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 April, 2018
Commission File Number: 001-14946
CEMEX, S.A.B. de C.V.
(Translation of Registrant’s 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 April 27, 2018, announcing first quarter 2018 results for CEMEX Holdings Philippines, Inc., an indirect subsidiary of CEMEX, S.A.B. de C.V. (NYSE: CX). | |
| 2. | First quarter 2018 results for CEMEX Holdings Philippines, Inc., an indirect subsidiary of CEMEX, S.A.B. de C.V. (NYSE: CX). | |
| 3. | Presentation regarding first quarter 2018 results for CEMEX Holdings Philippines, Inc., an indirect subsidiary of 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: | April 27, 2018 | By: | /s/ Rafael Garza | |||||||
|
|
| |||||||||
| Name: Rafael Garza | ||||||||||
| Title: Chief Comptroller | ||||||||||
EXHIBIT INDEX
| EXHIBIT NO. |
DESCRIPTION | |
| 1. | Press release, dated April 27, 2018, announcing first quarter 2018 results for CEMEX Holdings Philippines, Inc., an indirect subsidiary of CEMEX, S.A.B. de C.V. (NYSE: CX). | |
| 2. | First quarter 2018 results for CEMEX Holdings Philippines, Inc., an indirect subsidiary of CEMEX, S.A.B. de C.V. (NYSE: CX). | |
| 3. | Presentation regarding first quarter 2018 results for CEMEX Holdings Philippines, Inc., an indirect subsidiary of CEMEX, S.A.B. de C.V. (NYSE: CX). | |
Exhibit 1
| Media Relations Chito Maniago |
Investor Relations Pierre Co | |
| +632 849 3600 chito.maniago@cemex.com |
+632 849 3600 pierre.co@cemex.com |
CHP POSTS RECORD VOLUME SALES IN Q1 2018
| • | Record sales volume posted in the first quarter behind strong demand |
| • | First quarter 2018 EBITDA highest since second quarter 2017 |
MANILA, PHILIPPINES. APRIL 27, 2018 – CEMEX HOLDINGS PHILIPPINES, INC. (“CHP”)
(PSE: CHP), announced today that it posted higher operating EBITDA during the first quarter of 2018 compared to the past three quarters, driven by record quarterly domestic cement volume sales. For the first quarter, CHP cement sales volume picked up by 16 percent from the same period last year and were higher by 11 percent versus the fourth quarter of 2017.
This growth in volumes resulted to a 10 percent increase in net sales to P5.9 billion during the first quarter of the year from P5.4 billion in the same period in 2017. The company saw cost of sales also increasing, however, at a faster pace at 24 percent driven by higher fuel and power costs compared to the same period last year. This resulted in a first quarter EBITDA of P886 million, up by 41 percent from the fourth quarter of 2017 but down by 17 percent from the first quarter of last year.
After deducting financial expenses and higher unrealized foreign exchange losses, CHP’s net income was recorded at P100 million, down from P350 million during the same period last year.
Ignacio Mijares, President and CEO of CHP, said, “We are very focused on supplying the needs of the market, given the growing Philippine economy and what we believe will be a robust construction sector for many years to come. Our results showed our ability as a company to deliver on the country’s needs.”
“Strong local demand presents both opportunities and challenges for the industry. The execution of our expansion project, and the attainment of greater operational efficiencies will be important for us to continue growing,” Mr. Mijares added.
The company has embarked on debottlenecking activities this year to increase its annual throughput by half a million tons.
CHP, a listed company at the Philippine Stock Exchange, is one of the leading cement producers in the Philippines, based on annual installed capacity. CHP produces and markets cement and cement products, such as ready-mix concrete and clinker, in the Philippines through direct sales using its extensive marine and land distribution network. Moreover, CHP’s cement manufacturing subsidiaries have been operating in the Philippines with well-established brands, such as “APO,” “Island,” and “Rizal,” all having a multi-decade history in the country.
