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, 2022
Commission File Number: 001-14946
CEMEX, S.A.B. de C.V.
(Translation of Registrants name into English)
Avenida Ricardo Margáin Zozaya #325, Colonia Valle del Campestre,
San Pedro Garza García, Nuevo León 66265, México
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ☒ 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 28, 2022, announcing third quarter 2022 results for CEMEX Holdings Philippines, Inc. an indirect subsidiary of CEMEX, S.A.B. de C.V. (NYSE: CX) (CEMEX). |
2. | Third quarter 2022 results for CEMEX Holdings Philippines, Inc., an indirect subsidiary of CEMEX. |
3. | Presentation regarding third quarter 2022 results for 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 27, 2022 | By: | /s/ Rafael Garza Lozano | ||||
Name: Rafael Garza Lozano | ||||||
Title: Chief Comptroller |
3
EXHIBIT INDEX
EXHIBIT | ||
NO. |
DESCRIPTION | |
1. | Press release dated October 28, 2022, announcing third quarter 2022 results for CEMEX Holdings Philippines, Inc. an indirect subsidiary of CEMEX, S.A.B. de C.V. (NYSE: CX) (CEMEX). | |
2. | Third quarter 2022 results for CEMEX Holdings Philippines, Inc., an indirect subsidiary of CEMEX. | |
3. | Presentation regarding third quarter 2022 results for 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 2022 RESULTS
MANILA, PHILIPPINES. OCTOBER 28, 2022 CEMEX HOLDINGS PHILIPPINES, INC. (CHP) (PSE: CHP), announced today that its consolidated net sales for the first nine months of 2022 amounted to PHP 15.8 billion, a decrease of 3% compared to the same period last year. For the third quarter, net sales decreased by 5% year-over-year due to lower volume.
CHPs domestic cement volume decreased by 11% year-over-year for the first nine months of 2022. The decline in volume was mainly due to lower-than-expected cement demand.
CHPs domestic cement price for the first nine months of 2022 was up by 9% year-over-year as price updates were made mainly to reflect input cost inflation, such as in fuel and transport.
CHPs cost of sales, as a percentage of net sales, increased by 3 percent points year-over-year for the first nine months of 2022 mainly due to higher fuel costs. CHPs fuel cost, as a percentage of net sales, increased by 9 percentage points year-over-year for the first nine months driven by elevated energy prices.
Operating EBITDA for the first nine months of 2022 amounted to PHP 2.8 billion, 16% lower year-over-year. The decrease was mainly due to lower volume and higher input costs, arising from the challenges of subdued market demand and rising inflation. Operating EBITDA margin for the first nine months of the year declined by 2.8 percentage points year-over-year to 17.7%.
CHP recorded a net loss of PHP 819 million for the first nine months of 2022, with a net loss of PHP 552 million recorded during the third quarter, mainly as a result of foreign exchange losses and lower operating EBITDA.
Foreign exchange losses, amounting to PHP 1.5 billion for the first nine months of the year, were attributable to movement in the Philippine Peso to U.S. Dollar exchange rate. Majority of CHPs foreign exchange losses are unrealized (non-cash expenses).
Luis Franco, President and CEO of CHP, said: Despite the challenging market environment, the medium- and long-term potential of the country keep me optimistic. We expect that the next six to twelve months should be a period of transition for the construction industry in the country, and, as a result, for CHP. While headwinds persist, we are determined to maximize our EBITDA, and capture the opportunities that arise. I am confident that our customer-centric strategy and strong footprint will allow us to continue creating value for all stakeholders.
For full year 2022, CHP is guiding for a mid-single-digit percentage decrease for its domestic cement sales volume.
1
CHP, a listed company on 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 other building materials in the Philippines through direct sales using its extensive marine and land distribution network. Moreover, CHPs 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 contains forward-looking statements within the meaning of the securities laws. CHP intends these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the applicable securities laws. These forward-looking statements reflect CHPs current expectations and projections about future events based on CHPs knowledge of present facts and circumstances and assumptions about future events, as well as CHPs current plans based on such facts and circumstances. These statements necessarily involve risks, uncertainties, and assumptions that could cause actual results to differ materially from CHPs expectations, including, among others, risks, uncertainties, and assumptions discussed in CHPs most recent annual report and detailed from time to time in CHPs other filings with the Philippine Securities and Exchange Commission, which factors are incorporated herein by reference, which if materialized could ultimately lead to CHPs expectations and projections not producing the expected benefits and/or results. These factors may be revised or supplemented, but CHP is not under, and expressly disclaims, any obligation to update or correct this press release or any forward-looking statement contained herein, whether as a result of new information, future events or otherwise. Any or all of CHPs forward-looking statements may turn out to be inaccurate. Accordingly, undue reliance on forward-looking statements should not be placed, as such forward-looking statements speak only as of the dates on which they are made. The content of this press release is for informational purposes only, and you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
2
Exhibit 2
2022 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 | |||||||||||||||||||||||
2022 | 2021 | % var | 2022 | 2021 | % var | |||||||||||||||||||
Net sales |
15,807 | 16,308 | (3 | %) | 5,132 | 5,414 | (5 | %) | ||||||||||||||||
Gross profit |
5,808 | 6,500 | (11 | %) | 1,705 | 2,079 | (18 | %) | ||||||||||||||||
as % of net sales |
36.7 | % | 39.9 | % | (3.2pp | ) | 33.2 | % | 38.4 | % | (5.2pp) | |||||||||||||
Operating earnings before other expenses, net |
1,392 | 1,848 | (25 | %) | 208 | 556 | (63 | %) | ||||||||||||||||
as % of net sales |
8.8 | % | 11.3 | % | (2.5pp | ) | 4.1 | % | 10.3 | % | (6.2pp | ) | ||||||||||||
Controlling Interest Net Income (Loss) |
(819 | ) | 897 | N/A | (552 | ) | 94 | N/A | ||||||||||||||||
Operating EBITDA |
2,796 | 3,340 | (16 | %) | 671 | 1,009 | (33 | %) | ||||||||||||||||
as % of net sales |
17.7 | % | 20.5 | % | (2.8pp | ) | 13.1 | % | 18.6 | % | (5.5pp | ) | ||||||||||||
Free cash flow after maintenance capital expenditures |
232 | 3,432 | (93 | %) | (247 | ) | 1,074 | N/A | ||||||||||||||||
Free cash flow |
(779 | ) | 1,738 | N/A | (922 | ) | 689 | N/A | ||||||||||||||||
Net debt1 |
7,144 | 4,363 | 64 | % | 7,144 | 4,363 | 64 | % | ||||||||||||||||
Total debt1 |
10,110 | 10,718 | (6 | %) | 10,110 | 10,718 | (6 | %) | ||||||||||||||||
Earnings per share2 |
(0.06 | ) | 0.07 | N/A | (0.04 | ) | 0.01 | N/A |
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 for the first nine months of 2022 were down by 3% year-over-year mainly due to lower volume and spot sales of raw materials completed in 2021.
