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, 2012
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
Garza García, Nuevo León, México 66265
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Contents
| 1. | Press release, dated October 15, 2012, announcing third quarter 2012 results for CEMEX, S.A.B. de C.V. (NYSE:CX). |
| 2. | Third quarter 2012 results for CEMEX, S.A.B. de C.V. (NYSE:CX). |
| 3. | Presentation regarding third quarter 2012 results for CEMEX, S.A.B. de C.V. (NYSE:CX). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, CEMEX, S.A.B. de C.V. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| CEMEX, S.A.B. de C.V. |
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| (Registrant) |
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| Date: | October 15, 2012 |
By: | /s/ Rafael Garza |
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| Name: Rafael Garza |
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| Title: Chief Comptroller |
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EXHIBIT INDEX
| EXHIBIT NO. |
DESCRIPTION | |
| 1. |
Press release, dated October 15, 2012, announcing third quarter 2012 results for CEMEX, S.A.B. de C.V. (NYSE:CX). | |
| 2. |
Third quarter 2012 results for CEMEX, S.A.B. de C.V. (NYSE:CX). | |
| 3. |
Presentation regarding third quarter 2012 results for CEMEX, S.A.B. de C.V. (NYSE:CX). | |
Exhibit 1
| Media Relations Jorge Pérez +52(81) 8888-4334 mr@cemex.com |
Investor Relations Eduardo Rendón +52(81) 8888-4256 ir@cemex.com |
Analyst Relations Luis Garza +52(81) 8888-4136 ir@cemex.com |
CEMEX REPORTS THIRD-QUARTER 2012 RESULTS
MONTERREY, MEXICO, OCTOBER 15, 2012– CEMEX, S.A.B. de C.V. (“CEMEX”) (NYSE: CX), announced today that consolidated net sales reached U.S.$3.9 billion during the third quarter of 2012, an increase of 2% on a like-to-like basis for the ongoing operations and adjusting for currency fluctuations, versus the comparable period in 2011. Operating EBITDA increased by 9% during the quarter to U.S.$730 million versus the same period in 2011. On a like-to-like basis, operating EBITDA increased by 13% in the same period.
CEMEX’s Consolidated Third-Quarter 2012 Financial and Operational Highlights
| • | The increase in consolidated net sales on a like-to-like basis was due to higher prices in local currency terms in most of our regions. |
| • | Operating income in the third quarter increased by 35%, to U.S.$410 million. |
| • | Operating EBITDA increased during the quarter by 9% and, on a like-to-like basis, by 13%. |
| • | Operating EBITDA margin grew by 1.8 percentage points on a year-over-year basis reaching 18.7%. |
| • | The infrastructure and residential sectors were the main drivers of demand in most of our markets. |
| • | Free cash flow after maintenance capital expenditures for the quarter was U.S.$204 million, compared with U.S.$102 million in the same quarter of 2011. |
Fernando A. González, Executive Vice President of Finance and Administration, said: “We are pleased with our 13% growth in operating EBITDA, on a like-to-like basis, on the back of a 2% percent growth in consolidated net sales. This is the highest EBITDA generation since the third quarter of 2009 and the fifth consecutive quarter with a year-over-year EBITDA increase.
An improvement in pricing and volume in several of our regions as well as the continued success of our transformation effort has led to the highest operating EBITDA margin in three years. We are particularly pleased with the quarterly performance of our operations in Mexico, United States and the South, Central America and the Caribbean and Asia regions.
During the quarter we successfully completed the refinancing of our August 2009 Financing Agreement. Earlier this month, we also issued U.S.$1.5 billion dollars in senior secured notes. We will use the proceeds from these notes to satisfy the U.S.$1 billion dollar March 2013 prepayment milestone and the U.S.$500 million amortization due in February 2014 under the new Facilities Agreement. With these prepayments, we will have no significant maturities until February of 2014.
1
Also, during the quarter we signed a 10-year strategic agreement with IBM. Under this agreement, IBM will provide finance, accounting, and human-resource back-office services, as well as IT infrastructure, application development and maintenance services. We expect this agreement will result in approximately U.S.$1 billion in savings during the life of the contract.
We also remain focused on our transformation process and expect an incremental improvement of 200 million dollars in our steady-state EBITDA during 2012, reaching a run rate of 400 million dollars by the end of this year.”
Consolidated Corporate Results
During the third quarter of 2012, controlling interest net income was a loss of U.S.$203 million, an improvement over the loss of U.S.$730 million in the same period last year.
Total debt plus perpetual notes increased U.S.$14 million during the quarter.
Geographical Markets Third-Quarter 2012 Highlights
Net sales in our operations in Mexico increased 2% in the third quarter of 2012 to U.S.$875 million, compared with U.S.$856 million in the third quarter of 2011. Operating EBITDA increased by 9% to U.S.$313 million versus the same period of last year.
CEMEX’s operations in the United States reported net sales of U.S.$826 million in the third quarter of 2012, up 12% from the same period in 2011. Operating EBITDA increased to U.S.$27 million in the quarter, versus the loss of U.S.$11 million in the same quarter of 2011.
In Northern Europe, net sales for the third quarter of 2012 decreased 15% to U.S.$1,105 million, compared with U.S.$1,302 million in the third quarter of 2011. Operating EBITDA was U.S.$143 million for the quarter, 18% lower than the same period last year.
Third-quarter net sales in the Mediterranean region were U.S.$342 million, 19% lower compared with U.S.$425 million during the third quarter of 2011. Operating EBITDA decreased 5% to U.S.$99 million for the quarter versus the comparable period in 2011.
CEMEX’s operations in South, Central America and the Caribbean reported net sales of U.S.$520 million during the third quarter of 2012, representing an increase of 15% over the same period of 2011. Operating EBITDA increased 25% to U.S.$177 million in the third quarter of 2012, from U.S.$142 million in the third quarter of 2011.
Operations in Asia reported a 2% increase in net sales for the third quarter of 2012, to U.S.$133 million, versus the third quarter of 2011, and operating EBITDA for the quarter was U.S.$28 million, up 46% from the same period last year.
CEMEX is a global building materials company that provides high-quality products and reliable service to customers and communities in more than 50 countries throughout the world. CEMEX has a rich history of improving the well-being of those it serves through its efforts to pursue innovative industry solutions and efficiency advancements and to promote a sustainable future.
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This press release contains forward-looking statements and information that are necessarily subject to risks, uncertainties and assumptions. Many factors could cause the actual results, performance or achievements of CEMEX 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 CEMEX 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 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. CEMEX assumes no obligation to update or correct the information contained in this press release.
2
Operating EBITDA is defined as operating income plus depreciation and operating amortization. Free Cash Flow is defined as Operating EBITDA minus net interest expense, maintenance and expansion capital expenditures, change in working capital, taxes paid, and other cash items (net other expenses less proceeds from the disposal of obsolete and/or substantially depleted operating fixed assets that are no longer in operation). Net debt is defined as total debt minus the fair value of cross-currency swaps associated with debt minus cash and cash equivalents. The Consolidated Funded Debt to Operating EBITDA ratio is calculated by dividing Consolidated Funded Debt at the end of the quarter by Operating EBITDA for the last twelve months. All of the above items are presented under the guidance of International Financial Reporting Standards as issued by the International Accounting Standards Board. Operating EBITDA and Free Cash Flow (as defined above) are presented herein because CEMEX believes that they are widely accepted as financial indicators of CEMEX’s ability to internally fund capital expenditures and service or incur debt. Operating EBITDA and Free Cash Flow should not be considered as indicators of CEMEX’s financial performance, as alternatives to cash flow, as measures of liquidity or as being comparable to other similarly titled measures of other companies.
