UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 or 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of October, 2017
Commission File Number: 001-14946
CEMEX, S.A.B. de C.V.
(Translation of Registrants name into English)
Avenida Ricardo Margáin Zozaya #325, Colonia Valle del Campestre
San Pedro Garza García, Nuevo León, México 66265
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Contents
1. | Press release, dated October 26, 2017, announcing third quarter 2017 results for CEMEX, S.A.B. de C.V. (NYSE:CX). |
2. | Third quarter 2017 results for CEMEX, S.A.B. de C.V. (NYSE:CX). |
3. | Presentation regarding third quarter 2017 results for CEMEX, S.A.B. de C.V. (NYSE:CX). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, CEMEX, S.A.B. de C.V. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CEMEX, S.A.B. de C.V. | ||||||||
| ||||||||
(Registrant) | ||||||||
Date: |
October 26, 2017 |
By: |
/s/ Rafael Garza | |||||
|
| |||||||
Name: Rafael Garza | ||||||||
Title: Chief Comptroller |
EXHIBIT INDEX
EXHIBIT NO. |
DESCRIPTION | |
1. | Press release, dated October 26, 2017, announcing third quarter 2017 results for CEMEX, S.A.B. de C.V. (NYSE:CX). | |
2. | Third quarter 2017 results for CEMEX, S.A.B. de C.V. (NYSE:CX). | |
3. | Presentation regarding third quarter 2017 results for CEMEX, S.A.B. de C.V. (NYSE:CX). |
Exhibit 99.1
Media Relations Jorge Pérez +52(81) 8888-4334 mr@cemex.com |
Investor Relations Eduardo Rendón +52(81) 8888-4256 ir@cemex.com |
Analyst Relations Lucy Rodriguez +1(212) 317-6007 ir@cemex.com |
CEMEXS NET INCOME GROWS 72%
DURING THE FIRST NINE MONTHS OF 2017
| Net income reached U.S.$916 million in the first nine months of 2017, an increase of 72% compared to the same period last year. This is the highest net income for this period since almost 10 years. |
| Total debt plus perpetual notes declined by U.S.$1.5 billion year-to-date September. |
MONTERREY, MEXICO, OCTOBER 26, 2017 CEMEX, S.A.B. de C.V. (CEMEX) (NYSE: CX), announced today that consolidated net sales reached U.S.$3.5 billion during the third quarter of 2017, representing an increase of 2%, or an increase of 1% on a like-to-like basis for the ongoing operations and adjusting for currency fluctuations, versus the comparable period in 2016. Operating EBITDA decreased by 8% during the quarter to U.S.$702 million versus the same period in 2016.
CEMEXs Consolidated Third-Quarter 2017 Financial and Operational Highlights
| The increase in consolidated net sales on a like-to-like basis was due to higher prices for our products in Mexico and the U.S., as well as higher cement volumes in the U.S., Europe, and Asia Middle East and Africa regions. |
| Operating earnings before other expenses, net, in the third quarter decreased by 9%, to U.S.$494 million. |
| Controlling interest net income during the quarter improved to U.S.$289 million from an income of U.S.$286 million in the same period last year. |
| Operating EBITDA decreased during the quarter by 8% on a like-to-like basis to U.S.$702 million. |
| Operating EBITDA margin decreased by 2.2 percentage points on a year-over-year basis reaching 19.8%, reflecting in part higher energy and freight costs, increase costs in raw materials in some of our ready-mix operations, as well as the impact of lower volumes. |
| Free cash flow after maintenance capital expenditures for the quarter was U.S.$435 million, compared with U.S.$548 million in the same quarter of 2016. The conversion rate of EBITDA into free cash flow after maintenance capex during the quarter reached 62 percent. |
Fernando A. Gonzalez, CEMEX Chief Executive Officer, said: We are pleased with the double-digit, year-to-date growth in operating EBITDA in our two largest markets: Mexico and the U.S, which represent about two-thirds of our total EBITDA generation.
In addition, our debt leverage during the quarter reached 3.98 times during the quarter. This is the first time that our leverage ratio falls below 4 times since the third quarter of 2008. This will continue contributing to further savings in our financial expenses.
Im particularly encouraged with our net income reaching US$916 million during the first nine months of 2017. This is the highest year-to-date net income in almost 10 years.
Consolidated Corporate Results
During the third quarter of 2017, controlling interest net income was U.S.$289 million, an improvement over U.S.$286 million in the same period last year.
Total debt plus perpetual notes decreased by U.S.$369 million during the quarter and by U.S.$1.5 billion during the first nine months of the year.
Geographical Markets Third-Quarter 2017 Highlights
Net sales in our operations in Mexico increased 1% on a like-to-like basis in the third quarter of 2017 to U.S.$782 million, compared with U.S.$732 million in the third quarter of 2016. Operating EBITDA increased by 7% on a like-to-like basis to U.S.$302 million versus the same period of last year.
CEMEXs operations in the United States reported net sales of U.S.$916 million in the third quarter of 2017, an increase of 2% on a like-to-like basis from the same period in 2016. Operating EBITDA increased 1% on a like-to-like basis to U.S.$160 million in the quarter.
CEMEXs operations in South, Central America and the Caribbean reported net sales of U.S.$472 million during the third quarter of 2017, representing a decrease of 6% on a like-to-like basis over the same period of 2016. Operating EBITDA decreased 28% on a like-to-like basis to U.S.$113 million in the third quarter of 2017, from U.S.$145 million in the third quarter of 2016.
In Europe, net sales for the third quarter of 2017 increased 2% on a like-to-like basis to U.S.$948 million, compared with U.S.$887 million in the third quarter of 2016. Operating EBITDA was U.S.$129 million for the quarter, 7% lower on a like-to-like basis than the same period last year.
Operations in Africa, Middle East and Asia reported a 1% increase in net sales on a like-to-like basis for the third quarter of 2017, to U.S.$346 million, versus the third quarter of 2016, and operating EBITDA for the quarter was U.S.$57 million, down 41% on a like-to-like basis from the same period last year.
CEMEX is a global building materials company that provides high quality products and reliable service to customers and communities in more than 50 countries. Celebrating its 110th anniversary, CEMEX has a rich history of improving the well-being of those it serves through innovative building solutions, efficiency advancements, and efforts to promote a sustainable future.
###
This press release contains forward-looking statements and information that are necessarily subject to risks, uncertainties and assumptions. Many factors could cause the actual results, performance or achievements of CEMEX to be materially different from those expressed or implied in this release, including, among others, changes in general economic, political, governmental and business conditions globally and in the countries in which CEMEX does business, changes in interest rates, changes in inflation rates, changes in exchange rates, the level of construction generally, changes in cement demand and prices, changes in raw material and energy prices, changes in business strategy and various other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. CEMEX assumes no obligation to update or correct the information contained in this press release.
Operating EBITDA is defined as operating income plus depreciation and operating amortization. Free Cash Flow is defined as Operating EBITDA minus net interest expense, maintenance and expansion capital expenditures, change in working capital, taxes paid, and other cash items (net other expenses less proceeds from the disposal of obsolete and/or substantially depleted operating fixed assets that are no longer in operation). Net debt is defined as total debt minus the fair value of cross-currency swaps associated with debt minus cash and cash equivalents. The Consolidated Funded Debt to Operating EBITDA ratio is calculated by dividing Consolidated Funded Debt at the end of the quarter by Operating EBITDA for the last twelve months. All of the above items are presented under the guidance of International Financial Reporting Standards as issued by the International Accounting Standards Board. Operating EBITDA and Free Cash Flow (as defined above) are presented herein because CEMEX believes that they are widely accepted as financial indicators of CEMEXs ability to internally fund capital expenditures and service or incur debt. Operating EBITDA and Free Cash Flow should not be considered as indicators of CEMEXs financial performance, as alternatives to cash flow, as measures of liquidity or as being comparable to other similarly titled measures of other companies.
