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 July, 2021
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 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 ☒ 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 July 30, 2021, announcing second quarter 2021 results for CEMEX Holdings Philippines, Inc. an indirect subsidiary of CEMEX, S.A.B. de C.V. (NYSE: CX) (“CEMEX”). | |
| 2. | Second quarter 2021 results for CEMEX Holdings Philippines, Inc., an indirect subsidiary of CEMEX. | |
| 3. | Presentation regarding second quarter 2021 results for CEMEX Holdings Philippines, Inc., an indirect subsidiary of CEMEX. | |
2
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: July 30, 2021 | By: | /s/ Rafael Garza Lozano | ||||
| Name: Rafael Garza Lozano | ||||||
| Title: Chief Comptroller | ||||||
3
EXHIBIT INDEX
| EXHIBIT NO. |
DESCRIPTION | |
| 1. | Press release dated July 30, 2021, announcing second quarter 2021 results for CEMEX Holdings Philippines, Inc. an indirect subsidiary of CEMEX, S.A.B. de C.V. (NYSE: CX) (“CEMEX”). | |
| 2. | Second quarter 2021 results for CEMEX Holdings Philippines, Inc., an indirect subsidiary of CEMEX. | |
| 3. | Presentation regarding second quarter 2021 results for CEMEX Holdings Philippines, Inc., an indirect subsidiary of CEMEX. | |
4
Exhibit 1
| Media Relations Erlinda Lizardo +632 8849 3600 erlinda.lizardo@cemex.com |
Investor Relations Pierre Co +632 8849 3600 pierre.co@cemex.com |
CHP REPORTS SECOND QUARTER 2021 RESULTS
MANILA, PHILIPPINES. JULY 30, 2021 – CEMEX HOLDINGS PHILIPPINES, INC. (“CHP”) (PSE: CHP), announced today that its consolidated net sales increased by 13%, reaching PHP 10.9 billion during the first six months of 2021, versus the comparable period in 2020. Sales increased by 43% year-over-year in the second quarter, amounting to PHP 5.7 billion, reflecting a low comparable base resulting from strict government lockdown last year.
CHP’s domestic cement volumes increased by 16% during the first six months of 2021 versus the same period of last year. For the second quarter, domestic cement volumes increased by 45% year-over-year, supported by a low base effect.
CHP’s domestic cement prices during the first six months of 2021 were 4% lower year-over-year. Net of freight charges, CHP’s domestic cement prices during the first half of the year decreased by 1% year-over-year mainly due to competitive market dynamics and the impact of COVID-19 on business activity.
CHP’s Operating EBITDA for the first six months of 2021 was PHP 2.3 billion, an increase of 26% versus the same period in 2020, mainly due to higher volume.
Operating EBITDA margin was 21% for the first six months of 2021, compared with 19% in the same period of last year.
For the second half of 2021, CHP expects its performance to be affected by seasonality factors resulting from the rainy season, competitive market dynamics, and inflationary cost pressures, while the threat of COVID-19 remains. The government’s public infrastructure spending program should be a key driver of economic activity for the rest of the year.
Net income for CHP was PHP 804 million for the first six months of 2021, versus PHP 135 million for the first half of last year, mainly due to higher operating earnings.
Ignacio Mijares, President and CEO of CHP, said: “Despite the positive developments we have seen during the first six months, we recognize that there will be headwinds during the second half of the year. I am confident in our ability to face these challenges through the commitment, teamwork, and proven resilience of our employees.”
Regarding CHP’s Solid Cement New Line, the works on the different superstructures of the new line and installation of various equipment remained ongoing throughout the second quarter, following strict health and safety protocols during the current COVID-19 pandemic.
CHP now expects the construction of the Solid Cement New Line to be completed in June 2022.
1
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. For more information please visit: www.cemexholdingsphilippines.com
CHP is an indirect subsidiary of CEMEX, S.A.B. de C.V., a global construction materials company that is building a better future through sustainable products and solutions. CEMEX is committed to achieving carbon neutrality through relentless innovation and industry-leading research and development. CEMEX is at the forefront of the circular economy in the construction value chain, and is pioneering ways to increase the use of waste and residues as alternative raw materials and fuels in its operations with the use of new technologies. CEMEX offers cement, ready-mix concrete, aggregates, and urbanization solutions in growing markets around the world, powered by a multinational workforce focused on providing a superior customer experience, enabled by digital technologies. 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 please visit: www.cemex.com
For more information on CHP, please visit website: www.cemexholdingsphilippines.com.