3
Exhibit 2
2012
THIRD QUARTER RESULTS
Stock Listing Information
NYSE (ADS)
Ticker: CX
Mexican stock exchange
Ticker: CEMEXCPO
Ratio of CEMEXCPO TO CX = 10:1
Investor Relations
In the United States:
+ 1 877 7CX NYSE
In Mexico:
+ 52 (81) 8888 4292
E Mail:
ir@cemex.com
OPERATING AND FINANCIAL HIGHLIGHTS
January September Third Quarter
l t l l t l
2012 2011 % Var. % Var.* 2012 2011 % Var. % Var.*
Consolidated cement volume (thousand
50,077 50,483 (1%) 17,146 17,454 (2%)
of metric tons)
Consolidated ready mix volume
41,199 40,949 1% 14,512 14,513 (0%)
(thousand of cubic meters)
Consolidated aggregates volume
118,874 120,979 (2%) 44,078 43,216 2%
(thousand of metric tons)
Net sales 11,274 11,513 (2%) 2% 3,899 3,977 (2%) 2%
Gross profit 3,301 3,291 0% 5% 1,197 1,177 2% 6%
Gross profit margin 29.3% 28.6% 0.7pp 30.7% 29.6% 1.1pp
Operating income 1,022 742 38% 51% 410 303 35% 41%
Operating income margin 9.1% 6.4% 2.7pp 10.5% 7.6% 2.9pp
Consolidated net income (loss) (408) (1,189) 66% (197) (729) 73%
Controlling interest net income (loss) (420) (1,191) 65% (203) (730) 72%
Operating EBITDA 2,003 1,838 9% 15% 730 671 9% 13%
Operating EBITDA margin 17.8% 16.0% 1.8pp 18.7% 16.9% 1.8pp
Free cash flow after maintenance
| (56) |
|
(230) 76% 204 102 100% |
capital expenditures
Free cash flow (149) (309) 52% 171 70 146%
Net debt plus perpetual notes 16,866 17,635 (4%) 16,866 17,635 (4%)
Total debt 17,180 17,210 (0%) 17,180 17,210 (0%)
Total debt plus perpetual notes 17,651 18,371 (4%) 17,651 18,371 (4%)
Earnings (loss) per ADS (0.38) (1.08) 65% (0.18) (0.66) 72%
Fully diluted earnings per ADS (0.38) (1.08) 65% (0.18) (0.66) 72%
Average ADSs outstanding 1,114.7 1,107.7 1% 1,117.4 1,109.2 1%
Employees 45,087 44,870 0% 45,087 44,870 0%
In millions of US dollars, except percentages, employees, and per ADS amounts. Average
ADSs outstanding are presented in millions. Please refer to page 8 for end of quarter
CPO equivalent units outstanding.
* Like to like (“l t l”) percentage variations adjusted for investments/divestments and currency fluctuations.
(1)For 2012 and 2011, the effects on the denominator and numerator of potential dilutive shares
generate anti dilution; therefore, there is no change between the reported basic and diluted loss per share.
Consolidated net sales in the third quarter of 2012 decreased to US$3,899 million, representing a
decline of 2% compared with the third quarter of 2011, or an increase of 2% on a like to like basis
for the ongoing operations and for foreign exchange fluctuations. The like to like increase in
consolidated net sales was due to higher prices in local currency terms in most of our regions partially
mitigated by lower volumes in Northern Europe and the Mediterranean operations.
Cost of sales as a percentage of net sales decreased by 1.1pp during the third quarter of 2012
compared to the same period last year. The decrease was mainly the result of savings
from our cost reduction initiatives and lower fuel costs.
Selling, general and administrative (SG&A) expenses as a percentage of net sales decreased by
1.8pp during the third quarter of 2012 compared with the same period last year, from 22.0% to 20.2%.
The decrease in SG&A expenses during the quarter was mainly due to savings from our cost reduction initiatives.
Operating EBITDA increased by 9% to US$730 million during the third quarter of 2012 compared
with the same period last year. The increase was mainly due to higher contributions from Mexico,
U.S., and the South, Central America and the Caribbean, and Asia regions, as well as our cost
reduction initiatives. On a like to like basis for the ongoing operations and adjusting for foreign
exchange fluctuations, operating EBITDA increased by 13% in the third quarter of 2012 compared
with the same period last year. Operating EBITDA margin increased by 1.8pp from 16.9% in the
third quarter of 2011 to 18.7% this quarter, mainly as a result of savings from our cost reduction
initiatives, as well as higher prices in local currency terms in most of our regions, partially
mitigated by lower volumes in Northern Europe and the Mediterranean operations.
Other expenses, net, for the quarter were US$168 million, which included mainly a provision related
to the implementation phase of the outsourcing agreement for back office services as well as impairments of fixed assets.
Gain (loss) on financial instruments for the quarter was a gain of US$19 million, resulting mainly
from our equity derivatives related to CEMEX shares.
Controlling interest net income (loss) was a loss of US$203 million in the third quarter of 2012,
versus a loss of US$730 million in the same quarter of 2011. The smaller quarterly loss is primarily
due to a higher operating income, a lower foreign exchange loss and a gain on financial instruments
versus a loss in the third quarter of 2011; all of them partially mitigated by an increase in other expenses, net.
Total debt plus perpetual notes increased by US$14 million during the quarter.
2012 Third Quarter Results Page 2
OPERATING RESULTS
Mexico
January September Third Quarter
2012 2011 % Var. 2012 2011 % Var.
Var.* Var.*
Net sales 2,545 2,661 (4%) 4% 875 856 2% 6%
Operating EBITDA 910 894 2% 11% 313 289 9% 13%
Operating EBITDA margin 35.8% 33.6% 2.2pp 35.8% 33.7% 2.1pp
In millions of US dollars, except percentages.
Domestic gray cement Ready mix Aggregates
Year over year percentage January September Third Quarter January September Third Quarter January September Third Quarter
variation
Volume 1% 4% (4%) 0% (2%) 8%
Price (USD) (6%) (2%) (4%) 0% (7%) (3%)
Price (local currency) 3% 3% 5% 4% 2% 1%
Our Mexican operations’ domestic gray cement volumes increased by 4% during the quarter versus the same period last year, while ready mix volumes remained flat during the same period. During the first nine months of the year, domestic gray cement volumes increased by 1% while ready mix volumes declined by 4% versus the comparable period a year ago.
During the quarter, bulk cement and ready mix volumes were affected by lower than expected infrastructure activity in cement intensive projects and a weak formal residential sector. The decline in volumes in the formal residential s
ctor reflects the continued working capital financing constra
nts faced by homebuilders. Favorable performance from the infor
mal residential and industrial and commercial sectors mitigated declines in these sectors.
United States
January September Third Quarter
l
2012 2011 % Var. 2012 2011 % Var.
Var.* Var.*
Net sales 2,305 1,934 19% 15% 826 734 12% 12%
Operating EBITDA 30 (74) N/A N/A 27 (11) N/A N/A
Operating EBITDA margin 1.3% (3.8%) 5.1pp 3.3% (1.6%) 4.9pp
In millions of US dollars, except percentages.
Domestic gray cement Ready mix Aggregates
Year over year percentage January September Third Quarter January
September Third Quarter January September Third Quarter
variation
Volume 16% 8% 24% 13% 11% 14%
Price (USD) 1% 2% 3% 3% 1% (4%)
Price (local currency) 1% 2% 3% 3% 1% (4%)
Domestic gray cement, ready mix and aggregates volumes for CEMEX’s operations in the
United States increased by 8%, 13% and 14%, respectively, during the third quarter of 2012 versus the same period last yea
r. During the first nine months of the year and on a year over year basis, domestic gray cement,
ready mix and aggregates increased by 16%, 24% and 11%, respectively. On a like to like basis
for the ongoing operations, ready mix and aggregates volumes increased by 16% and 10%, respectively,
during the first nine months of the year versus the comparable period in 2011. Sales volumes for the
quarter reflect an improved demand in most of our markets and regions. Activity from the residential
sector continues its positive trend. The industrial and commercial sector also shows a strong
performance driven by the manufacturing, lo
dging, office and commercial segments.
2012 Third Quarter Results Page 3
OPERATING RESULTS
Northern Europe
January September Third Quarter
2012 2011 % Var. 2012 2011 % Var.