Exhibit 99.2
2017
THIRD QUARTER RESULTS
● Stock Listing Information
NYSE (ADS)
Ticker: CX
Mexican Stock Exchange
Ticker: CEMEXCPO
Ratio of CEMEXCPO to CX = 10:1
● Investor Relations
In the United States:
+ 1 877 7CX NYSE
In Mexico:
+ 52 (81) 8888 4292
E-Mail:
ir@cemex.com
Operating and financial highlights |
January - September | Third Quarter | |||||||||||||||||||||||||||||||
2017 | 2016 | % Var. | l-t-l % Var.* |
2017 | 2016 | % Var. | l-t-l % Var.* |
|||||||||||||||||||||||||
Consolidated cement volume |
51,310 | 52,164 | (2 | %) | 17,463 | 17,448 | 0 | % | ||||||||||||||||||||||||
Consolidated ready-mix volume |
38,656 | 38,631 | 0 | % | 13,220 | 13,410 | (1 | %) | ||||||||||||||||||||||||
Consolidated aggregates volume |
110,423 | 110,129 | 0 | % | 37,659 | 38,931 | (3 | %) | ||||||||||||||||||||||||
Net sales |
10,244 | 10,196 | 0 | % | 2 | % | 3,549 | 3,475 | 2 | % | 1 | % | ||||||||||||||||||||
Gross profit |
3,507 | 3,616 | (3 | %) | (1 | %) | 1,265 | 1,285 | (2 | %) | (3 | %) | ||||||||||||||||||||
as % of net sales |
34.2 | % | 35.5 | % | (1.3pp | ) | 35.6 | % | 37.0 | % | (1.4pp | ) | ||||||||||||||||||||
Operating earnings before other expenses, net |
1,315 | 1,443 | (9 | %) | (8 | %) | 494 | 544 | (9 | %) | (10 | %) | ||||||||||||||||||||
as % of net sales |
12.8 | % | 14.2 | % | (1.4pp | ) | 13.9 | % | 15.6 | % | (1.7pp | ) | ||||||||||||||||||||
Controlling interest net income (loss) |
916 | 534 | 72 | % | 289 | 286 | 1 | % | ||||||||||||||||||||||||
Operating EBITDA |
1,947 | 2,101 | (7 | %) | (6 | %) | 702 | 764 | (8 | %) | (8 | %) | ||||||||||||||||||||
as % of net sales |
19.0 | % | 20.6 | % | (1.6pp | ) | 19.8 | % | 22.0 | % | (2.2pp | ) | ||||||||||||||||||||
Free cash flow after maintenance capital expenditures |
603 | 1,048 | (42 | %) | 435 | 548 | (21 | %) | ||||||||||||||||||||||||
Free cash flow |
522 | 868 | (40 | %) | 411 | 469 | (12 | %) | ||||||||||||||||||||||||
Total debt plus perpetual notes |
11,558 | 13,965 | (17 | %) | 11,558 | 13,965 | (17 | %) | ||||||||||||||||||||||||
Earnings (loss)of continuing operations per ADS |
0.49 | 0.34 | 42 | % | 0.19 | 0.19 | 2 | % | ||||||||||||||||||||||||
Fully diluted earnings (loss) of continuing operations per ADS (1) |
0.48 | 0.34 | 41 | % | 0.19 | 0.18 | 2 | % | ||||||||||||||||||||||||
Average ADSs outstanding |
1,508.9 | 1,485.7 | 2 | % | 1,537.9 | 1,489.7 | 3 | % | ||||||||||||||||||||||||
Employees |
40,263 | 41,571 | (3 | %) | 40,263 | 41,571 | (3 | %) |
This information does not include discontinued operations. Please see page 14 on this report for additional information.
Cement and aggregates volumes in thousands of metric tons. Ready-mix volumes in thousands of cubic meters.
In millions of US dollars, except volumes, percentages, employees, and per-ADS amounts. Average ADSs outstanding are presented in millions.
Please refer to page 7 for end-of quarter CPO-equivalent units outstanding.
* | Like-to-like (l-t-l) percentage variations adjusted for investments/divestments and currency fluctuations. |
(1) | For JanuarySeptember 2016, the effect of the potential dilutive shares generate anti-dilution; therefore, there is no change between the reported basic and diluted loss per share. |
2017 Third Quarter Results | Page 2 |
Operating results |
Mexico
January - September | Third Quarter | |||||||||||||||||||||||
2017 | 2016 | % Var. | l-t-l % Var.* |
2017 | 2016 | % Var. | l-t-l % Var.* | |||||||||||||||||
Net sales | 2,314 | 2,163 | 7% | 10% | 782 | 732 | 7% | 1% | ||||||||||||||||
Operating EBITDA | 868 | 797 | 9% | 12% | 302 | 268 | 13% | 7% | ||||||||||||||||
Operating EBITDA margin | 37.5 | % | 36.8 | % | 0.7pp | 38.6 | % | 36.6 | % | 2.0pp |
In millions of US dollars, except percentages.
Domestic gray cement | Ready-mix | Aggregates | ||||||||||||||||||||||
Year-over-year percentage variation |
January - September | Third Quarter | January - September | Third Quarter | January - September | Third Quarter | ||||||||||||||||||
Volume |
(4%) | (10 | %) | (2%) | (6 | %) | (3 | %) | (4 | %) | ||||||||||||||
Price (USD) |
15% | 22 | % | 7% | 15 | % | 10 | % | 13 | % | ||||||||||||||
Price (local currency) |
18% | 15 | % | 9% | 9 | % | 12 | % | 7 | % |
In Mexico, our domestic gray cement, ready mix and aggregates volumes decreased by 10%, 6%, and 4%, respectively, during the third quarter of 2017 versus the same period last year. During the first nine months of the year, domestic gray cement, ready-mix, and aggregates volumes decreased by 4%, 2%, and 3%, respectively, versus the comparable period of 2016. During the quarter construction activity was affected by natural disasters including earthquakes, hurricanes and heavy rains. Our domestic gray cement prices in local currency increased on a year over year and sequential basis by 15% and 2%, respectively, during the quarter.
In the industrial-and-commercial sector, while recent indicators reflect slower growth in retail sales, favorable dynamics continued in shopping malls, hospitality and tourism-related construction. Regarding the self-construction sector, while disposable income was temporarily affected by higher inflation, indicators including job creation and remittances continued to be solid. In the formal residential sector, there has been a recent shift in mortgage dynamics between banking and government-related entities. Mortgage credits from the banking sector, recently reflected a slowdown in credits while mortgages from INFONAVIT rebounded. INFONAVIT is now offering higher-value loans with improved terms and conditions. Low-income housing activity has been affected by a decline in government subsidies. The infrastructure sector was affected by lower investment from the federal government.
United States
January - September | Third Quarter | |||||||||||||||||||||||||||||||
2017 | 2016 | % Var. | l-t-l % Var.* |
2017 | 2016 | % Var. | l-t-l % Var.* |
|||||||||||||||||||||||||
Net sales |
2,646 | 2,706 | (2 | %) | 3 | % | 916 | 949 | (3 | %) | 2 | % | ||||||||||||||||||||
Operating EBITDA |
447 | 428 | 4 | % | 14 | % | 160 | 176 | (9 | %) | 1 | % | ||||||||||||||||||||
Operating EBITDA margin |
16.9 | % | 15.8 | % | 1.1pp | 17.4 | % | 18.5 | % | (1.1pp | ) |
In millions of US dollars, except percentages.
Domestic gray cement | Ready-mix | Aggregates | ||||||||||||||||||||||
Year-over-year percentage variation |
January - September | Third Quarter | January - September | Third Quarter | January - September | Third Quarter | ||||||||||||||||||
Volume |
(7%) | (7 | %) | (4%) | (4 | %) | (4 | %) | (8 | %) | ||||||||||||||
Price (USD) |
3% | 3 | % | 1% | 1 | % | 5 | % | 7 | % | ||||||||||||||
Price (local currency) |
3% | 3 | % | 1% | 1 | % | 5 | % | 7 | % |
In the United States, our domestic gray cement, ready-mix, and aggregates volumes decreased by 7%, 4%, and 8%, respectively, during the third quarter of 2017 and compared to the same period last year. During the first nine months of the year, domestic gray cement, ready-mix and aggregates volumes decreased by 7%, 4% and 4%, respectively, on a year-over-year basis. Cement volumes on a like-to-like basis, excluding volumes related to the cement plants sold in Odessa and Fairborn, increased 2% during the quarter and 1% year to date. Ready-mix volumes, on a like-to-like basis excluding the West Texas operations, declined by 2% during both the quarter and the first nine months of the year. Aggregates volumes, also on a like-to-like basis, decreased by 4% during the quarter and remained flat during the first nine months of the year, compared with the same periods last year. Cement prices during the quarter on a like-to-like basis increased by 5% year-over-year.
Despite significant precipitation and two hurricanesHarvey that impacted Houston and Irma that impacted Florida, Georgia and Tennesseeour cement volumes increased 2% during the quarter on a like-to-like basis. The residential sector continued as the main driver of demand during the quarter. Single family housing starts increased 11% in this period supported by low inventories, wage growth, job creation, positive consumer sentiment, and improved lending conditions. Additionally, single-family housing permits increased 10% year-to-date September. In the industrial-and-commercial sector, construction spending increased 4% year-to-date August with cement consumption growth in commerce, office and lodging.
2017 Third Quarter Results | Page 3 |
Operating results |
South, Central America and the Caribbean
January - September | Third Quarter | |||||||||||||||||||||||||||||||
2017 | 2016 | % Var. | l-t-l % Var.* |
2017 | 2016 | % Var. | l-t-l % Var.* |
|||||||||||||||||||||||||
Net sales |
1,431 | 1,324 | 8 | % | (6 | %) | 472 | 438 | 8 | % | (6 | %) | ||||||||||||||||||||
Operating EBITDA |
366 | 434 | (16 | %) | (25 | %) | 113 | 145 | (22 | %) | (28 | %) | ||||||||||||||||||||
Operating EBITDA margin |
25.6 | % | 32.8 | % | (7.2pp | ) | 23.9 | % | 33.2 | % | (9.3pp | ) |
In millions of US dollars, except percentages.