1
CHP is an indirect subsidiary of CEMEX, S.A.B. de C.V., one of the largest cement companies in the world based on annual installed cement production capacity. The shares of CEMEX, S.A.B. de C.V. are listed on the Mexican Stock Exchange and the New York Stock Exchange.
For more information on CHP, please visit website: www.cemexholdingsphilippines.com.
# # #
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 CHP 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 CHP 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, changes derived from events affecting CEMEX, S.A.B de C.V. and subsidiaries (“CEMEX”) 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. CHP assumes no obligation to update or correct the information contained in this press release.
2
Exhibit 2
2018 FIRST QUARTER RESULTS Philippine Stock Exchange Ticker: CHP + 632 849 3600 E-Mail: chp.ir@cemex.com
2018 First Quarter Results Page 2 Operating and Financial Highlights 20182017% var20182017% varNet sales5,8915,36210%5,8915,36210%Gross profit2,4462,573 (5%)2,4462,573 (5%) as % of net sales42%48% (6pp)42%48% (6pp)Operating earnings before other expenses, net557768 (28%)557768 (28%) as % of net sales9%14% (5pp)9%14% (5pp)Controlling Interest Net Income (Loss)100350(71%)100350(71%)Operating EBITDA8861,071 (17%)8861,071 (17%) as % of net sales15%20% (5pp)15%20% (5pp)Free cash flow after maintenance capital expenditures721(239)N/A721(239)N/AFree cash flow606(313)N/A606(313)N/ANet debt113,47614,865 (9%)13,47614,865 (9%)Total debt115,32715,647 (2%)15,32715,647 (2%)Earnings per share20.020.07 (71%)0.020.07 (71%)January—MarchFirst Quarter In millions of Philippine Pesos, except percentages and earnings per share 1 U.S. dollar debt converted using end-of-period exchange rate. See Debt Information on page 4 and Exchange Rates on page 7 for more detail. 2 In Philippine Pesos Net sales grew by 10% year-over-year during the first quarter as a result of higher volumes, mitigated by lower prices. Cost of sales went up by 24%. As a percentage of sales, this resulted to an increase of 6 pp year-over-year during the first quarter. Fuel costs accounted for 26% of cost of sales, up from 19% during the same period last year. This increase was mainly driven by timing differences in the usage of our coal inventory, and higher excise taxes on coal and liquid fuels. For the rest of the year, we expect the impact of fuel costs to lessen as our coal costs, having been fully contracted for 2018, start to converge closer to 2017 levels. Power costs accounted for 22% of cost of sales versus 21% during the same period last year. Higher grid rates in both our plants resulted to this increase. Operating expenses increased by 5%. As a percentage of sales, this resulted to an increase of 2 pp year-over-year during the first quarter. Distribution expenses were 9% higher year-over-year and 6% higher sequentially due to higher sales volume. However, on a unitary basis, distribution expenses declined by 6% year-over-year and by 4% sequentially. This improved efficiency was driven by higher dispatched volumes and improved utilization of logistics assets. Selling and administrative expenses during the first quarter remained stable year-over-year and were 4% lower sequentially. As a percentage of sales, selling and administrative expenses declined by 1 pp year-over-year and by 2 pp sequentially. Operating EBITDA during the first quarter was the highest in the last four quarters or since the second quarter of 2017. On a year-over-year basis, operating EBITDA decreased by 17%. Operating EBITDA margin during the first quarter was also the highest in the last four quarters or since the second quarter of 2017. Operating EBITDA margin decreased by 5 pp compared to the same period last year. Lower cement prices year-over-year continued to put pressure on margins together with higher energy costs. Controlling interest net income declined 71% during the first quarter mainly due to lower operating earnings before other expenses and higher unrealized foreign exchange losses. These foreign exchange losses were mainly a result of intragroup borrowings between CHP and subsidiaries. Total debt at the end of March 2017 stood at PHP 15,327 million, of which PHP 13,872 million pertained to long-term debt owed to BDO Unibank, Inc.