Var.* Var.*
Net sales 3,086 3,633 (15%) (8%) 1,105 1,302 (15%) (7%)
Operating EBITDA 324 332 (2%) 5% 143 173 (18%) (10%)
Operating EBITDA margin 10.5% 9.1% 1.4pp 12.9% 13.3% (0.4pp)
In millions of US dollars, except percentages.
Domestic gray cement Ready mix Aggregates
Year over year percentage January September Third Quarter January September Third Quarter January September Third Quarter
variation
Volume (13%) (11%) (8%) (6%) (8%) (5%)
Price (USD) (6%) (7%) (7%) (8%) (5%) (6%)
Price (local currency) 2% 1% 2% 1% 3% 2%
Our domestic gray cement volumes in the Northern Europe region decreased by 11% during
the third quarter of 2012 and decreased by 13% during the first nine months of the year versus the same periods in 2011.
In the United Kingdom, during the quarter and on a year over year basis, volumes for domestic gray cement, ready mix and aggregates decreased by 5%, 10% and 10%, respectively. For the first nine months
of the year our domestic gray cement volumes, ready mix and aggregates declined by 9%, 14% and 13%, respectively, versus the comparable period in the previous year.
The deteriorating macroeconomic conditions have impacted the construction sector in the country. The year over year decrease in volumes in the quarter reflects continued adverse weather conditions as well as some slowdown due to the celebration of the Olympics.
In our operations in France, domestic ready mix volumes decreased by 3% and our aggregates volumes declined by 2% during the third quarter of 2012 versus the comparable period last year. During the first nine months of the year, ready mix volumes decreased by 4% and our aggregates volumes declined by 5%, on a year over year basis. The economic slowdown and adverse weather conditions during the months of July and August affected the construction activity for the quarter. Difficulty to obtain credit for household and the elimination of tax incentives caused a decline in the residential sector. The infrastructure sector continues to be supported by ongoing projects.
In Germany, our domestic gray cement volumes decreased by 10% during the third quarter and decreased by 13% during the first nine months of the year versus the comparable periods in 2011. The residential sector continued to be the main driver of demand. Adverse weather conditions during the first quarter and overall bottlenecks in the construction industry have affected construction work and increased the backlog of projects.
Domestic gray cement volumes for our operations in Poland declined by 10% during the quarter and by 12% during the first nine months of the year versus the comparable periods in 2011. During the quarter, within a context of tight fiscal consolidation, infrastructure spending declined particularly from a very high consumption base in 2011, as road and sports infrastructure projects built in anticipation to the EURO 2012 championship came to an end.
2012 Third Quarter Results Page 4
OPERATING RESULTS
Mediterranean
January September Third Quarter
2012 2011 % Var. 2012 2011 % Var.
Var.* Var.*
Net sales 1,103 1,337 (17%) (12%) 342 425 (19%) (13%)
Operating EBITDA 293 345 (15%) (10%) 99 104 (5%) 2%
Operating EBITDA margin 26.5% 25.8% 0.7pp 28.9% 24.6% 4.3pp
In millions of US dollars, except percentages.
Domestic gray cement Ready mix Aggregates
Year over year percentage January September Third Quarter January September Third Quarter January September Third Quarter
variation
Volume (20%) (20%) (11%) (12%) (17%) (16%)
Price (USD) (7%) (6%) (4%) (6%) (6%) (8%)
Price (local currency) (2%) (1%) 5% 4% 3% 3%
Our domestic gray cement volumes in the Mediterranean region decreased by 20% during the third quarter and decreased by 20% during the first nine months of the year versus the same periods in 2011.
Domestic gray cement volumes for our operations in Spain decreased by 41% and our ready mix volumes declined by 45% on a year over year basis during the quarter. For the first nine months of the year, domestic gray cement volumes decreased by 42%, while ready mix volumes declined by 46% compared with the same period in 2011. The decrease in volumes for building materials during the quarter reflects the continued weak demand from all segments. Economic uncertainty, limited credit availability and high inventories continue to affect the performance of the residential sector. Continued focus of the government on fiscal austerity keeps infrastructure spending at very low levels.
In Egypt, our domestic gray cement volumes decreased by 10% during the third quarter of 2012 and decreased by 10% during the first nine months of the year versus the comparable periods in 2011. The main driver of demand continues to be the informal residential sector. Infrastructure spending is minimal.
South, Central America and the Caribbean
d Quarter
2012 2011 % Var. 2012 2011 % Var.
Var.* Var.*
Net sales 1,574 1,298 21% 22% 520 454 15% 16%
Operating EBITDA 544 376 45% 45% 177 142 25% 25%
Operating EBITDA margin 34.6% 28.9% 5.7pp 34.0% 31.2% 2.8pp
In millions of US dollars, except percentages.
Domestic grey cement Ready mix Aggregates
Year over year percentage January September Third Quarter January September Third Quarter January September Third Quarter
variation
Volume 6% 5% 6% (1%) 8% 2%
Price (USD) 11% 9% 18% 15% 12% 13%
Price (local currency) 12% 10% 17% 15% 11% 12%
Our domestic gray cement volumes in the region increased by 5% during the third quarter of 2012 and increased by 6% during the first nine months of the year versus the comparable periods last year.
Domestic gray cement volumes for our operations in Colombia remained flat during the third quarter and increased by 6% during the first nine months of the year on a year over year basis. Our quarterly cement volumes reflect two fewer business days versus third quarter 2011 as well as increased cement pre ordering in anticipation to the July price increase. The industrial and commercial sector continued with its positive trend, especially in the construction of hotels, and shopping centers. Infrastructure projects at the local level have been limited as new governors and mayors have recently taken office in different entities. Government projects at the federal level continue.
2012 Third Quarter Results Page 5
OPERATING RESULTS
Asia
January September Third Quarter
2012 2011 % Var. 2012 2011 % Var.
Var.* Var.*
Net sales 403 381 6% 6% 133 130 2% 1%
Operating EBITDA 70 63 11% 11% 28 19 46% 44%
Operating EBITDA margin 17.4% 16.5% 0.9pp 21.3% 14.9% 6.4pp
In millions of US dollars, except percentages.
Domestic grey cement Ready mix Aggregates
Year over year percentage January September Third Quarter January September Third Quarter January September Third Quarter
variation
Volume 13% 7% (19%) (24%) (54%) (59%)
Price (USD) 6% 12% (0%) (2%) (10%) (15%)
Price (local currency) 6% 11% 0% (1%) (8%) (13%)
Our domestic gray cement volumes in the region increased by 7% during the third quarter and increased by 13% during the first nine months of 2012 on a year over year basis. ‘
In the Philippines, our domestic gray cement volumes increased by 8% during the third quarter and increased by 15% during the first nine months of 2012 versus the comparable periods of last year. Volumes for the quarter benefited from the continued recovery in infrastructure spending. Strong levels of remittances bolstered growth in the residential sector. In addition, the industrial and commercial sector also exhibited growth during the quarter.
2012 Third Quarter Results Page 6
OPERATING EBITDA, FREE CASH FLOW AND DEBT RELATED INFORMATION
Operating EBITDA and free cash flow
January September Third Quarter
2012 2011 % Var 2012 2011 % Var
Operating income 1,022 742 38% 410 303 35%
+ Depreciation and operating amortization 981 1,097 320 368
Operating EBITDA 2,003 1,838 9% 730 671 9%
Net financial expense 1,026 1,001 344 348
Maintenance capital expenditures 219 159 96 72
Change in working capital 513 640 51 99
Taxes paid 298 169 48 19
Other cash items (net) 3 100 (12) 30
Free cash flow after maintenance capital expenditures (56) (230) 76% 204 102 100%
Strategic capital expenditures 93 79 33 32
Free cash flow (149) (309) 52% 171 70 146%
In millions of US dollars, except percentages.
The free cash flow during the quarter was used mainly to replenish our cash balance and for general corporate purposes.
Our debt during the quarter reflects a negative foreign exchange
conversion effect of US$56 million.