Cost of sales was 63.3% of sales for the first nine months of 2022, compared with 60.1% in the same period of 2021, mainly due to higher fuel cost.
Fuel cost, as a percentage of net sales, was higher, at 21.0% for the first nine months of 2022, compared with 11.9% in the same period of 2021, driven by elevated global energy prices.
Power cost, as a percentage of net sales, was flattish, at 12.2% for the first nine months of 2022, compared with 12.6% in the same period of 2021. Power cost is expected to increase in the coming quarters.
CHP is expecting to incur maintenance expenses for APO Plant kiln #2 and Solid Plant kiln in the fourth quarter of 2022.
Operating expenses were 27.9% of sales for the first nine months of 2022, compared with 28.5% in the same period of 2021.
Distribution expenses were 14.2% of sales, a decrease of 0.9pp year-over-year for the first nine months of 2022, supported by supply chain efficiencies.
Selling and administrative expenses, as a percentage of sales, were higher by 0.3pp, at 13.7% for the first nine months of 2022, mainly due to lower volume.
Operating EBITDA for the first nine months of 2022 decreased by 16% year-over-year, while Operating EBITDA margin declined by 2.8pp year-over-year to 17.7%, mainly due to lower volume and higher input costs, arising from the challenges of subdued market demand and rising inflation.
Controlling interest net income was a loss for the third quarter and first nine months of 2022 mainly as a result of foreign exchange losses and lower operating EBITDA.
Foreign exchange losses were attributable to movement in the Philippine Peso to U.S. Dollar exchange rate. These foreign exchange losses mainly relate to intragroup deposits between CHP and its foreign subsidiaries. These intragroup deposits are essentially neutral on a net equity basis. Majority of CHPs foreign exchange losses are unrealized
(non-cash expenses).
Financial expenses decreased by 3% year-over-year for the first nine months of 2022 due to lower debt balances and interest rates.
Income tax expenses were higher by 38% year-over-year for the first nine months of 2022 mainly due to an increase in current income taxes (CIT), as CIT in 2021 included a utilization of deferred tax assets and a one-time benefit from an adjustment in CIT pursuant to the Corporate Recovery and Tax Incentives for Enterprises or the CREATE Act, which was approved into law on March 26, 2021.
Total debt declined by 6% year-over-year, and stood at PHP 10,110 million at the end of September 2022, of which PHP 7,798 million pertained to debt owed to BDO Unibank, Inc. under the BDO Loan
Facility.
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2022 Third Quarter Results | Page 2 |
Operating Results
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January - September | Third Quarter | Third Quarter 2022 | ||||||||||
Domestic Gray Cement | 2022 vs. 2021 | 2022 vs. 2021 | vs. Second Quarter 2022 | |||||||||
Volume |
(11 | %) | (16 | %) | (9 | %) | ||||||
Price in PHP |
9 | % | 12 | % | 4 | % |
Our domestic cement volume during the first nine months of 2022 decreased by 11% year-over-year due to lower-than-expected cement demand and an impact from our price increase implemented in July.
For the third quarter, our domestic cement volume decreased by 16% year-over-year, mainly reflecting the impact of our price increase implemented in July.
Our domestic cement prices were higher year-over-year for the first nine months and third quarter of 2022, as price updates were made mainly to reflect input cost inflation such as in fuel and transport.
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2022 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 | |||||||||||||||||||||||
2022 | 2021 | % var | 2022 | 2021 | % var | |||||||||||||||||||
Operating earnings before other income, net |
1,392 | 1,848 | (25 | %) | 208 | 556 | (63 | %) | ||||||||||||||||
+ Depreciation and operating amortization |
1,404 | 1,491 | 463 | 453 | ||||||||||||||||||||
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Operating EBITDA |
2,796 | 3,340 | (16 | %) | 671 | 1,009 | (33 | %) | ||||||||||||||||
- Net financial expenses |
189 | 195 | 41 | 80 | ||||||||||||||||||||
- Maintenance capital expenditures |
338 | 164 | 165 | 90 | ||||||||||||||||||||
- Change in working capital |
1,619 | (607 | ) | 616 | (320 | ) | ||||||||||||||||||
- Income taxes paid |
364 | 184 | 71 | 76 | ||||||||||||||||||||
- Other cash items (net) |
54 | (27 | ) | 25 | 10 | |||||||||||||||||||
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Free cash flow after maintenance capital expenditures |
232 | 3,432 | (93 | %) | (247 | ) | 1,074 | N/A | ||||||||||||||||
- Strategic capital expenditures |
1,010 | 1,694 | 676 | 385 | ||||||||||||||||||||
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Free cash flow |
(779 | ) | 1,738 | N/A | (922 | ) | 689 | N/A | ||||||||||||||||
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In millions of Philippine Pesos
Debt Information as of September 30, 2022
Third Quarter | Second Quarter | |||||||||||||||
2022 | 2021 | % var | 2022 | |||||||||||||
Total debt(1)(2) |
10,110 | 10,718 | (6 | %) | 9,850 | |||||||||||
Short term |
6 | % | 25 | % | 52 | % | ||||||||||
Long term |
94 | % | 75 | % | 48 | % | ||||||||||
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Cash and cash equivalents |
2,966 | 6,355 | (53 | %) | 3,870 | |||||||||||
