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, 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 October 29, 2021, announcing third quarter 2021 results for CEMEX Holdings Philippines, Inc. an indirect subsidiary of CEMEX, S.A.B. de C.V. (NYSE: CX) (“CEMEX”). |
| 2. | Third quarter 2021 results for CEMEX Holdings Philippines, Inc., an indirect subsidiary of CEMEX. |
| 3. | Presentation regarding third quarter 2021 results for CEMEX Holdings Philippines, Inc., an indirect subsidiary of CEMEX. |
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 28, 2021 | By: | /s/ Rafael Garza Lozano | ||||||
| Name: Rafael Garza Lozano | ||||||||
| Title: Chief Comptroller | ||||||||
3
EXHIBIT INDEX
| EXHIBIT | ||
| NO. |
DESCRIPTION | |
| 1. | Press release dated October 29, 2021, announcing third quarter 2021 results for CEMEX Holdings Philippines, Inc. an indirect subsidiary of CEMEX, S.A.B. de C.V. (NYSE: CX) (“CEMEX”). | |
| 2. | Third quarter 2021 results for CEMEX Holdings Philippines, Inc., an indirect subsidiary of CEMEX. | |
| 3. | Presentation regarding third 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 THIRD QUARTER 2021 RESULTS
MANILA, PHILIPPINES. OCTOBER 29, 2021 – CEMEX HOLDINGS PHILIPPINES, INC. (“CHP”) (PSE: CHP), announced today that its consolidated net sales increased by 8%, reaching PHP 16.3 billion, during the first nine months of 2021 versus the comparable period in 2020, due to higher volumes. Sales slightly decreased by 2% year-over-year in the third quarter, amounting to PHP 5.4 billion, due to lower prices.
CHP’s domestic cement volumes increased by 11% during the first nine months of 2021 versus the same period of last year. For the third quarter, domestic cement volumes increased by 1% year-over-year, as construction activity remained stable despite a return to stricter lockdown measures due to the spread of the COVID-19 Delta variant.
CHP’s domestic cement prices during the first nine months of 2021 were 4% lower year-over-year mainly driven by higher proportion of pick-up sales. Net of freight charges, CHP’s domestic cement prices year-to-date decreased by 1% versus the comparable period in 2020 mainly due to competitive market dynamics and the impact of COVID-19 in business activity.
CHP’s Operating EBITDA for the first nine months of 2021 was PHP 3.3 billion, an increase of 2% versus the same period in 2020, supported by higher volume.
Operating EBITDA margin was 20% for the first nine months of 2021, compared with 22% in the same period of last year, mainly due to higher cost of sales.
For the rest of the year, CHP expects its performance to be affected by seasonality factors resulting from the La Niña phenomenon, inflationary pressures driven by global energy and supply chain dynamics, and intense competition, as the effects of the COVID-19 pandemic remain. Execution of public infrastructure projects should remain an important driver of economic recovery in the fourth quarter of 2021.
Net income for CHP was PHP 897 million for the first nine months of 2021, versus PHP 758 million during the same period of last year, mainly due to higher operating earnings and lower financial expenses.
During the third quarter, CHP launched its “Vertua” and “Type 1P High Strength” cement products. These new products offer reductions in CO2 emissions, providing customers with eco-friendly alternatives.
Ignacio Mijares, President and CEO of CHP, said: “Despite the challenges, we will look to create opportunities and work within the variables we can control, such as reducing expenses, enhancing customer experience, and making progress with our sustainability targets.”
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. Unless the context indicates otherwise, all references to pricing initiatives, price increases or decreases, refer to CHP and its subsidiaries’ (together the “CHP Group”) prices for products sold or distributed by the CHP Group.