Information on Debt and Perpetual Notes
Second Third
Third Quarter Quarter Quarter
2012 2011 % Var 2012 2012 2011
Total debt (1) 17,180 17,210 (0%) 17,167 Currency denomination
Short term 1% 2% 1% US dollar 82% 78%
Long term 99% 98% 99% Euro 16% 19%
Perpetual notes 471 1,161 (59%) 470 Mexican peso 2% 3%
Cash and cash equivalents 785 736 7% 625 Other 0% 0%
Net debt plus perpetual notes 16,866 17,635 (4%) 17,012
Interest rate
Consolidated funded debt (2)/ EBITDA (3) 5.98 6.15 Fixed 59% 56%
Variable 41% 44%
Interest coverage (3) (4) 2.03 1.99
In millions of US dollars, except percentages and ratios.
(1) Includes convertible notes and capital leases, in accordance with International Financial Reporting Standards (IFRS).
(2) Consolidated funded debt as of September 30, 2012 was US$15,207 million, in accordance with our contractual
obligations under the Facilities Agreement.
| (3) |
|
EBITDA calculated in accordance with IFRS. |
| (4) |
|
Interest expense calculated in accordance with our contractual obligations under the Facilities Agreement. |
2012 Third Quarter Results Page 7
EQUITY RELATED AND DERIVATIVE INSTRUMENTS INFORMATION
Equity related information
One CEMEX ADS represents ten CEMEX CPOs. The following amounts are expressed in CPO terms.
Beginning of quarter CPO equivalent units outstanding 10,880,317,265
Stock based compensation 36,892,479
End of quarter CPO equivalent units outstanding 10,917,209,744
Outstanding units equal total CPOs issued by CEMEX less CPOs held in subsidiaries. CEMEX has outstanding mandatory convertible notes which, upon conversion, will increase the number of CPOs outstanding by
approximately 194 million, subject to antidilution adjustments.
Employee long term compensation plans
As of September 30, 2012, executives had outstanding options on a total of 11,992,356 CPOs, with a weighted average strike
price of approximately US$1.40 per CPO (equivalent to US$13.99 per ADS). Starting in 2005, CEMEX began offering
executives a restricted stock ownership program. As of September 30, 2012, our executives held 31,613,700 restricted CPOs,
representing 0.3% of our total CPOs outstanding as of such date.
Derivative instruments
The following table shows the notional amount for each type of derivative instrument and the aggregate fair market value for all
of CEMEX’s derivative instruments as of the last day of each quarter presented.
Third Quarter Second Quarter
2012 2011 2012
Notional amounts of equity related derivatives (1) (2) (3) 2,774 2,802 2,774
Estimated aggregate fair market value (1) (2) (4) (5) (57) 2 (11)
In millions of US dollars.
The estimated aggregate fair market value represents the approximate settlement result as of the valuation date, based upon
quoted market prices and estimated settlement costs, which fluctuate over time. Fair market values and notional amounts do not
represent amounts of cash currently exchanged between the parties; cash amounts will be determined upon termination of the contrac
ts considering the notional amounts and quoted market prices as well as other derivative items as of the settlement date. Fair market
values should not be viewed in isolation, but rather in relation to the fair market values of the underlying hedge transactions and the
overall reduction in CEMEX’s exposure to the risks being hedged.
Note: Under IFRS, companies are required to recognize all derivative financial instruments on the balance sheet as assets or liabilities, at their
estimated fair market value, with changes in such fair market values recorded in the income statement, except when transactions are entered into
for cash flow hedging purposes, in which case changes in the fair market value of the related derivative instruments are recognized temporarily in
equity and then reclassified into earnings as the inverse effects of the underlying hedged items flow through the income statement. As of September 30, 2012,
in connection with the fair market value recognition of its derivatives portfolio, CEMEX recognized increases in its assets and
liabilities resulting in a net a liability of US$3 million, including a liability of US$232 million corresponding to an equity embedded derivative related to our convertible notes, which according to our debt agreements, is presented net of the assets associated with the derivative instruments. The notional amounts of derivatives substantially match the amounts of underlying assets, liabilities, or equity transactions on which the derivatives are being entered into.
(1)Excludes an interest rate swap related to our long term energy contracts. As of September 30, 2012, the notional amount of this derivative was US$185 million, with a positive fair market value of approximately US$52 million.
(2)Excludes two exchange rate derivatives, as of September 30, 2012, the notional amount of both derivatives were US$100, with a positive fair market value of approximately US$1 million.
(3)Includes a notional amount of US$360 million in connection with a guarantee by CEMEX of a financial transaction entered into by its employees’ pension fund trust. As of September 30, 2012, the fair value of this financial guarantee represented a liability of US$38 million, which is net of a collateral deposit of US$126 million.
(4) Net of a cash collateral deposited under open positions. Cash collateral was US$140 million as of September 30, 2012.
(5)Includes, as required by IFRS, changes in fair value of conversion call options embedded in CEMEX’s convertible notes, representing as of September 30, 2012 and 2011 US$232 million and US$26 million, respectively.
2012 Third Quarter Results Page 8
OPERATING RESULTS
Consolidated Income Statement & Balance Sheet
CEMEX, S.A.B. de C.V. and Subsidiaries
(Thousands of U.S. Dollars, except per ADS amounts)
January September Third Quarter
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INCOME STATEMENT 2012 2011 % Var. % Var.* 2012 2011 % Var. % Var.*
Net Sales 11,273,796 11,512,525 (2%) 2% 3,899,010 3,976,795 (2%) 2%
Cost of Sales (7,972,792) (8,222,018) 3% (2,701,616) (2,799,648) 4%
Gross Profit 3,301,005 3,290,507 0% 5% 1,197,394 1,177,147 2% 6%
Selling, General and Administrative Expenses (2,279,206) (2,548,966) 11% (787,159) (874,129) 10%
Operating Income 1,021,798 741,540 38% 51% 410,235 303,018 35% 41%
Other Expenses, Net (204,018) (282,101) 28% (168,270) (55,409) (204%)
Operating Income After Other Expenses, Net 817,780 459,439 78% 241,965 247,609 (2%)
Financial Expenses (1,079,174) (1,034,094) (4%) (363,590) (364,707) 0%
Financial Income 34,333 26,267 31% 10,519 9,087 16%
Exchange Gain (loss), Net 21,417 (104,281) N/A (3,242) (228,409) 99%
Gain (loss) on Financial Instruments 31,352 (35,613) N/A 19,283 (87,325) N/A
Total Comprehensive Financing (cost) Income (992,072) (1,147,721) 14% (337,030) (671,353) 50%
Net Income Before Income Taxes (174,292) (688,282) 75% (95,065) (423,745) 78%
Income Tax (265,865) (466,476) 43% (122,955) (300,636) 59%
Net Income Before Participation
of Uncons. Subs. (440,157) (1,154,758) 62% (218,020) (724,380) 70%
Participation in Unconsolidated Subsidiaries 32,571 (33,894) N/A 20,623 (4,891) N/A
Consolidated Net Income (loss) (407,586) (1,188,652) 66% (197,397) (729,271) 73%
Non controlling Interest Net Income (loss) 12,118 2,252 438% 5,317 322 1553%
CONTROLLING INTEREST NET INCOME (LOSS) (419,704) (1,190,904) 65% (202,714) (729,593) 72%
Operating EBITDA 2,003,150 1,838,039 9% 15% 730,005 670,579 9% 13%
Earnings (loss) per ADS (0.38) (1.08) 65% (0.18) (0.66) 72%
As of September 30
BALANCE SHEET 2012 2011 % Var.
