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, 2019
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 66265, México
(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 X 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 24, 2019, announcing third quarter 2019 results for CEMEX, S.A.B. de C.V. (NYSE: CX). |
2. | Third quarter 2019 results for CEMEX, S.A.B. de C.V. (NYSE: CX). |
3. | Presentation regarding third quarter 2019 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 24, 2019 |
By: | /s/ Rafael Garza Lozano |
||||||
Name: Rafael Garza Lozano | ||||||||
Title: Chief Comptroller |
3
EXHIBIT INDEX
EXHIBIT NO. |
DESCRIPTION | |
1. | Press release, dated October 24, 2019, announcing third quarter 2019 results for CEMEX, S.A.B. de C.V. (NYSE: CX). | |
2. | Third quarter 2019 results for CEMEX, S.A.B. de C.V. (NYSE: CX). | |
3. | Presentation regarding third quarter 2019 results for CEMEX, S.A.B. de C.V. (NYSE: CX). |
4
Exhibit 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 |
CEMEX REPORTS THIRD QUARTER 2019 RESULTS
MONTERREY, MEXICO, OCTOBER 24, 2019 CEMEX, S.A.B. de C.V. (CEMEX) (NYSE: CX), announced today that, on a like-to-like basis for the ongoing operations and adjusting for foreign exchange fluctuations, consolidated net sales decreased by 1%, reaching US$3.5 billion during the third quarter of 2019 versus the comparable period in 2018. Operating EBITDA decreased by 7% on a like-to-like basis during the third quarter of 2019 to US$681 million on a year-over-year basis.
CEMEXs Consolidated Third-Quarter 2019 Financial and Operational Highlights
| The decrease in quarterly consolidated net sales was due to lower volumes mainly in Mexico and our Asia, Middle East and Africa region, partially offset by improved prices for our products, in local-currency terms in most of our regions. |
| Operating earnings before other expenses, net, decreased by 14%, on a like-to-like basis, in the third quarter, to US$409 million. |
| Controlling interest net income during the quarter was US$187 million, from US$169 million in the same period of 2018. |
| Operating EBITDA decreased by 7%, on a like-to-like basis, during the quarter on a year-over-year basis, to US$681 million. |
| Operating EBITDA margin during the quarter decreased to 19.5% from 20.6% in the same period in the previous year. |
| Free cash flow after maintenance capital expenditures for the quarter was US$290 million. |
Fernando A. Gonzalez, Chief Executive Officer of CEMEX, said: In the third quarter, our business continued to be challenging and was negatively impacted by the weaker macroeconomic conditions in several of the markets we serve. In Mexico, we believe demand for our products is bottoming out and we are cautiously optimistic on renewed activity going forward given the expected announcement of a new infrastructure program. In the US, EBITDA improved during the quarter as a result of favorable pricing, and despite weaker volumes mainly due to weather and competitive dynamics in some of our markets. In our Europe and AMEA regions, we are pleased with the solid growth in EBITDA and expansion in margins driven primarily by favorable pricing and our cost-reduction initiatives.
As part of our A Stronger CEMEX plan, we are committed to further strengthen our balance sheet through an important reduction in our debt and repositioning our portfolio for higher growth.
Consolidated Corporate Results
During the third quarter of 2019, controlling interest net income was US$187 million, versus US$169 million in the same period last year.
Net debt plus perpetual notes decreased by US$156 million during the quarter.
Geographical Markets Third-Quarter 2019 Highlights
Net sales in our operations in Mexico, on a like-to-like basis, decreased 12% in the third quarter of 2019 to US$716 million. Operating EBITDA, on a like-to-like basis, declined by 20% to US$240 million in the quarter, versus the same period of last year.
CEMEXs operations in the United States reported net sales of US$1,044 million in the third quarter of 2019, an increase of 5% from the same period in 2018. Operating EBITDA increased by 2% to US$205 million from US$202 million in the same quarter of 2018.
CEMEXs operations in South, Central America and the Caribbean reported net sales of US$417 million during the third quarter of 2019, representing a like-to-like decrease of 1% over the same period of 2018. Operating EBITDA, on a like-to-like basis, decreased by 6% to US$89 million in the third quarter of 2019, compared to the same quarter of 2018.
In Europe, net sales for the third quarter of 2019 increased by 2% on a like-to-like basis to US$856 million, compared to the third quarter of 2018. Operating EBITDA was US$141 million for the quarter, 7% higher than the same period last year, on a like-to-like basis.
Operations in Asia, Middle East and Africa, on a like-to-like basis, reported a 2% decline in net sales for the third quarter of 2019, to US$365 million, versus the same quarter of 2018. Operating EBITDA for the quarter was US$59 million, 4% higher, on a like-to-like basis, than the same period last year.
CEMEX is a global building materials company that provides high quality products and reliable services. CEMEX has a rich history of improving the wellbeing of those it serves through innovative building solutions, efficiency advancements, and efforts to promote a sustainable future. For more information, please visit: www.cemex.com
###
This press release contains forward-looking statements and information within the meaning of the U.S. federal securities laws. CEMEX, S.A.B. de C.V. and its direct and indirect subsidiaries (CEMEX) intend, 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, assume, should, could ,continue, would, can, consider, anticipate, estimate, expect, plan, believe, foresee, predict, potential, guidance, target, strategy and intend or other similar words. These forward-looking statements, and in particular in the case of CEMEXs new plan, A Stronger CEMEX, reflect CEMEXs current expectations and projections about future events based on CEMEXs knowledge of present facts and circumstances and assumptions about future events, as well as CEMEXs current plans based on such facts and circumstances. These statements necessarily involve risks and uncertainties that could cause actual results to differ materially from CEMEXs 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; CEMEXs exposure to other sectors that impact its business, such as, but not limited to, the energy sector; competition; availability of raw materials and related fluctuating prices; general political, social, economic and business conditions in the markets in which CEMEX operates or that affects its operations and any significant economic, political or social developments in those markets, including any nationalization or privatization of any assets or operations; the regulatory environment, including environmental, tax, antitrust and acquisition-related rules and regulations; CEMEXs ability to satisfy its obligations under CEMEXs material debt agreements, the indentures that govern CEMEXs outstanding senior secured notes and CEMEXs other debt instruments; availability of short-term credit lines, which can assist us in connection with market cycles; the impact of CEMEXs below investment grade debt rating on its cost of capital; loss of reputation of our brands; CEMEXs ability to
consummate asset sales, fully integrate newly acquired businesses, achieve cost-savings from its cost-reduction initiatives and implement its global pricing initiatives for CEMEXs products, including CEMEXs A Stronger CEMEX plan; the increasing reliance on information technology infrastructure for CEMEXs operations, sales in general, sales invoicing, procurement, financial statements and other processes that can adversely affect CEMEXs sales and operations in the event that the infrastructure does not work as intended, experiences technical difficulties or is subject to cyber-attacks; changes in the economy that affect demand for consumer goods, consequently affecting demand for our products; weather conditions; trade barriers, including tariffs or import taxes and changes in existing trade policies or changes to, or withdrawals from, free trade agreements; terrorist and organized criminal activities as well as geopolitical events; declarations of insolvency of bankruptcy, or becoming subject to similar proceedings; natural disasters and other unforeseen events; and the other risks and uncertainties described in CEMEXs public filings. Readers are urged to read this presentation and carefully consider the risks, uncertainties and other factors that affect CEMEXs business. CEMEX assumes no obligation to update or correct the information contained in this press release. Readers are urged to read this press release and carefully consider the risks, uncertainties and other factors that affect CEMEXs business. The information contained in this press release 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 CEMEXs prices for CEMEXs products.