2
Exhibit 2
2021 THIRD 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 - September | Third Quarter | |||||||||||||||||||||||
| 2021 | 2020 | % var | 2021 | 2020 | % var | |||||||||||||||||||
| Net sales |
16,308 | 15,142 | 8 | % | 5,414 | 5,519 | (2 | %) | ||||||||||||||||
| Gross profit |
6,500 | 6,313 | 3 | % | 2,079 | 2,529 | (18 | %) | ||||||||||||||||
| as % of net sales |
39.9 | % | 41.7 | % | (1.8pp | ) | 38.4 | % | 45.8 | % | (7.4pp | ) | ||||||||||||
| Operating earnings before other expenses, net |
1,848 | 1,492 | 24 | % | 556 | 840 | (34 | %) | ||||||||||||||||
| as % of net sales |
11.3 | % | 9.9 | % | 1.4pp | 10.3 | % | 15.2 | % | (4.9pp | ) | |||||||||||||
| Controlling Interest Net Income (Loss) |
897 | 758 | 18 | % | 94 | 623 | (85 | %) | ||||||||||||||||
| Operating EBITDA |
3,340 | 3,281 | 2 | % | 1,009 | 1,431 | (30 | %) | ||||||||||||||||
| as % of net sales |
20.5 | % | 21.7 | % | (1.2pp | ) | 18.6 | % | 25.9 | % | (7.3pp | ) | ||||||||||||
| Free cash flow after maintenance capital expenditures |
3,432 | 1,967 | 74 | % | 1,074 | 1,922 | (44 | %) | ||||||||||||||||
| Free cash flow |
1,738 | (365 | ) | N/A | 689 | 1,543 | (55 | %) | ||||||||||||||||
| Net debt1 |
4,363 | 6,843 | (36 | %) | 4,363 | 6,843 | (36 | %) | ||||||||||||||||
| Total debt1 |
10,718 | 13,510 | (21 | %) | 10,718 | 13,510 | (21 | %) | ||||||||||||||||
| Earnings per share2 |
0.07 | 0.06 | 3 | % | 0.01 | 0.05 | (85 | %) | ||||||||||||||||
In millions of Philippine Pesos, except percentages and earnings per share
| 1 | U.S. dollar debt converted using end-of-period exchange rate. See Debt Information on page 4 and Exchange Rates on page 7 for more detail. |
| 2 | In Philippine Pesos |
Net sales increased by 8% year-over-year during the first nine months of 2021 due to higher volumes. For the third quarter, net sales slightly decreased by 2% year-over-year mainly due to lower prices.
Cost of sales was 60% of sales during the first nine months of 2021, compared with 58% in the same period of 2020.
During the third quarter, CHP purchased additional clinker on a one-off basis to support production requirements.
APO Cement Plant executed scheduled major kiln shutdown works towards the end of the third quarter.
Total fuel cost was 5% lower year-over-year for the first nine months of 2021, mainly due to the use of purchased clinker in production, and supported by higher substitution of secondary fuels.
Total power cost increased by 29% year-over-year for the first nine months of 2021 due to higher production volume, increased electricity rates, and a rebate from the wholesale electricity spot market received in the prior year.
Operating expenses, as a percentage of sales, were 29% during the first nine months of 2021, compared with 32% in the same period of 2020.
Distribution expenses were 15% of sales during the first nine months of 2021, a decrease of 3 pp year-over-year. This was driven primarily by lower delivered volumes and efficiency initiatives.
Selling and administrative expenses was 13% of sales during the first nine months of 2021, lower by 1 pp year-over-year.
Operating EBITDA for the first nine months of 2021 increased by 2% year-over-year, supported by higher volume.
Operating EBITDA margin was 20% for the first nine months of 2021, compared with 22% in the same period of last year, mainly due to higher cost of sales.
Controlling interest net income was at PHP 897 million for the first nine months of 2021 mainly due to higher operating earnings and lower financial expenses.
Financial expenses decreased by 72% year-over-year during the first nine months of 2021, reflecting lower debt levels and declining interest rates.
Foreign exchange losses were primarily 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 Corporate Recovery and Tax Incentives for Enterprises or the CREATE Act, which was approved into law on March 26, 2021.
Total debt at the end of September 2021 was at PHP 10,718 million, of which PHP 8,982 million pertained to debt owed to BDO Unibank, Inc. (the “BDO Loan Facility”).
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| 2021 Third Quarter Results | Page 2 | |
| Operating Results |
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| January - September | Third Quarter | Third Quarter 2021 | ||||||||||
| Domestic Gray Cement | 2021 vs. 2020 | 2021 vs. 2020 | vs. Second Quarter 2021 | |||||||||
| Volume |
11 | % | 1 | % | (4 | %) | ||||||
| Price in PHP |
(4 | %) | (3 | %) | 1 | % | ||||||
Our domestic cement volumes increased by 1% year-over-year during the third quarter, as construction activity remained stable despite a return to stricter lockdown measures due to the spread of the COVID-19 Delta variant.
Sequentially, our domestic cement volumes decreased by 4%, as the rainy season affected our industry.
On a year-to-date basis, our domestic cement volumes increased by 11% year-over-year.
Our domestic cement prices increased by 1% sequentially, due to price adjustments implemented in the third quarter of 2021.
Year-over-year, the change in our domestic cement prices was mainly driven by a higher proportion of pick-up sales.