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Net debt |
7,144 | 4,363 | 64 | % | 5,980 | |||||||||||
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Leverage Ratio(3) |
3.00 | 2.53 | 2.69 | |||||||||||||
Coverage Ratio(3) |
6.71 | 7.54 | 7.24 |
Third Quarter | ||||||||
2022 | 2021 | |||||||
Currency denomination |
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U.S. dollar |
4 | % | 2 | % | ||||
Philippine peso |
96 | % | 98 | % | ||||
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Interest rate |
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Fixed |
23 | % | 66 | % | ||||
Variable |
77 | % | 34 | % | ||||
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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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2022 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 |
2022 | 2021 | % var | 2022 | 2021 | % var | ||||||||||||||||||
Net sales |
15,806,820 | 16,308,455 | (3 | %) | 5,132,152 | 5,414,362 | (5 | %) | ||||||||||||||||
Cost of sales |
(9,998,711 | ) | (9,808,216 | ) | (2 | %) | (3,426,806 | ) | (3,335,332 | ) | (3 | %) | ||||||||||||
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Gross profit |
5,808,109 | 6,500,239 | (11 | %) | 1,705,346 | 2,079,030 | (18 | %) | ||||||||||||||||
Selling and Administrative Expenses |
(2,172,502 | ) | (2,192,126 | ) | 1 | % | (724,696 | ) | (735,712 | ) | 1 | % | ||||||||||||
Distribution expenses |
(2,243,743 | ) | (2,459,798 | ) | 9 | % | (772,515 | ) | (787,413 | ) | 2 | % | ||||||||||||
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Operating earnings before other expenses, net |
1,391,864 | 1,848,315 | (25 | %) | 208,135 | 555,905 | (63 | %) | ||||||||||||||||
Other income (expenses), net |
(53,999 | ) | 27,282 | N/A | (25,217 | ) | (9,633 | ) | (162 | %) | ||||||||||||||
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Operating earnings |
1,337,865 | 1,875,597 | (29 | %) | 182,918 | 546,272 | (67 | %) | ||||||||||||||||
Financial income (expense), net |
(188,748 | ) | (194,633 | ) | 3 | % | (40,583 | ) | (79,681 | ) | 49 | % | ||||||||||||
Foreign exchange gain (loss), net |
(1,502,167 | ) | (447,045 | ) | (236 | %) | (788,857 | ) | (331,928 | ) | (138 | %) | ||||||||||||
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Income (loss) before income tax |
(353,050 | ) | 1,233,919 | N/A | (646,522 | ) | 134,663 | N/A | ||||||||||||||||
Income tax (expense) benefit |
(465,723 | ) | (336,702 | ) | (38 | %) | 94,447 | (41,117 | ) | N/A | ||||||||||||||
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Consolidated net income (loss) |
(818,773 | ) | 897,217 | N/A | (552,075 | ) | 93,546 | N/A | ||||||||||||||||
Non-controlling interest net income (loss) |
19 | 19 | 0 | % | 5 | 5 | 0 | % | ||||||||||||||||
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Controlling Interest net income (loss) |
(818,754 | ) | 897,236 | N/A | (552,070 | ) | 93,551 | N/A | ||||||||||||||||
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Operating EBITDA |
2,795,716 | 3,339,765 | (16 | %) | 671,282 | 1,008,774 | (33 | %) | ||||||||||||||||
Earnings per share |
(0.06 | ) | 0.07 | N/A | (0.04 | ) | 0.01 | N/A | ||||||||||||||||
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as of September 30 | as of December 31 | |||||||||||||||||||
BALANCE SHEET |
2022 | 2021 | % Var | 2021 | % Var | |||||||||||||||
Total Assets |
65,457,980 | 64,344,395 | 2 | % | 64,387,766 | 2 | % | |||||||||||||
Cash and cash equivalents |
2,966,164 | 6,355,034 | (53 | %) | 5,811,635 | (49 | %) | |||||||||||||
Derivative Asset |
34,831 | 35,050 | (1 | %) | 12,540 | 178 | % | |||||||||||||
Trade receivables - net |
647,888 | 689,824 | (6 | %) | 696,868 | (7 | %) | |||||||||||||
Other current accounts receivable |
77,373 | 61,209 | 26 | % | 66,522 | 16 | % | |||||||||||||
Insurance Claims and Premium Receivables |
223,852 | 183,600 | 22 | % | 91,798 | 144 | % | |||||||||||||
Inventories, net |
5,704,492 | 2,929,904 | 95 | % | 3,099,092 | 84 | % | |||||||||||||
Prepayments and other current assets |
2,394,939 | 1,754,148 | 37 | % | 2,209,600 | 8 | % | |||||||||||||
Current Assets |
12,049,539 | 12,008,769 | 0 | % | 11,988,055 | 1 | % | |||||||||||||
Fixed Assets |
23,397,991 | 22,178,296 | 5 | % | 22,788,019 | 3 | % | |||||||||||||
Investments in an Associate and Other Investments |
14,097 | 14,097 | 0 | % | 14,097 | 0 | % | |||||||||||||
Other Assets and Noncurrent Accounts Receivables |
437,787 | 444,299 | (1 | %) | 436,240 | 0 | % | |||||||||||||
Advances to Contractors |
960,575 | 908,543 | 6 | % | 454,805 | 111 | % | |||||||||||||
Derivative asset net of current portion |
5,043 | 0 | 17,910 | (72 | %) | |||||||||||||||
Deferred income tax assets - net |
733,254 | 930,697 | (21 | %) | 828,946 | (12 | %) | |||||||||||||
Goodwill |
27,859,694 | 27,859,694 | 0 | % | 27,859,694 | 0 | % | |||||||||||||
Other Assets |
30,010,450 | 30,157,330 | (0 | %) | 29,611,692 | 1 | % | |||||||||||||
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Total Liabilities |
20,809,628 | 20,007,371 | 4 | % | 20,180,841 | 3 | % | |||||||||||||
Current Liabilities |
10,900,508 | 11,301,253 | (4 | %) | 12,695,504 | (14 | %) | |||||||||||||
Long-Term Liabilities |
7,714,633 | 6,623,167 | 16 | % | 5,515,700 | 40 | % | |||||||||||||
Deferred Tax Liability |
3,587 | 1,448 | 148 | % | 1,445 | 148 | % | |||||||||||||
Other Liabilities |