Domestic gray cement | Ready-mix | Aggregates | ||||||||||||||||||||||
Year-over-year percentage variation |
January - September | Third Quarter | January - September | Third Quarter | January - September | Third Quarter | ||||||||||||||||||
Volume |
13 | % | 12 | % | (6 | %) | (7 | %) | 1 | % | (2 | %) | ||||||||||||
Price (USD) |
(4 | %) | (5 | %) | 1 | % | (1 | %) | (2 | %) | (4 | %) | ||||||||||||
Price (local currency) |
(4 | %) | (4 | %) | 0 | % | (0 | %) | (3 | %) | (3 | %) |
Our domestic gray cement volumes in the region increased by 12% and 13% during the quarter and the first nine months of the year, respectively, versus the comparable periods last year. Cement volumes on a like-to-like basis, including the regional operations of TCL, decreased by 2% and 1% during the quarter and first nine months of the year, respectively, versus the comparable periods of last year.
In Colombia, during the third quarter our domestic gray cement, ready-mix, and aggregates volumes decreased by 4%, 16%, and 21%, respectively, compared to the third quarter of 2016. For the first nine months of the year, cement, ready-mix, and aggregates volumes decreased by 5%, 15% and 18%, respectively, on a year-over-year basis. Cement consumption during the quarter was affected by weak demand from industrial-and-commercial projects and from high and middle-income housing developments. Although our cement prices declined during the quarter on a sequential basis, point-to-point prices September versus June increased 2%.
Europe
January - September | Third Quarter | |||||||||||||||||||||||||||||||
2017 | 2016 | % Var. | l-t-l % Var.* |
2017 | 2016 | % Var. | l-t-l % Var.* |
|||||||||||||||||||||||||
Net sales |
2,607 | 2,580 | 1 | % | 3 | % | 948 | 887 | 7 | % | 2 | % | ||||||||||||||||||||
Operating EBITDA |
265 | 313 | (16 | %) | (13 | %) | 129 | 132 | (3 | %) | (7 | %) | ||||||||||||||||||||
Operating EBITDA margin |
10.2 | % | 12.1 | % | (1.9pp | ) | 13.6 | % | 14.9 | % | (1.3pp | ) |
In millions of US dollars, except percentages.
Domestic gray cement | Ready-mix | Aggregates | ||||||||||||||||||||||
Year-over-year percentage variation |
January - September | Third Quarter | January - September | Third Quarter | January - September | Third Quarter | ||||||||||||||||||
Volume |
7 | % | 10 | % | 5 | % | (0 | %) | 4 | % | (1 | %) | ||||||||||||
Price (USD) |
(1 | %) | 4 | % | (0 | %) | 7 | % | (3 | %) | 4 | % | ||||||||||||
Price (local currency) |
(1 | %) | (1 | %) | 1 | % | 2 | % | (0 | %) | 1 | % |
In the Europe region, our volumes for domestic gray cement increased 10%, for ready-mix remained flat and for aggregates decreased 1%, during the third quarter of 2017 on a year-over-year basis. During the first nine months of 2017 our domestic cement, ready-mix and aggregates volumes increased 7%, 5%, and 4%, respectively, compared with the same period of last year.
In the United Kingdom, our domestic gray cement, ready-mix, and aggregates volumes decreased by 6%, 4% and 6%, respectively, during the third quarter of 2017 on a year-over-year basis. For the first nine months of the year our domestic gray cement, ready-mix, and aggregates volumes decreased 8%, 2%, and 3%, respectively, versus the comparable period in 2016. The year-to-date cement volume decline reflects a high base of comparison with the same period last year due to non-recurring industry sales particularly in the first half of 2016, as well as softening market conditions due to political uncertainty. The residential sector was the main driver of demand during the quarter supported by governments help-to-buy program.
2017 Third Quarter Results | Page 4 |
Operating results |
In Spain, our domestic gray cement, ready-mix, and aggregates volumes increased 40%, 5% and 30%, respectively, during the quarter and on a year-over-year basis. For the first nine months of the year our domestic gray cement and aggregates volumes increased 23% and 30%, respectively, while ready-mix volumes remained flat, versus the comparable period in 2016. Our cement volume growth during the quarter reflects favorable activity from the residential and the industrial-and-commercial sectors. The residential sector benefited from favorable credit conditions and income perspectives, job creation, and pent-up housing demand. The industrial-and-commercial sector was supported by offices, tourism and agricultural projects.
In Germany, our domestic gray cement volumes increased 13%, while our ready-mix and aggregates volumes decreased 4% and 2%, respectively, during the third quarter of 2017 compared with the same period of last year. During the first nine months of the year, our domestic gray cement and ready-mix volumes increased 14% and 2%, respectively, while our aggregates volumes remained flat, compared with the same period of 2016. Cement volume growth reflects our participation in infrastructure projects and strong demand from the residential sector. The infrastructure sector benefited from increased central government spending, while the residential sector continued to benefit from low unemployment and mortgage rates, rising purchasing power as well as immigration.
In Poland, domestic gray cement volumes increased by 8% and 3% during the third quarter and the first nine months of the year, respectively, versus the comparable periods in 2016. Our cement prices during the quarter increased 3% on a year-over-year basis and remained stable on a sequential basis. The residential sector continued with favorable activity supported by low interest rates, low unemployment and governmental sponsored programs. The infrastructure sector activity continued developing during the quarter.
In our operations in France, ready-mix and aggregates volumes both increased by 3%, during the third quarter and on a year-over-year basis. During the first nine months of the year and compared with the same period last year, ready-mix and aggregates volumes increased by 7% and 10%, respectively. In the case of aggregates volumes, there was higher activity in traded aggregates volumes. Volume growth during the quarter reflects continued activity in the residential sector as well as Grand Paris-related projects. The residential sector was supported by low interest rates and governments initiatives including a buy-to-let program and zero-rate loans for first time buyers.
Asia, Middle East and Africa
January - September | Third Quarter | |||||||||||||||||||||||||||||||
2017 | 2016 | % Var. | l-t-l % Var.* |
2017 | 2016 | % Var. | l-t-l % Var.* |
|||||||||||||||||||||||||
Net sales |
999 | 1,201 | (17 | %) | (4 | %) | 346 | 398 | (13 | %) | 1 | % | ||||||||||||||||||||
Operating EBITDA |
170 | 308 | (45 | %) | (35 | %) | 57 | 111 | (49 | %) | (41 | %) | ||||||||||||||||||||
Operating EBITDA margin |
17.0 | % | 25.6 | % | (8.6pp | ) | 16.4 | % | 27.9 | % | (11.5pp | ) |
In millions of US dollars, except percentages.
Domestic gray cement | Ready-mix | Aggregates | ||||||||||||||||||||||
Year-over-year percentage variation |
January - September | Third Quarter | January - September | Third Quarter | January - September | Third Quarter | ||||||||||||||||||
Volume |
(7 | %) | 1 | % | 3 | % | 10 | % | 5 | % | 1 | % | ||||||||||||
Price (USD) |
(26 | %) | (29 | %) | (0 | %) | (1 | %) | 8 | % | 7 | % | ||||||||||||
Price (local currency) |
(2 | %) | (3 | %) | (1 | %) | (2 | %) | 3 | % | 2 | % |
Our domestic gray cement volumes in the Asia, Middle East and Africa region increased by 1% during the third quarter and decreased by 7% during the first nine months of the year, on a year-over-year basis.
In the Philippines, our domestic gray cement volumes increased by 2% during the third quarter and decreased by 3% during the first nine months of 2017, versus the comparable periods of last year. Cement demand improved during the quarter supported by a pick-up in infrastructure activity and a modest growth in the residential and industrial-and-commercial sectors volumes.
In Egypt, our domestic gray cement volumes decreased by 2% and 14% during the third quarter and the first nine months of 2017, respectively, versus the comparable periods in the previous year. Our cement prices on a year-over-year and on a sequential basis increased by 11% and 8%, respectively. The volume decline during the quarter mainly reflects reduced consumer purchasing power resulting from the currency devaluation in November 2016. Government projects related to the Suez Canal tunnels, the port platforms in the city of Port Said, as well as the new administrative capital, continued during the quarter.
2017 Third Quarter Results | Page 5 |
Operating EBITDA, free cash flow and debt-related information |
Operating EBITDA and free cash flow
January - September | Third Quarter | |||||||||||||||||||||||
2017 | 2016 | % Var | 2017 | 2016 | % Var | |||||||||||||||||||
Operating earnings before other expenses, net |
1,315 | 1,443 | (9 | %) | 494 | 544 | (9 | %) | ||||||||||||||||
+ Depreciation and operating amortization |
632 | 658 | 208 | 220 | ||||||||||||||||||||
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Operating EBITDA |
1,947 | 2,101 | (7 | %) | 702 | 764 | (8 | %) | ||||||||||||||||
- Net financial expense |
642 | 762 | 203 | 235 | ||||||||||||||||||||
- Maintenance capital expenditures |
259 | 250 | 105 | 93 | ||||||||||||||||||||
- Change in working capital |
200 | (191 | ) | (109 | ) | (154 | ) | |||||||||||||||||
- Taxes paid |
203 | 251 | 40 | 43 | ||||||||||||||||||||
- Other cash items (net) |
47 | 28 | 26 | 18 | ||||||||||||||||||||
- Free cash flow discontinued operations |
(8 | ) | (47 | ) | 2 | (20 | ) | |||||||||||||||||
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Free cash flow after maintenance capital expenditures |
603 | 1,048 | (42 | %) | 435 | 548 | (21 | %) | ||||||||||||||||
- Strategic capital expenditures |
81 | 179 | 24 | 79 | ||||||||||||||||||||
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Free cash flow |
522 | 868 | (40 | %) | 411 | 469 | (12 | %) | ||||||||||||||||
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During the quarter, free cash flow plus proceeds from asset divestments were mainly used for debt repayment.