Net of freight charges, our domestic cement prices decreased by 1% year-over-year during the third quarter and first nine months of 2021, mainly due to competitive market dynamics and the impact of COVID-19 on business activity.
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| 2021 Third Quarter Results | Page 3 | |
| Operating EBITDA, Free Cash Flow and Debt Information |
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Operating EBITDA and Free Cash Flow
| January - September | Third Quarter | |||||||||||||||||||||||
| 2021 | 2020 | % var | 2021 | 2020 | % var | |||||||||||||||||||
| Operating earnings before other income, net |
1,848 | 1,492 | 24 | % | 556 | 840 | (34 | %) | ||||||||||||||||
| + Depreciation and operating amortization |
1,491 | 1,789 | 453 | 592 | ||||||||||||||||||||
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| Operating EBITDA |
3,340 | 3,281 | 2 | % | 1,009 | 1,431 | (30 | %) | ||||||||||||||||
| - Net financial expenses |
195 | 707 | 80 | 173 | ||||||||||||||||||||
| - Maintenance capital expenditures |
164 | 167 | 90 | 121 | ||||||||||||||||||||
| - Change in working capital |
(607 | ) | 131 | (320 | ) | (888 | ) | |||||||||||||||||
| - Income taxes paid |
184 | 305 | 76 | 100 | ||||||||||||||||||||
| - Other cash items (net) |
(27 | ) | 4 | 10 | 3 | |||||||||||||||||||
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| Free cash flow after maintenance capital expenditures |
3,432 | 1,967 | 74 | % | 1,074 | 1,922 | (44 | %) | ||||||||||||||||
| - Strategic capital expenditures |
1,694 | 2,331 | 385 | 379 | ||||||||||||||||||||
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| Free cash flow |
1,738 | (365 | ) | N/A | 689 | 1,543 | (55 | %) | ||||||||||||||||
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In millions of Philippine Pesos
Debt Information
| Third Quarter | Second Quarter | |||||||||||||||
| 2021 | 2020 | % var | 2021 | |||||||||||||
| Total debt(1)(2) |
10,718 | 13,510 | (21 | %) | 11,491 | |||||||||||
| Short term |
25 | % | 6 | % | 4 | % | ||||||||||
| Long term |
75 | % | 94 | % | 96 | % | ||||||||||
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| Cash and cash equivalents |
6,355 | 6,667 | (5 | %) | 6,062 | |||||||||||
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| Net debt |
4,363 | 6,843 | (36 | %) | 5,429 | |||||||||||
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| Leverage Ratio(3) |
2.53 | 3.33 | 2.47 | |||||||||||||
| Coverage Ratio(3) |
7.54 | 5.21 | 7.83 | |||||||||||||
| Third Quarter | ||||||||
| 2021 | 2020 | |||||||
| Currency denomination |
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| U.S. dollar |
2 | % | 5 | % | ||||
| Philippine peso |
98 | % | 95 | % | ||||
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| Interest rate |
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| Fixed |
66 | % | 56 | % | ||||
| Variable |
34 | % | 44 | % | ||||
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In millions of Philippine Pesos, except percentages
| (1) | U.S. dollar debt converted using end-of-period exchange rate. See Exchange Rates on page 7 for more detail |
| (2) | Includes leases, in accordance with Philippine Financial Reporting Standards (PFRS) |
| (3) | Based on BDO Loan Facility financial covenants |
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| 2021 Third Quarter Results | Page 4 | |
| Financial Results |
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Income Statement & Balance Sheet Information
CEMEX Holdings Philippines, Inc.