Total Assets 39,029,308 39,196,389 (0%)
Cash and Temporary Investments 785,237 736,267 7%
Trade Accounts Receivables 2,182,687 2,217,867 (2%)
Other Receivables 499,675 394,551 27%
Inventories 1,288,113 1,308,021 (2%)
Other Current Assets 317,606 355,460 (11%)
Current Assets 5,073,319 5,012,165 1%
Fixed Assets 16,510,203 16,973,808 (3%)
Other Assets 17,445,786 17,210,415 1%
Total Liabilities 26,841,805 26,258,370 2%
Current Liabilities 4,250,027 4,559,107 (7%)
Long Term Liabilities 14,807,684 14,905,267 (1%)
Other Liabilities 7,784,093 6,793,996 15%
Consolidated Stockholders’ Equity 12,187,503 12,938,018 (6%)
Non controlling Interest and Perpetual Instruments 694,778 1,419,551 (51%)
Stockholders’ Equity Attributable to Controlling Interest 11,492,725 11,518,467 (0%)
2012 Third Quarter Results Page 9
OPERATING RESULTS
Consolidated Income Statement & Balance Sheet
CEMEX, S.A.B. de C.V. and Subsidiaries
(Thousands of Mexican Pesos in nominal terms, except per ADS amounts)
January September Third Quarter
INCOME STATEMENT 2012 2011 % Var. 2012 2011 % Var.
Net Sales 148,926,851 139,301,555 7% 51,232,988 50,306,459 2%
Cost of Sales (105,320,577) (99,486,423) (6%) (35,499,228) (35,415,545) (0%)
Gross Profit 43,606,274 39,815,132 10% 15,733,760 14,890,915 6%
Selling, General and Administrative Expenses (30,108,317) (30,842,494) 2% (10,343,274) (11,057,736) 6%
Operating Income 13,497,957 8,972,638 50% 5,390,485 3,833,179 41%
Other Expenses, Net (2,695,078) (3,413,421) 21% (2,211,064) (700,930) (215%)
Operating Income After Other Expenses, Net 10,802,879 5,559,217 94% 3,179,422 3,132,249 2%
Financial Expenses (14,255,891) (12,512,543) (14%) (4,777,576) (4,613,540) (4%)
Financial Income 453,544 317,826 43% 138,223 114,951 20%
Exchange Gain (loss), Net 282,913 (1,261,794) N/A (42,596) (2,889,376) 99%
Gain (loss) on Financial Instruments 414,164 (430,918) N/A 253,375 (1,104,656) N/A
Total Comprehensive Financing (cost) Income (13,105,270) (13,887,429) 6% (4,428,574) (8,492,621) 48%
Net Income Before Income Taxes (2,302,391) (8,328,212) 72% (1,249,152) (5,360,372) 77%
Income Tax (3,512,081) (5,644,357) 38% (1,615,635) (3,803,040) 58%
Net Income Before Participation
of Uncons. Subs. (5,814,472) (13,972,569) 58% (2,864,787) (9,163,411) 69%
Participation in Unconsolidated Subsidiaries 430,261 (410,120) N/A 270,987 (61,871) N/A
Consolidated Net Income (loss) (5,384,209) (14,382,689) 63% (2,593,799) (9,225,283) 72%
Non controlling Interest Net Income (loss) 160,079 27,254 487% 69,866 4,070 1617%
CONTROLLING INTEREST NET INCOME (LOSS) (5,544,288) (14,409,943) 62% (2,663,665) (9,229,353) 71%
Operating EBITDA 26,461,613 22,240,271 19% 9,592,272 8,482,820 13%
Earnings (loss) per ADS (4.97) (13.01) 62% (2.38) (8.32) 71%
As of September 30
BALANCE SHEET 2012 2011 % Var.
Total Assets 502,307,193 543,653,910 (8%)
Cash and Temporary Investments 10,106,004 10,212,018 (1%)
Trade Accounts Receivables 28,091,188 30,761,810 (9%)
Other Receivables 6,430,821 5,472,427 18%
Inventories 16,578,014 18,142,247 (9%)
Other Current Assets 4,087,595 4,930,228 (17%)
Current Assets 65,293,622 69,518,729 (6%)
Fixed Assets 212,486,306 235,426,720 (10%)
Other Assets 224,527,264 238,708,460 (6%)
Total Liabilities 345,454,027 364,203,598 (5%)
Current Liabilities 54,697,853 63,234,813 (14%)
Long Term Liabilities 190,574,891 206,736,057 (8%)
Other Liabilities 100,181,283 94,232,727 6%
Consolidated Stockholders’ Equity 156,853,166 179,450,312 (13%)
Non controlling Interest and Perpetual Instruments 8,941,791 19,689,169 (55%)
Stockholders’ Equity Attributable to Controlling Interest 147,911,375 159,761,143 (7%)
2012 Third Quarter Results Page 10
OPERATING RESULTS
Operating Summary per Country
In thousands of U.S. dollars
January September Third Quarter
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NET SALES 2012 2011 % Var. % Var. * 2012 2011 % Var. % Var. *
Mexico 2,545,195 2,661,434 (4%) 4% 874,556 856,314 2% 6%
U.S.A. 2,305,377 1,934,112 19% 15% 825,737 734,193 12% 12%
Northern Europe 3,085,616 3,632,851 (15%) (8%) 1,105,346 1,302,016 (15%) (7%)
Mediterranean 1,103,189 1,336,986 (17%) (12%) 342,469 424,555 (19%) (13%)
South, Central America and the Caribbean 1,573,988 1,297,734 21% 22% 520,334 453,703 15% 16%
Asia 402,729 381,369 6% 6% 132,646 130,455 2% 1%
Others and intercompany eliminations 257,702 268,040 (4%) (4%) 97,923 75,558 30% 30%
TOTAL 11,273,796 11,512,525 (2%) 2% 3,899,010 3,976,795 (2%) 2%
GROSS PROFIT
Mexico 1,257,121 1,272,670 (1%) 8% 435,527 404,564 8% 12%
U.S.A. 174,713 (22,616) N/A 892% 98,324 21,195 364% 364%
Northern Europe 759,280 884,048 (14%) (8%) 315,442 360,159 (12%) (5%)
Mediterranean 369,989 459,782 (20%) (14%) 120,879 136,922 (12%) (5%)
South, Central America and the Caribbean 737,891 502,879 47% 47% 239,941 181,108 32% 33%
Asia 97,994 100,317 (2%) (3%) 37,948 31,573 20% 19%
Others and intercompany eliminations (95,983) 93,427 N/A N/A (50,667) 41,627 N/A N/A
TOTAL 3,301,005 3,290,507 0% 5% 1,197,394 1,177,147 2% 6%
OPERATING INCOME
Mexico 761,687 745,998 2% 11% 264,935 242,327 9% 14%
U.S.A. (347,364) (486,889) 29% 32% (92,502) (141,326) 35% 35%
Northern Europe 139,011 104,238 33% 42% 82,035 97,024 (15%) (7%)
Mediterranean 206,179 253,276 (19%) (14%) 71,695 74,242 (3%) 4%
South, Central America and the Caribbean 481,461 298,353 61% 61% 155,667 114,371 36% 37%
Asia 48,980 41,363 18% 19% 21,071 12,249 72% 71%
Others and intercompany eliminations (268,156) (214,798) (25%) (39%) (92,667) (95,868) 3% (4%)
TOTAL 1,021,798 741,540 38% 51% 410,235 303,018 35% 41%
2012 Third Quarter Results Page 11
OPERATING RESULTS
Operating Summary per Country
EBITDA in thousands of U.S. dollars. EBITDA margin as a percentage of net sales.
January September Third Quarter
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OPERATING EBITDA 2012 2011 % Var. % Var. * 2012 2011 % Var. % Var. *
Mexico 910,449 894,373 2% 11% 313,391 288,650 9% 13%
U.S.A. 29,764 (73,784) N/A N/A 27,174 (11,449) N/A N/A
Northern Europe 324,303 331,815 (2%) 5% 142,903 173,412 (18%) (10%)
Mediterranean 292,689 344,973 (15%) (10%) 99,100 104,370 (5%) 2%
South, Central America and the Caribbean 544,005 375,602 45% 45% 176,813 141,564 25% 25%
Asia 70,172 63,071 11% 11% 28,259 19,419 46% 44%
Others and intercompany eliminations (168,233) (98,010) (72%) (102%) (57,633) (45,387) (27%) (44%)
TOTAL 2,003,150 1,838,039 9% 15% 730,005 670,579 9% 13%
OPERATING EBITDA MARGIN
Mexico 35.8% 33.6% 35.8% 33.7%
U.S.A. 1.3% (3.8%) 3.3% (1.6%)
Northern Europe 10.5% 9.1% 12.9% 13.3%
Mediterranean 26.5% 25.8% 28.9% 24.6%
South, Central America and the Caribbean 34.6% 28.9% 34.0% 31.2%
Asia 17.4% 16.5% 21.3% 14.9%
TOTAL 17.8% 16.0% 18.7% 16.9%
|
2012 Third Quarter Results Page 12 |
OPERATING RESULTS
Volume Summary
Consolidated volume summary
Cement and aggregates: Thousands of metric tons. Ready mix: Thousands of cubic meters.