2,190,900 | 2,081,503 | 5 | % | 1,968,192 | 11 | % | |||||||||||||
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Consolidated Stockholders Equity |
44,648,352 | 44,337,024 | 1 | % | 44,206,925 | 1 | % | |||||||||||||
Non-controlling Interest |
106 | 131 | (19 | %) | 125 | (15 | %) | |||||||||||||
Stockholders Equity Attributable to Controlling Interest |
44,648,246 | 44,336,893 | 1 | % | 44,206,800 | 1 | % | |||||||||||||
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2022 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 |
2022 | 2021 | % var | 2022 | 2021 | % var | ||||||||||||||||||
Net sales |
294,296 | 333,184 | (12 | %) | 90,621 | 107,763 | (16 | %) | ||||||||||||||||
Cost of sales |
(186,159 | ) | (200,384 | ) | 7 | % | (60,509 | ) | (66,384 | ) | 9 | % | ||||||||||||
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Gross profit |
108,137 | 132,800 | (19 | %) | 30,112 | 41,379 | (27 | %) | ||||||||||||||||
Selling and Administrative Expenses |
(40,448 | ) | (44,786 | ) | 10 | % | (12,796 | ) | (14,643 | ) | 13 | % | ||||||||||||
Distribution expenses |
(41,775 | ) | (50,254 | ) | 17 | % | (13,641 | ) | (15,672 | ) | 13 | % | ||||||||||||
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Operating earnings before other expenses, net |
25,914 | 37,760 | (31 | %) | 3,675 | 11,064 | (67 | %) | ||||||||||||||||
Other income (expenses), net |
(1,005 | ) | 557 | N/A | (445 | ) | (192 | ) | (132 | %) | ||||||||||||||
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Operating earnings |
24,909 | 38,317 | (35 | %) | 3,230 | 10,872 | (70 | %) | ||||||||||||||||
Financial income (expense), net |
(3,514 | ) | (3,976 | ) | 12 | % | (717 | ) | (1,586 | ) | 55 | % | ||||||||||||
Foreign exchange gain (loss), net |
(27,968 | ) | (9,133 | ) | (206 | %) | (13,929 | ) | (6,606 | ) | (111 | %) | ||||||||||||
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Income (loss) before income tax |
(6,573 | ) | 25,208 | N/A | (11,416 | ) | 2,680 | N/A | ||||||||||||||||
Income tax (expense) benefit |
(8,671 | ) | (6,879 | ) | (26 | %) | 1,668 | (818 | ) | N/A | ||||||||||||||
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Consolidated net income (loss) |
(15,244 | ) | 18,329 | N/A | (9,748 | ) | 1,862 | N/A | ||||||||||||||||
Non-controlling interest net income (loss) |
0 | 0 | 0 | 0 | ||||||||||||||||||||
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Controlling Interest net income (loss) |
(15,244 | ) | 18,329 | N/A | (9,748 | ) | 1,862 | N/A | ||||||||||||||||
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Operating EBITDA |
52,052 | 68,232 | (24 | %) | 11,853 | 20,078 | (41 | %) | ||||||||||||||||
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as of September 30 | as of December 31 | |||||||||||||||||||
BALANCE SHEET |
2022 | 2021 | % Var | 2021 | % Var | |||||||||||||||
Total Assets |
1,116,555 | 1,261,656 | (12 | %) | 1,262,529 | (12 | %) | |||||||||||||
Cash and cash equivalents |
50,596 | 124,609 | (59 | %) | 113,956 | (56 | %) | |||||||||||||
Derivative Asset |
594 | 687 | (14 | %) | 246 | 141 | % | |||||||||||||
Trade receivables - net |
11,051 | 13,526 | (18 | %) | 13,664 | (19 | %) | |||||||||||||
Other current accounts receivable |
1,320 | 1,200 | 10 | % | 1,304 | 1 | % | |||||||||||||
Insurance Claims and Premium Receivables |
3,818 | 3,600 | 6 | % | 1,800 | 112 | % | |||||||||||||
Inventories, net |
97,305 | 57,449 | 69 | % | 60,768 | 60 | % | |||||||||||||
Prepayments and other current assets |
40,852 | 34,395 | 19 | % | 43,326 | (6 | %) | |||||||||||||
Current Assets |
205,536 | 235,466 | (13 | %) | 235,064 | (13 | %) | |||||||||||||
Fixed Assets |
399,113 | 434,869 | (8 | %) | 446,833 | (11 | %) | |||||||||||||
Investments in an Associate and Other Investments |
240 | 276 | (13 | %) | 276 | (13 | %) | |||||||||||||
Other Assets and Noncurrent Accounts Receivables |
7,468 | 8,712 | (14 | %) | 8,554 | (13 | %) | |||||||||||||
Advances to Contractors |
16,385 | 17,815 | (8 | %) | 8,918 | 84 | % | |||||||||||||
Derivative asset net of current portion |
86 | 0 | 351 | (75 | %) | |||||||||||||||
Deferred income tax assets - net |
12,508 | 18,249 | (31 | %) | 16,254 | (23 | %) | |||||||||||||
Goodwill |
475,219 | 546,269 | (13 | %) | 546,279 | (13 | %) | |||||||||||||
Other Assets |
511,906 | 591,321 | (13 | %) | 580,632 | (12 | %) | |||||||||||||
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Total Liabilities |
354,962 | 392,302 | (10 | %) | 395,710 | (10 | %) | |||||||||||||
Current Liabilities |
185,937 | 221,594 | (16 | %) | 248,936 | (25 | %) | |||||||||||||
Long-Term Liabilities |
131,593 | 129,866 | 1 | % | 108,153 | 22 | % | |||||||||||||
Deferred Tax Liability |
61 | 28 | 118 | % | 28 | 118 | % | |||||||||||||
Other Liabilities |
37,371 | 40,814 | (8 | %) | 38,593 | (3 | %) | |||||||||||||
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Consolidated Stockholders Equity |
761,592 | 869,353 | (12 | %) | 866,819 | (12 | %) | |||||||||||||
Non-controlling Interest |
2 | 3 | (33 | %) | 2 | 0 | % | |||||||||||||
Stockholders Equity Attributable to Controlling Interest |
761,590 | 869,350 | (12 | %) | 866,817 | (12 | %) | |||||||||||||
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2022 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 to consolidated financial statements, it means financial statements corresponding to CHP together with its subsidiaries.