Our debt during the quarter reflects a negative foreign conversion effect of US$95 million.
Information on debt and perpetual notes
Third Quarter | Second Quarter |
Third Quarter |
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2017 | 2016 | % Var | 2017 | 2017 | 2016 | |||||||||||||||||||||
Total debt (1) |
11,111 | 13,523 | (18 | %) | 11,483 | Currency denomination | ||||||||||||||||||||
Short-term |
7 | % | 3 | % | 5 | % | US dollar | 69 | % | 78 | % | |||||||||||||||
Long-term |
93 | % | 97 | % | 95 | % | Euro | 23 | % | 21 | % | |||||||||||||||
Perpetual notes |
446 | 443 | 1 | % | 444 | Mexican peso | 1 | % | 1 | % | ||||||||||||||||
Cash and cash equivalents |
449 | 593 | (24 | %) | 418 | Other | 7 | % | 0 | % | ||||||||||||||||
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Net debt plus perpetual notes |
11,108 | 13,372 | (17 | %) | 11,509 | |||||||||||||||||||||
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Interest rate | ||||||||||||||||||||||||||
Consolidated funded debt (2)/EBITDA (3) |
3.98 | 4.52 | 4.04 | Fixed | 69 | % | 72 | % | ||||||||||||||||||
Variable | 31 | % | 28 | % | ||||||||||||||||||||||
Interest coverage (3) (4) |
3.31 | 3.03 | 3.39 |
In millions of US dollars, except percentages and ratios.
(1) | Includes convertible notes and capital leases, in accordance with International Financial Reporting Standards (IFRS). |
(2) | Consolidated funded debt as of September 30, 2017 was US$10,448 million, in accordance with our contractual obligations under the Credit Agreement. |
(3) | EBITDA calculated in accordance with IFRS. |
(4) | Interest expense calculated in accordance with our contractual obligations under the Credit Agreement. |
2017 Third Quarter Results | Page 6 |
Equity-related and derivative instruments information |
Equity-related information
One CEMEX ADS represents ten CEMEX CPOs. The following amounts are expressed in CPO terms.
Beginning-of-quarter CPO-equivalent units outstanding |
15,019,585,061 | |||
CPOs issued as a result of the conversion of a portion of our 3.75% Convertible Subordinated Notes due 2018 into CEMEX ADSs |
52,027,540 | |||
Stock-based compensation |
35,622,355 | |||
End-of-quarter CPO-equivalent units outstanding |
15,107,234,956 |
Outstanding units equal total CEMEX CPO-equivalent units less CPOs held in subsidiaries, which as of September 30, 2017 were 20,541,277.
CEMEX has outstanding mandatorily convertible securities which, upon conversion, will increase the number of CPOs outstanding by approximately 236 million, subject to antidilution adjustments.
Employee long-term compensation plans
As of September 30, 2017, our executives held 31,151,326 restricted CPOs, representing 0.2% of our total CPOs outstanding as of such date.
Derivative instruments
The following table shows the notional amount for each type of derivative instrument and the aggregate fair market value for all of CEMEXs derivative instruments as of the last day of each quarter presented.
Third Quarter | Second Quarter | |||||||||||||||||||||||
2017 | 2016 | 2017 | ||||||||||||||||||||||
In millions of US dollars. | Notional amount | Fair value | Notional amount | Fair value | Notional amount | Fair value | ||||||||||||||||||
Exchange rate derivatives (1) |
1,062 | (27 | ) | 202 | (1 | ) | 888 | (41 | ) | |||||||||||||||
Equity related derivatives (2) (5) |
168 | (34 | ) | 576 | 33 | 289 | 24 | |||||||||||||||||
Interest rate swaps (3) |
142 | 21 | 152 | 31 | 142 | 21 | ||||||||||||||||||
Fuel derivatives (4) |
74 | 12 | 77 | 6 | 91 | | ||||||||||||||||||
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1,446 | (28 | ) | 1,007 | 69 | 1,410 | 4 | ||||||||||||||||||
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(1) | Exchange rate derivatives are used to manage currency exposures that arise from the regular operations and from expected sale of assets. |
(2) | Until June 30, 2017 equity derivatives were related with options on the Parent Company own shares and as of September 30, 2017 to forwards, net of cash collateral, over the shares of Grupo Cementos de Chihuahua, S.A.B. de C.V. |
(3) | Interest-rate swap related to our long-term energy contracts. |
(4) | Forward contracts negotiated to hedge the price of the fuel consumed in certain operations. |
(5) | As required by IFRS, the equity related derivatives fair market value as of September 30, 2017 and 2016 includes a liability of US$37 million, respectively, relating to an embedded derivative in CEMEXs mandatorily convertible securities. |
Under IFRS, companies are required to recognize all derivative financial instruments on the balance sheet as assets or liabilities, at their estimated fair market value, with changes in such fair market values recorded in the income statement, except when transactions are entered into for cash-flow-hedging purposes, in which case changes in the fair market value of the related derivative instruments are recognized temporarily in equity and then reclassified into earnings as the inverse effects of the underlying hedged items flow through the income statement, and/or transactions related to net investment hedges, in which case changes in fair value are recorded directly in equity as part of the currency translation effect, and are reclassified to the income statement only upon disposal of the net investment. As of September 30, 2017, regarding the fair market value recognition of its derivatives portfolio, CEMEX recognized increases in its assets and liabilities resulting in a net liability of US$28 million, including a liability of US$37 million corresponding to an embedded derivative related to our mandatorily convertible securities, which according to our debt agreements, is presented net of the assets associated with the derivative instruments.
2017 Third Quarter Results | Page 7 |
Operating results |
Consolidated Income Statement & Balance Sheet
CEMEX, S.A.B. de C.V. and Subsidiaries
(Thousands of U.S. Dollars, except per ADS amounts)
January - September | Third Quarter | |||||||||||||||||||||||||||||||
INCOME STATEMENT |
2017 | 2016 | % Var. | like-to-like % Var.* |
2017 | 2016 | % Var. | like-to-like % Var.* |
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Net sales |
10,244,388 | 10,196,410 | 0 | % | 2 | % | 3,549,077 | 3,474,899 | 2 | % | 1 | % | ||||||||||||||||||||
Cost of sales |
(6,737,668 | ) | (6,580,266 | ) | (2 | %) | (2,283,987 | ) | (2,189,709 | ) | (4 | %) | ||||||||||||||||||||
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Gross profit |
3,506,720 | 3,616,144 | (3 | %) | (1 | %) | 1,265,091 | 1,285,190 | (2 | %) | (3 | %) | ||||||||||||||||||||
Operating expenses |
(2,192,108 | ) | (2,173,188 | ) | (1 | %) | (771,010 | ) | (741,659 | ) | (4 | %) | ||||||||||||||||||||
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Operating earnings before other expenses, net |
1,314,613 | 1,442,956 | (9 | %) | (8 | %) | 494,081 | 543,530 | (9 | %) | (10 | %) | ||||||||||||||||||||
Other expenses, net |
73,226 | (82,501 | ) | N/A | (68,134 | ) | (26,950 | ) | (153 | %) | ||||||||||||||||||||||
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Operating earnings |
1,387,839 | 1,360,456 | 2 | % | 425,947 | 516,581 | (18 | %) | ||||||||||||||||||||||||
Financial expense |
(804,666 | ) | (907,133 | ) | 11 | % | (263,466 | ) | (293,857 | ) | 10 | % | ||||||||||||||||||||
Other financial income (expense), net |
114,544 | 196,841 | (42 | %) | 116,123 | 102,661 | 13 | % | ||||||||||||||||||||||||
Financial income |