January September Third Quarter
2012 2011 % Var. 2012 2011 % Var.
Consolidated cement volume 1 50,077 50,483 (1%) 17,146 17,454 (2%)
Consolidated ready mix volume 2 41,199 40,949 1% 14,512 14,513 (0%)
Consolidated aggregates volume 2 118,874 120,979 (2%) 44,078 43,216 2%
Per country volume summary
January September Third Quarter Third Quarter 2012 Vs.
DOMESTIC GRAY CEMENT VOLUME 2012 Vs. 2011 2012 Vs. 2011 Second Quarter 2012
Mexico 1% 4% 1%
U.S.A. 16% 8% (1%)
Northern Europe (13%) (11%) 8%
Mediterranean (20%) (20%) (6%)
South, Central America and the Caribbean 6% 5% (1%)
Asia 13% 7% (11%)
READY MIX VOLUME
Mexico (4%) 0% 9%
U.S.A. 24% 13% 6%
Northern Europe (8%) (6%) 1%
Mediterranean (11%) (12%) (8%)
South, Central America and the Caribbean 6% (1%) (3%)
Asia (19%) (24%) (7%)
AGGREGATES VOLUME
Mexico (2%) 8% 15%
U.S.A. 11% 14% 13%
Northern Europe (8%) (5%) 4%
Mediterranean (17%) (16%) (2%)
South, Central America and the Caribbean 8% 2% 1%
Asia (54%) (59%) (37%)
1 Consolidated cement volume includes domestic and export volume of gray cement, white cement, special cement, mortar and clinker.
2 The 2011 consolidated volumes do not include the Ready Mix USA’s volumes from April 1, 2011 to July 31, 2011 due to the IFRS migration which changed Ready Mix consolidation date from August 1, 2011 to March 31, 2011.
2012 Third Quarter Results Page 13
OPERATING RESULTS
Price Summary
Variation in U.S. Dollars
January September Third Quarter Third Quarter 2012 Vs.
DOMESTIC GRAY CEMENT PRICE 2012 Vs. 2011 2012 Vs. 2011 Second Quarter 2012
Mexico (6%) (2%) 2%
U.S.A. 1% 2% 0%
Northern Europe (*) (6%) (7%) (2%)
Mediterranean (*) (7%) (6%) (4%)
South, Central America and the Caribbean (*) 11% 9% 2%
Asia (*) 6% 12% 3%
READY MIX PRICE
Mexico (4%) 0% 2%
U.S.A. 3% 3% 1%
Northern Europe (*) (7%) (8%) (2%)
Mediterranean (*) (4%) (6%) (3%)
South, Central America and the Caribbean (*) 18% 15% 0%
Asia (*) (0%) (2%) 1%
AGGREGATES PRICE
Mexico (7%) (3%) 2%
U.S.A. 1% (4%) (5%)
Northern Europe (*) (5%) (6%) (2%)
Mediterranean (*) (6%) (8%) (2%)
South, Central America and the Caribbean (*) 12% 13% 4%
Asia (*) (10%) (15%) (5%)
(*) Volume weighted average price.
2012 Third Quarter Results Page 14
OPERATING RESULTS
Price Summary
Variation in Local Currency
January September Third Quarter Third Quarter 2012 Vs.
DOMESTIC GRAY CEMENT PRICE 2012 Vs. 2011 2012 Vs. 2011 Second Quarter 2012
Mexico 3% 3% (1%)
U.S.A. 1% 2% 0%
Northern Europe (*) 2% 1% (2%)
Mediterranean (*) (2%) (1%) (3%)
South, Central America and the Caribbean (*) 12% 10% 2%
Asia (*) 6% 11% 2%
READY MIX PRICE
Mexico 5% 4% (2%)
U.S.A. 3% 3% 1%
Northern Europe (*) 2% 1% (1%)
Mediterranean (*) 5% 4% 0%
South, Central America and the Caribbean (*) 17% 15% 1%
Asia (*) 0% (1%) 1%
AGGREGATES PRICE
Mexico 2% 1% (2%)
U.S.A. 1% (4%) (5%)
Northern Europe (*) 3% 2% (1%)
Mediterranean (*) 3% 3% 1%
South, Central America and the Caribbean (*) 11% 12% 4%
Asia (*) (8%) (13%) (5%)
(*) Volume weighted average price.
2012 Third Quarter Results Page 15
CEMEX announces pricing of U.S.$1.5 billion in senior secured notes
On October 4, 2012, CEMEX announced the pricing of U.S.$1.5 billion
aggregate principal amount of senior secured notes (the “Notes”)
denominated in U.S. dollars. The Notes issued by CEMEX Finance LLC
bear interest at an annual rate of 9.375% and mature in 2022. The Notes
were issued at par and will be callable commencing on their 5th
anniversary. The closing of the offering occurred on October 12, 2012.
CEMEX intends to use the net proceeds from the offering to prepay
principal outstanding under CEMEX’s Facilities Agreement, dated
September 17, 2012, thereby allowing CEMEX to satisfy the March 31,
2013 U.S.$1.0 billion prepayment milestone and the February 14, 2014
U.S.$500 million amortization payment thereunder. These payments will
reduce the interest rate on the Facilities Agreement debt by 25 basis
points. The Notes share in the collateral pledged for the benefit of the
lenders under the Facilities Agreement and other secured obligations
having the benefit of such collateral, and are guaranteed by CEMEX,
CEMEX México, S.A. de C.V., CEMEX España, S.A., CEMEX Corp., CEMEX
Concretos, S.A. de C.V., Empresas Tolteca de México, S.A. de C.V., New
Sunward Holding B.V., Cemex Research Group AG, Cemex Shipping B.V.,
Cemex Asia B.V., CEMEX France Gestion (S.A.S.), CEMEX UK and Cemex
Egyptian Investments B.V.
CEMEX introduces Fortium ICF
On September 25, 2012, CEMEX and CEMEX USA, announced the launch
in the United States of Fortium ICF, a new construction material
specifically engineered to reduce the time and material needed to build
vertical concrete wall systems, such as Insulated Concrete Form (ICF)
building envelopes, while providing substantial savings in long term
maintenance and energy costs. Fortium ICF employs cutting edge
advancements in mineralogy and nanotechnology to improve the
performance of concrete at a microscopic level, and eliminates fully up to
75% of the steel reinforcement typically required for vertical concrete
construction. The result is a concrete structure that is built 50% faster
with turn key savings of over 32% compared to traditional ICF
construction. As CEMEX’s most recent addition to its growing portfolio of
products and initiatives that significantly reduce environmental impacts,
Fortium ICF is a product that delivers energy and CO2 savings. Each home
built with Fortium ICF reduces building emissions by a total of 170 metric
tons of CO2 over the course of 30 years.
CEMEX to increase cement production capacity in The Philippines
On September 17, 2012, CEMEX announced that it is planning to expand
the cement production capacity of its APO plant in the Philippines by 1.5
million metric tons per year. Through an investment of approximately
US$65 million, the company will increase production and strengthen its
distribution network to better serve high demand areas throughout the
country. The increase is expected to be operational by the first quarter of
2014. With this new investment, CEMEX will keep pace with the
Philippines market’s rapid growth. The country registered a gross
domestic product growth of 6.1% in the first half of 2012, according to
the National Statistical Coordination Board. The Metropolitan Manila
Development Authority has begun multiple infrastructure projects as the
country recovers from damage caused by extreme weather conditions.