For the purpose of presenting figures in U.S. dollars, the consolidated balance sheet as of September 30, 2022 has been converted at the end of period exchange rate of 58.63 Philippine pesos per US dollar while the consolidated income statement for the nine-month period ended September 30, 2022 has been converted at the January to September 2022 average exchange rate of 53.71 Philippine pesos per US dollar. On the other hand, the consolidated income statement for the three-month period ended September 30, 2022 has been converted at the July to September 2022 average exchange rate of 56.63 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 companys 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 companys 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 | ||||||||||||||||||||||
Exchange Rates | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||
average | average | average | average | End of period | End of period | |||||||||||||||||||
Philippine peso |
53.71 | 48.95 | 56.63 | 50.24 | 58.63 | 51.00 |
Amounts provided in units of local currency per US dollar
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2022 Third Quarter Results | Page 7 |
Disclaimer
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| |
|
Except as the context otherwise may require, references in this report to CHP, we, us or our refer to CEMEX Holdings Philippines, Inc. and its consolidated entities. The information contained in this report contains forward-looking statements within the meaning of securities laws. We intend these forward-looking statements to be covered by any applicable safe harbor provisions for forward-looking statements within the meaning of securities laws. These forward-looking statements and information are necessarily subject to risks, uncertainties, and assumptions, including but not limited to statements related to CHPs plans, objectives, expectations (financial or otherwise), and typically can be identified by the use of words such as will, may, assume, might, should, could, continue, would, can, consider, anticipate, estimate, expect, envision, plan, believe, foresee, predict, potential, target, strategy, intend, aimed, and similar terms. Although CHP believes that its expectations are reasonable, it can give no assurance that these expectations will prove to be correct, and actual results may vary materially from historical results or results anticipated by forward-looking statements due to various factors. These forward-looking statements reflect, as of the date on which such forward-looking statements are made, our current expectations and projections about future events based on our knowledge of present facts and circumstances and assumptions about future events, unless otherwise indicated. These statements necessarily involve risks, uncertainties and assumptions that could cause actual results to differ materially from historical results or those anticipated in this report. Among others, such risks, uncertainties, and assumptions include those discussed in CHPs most recent annual report and those detailed from time to time in CHPs filings with the Philippine Securities and Exchange Commission, which factors are incorporated herein by reference, including, but not limited to: the impact of pandemics, epidemics or outbreaks of infectious diseases and the response of governments and other third parties, including with respect to the novel strain of the coronavirus identified in China in late 2019 and its variants (COVID-19), which have affected and may continue to adversely affect, among other matters, the ability of our operating facilities to operate at full or any capacity, supply chains, international operations, availability of liquidity, investor confidence and consumer spending, as well as the availability of, and demand for, our products and services; the cyclical activity of the construction sector; our exposure to other sectors that impact our and our clients businesses, such as, but not limited to, the energy sector; availability of raw materials and related fluctuating prices; volatility in pension plan asset values and liabilities, which may require cash contributions to the pension plans; the impact of environmental cleanup costs and other liabilities relating to existing and/or divested businesses; our ability to secure and permit aggregates reserves in strategically located areas; the timing and amount of federal, state and local funding for infrastructure; changes in the level of spending for private residential and private nonresidential construction; changes in our effective tax rate; competition in the markets in which we offer our products and services; general political, social, health, economic and business conditions in the markets in which we operate or that affect our operations and any significant economic, health, political or social developments in those markets, as well as any inherent risks to international operations; the regulatory environment, including environmental, energy, tax, labor, antitrust, and acquisition-related rules and regulations; our ability to satisfy our obligations under our material debt agreements and CEMEX, S.A.B. de C.V.s (CEMEX), the ultimate parent company of the major shareholder of CHP, ability to satisfy CEMEXs obligations under its material debt agreements, the indentures that govern CEMEXs outstanding notes, and other debt instruments and financial obligations, including CEMEXs subordinated notes with no fixed maturity and other financial obligations; the availability of short-term credit lines or working capital facilities, which can assist us in connection with market cycles; the impact of CEMEXs below investment grade debt rating on our cost of capital and on the cost of the products and services we purchase; loss of reputation of our brands; our ability to consummate asset sales, fully integrate newly acquired businesses, achieve cost-savings from our cost-reduction initiatives, implement our pricing initiatives for our products and CEMEXs ability to generally meet its Operation Resilience strategys goals; the increasing reliance on information technology infrastructure for our sales, invoicing, procurement, financial statements and other processes that can adversely affect our sales and 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 the demand for consumer goods, consequently affecting demand for our 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; availability and cost of trucks, railcars, barges and ships, as well as their licensed operators, for transport of our materials; labor shortages and constraints; terrorist and organized criminal activities as well as geopolitical events, such as war and armed conflicts, including the current war between Russia and Ukraine; declarations of insolvency or bankruptcy, or becoming subject to similar proceedings; and, natural disasters and other unforeseen events (including global health hazards such as COVID-19). Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from historical results, performance or achievements and/or results, performance or achievements expressly or implicitly anticipated by the forward-looking statements, or otherwise could have an impact on us or our consolidated entities. Any or all of CHPs forward-looking statements may turn out to be inaccurate and the factors identified above are not exhaustive. Accordingly, undue reliance on forward-looking statements should not be placed, as such forward-looking statements speak only as of the dates on which they are made. These factors may be revised or supplemented, but CHP is not under, and expressly disclaims, any obligation to update or correct the information contained in this report or any forward-looking statement that it may make from time to time, whether as a result of new information, future events or otherwise. Readers should review future reports filed by us with the Philippine Securities and Exchange Commission. This report also includes statistical data regarding the production, distribution, marketing and sale of cement, ready mix concrete, clinker, aggregates and Urbanization Solutions. Unless the context indicates otherwise, all references to pricing initiatives, price increases or decreases, refer to CHPs prices for CHPs products. We generated some of this data internally, and some was obtained from independent industry publications and reports that we believe to be reliable sources. We have not independently verified this data nor sought the consent of any organizations to refer to their reports in this report.