# # #
This press release may contain 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
2021
SECOND QUARTER RESULTS
◾ Stock Listing Information
Philippine Stock Exchange
Ticker: CHP
◾ Investor Relations
+ 632 8849 3600
E-Mail:
chp.ir@cemex.com
| Operating and Financial Highlights |
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| January - June | Second Quarter | |||||||||||||||||||||||
| 2021 | 2020 | % var | 2021 | 2020 | % var | |||||||||||||||||||
| Net sales |
10,894 | 9,623 | 13 | % | 5,692 | 3,993 | 43 | % | ||||||||||||||||
| Gross profit |
4,421 | 3,784 | 17 | % | 2,398 | 1,430 | 68 | % | ||||||||||||||||
| as % of net sales |
40.6 | % | 39.3 | % | 1.3pp | 42.1 | % | 35.8 | % | 6.3pp | ||||||||||||||
| Operating earnings before other expenses, net |
1,292 | 653 | 98 | % | 819 | 132 | 521 | % | ||||||||||||||||
| as % of net sales |
11.9 | % | 6.8 | % | 5.1pp | 14.4 | % | 3.3 | % | 11.1pp | ||||||||||||||
| Controlling Interest Net Income (Loss) |
804 | 135 | 495 | % | 598 | 46 | 1203 | % | ||||||||||||||||
| Operating EBITDA |
2,331 | 1,850 | 26 | % | 1,305 | 767 | 70 | % | ||||||||||||||||
| as % of net sales |
21.4 | % | 19.2 | % | 2.2pp | 22.9 | % | 19.2 | % | 3.7pp | ||||||||||||||
| Free cash flow after maintenance capital expenditures |
2,358 | 45 | 5161 | % | 1,092 | (267 | ) | N/A | ||||||||||||||||
| Free cash flow |
1,049 | (1,908 | ) | N/A | 469 | (768 | ) | N/A | ||||||||||||||||
| Net debt1 |
5,429 | 8,409 | (35 | %) | 5,429 | 8,409 | (35 | %) | ||||||||||||||||
| Total debt1 |
11,491 | 13,681 | (16 | %) | 11,491 | 13,681 | (16 | %) | ||||||||||||||||
| Earnings per share2 |
0.06 | 0.01 | 381 | % | 0.04 | 0.00 | 1203 | % | ||||||||||||||||
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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 |
| 2021 Second Quarter Results | Page 2 |
| Operating Results |
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| Domestic Gray Cement | January - June | Second Quarter | Second Quarter 2021 | |||||||||
| 2021 vs. 2020 | 2021 vs. 2020 | vs. First Quarter 2021 | ||||||||||
| Volume |
16 | % | 45 | % | 7 | % | ||||||
| Price in PHP |
(4 | %) | (3 | %) | 2 | % | ||||||
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Our domestic cement volumes increased by 45% year-over-year during the second quarter, supported by an easing of quarantine restrictions on our industry and reflecting a low base effect due to strict lockdowns in the same period last year.
Sequentially, our domestic cement volumes increased by 7%, as favorable weather conditions aided construction activity during the second quarter.
On a year-to-date basis, our domestic cement volumes increased by 16% year-over-year. Our domestic cement prices increased by 2% sequentially, due to price adjustments implemented in 2Q21.
Year-over-year, the change in our domestic cement prices was mainly driven by higher proportion of pick-up sales.
Net of freight charges, our domestic cement prices decreased by 1% year-over-year during the second quarter and first half of 2021, mainly due to competitive market dynamics and the impact of COVID-19 on business activity.