13,361 | 17,433 | (23 | %) | 4,270 | 6,334 | (33 | %) | ||||||||||||||||||||||||
Results from financial instruments, net |
202,242 | 21,598 | 836 | % | 95,355 | 22,916 | 316 | % | ||||||||||||||||||||||||
Foreign exchange results |
(60,263 | ) | 199,710 | N/A | 30,972 | 86,973 | (64 | %) | ||||||||||||||||||||||||
Effects of net present value on assets and liabilities and others, net |
(40,796 | ) | (41,901 | ) | 3 | % | (14,474 | ) | (13,562 | ) | (7 | %) | ||||||||||||||||||||
Equity in gain (loss) of associates |
20,491 | 30,259 | (32 | %) | 11,194 | 13,732 | (18 | %) | ||||||||||||||||||||||||
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Income (loss) before income tax |
718,208 | 680,423 | 6 | % | 289,798 | 339,116 | (15 | %) | ||||||||||||||||||||||||
Income tax |
69,726 | (123,207 | ) | N/A | 27,820 | (42,774 | ) | N/A | ||||||||||||||||||||||||
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Profit (loss) of continuing operations |
787,934 | 557,216 | 41 | % | 317,618 | 296,342 | 7 | % | ||||||||||||||||||||||||
Discontinued operations |
186,304 | 30,385 | 513 | % | (2,816 | ) | 7,693 | N/A | ||||||||||||||||||||||||
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Consolidated net income (loss) |
974,238 | 587,601 | 66 | % | 314,802 | 304,035 | 4 | % | ||||||||||||||||||||||||
Non-controlling interest net income (loss) |
57,796 | 54,022 | 7 | % | 25,634 | 18,449 | 39 | % | ||||||||||||||||||||||||
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Controlling interest net income (loss) |
916,441 | 533,579 | 72 | % | 289,168 | 285,586 | 1 | % | ||||||||||||||||||||||||
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Operating EBITDA |
1,946,631 | 2,100,607 | (7 | %) | (6 | %) | 701,896 | 763,503 | (8 | %) | (8 | %) | ||||||||||||||||||||
Earnings (loss) of continued operations per ADS |
0.49 | 0.34 | 42 | % | 0.19 | 0.19 | 2 | % | ||||||||||||||||||||||||
Earnings (loss) of discontinued operations per ADS |
0.12 | 0.02 | 504 | % | (0.00 | ) | 0.01 | N/A | ||||||||||||||||||||||||
As of September 30 | ||||||||||||||||||||||||||||||||
BALANCE SHEET |
2017 | 2016 | % Var. | |||||||||||||||||||||||||||||
Total assets |
29,194,971 | 30,369,239 | (4 | %) | ||||||||||||||||||||||||||||
Cash and cash equivalents |
449,489 | 593,492 | (24 | %) | ||||||||||||||||||||||||||||
Trade receivables less allowance for doubtful accounts |
1,729,661 | 1,709,675 | 1 | % | ||||||||||||||||||||||||||||
Other accounts receivable |
228,942 | 252,505 | (9 | %) | ||||||||||||||||||||||||||||
Inventories, net |
991,378 | 948,390 | 5 | % | ||||||||||||||||||||||||||||
Assets held for sale |
84,533 | 670,998 | (87 | %) | ||||||||||||||||||||||||||||
Other current assets |
130,549 | 155,001 | (16 | %) | ||||||||||||||||||||||||||||
Current assets |
3,614,552 | 4,330,061 | (17 | %) | ||||||||||||||||||||||||||||
Property, machinery and equipment, net |
11,831,863 | 11,747,242 | 1 | % | ||||||||||||||||||||||||||||
Other assets |
13,748,556 | 14,291,936 | (4 | %) | ||||||||||||||||||||||||||||
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Total liabilities |
18,245,955 | 20,443,739 | (11 | %) | ||||||||||||||||||||||||||||
Liabilities held for sale |
| 18,018 | (100 | %) | ||||||||||||||||||||||||||||
Other current liabilities |
4,894,386 | 4,298,777 | 14 | % | ||||||||||||||||||||||||||||
Current liabilities |
4,894,386 | 4,316,795 | 13 | % | ||||||||||||||||||||||||||||
Long-term liabilities |
9,632,980 | 11,894,429 | (19 | %) | ||||||||||||||||||||||||||||
Other liabilities |
3,718,589 | 4,232,515 | (12 | %) | ||||||||||||||||||||||||||||
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Total Stockholders equity |
10,949,016 | 9,925,500 | 10 | % | ||||||||||||||||||||||||||||
Non-controlling interest and perpetual instruments |
1,489,568 | 1,404,144 | 6 | % | ||||||||||||||||||||||||||||
Total Controlling interest |
9,459,448 | 8,521,356 | 11 | % |
2017 Third Quarter Results | Page 8 |
Operating results |
Consolidated Income Statement & Balance Sheet
CEMEX, S.A.B. de C.V. and Subsidiaries
(Thousands of Mexican Pesos in nominal terms, except per ADS amounts)
January - September | Third Quarter | |||||||||||||||||||||||
INCOME STATEMENT |
2017 | 2016 | % Var. | 2017 | 2016 | % Var. | ||||||||||||||||||
Net sales |
192,594,503 | 186,288,410 | 3 | % | 63,812,408 | 65,953,576 | (3 | %) | ||||||||||||||||
Cost of sales |
(126,668,163 | ) | (120,221,459 | ) | (5 | %) | (41,066,079 | ) | (41,560,678 | ) | 1 | % | ||||||||||||
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Gross profit |
65,926,339 | 66,066,950 | (0 | %) | 22,746,329 | 24,392,899 | (7 | %) | ||||||||||||||||
Operating expenses |
(41,211,623 | ) | (39,704,137 | ) | (4 | %) | (13,862,756 | ) | (14,076,691 | ) | 2 | % | ||||||||||||
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Operating earnings before other expenses, net |
24,714,716 | 26,362,814 | (6 | %) | 8,883,573 | 10,316,208 | (14 | %) | ||||||||||||||||
Other expenses, net |
1,376,651 | (1,507,291 | ) | N/A | (1,225,042 | ) | (511,502 | ) | (139 | %) | ||||||||||||||
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Operating earnings |
26,091,368 | 24,855,522 | 5 | % | 7,658,531 | 9,804,706 | (22 | %) | ||||||||||||||||
Financial expense |
(15,127,718 | ) | (16,573,314 | ) | 9 | % | (4,737,125 | ) | (5,577,413 | ) | 15 | % | ||||||||||||
Other financial income (expense), net |
2,153,431 | 3,596,289 | (40 | %) | 2,087,885 | 1,948,499 | 7 | % | ||||||||||||||||
Financial income |
251,189 | 318,505 | (21 | %) | 76,774 | 120,225 | (36 | %) | ||||||||||||||||
Results from financial instruments, net |
3,802,146 | 394,602 | 864 | % | 1,714,474 | 434,941 | 294 | % | ||||||||||||||||
Foreign exchange results |
(1,132,948 | ) | 3,648,706 | N/A | 556,871 | 1,650,748 | (66 | %) | ||||||||||||||||
Effects of net present value on assets and liabilities and others, net |
(766,956 | ) | (765,524 | ) | (0 | %) | (260,234 | ) | (257,416 | ) | (1 | %) | ||||||||||||
Equity in gain (loss) of associates |
385,230 | 552,830 | (30 | %) | 201,269 | 260,634 | (23 | %) | ||||||||||||||||
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Income (loss) before income tax |
13,502,311 | 12,431,327 | 9 | % | 5,210,561 | 6,436,425 | (19 | %) | ||||||||||||||||
Income tax |
1,310,850 | (2,250,986 | ) | N/A | 500,211 | (811,856 | ) | N/A | ||||||||||||||||
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Profit (loss) of continuing operations |
14,813,161 | 10,180,341 | 46 | % | 5,710,772 | 5,624,569 | 2 | % | ||||||||||||||||
Discontinued operations |
3,502,507 | 555,135 | 531 | % | (50,636 | ) | 146,015 | N/A | ||||||||||||||||
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Consolidated net income (loss) |
18,315,668 | 10,735,476 | 71 | % | 5,660,137 | 5,770,585 | (2 | %) | ||||||||||||||||
Non-controlling net income (loss) |
1,086,570 | 986,979 | 10 | % | 460,894 | 350,165 | 32 | % | ||||||||||||||||
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Controlling net income (loss) |
17,229,098 | 9,748,497 | 77 | % | 5,199,243 | 5,420,419 | (4 | %) | ||||||||||||||||
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Operating EBITDA |
36,596,662 | 38,378,098 | (5 | %) | 12,620,097 | 14,491,282 | (13 | %) | ||||||||||||||||
Earnings (loss) of continued operations per ADS |
9.15 | 6.25 | 46 | % | 3.43 | 3.56 | (4 | %) | ||||||||||||||||
Earnings (loss) of discontinued operations per ADS |
2.32 | 0.37 | 521 | % | (0.03 | ) | 0.10 | N/A | ||||||||||||||||