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 2
2019
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 | |||||||||||||||||||||||||||||||
2019 | 2018 | % var | l-t-l % var |
2019 | 2018 | % var | l-t-l % var |
|||||||||||||||||||||||||
Consolidated cement volume |
48,013 | 51,933 | (8%) | 16,875 | 17,702 | (5%) | ||||||||||||||||||||||||||
Consolidated ready-mix volume |
38,135 | 39,322 | (3%) | 13,222 | 13,650 | (3%) | ||||||||||||||||||||||||||
Consolidated aggregates volume |
106,738 | 107,409 | (1%) | 36,598 | 37,675 | (3%) | ||||||||||||||||||||||||||
Net sales |
10,192 | 10,608 | (4%) | (1%) | 3,494 | 3,636 | (4%) | (1%) | ||||||||||||||||||||||||
Gross profit |
3,343 | 3,638 | (8%) | (6%) | 1,187 | 1,277 | (7%) | (3%) | ||||||||||||||||||||||||
as % of net sales |
32.8% | 34.3% | (1.5pp) | 34.0% | 35.1% | (1.1pp) | ||||||||||||||||||||||||||
Operating earnings before other expenses, net |
1,079 | 1,334 | (19%) | (17%) | 409 | 488 | (16%) | (14%) | ||||||||||||||||||||||||
as % of net sales |
10.6% | 12.6% | (2.0pp) | 11.7% | 13.4% | (1.7pp) | ||||||||||||||||||||||||||
Controlling interest net income (loss) |
381 | 565 | (33%) | 187 | 169 | 11% | ||||||||||||||||||||||||||
Operating EBITDA |
1,882 | 2,105 | (11%) | (9%) | 681 | 750 | (9%) | (7%) | ||||||||||||||||||||||||
as % of net sales |
18.5% | 19.8% | (1.3pp) | 19.5% | 20.6% | (1.1pp) | ||||||||||||||||||||||||||
Free cash flow after maintenance capital expenditures |
169 | 412 | (59%) | 290 | 369 | (21%) | ||||||||||||||||||||||||||
Free cash flow |
6 | 317 | (98%) | 211 | 312 | (33%) | ||||||||||||||||||||||||||
Total debt plus perpetual notes |
11,330 | 11,816 | (4%) | 11,330 | 11,816 | (4%) | ||||||||||||||||||||||||||
Earnings (loss) of continuing operations per ADS |
0.15 | 0.34 | (55%) | 0.11 | 0.09 | 17% | ||||||||||||||||||||||||||
Fully diluted earnings (loss) of continuing operations per |
0.15 | 0.38 | (60%) | 0.11 | 0.11 | 2% | ||||||||||||||||||||||||||
Average ADSs outstanding |
1,532 | 1,542 | (1%) | 1,530 | 1,545 | (1%) | ||||||||||||||||||||||||||
Employees |
40,407 | 42,089 | (4%) | 40,407 | 42,089 | (4%) |
This information does not include discontinued operations. Please see page 13 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 U.S. dollars, except volumes, percentages, employees, and per-ADS amounts. Average ADSs outstanding are presented in millions.
Please refer to page 12 for end-of quarter CPO-equivalent units outstanding.
(1) For the period January-September 2019, the effect of the potential dilutive shares generates anti-dilution; therefore, there is no change between the reported basic and diluted gain per share.
2019 Third Quarter Results |
Page 2 |
Operating results |
|
Mexico
January - September | Third Quarter | |||||||||||||||||||||||||||||||
2019
|
2018
|
% var
|
l-t-l % var
|
2019
|
2018
|
% var
|
l-t-l % var
| |||||||||||||||||||||||||
Net sales |
2,175 | 2,526 | (14% | ) | (12% | ) | 716 | 858 | (16% | ) | (13% | ) | ||||||||||||||||||||
Operating EBITDA |
740 | 943 | (22% | ) | (20% | ) | 240 | 314 | (24% | ) | (20% | ) | ||||||||||||||||||||
Operating EBITDA margin |
34.0% | 37.3% | (3.3pp | ) | 33.5% | 36.6% | (3.1pp | ) |
In millions of U.S. 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 |
(16%) | (15%) | (15%) | (16%) | (12%) | (13%) | ||||||
Price (USD) |
(0%) | (3%) | 1% | (1%) | (0%) | (3%) | ||||||
Price (local currency) |
2% | 1% | 3% | 3% | 2% | 1% |
In Mexico, our domestic gray cement, ready-mix and aggregates volumes declined by 15%, 16% and 13%, respectively, during the third quarter on a year-over-year basis. During the first nine months of the year, domestic gray cement, ready-mix and aggregates volumes decreased by 16%, 15%, and 12%, respectively, versus the comparable period of 2018. Our quarterly domestic gray cement prices in local-currency terms increased 1% year-over-year and were down 2% sequentially.
During the third quarter, activity in the industrial-and-commercial sector was driven by tourism-related investment and commercial projects. In the residential sector, the mid- to high-income housing segments continue to be supported by mortgages from both commercial banks and INFONAVIT; social housing has been impacted by the elimination of subsidies. The self-construction sector also experienced a decline due in part to lower demand for bagged-cement related to government housing programs and a slowdown in job creation. While infrastructure activity has improved, it continues to be affected by the post-election transition process.
United States
January - September | Third Quarter | |||||||||||||||||||||||
2019 | 2018 | % var | l-t-l % var |
2019 | 2018 | % var | l-t-l % var | |||||||||||||||||
Net sales |
2,955 | 2,843 | 4% | 4% | 1,044 | 999 | 5% | 5% | ||||||||||||||||
Operating EBITDA |
519 | 543 | (4%) | (4%) | 205 | 202 | 2% | 2% | ||||||||||||||||
Operating EBITDA margin |
17.6% | 19.1% | (1.5pp) | 19.6% | 20.2% | (0.6pp) |
In millions of U.S. 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 |
(3%) | (1%) | 2% | 1% | 6% | 3% | ||||||
Price (USD) |
4% | 4% | 3% | 3% | 3% | 4% | ||||||
Price (local currency) |
4% | 4% | 3% | 3% | 3% | 4% |
In the United States, our third quarter domestic gray cement volumes declined by 1%, while volumes of ready-mix and aggregates rose by 1% and 3%, respectively, on a year-over-year basis. During the first nine months of the year, domestic gray cement volumes decreased by 3%, while ready-mix and aggregates volumes increased by 2% and 6%, respectively, on a year-over-year basis. Our cement prices during the quarter grew 4% year-over-year and remained stable sequentially.
Cement volumes in our Southeast operation were disrupted as the region prepared for a hurricane. In addition, we faced unfavorable competitive dynamics in Florida. The infrastructure sector remained the most dynamic sector in the quarter, with street-and-highway spending up 11% and state-transportation spending increasing 20%, both year-to-date August. Activity in the residential sector increased during the quarter, supported by improved housing affordability and lower interest rates. In the industrial-and-commercial sector, a decline in commercial construction was offset by growth in offices and lodging.
2019 Third Quarter Results |
Page 3 |
Operating results |
|
South, Central America and the Caribbean
January - September | Third Quarter | |||||||||||||||||||||||
2019 | 2018 | % var | l-t-l % var |
2019 | 2018 | % var | l-t-l % var | |||||||||||||||||
Net sales |
1,267 | 1,359 | (7%) | (1%) | 417 | 442 | (6%) | 1% | ||||||||||||||||
Operating EBITDA |
284 | 320 | (11%) | (7%) | 89 | 100 | (11%) | (6%) | ||||||||||||||||
Operating EBITDA margin |
22.4% | 23.5% | (1.1pp) | 21.4% | 22.6% | (1.2pp) |
In millions of U.S. 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 |
(1%) | 1% | (6%) | (6%) | (11%) | (7%) | ||||||
Price (USD) |
(4%) | (5%) | (8%) | (9%) | (5%) | (6%) | ||||||
Price (local currency) (*) |
2% | 2% | (0%) | (0%) | 3% | 2% |
In our South, Central America and the Caribbean region, our domestic gray cement volumes increased by 1% during the third quarter and decreased by 1% during the first nine months of 2019, versus the comparable periods of 2018. During the third quarter, cement volumes grew in Colombia, the Dominican Republic, and El Salvador, while ready-mix volumes increased in Colombia and Puerto Rico.