| 2021 Second Quarter Results | Page 3 |
| Operating EBITDA, Free Cash Flow and Debt Information |
|
Operating EBITDA and Free Cash Flow
| January - June | Second Quarter | |||||||||||||||||||||||
| 2021 | 2020 | % var | 2021 | 2020 | % var | |||||||||||||||||||
| Operating earnings before other income, net |
1,292 | 653 | 98 | % | 819 | 132 | 521 | % | ||||||||||||||||
| + Depreciation and operating amortization |
1,039 | 1,197 | 486 | 636 | ||||||||||||||||||||
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| Operating EBITDA |
2,331 | 1,850 | 26 | % | 1,305 | 767 | 70 | % | ||||||||||||||||
| - Net financial expenses |
115 | 534 | 52 | 255 | ||||||||||||||||||||
| - Maintenance capital expenditures |
73 | 45 | 41 | (4 | ) | |||||||||||||||||||
| - Change in working capital |
(286 | ) | 1,019 | 37 | 687 | |||||||||||||||||||
| - Income taxes paid |
108 | 205 | 81 | 83 | ||||||||||||||||||||
| - Other cash items (net) |
(37 | ) | 1 | 1 | 13 | |||||||||||||||||||
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Free cash flow after maintenance capital expenditures |
2,358 | 45 | 5161 | % | 1,092 | (267 | ) | N/A | ||||||||||||||||
| - Strategic capital expenditures |
1,309 | 1,953 | 623 | 501 | ||||||||||||||||||||
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| Free cash flow |
1,049 | (1,908 | ) | N/A | 469 | (768 | ) | N/A | ||||||||||||||||
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In millions of Philippine Pesos
Debt Information
| 2021 Second Quarter Results | Page 4 |
| Financial Results |
|
Income Statement & Balance Sheet Information
CEMEX Holdings Philippines, Inc.
(Thousands of Philippine Pesos in nominal terms, except per share amounts)
| January - June | Second Quarter | |||||||||||||||||||||||
| INCOME STATEMENT |
2021 | 2020 | % var | 2021 | 2020 | % var | ||||||||||||||||||
| Net sales |
10,894,093 | 9,623,042 | 13 | % | 5,691,856 | 3,993,126 | 43 | % | ||||||||||||||||
| Cost of sales |
(6,472,884 | ) | (5,838,720 | ) | (11 | %) | (3,293,587 | ) | (2,562,903 | ) | (29 | %) | ||||||||||||
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| Gross profit |
4,421,209 | 3,784,322 | 17 | % | 2,398,269 | 1,430,223 | 68 | % | ||||||||||||||||
| Selling and Administrative Expenses |
(1,456,414 | ) | (1,377,933 | ) | (6 | %) | (737,213 | ) | (610,477 | ) | (21 | %) | ||||||||||||
| Distribution expenses |
(1,672,385 | ) | (1,753,826 | ) | 5 | % | (842,491 | ) | (688,022 | ) | (22 | %) | ||||||||||||
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| Operating earnings before other expenses, net |
1,292,410 | 652,563 | 98 | % | 818,565 | 131,724 | 521 | % | ||||||||||||||||
| Other income (expenses), net |
36,915 | (1,373 | ) | N/A | (1,157 | ) | (13,467 | ) | 91 | % | ||||||||||||||
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| Operating earnings (loss) |
1,329,325 | 651,190 | 104 | % | 817,408 | 118,257 | 591 | % | ||||||||||||||||
| Financial and other financial expenses, net |
(114,952 | ) | (534,124 | ) | 78 | % | (52,374 | ) | (254,584 | ) | 79 | % | ||||||||||||
| Foreign exchange gain (loss), net |
(115,116 | ) | (305 | ) | (37643 | %) | (44,073 | ) | 66,106 | N/A | ||||||||||||||
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| Net income (loss) before income taxes |
1,099,257 | 116,761 | 841 | % | 720,961 | (70,221 | ) | N/A | ||||||||||||||||
| Income tax benefit (expenses) |
(295,585 | ) | 18,256 | N/A | (122,772 | ) | 116,117 | N/A | ||||||||||||||||
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| Consolidated net income (loss) |
803,672 | 135,017 | 495 | % | 598,189 | 45,896 | 1203 | % | ||||||||||||||||
| Non-controlling interest net income (loss) |
14 | 12 | 17 | % | 5 | 3 | 67 | % | ||||||||||||||||
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| Controlling Interest net income (loss) |
803,686 | 135,029 | 495 | % | 598,194 | 45,899 | 1203 | % | ||||||||||||||||
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| Operating EBITDA |
2,330,991 | 1,849,907 | 26 | % | 1,304,958 | 767,471 | 70 | % | ||||||||||||||||
| Earnings per share |
0.06 | 0.01 | 381 | % | 0.04 | 0.00 | 1203 | % | ||||||||||||||||
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| as of June 30 | as of December 31 | |||||||||||||||||||
| BALANCE SHEET |
2021 | 2020 | % Var | 2020 | % Var | |||||||||||||||