As of September 30 | ||||||||||||||||||||||||
BALANCE SHEET |
2017 | 2016 | % Var. | |||||||||||||||||||||
Total assets |
532,808,223 | 588,859,552 | (10 | %) | ||||||||||||||||||||
Cash and cash equivalents |
8,203,166 | 11,507,804 | (29 | %) | ||||||||||||||||||||
Trade receivables less allowance for doubtful accounts |
31,566,320 | 33,150,596 | (5 | %) | ||||||||||||||||||||
Other accounts receivable |
4,178,189 | 4,896,077 | (15 | %) | ||||||||||||||||||||
Inventories, net |
18,092,650 | 18,389,291 | (2 | %) | ||||||||||||||||||||
Assets held for sale |
1,542,734 | 13,010,653 | (88 | %) | ||||||||||||||||||||
Other current assets |
2,382,519 | 3,005,470 | (21 | %) | ||||||||||||||||||||
Current assets |
65,965,578 | 83,959,891 | (21 | %) | ||||||||||||||||||||
Property, machinery and equipment, net |
215,931,498 | 227,779,020 | (5 | %) | ||||||||||||||||||||
Other assets |
250,911,148 | 277,120,641 | (9 | %) | ||||||||||||||||||||
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Total liabilities |
332,988,676 | 396,404,106 | (16 | %) | ||||||||||||||||||||
Liabilities held for sale |
| 349,369 | (100 | %) | ||||||||||||||||||||
Other current liabilities |
89,322,546 | 83,353,286 | 7 | % | ||||||||||||||||||||
Current liabilities |
89,322,546 | 83,702,655 | 7 | % | ||||||||||||||||||||
Long-term liabilities |
175,801,884 | 230,632,986 | (24 | %) | ||||||||||||||||||||
Other liabilities |
67,864,245 | 82,068,465 | (17 | %) | ||||||||||||||||||||
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Total stockholders equity |
199,819,547 | 192,455,446 | 4 | % | ||||||||||||||||||||
Non-controlling interest and perpetual instruments |
27,184,614 | 27,226,354 | (0 | %) | ||||||||||||||||||||
Total controlling interest |
172,634,933 | 165,229,092 | 4 | % | ||||||||||||||||||||
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2017 Third Quarter Results | Page 9 |
Operating results |
Operating Summary per Country
In thousands of U.S. dollars
January - September | Third Quarter | |||||||||||||||||||||||||||||||
NET SALES |
2017 | 2016 | % Var. | like-to-like % Var. * |
2017 | 2016 | % Var. |
like-to-like % Var. * |
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Mexico |
2,313,894 | 2,162,890 | 7 | % | 10 | % | 782,045 | 731,667 | 7 | % | 1 | % | ||||||||||||||||||||
U.S.A. |
2,646,458 | 2,705,776 | (2 | %) | 3 | % | 915,721 | 948,834 | (3 | %) | 2 | % | ||||||||||||||||||||
South, Central America and the Caribbean |
1,430,695 | 1,323,894 | 8 | % | (6 | %) | 472,475 | 437,916 | 8 | % | (6 | %) | ||||||||||||||||||||
Europe |
2,606,998 | 2,579,793 | 1 | % | 3 | % | 947,510 | 886,827 | 7 | % | 2 | % | ||||||||||||||||||||
Asia, Middle East and Africa |
998,639 | 1,201,381 | (17 | %) | (4 | %) | 345,877 | 398,138 | (13 | %) | 1 | % | ||||||||||||||||||||
Others and intercompany eliminations |
247,703 | 222,676 | 11 | % | 8 | % | 85,450 | 71,518 | 19 | % | 19 | % | ||||||||||||||||||||
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TOTAL |
10,244,388 | 10,196,410 | 0 | % | 2 | % | 3,549,077 | 3,474,899 | 2 | % | 1 | % | ||||||||||||||||||||
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GROSS PROFIT |
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Mexico |
1,253,738 | 1,145,857 | 9 | % | 13 | % | 438,853 | 388,376 | 13 | % | 7 | % | ||||||||||||||||||||
U.S.A. |
708,142 | 703,072 | 1 | % | 6 | % | 261,130 | 268,016 | (3 | %) | 2 | % | ||||||||||||||||||||
South, Central America and the Caribbean |
535,861 | 571,885 | (6 | %) | (15 | %) | 170,683 | 192,628 | (11 | %) | (16 | %) | ||||||||||||||||||||
Europe |
686,248 | 728,603 | (6 | %) | (4 | %) | 284,160 | 277,025 | 3 | % | (2 | %) | ||||||||||||||||||||
Asia, Middle East and Africa |
300,393 | 427,533 | (30 | %) | (19 | %) | 100,950 | 153,507 | (34 | %) | (25 | %) | ||||||||||||||||||||
Others and intercompany eliminations |
22,337 | 39,195 | (43 | %) | (48 | %) | 9,315 | 5,638 | 65 | % | 3 | % | ||||||||||||||||||||
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TOTAL |
3,506,720 | 3,616,144 | (3 | %) | (1 | %) | 1,265,091 | 1,285,190 | (2 | %) | (3 | %) | ||||||||||||||||||||
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OPERATING EARNINGS BEFORE OTHER EXPENSES, NET |
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Mexico |
778,998 | 699,278 | 11 | % | 15 | % | 270,851 | 235,927 | 15 | % | 9 | % | ||||||||||||||||||||
U.S.A. |
195,238 | 159,823 | 22 | % | 54 | % | 83,244 | 84,549 | (2 | %) | 16 | % | ||||||||||||||||||||
South, Central America and the Caribbean |
299,150 | 377,358 | (21 | %) | (30 | %) | 91,484 | 125,887 | (27 | %) | (33 | %) | ||||||||||||||||||||
Europe |
120,087 | 163,903 | (27 | %) | (24 | %) | 77,830 | 82,826 | (6 | %) | (10 | %) | ||||||||||||||||||||
Asia, Middle East and Africa |
123,571 | 251,433 | (51 | %) | (44 | %) | 41,462 | 92,517 | (55 | %) | (49 | %) | ||||||||||||||||||||
Others and intercompany eliminations |
(202,432 | ) | (208,840 | ) | 3 | % | (2 | %) | (70,790 | ) | (78,177 | ) | 9 | % | 15 | % | ||||||||||||||||
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TOTAL |
1,314,613 | 1,442,956 | (9 | %) | (8 | %) | 494,081 | 543,530 | (9 | %) | (10 | %) | ||||||||||||||||||||
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2017 Third Quarter Results | Page 10 |
Operating results |
Operating Summary per Country
EBITDA in thousands of U.S. dollars. EBITDA margin as a percentage of net sales.
January - September | Third Quarter | |||||||||||||||||||||||||||||||
OPERATING EBITDA |
2017 | 2016 | % Var. | like-to-like % Var. * |
2017 | 2016 | % Var. | like-to-like % Var. * |
||||||||||||||||||||||||
Mexico |
868,357 | 796,987 | 9 | % | 12 | % | 301,895 | 267,506 | 13 | % | 7 | % | ||||||||||||||||||||
U.S.A. |
446,668 | 428,445 | 4 | % | 14 | % | 159,629 | 175,653 | (9 | %) | 1 | % | ||||||||||||||||||||
South, Central America and the Caribbean |
365,706 | 434,077 | (16 | %) | (25 | %) | 112,949 | 145,209 | (22 | %) | (28 | %) | ||||||||||||||||||||
Europe |
264,676 | 313,240 | (16 | %) | (13 | %) | 128,686 | 132,208 | (3 | %) | (7 | %) | ||||||||||||||||||||
Asia, Middle East and Africa |
169,768 | 308,082 | (45 | %) | (35 | %) | 56,852 | 111,268 | (49 | %) | (41 | %) | ||||||||||||||||||||
Others and intercompany eliminations |
(168,544 | ) | (180,224 | ) | 6 | % | 1 | % | (58,115 | ) | (68,341 | ) | 15 | % | 22 | % | ||||||||||||||||
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TOTAL |
1,946,631 | 2,100,607 | (7 | %) | (6 | %) | 701,896 | 763,503 | (8 | %) | (8 | %) | ||||||||||||||||||||
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OPERATING EBITDA MARGIN |
||||||||||||||||||||||||||||||||
Mexico |
37.5 | % | 36.8 | % | 38.6 | % | 36.6 | % | ||||||||||||||||||||||||
U.S.A. |
16.9 | % | 15.8 | % | 17.4 | % | 18.5 | % | ||||||||||||||||||||||||
South, Central America and the Caribbean |
25.6 | % | 32.8 | % | 23.9 | % | 33.2 | % | ||||||||||||||||||||||||
Europe |
10.2 | % | 12.1 | % | 13.6 | % | 14.9 | % | ||||||||||||||||||||||||
Asia, Middle East and Africa |
17.0 | % | 25.6 | % | 16.4 | % | 27.9 | % | ||||||||||||||||||||||||
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TOTAL |
19.0 | % | 20.6 | % | 19.8 | % | 22.0 | % | ||||||||||||||||||||||||
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2017 Third Quarter Results | Page 11 |
Operating results |
Volume Summary
Consolidated volume summary
Cement and aggregates: Thousands of metric tons.
Ready-mix: Thousands of cubic meters.