During the quarter, we continued to see recovery in Colombia, with a strong infrastructure sector supported by 4G and other regional projects; as well as favorable activity in residential self-construction. In the Dominican Republic, our cement volume performance was supported by tourism-related projects around Punta Cana, and residential activity, with government investment in social housing and growth in the high-end residential sector in Santo Domingo.
(*) Calculated on a volume-weighted-average basis at constant foreign-exchange rates
Europe
January - September | Third Quarter | |||||||||||||||||||||||||||
2019 | 2018 | % var | l-t-l % var |
2019 | 2018 | % var | l-t-l % var | |||||||||||||||||||||
Net sales |
2,484 | 2,561 | (3%) | 3% | 856 | 894 | (4%) | 2% | ||||||||||||||||||||
Operating EBITDA |
336 | 303 | 11% | 18% | 141 | 140 | 1% | 7% | ||||||||||||||||||||
Operating EBITDA margin |
13.5% | 11.8% | 1.7pp | 16.5% | 15.6% | 0.9pp |
In millions of U.S. 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 |
(0%) | (0%) | 1% | (2%) | 3% | (2%) | ||||||
Price (USD) |
(1%) | 0% | (2%) | (2%) | (3%) | (4%) | ||||||
Price (local currency) (*) |
6% | 7% | 4% | 4% | 3% | 2% |
In the Europe region, domestic gray cement volumes were stable both during the quarter and the first nine months of the year, on a year-over-year basis. Both regional ready-mix and aggregates volumes declined by 2% during the third quarter but grew in the low-single digits for the first nine months of the year. Quarterly cement volumes grew in Spain, Germany, and the Czech Republic, while ready-mix volumes grew in the UK, Spain, the Czech Republic, and Croatia.
Our quarterly performance was affected in part by delays in infrastructure projects in Poland, as well as continued Brexit-related uncertainty in the UK. The infrastructure and the industrial-and-commercial sectors were the main demand drivers of volumes in the region, with large infrastructure projects in Germany, France, and the UK; as well as growth in industrial-and-commercial activity in Poland, France, Germany, and Spain.
(*) Calculated on a volume-weighted-average basis at constant foreign-exchange rates
2019 Third Quarter Results |
Page 4 |
Operating results |
|
Asia, Middle East and Africa
January - September | Third Quarter | |||||||||||||||
2019 | 2018 | % var | l-t-l % var |
2019 | 2018 | % var | l-t-l % var | |||||||||
Net sales |
1,050 | 1,088 | (3%) | (4%) | 365 | 359 | 2% | (2%) | ||||||||
Operating EBITDA |
166 | 177 | (6%) | (7%) | 59 | 54 | 8% | 4% | ||||||||
Operating EBITDA margin |
15.8% | 16.3% | (0.5pp) | 16.0% | 15.1% | 0.9pp |
In millions of U.S. 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 |
(15%) | (16%) | (2%) | 6% | (5%) | (4%) | ||||||||||||||||||
Price (USD) |
10% | 10% | 2% | 7% | 5% | 12% | ||||||||||||||||||
Price (local currency) (*) |
8% | 5% | 2% | 3% | 5% | 8% |
Our domestic gray cement volumes in the Asia, Middle East and Africa region decreased by 16% during the third quarter and by 15% during the first nine months of the year, on a year-over-year basis.
In the Philippines, our domestic gray cement volumes decreased by 6% and 3% during the third quarter and the first nine months of 2019, respectively, versus the comparable periods in the previous year. The decrease in volumes is due to lower construction activity, mainly related to public infrastructure.
In Israel, our ready-mix volumes increased by 16% during the quarter and by 5% during the first nine months of the year compared with the same periods in 2018. Our aggregates volumes declined by 1% both during the quarter and the first nine months of the year on a year-over-year basis.
In Egypt, our domestic gray cement volumes declined by 30% during both the quarter and the first nine months of the year, versus the comparable periods of 2018. A difficult supply-demand environment has continued to affect the market, coupled with a high base of comparison as last years volumes included temporary sales to the Lower Egypt region.
(*) Calculated on a volume-weighted-average basis at constant foreign-exchange rates
2019 Third Quarter Results |
Page 5 |
Operating EBITDA, free cash flow and debt-related information |
|
Operating EBITDA and free cash flow
January - September | Third Quarter | |||||||||||||||||||||||||||
2019 | 2018 | % var | 2019 | 2018 | % var | |||||||||||||||||||||||
Operating earnings before other expenses, net |
1,079 | 1,334 | (19% | ) | 409 | 488 | (16% | ) | ||||||||||||||||||||
+ Depreciation and operating amortization |
804 | 771 | 271 | 261 | ||||||||||||||||||||||||
Operating EBITDA |
1,882 | 2,105 | (11% | ) | 681 | 750 | (9% | ) | ||||||||||||||||||||
- Net financial expense |
522 | 545 | 169 | 177 | ||||||||||||||||||||||||
- Maintenance capital expenditures |
441 | 508 | 176 | 181 | ||||||||||||||||||||||||
- Change in working capital |
563 | 427 | (7 | ) | 13 | |||||||||||||||||||||||
- Taxes paid |
142 | 187 | 31 | 37 | ||||||||||||||||||||||||
- Other cash items (net) |
40 | 59 | 23 | (6 | ) | |||||||||||||||||||||||
- Free cash flow discontinued operations |
5 | (32 | ) | (2 | ) | (21 | ) | |||||||||||||||||||||
Free cash flow after maintenance capital expenditures |
169 | 412 | (59% | ) | 290 | 369 | (21% | ) | ||||||||||||||||||||
- Strategic capital expenditures |
163 | 95 | 80 | 56 | ||||||||||||||||||||||||
Free cash flow |
6 | 317 | (98% | ) | 211 | 312 | (33% | ) | ||||||||||||||||||||
In millions of U.S. dollars, except percentages. |
During the quarter, free cash flow was mainly used for repurchasing CEMEX CPOs and CHP shares, reducing debt and other corporate purposes.
Our total debt plus perpetual notes during the quarter reflects a favorable foreign exchange conversion effect of US$140 million.