| Total Assets |
64,143,452 | 63,348,718 | 1 | % | 63,760,347 | 1 | % | |||||||||||||
| Cash and Temporary Investments |
6,062,321 | 5,271,916 | 15 | % | 6,139,411 | (1 | %) | |||||||||||||
| Derivative Asset |
51,067 | 0 | 24,039 | 112 | % | |||||||||||||||
| Trade Accounts Receivables |
883,386 | 883,519 | (0 | %) | 700,162 | 26 | % | |||||||||||||
| Other Receivables |
130,984 | 39,038 | 236 | % | 47,512 | 176 | % | |||||||||||||
| Insurance Claims and Premium Receivables |
263,520 | 359,821 | (27 | %) | 87,569 | 201 | % | |||||||||||||
| Inventories |
2,173,369 | 2,380,727 | (9 | %) | 2,349,966 | (8 | %) | |||||||||||||
| Assets Held for Sale |
0 | 0 | 0 | |||||||||||||||||
| Other Current Assets |
1,984,774 | 1,778,188 | 12 | % | 1,825,209 | 9 | % | |||||||||||||
| Current Assets |
11,549,421 | 10,713,209 | 8 | % | 11,173,868 | 3 | % | |||||||||||||
| Fixed Assets |
22,117,102 | 21,248,850 | 4 | % | 21,699,377 | 2 | % | |||||||||||||
| Investments in an Associate and Other Investments |
14,097 | 14,097 | 0 | % | 14,097 | 0 | % | |||||||||||||
| Other Assets and Noncurrent Accounts Receivables |
746,896 | 873,674 | (15 | %) | 782,399 | (5 | %) | |||||||||||||
| Advances to Contractors |
958,597 | 1,378,280 | (30 | %) | 1,142,685 | (16 | %) | |||||||||||||
| Deferred Income Taxes - net |
897,645 | 1,260,914 | (29 | %) | 1,088,227 | (18 | %) | |||||||||||||
| Goodwill |
27,859,694 | 27,859,694 | 0 | % | 27,859,694 | 0 | % | |||||||||||||
| Other Assets |
30,476,929 | 31,386,659 | (3 | %) | 30,887,102 | (1 | %) | |||||||||||||
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| Total Liabilities |
20,274,725 | 21,131,517 | (4 | %) | 20,849,759 | (3 | %) | |||||||||||||
| Current Liabilities |
8,643,137 | 7,511,370 | 15 | % | 8,169,894 | 6 | % | |||||||||||||
| Long-Term Liabilities |
9,579,624 | 11,123,722 | (14 | %) | 10,566,642 | (9 | %) | |||||||||||||
| Deferred Tax Liability |
858 | 1,453 | (41 | %) | 853 | 1 | % | |||||||||||||
| Other Liabilities |
2,051,106 | 2,494,972 | (18 | %) | 2,112,370 | (3 | %) | |||||||||||||
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| Consolidated Stockholders’ Equity |
43,868,727 | 42,217,201 | 4 | % | 42,910,588 | 2 | % | |||||||||||||
| Non-controlling Interest |
136 | 158 | (14 | %) | 150 | (9 | %) | |||||||||||||
| Stockholders’ Equity Attributable to Controlling Interest |
43,868,591 | 42,217,043 | 4 | % | 42,910,438 | 2 | % | |||||||||||||
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| 2021 Second 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 - June | Second Quarter | |||||||||||||||||||||||
| INCOME STATEMENT |
2021 | 2020 | % var | 2021 | 2020 | % var | ||||||||||||||||||
| Net sales |
225,554 | 190,354 | 18 | % | 118,092 | 79,418 | 49 | % | ||||||||||||||||
| Cost of sales |
(134,016 | ) | (115,496 | ) | (16 | %) | (68,334 | ) | (50,973 | ) | (34 | %) | ||||||||||||
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| Gross profit |
91,538 | 74,858 | 22 | % | 49,758 | 28,445 | 75 | % | ||||||||||||||||
| Selling and Administrative Expenses |
(30,154 | ) | (27,258 | ) | (11 | %) | (15,295 | ) | (12,143 | ) | (26 | %) | ||||||||||||
| Distribution expenses |
(34,626 | ) | (34,693 | ) | 0 | % | (17,480 | ) | (13,684 | ) | (28 | %) | ||||||||||||
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| Operating earnings before other expenses, net |
26,758 | 12,907 | 107 | % | 16,983 | 2,618 | 549 | % | ||||||||||||||||
| Other income (expenses), net |
764 | (27 | ) | N/A | (24 | ) | (268 | ) | 91 | % | ||||||||||||||
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| Operating earnings (loss) |
27,522 | 12,880 | 114 | % | 16,959 | 2,350 | 622 | % | ||||||||||||||||
| Financial and other financial expenses, net |
(2,380 | ) | (10,566 | ) | 77 | % | (1,087 | ) | (5,063 | ) | 79 | % | ||||||||||||
| Foreign exchange gain (loss), net |
(2,383 | ) | (6 | ) | (39617 | %) | (914 | ) | 1,315 | N/A | ||||||||||||||
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| Net income (loss) before income taxes |
22,759 | 2,308 | 886 | % | 14,958 | (1,398 | ) | N/A | ||||||||||||||||
| Income tax benefit (expenses) |
(6,120 | ) | 361 | N/A | (2,547 | ) | 2,309 | N/A | ||||||||||||||||
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| Consolidated net income (loss) |