CEMEX announces successful completion of refinancing
On September 17, 2012, CEMEX announced that it has successfully
completed the previously announced refinancing of its Financing
Agreement, dated as of August 14, 2009, as amended. Pursuant to the
refinancing, participating creditors representing approximately 92.7% of
the aggregate principal amount outstanding under the existing Financing
Agreement agreed to extinguish their existing loans and private
placement notes and to receive in place thereof:
approximately U.S.$6.155 billion in aggregate principal amount of
new loans and new U.S. Dollar private placement notes issued
pursuant to a New Facilities Agreement and a New Note Purchase
Agreement, both dated as of September 17, 2012; and
U.S.$500 million of new 9.5% senior secured notes due 2018,
issued pursuant to an indenture dated as of September 17, 2012,
which notes were delivered by the exchange agent to recipients.
As a result of the refinancing, the New Facilities Agreement, with a final
maturity of February 14, 2017, the principal terms of which were
previously announced in CEMEX’s press release dated June 29, 2012,
became effective on September 17, 2012. Also, approximately U.S.$525
million aggregate principal amount of loans and U.S. Dollar private
placement notes remain outstanding under the original Financing
Agreement, as amended and restated pursuant to the terms of the
exchange offer, and the Note Purchase Agreement, each with a final
maturity of February 14, 2014.
CEMEX subsidiary presents application to Colombian authorities for
potential sale of a minority stake in its Latin American assets
On August 21, 2012, CEMEX announced that CEMEX Latam Holdings, S.A.
(“CEMEX Latam”), a wholly owned subsidiary of CEMEX España, S.A.,
presented to the Superintendencia Financiera de Colombia an application
to list its shares on the Colombian stock exchange and to offer a minority
of CEMEX Latam’s shares in a public offering to investors in Colombia
and, in a concurrent private placement, to eligible investors outside of
Colombia. CEMEX Latam’s assets are expected to include substantially all
of CEMEX’s assets in Central and South America, which does not include
Mexico. This application is one component of the previously announced
asset sale alternatives CEMEX is pursuing in connection with its ongoing
initiative to reduce debt and extend its debt maturities. CEMEX continues
to pursue its previously announced asset sale alternatives, and ultimate
implementation of any of such alternatives (which include the potential
sales of: (i) a minority stake in operations in select countries; (ii) selected
U.S. assets; (iii) selected European assets; and/or (iv) other non core
assets) remains at the discretion of CEMEX.
CEMEX signs strategic agreement with IBM to provide business process
outsourcing and IT services
On July 30, 2012, CEMEX and IBM announced a 10 year strategic
agreement in which IBM will deliver world class business process and
information technology services. Additionally, IBM will provide to CEMEX
business consultant services to detect and drive sustainable
improvements in profitability, using the entire breadth of IBM’s
capabilities, including R&D expertise. This agreement is expected to
generate CEMEX savings of close to US$1 billion during the life of the
contract. Additionally, it will improve the quality of the services provided
to CEMEX; enhance business agility and scalability; maximize internal
efficiencies; and allow the company to better serve its customers. The
10 year services contract awarded to IBM is worth just over US$1 billion,
and will include: finance and accounting, and human resource back office
services, as well as IT infrastructure, application development and
maintenance services. Together, IBM and CEMEX will implement state ofthe
art business processes, practices, and information systems developed
by IBM. CEMEX will also leverage IBM’s worldwide expertise to accelerate
and replicate innovative practices in CEMEX business units to achieve
better customer service, increase process quality and sustain cost
improvements.
CEMEX launches its new global ready mix concrete brand: Insularis
On July 26, 2012, CEMEX announced the launch of its latest global readymix
concrete brand, Insularis. This new brand offers a portfolio of
construction solutions and ready mix concrete products designed to
improve the energy efficiency of buildings—intensifying the company’s
commitment to bring about industry transforming sustainable
construction practices. One unique construction solution under the
Insularis brand portfolio is a special ready mix concrete product created
by integrating innovative concrete technologies with a proprietary
construction system. This innovation makes it possible to offer a 100%
structural light weight ready mix concrete solution with superior thermal
insulation that very effectively reduces thermal bridges and improves
acoustic performance. Another important feature of Insularis ready mix
concretes is their fresh properties, including self compacting, high
workability retention of at least 90 minutes and easy to pump. These
qualities are made possible due to tailor designed proprietary admixture
technologies. Insularis was developed by the CEMEX Research Group AG
in Switzerland in collaboration with CEMEX France, who played a
fundamental role in the industrialization of this construction system.
Insularis is already being offered in Mexico and France, and the
industrialization of this technology is underway in a number of CEMEX
countries.
2012 Third Quarter Results Page 16
OTHER INFORMATION
Most significant reconciliation items from MFRS to IFRS in 2011
Considering the disclosure requirements of IFRS 1 and IAS 34, the
following tables present the reconciliation from MFRS to IFRS of the main
accounts of the consolidated balance sheet as of September 30, 2011 and
the statements of operations for the nine month and the three month
periods ended September 30, 2011.
Reconciliation of statements of operations for the nine month period
ended September 30, 2011
Millions of US
dollars
Reconciling
notes MFRS Adjustment
(unaudited)
IFRS
(unaudited)
Net sales (m) 11,437 76 11,513
Cost of sales (d, e, f, m) (8,134) (88) (8,222)
Gross profit 3,303 (12) 3,291
Operating expenses (e, f, m) (2,566) 17 (2,549)
Operating income 737 5 742
Other expenses, net (e, m) (366) 84 (282)
Operating income
after other
expenses, net 371 89 460
Comprehensive
financing cost, net (b, g, m) (1,558) 410 (1,148)
Equity in loss of
associates (m) (40) 6 (34)
Loss before income
taxes (1,227) 505 (722)
Income tax (k, l, m) (191) (275) (466)
Consolidated net
loss (1,418) 230 (1,188)
Non controlling
interest net income
(loss) (2) 4 2
Controlling interest
net loss (1,416) 226 (1,190)
Reconciliation of statements of operations for the three month
period ended September 30, 2011
Millions of US
dollars
Reconciling
notes MFRS Adjustment
(unaudited)
IFRS
(unaudited)
Net sales (m) 3,967 10 3,977
Cost of sales (d, e, f, m) (2,781) (19) (2,800)
Gross profit 1,186 (9) 1,177
SG&A expenses (e, f, m) (881) 7 (874)
Operating income 305 (2) 303
Other expenses, net (e, m) (93) 38 (55)
Operating income
after other
expenses, net 212 36 248
Comprehensive
financing cost, net (b, g, m) (916) 245 (671)
Equity in loss of
associates (m) (7) 2 (5)
Loss before income
taxes (711) 283 (428)
Income tax (k, l, m) (111) (190) (301)
Consolidated net
loss (822) 93 (729)
Non controlling
interest net Income (1) 1
Controlling interest
net loss (821) 92 (729)
Balance sheet reconciliation as of September 30, 2011
Millions of US
dollars
Reconciling
notes MFRS Adjustment
(unaudited)
IFRS
(unaudited)
Total Assets 39,945 (749) 39,196
Cash and
Investments 736 736
Trade receivables
less allowance for
doubtful accounts (a) 1,225 992 2,217
Other accounts
receivables and
other current assets (a, b, c) 1,024 (273) 751
Inventories, net (d) 1,309 (1) 1,308
Property, machinery
and equipment (c, e) 17,871 (898) 16,973
Other non current
assets (c, f, g, k,) 17,780 (569) 17,211
Total Liabilities 24,511 1,747 26,258
Current Liabilities (a, c, i, j) 4,054 505 4,559
Long term
liabilities (b, c, h) 16,965 (2,060) 14,905
Other liabilities
(a, b, c, i, j,
k, l) 3,492 3,302 6,794
Total stockholders’
equity 15,434 (2,496) 12,938
Total liabilities and
stockholders´
equity 39,945 (749) 39,196
Notes to the reconciliations from MFRS to IFRS
a) Derecognition of financial assets and liabilities
CEMEX has securitization programs in several countries with various
financial institutions under which, in accordance with MFRS and
considering that CEMEX surrenders control associated with the trade
receivables sold and that there is no guarantee or obligation to
reacquire the assets, the accounts receivable were removed from the
balance sheet at the moment of the sale, except for the unfunded
amounts that were reclassified to other short term accounts
receivable. IAS 39 under IFRS does not permit many securitizations to
qualify for derecognition due to some ongoing involvement that
causes entities to retain some of the risks and rewards related to the
transferred assets. Hence, under IFRS, except for non recourse
factoring transactions, CEMEX´s securitization programs of trade
accounts receivable under IFRS did not qualify for derecognition, and
the funded amount is recognized against a corresponding liability. As
of September 30, 2011 there was a net increase in short term assets of
approximately US$693 million.