(Thousands of Philippine Pesos in nominal terms, except per share amounts)
| January - September | Third Quarter | |||||||||||||||||||||||
| INCOME STATEMENT |
2021 | 2020 | % var | 2021 | 2020 | % var | ||||||||||||||||||
| Net sales |
16,308,455 | 15,142,304 | 8 | % | 5,414,361 | 5,519,262 | (2 | %) | ||||||||||||||||
| Cost of sales |
(9,808,216 | ) | (8,829,341 | ) | (11 | %) | (3,335,332 | ) | (2,990,621 | ) | (12 | %) | ||||||||||||
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| Gross profit |
6,500,239 | 6,312,963 | 3 | % | 2,079,029 | 2,528,641 | (18 | %) | ||||||||||||||||
| Selling and Administrative Expenses |
(2,192,126 | ) | (2,131,900 | ) | (3 | %) | (735,712 | ) | (753,968 | ) | 2 | % | ||||||||||||
| Distribution expenses |
(2,459,798 | ) | (2,688,895 | ) | 9 | % | (787,413 | ) | (935,069 | ) | 16 | % | ||||||||||||
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| Operating earnings before other expenses, net |
1,848,315 | 1,492,168 | 24 | % | 555,904 | 839,604 | (34 | %) | ||||||||||||||||
| Other income (expenses), net |
27,282 | (4,308 | ) | N/A | (9,633 | ) | (2,935 | ) | (228 | %) | ||||||||||||||
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| Operating earnings (loss) |
1,875,597 | 1,487,860 | 26 | % | 546,271 | 836,669 | (35 | %) | ||||||||||||||||
| Financial and other financial expenses, net |
(194,632 | ) | (707,223 | ) | 72 | % | (79,680 | ) | (173,099 | ) | 54 | % | ||||||||||||
| Foreign exchange gain (loss), net |
(447,045 | ) | 133,009 | N/A | (331,929 | ) | 133,314 | N/A | ||||||||||||||||
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| Net income (loss) before income taxes |
1,233,920 | 913,646 | 35 | % | 134,662 | 796,884 | (83 | %) | ||||||||||||||||
| Income tax benefit (expenses) |
(336,702 | ) | (155,512 | ) | (117 | %) | (41,117 | ) | (173,768 | ) | 76 | % | ||||||||||||
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| Consolidated net income (loss) |
897,218 | 758,134 | 18 | % | 93,545 | 623,116 | (85 | %) | ||||||||||||||||
| Non-controlling interest net income (loss) |
19 | 16 | 19 | % | 5 | 4 | 25 | % | ||||||||||||||||
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| Controlling Interest net income (loss) |
897,237 | 758,150 | 18 | % | 93,550 | 623,120 | (85 | %) | ||||||||||||||||
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| Operating EBITDA |
3,339,765 | 3,281,154 | 2 | % | 1,008,774 | 1,431,247 | (30 | %) | ||||||||||||||||
| Earnings per share |
0.07 | 0.06 | 3 | % | 0.01 | 0.05 | (85 | %) | ||||||||||||||||
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| as of September 30 | as of December 31 | |||||||||||||||||||
| BALANCE SHEET |
2021 | 2020 | % Var | 2020 | % Var | |||||||||||||||
| Total Assets |
64,344,395 | 63,721,233 | 1 | % | 63,760,347 | 1 | % | |||||||||||||
| Cash and Temporary Investments |
6,355,034 | 6,667,022 | (5 | %) | 6,139,411 | 4 | % | |||||||||||||
| Derivative Asset |
35,050 | 0 | 24,039 | 46 | % | |||||||||||||||
| Trade Accounts Receivables |
689,824 | 807,720 | (15 | %) | 700,162 | (1 | %) | |||||||||||||
| Other Receivables |
61,209 | 41,077 | 49 | % | 47,512 | 29 | % | |||||||||||||
| Insurance Claims and Premium Receivables |
183,600 | 175,285 | 5 | % | 87,569 | 110 | % | |||||||||||||
| Inventories |
2,929,904 | 2,273,242 | 29 | % | 2,349,966 | 25 | % | |||||||||||||
| Assets Held for Sale |
0 | 0 | 0 | |||||||||||||||||
| Other Current Assets |
1,754,148 | 1,362,209 | 29 | % | 1,825,209 | (4 | %) | |||||||||||||
| Current Assets |
12,008,769 | 11,326,555 | 6 | % | 11,173,868 | 7 | % | |||||||||||||
| Fixed Assets |
22,178,296 | 21,246,158 | 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 |
444,299 | 799,317 | (44 | %) | 782,399 | (43 | %) | |||||||||||||
| Advances to Contractors |
908,543 | 1,286,693 | (29 | %) | 1,142,685 | (20 | %) | |||||||||||||
| Deferred Income Taxes - net |
930,697 | 1,188,719 | (22 | %) | 1,088,227 | (14 | %) | |||||||||||||
| Goodwill |
27,859,694 | 27,859,694 | 0 | % | 27,859,694 | 0 | % | |||||||||||||
| Other Assets |
30,157,330 | 31,148,520 | (3 | %) | 30,887,102 | (2 | %) | |||||||||||||
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| Total Liabilities |
20,007,371 | 21,080,917 | (5 | %) | 20,849,759 | (4 | %) | |||||||||||||
| Current Liabilities |
11,301,253 | 7,549,321 | 50 | % | 8,169,894 | 38 | % | |||||||||||||
| Long-Term Liabilities |
6,623,167 | 11,095,900 | (40 | %) | 10,566,642 | (37 | %) | |||||||||||||
| Deferred Tax Liability |
1,448 | 1,043 | 39 | % | 853 | 70 | % | |||||||||||||
| Other Liabilities |
2,081,503 | 2,434,653 | (15 | %) | 2,112,370 | (1 | %) | |||||||||||||
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| Consolidated Stockholders’ Equity |
44,337,024 | 42,640,316 | 4 | % | 42,910,588 | 3 | % | |||||||||||||
| Non-controlling Interest |
131 | 154 | (15 | %) | 150 | (13 | %) | |||||||||||||
| Stockholders’ Equity Attributable to Controlling Interest |
44,336,893 | 42,640,162 | 4 | % | 42,910,438 | 3 | % | |||||||||||||
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| 2021 Third Quarter Results | Page 5 | |
| Financial Results |
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Income Statement & Balance Sheet Information
CEMEX Holdings Philippines, Inc.