16,639 | 2,669 | 523 | % | 12,411 | 911 | 1262 | % | ||||||||||||||||
| Non-controlling interest net income (loss) |
0 | 0 | 0 | 0 | ||||||||||||||||||||
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| Controlling Interest net income (loss) |
16,639 | 2,669 | 523 | % | 12,411 | 911 | 1262 | % | ||||||||||||||||
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| Operating EBITDA |
48,262 | 36,593 | 32 | % | 27,075 | 15,264 | 77 | % | ||||||||||||||||
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| as of June 30 | as of December 31 | |||||||||||||||||||
| BALANCE SHEET |
2021 | 2020 | % Var | 2020 | % Var | |||||||||||||||
| Total Assets |
1,314,412 | 1,271,298 | 3 | % | 1,327,705 | (1 | %) | |||||||||||||
| Cash and Temporary Investments |
124,228 | 105,798 | 17 | % | 127,843 | (3 | %) | |||||||||||||
| Derivative Asset |
1,046 | 0 | 501 | 109 | % | |||||||||||||||
| Trade Accounts Receivables |
18,102 | 17,731 | 2 | % | 14,580 | 24 | % | |||||||||||||
| Other Receivables |
2,684 | 783 | 243 | % | 989 | 171 | % | |||||||||||||
| Insurance Claims and Premium Receivables |
5,400 | 7,221 | (25 | %) | 1,823 | 196 | % | |||||||||||||
| Inventories |
44,536 | 47,777 | (7 | %) | 48,934 | (9 | %) | |||||||||||||
| Assets Held for Sale |
0 | 0 | 0 | |||||||||||||||||
| Other Current Assets |
40,672 | 35,685 | 14 | % | 38,007 | 7 | % | |||||||||||||
| Current Assets |
236,668 | 214,995 | 10 | % | 232,677 | 2 | % | |||||||||||||
| Fixed Assets |
453,219 | 426,427 | 6 | % | 451,854 | 0 | % | |||||||||||||
| Investments in an Associate and Other Investments |
289 | 283 | 2 | % | 294 | (2 | %) | |||||||||||||
| Other Assets and Noncurrent Accounts Receivables |
15,304 | 17,534 | (13 | %) | 16,292 | (6 | %) | |||||||||||||
| Advances to Contractors |
19,643 | 27,660 | (29 | %) | 23,795 | (17 | %) | |||||||||||||
| Deferred Income Taxes - net |
18,394 | 25,304 | (27 | %) | 22,661 | (19 | %) | |||||||||||||
| Goodwill |
570,895 | 559,095 | 2 | % | 580,132 | (2 | %) | |||||||||||||
| Other Assets |
624,525 | 629,876 | (1 | %) | 643,174 | (3 | %) | |||||||||||||
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| Total Liabilities |
415,467 | 424,071 | (2 | %) | 434,163 | (4 | %) | |||||||||||||
| Current Liabilities |
177,114 | 150,740 | 17 | % | 170,125 | 4 | % | |||||||||||||
| Long-Term Liabilities |
196,304 | 223,233 | (12 | %) | 220,033 | (11 | %) | |||||||||||||
| Deferred Tax Liability |
18 | 29 | (38 | %) | 18 | 0 | % | |||||||||||||
| Other Liabilities |
42,031 | 50,069 | (16 | %) | 43,987 | (4 | %) | |||||||||||||
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| Consolidated Stockholders’ Equity |
898,949 | 847,225 | 6 | % | 893,542 | 1 | % | |||||||||||||
| Non-controlling Interest |
3 | 3 | 0 | % | 3 | 0 | % | |||||||||||||
| Stockholders’ Equity Attributable to Controlling Interest |
898,946 | 847,222 | 6 | % | 893,539 | 1 | % | |||||||||||||
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| 2021 Second Quarter Results | Page 6 |
| Definitions of Terms and Disclosures |
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| January - June | Second Quarter | January - June | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Exchange Rates |
average | average | average | average | End of period | End of period | ||||||||||||||||||
| Philippine peso |
48.30 | 50.55 | 48.20 | 50.28 | 48.80 | 49.83 | ||||||||||||||||||
Amounts provided in units of local currency per US dollar
| 2021 Second Quarter Results | Page 7 |
| Disclaimer |
|
This report contains forward-looking statements. In some cases, these statements can be identified by the use of forward-looking words such as “may,” “assume,” “might,” “should,” “could,” “continue,” “would,” “can,” “consider,” “anticipate,” “estimate,” “expect,” “envision,” “plan,” “believe,” “foresee,” “predict,” “potential” “target,” “strategy,” “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 (together, the “CHP Group”), include, but are not limited to, the cyclical activity of the construction sector; the CHP Group’s exposure to other sectors that impact the CHP Group’s business, such as, but not limited to, the energy sector; general political, social, economic, health and business conditions in the markets in which the CHP Group operates; competition in the markets in which the CHP Group offers its products and services; the