolidated debt maturity profile ‘ proforma1 Total debt excluding perpetual notes as of June 30, 2018: US$10,444 million Credit Agreement Other bank debt Fixed Income Avg. life of debt: 5.0 years Convertible Subordinated Notes2 2,443 1,865 1,970 1,141 1,204 998 643 138 42 2018 2019 2020 2021
Slide 18: Second Quarter 2018 2018 Outlook
Second Quarter 2018 2018 Outlook Pharmax Pharmaceutical, United Arab Emirates
Slide 19: 2018 guidance
2018 guidance Cement: 2% to 3% Consolidated Ready mix: 3% to 4% volumes Aggregates: 1% to 2% Energy cost per ton of cement Increase of approximately 6% produced US$550 million Maintenance CapEx Capital US$250 million Strategic CapEx expenditures US$800 million Total CapEx Investment in US$0 million
Slide 20: A Stronger CEMEX
A Stronger CEMEX Torre Reforma, Mexico 20
Slide 21: A Stronger CEMEX
A Stronger CEMEX Optimize portfolio for growth Accelerate balance sheet deleveraging Initiate capital return program US$1.5-2.0B asset sales by 2020 US$150M operational initiatives/cost reduction by 2019 US$3.5B total debt reduction by 2020 Ongoing cash dividend program starting in 2019; ~US$150M in
Slide 22: Plan rationale
Plan rationale Resilient Business Model Headwinds Persist Actions to date have benefitted the business, but deleveraging needs to be done at a faster pace Plan to increase speed of executing strategic priorities Follows extensive review of business by Board and management, taking into account feedba
Slide 23: Enhanced commitment to portfolio optimization for growth
Enhanced commitment to portfolio optimization for growth US$1.5B-2.0B of Asset Sales = Reposition CEMEX Portfolio Toward Higher Growth Streamline global portfolio Focus on markets with greatest long-term growth potential Retain assets best suited to grow within CEMEX portfolio Sell certain assets to
Slide 24: Operational initiatives / cost reduction
Operational initiatives / cost reduction Built a Resilient Business ModelBut More to Do: A Stronger CEMEX In addition to selling assets, plan to secure US$150 million of annual cost savings through: Extracting SG&A efficiencies Increasing alternative fuel utilization Serving our customers better
Slide 25: Total debt reduction of $3.5B by 2020
Total debt reduction of $3.5B by 2020 Total debt plus perpetuals -38% 17.5 -33% 10.9 7.4 Debt reduction of $3.5B by 2020 2013 2Q18 2020 Materially accelerating our path to investment grade Billions of U.S. dollars 25
Slide 26: Return capital to shareholders - initiating cash dividend
Return capital to shareholders ‘ initiating cash dividend Beginning in 2019, CEMEX to pay a cash dividend ~US$150M in 2019; amount in subsequent years to be based on business performance Targeting dividend metrics consistent with heavy building materials peers over the mid-term Subject to shareholde
Slide 27: Accelerated achievement of priorities underpins framework for growth
Accelerated achievement of priorities underpins framework for growth Optimize CEMEX US$1.5B-2.0B of asset sales ‘ launching divestiture processes in 2H18 Portfolio Rebalance CEMEX‘s portfolio toward attractive growth markets through organic/inorganic growth opportunities and asset sales Implement US
Slide 28: Accelerating the timeline of our priorities - A Stronger CEMEX
Accelerating the timeline of our priorities ‘ A Stronger CEMEX Pursue organic ~US$150M and inorganic annual cash growth dividend starting Total debt in 2019; share reduction of buybacks US$3.5B by 2020 US$150M Invest in cost reduction Growth US$1.5-2.0B Return asset sales Capital to Accelerate Share
Slide 29: Second Quarter 2018 Appendix
Second Quarter 2018 Appendix Chase Center, USA 29
Slide 30: Consolidated volumes and prices
Consolidated volumes and prices 6M18 vs. 6M17 2Q18 vs. 2Q17 2Q18 vs. 1Q18 Volume (l-t-l1) 3% 4% 14% Domestic gray Price (USD) 3% 2% (2%) cement Price (l-t-l1) 2% 3% 1% Volume (l-t-l1) 3% 5% 14% Ready mix Price (USD) 7% 4% (3%) Price (l-t-l1) 3% 3% (0%) Volume (l-t-l1) 0% 2% 18% Aggregates Price (USD
Slide 31: Additional information on debt and perpetual notes
Additional information on debt and perpetual notes Second Quarter First Quarter 2018 2017 % var 2018 Total debt1 10,444 11,483 (9%) 10,902 Short-term 5% 5% 4% Long-term 95% 95% 96% Perpetual notes 446 444 0% 450 Total debt plus perpetual notes 10,890 11,927 (9%) 11,352 Cash and cash equivalents 308
Slide 32: Additional information on debt
Additional information on debt Second Quarter First Quarter 2018 % of total 2017 % of total 2018 % of total Fixed Income 6,107 58% 7,760 68% 6,203 57% 2017 Credit Agreement 3,292 32% 2,249 20% 3,666 34% Convertible Subordinated Notes 511 5% 860 7% 509 5% Others 534 5% 613 5% 524 5% Total Debt1 10,44
Slide 33: 6M18 volume and price summary: Selected countries
6M18 volume and price summary: Selected countries Domestic gray cement Ready mix Aggregates 6M18 vs. 6M17 6M18 vs. 6M17 6M18 vs. 6M17 Volumes Prices (USD) Prices (LC) Volumes Prices (USD) Prices (LC) Volumes Prices (USD) Prices (LC) Mexico (0%) 4% 4% 10% 10% 9% 11% 7% 7% U.S. 7% 3% 3% 8% 2% 2% 2% 5%
Slide 34: 2Q18 volume and price summary: Selected countries
2Q18 volume and price summary: Selected countries Domestic gray cement Ready mix Aggregates 2Q18 vs. 2Q17 2Q18 vs. 2Q17 2Q18 vs. 2Q17 Volumes Prices (USD) Prices (LC) Volumes Prices (USD) Prices (LC) Volumes Prices (USD) Prices (LC) Mexico 3% (2%) 3% 15% 3% 9% 14% 3% 8% U.S. 9% 3% 3% 8% 3% 3% (1%) 6
Slide 35: 2018 expected outlook: Selected countries
2018 expected outlook: Selected countries Domestic gray cement Ready mix Aggregates Volumes Volumes Volumes Consolidated1 2%—3% 3%—4% 1%—2% Mexico 1%—2% 8%—10% 6%—8% United States1 4%—6% 4%—6% 2%—4% Colombia (9%)—(7%) (10%)—(8%) (12%)—(10%) Panama (15%)—(13%) (8%)—(4%) 3%—6% Costa Rica 3%—5% 5%—7% 5
Slide 36: Definitions
Definitions 6M18 / 6M17 Results for the first six months of the years 2018 and 2017, respectively AMEA Asia, Middle East and Africa Cement When providing cement volume variations, refers to domestic gray cement operations (starting in 2Q10, the base for reported cement volumes changed from total dom
Slide 37: Contact information
Contact information Investor Relations Stock Information In the United States NYSE (ADS): +1 877 7CX NYSE CX In Mexico Mexican Stock Exchange: +52 81 8888 4292 CEMEXCPO ir@cemex.com Ratio of CEMEXCPO to CX: 10 to 1 Calendar of Events October 25, 2018 Third quarter 2018 financial results conference c