(Thousands of U.S. Dollars, except per share amounts)
| January - September | Third Quarter | |||||||||||||||||||||||
| INCOME STATEMENT |
2021 | 2020 | % var | 2021 | 2020 | % var | ||||||||||||||||||
| Net sales |
333,184 | 303,217 | 10 | % | 107,763 | 113,309 | (5 | %) | ||||||||||||||||
| Cost of sales |
(200,384 | ) | (176,803 | ) | (13 | %) | (66,384 | ) | (61,396 | ) | (8 | %) | ||||||||||||
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| Gross profit |
132,800 | 126,414 | 5 | % | 41,379 | 51,913 | (20 | %) | ||||||||||||||||
| Selling and Administrative Expenses |
(44,786 | ) | (42,690 | ) | (5 | %) | (14,643 | ) | (15,480 | ) | 5 | % | ||||||||||||
| Distribution expenses |
(50,254 | ) | (53,844 | ) | 7 | % | (15,672 | ) | (19,197 | ) | 18 | % | ||||||||||||
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| Operating earnings before other expenses, net |
37,760 | 29,880 | 26 | % | 11,064 | 17,236 | (36 | %) | ||||||||||||||||
| Other income (expenses), net |
557 | (86 | ) | N/A | (192 | ) | (60 | ) | (220 | %) | ||||||||||||||
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| Operating earnings (loss) |
38,317 | 29,794 | 29 | % | 10,872 | 17,176 | (37 | %) | ||||||||||||||||
| Financial and other financial expenses, net |
(3,976 | ) | (14,162 | ) | 72 | % | (1,586 | ) | (3,554 | ) | 55 | % | ||||||||||||
| Foreign exchange gain (loss), net |
(9,133 | ) | 2,663 | N/A | (6,606 | ) | 2,737 | N/A | ||||||||||||||||
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| Net income (loss) before income taxes |
25,208 | 18,295 | 38 | % | 2,680 | 16,359 | (84 | %) | ||||||||||||||||
| Income tax benefit (expenses) |
(6,879 | ) | (3,114 | ) | (121 | %) | (818 | ) | (3,567 | ) | 77 | % | ||||||||||||
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| Consolidated net income (loss) |
18,329 | 15,181 | 21 | % | 1,862 | 12,792 | (85 | %) | ||||||||||||||||
| Non-controlling interest net income (loss) |
0 | 0 | 0 | 0 | ||||||||||||||||||||
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| Controlling Interest net income (loss) |
18,329 | 15,181 | 21 | % | 1,862 | 12,792 | (85 | %) | ||||||||||||||||
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| Operating EBITDA |
68,232 | 65,703 | 4 | % | 20,078 | 29,383 | (32 | %) | ||||||||||||||||
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| as of September 30 | as of December 31 | |||||||||||||||||||
| BALANCE SHEET |
2021 | 2020 | % Var | 2020 | % Var | |||||||||||||||
| Total Assets |
1,261,656 | 1,313,975 | (4 | %) | 1,327,705 | (5 | %) | |||||||||||||
| Cash and Temporary Investments |
124,609 | 137,479 | (9 | %) | 127,843 | (3 | %) | |||||||||||||
| Derivative Asset |
687 | 0 | 501 | 37 | % | |||||||||||||||
| Trade Accounts Receivables |
13,526 | 16,656 | (19 | %) | 14,580 | (7 | %) | |||||||||||||
| Other Receivables |
1,200 | 847 | 42 | % | 989 | 21 | % | |||||||||||||
| Insurance Claims and Premium Receivables |
3,600 | 3,614 | (0 | %) | 1,823 | 97 | % | |||||||||||||
| Inventories |
57,449 | 46,876 | 23 | % | 48,934 | 17 | % | |||||||||||||
| Assets Held for Sale |
0 | 0 | 0 | |||||||||||||||||
| Other Current Assets |
34,395 | 28,090 | 22 | % | 38,007 | (10 | %) | |||||||||||||
| Current Assets |
235,466 | 233,562 | 1 | % | 232,677 | 1 | % | |||||||||||||
| Fixed Assets |
434,869 | 438,110 | (1 | %) | 451,854 | (4 | %) | |||||||||||||
| Investments in an Associate and Other Investments |
276 | 291 | (5 | %) | 294 | (6 | %) | |||||||||||||
| Other Assets and Noncurrent Accounts Receivables |
8,712 | 16,482 | (47 | %) | 16,292 | (47 | %) | |||||||||||||
| Advances to Contractors |