Information on debt and perpetual notes
Third Quarter | Second Quarter |
Third Quarter | ||||||||||||||||||||||||||||
2019 | 2018 | % var | 2019 | 2019 | 2018 | |||||||||||||||||||||||||
Total debt (1) |
10,889 | 11,371 | (4% | ) | 11,048 | Currency denomination | ||||||||||||||||||||||||
Short-term |
10% | 3% | 7% | U.S. dollar | 68% | 66% | ||||||||||||||||||||||||
Long-term |
90% | 97% | 93% | Euro | 23% | 25% | ||||||||||||||||||||||||
Perpetual notes |
441 | 445 | (1% | ) | 444 | Mexican peso | 1% | 1% | ||||||||||||||||||||||
Total debt plus perpetual notes |
11,330 | 11,816 | (4% | ) | 11,492 | Other | 8% | 8% | ||||||||||||||||||||||
Cash and cash equivalents |
299 | 304 | (2% | ) | 304 | |||||||||||||||||||||||||
Net debt plus perpetual notes |
11,031 | 11,512 | (4% | ) | 11,187 | Interest rate(3) | ||||||||||||||||||||||||
Fixed | 75% | 66% | ||||||||||||||||||||||||||||
Consolidated funded debt (2) |
10,624 | 11,062 | 10,805 | Variable | 25% | 34% | ||||||||||||||||||||||||
Consolidated leverage ratio (2) |
4.05 | 3.78 | 4.00 | |||||||||||||||||||||||||||
Consolidated coverage ratio (2) |
4.03 | 4.24 | 4.11 | |||||||||||||||||||||||||||
In millions of U.S. dollars, except percentages and ratios. |
|
(1) | Includes convertible notes and leases, in accordance with International Financial Reporting Standards (IFRS). |
(2) | Calculated in accordance with our contractual obligations under the 2017 Facilities Agreement, as amended and restated on April 2, 2019. 2018 amounts and ratios are not audited, and were not the actual amounts and ratios reported during 2018 under our Facilities Agreement dated July 2017, and are shown in this document for reference purposes only, giving effect to the adoption of IFRS 16, Leases, as if it had been in effect from January 1, 2018. |
(3) | Includes the effect of interest-rate swap instruments related to bank loans to fix floating rates with a nominal amount of US$1,000 million. |
2019 Third Quarter Results |
Page 6 |
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 | 2019 | 2018 | % var | like-to-like
% var |
2019 | 2018 | % var | like-to-like
% var |
||||||||||||||||||||||||
Net sales |
10,191,892 | 10,607,822 | (4%) | (1%) | 3,494,091 | 3,636,210 | (4%) | (1%) | ||||||||||||||||||||||||
Cost of sales |
(6,849,057) | (6,970,002) | 2% | (2,307,458) | (2,359,044) | 2% | ||||||||||||||||||||||||||
Gross profit |
3,342,835 | 3,637,820 | (8%) | (6%) | 1,186,633 | 1,277,165 | (7%) | (3%) | ||||||||||||||||||||||||
Operating expenses |
(2,264,243) | (2,303,698) | 2% | (777,385) | (788,780) | 1% | ||||||||||||||||||||||||||
Operating earnings before other expenses, net |
1,078,592 | 1,334,122 | (19%) | (17%) | 409,248 | 488,385 | (16%) | (14%) | ||||||||||||||||||||||||
Other expenses, net |
(131,643) | (82,036) | (60%) | (44,836) | (48,124) | 7% | ||||||||||||||||||||||||||
Operating earnings |
946,949 | 1,252,086 | (24%) | 364,412 | 440,261 | (17%) | ||||||||||||||||||||||||||
Financial expense |
(525,864) | (551,210) | 5% | (166,718) | (171,106) | 3% | ||||||||||||||||||||||||||
Other financial income (expense), net |
(38,163) | 28,036 | N/A | (11,929) | (33,453) | 64% | ||||||||||||||||||||||||||
Financial income |
15,954 | 13,403 | 19% | 6,168 | 3,989 | 55% | ||||||||||||||||||||||||||
Results from financial instruments, net |
1,405 | 60,424 | (98%) | (4,537) | 913 | N/A | ||||||||||||||||||||||||||
Foreign exchange results |
(10,331) | (3,696) | (180%) | 1,909 | (21,879) | N/A | ||||||||||||||||||||||||||
Effects of net present value on assets and liabilities and others, net |
(45,192) | (42,096) | (7%) | (15,468) | (16,476) | 6% | ||||||||||||||||||||||||||
Equity in gain (loss) of associates |
30,536 | 20,852 | 46% | 19,306 | 7,394 | 161% | ||||||||||||||||||||||||||
Income (loss) before income tax |
413,459 | 749,763 | (45%) | 205,071 | 243,096 | (16%) | ||||||||||||||||||||||||||
Income tax |
(151,165) | (185,490) | 19% | (35,991) | (84,511) | 57% | ||||||||||||||||||||||||||
Profit (loss) of continuing operations |
262,293 | 564,273 | (54%) | 169,080 | 158,584 | 7% | ||||||||||||||||||||||||||
Discontinued operations |
148,114 | 39,711 | 273% | 23,306 | 27,784 | (16%) | ||||||||||||||||||||||||||
Consolidated net income (loss) |
410,407 | 603,984 | (32%) | 192,386 | 186,368 | 3% | ||||||||||||||||||||||||||
Non-controlling interest net income (loss) |
29,647 | 39,033 | (24%) | 5,014 | 17,455 | (71%) | ||||||||||||||||||||||||||
Controlling interest net income (loss) |
380,760 | 564,951 | (33%) | 187,372 | 168,913 | 11% | ||||||||||||||||||||||||||
Operating EBITDA |
1,882,164 | 2,104,788 | (11%) | (9%) | 680,525 | 749,700 | (9%) | (7%) | ||||||||||||||||||||||||
Earnings (loss) of continued operations per ADS |
0.15 | 0.34 | (55%) | 0.11 | 0.09 | 17% | ||||||||||||||||||||||||||
Earnings (loss) of discontinued operations per ADS |
0.10 | 0.03 | 275% | 0.02 | 0.02 | (16%) | ||||||||||||||||||||||||||
As of September 30 | ||||||||||||||||||||||||||||||||
BALANCE SHEET | 2019 | 2018 | % var | |||||||||||||||||||||||||||||
Total assets |
28,508,655 | 29,707,146 | (4%) | |||||||||||||||||||||||||||||
Cash and cash equivalents |
299,078 | 304,442 | (2%) | |||||||||||||||||||||||||||||
Trade receivables less allowance for doubtful accounts |
1,660,115 | 1,746,453 | (5%) | |||||||||||||||||||||||||||||
Other accounts receivable |
295,426 | 305,396 | (3%) | |||||||||||||||||||||||||||||
Inventories, net |
1,016,551 | 1,061,465 | (4%) | |||||||||||||||||||||||||||||
Assets held for sale |
189,467 | 97,707 | 94% | |||||||||||||||||||||||||||||
Other current assets |
122,956 | 134,695 | (9%) | |||||||||||||||||||||||||||||
Current assets |
3,583,593 | 3,650,157 | (2%) | |||||||||||||||||||||||||||||
Property, machinery and equipment, net |
11,717,024 | 12,595,075 | (7%) | |||||||||||||||||||||||||||||
Other assets |
13,208,038 | 13,461,914 | (2%) | |||||||||||||||||||||||||||||
Total liabilities |
17,450,077 | 18,433,570 | (5%) | |||||||||||||||||||||||||||||
Current liabilities |
5,182,077 | 4,733,741 | 9% | |||||||||||||||||||||||||||||
Long-term liabilities |
8,769,667 | 9,422,935 | (7%) | |||||||||||||||||||||||||||||
Other liabilities |
3,498,333 | 4,276,894 | (18%) | |||||||||||||||||||||||||||||
Total stockholders equity |