regulatory environment, including environmental, tax, antitrust and acquisition-related rules and regulations; the CHP Group’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; the CHP Group’s and CEMEX’s ability to refinance their existing indebtedness; the impact of CEMEX’s below investment grade debt rating on the CHP Group’s and CEMEX’s cost of capital; the CHP Group’s and CEMEX’s ability to consummate asset sales and fully integrate newly acquired businesses; achieve cost-savings from the CHP Group’s cost-reduction initiatives and implement the CHP Group’s pricing initiatives for the CHP Group’s products; the increasing reliance on information technology infrastructure for the CHP Group’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 subject to cyber-attacks; changes in the economy that affect demand for consumer goods, consequently affecting demand for the CHP Group’s products and services; the impact of pandemics, epidemics or outbreaks of infectious diseases and the response of governments and other third parties, including with respect to COVID-19, which have affected and may continue to adversely affect, among other matters, supply chains, international operations, availability of liquidity, investor confidence and consumer spending, as well as availability of, and demand for, the CHP Group’s products and services; weather conditions, including but not limited to, excessive rain and snow, and disasters such as earthquakes and floods; 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 or bankruptcy or becoming subject to similar proceedings; natural disasters and other unforeseen events (including global health hazards such as COVID-19); and the other risks and uncertainties described in CHP’s public filings. Readers are urged to read this document and carefully consider the risks, uncertainties and other factors that affect the CHP Group’s business. The information contained in this report 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 the CHP Group’s prices for products sold or distributed by the CHP Group.
Copyright CEMEX Holdings Philippines, Inc. and its subsidiaries
| 2021 Second Quarter Results | Page 8 |
2021 Second Quarter Results Exhibit 3
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, as of the date such statements are made, 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; general political, economic, health and business conditions in the markets in which CHP operates; competition in the markets in which we offer our products and services; 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; changes in the economy that affect demand for consumer goods, consequently affecting demand for our products and services; the impact of pandemics, epidemics or outbreaks of infectious diseases and the response of governments and other third parties, including with respect to COVID-19, which have affected and may continue to adversely affect, among other matters, supply chains, international operations, availability of liquidity, investor confidence and consumer spending, as well as availability of, and demand for, our products and services; weather conditions, including but not limited to, excessive rain and snow, and disasters such as earthquakes and floods; weather conditions; natural disasters and other unforeseen events (including global health hazards such as COVID-19); 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
Second Quarter 2021 Update In 2Q21, we saw construction activity benefit from an easing of quarantine restrictions on the construction industry and drier weather conditions. Despite a tightening of lockdown measures in 2Q21, the construction industry was allowed to operate with minimal restrictions, even under the strictest quarantine level. Year-over-year comparison reflects a low base effect due to stringent lockdown measures in 2Q20. Sequentially, despite a surge in COVID-19 cases, 2Q21 saw more favorable weather conditions which allowed construction activity to increase during the summer months of April and May. Solid Cement Plant achieved its all-time record for cement production in a single month in 2Q21. Solid and APO are the only Philippine-based laboratories certified for ISO/IEC 17205:2017 Laboratory Management System by the National Association of Testing Authorities (NATA) of Australia.