17,815 | 26,532 | (33 | %) | 23,795 | (25 | %) | |||||||||||||
| Deferred Income Taxes - net |
18,249 | 24,512 | (26 | %) | 22,661 | (19 | %) | |||||||||||||
| Goodwill |
546,269 | 574,486 | (5 | %) | 580,132 | (6 | %) | |||||||||||||
| Other Assets |
591,321 | 642,303 | (8 | %) | 643,174 | (8 | %) | |||||||||||||
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| Total Liabilities |
392,303 | 434,703 | (10 | %) | 434,163 | (10 | %) | |||||||||||||
| Current Liabilities |
221,594 | 155,672 | 42 | % | 170,125 | 30 | % | |||||||||||||
| Long-Term Liabilities |
129,866 | 228,805 | (43 | %) | 220,033 | (41 | %) | |||||||||||||
| Deferred Tax Liability |
28 | 22 | 27 | % | 18 | 56 | % | |||||||||||||
| Other Liabilities |
40,814 | 50,204 | (19 | %) | 43,987 | (7 | %) | |||||||||||||
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| Consolidated Stockholders’ Equity |
869,353 | 879,272 | (1 | %) | 893,542 | (3 | %) | |||||||||||||
| Non-controlling Interest |
3 | 3 | 0 | % | 3 | 0 | % | |||||||||||||
| Stockholders’ Equity Attributable to Controlling Interest |
869,350 | 879,269 | (1 | %) | 893,539 | (3 | %) | |||||||||||||
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| 2021 Third Quarter Results | Page 6 | |
| Definitions of Terms and Disclosures |
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Methodology for translation, consolidation, and presentation of results
CEMEX Holdings Philippines, Inc. (“CHP”) reports its consolidated financial statements under Philippine Financial Reporting Standards (“PFRS”). When reference is made in 2021 and 2020 to consolidated financial statements, it means CHP financial information together with its subsidiaries.
For the purpose of presenting figures in U.S. dollars, the consolidated balance sheet as of September 30, 2021 has been converted at the end of period exchange rate of 51.00 Philippine pesos per US dollar while the consolidated income statement for the nine-month period ended September 30, 2021 has been converted at the January to September 2021 average exchange rate of 48.95 Philippine pesos per US dollar. On the other hand, the consolidated income statement for the three-month period ended September 30, 2021 has been converted at the July to September 2021 average exchange rate of 50.24 Philippine pesos per US dollar.
Definition of terms
PHP refers to Philippine Pesos.
pp equals percentage points.
Prices all references to pricing initiatives, price increases or decreases, refer to our prices for our products.
Operating EBITDA equals operating earnings before other expenses, net, plus depreciation and operating amortization.
Free cash flow equals operating EBITDA minus net interest expense, maintenance and strategic capital expenditures, change in working capital, taxes paid, and other cash items (net other expenses less proceeds from the disposal of obsolete and/or substantially depleted operating fixed assets that are no longer in operation).
Maintenance capital expenditures are 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 are investments incurred with the purpose of increasing the company’s profitability. These include capital expenditures on projects designed to increase profitability by expanding capacity, and margin improvement capital expenditures, which are projects designed to increase profitability by reducing costs.
Change in Working capital in the Free cash flow statements only include trade receivables, trade payables, receivables and payables from and to related parties, other current receivables, inventories, other current assets, and other accounts payable and accrued expense.