11,058,578 | 11,273,576 | (2%) | |||||||||||||||||||||||||||||
Non-controlling interest and perpetual instruments |
1,501,334 | 1,564,016 | (4%) | |||||||||||||||||||||||||||||
Total controlling interest |
9,557,244 | 9,286,859 | 3% |
2019 Third Quarter Results |
Page 7 |
Operating results |
|
Operating Summary per Country
In thousands of U.S. dollars
January - September | Third Quarter | |||||||||||||||||||||||||||
like-to-like | like-to-like | |||||||||||||||||||||||||||
NET SALES | 2019 | 2018 | % var | % var | 2019 | 2018 | % var | % var | ||||||||||||||||||||
Mexico |
2,175,045 | 2,525,901 | (14%) | (12%) | 716,148 | 857,563 | (16%) | (13%) | ||||||||||||||||||||
U.S.A. |
2,954,685 | 2,843,065 | 4% | 4% | 1,044,248 | 998,688 | 5% | 5% | ||||||||||||||||||||
South, Central America and the Caribbean |
1,267,455 | 1,358,825 | (7%) | (1%) | 417,156 | 442,390 | (6%) | 1% | ||||||||||||||||||||
Europe |
2,483,991 | 2,561,122 | (3%) | 3% | 856,113 | 894,193 | (4%) | 2% | ||||||||||||||||||||
Asia, Middle East and Africa |
1,049,874 | 1,087,578 | (3%) | (4%) | 364,761 | 359,243 | 2% | (2%) | ||||||||||||||||||||
Others and intercompany eliminations |
260,841 | 231,332 | 13% | 14% | 95,665 | 84,133 | 14% | 14% | ||||||||||||||||||||
TOTAL |
10,191,892 | 10,607,822 | (4%) | (1%) | 3,494,091 | 3,636,210 | (4%) | (1%) | ||||||||||||||||||||
GROSS PROFIT | ||||||||||||||||||||||||||||
Mexico |
1,133,385 | 1,351,730 | (16%) | (14%) | 379,669 | 453,673 | (16%) | (13%) | ||||||||||||||||||||
U.S.A. |
782,018 | 798,367 | (2%) | (2%) | 301,422 | 291,208 | 4% | 4% | ||||||||||||||||||||
South, Central America and the Caribbean |
455,697 | 492,694 | (8%) | (2%) | 147,269 | 158,305 | (7%) | (1%) | ||||||||||||||||||||
Europe |
662,801 | 663,943 | (0%) | 6% | 248,818 | 262,885 | (5%) | 1% | ||||||||||||||||||||
Asia, Middle East and Africa |
280,863 | 302,995 | (7%) | (8%) | 97,081 | 95,383 | 2% | (2%) | ||||||||||||||||||||
Others and intercompany eliminations |
28,072 | 28,091 | (0%) | (48%) | 12,373 | 15,711 | (21%) | 64% | ||||||||||||||||||||
TOTAL |
3,342,835 | 3,637,820 | (8%) | (6%) | 1,186,633 | 1,277,165 | (7%) | (3%) | ||||||||||||||||||||
OPERATING EARNINGS BEFORE OTHER EXPENSES, NET | ||||||||||||||||||||||||||||
Mexico |
620,628 | 831,027 | (25%) | (24%) | 198,073 | 275,440 | (28%) | (25%) | ||||||||||||||||||||
U.S.A. |
210,984 | 257,800 | (18%) | (18%) | 102,322 | 102,953 | (1%) | (1%) | ||||||||||||||||||||
South, Central America and the Caribbean |
213,720 | 248,076 | (14%) | (10%) | 66,225 | 76,085 | (13%) | (9%) | ||||||||||||||||||||
Europe |
151,989 | 114,000 | 33% | 42% | 79,459 | 77,065 | 3% | 10% | ||||||||||||||||||||
Asia, Middle East and Africa |
105,571 | 117,898 | (10%) | (11%) | 37,928 | 34,064 | 11% | 8% | ||||||||||||||||||||
Others and intercompany eliminations |
(224,300 | ) | (234,679 | ) | 4% | 0% | (74,759 | ) | (77,224 | ) | 3% | (1%) | ||||||||||||||||
TOTAL |
1,078,592 | 1,334,122 | (19%) | (17%) | 409,248 | 488,385 | (16%) | (14%) |
2019 Third Quarter Results |
Page 8 |
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 | |||||||||||||||||||||||||||
like-to-like | like-to-like | |||||||||||||||||||||||||||
OPERATING EBITDA | 2019 | 2018 | % var | % var | 2019 | 2018 | % var | % var | ||||||||||||||||||||
Mexico |
739,665 | 943,063 | (22%) | (20%) | 239,892 | 314,008 | (24%) | (20%) | ||||||||||||||||||||
U.S.A. |
518,992 | 543,029 | (4%) | (4%) | 204,925 | 201,708 | 2% | 2% | ||||||||||||||||||||
South, Central America and the Caribbean |
284,487 | 319,571 | (11%) | (7%) | 89,245 | 99,870 | (11%) | (6%) | ||||||||||||||||||||
Europe |
335,634 | 303,113 | 11% | 18% | 140,852 | 139,711 | 1% | 7% | ||||||||||||||||||||
Asia, Middle East and Africa |
165,966 | 177,188 | (6%) | (7%) | 58,508 | 54,133 | 8% | 4% | ||||||||||||||||||||
Others and intercompany eliminations |
(162,580 | ) | (181,175 | ) | 10% | 5% | (52,897 | ) | (59,731 | ) | 11% | 5% | ||||||||||||||||
TOTAL |
1,882,164 | 2,104,788 | (11%) | (9%) | 680,525 | 749,700 | (9%) | (7%) | ||||||||||||||||||||
OPERATING EBITDA MARGIN | ||||||||||||||||||||||||||||
Mexico |
34.0% | 37.3% | 33.5% | 36.6% | ||||||||||||||||||||||||
U.S.A. |
17.6% | 19.1% | 19.6% | 20.2% | ||||||||||||||||||||||||
South, Central America and the Caribbean |
22.4% | 23.5% | 21.4% | 22.6% | ||||||||||||||||||||||||
Europe |
13.5% | 11.8% | 16.5% | 15.6% | ||||||||||||||||||||||||
Asia, Middle East and Africa |
15.8% | 16.3% | 16.0% | 15.1% | ||||||||||||||||||||||||
TOTAL |
18.5% | 19.8% | 19.5% | 20.6% |
2019 Third Quarter Results |
Page 9 |
Operating results |
|
Volume Summary
Consolidated volume summary
Cement and aggregates: Thousands of metric tons.
Ready-mix: Thousands of cubic meters.
January - September | Third Quarter | |||||||||||||
2019 | 2018 | % var | 2019 | 2018 | % var | |||||||||
Consolidated cement volume (1) |
48,013 | 51,933 | (8%) | 16,875 | 17,702 | (5%) | ||||||||
Consolidated ready-mix volume |
38,135 | 39,322 | (3%) | 13,222 | 13,650 | (3%) | ||||||||
Consolidated aggregates volume |
106,738 | 107,409 | (1%) | 36,598 | 37,675 | (3%) | ||||||||
Per-country volume summary |
||||||||||||||
January - September | Third Quarter | Third Quarter 2019 vs. | ||||||||||||
DOMESTIC GRAY CEMENT VOLUME | 2019 vs. 2018 | 2019 vs. 2018 | Second Quarter 2019 | |||||||||||
Mexico |
(16%) | (15%) | (1%) | |||||||||||
U.S.A. |
(3%) | (1%) | 3% | |||||||||||
South, Central America and the Caribbean |
(1%) | 1% | 1% | |||||||||||
Europe |
(0%) | (0%) | 4% | |||||||||||
Asia, Middle East and Africa |
(15%) | (16%) | 0% | |||||||||||
READY-MIX VOLUME | ||||||||||||||
Mexico |
(15%) | (16%) | 2% | |||||||||||
U.S.A. |
2% | 1% | (1%) | |||||||||||
South, Central America and the Caribbean |
(6%) | (6%) | 2% | |||||||||||
Europe |
1% | (2%) | (1%) | |||||||||||
Asia, Middle East and Africa |
(2%) | 6% | 15% | |||||||||||
AGGREGATES VOLUME | ||||||||||||||
Mexico |
(12%) | (13%) | 8% | |||||||||||
U.S.A. |
6% | 3% | (5%) | |||||||||||
South, Central America and the Caribbean |
(11%) | (7%) | (1%) | |||||||||||
Europe |
3% | (2%) | (2%) | |||||||||||
Asia, Middle East and Africa |
(5%) | (4%) | 2% |
(1) Consolidated cement volume includes domestic and export volume of gray cement, white cement, special cement, mortar and clinker.