2018 First Quarter Results Page 3 Operating Results Domestic Gray CementJanuary—MarchFirst QuarterFirst Quarter 20182018 vs. 20172018 vs. 2017vs. Fourth Quarter 2017Volume16%16%11%Price in USD (8%) (8%)0%Price in PHP (5%) (5%)2% Our domestic cement volumes increased by 16% year-over-year during the first quarter, supported by a 19% increase in our domestic cement production, as well as higher dispatched volumes due to our debottlenecking efforts. Growth across all sectors, led by improved infrastructure activity from higher government spending, favorable weather conditions, and a low base of comparison versus the same period last year were the main drivers for our performance. Our domestic cement prices in local-currency terms increased by 2% sequentially. Prices as of the end of March were 5% higher than those in December, resulting from a nationwide price increase implemented during the quarter. On a year-over-year basis, our first quarter prices are still lower by 5% reflecting the heightened competitive dynamics in the industry.
2018 First Quarter Results Page 4 Operating EBITDA, Free Cash Flow and Debt Information Operating EBITDA and Free Cash Flow 2018 2017 % var 2018 2017 % var Operating earnings before other expenses, net 557 768 (28%) 557 768 (28%) + Depreciation and operating amortization 330 303 330 303 Operating EBITDA 886 1,071 (17%) 886 1,071 (17%)—Net financial expenses 208 258 208 258—Maintenance capital expenditures 80 49 80 49—Change in working capital (223) 920 (223) 920—Taxes paid 104 102 104 102—Other cash items (net) (2) (19) (2) (19) Free cash flow after maintenance capital expenditures 721 (239) N/A 721 (239) N/A—Strategic capital expenditures 114 74 114 74 Free cash flow 606 (313) N/A 606 (313) N/A January—March First Quarter In millions of Philippine Pesos Debt Information 20181 20171 % var 20171 2018 2017 Total debt 15,327 15,647 (2%) 15,196 Currency denomination Short term 3% 0% 2% U.S. dollar2 2% 10% Long term 97% 100% 98% Philippine peso 98% 90% Cash and cash equivalents 1,851 782 137% 1,058 Interest rate Net debt 13,476 14,865 (9%) 14,138 Fixed 43% 36% Variable 57% 64% Fourth Quarter First QuarterFirst Quarter In millions of Philippine Pesos, except percentages 1 U.S. dollar debt converted using end-of-period exchange rate. See Exchange Rates on page 7 for more detail. 2 Pertains to related party loans with CEMEX Asia B.V.
Financial Results Income Statement & Balance Sheet Information CEMEX Holdings Philippines, Inc. (Thousands of Philippine Pesos in nominal terms, except per share amounts) January - March First Quarter INCOME STATEMENT 2018 2017 % var 2018 2017 % var Net sales 5,891,259 5,362,377 10% 5,891,259 5,362,377 10% Cost of sales (3,445,425) (2,789,516) (24%) (3,445,425) (2,789,516) (24%) Gross profit 2,445,834 2,572,861 (5%) 2,445,834 2,572,861 (5%) Operating expenses (1,889,136) (1,804,749) (5%) (1,889,136) (1,804,749) (5%) Operating earnings before other expenses, net 556,698 768,112 (28%) 556,698 768,112 (28%) Other income (expenses), net 2,276 19,166 (88%) 2,276 19,166 (88%) Operating earnings 558,974 787,278 (29%) 558,974 787,278 (29%) Financial expenses, net (207,744) (258,479) 20% (207,744) (258,479) 20% Foreign exchange loss, net (247,784) (88,045) (181%) (247,784) (88,045) (181%) Net income (loss) before income taxes 103,446 440,754 (77%) 103,446 440,754 (77%) Income tax (3,164) (91,217) 97% (3,164) (91,217) 97% Consolidated net income (loss) 100,282 349,537 (71%) 100,282 349,537 (71%) Non-controlling interest net income (loss) 10 9 11% 10 9 11% Controlling Interest net income (loss) 100,292 349,546 (71%) 100,292 349,546 (71%) Operating EBITDA 886,450 1,070,695 (17%) 886,450 1,070,695 (17%) Earnings per share 0.02 0.07 (71%) 0.02 0.07 (71%) as of March 31 BALANCE SHEET 2018 2017 % Var Total Assets 52,758,973 50,795,952 4% Cash and Temporary