Net debt equals total debt minus cash and cash equivalents.
| January - September | Third Quarter | January - September | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Exchange Rates | average | average | average | average | End of period | End of period | ||||||||||||||||||
| Philippine peso |
48.95 | 49.94 | 50.24 | 48.71 | 51.00 | 48.50 | ||||||||||||||||||
Amounts provided in units of local currency per US dollar
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| 2021 Third Quarter Results | Page 7 | |
| Disclaimer |
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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 CEMEX Holdings Philippines, Inc.’s (“CHP”) current expectations and projections about future events based on CHP’s knowledge of present facts and circumstances and assumptions about future events, as well as CHP’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 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 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
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| 2021 Third Quarter Results | Page 8 | |
2021 Third 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,” “assume,” “might,” “continue,” “would,” “can,” “consider,” “envision,” “foresee,” “target,” “strategy,” “should,” “could,” “anticipate,” “estimate,” “expect,” “plan,” “believe,” “predict,” “potential” and “intend” or other similar words. These forward-looking statements reflect current expectations and projections about future events of CEMEX Holdings Philippines, Inc. ("CHP") based on CHP’s knowledge of present facts and circumstances and assumptions about future events. These statements necessarily involve risks and uncertainties that could cause actual results to differ materially from CHP’s expectations. Some of the risks, uncertainties and other important factors that could cause results to differ, or that otherwise could have an impact on CHP or its subsidiaries (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 subjected 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; 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 the CHP Group’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 the CHP Group’s prices for products sold or distributed by the CHP Group. Copyright CEMEX Holdings Philippines, Inc. and its subsidiaries
Third quarter 2021 update In 3Q21, construction activity remained stable, despite a reversion to stricter lockdown measures, due to the spread of the COVID-19 Delta variant. Start of the monsoon season in the third quarter negatively affected sequential performance. Successfully executed major kiln maintenance works in APO Cement Plant, more than two years since our last major shutdown in APO. We brought in additional clinker to support our production requirements during our APO shutdown. Increased use of secondary fuels. However, for the fourth quarter, our upcoming shipments of coal will reflect higher rates. Pursuing operations and supply chain efficiency initiatives to mitigate cost increases.
Committed to operate at world-class standards Solid Cement and APO Cement attained continued certifications for: ISO 9001:2015Quality Management System ISO 14001:2015Environmental Management System ISO 45001:2018Occupational Safety and Health Management System ISO 50001:2018Energy Management System CHP is the only cement producer in the Philippines with ISO 50001:2018 Certification for Energy Management System.
Soon to be completed 8.9-kilometer toll bridge connecting Cebu City to the Municipality of Cordova in Mactan Island APO Cement is the sole cement supplier for the project Uses APO Portland Cement Type 2 : sulfate resistant and suitable for applications near bodies of water Cement supplier for Cebu-Cordova Link Expressway
Nearly all our employees and more than two thirds of our contractors have been vaccinated for COVID-19 We are collaborating with local government units for the vaccination of our communities Solid Cement Plant received Safety Seal Certification from the Department of Labor and Employment under the Department’s voluntary certification process. This safety seal certification recognizes our facility to be compliant with public health standards and safety protocols. Three of our distribution centers have also obtained this Safety Seal. Behaviors That Save Lives
Third quarter 2021 initiatives Soft launch of our online booking system for pick-up transactions, complemented by our Electronic Authority to Withdraw digital solution, for a contactless pick-up experience Our Electronic Authority to Withdraw solution reached 100% percent adoption, one year after rollout Paperless transactions and online payment options to enhance customer experience Benefitting from higher pick-up transactions Supply chain efficiencies contributed to lowering distribution cost Targeting our highest level of secondary fuel substitution by end of the year
Sustainability and Climate Action Launched our “Vertua” and “Type 1P High Strength” cement products, giving our customers eco-friendly alternatives Our kilns continue co-processing, saving inorganic waste from landfills and bodies of water Solid Cement Plant recognized by the Department of Environment and Natural Resources for “Small Scale – Waste to Energy for Co-processing of Residual Wastes” Expecting start-up of 4.5-megawatt waste-heat recovery facility in APO Cement Plant by first quarter 2022, similar to the 6-megawatt waste-heat recovery facility in our Solid Cement Plant
Rest of the year outlook National weather bureau announced the onset of the La Niña phenomenon, which may persist until the first quarter of 2022 We continue to face inflationary pressures driven by global energy price increases and supply chain disruptions Execution of public infrastructure projects remains a driver of economic recovery