January - September | Third Quarter | |||||||||||||||||||||||
2017 | 2016 | % Var. | 2017 | 2016 | % Var. | |||||||||||||||||||
Consolidated cement volume 1 |
51,310 | 52,164 | (2 | %) | 17,463 | 17,448 | 0 | % | ||||||||||||||||
Consolidated ready-mix volume |
38,656 | 38,631 | 0 | % | 13,220 | 13,410 | (1 | %) | ||||||||||||||||
Consolidated aggregates volume |
110,423 | 110,129 | 0 | % | 37,659 | 38,931 | (3 | %) |
Per-country volume summary
DOMESTIC GRAY CEMENT VOLUME |
January - September 2017 Vs. 2016 |
Third Quarter 2017 Vs. 2016 |
Third Quarter 2017 Vs. Second Quarter 2017 |
|||||||||
Mexico |
(4 | %) | (10 | %) | (10 | %) | ||||||
U.S.A. |
(7 | %) | (7 | %) | 3 | % | ||||||
South, Central America and the Caribbean |
13 | % | 12 | % | (2 | %) | ||||||
Europe |
7 | % | 10 | % | (0 | %) | ||||||
Asia, Middle East and Africa |
(7 | %) | 1 | % | 7 | % | ||||||
READY-MIX VOLUME |
||||||||||||
Mexico |
(2 | %) | (6 | %) | 1 | % | ||||||
U.S.A. |
(4 | %) | (4 | %) | (1 | %) | ||||||
South, Central America and the Caribbean |
(6 | %) | (7 | %) | (1 | %) | ||||||
Europe |
5 | % | (0 | %) | (2 | %) | ||||||
Asia, Middle East and Africa |
3 | % | 10 | % | 8 | % | ||||||
AGGREGATES VOLUME |
||||||||||||
Mexico |
(3 | %) | (4 | %) | 4 | % | ||||||
U.S.A. |
(4 | %) | (8 | %) | (7 | %) | ||||||
South, Central America and the Caribbean |
1 | % | (2 | %) | (6 | %) | ||||||
Europe |
4 | % | (1 | %) | (4 | %) | ||||||
Asia, Middle East and Africa |
5 | % | 1 | % | 8 | % |
1 | Consolidated cement volume includes domestic and export volume of gray cement, white cement, special cement, mortar and clinker. |
2017 Third Quarter Results | Page 12 |
Operating results |
Price Summary
Variation in U.S. Dollars
DOMESTIC GRAY CEMENT PRICE |
January - September 2017 Vs. 2016 |
Third Quarter 2017 Vs. 2016 |
Third Quarter 2017 Vs. Second Quarter 2017 |
|||||||||
Mexico |
15 | % | 22 | % | 5 | % | ||||||
U.S.A. |
3 | % | 3 | % | (0 | %) | ||||||
South, Central America and the Caribbean (*) |
(4 | %) | (5 | %) | (0 | %) | ||||||
Europe (*) |
(1 | %) | 4 | % | 4 | % | ||||||
Asia, Middle East and Africa (*) |
(26 | %) | (29 | %) | (3 | %) | ||||||
READY-MIX PRICE |
||||||||||||
Mexico |
7 | % | 15 | % | 5 | % | ||||||
U.S.A. |
1 | % | 1 | % | 1 | % | ||||||
South, Central America and the Caribbean (*) |
1 | % | (1 | %) | (0 | %) | ||||||
Europe (*) |
(0 | %) | 7 | % | 4 | % | ||||||
Asia, Middle East and Africa (*) |
(0 | %) | (1 | %) | 1 | % | ||||||
AGGREGATES PRICE |
||||||||||||
Mexico |
10 | % | 13 | % | 1 | % | ||||||
U.S.A. |
5 | % | 7 | % | 4 | % | ||||||
South, Central America and the Caribbean (*) |
(2 | %) | (4 | %) | 4 | % | ||||||
Europe (*) |
(3 | %) | 4 | % | 3 | % | ||||||
Asia, Middle East and Africa (*) |
8 | % | 7 | % | 1 | % |
Variation in Local Currency
DOMESTIC GRAY CEMENT PRICE |
January - September 2017 Vs. 2016 |
Third Quarter 2017 Vs. 2016 |
Third Quarter 2017 Vs. Second Quarter 2017 |
|||||||||
Mexico |
18 | % | 15 | % | 2 | % | ||||||
U.S.A. |
3 | % | 3 | % | (0 | %) | ||||||
South, Central America and the Caribbean (*) |
(4 | %) | (4 | %) | (1 | %) | ||||||
Europe (*) |
(1 | %) | (1 | %) | (1 | %) | ||||||
Asia, Middle East and Africa (*) |
(2 | %) | (3 | %) | (2 | %) | ||||||
READY-MIX PRICE |
||||||||||||
Mexico |
9 | % | 9 | % | 2 | % | ||||||
U.S.A. |
1 | % | 1 | % | 1 | % | ||||||
South, Central America and the Caribbean (*) |
0 | % | (0 | %) | (0 | %) | ||||||
Europe (*) |
1 | % | 2 | % | (0 | %) | ||||||
Asia, Middle East and Africa (*) |
(1 | %) | (2 | %) | 1 | % | ||||||
AGGREGATES PRICE |
||||||||||||
Mexico |
12 | % | 7 | % | (2 | %) | ||||||
U.S.A. |
5 | % | 7 | % | 4 | % | ||||||
South, Central America and the Caribbean (*) |
(3 | %) | (3 | %) | 4 | % | ||||||
Europe (*) |
(0 | %) | 1 | % | (1 | %) | ||||||
Asia, Middle East and Africa (*) |
3 | % | 2 | % | 1 | % |
(*) | Volume weighted-average price. |
2017 Third Quarter Results | Page 13 |
Other information |
2017 Third Quarter Results | Page 14 |
Other information |
2017 Third Quarter Results | Page 15 |
Definitions of terms and disclosures |
Exchange rates | January - September | Third Quarter | Third Quarter | |||||||||||||||||||||
2017 Average |
2016 Average |
2017 Average |
2016 Average |
2017 End of period |
2016 End of period |
|||||||||||||||||||
Mexican peso |
18.8 | 18.27 | 17.98 | 18.98 | 18.25 | 19.39 | ||||||||||||||||||
Euro |
0.8939 | 0.8972 | 0.8463 | 0.8966 | 0.8464 | 0.8901 | ||||||||||||||||||
British pound |
0.7783 | 0.7252 | 0.7606 | 0.7649 | 0.7464 | 0.7709 |
Amounts provided in units of local currency per US dollar.
2017 Third Quarter Results | Page 16 |
2017 Third Quarter Results Exhibit 99.3
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 forward-looking statements in the U.S. federal securities laws. In some cases, these statements can be identified by the use of forward-looking words such as “may,” “should,” “could,” “anticipate,” “estimate,” “expect,” “plan,” “believe,” “predict,” “potential” and “intend” or other similar words. These forward-looking statements reflect CEMEX’s current expectations and projections about future events based on CEMEX’s knowledge of present facts and circumstances and assumptions about future events. These statements necessarily involve risks and uncertainties that could cause actual results to differ materially from CEMEX’s expectations. Some of the risks, uncertainties and other important factors that could cause results to differ, or that otherwise could have an impact on CEMEX or its subsidiaries, include, but are not limited to, the cyclical activity of the construction sector; CEMEX’s exposure to other sectors that impact CEMEX’s business, such as the energy sector; competition; general political, economic and business conditions in the markets in which CEMEX operates; the regulatory environment, including environmental, tax, antitrust and acquisition-related rules and regulations; CEMEX’s ability to satisfy CEMEX’s obligations under its material debt agreements, the indentures that govern CEMEX’s senior secured notes and CEMEX’s other debt instruments; expected refinancing of existing indebtedness; the impact of CEMEX’s below investment grade debt rating on CEMEX’s cost of capital; CEMEX’s ability to consummate asset sales, fully integrate newly acquired businesses, achieve cost-savings from CEMEX’s cost-reduction initiatives and implement CEMEX’s global pricing initiatives for CEMEX’s products; the increasing reliance on information technology infrastructure for CEMEX’s invoicing, procurement, financial statements and other processes that can adversely affect operations in the event that the infrastructure does not work as intended, experiences technical difficulties or is subjected to cyber-attacks; weather conditions; natural disasters and other unforeseen events; and the other risks and uncertainties described in CEMEX’s public filings. Readers are urged to read these presentations and carefully consider the risks, uncertainties and other factors that affect CEMEX’s business. The information contained in these presentations is subject to change without notice, and CEMEX is not obligated to publicly update or revise forward-looking statements. Readers should review future reports filed by CEMEX with the U.S. Securities and Exchange Commission. Unless the context indicates otherwise, all references to pricing initiatives, price increases or decreases, refer to CEMEX’s prices for CEMEX’s products. UNLESS OTHERWISE NOTED, ALL FIGURES ARE PRESENTED IN DOLLARS, BASED ON INTERNATIONAL FINANCIAL REPORTING STANDARDS, AS APPLICABLE Copyright CEMEX, S.A.B. de C.V. and its subsidiaries
Higher like-to-like consolidated prices for our three core products during the quarter and year-to-date September, on a year-over-year basis Sales on a like-to-like basis increased 1% during 3Q17 due to favorable prices in Mexico and the U.S., as well as higher cement volumes in the U.S., Europe and AMEA regions Operating EBITDA declined by 8% on a like-to-like basis, due to lower contributions in the SAC, Europe and AMEA regions, partially offset by higher contributions in Mexico and the U.S. During 3Q17, operating EBITDA margin declined by 2.2pp Operating EBITDA declined 8% on a like-to-like basis EBITDA variation Millions of U.S. dollars 1 Includes US$12 million from Trinidad Cement Limited (“TCL”), which CEMEX began consolidating starting February 2017, -US$10 million from the Fairborn cement plant divestment, which closed in February 2017, and -US$7 million from the Odessa cement plant divestment, which closed in November 2016. Fixed cost & other 3Q17 l-t-l Vol. FX Var. cost & distr. 3Q17 Price Acq/ Div1 3Q16 3Q16 pro-forma
Free cash flow conversion rate1 reached 62% Controlling interest net income Free cash flow Millions of U.S. dollars 1 Free cash flow conversion rate = Free cash flow after maintenance CAPEX / EBITDA 2 Includes Other Cash Items plus Free Cash Flow Discontinued Operations Other2 Maint. CapEx FCF after maint. CapEx Taxes WC FCF 3Q17 EBITDA 3Q17 Net fin. Exp Stra-tegic CapEx 3Q17 3Q16
Free cash flow generation and divestments proceeds mainly used to reduce debt We have reduced total debt plus perpetuals by close to US$3.8 billion since December 2015, representing a reduction of approximately 25% New facilities agreement for US$4.05 billion under improved conditions, extending average life of debt and reducing cost of debt S&P Global Ratings upgraded our corporate credit rating in its global scale to BB with a stable outlook Debt declined by ~US$1.5 billion year-to-date September Total debt plus perpetuals variation Millions of U.S. dollars 1 Mainly includes the following divestments: US$500 million from the U.S. Concrete Pipe Business, US$400 million from the Fairborn cement plant in the U.S., US$378 million from the stake of Grupo Cementos de Chihuahua, US$150 million from the Pacific Northwest Materials Business in the U.S., among others 2 Conversion of approximately US$325 million of 3.75% convertible notes due 2018 1 2
Third Quarter 2017 Regional Highlights