Investments 1,850,878 782,084 137% Trade Accounts Receivables 986,253 1,002,487 (2%) Other Receivables 357,001 201,490 77% Inventories 2,692,510 2,729,999 (1%) Assets held for sale 111,348 0 Other Current Assets 1,606,962 1,750,714 (8%) Current Assets 7,604,952 6,466,774 18% Fixed Assets 15,464,533 15,623,365 (1%) Other Assets 29,689,488 28,705,813 3% Total Liabilities 23,030,036 21,747,872 6% Current Liabilities 7,439,025 5,293,500 41% Long-Term Liabilities 14,681,204 15,647,027 (6%) Other Liabilities 909,807 807,345 13% Consolidated Stockholders’ Equity 29,728,937 29,048,080 2% Non-controlling Interest 211 238 (11%) Stockholders’ Equity Attributable to Controlling Interest 29,728,726 29,047,842 2% 2018 First Quarter Results Page 5
Financial Results Income Statement & Balance Sheet Information CEMEX Holdings Philippines, Inc. (Thousands of U.S. Dollars, except per share amounts) January - March First Quarter INCOME STATEMENT 2018 2017 % var 2018 2017 % var Net sales 113,618 107,148 6% 113,618 107,148 6% Cost of sales (66,448) (55,738) (19%) (66,448) (55,738) (19%) Gross profit 47,170 51,410 (8%) 47,170 51,410 (8%) Operating expenses (36,433) (36,061) (1%) (36,433) (36,061) (1%) Operating earnings before other expenses, net 10,737 15,349 (30%) 10,737 15,349 (30%) Other income (expenses), net 44 383 (89%) 44 383 (89%) Operating earnings 10,781 15,732 (31%) 10,781 15,732 (31%) Financial expenses, net (4,007) (5,165) 22% (4,007) (5,165) 22% Foreign exchange loss, net (4,779) (1,759) (172%) (4,779) (1,759) (172%) Net income (loss) before income taxes 1,995 8,808 (77%) 1,995 8,808 (77%) Income tax (61) (1,823) 97% (61) (1,823) 97% Consolidated net income (loss) 1,934 6,985 (72%) 1,934 6,985 (72%) Non-controlling interest net income (loss) 0 0 0 0 Controlling Interest net income (loss) 1,934 6,985 (72%) 1,934 6,985 (72%) Operating EBITDA 17,096 21,394 (20%) 17,096 21,394 (20%) as of March 31 BALANCE SHEET 2018 2017 % Var Total Assets 1,011,484 1,012,678 (0%) Cash and Temporary Investments 35,485 15,592 128% Trade Accounts Receivables 18,908 19,986 (5%) Other Receivables 6,844 4,017 70% Inventories 51,620 54,426 (5%) Assets held for sale 2,135 0 Other Current Assets 30,808 34,903 (12%) Current Assets 145,800 128,924 13% Fixed Assets 296,483 311,471 (5%) Other Assets 569,201 572,283 (1%) Total Liabilities 441,527 433,570 2% Current Liabilities 142,619 105,532 35% Long-Term Liabilities 281,465 311,942 (10%) Other Liabilities 17,443 16,096 8% Consolidated Stockholders’ Equity 569,957 579,108 (2%) Non-controlling Interest 4 5 (20%) Stockholders’ Equity Attributable to Controlling Interest 569,953 579,103 (2%) 2018 First Quarter Results Page 6
2018 First Quarter Results Page 7 Definitions of Terms and Disclosures Methodology for translation, consolidation, and presentation of results CEMEX Holdings Philippines, Inc. (“CHP”) reports its consolidated financial statements under Philippine Financial Reporting Standards (“PFRS”). When reference is made in 2018 and 2017 to consolidated financial statements, it means CHP financial information together with its subsidiaries. For the purpose of presenting figures in U.S. dollars, the consolidated balance sheet as of March 31, 2018 has been converted at the end of period exchange rate of 52.16 Philippine pesos per US dollar while the consolidated income statement for the three-month period ended March 31, 2018 has been converted at the January to March, 2018 average exchange rate of 51.85 Philippine pesos per US dollar. Definition of terms PHP refers to Philippine Pesos. pp equals percentage points. Prices all references to pricing initiatives, price increases or decreases, refer to our prices for our products. Operating EBITDA equals operating earnings before other expenses, net, plus depreciation and operating amortization. Free cash flow equals operating EBITDA minus net interest expense, maintenance and strategic 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). 