Domestic cement volumes increased by 1% year-over-year during the third quarter, as construction activity remained stable despite a return to stricter lockdown measures due to the spread of the COVID-19 Delta variant Sequentially, our domestic cement volumes decreased by 4%, as the rainy season affected our industry On a year-to-date basis, our domestic cement volumes increased by 11% year-over-year Our domestic cement prices increased by 1% sequentially, due to price adjustments implemented in 3Q21 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 3Q21 and 9M21, mainly due to competitive market dynamics and the impact of COVID-19 on business activity Domestic Cement Volumes and Prices
Net Sales Net sales for the third quarter decreased by 2% year-over-year due to lower prices. For the first nine months of 2021, net sales increased by 8% year-over-year due to higher volume. Net Sales1 1 Millions of Philippine Pesos -2% +8%
Private Sector Construction sector employment remained above the 4 million threshold in August despite strict lockdown measures, as essential projects in the construction industry were allowed to operate at full capacity. Activity in the residential sector improved compared to last year as seen in the positive trend of residential building permits, and horizontal residential real estate prices. Overall spending and investment for this sector may be challenged by elevated inflation rates. In addition, despite resilient remittance inflows, OFW households could apportion more remittance proceeds for basic and health necessities. Non-residential sector activity declined year-on-year as mobility restrictions continue to hamper the sector’s performance as seen in non-residential building permits, non-residential capital formation, and postponed project launches. The general decline in this sector is softened by growing demand for logistics and warehousing. For the rest of the year, above-normal rainfall conditions forecasted by the national weather bureau may affect general construction activity. Sources: Bangko Sentral ng Pilipinas, Colliers, Jones Lang Lasalle, Philippine Statistics Authority Employment in Construction (K Persons)
Public Sector Infrastructure disbursements for the first two months of 3Q2021 reached PHP 144 billion, a 49% increase compared to the same period in 2020 and higher than the PHP 135 billion recorded during the same period in 2019. The eight-month figure reflects a 45% year-over-year growth and a 28% increase compared to the same period in 2019. The government is expected to fast track infrastructure projects for the rest of the year to catch up, and in anticipation of the construction ban next year due to elections. While the risk of COVID-19 remains, infrastructure activities are considered essential and a driver of the country’s 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 60% of sales during the first nine months of 2021, compared with 58% in the same period of 2020 Purchased additional clinker on a one-off basis during the quarter to support production requirements APO Cement Plant executed scheduled major kiln shutdown towards end of 3Q21 Total fuel cost was 5% lower year-over-year for 9M21, mainly due to the use of purchased clinker in production, and supported by higher substitution of secondary fuels. Total power cost was up by 29% year-over-year for 9M21 due to higher production volume, increased electricity rates, and a rebate from the wholesale electricity spot market received in the prior year. Cost of Sales (% of net sales) Fuel and Power (% of cost of sales)
Operating expenses Distribution expenses was 15% of sales during the first nine months 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 nine months of 2021, lower by 1 pp year-over-year. Distribution (% of net sales) Selling and administrative (% of net sales)
Operating EBITDA and EBITDA Margin Operating EBITDA for the first nine months of 2021 increased by 2% year-over-year, supported by higher volume 3Q21 mainly affected by higher cost from one-off purchases of clinker and APO plant’s major kiln maintenance Operating EBITDA margin was at 20% for the first nine months of 2021 primarily due to higher cost of sales 1 Millions of Philippine Pesos Refers to operating EBITDA margin % Operating EBITDA Variation1 26% 19% 22% 20%
Net income Net income was at PHP 897 million for 9M21 mainly due to higher operating earnings and lower financial expenses Financial expenses declined by 72% year-over-year for 9M21, reflecting lower debt balances 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 nine months of 2021 was around PHP 3.4 billion. Working capital improvement was mainly due to higher payables and lower receivables. Free Cash Flow
Works on the different superstructures of the new line and installation of various equipment remained ongoing throughout the third quarter, following strict health and safety protocols during the current COVID-19 pandemic Expected completion of construction: June 2022 If the same conditions that have caused general delays persist, 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 3,200 million PHP 1,000 million PHP 4,200 million Solid Cement Plant Expansion CAPEX Maintenance and Other CAPEX Total CAPEX
Q&A Session 2021 Third Quarter Results
2021 Third Quarter Appendix
Debt maturity profile Total Debt: PHP 10,718 Avg. life of debt1: 4.8 years Net Debt to EBITDA2: 1.0x All amounts in millions of Philippine Pesos 1 Based on weighted average life of debt 2 Last 12 months Consolidated EBITDA 254 3,553 4,521
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
Definitions 9M21 / 9M20 Results for the first nine 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