Copyright CEMEX Holdings Philippines, Inc. and its subsidiaries
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2022 Third Quarter Results | Page 8 |
Exhibit 3
2022 Third Quarter Results
Except as the context otherwise may require, references in this presentation to CHP, we, us or our refer to CEMEX Holdings Philippines, Inc. and its consolidated entities. The information contained in this presentation includes forward-looking statements within the meaning of securities laws. We intend these forward-looking statements to be covered by any applicable safe harbor provisions for forward-looking statements within the meaning of securities laws. These forward-looking statements and information are necessarily subject to risks, uncertainties, and assumptions, including but not limited to statements related to CHPs plans, objectives, expectations (financial or otherwise), and typically can be identified by the use of words such as will, may, assume, might, should, could, continue, would, can, consider, anticipate, estimate, expect, envision, plan, believe, foresee, predict, potential, target, strategy, intend, aimed, and similar terms. Although CHP believes that its expectations are reasonable, it can give no assurance that these expectations will prove to be correct, and actual results may vary materially from historical results or results anticipated by forward-looking statements due to various factors. These forward-looking statements reflect, as of the date on which such forward-looking statements are made, our current expectations and projections about future events based on our knowledge of present facts and circumstances and assumptions about future events, unless otherwise indicated. These statements necessarily involve risks, uncertainties and assumptions that could cause actual results to differ materially from historical results or those anticipated in this presentation. Among others, such risks, uncertainties, and assumptions include those discussed in CHPs most recent annual report and those detailed from time to time in CHPs filings with the Philippine Securities and Exchange Commission, which factors are incorporated herein by reference, including, but not limited to: the impact of pandemics, epidemics or outbreaks of infectious diseases and the response of governments and other third parties, including with respect to the novel strain of the coronavirus identified in China in late 2019 and its variants (COVID-19), which have affected and may continue to adversely affect, among other matters, the ability of our operating facilities to operate at full or any capacity, supply chains, international operations, availability of liquidity, investor confidence and consumer spending, as well as the availability of, and demand for, our products and services; the cyclical activity of the construction sector; our exposure to other sectors that impact our and our clients businesses, such as, but not limited to, the energy sector; availability of raw materials and related fluctuating prices; volatility in pension plan asset values and liabilities, which may require cash contributions to the pension plans; the impact of environmental cleanup costs and other liabilities relating to existing and/or divested businesses; our ability to secure and permit aggregates reserves in strategically located areas; the timing and amount of federal, state and local funding for infrastructure; changes in the level of spending for private residential and private nonresidential construction; changes in our effective tax rate; competition in the markets in which we offer our products and services; general political, social, health, economic and business conditions in the markets in which we operate or that affect our operations and any significant economic, health, political or social developments in those markets, as well as any inherent risks to international operations; the regulatory environment, including environmental, energy, tax, labor, antitrust, and acquisition-related rules and regulations; our ability to satisfy our obligations under our material debt agreements and CEMEX, S.A.B. de C.V.s (CEMEX), the ultimate parent company of the major shareholder of CHP, ability to satisfy CEMEXs obligations under its material debt agreements, the indentures that govern CEMEXs outstanding notes, and other debt instruments and financial obligations, including CEMEXs subordinated notes with no fixed maturity and other financial obligations; the availability of short-term credit lines or working capital facilities, which can assist us in connection with market cycles; the impact of CEMEXs below investment grade debt rating on our cost of capital and on the cost of the products and services we purchase; loss of reputation of our brands; our ability to consummate asset sales, fully integrate newly acquired businesses, achieve cost-savings from our cost-reduction initiatives, implement our pricing initiatives for our products and CEMEXs ability to generally meet its Operation Resilience strategys goals; the increasing reliance on information technology infrastructure for our sales, invoicing, procurement, financial statements and other processes that can adversely affect our sales and 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 the demand for consumer goods, consequently affecting demand for our 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; availability and cost of trucks, railcars, barges and ships, as well as their licensed operators, for transport of our materials; labor shortages and constraints; terrorist and organized criminal activities as well as geopolitical events, such as war and armed conflicts, including the current war between Russia and Ukraine; declarations of insolvency or bankruptcy, or becoming subject to similar proceedings; and, natural disasters and other unforeseen events (including global health hazards such as COVID-19). Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from historical results, performance or achievements and/or results, performance or achievements expressly or implicitly anticipated by the forward-looking statements, or otherwise could have an impact on us or our consolidated entities. Any or all of CHPs forward-looking statements may turn out to be inaccurate and the factors identified above are not exhaustive. Accordingly, undue reliance on forward-looking statements should not be placed, as such forward-looking statements speak only as of the dates on which they are made. These factors may be revised or supplemented, but CHP is not under, and expressly disclaims, any obligation to update or correct the information contained in this presentation or any forward-looking statement that it may make from time to time, whether as a result of new information, future events or otherwise. Readers should review future reports filed by us with the Philippine Securities and Exchange Commission. This presentation also includes statistical data regarding the production, distribution, marketing and sale of cement, ready mix concrete, clinker, aggregates, and Urbanization Solutions. Unless the context indicates otherwise, all references to pricing initiatives, price increases or decreases, refer to CHPs prices for CHPs products. We generated some of this data internally, and some was obtained from independent industry publications and reports that we believe to be reliable sources. We have not independently verified this data nor sought the consent of any organizations to refer to their reports in this presentation. 2 Copyright CEMEX Holdings Philippines, Inc. and its subsidiaries
Third Quarter 2022 Update ? Despite significant headwinds, we continue with efforts to address the variables within our control Cement demand remained subdued, affecting our year-to-date volumes Global energy prices continued to rise, leading to unprecedented input cost increases Markets remain highly competitive, heightened by the presence of imported cement ? Our year-to-date prices reflect a pricing strategy intended to recover the input cost inflation for our products ? Pursuing operating efficiencies and increasing use of alternative fuels and raw materials Our commercial strategy and operational excellence will remain key value drivers moving forward 3
Health and Safety: Our Top Priority 33% reduction in recordable injuries year-over-year for 9M22 Property damage incidents lower by 35% year-over-year for 9M22 Resumed face-to-face engagements (e.g. safety and emergency response trainings) Resumed safety initiatives for the community (e.g. vulnerable road-users campaign) 4
Focusing on customers to drive our actions Enhancing customer experience by improving our pick-up process for clients through on-site and online solutions Digital efforts such as paperless invoicing and CEMEX Go rewards program generating competitive advantages Average Net Promoter Score of 62 for the first three quarters of 2022 Net Promoter Score (NPS) 58 66 63 62 35 2018 2019 2020 2021 9M22 5
Reinforcing our market presence through the best available products and value offers During the third quarter of 2022, over two-thirds of our products sold were under the Vertua® brand, CEMEXs family of eco-friendly products 6
Achieving cost efficiency through sustainable operations Aiming to further increase alternative fuels usage, while optimizing the proportion of fossil-based fuels in our mix Co-processed ~30 k tons of residual waste year-to-date, eliminating an equivalent of 5 days worth of Metro Manila waste In July, Solid Cement Plant was recognized for Exemplary Operations in Small Scale Waste-to-Energy Operations by DENR-EMB1 Our ability to co-process waste supports both the public and private sector in advancing a circular economy Seeking to expand usage of alternative and decarbonated raw materials 1 Department of Environment and Natural ResourcesEnvironmental Management Bureau (Region IV-A)
Operating and Financial Highlights
Financial Results Summary Net Sales Operating EBITDA Margin EBITDA (PHP M) (PHP M) (%) -3% -16% -2.8pp -5.6pp -5% -33% . 5% 6% 7% . 16,308 15,807 3,340 2,796 20 . 17 18 1% 5,414 5,132 1,009 13 . 671 9M21 9M22 3Q21 3Q22 9M21 9M22 3Q21 3Q22 9M21 9M22 3Q21 3Q22 9
Operating EBITDA Variation 9M22 -16% EBITDA 20.5% -2.8pp 17.7% margin 10 All amounts in millions of Philippine Pesos, except percentages
Operating EBITDA Variation 3Q22 -33% EBITDA 18.6% -5.6pp 13.1% margin 11 All amounts in millions of Philippine Pesos, except percentages
Domestic Cement Volumes and Prices 9M22 vs. 3Q22 vs. 3Q22 vs. 9M21 3Q21 2Q22 Domestic Volume (11%) (16%) (9%) Cement Price (PHP) 9% 12% 4% Domestic cement volumes during 9M22 decreased by 11% year-over-year due to lower-than-expected cement demand and an impact from our price increase implemented in July For 3Q22, our domestic cement volumes decreased by 16% year-over-year, mainly reflecting the impact of our price increase implemented in July Our domestic cement prices were higher, as price updates were made to reflect input cost inflation 12
Construction Employment and Private Sector Employment in Construction1 Construction employment Contribution to total employment (M Persons) (%) Construction sector employment declining in July 10.1% 10.0% 9.7% 9.6% 10.0% 9.5% and August 2022 8.9% 8.9% Inflation and softer industry demand further 4.3 4.4 4.2 4.4 4.6 4.7 4.5 4.3 lessened construction firms optimism in 3Q22 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 High borrowing costs and inflation affecting refurbishing and construction for mid- and low- Outlook on Volume of Business Activity, Current Quarter2 income residential works (Net Balance Index) 40 Industry Construction BPO3, tourism, and warehousing industries support the non-residential sector but risks from high 30 20 commercial inventory levels remain 10 0 -10 1 Source: Philippine Statistics Authority 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 2 Source: Bangko Sentral ng Pilipinas 3 13 Business Process Outsourcing Other sources: Colliers, Jones Lang Lasalle
Public Sector Infrastructure Program (in PHP billion) Infrastructure Program % of GDP Governments 2023 infrastructure program 5.8% lower than 2022 level, but still aligned with 5.5% 5.0% minimum target of at least 5% of GDP +6.8% -1.6% Tight fiscal space may limit infrastructure and spending potential 1,124 1,200 1,180 New infrastructure projects expected to rely on Public-Private Partnerships (PPP) 2021* 2022 2023 % Refers to year-over-year change *Refers to actual infrastructure disbursement 14 Source: Department of Budget and Management (DBM)
Cost of Sales (% of net sales) Cost of sales, as a percentage of net 66.8% sales, increased by 3pp year-over-year o Total Cost of Sales 63.3% 61.6% 60.1% during 9M22 mainly due to higher fuel cost 2% Fuel cost, as a percentage of net 1% . sales, was up by 9pp year-over-year . 30 30 6% 1% during 9M22 driven by elevated global . . 35 38 energy prices Power cost is expected to increase in 7% the coming quarters 0% . . 9% 23 5% 21 . 11 . 11 Expecting to incur maintenance expenses for APO Plant1 kiln #2 and 2% 6% 9% . 0% Solid Plant kiln in 4Q22 . . . 12 12 12 12 9M22 9M21 3Q22 3Q21 15 1 APO Plant kiln #1 maintenance executed in 1Q22