2019 Third Quarter Results |
Page 10 |
Operating results |
|
Price Summary
Variation in U.S. dollars
January - September | Third Quarter | Third Quarter 2019 vs. | ||||||||
DOMESTIC GRAY CEMENT PRICE |
2019 vs. 2018 | 2019 vs. 2018 | Second Quarter 2019 | |||||||
Mexico |
(0%) | (3%) | (4%) | |||||||
U.S.A. |
4% | 4% | (0%) | |||||||
South, Central America and the Caribbean (*) |
(4%) | (5%) | (2%) | |||||||
Europe (*) |
(1%) | 0% | (3%) | |||||||
Asia, Middle East and Africa (*) |
10% | 10% | (1%) | |||||||
READY-MIX PRICE |
||||||||||
Mexico |
1% | (1%) | (1%) | |||||||
U.S.A. |
3% | 3% | 2% | |||||||
South, Central America and the Caribbean (*) |
(8%) | (9%) | (3%) | |||||||
Europe (*) |
(2%) | (2%) | (3%) | |||||||
Asia, Middle East and Africa (*) |
2% | 7% | 3% | |||||||
AGGREGATES PRICE |
||||||||||
Mexico |
(0%) | (3%) | (4%) | |||||||
U.S.A. |
3% | 4% | 2% | |||||||
South, Central America and the Caribbean (*) |
(5%) | (6%) | 3% | |||||||
Europe (*) |
(3%) | (4%) | (3%) | |||||||
Asia, Middle East and Africa (*) |
5% | 12% | 7% | |||||||
Variation in Local Currency
|
||||||||||
January - September | Third Quarter | Third Quarter 2019 vs. | ||||||||
DOMESTIC GRAY CEMENT PRICE |
2019 vs. 2018 | 2019 vs. 2018 | Second Quarter 2019 | |||||||
Mexico |
2% | 1% | (2%) | |||||||
U.S.A. |
4% | 4% | (0%) | |||||||
South, Central America and the Caribbean (*) |
2% | 2% | (0%) | |||||||
Europe (*) |
6% | 7% | (1%) | |||||||
Asia, Middle East and Africa (*) |
8% | 5% | (2%) | |||||||
READY-MIX PRICE |
||||||||||
Mexico |
3% | 3% | 1% | |||||||
U.S.A. |
3% | 3% | 2% | |||||||
South, Central America and the Caribbean (*) |
(0%) | (0%) | (1%) | |||||||
Europe (*) |
4% | 4% | (1%) | |||||||
Asia, Middle East and Africa (*) |
2% | 3% | 0% | |||||||
AGGREGATES PRICE |
||||||||||
Mexico |
2% | 1% | (3%) | |||||||
U.S.A. |
3% | 4% | 2% | |||||||
South, Central America and the Caribbean (*) |
3% | 2% | 5% | |||||||
Europe (*) |
3% | 2% | (0%) | |||||||
Asia, Middle East and Africa (*) |
5% | 8% | 4% |
(*) Price variation in U.S. dollars calculated on a volume-weighted-average basis; price variation in local currency calculated on a volume-weighted-average basis at constant foreign-exchange rates
2019 Third Quarter Results |
Page 11 |
Other information |
|
2019 Third Quarter Results |
Page 12 |
Other information |
|
2019 Third Quarter Results |
Page 13 |
Other information |
|
2019 Third Quarter Results |
Page 14 |
Definitions of terms and disclosures |
|
Exchange rates | January - September | Third Quarter | Third Quarter | |||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||
Average | Average | Average | Average | End of period | End of period | |||||||
Mexican peso |
19.39 | 18.97 | 19.64 | 18.82 | 19.73 | 18.72 | ||||||
Euro |
0.8925 | 0.8386 | 0.9061 | 0.8576 | 0.9174 | 0.8616 | ||||||
British pound |
0.7881 | 0.7413 | 0.8191 | 0.7657 | 0.8134 | 0.7672 |
Amounts provided in units of local currency per U.S. dollar.
2019 Third Quarter Results |
Page 15 |
Exhibit 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”) intend, 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,” “assume,” “should,” “could ,”“continue,” “would,” “can,” “consider,” “anticipate,” “estimate,” “expect,” “plan,” “believe,” “foresee,” “predict,” “potential,” “guidance,” “target,” “strategy” and “intend” or other similar words. The items presented on the slide “2019 guidance” are forward-looking and difficult to forecast. These forward-looking statements, and in particular in the case of CEMEX’s new plan, “A Stronger CEMEX”, 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, as well as CEMEX’s current plans based on such facts and circumstances. 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 its business, such as, but not limited to, the energy sector; competition; availability of raw materials and related fluctuating prices; general political, social, economic and business conditions in the markets in which CEMEX operates or that affects its operations and any significant economic, political or social developments in those markets, including any nationalization or privatization of any assets or operations; the regulatory environment, including environmental, tax, antitrust and acquisition-related rules and regulations; CEMEX’s ability to satisfy its obligations under CEMEX’s material debt agreements, the indentures that govern CEMEX’s outstanding senior secured notes and CEMEX’s other debt instruments; availability of short-term credit lines, which can assist us in connection with market cycles; the impact of CEMEX’s below investment grade debt rating on its cost of capital; loss of reputation of our brands; CEMEX’s ability to consummate asset sales, fully integrate newly acquired businesses, achieve cost-savings from its cost-reduction initiatives and implement its global pricing initiatives for CEMEX’s products, including CEMEX’s “A Stronger CEMEX” plan; the increasing reliance on information technology infrastructure for CEMEX’s operations, sales in general, sales invoicing, procurement, financial statements and other processes that can adversely affect CEMEX’s sales and operations in the event that the infrastructure does not work as intended, experiences technical difficulties or is subject to cyber-attacks; changes in the economy that affect demand for consumer goods, consequently affecting demand for our products; weather conditions; trade barriers, including tariffs or import taxes and changes in existing trade policies or changes to, or withdrawals from, free trade agreements; terrorist and organized criminal activities as well as geopolitical events; declarations of insolvency of bankruptcy, or becoming subject to similar proceedings; natural disasters and other unforeseen events; and the other risks and uncertainties described in CEMEX’s public filings. Readers are urged to read this presentation and carefully consider the risks, uncertainties and other factors that affect CEMEX’s business. The information contained in this presentation is subject to change without notice, and CEMEX is not obliged to publicly update or revise forward-looking statements. CEMEX’s “A Stronger CEMEX” plan is designed based on CEMEX’s current beliefs and expectations. 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
Sales on a like-to-like basis decreased by 1% during 3Q19 due to lower consolidated volumes partially mitigated by price increases for our products in all of our regions Higher quarterly consolidated prices for our three core products on a like-to-like basis, both in local-currency and US-dollars terms Consolidated volumes for cement, ready-mix and aggregates decreased by 7%, 3% and 3%, respectively, during 3Q19 on a like-to-like basis Operating EBITDA during 3Q19 decreased by 7% on a like-to-like basis, with a decline in margin of 1.1pp A Stronger CEMEX plan cost-reduction initiatives resulted in savings of US$53 million during 3Q19 3Q19 EBITDA affected by decline in volumes EBITDA variation Millions of U.S. dollars Stronger CEMEX savings 699 681 -11% -9%
Free cash flow conversion rate1 reached 43% during 3Q19 Free cash flow Millions of U.S. dollars 1 Free cash flow conversion rate = free cash flow after maintenance capital expenditures / operating EBITDA
Good progress on our “A Stronger CEMEX” targets Initiatives Progress Targets Asset sales US$830M1 US$1.5 – 2.0B by 2020 Operational initiatives / cost reduction US$128M US$230M by 2020 (US$170M of which are expected to be captured in 2019) Total debt plus perpetuals reduction US$913M2 US$3.5B by 2020 Ongoing cash dividend program US$75M cash dividend paid in June 2019; US$75M expected to be paid in December 2019 US$150M in 2019 1 Includes divestments that have closed or are expected to close of Baltics and Nordics assets US$387M, Brazil US$31M, German assets €87M, some assets in France €32M, most of our white cement business US$180M, and other fixed asset sales US$97M 2 Pro forma reflecting divestment of most of our white-cement business for approximately US$180 million which is expected to close during 4Q19 or early in 2020