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. 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. Change in Working capital in the Free cash flow statements only include trade receivables, trade payables, receivables and payables from and to related parties, other current receivables, inventories, other current assets, and other accounts payable and accrued expense. Net debt equals total debt minus cash and cash equivalents. Exchange Rates2018 average2017 average2018 average2017 average2018 End of period2017 End of periodPhilippine peso51.8550.0551.8550.0552.1650.16January—MarchJanuary—MarchFirst Quarter Amounts provided in units of local currency per US dollar
Exhibit 3
1Q 2018
RESULTS
April 27, 2018
01
This presentation contains forward-looking statements. 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 current expectations and projections about future events of CEMEX Holdings Philippines, Inc. (“CHP”) based on CHP’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 CHP’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 CHP or its subsidiaries, include, but are not limited to, the cyclical activity of the construction sector; CHP’s exposure to other sectors that impact
CHP’s business, such as the energy sector; competition; general political, economic and business conditions in the markets in which CHP operates; the regulatory environment, including environmental, tax, antitrust and acquisition-related rules
and regulations; CHP’s ability to satisfy its debt obligations and the ability of CEMEX, S.A.B. de C.V. (“CEMEX”), the ultimate parent company of the major shareholder of CHP, 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 CEMEX’s existing indebtedness; the impact of CEMEX’s below investment grade debt rating on
CHP’s and CEMEX’s cost of capital; CEMEX’s ability to consummate asset sales and fully integrate newly acquired businesses; achieve cost-savings from CHP’s cost-reduction initiatives and implement CHP’s pricing initiatives
for CHP’s products; the increasing reliance on information technology infrastructure for CHP’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 CHP’s public filings. Readers are
urged to read these presentations and carefully consider the risks, uncertainties and other factors that affect CHP’s business. The information contained in these presentations is subject to change without notice, and CHP is not obligated to
publicly update or revise forward-looking statements. Unless the context indicates otherwise, all references to pricing initiatives, price increases or decreases, refer to CHP’s prices for products sold or distributed by CHP or its
subsidiaries.
Copyright CEMEX Holdings Philippines, Inc. and its subsidiaries
02
First Quarter 2018 Achievements
All-time highest quarterly sales volume
All-time highest monthly sales volume in March
Record cement production for Solid Plant and APO Plant in March
Record bagging output for Solid Plant in March
Record dispatch for Solid Plant in March
Initial progress from debottlenecking efforts as loading rates at port operations have significantly improved
03
Domestic Cement Volumes and Prices
3M18 vs. 1Q18 vs. 1Q18 vs. 3M17 1Q17 4Q17
Volume 16% 16% 11% Domestic Price (USD) (8%) (8%) 0%
Cement
Price (PHP) (5%) (5%) 2%
Net Sales1
+10%
5,362 5,891
Domestic cement volumes increased 16% year-over-year during the first quarter. 5,362
Supported
by 19% increase in domestic cement production
Higher dispatched volumes due to our debottlenecking efforts
Growth across all sectors, led by improved infrastructure activity from higher government spending
Favorable weather conditions 1Q17 1Q18
Low base of comparison versus the same period last year
Domestic cement prices increased 2% sequentially.