Operating Expenses Distribution Selling and administrative Distribution expenses, as a percentage (% of net sales) (% of net sales) of net sales, decreased by 0.9pp year-over-year during 9M22, supported by supply chain efficiencies Selling and administrative expenses, as a percentage of net sales, increased by 1% 1% 5% 0.3pp year-over-year during 9M22, 2% .. . 1% . 7% 6% . 4% . mainly due to lower volume . . 14 15 15 14 . 14 13 13 13 Operating expenses, as a percentage of net sales, decreased by 0.6pp year- 9M22 9M21 3Q22 3Q21 9M22 9M21 3Q22 3Q21 over-year during 9M22 16
Net Income JanuarySeptember Third Quarter (In Millions of Philippine Pesos) 2022 2021 % var 2022 2021 % var Operating earnings 1,338 1,876 (29%) 183 546 (67%) Financial income (expense), net (189) (195) 3% (41) (80) 49% Foreign exchange gain (loss), net (1,502) (447) (236%) (789) (332) (138%) Net income (loss) before income (353) 1,234 N/A (647) 135 N/A Income tax benefit (expenses) (466) (337) (38%) 94 (41) N/A Consolidated net income (loss) (819) 897 N/A (552) 94 N/A Net loss for 9M22 and 3Q22 was mainly a result of foreign exchange losses and lower EBITDA. Foreign exchange (FX) losses were attributable to movement in the PHP to US$ exchange rate. This mainly relates to intragroup deposits between CHP and its foreign subsidiaries. These intragroup deposits are essentially neutral on a net equity basis. Majority of these FX losses are unrealized (non-cash expenses). Financial expenses decreased for 9M22 and 3Q22 due to lower debt balances and interest rates. Income tax expenses were higher for 9M22 mainly due to an increase in current income taxes (CIT), as CIT in 2021 included a utilization of deferred tax assets and a one-time benefit from an adjustment in CIT pursuant to the CREATE Act1 17 1 The Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which was approved into law on March 26, 2021
Free Cash Flow & Guidance
Free Cash Flow JanuarySeptember Third Quarter Year-to-date investment in working capital 2022 2021 % var 2022 2021 % var was mainly due to higher inventories Operating EBITDA 2,796 3,340 (16%) 671 1,009 (33%) Net Financial Expenses 189 195 41 80 Income taxes paid in 2021 included a utilization of deferred tax assets and a one- Maintenance Capex 338 164 165 90 time benefit from an adjustment in current Change in Working Capital 1,619 (607) 616 (320) income taxes pursuant to the CREATE Act1 Income Taxes Paid 364 184 71 76 Other Cash Items (net) 54 (27) 25 10 Net financial expenses for 9M22 decreased Free Cash Flow after due to lower debt balances and interest rates 232 3,432 (93%) (247) 1,074 N/A Maintenance Capex Strategic Capex 1,010 1,694 676 385 Year-to-date strategic capital expenditures were lower due to delay in the Free Cash Flow (779) 1,738 N/A (922) 689 N/A implementation of the Solid Plant New Line Millions of Philippine Pesos project 19 1 The Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which was approved into law on March 26, 2021
Solid Cement Plant New Line Completed slip form works for raw meal silo and clinker silos Activities currently ongoing include: Slip form works for cement silos Mechanical installation of various equipment Construction of material transportation system Construction of the different buildings for the new line We have invested around US$212 million1 from the start of the project until end September 2022 Expected completion of construction: March 2024 Expected total investment of US$356 million1 20 1 Includes project cost and interest capitalization
2022 Guidance Cement Volumes Mid-single-digit percentage decrease PHP 2,000 million Solid Cement Plant New Line CAPEX Capital expenditures PHP 1,900 million Maintenance and Other Strategic CAPEX PHP 3,900 million Total CAPEX
Q&A Session 2022 Third Quarter Results
Contact Information Investor Relations Stock Information In the Philippines PSE: +632 8849 3600 CHP chp.ir@cemex.com
2022 Third Quarter Appendix
Debt Maturity Profile Leases Debt under the BDO loan facility Short-term loan with BDO 3,896 Total Debt: PHP 10,110 Avg. life of debt1: 7 years Net Debt to EBITDA2: 2.2x 1,390 2,112 1,620 1,736 23 65 88 2,506 462 2,089 1,532 1,671 284 302 160 2022 2023 2024 2025 2026 ≥ 2027 All amounts in millions of Philippine Pesos 1 Based on weighted average life of debt 25 2 Last 12 months Consolidated EBITDA
Additional Debt Information Third Quarter Second Quarter 2022 2021 % var 2022 Total debt(1)(2) 10,110 10,718 (6%) 9,850 Short term 6% 25% 52% Long term 94% 75% 48% Cash and cash equivalents 2,966 6,355 (53%) 3,870 Net debt 7,144 4,363 64% 5,980 Leverage Ratio(3) 3.00 2.53 2.69 Coverage Ratio(3) 6.71 7.54 7.24 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) 26 3 Based on BDO Loan Facility financial covenants
Definitions 9M22 / 9M21 Results for the first nine months of the years 2022 and 2021, respectively PHP Philippine Pesos pp Percentage points Prices All references to pricing initiatives, price increases or decreases, refer to our prices for our products. Operating EBITDA Operating earnings before other expenses, net, plus depreciation and operating amortization. Free Cash Flow Operating EBITDA minus net interest expense, maintenance and strategic capital expenditures, change in working capital, taxes paid, and other cash items (net other expenses less proceeds from the disposal of obsolete and/or substantially depleted operating fixed assets that are no longer in operation), Maintenance Capital Investments incurred for the purpose of ensuring the companys operational continuity. These include capital expenditures Expenditures on projects required to replace obsolete assets or maintain current operational levels, and mandatory capital expenditures, which are projects required to comply with governmental regulations or company policies, Strategic capital Investments incurred with the purpose of increasing the companys profitability. These include capital expenditures on expenditures projects designed to increase profitability by expanding capacity, and margin improvement capital expenditures, which are projects designed to increase profitability by reducing costs. Change in Working capital in Only include trade receivables, trade payables, receivables and payables from and to related parties, other current the Free cash flow receivables, inventories, other current assets, and other accounts payable and accrued expense. statements Net Debt Total debt (debt plus leases) minus cash and cash equivalents. 27