Let's ensure our safety and that of our families and communities by following these Behaviors that Save Lives. CHOOSE TO GET VACCINATED. WEAR YOUR MASK AT ALL TIMES. IDENTIFY SYMPTOMS AND INFORM. PRACTICE GOOD PERSONAL HYGIENE. MAINTAIN TWO-METER DISTANCE. SOURCE: World Health Organization
Second Quarter 2021 Initiatives CHP’s digitalization efforts recognized recently during the first CEMEX Global Awards. Our Distribution and Institutional commercial teams won first place for “CEMEX Go Top Orders Adoption” in 2020 for the Larger and Smaller Markets categories, respectively. Our Electronic Authority to Withdraw, or eATW, was awarded “Best Initiative Implemented”. The eATW is a digital solution for our customer’s pick-up experience. It automates the process, giving our customers the ability to order and monitor cement pick-ups anytime, anywhere, and from any device. We continue to reach more than 90% adoption among our customers for our CEMEX Go platform, and have achieved more than 90% adoption for our eATW solution. Distribution expenses reflect a sustained level of majority pick-up transactions in all our sites. Maximizing use of secondary and alternative fuels, to reduce dependence on coal.
Sustainability and Climate Action Developing “greener” cement products that will soon be available to the market. Reducing clinker factor with admixtures, alternative raw materials, and by-products of other industries. Contributing to the circular economy through the co-processing of plastics and inorganic waste, via partnerships with private companies and local government units. At CHP, we have been recycling 25 times more waste than we have generated in our operations1. 4.5-megawatt waste-heat-to-energy facility in the pipeline for our APO Cement Plant. This is similar to the 6-megawatt waste-heat facility we have in our Solid Cement Plant. 1 In 2019 and 2020
Second Half 2021 Outlook National weather bureau, PAGASA, announced the start of the rainy season in June. Highly competitive markets should continue with the presence of imported cement in all regions of the country. The threat of COVID-19 remains, with the resurgence of outbreaks around the country, the emergence of more contagious variants, and vaccination efforts in-progress. The government’s public infrastructure spending program is expected to be a key driver of economic activity for the rest of the year. Inflationary pressures to costs persist. Coal prices have reached their highest levels in more than a decade, while supply chain bottlenecks and a weaker foreign exchange rate present additional headwinds.
Domestic cement volumes increased by 45% year-over-year during the second quarter, supported by an easing of quarantine restrictions on our industry and reflecting a low base effect. Sequentially, our domestic cement volumes increased by 7%, as favorable weather conditions aided construction activity during the second quarter. On a year-to-date basis, our domestic cement volumes increased by 16% year-over-year. Our domestic cement prices increased by 2% sequentially, due to price adjustments implemented in 2Q21. Year-over-year, change in our domestic cement prices mainly driven by higher proportion of pick-up sales. Net of freight charges, our domestic cement prices decreased by 1% year-over-year during 2Q21 and 6M21, mainly due to competitive market dynamics and the impact of COVID-19 on business activity. Domestic Cement Volumes and Prices 1 Millions of Philippine Pesos
Net Sales As a result of higher volume, net sales increased, year over year, by 43% during the second quarter and by 13% during the first six months of 2021. Net Sales1 1 Millions of Philippine Pesos +43% +13%
Private Sector Construction sector employment remained above 4 million persons in April and May of 2021, despite tightening of quarantine measures, as restrictions on the construction industry were eased. Activity in the residential sector was higher year-over-year as a positive trend in approved residential building permits supported the sector during the quarter. Demand may still be challenged by the impact of inflation on short-term purchase behavior. In addition, despite positive remittance inflows, OFW households are likely to apportion more remittance proceeds for basic and health necessities. Activity improved in the non-residential sector from its level in the same period last year as mobility restrictions eased despite stricter quarantine levels during the second quarter. This year, property developers have programmed higher CAPEX, and activity in the sector may improve as more projects start. The CREATE law’s application could provide support to private activity by incentivizing firms to expand development plans. Sources: Bangko Sentral ng Pilipinas, Colliers, Cushman and Wakefield, Jones Lang Lasalle, Philippine Statistics Authority Employment in Construction (K Persons)