Mexico: sequential increase in EBITDA margin reflecting lower energy costs and operating expenses EBITDA margin increased by 1.0pp sequentially, reaching 33.5% during the third quarter, mainly due to lower energy costs and operating expenses Decline in volumes for our three core products during 3Q19 reflecting lower construction activity Activity in the industrial-and-commercial sector was driven by tourism-related investment and commercial projects In the residential sector, mid- to high-income housing continued to be supported by mortgages from commercial banks and INFONAVIT; social housing was impacted by elimination of subsidies While infrastructure activity has improved sequentially, it continues to be affected by the post-election transition process l-t-l l-t-l % var % var Net Sales 2,175 2,526 (14%) (12%) 716 858 (16%) (13%) Op. EBITDA 740 943 (22%) (20%) 240 314 (24%) (20%) as % net sales 34.0% 37.3% (3.3pp) 33.5% 36.6% (3.1pp) Millions of U.S. dollars 3Q19 3Q18 % var 9M19 9M18 % var 9M19 vs. 9M18 3Q19 vs. 3Q18 3Q19 vs. 2Q19 Cement (16%) (15%) (1%) Ready mix (15%) (16%) 2% Aggregates (12%) (13%) 8% Volume 9M19 vs. 9M18 3Q19 vs. 3Q18 3Q19 vs. 2Q19 Cement 2% 1% (2%) Ready mix 3% 3% 1% Aggregates 2% 1% (3%) Price (LC)
United States: EBITDA growth despite adverse weather and unfavorable competitive dynamics Quarterly prices for our three core products up on a year-over-year basis Volumes for ready-mix and aggregates increased by 1% and 3%, respectively, while domestic gray cement volumes decreased by 1% during 3Q19 The infrastructure sector, remained the most dynamic sector during the quarter; street-and-highway spending grew 11% year-to-date August, supported by increase in state-transportation funding initiatives The residential sector started to show some improvement in the last months; housing starts increased 4% during the quarter supported by improved housing affordability with significantly lower interest rates In the industrial-and-commercial sector, construction spending decreased 1% year-to-date August, decline in commercial construction was significantly offset by growth in offices and lodging l-t-l l-t-l % var % var Net Sales 2,955 2,843 4% 4% 1,044 999 5% 5% Op. EBITDA 519 543 (4%) (4%) 205 202 2% 2% as % net sales 17.6% 19.1% (1.5pp) 19.6% 20.2% (0.6pp) 3Q19 3Q18 % var 9M19 9M18 % var Millions of U.S. dollars 9M19 vs. 9M18 3Q19 vs. 3Q18 3Q19 vs. 2Q19 Cement (3%) (1%) 3% Ready mix 2% 1% (1%) Aggregates 6% 3% (5%) Volume 9M19 vs. 9M18 3Q19 vs. 3Q18 3Q19 vs. 2Q19 Cement 4% 4% (0%) Ready mix 3% 3% 2% Aggregates 3% 4% 2% Price (LC)
Regional domestic gray cement volumes increased by 1% during 3Q19 driven by growth in Colombia, the Dominican Republic and El Salvador Both regional cement and aggregates prices increased by 2% year over year during 3Q19; sequentially, regional aggregates prices increased 5% while cement prices remained flat In Colombia, increase in volumes driven by strong infrastructure activity related to 4G projects and a good performance in residential self-construction In the Dominican Republic, demand benefited from strong activity in tourism-related projects around Punta Cana, and a solid residential sector in Santo Domingo In Panama, our volumes declined, affected by high levels of inventory in apartments and offices, delays in infrastructure projects as well as increased participation of imported cement South, Central America and the Caribbean: favorable volume dynamics in Colombia and Dominican Republic l-t-l l-t-l % var % var Net Sales 1,267 1,359 (7%) (1%) 417 442 (6%) 1% Op. EBITDA 284 320 (11%) (7%) 89 100 (11%) (6%) as % net sales 22.4% 23.5% (1.1pp) 21.4% 22.6% (1.2pp) Millions of U.S. dollars 3Q19 3Q18 % var 9M19 9M18 % var 9M19 vs. 9M18 3Q19 vs. 3Q18 3Q19 vs. 2Q19 Cement (1%) 1% 1% Ready mix (6%) (6%) 2% Aggregates (11%) (7%) (1%) Volume 9M19 vs. 9M18 3Q19 vs. 3Q18 3Q19 vs. 2Q19 Cement 2% 2% (0%) Ready mix (0%) (0%) (1%) Aggregates 3% 2% 5% Price (LC) calculated on a volume-weighted-average basis at constant foreign-exchange rates Price (LC)
Europe: double digit increase in year-to-date EBITDA generation with EBITDA margin expansion Regional cement volumes remained flat while ready-mix and aggregates decreased during 3Q19 on a year-over-year basis mainly due to lower activity in Poland and the UK Higher quarterly regional prices for our three core products, in local-currency terms, on a year-over-year basis The infrastructure sector continued to be the main driver of demand during the quarter supported by large infrastructure projects in Germany, France and the UK The industrial-and-commercial sector also contributed to cement demand during the quarter with growth in activity in Poland, France, Germany and Spain Residential activity was supported by favorable conditions mainly in Spain, Germany, Poland and the Czech Republic l-t-l l-t-l % var % var Net Sales 2,484 2,561 (3%) 3% 856 894 (4%) 2% Op. EBITDA 336 303 11% 18% 141 140 1% 7% as % net sales 13.5% 11.8% 1.7pp 16.5% 15.6% 0.9pp Millions of U.S. dollars 3Q19 3Q18 % var 9M19 9M18 % var 9M19 vs. 9M18 3Q19 vs. 3Q18 3Q19 vs. 2Q19 Cement (0%) (0%) 4% Ready mix 1% (2%) (1%) Aggregates 3% (2%) (2%) Volume 9M19 vs. 9M18 3Q19 vs. 3Q18 3Q19 vs. 2Q19 Cement 6% 7% (1%) Ready mix 4% 4% (1%) Aggregates 3% 2% (0%) Price (LC) calculated on a volume-weighted-average basis at constant foreign-exchange rates Price (LC)
Asia, Middle East and Africa: higher pricing levels both during the quarter and year to date Higher regional prices for our three core products, both in local-currency and US-dollars terms, on a year-over-year basis Increase in ready-mix volumes reflecting favorable contribution from Israel, partially offset by a decline in Egypt In the Philippines, domestic gray cement volumes decreased by 6% during 3Q19 on a year-over-year basis mainly due to lower infrastructure activity, mainly related to public infrastructure In Egypt, domestic gray cement volumes declined 30% due to difficult supply-demand conditions as well as a high base of comparison in 2018
Operating EBITDA during 3Q19 decreased 7% on a like-to-like basis mainly due to lower contributions from Mexico and SCAC regions, mitigated by improvement in the rest of our regions Cost of sales, as a percentage of net sales, increased 1.1 pp during the third quarter of 2019 mainly reflecting higher costs of raw materials partially offset by lower energy costs Operating expenses, as a percentage of net sales, increased 0.5pp during the third quarter compared with the same period in 2018, mainly due to higher selling expenses 3Q19 EBITDA impacted by decline in consolidated volumes
Free cash flow: expect more than two thirds of year-to-date working-capital investment expected to reverse in 4Q19 Average working capital days
Pro-forma total debt plus perpetuals has declined by US$913 million under our A Stronger CEMEX plan -733 Millions of U.S. dollars 1 Debt adjusted for IFRS 16 2 Divestment of most of our white-cement business for approximately US$180 million which is expected to close during 4Q19 or early in 2020 Total debt plus perpetuals variation -913 1 1 2
Millions of U.S. dollars 1 Convertible Subordinated Notes include only the debt component of US$518 million; total notional amount is about US$521 million Avg. life of debt: 4.1 years Healthy consolidated debt maturity profile Total debt excluding perpetual notes as of September 30, 2019: US$10,889 million > 2026 Fixed Income Other bank debt Convertible Subordinated Notes1 2017 Facilities Agreement Leases