March 2018 prices 5% higher than December 2017 due to nationwide price increase implemented during the quarter.
5% year-over-year decline in the first quarter reflecting heightened competitive dynamics. Net sales during the first quarter grew 10% year-over-year.
1 Millions of Philippine Pesos
04
Residential Sector
The
residential sector appears to have picked up in the first quarter of 2018.
The sector’s growth will be supported by remittances from overseas Filipino
workers, demand from the growing middle class and foreign markets, and the government’s emphasis on low-income/socialized housing.
Approved Residential
Building Permits
30% based on floor area1
20%
10%
0%
-10%
-20%
-30%
4Q16 1Q17 2Q17 3Q17 4Q17
Year-on-Year Growth
1Source: Philippine Statistics Authority
1Source: Philippine Statistics Authority
05
Industrial-and-Commercial
Sector
Industrial and commercial activity grew in the first
quarter compared
to the same period last year.
Take-up from the business process outsourcing
sector recovered in the first quarter, and
supplemented demand from the offshore gaming
and traditional companies.1
In 2018, steady expansion in manufacturing,
consumer spending, and tourism sectors will support
the segment’s
growth.
1Source: Pronove Tai
2Source: Philippine Statistics Authority
Approved Non-Residential
Building
Permits
30% based on floor area2
20%
10%
0%
-10%
-20%
-30%
4Q16 1Q17 2Q17 3Q17 4Q17
Year-on-Year Growth
06
Infrastructure Sector
2017 National Government Disbursement on
Infrastructure and Capital Outlay
Year-on-Year Growth1
33.7%
26.0%
15.4%
12.2%
5.9%
1Q17 2Q17 3Q17 4Q171Q18
1 Source: Department of Budget and Management; (DBM)
Infrastructure
construction surged in the first quarter as the government accelerated the approval and implementation of its projects.
For 2018, infrastructure sector expected to
be a main driver of construction demand. According to the National Economic and Development Authority, several flagship projects that have secured funding are expected to start construction this year.
07
Cost of Sales
Millions of
Percentage Philippine Pesos of Net Sales
-6pp
-24%
52% 58% 2,790 3,445 1Q17 1Q18 1Q17 1Q18
Cost of sales, as a percentage to sales, increased 6
pp year-over-year during the first quarter.
Fuel costs accounted for 26% of cost of sales vs. 19% same period last year. Increase mainly driven by timing
differences in usage of our coal inventory, and higher excise taxes on coal and liquid fuels.
For the rest of the year, we expect the impact of fuel costs to
lessen as our coal costs, having been fully contracted for 2018, converge closer to 2017 levels.
Power costs accounted for 22% of cost of sales vs. 21% same period
last year. Higher grid rates in both plants resulted to this increase.
08
Operating Expenses
Distribution1 Selling and Administrative1
-9%
+1%
1,142
1,049 756 747 1Q17 1Q18 1Q17 1Q18
% of
20% 19% 14% 13% Net Sales
1 Millions of Philippine Pesos
Distribution expenses increased by 9% year-over-year.
On a unitary basis, distribution
expenses decreased by 6% year-over-year and by 4% sequentially. Improved efficiency was driven by higher dispatched volumes and improved utilization of logistics assets.
Selling and administrative expenses remained stable year-over-year and were 4% lower sequentially.
As a percentage of sales, declined by 1 pp year-over-year and 2 pp sequentially.
09
Operating EBITDA and Operating EBITDA Margin
Operating EBITDA1
-17%
1,071 753 803886
628
1Q17 2Q17 3Q174Q171Q18
% of
Net Sales 20% 13%14%12%15%
1 Millions of Philippine
Pesos
First quarter Operating EBITDA and Operating EBITDA margin highest in the last four quarters (or since the second quarter of 2017).
Operating EBITDA declined by 17% year-over-year.