Public Sector Infrastructure disbursements from April to June grew by 63% year-over-year to Php 232 billion. Spending during this period also surpassed the level in the comparable months two years ago. The growth reflects the government’s efforts to speed up execution in order to catch up on project delays. While the risk of COVID-19 remains, construction has been deemed an essential activity and a key contributor to economic recovery. Disbursements on Infrastructure and Capital Outlays (in PHP billion) Refers to year-over-year growth % Source: Department of Budget and Management
Cost of Sales Cost of sales was 59% of sales during the first six months of 2021, compared with 61% in the same period of 2020. Total fuel cost was 1% higher year-over-year for the first half of 2021. Using more cost-efficient fuel mix to lower dependence on coal, the market price of which has been at its highest level in more than a decade. Total power cost increased by 32% year-over-year for the first half of 2021 with higher electricity rates, and a rebate from the wholesale electricity spot market received in the prior year. APO Cement Plant major kiln shutdown scheduled for the third quarter of 2021. Cost of Sales (% of net sales) Fuel and Power (% of cost of sales) Note: In Millions of Philippine Pesos
Operating Expenses Distribution expenses was 15% of sales during the first half of 2021, a decrease of 3 pp year-over-year. This was mainly driven by lower delivered volumes and initiatives to increase efficiency. Selling and administrative expenses was 13% of sales during the first half of 2021, lower by 1 pp year-over-year. Distribution (% of net sales) Selling and Administrative (% of net sales)
Operating EBITDA and Operating EBITDA Margin Operating EBITDA for the first six months of 2021 increased by 26% year-over-year mainly due to higher volume. Operating EBITDA margin was at 21% for the first half of 2021. 1 Millions of Philippine Pesos Refers to operating EBITDA margin % Operating EBITDA Variation1 19% 23% 19% 21%
Net Income Net income was at PHP 804 million for the first six months of 2021 mainly due to higher operating earnings. Financial expenses were lower by 78% year-over-year during the first half, reflecting lower debt levels and declining interest rates. Foreign exchange losses were a result of the declining Philippine Peso to U.S. Dollar exchange rate. Year-to-date income taxes include a one-time expense from the revaluation of deferred tax assets pursuant to income tax rate reductions related to the CREATE Act2. 1 Millions of Philippine Pesos 2 The Corporate Recovery and Tax Incentives for Enterprises or the CREATE Act, which was approved into law on March 26, 2021 Net Income1
Free Cash Flow & Guidance
Free cash flow after maintenance CAPEX for the first six months of 2021 was around PHP 2.4 billion. Working capital improvement was mainly due to higher payables. Free Cash Flow
Works on the different superstructures of the new line and installation of various equipment remained ongoing throughout the second quarter, following strict health and safety protocols during the current COVID-19 pandemic. Expected completion of construction now in June 2022, due to general delays. If the same conditions that caused the delays persist during the next months, completion of the project could be further delayed beyond June 2022. Estimated total project cost of US$235 million Est. total interest capitalization of US$24 million Solid Cement Plant New Line Lifting of new rotary kiln into position at Solid Cement Plant (Jan. 2021)
2021 Guidance Cement Volumes 12-14% Capital expenditures PHP 3,440 million PHP 1,360 million PHP 4,800 million Solid Cement Plant Expansion CAPEX Maintenance and Other CAPEX Total CAPEX
Q&A Session 2021 Second Quarter Results
2021 Second Quarter Appendix
Debt Maturity Profile Total Debt: PHP 11,491 Avg. life of debt1: 4.8 years Net Debt to EBITDA2: 1.2x All amounts in millions of Philippine Pesos 1 Based on weighted average life of debt 2 Last 12 months Consolidated EBITDA 382 3,786 4,845
Additional Debt Information Note: All amounts in millions of Philippine Pesos, except percentages and ratios 1 U.S. dollar debt converted using end-of-period exchange rates 2 Includes leases, in accordance with Philippine Financial Reporting Standards (PFRS) 3 Based on BDO Loan Facility financial covenants which we are required to comply commencing on June 30, 2021
Definitions 6M21 / 6M20 Results for the first six months of the years 2021 and 2020, 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 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 Total debt (debt plus leases) minus cash and cash equivalents.
Contact Information Stock Information PSE: CHP Investor Relations In the Philippines +632 8849 3600 chp.ir@cemex.com