2019 guidance1 1 Reflects CEMEX’s current expectations 2 Including perpetual and convertible securities Consolidated volumes Cement: (6%) to (3%) Ready mix: (2%) to 0% Aggregates: (2%) to 0% Energy cost per ton of cement produced Decrease of 3% Operating EBITDA ~US$2.45 billion Capital expenditures US$750 million Maintenance CapEx US$300 million Strategic CapEx US$1,050 million Total CapEx Investment in working capital US$150 to 250 million Cash taxes US$250 million Cost of debt2 Reduction of ~US$25 million
Decrease in consolidated volumes for our three core products during the third quarter on a year-over-year basis During 3Q19, year-over-year cement volumes increased in our SCAC region and ready-mix volumes increased in our US and AMEA regions Increased consolidated prices for our three core products, in local-currency and US-dollar terms, both during 3Q19 and 9M19 on a year-over-year basis Consolidated volumes and prices 9M19 vs. 9M18 3Q19 vs. 3Q18 3Q19 vs. 2Q19 Volume (l-t-l) (8%) (7%) 1% Price (USD) 1% 1% (2%) Price (l-t-l) 4% 4% (1%) Volume (l-t-l) (3%) (3%) 2% Price (USD) 1% 2% (1%) Price (l-t-l) 4% 4% 0% Volume (l-t-l) (1%) (3%) (1%) Price (USD) 2% 2% (2%) Price (l-t-l) 5% 5% (0%) Price (l-t-l) calculated on a volume-weighted-average basis at constant foreign-exchange rates Aggregates Domestic gray cement Ready mix
Other income statement items during 3Q19 Other expenses, net, of US$45 million, mainly due to severance payments and impairment of assets Loss on financial instruments of US$5 million, mainly resulting from the derivatives related to GCC shares Foreign-exchange gain of US$2 million resulting mainly from the fluctuation of the Mexican peso versus the U.S. dollar, partially offset by the fluctuation of the Euro versus the U.S. dollar Controlling interest net gain of US$187 million in 3Q19 versus a gain of US$169 million in 3Q18 The higher gain primarily reflects lower financial expenses and income tax; positive variations in foreign exchange fluctuations, equity in gain of associates and non-controlling interest net income; partially offset by lower operating earnings, a loss in financial instruments and a negative variation in discontinued operations
Additional information on debt and perpetual notes Currency denomination Interest rate3 1 Includes convertible notes and leases, in accordance with International Financial Reporting Standard (IFRS) 2 Calculated in accordance with our contractual obligations under the 2017 Facilities Agreement, as amended and restated on April 2, 2019. 2018 amounts and ratios are not audited, and were not the actual amounts and ratios reported during 2018 under our Facilities Agreement dated July 2017, and are shown in this document for reference purposes only, giving effect to the adoption of IFRS 16, Leases, as if it had been in effect from January 1, 2018 3 Includes the effect of interest-rate swap instruments related to bank loans to fix floating rates with a nominal amount of US$1,000 million
Additional information on debt Total debt1 by instrument
9M19 volume and price summary: Selected countries
3Q19 volume and price summary: Selected countries Volume Price (USD) Price (LC) Volume Price (USD) Price (LC) Volume Price (USD) Price (LC) Mexico (15%) (3%) 1% (16%) (1%) 3% (13%) (3%) 1% U.S. (1%) 4% 4% 1% 3% 3% 3% 4% 4% Europe (0%) 0% 7% (2%) (2%) 4% (2%) (4%) 2% Colombia 12% (8%) 5% 6% (11%) 2% 2% (9%) 4% Panama (22%) (6%) (6%) (38%) 0% 0% (33%) (8%) (8%) Costa Rica (14%) (4%) (4%) (42%) (4%) (4%) (27%) (15%) (15%) Philippines (6%) 7% 3% N/A N/A N/A N/A N/A N/A Egypt (30%) 6% (2%) (34%) 22% 12% (24%) 48% 36% Ready mix Aggregates 3Q19 vs. 3Q18 3Q19 vs. 3Q18 Domestic gray cement 3Q19 vs. 3Q18 Price (LC) for Europe calculated on a volume-weighted-average basis at constant foreign-exchange rates
2019 expected outlook: Selected countries
9M18 originally reported1 9M18 restated2 Cash flows from (used in) operating activities Profit (loss) 410 604 + Discontinued operations -148 -40 + Adjustments for income tax expense 151 185 + Adjustments for depreciation and amortization expense 804 771 + Adjustments for impairment loss (reversal of impairment loss) recognized in profit/ loss 8 13 + (-) Adjustments for unrealized foreign exchange losses (gains) 10 4 + (-) Adjustments for losses (gains) on disposal of non-current assets -16 -19 + Participation in associates and joint ventures -31 -21 + (-) Adjustments for decrease (increase) in inventories 68 -110 + (-) Adjustments for decrease (increase) in trade accounts receivable -155 -210 + (-) Adjustments for decrease (increase) in other operating receivables 61 -65 + (-) Adjustments for increase (decrease) in trade accounts payable -309 52 + (-) Adjustments for increase (decrease) in other operating payables -144 -54 + Other items other than cash 13 0 + Other Adjustments for which cash effects are investing or financing cash flow -1 -60 + (-) Total adjustments to reconcile profit (loss) 300 446 Net cash flows from (used in) operations 711 1050 + Dividends received -1 -1 - Interest paid -571 -593 + Interest received -16 -13 + (-) Income taxes refund (paid) 138 180 Net cash flows from (used in) operating activities 1127 1449 Statement of cash flows, indirect method Millions of U.S. dollars 1 As CEMEX’s reporting currency last year was the Mexican peso, originally reported 9M18 figures have been converted into U.S. dollars using exchange rate of MXN 18.97 per U.S. dollar 2 Restated to reflect IFRS 16 as well as discontinued operations (Baltics & Nordics, France, Germany and Brazil)
9M18 originally reported1 9M18 restated2 Cash flows from (used in) investing activities + Cash flows from losing control of subsidiaries or other businesses 512 28 - Other cash payments to acquire interests in joint ventures 1 0 + Proceeds from sales of property, plant and equipment 44 46 - Purchase of property, plant and equipment 604 603 - Purchase of intangible assets 91 114 - Purchase of other long-term assets 23 86 - Cash advances and loans made to other parties 107 107 + Dividends received 1 1 + Interest received 16 13 Net cash flows from (used in) investing activities -252 -822 Cash flows from (used in) financing activities + Proceeds from changes in ownership interests in sub. that do not result in loss of control -31 0 - Payments to acquire or redeem entity’s shares 59 0 + Proceeds from borrowings -99 -602 - Dividends paid 75 0 - Interests paid 497 550 + (-) Other inflows (outflows) of cash -125 130 Net cash flows from (used in) financing activities -884 -1022 Net increase (decrease) in cash and cash equivalents before effect of exchange rate changes -10 -395 Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents -10 -395 Cash and cash equivalents at beginning of period 309 699 Cash and cash equivalents at end of period 299 304 Statement of cash flows, indirect method (continued) 1 As CEMEX’s reporting currency last year was the Mexican peso, originally reported 9M18 figures have been converted into U.S. dollars using exchange rate of MXN 18.97 per U.S. dollar 2 Restated to reflect IFRS 16 as well as discontinued operations (Baltics & Nordics, France, Germany and Brazil)
Definitions 9M19 / 9M18 Results for the first nine months of the years 2019 and 2018, 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 l-t-l (like to like) On a like-to-like basis adjusting for currency fluctuations and for investments/divestments when applicable 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 SCAC 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 TCL Operations Trinidad Cement Limited includes Barbados, Guyana, Jamaica and Trinidad and Tobago % var Percentage variation
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