3Q17 EBITDA increased 13% and EBITDA margin increased 2pp, on a year-over-year basis Construction activity affected during the quarter by natural disasters, as well as lower infrastructure spending Higher sequential and year-over-year prices for cement and ready mix during the quarter Slight loss in market position, due to focus on our value-before-volume strategy, which we expect to responsibly recover in upcoming quarters In the industrial-and-commercial sector, favorable dynamics continued in shopping malls, hospitality and tourism construction In the self-construction sector indicators including job creation and remittances continued to be solid Mexico
3Q17 operating EBITDA increased by 1% on a like-to-like basis Cement volumes increased 2% during the quarter on a like-to-like basis despite significant precipitation as well as the impact of two hurricanes in our footprint Cement prices on a like-to-like basis increased 5% during the quarter on a year-over-year basis Single-family housing starts increased 11% during the quarter and single-family housing permits increased 10% year-to-date September In the industrial-and-commercial sector, construction spending increased 4% year-to-date August, driven by commerce, office and lodging United States
Regional cement volumes on a like-to-like basis decreased by 2% reflecting declines in Colombia, Panama and Guatemala, as well as the impact of the hurricanes in Puerto Rico and, to a lesser extent, the Dominican Republic In Colombia, cement volumes declined 4% during the quarter; local-currency cement prices as of September are 2% higher than they were in June In Panama, our cement volumes during the quarter declined by 3% affected by a slowdown in the high-income-residential and industrial-and-commercial sectors Cement volumes in our TCL operations increased by 4% during the quarter, mainly reflecting a double-digit growth in Jamaican volumes South, Central America and the Caribbean
Increase in regional volumes for our three core products during the first nine months of the year In the UK, our quarterly cement volumes reflect softening market conditions due to political uncertainties In Spain, cement volume growth reflects continued strong activity in the residential sector In Germany, cement volumes increased 13% during the quarter supported by the residential sector and ongoing infrastructure projects In Poland, cement volumes increased 8% during the quarter driven by the residential and infrastructure sectors; our quarterly cement prices increased 3% year-over-year and remained stable on a sequential basis Europe
Increase in quarterly regional volumes for our three core products In the Philippines, cement volumes increased 2% during the quarter supported by improved infrastructure activity and modest growth in the residential and industrial-and-commercial sectors In Egypt, the slight decrease in cement volume during the quarter reflects a decline in purchasing power as a result of the devaluation; our cement prices in local currency terms increased 8% on a sequential basis In Israel, our ready-mix and aggregates businesses achieved record quarterly and year-to-date volumes Asia, Middle East and Africa
Third Quarter 2017 3Q17 Results
Operating EBITDA declined by 8% on a like-to-like basis due to lower contributions in SAC, Europe and AMEA regions, partially offset by higher contributions in Mexico and the U.S. Cost of sales, as a percentage of net sales, increased by 1.4pp during the quarter mainly reflecting higher energy costs Operating expenses, as a percentage of net sales, increased by 0.4pp during the quarter mainly driven by higher distribution expenses Operating EBITDA, cost of sales and operating expenses
Average working capital days Free cash flow Average working capital days decreased to -5 during 3Q17 from 1 during the same period in 2016
Other income statement items Other expenses, net, of US$68 million mainly includes impairment of assets and severance payments Foreign-exchange gain of US$31 million resulting primarily from the fluctuation of the Mexican peso versus the U.S. dollar Gain on financial instruments of US$95 million mainly resulting from the gain on the sale of the remaining direct interest in Grupo Cementos de Chihuahua Income tax had a positive effect of US$28 million mainly due to the reversal of the valuation allowance previously set for some net operating losses (NOL’s) Controlling interest net income of US$289 million, versus an income of US$286 million in 3Q16, mainly reflects lower financial expenses, better results from financial instruments and a positive effect in income tax, partially offset by lower operating earnings, a lower foreign exchange gain, a negative variation in discontinued operations and higher non-controlling interest net income Millions of U.S. dollars
In July, CEMEX entered into a new facilities agreement for US$4.05 billion under improved conditions, extending our average life of debt and reducing our cost of debt1: 5-year term, with an average debt maturity of 4.3 years Total amount includes a revolving credit line of approximately US$1.135 billion with a 5-year term; remaining amount of US$2.915 billion is under term loan tranches, amortizing in five equal semi-annual payments, beginning on July 2020 Increased flexibility to make new investments, incur debt, and pay dividends In September: S&P Global Ratings upgraded our Corporate credit rating in its global scale to BB from BB- We repurchased approximately US$700 million of 9.375% senior secured notes due 2022 through a cash tender offer; the remaining notes were redeemed on October 12, 2017 Debt-related information 1 The 2014 Credit Agreement was fully cancelled on July 25, 2017
Millions of U.S. dollars Avg. life of debt: 5.0 years 1 CEMEX has perpetual debentures totaling US$446 million 2 Convertible Subordinated Notes include only the debt component of US$865 million; total notional amount is about US$886 million 3 Includes the remaining balance of the 9.375% senior secured notes due 2022 that were not tendered but that were called prior to September 30, 2017 and redeemed on October 12, 2017 CEMEX consolidated debt maturity profile Fixed Income Other bank debt Convertible Subordinated Notes2 Credit Agreement Total debt excluding perpetual notes1 as of September 30, 2017: US$11,111 million 3
Millions of U.S. dollars Avg. life of debt: 5.1 years 1 Debt maturity profile presented on a proforma basis reflecting call payment on October 12th 2017 of US Senior Secured Notes of 9.375% due on 2022, applying US$174M held in cash reserve, and US$170M withdrawn from the revolving credit facility due 2022 2 CEMEX has perpetual debentures totaling US$446 million 3 Convertible Subordinated Notes include only the debt component of US$865 million; total notional amount is about US$886 million CEMEX consolidated debt maturity profile – pro forma1 Fixed Income Other bank debt Convertible Subordinated Notes3 Credit Agreement Total debt excluding perpetual notes2 as of September 30, 2017: US$10,937 million
Third Quarter 2017 2017 Outlook
2017 guidance 1 Including perpetual and convertible securities Consolidated volumes Cement: 0% Ready mix: 1% - 3% Aggregates: 0% - 3% Energy cost per ton of cement produced Increase of approximately 12% Capital expenditures US$520 million Maintenance CapEx US$210 million Strategic CapEx US$730 million Total CapEx Investment in working capital US$0 million Cash taxes Approximately US$275 million Cost of debt1 Reduction of approximately US$175 million
Progress of initiatives as of 3Q17 to further bolster our road to investment grade Initiatives Progress to date Building Blocks Targets 2016 & 2017 Asset divestments ~ US$2.7 billion US$2,655 divestments to date US$2.5 billion Total debt reduction ~ US$3.8 billion US$3,769 debt reduction to date + free cash flow 4Q 2017 ~ US$4 billion
Third Quarter 2017 Appendix
During the quarter and on a like-to-like basis, higher year-over-year cement volumes in the U.S., and the Europe and AMEA regions Quarterly and year-to-date increases in consolidated prices for our three core products, on a like-to-like basis Consolidated volumes and prices
Additional information on debt and perpetual notes Currency denomination Interest rate
Additional information on debt and perpetual notes Total debt1 by instrument
9M17 volume and price summary: Selected countries
3Q17 volume and price summary: Selected countries
2017 expected outlook: Selected countries
Definitions 9M17 / 9M16 Results for the first nine months of the years 2017 and 2016, 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 domestic cement including clinker to domestic gray cement) LC Local currency Like-to-like percentage variation (l-t-l % var) Percentage variations adjusted for investments/divestments and currency fluctuations Maintenance capital expenditures Investments incurred for the purpose of ensuring the company’s operational continuity. These include capital expenditures on projects required to replace obsolete assets or maintain current operational levels, and mandatory capital expenditures, which are projects required to comply with governmental regulations or company policies Operating EBITDA Operating earnings before other expenses, net plus depreciation and operating amortization pp Percentage points Prices All references to pricing initiatives, price increases or decreases, refer to our prices for our products SAC South, Central America and the Caribbean Strategic capital expenditures Investments incurred with the purpose of increasing the company’s profitability. These include capital expenditures on projects designed to increase profitability by expanding capacity, and margin improvement capital expenditures, which are projects designed to increase profitability by reducing costs
Contact information Stock Information NYSE (ADS): CX Mexican Stock Exchange: CEMEXCPO Ratio of CEMEXCPO to CX: 10 to 1 Investor Relations In the United States +1 877 7CX NYSE In Mexico +52 81 8888 4292 ir@cemex.com