Operating EBITDA margin
declined by 5 pp year-over-year. Lower cement prices continued to put pressure on margins during the first quarter together with higher energy costs.
10
Net Income
Net Income1 Like-to-like Net Income2
-71% -20%
438 348
178230
350
350 137202-29100
100 -120
1Q17 1Q18 1Q172Q173Q174Q171Q18
Net income during the
first quarter decreased by 71% mainly due to lower operating earnings before other expenses and higher unrealized foreign exchange losses. These foreign exchange losses were mainly a result of intragroup borrowings between CHP and subsidiaries.
On a like-to-like basis, excluding foreign exchange impact, net income decreased by
20%.
1 In Millions of Philippine Pesos, excluding foreign exchange gains or losses
2 In Millions of Philippine Pesos
011
1Q 2018
FREE CASH FLOW
& GUIDANCE
012
Free Cash Flow
January—March First Quarter
2018 2017
20182017
% var % var
Operating EBITDA 886
1,071(17%)8861,071(17%)
- Net Financial Expenses 208 258208258
- Maintenance Capex 80 498049
- Change in Working
Capital (223) 920(223)920
- Taxes Paid 104 102104102
- Other Cash Items (net) (2) (19)(2)(19)
Free Cash Flow
after
721 (239) N/A721(239)N/A
Maintenance Capex
- Strategic
Capex 114 7411474
Free Cash Flow 606 (313)N/A606(313)N/A
Millions of Philippine Pesos
Free cash flow during the quarter reached
PHP 721 million after maintenance CAPEX and PHP 606 million after strategic CAPEX.
Year-over-year improvement, from negative to positive, mainly the
result of lower inventories and continued efforts to improve working capital position.
EBITDA to free cash flow conversion for the quarter was at 68%.
013
Solid Plant Capacity Expansion
Expected total investment: US$ 225 million
New line expected to start operations in the
first quarter of 2020.
014
2018 Guidance
Cement
volumes 8-12%
PHP 700 million Maintenance CAPEX PHP 3,000 million Solid Plant Expansion CAPEX
Capital expenditures
PHP 40 million Other Strategic CAPEX
PHP 3,740 million Total CAPEX
Working capital Reduction of approximately PHP 1,500 -2,000 million
015
Q&A
SESSION
1Q 2018 RESULTS
016
1Q 2018
APPENDIX
017
Debt Information
Maturity
Profile1
Related Party Loans2 BDO Debt
Total Debt: PHP 15,327 Avg. life of
debt: 4.5 years Net Debt to EBITDA3: 4.4x
1,664
1,214
486 381 1,074140140
105 140
2018 201920202021202220232024
6,656
5,027
1 Millions of Philippine Pesos
2 Pertains to loans with CEMEX Asia B.V.
3 Last 12 months Consolidated EBITDA
018
Definitions
3M18 / 3M17 Results for the first three months of the years 2018 and 2017, respectively
PHP Philippine Pesos Pp Percentage points Prices All references to pricing initiatives, price increases or
decreases, refer to our prices for our products. Operating EBITDA Operating earnings before other expenses, net, plus depreciation and operating amortization. Free Cash Flow Operating EBITDA minus net
interest expense, maintenance and strategic 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), Maintenance Capital Investments incurred for the purpose of ensuring the company’s operational continuity. These include capital expenditures 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, Strategic
capital investments incurred with the purpose of increasing the company’s profitability. These include capital expenditures on expenditures projects designed to increase profitability by expanding
capacity, and margin improvement capital expenditures, which are projects designed to increase profitability by reducing costs. Change in Working capital in Only include trade receivables, trade payables, receivables and
payables from and to related parties, other current the Free cash flow receivables, inventories, other current assets, and other accounts payable and accrued expense. statements Net
Debt Total debt minus cash and cash equivalents.
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Contact Information
Investor Relations Stock Information
In the
Philippines PSE:
+632 849 3600 CHP
chp.ir@cemex.com
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