b) Fair value of derivative financial instruments
IAS 39 under IFRS requires that the fair value of derivative financial
instruments should reflect the credit risk of the counterparties, in
comparison with MFRS that does not provide any related guidance. As
of September 30, 2011, the effect of including the credit risk to
CEMEX´s derivative financial instruments represented a net increase of
US$14 million in the net liability under IFRS. The corresponding effect
for the nine month and the three month periods ended September 30,
2011 represented an approximately loss of US$22 million and a gain of
US$7million, respectively.
Under IFRS, due to the functional currency of the issuer, the
conversion options embedded in CEMEX’s convertible notes are
recognized at fair value through the statements of operations. Under
MFRS, these options represented the equity components of such notes
and were not subsequently valued after initial recognition. For the
nine month and the three month periods ended September 30, 2011,
changes in fair value under IFRS of the aforementioned options
resulted in gains of approximately US$417 million and US$268 million,
respectively.
2012 Third Quarter Results Page 17
OTHER INFORMATION
c) Others
As of September 30, 2011, in order to comply with IFRS presentation
requirements that differ from MFRS, there are certain reclassifications
between line items in the balance sheet, the most significant are as
follows: a) Approximately US$221 million of extraction rights and rights
for using rented quarries were reclassified from fixed assets under MFRS
to intangible assets under IFRS; and b) Approximately US$85 million of
deferred financing costs under MFRS were reclassified to debt under
IFRS.
d) Storage costs
According to IAS 2 under IFRS, storage costs that are incurred during the
production process should be excluded from the cost of inventories and
are required to be expensed as incurred. Under MFRS, storage costs were
recognized within inventories. As of September 30, 2011, this adjustment
represented a reduction in inventory under IFRS of approximately US$1
million. The corresponding effects during the nine month and the threemonth
periods ended September 30, 2011 represented immaterial
decreases in cost of sales against inventories.
e) Property, machinery and equipment
As of September 30, 2011, resulting from the valuation of mineral
reserves, certain buildings and major machinery and equipment located
in several countries at fair value as deemed cost upon transition to IFRS,
this line item decreased approximately US$44 million under IFRS as
compared to the carrying amount that such assets had under MFRS.
Under MFRS, in order to restate certain components of the financial
statements by inflation, several CEMEX’s operations were considered as
operating in highly inflationary environments considering that the
accumulated inflation rate over the last three years exceeded 26%. Upon
transition to IFRS as of January 1, 2010 and as of September 30, 2011, the
threshold to consider whether an economy is hyperinflationary
presented when the accumulated inflation rate over the last three years
is approaching, or exceeds 100% was not reached in any country in which
CEMEX operates. Consequently, as of September 30, 2011, the
elimination under IFRS of inflation restatement effects of property,
machinery and equipment and intangible assets recognized under MFRS
resulted in a net decrease in this line item for approximately US$559
million.
For the nine month and the three month periods ended September 30,
2011, the different depreciable amounts of property, machinery and
equipment under IFRS resulting from the reconciling adjustments
described above, resulted in increases in the depreciation expense under
IFRS for approximately US$57 million and US$20 million, respectively, as
compared to the amounts recognized under MFRS.
f) Intangible assets
Resulting from the identification and separation as intangible assets upon
transition to IFRS of certain extraction permits in the cement and ready
mix sectors that were recognized within goodwill under MFRS, for the
nine month and the three month periods ended September 30, 2011, the
amortization expense associated with extraction permits under IFRS
decreased by approximately US$16 million and US$4 million,
respectively, as compared to the amounts recognized under MFRS.
g) Deferred financing costs
Upon transition to IFRS, deferred financing costs under MFRS associated
with CEMEX’s Financing Agreement for approximately US$514 million did
not meet all the requirements for capitalization and deferral under IAS 39
and were immediately recognized upon transition against retained
earnings, decreasing CEMEX’s deferred charges under IFRS. In connection
with this adjustment, for the nine month and the three month periods
ended September 30, 2011, the amortization of deferred financing costs
under IFRS recognized in the statements of operations decreased for
approximately US$125 million and US$40 million, respectively, as
compared to the amounts recognized under MFRS.
h) Amortized cost of debt under the Financing Agreement
As of September 30, 2011, resulting from differences in the amortized
cost of a portion of the debt included in CEMEX’s Financing Agreement
upon transition to IFRS, the balance of debt under IFRS decreased for
approximately US$6 million. For the nine month and the three month
periods ended September 30, 2011, the accretion expense of this debt
(interest expense) associated with changes in its amortized cost was
approximately US$2 million and US$0.4 million, respectively.
i) Pensions and postretirement benefits
Upon transition to IFRS, CEMEX elected to reset to zero all cumulative net
actuarial losses pending for amortization under MFRS against retained
earnings. As of September 30, 2011, in connection with this adjustment,
the employee benefits’ liability increased for approximately US$411
million as compared to the amount recognized under MFRS.
Under IFRS, termination benefits are expensed as incurred, whereas
under MFRS, such termination benefits were accrued based on actuarial
calculations of the estimated obligation. Upon transition to IFRS, the
provision under MFRS was cancelled against retained earnings. As a
result of this adjustment, as of September 30, 2011, the employee
benefits liability under IFRS decreased for approximately US$34 million.
j) Asset retirement obligations (decommissioning costs)
Upon transition to IFRS, there were certain differences between CEMEX’s
liabilities for asset retirement obligations under MFRS and those
determined under IFRS, which resulted in an increase in the liability
under IFRS against the related assets. As of September 30, 2011 as a
result of this adjustment, the liabilities for asset retirement obligations
under IFRS increased by approximately US$36 million.
k) Deferred income taxes
The different amounts of assets and liabilities under IFRS generate
changes in the deferred tax assets and liabilities under IFRS as compared
to those previously recognized under MFRS. As of September 30, 2011,
the net deferred tax asset under IFRS (deferred tax assets less deferred
tax liabilities) increased for approximately US$169 million, as compared
to the net deferred tax asset previously recorded under MFRS.
l) Uncertain tax positions
Under MFRS, the income tax effects from an uncertain tax position were
recognized following a cumulative probability model; meanwhile, under
IFRS, the tax effects of a position are measured using either an expected
value approach or a single best estimate of the most likely outcome only
if it is “more likely than not” to be sustained based on its technical merits
as of the reporting date. In making this assessment, CEMEX has assumed
that the tax authorities will examine each position and have full
knowledge of all relevant information. Each position has been considered
on its own, regardless of its relation to any other broader tax settlement.
The more likely than not threshold represents a positive assertion by
management that CEMEX is entitled to the economic benefits of a tax
position. If a tax position is not considered more likely than not to be
sustained, no benefits of the position are to be recognized. As of
September 30, 2011, resulting from the difference in the measurement
and recognition of the effects related to uncertain tax positions between
MFRS and IFRS, the provision for uncertain tax positions recorded under
IFRS increased for approximately US$522 million as compared to the
amounts recorded under MFRS. For the nine month and the three month
periods ended September 30, 2011, the income tax effects from the
uncertain tax positions under IFRS resulted in increase in the income tax
expense for approximately US$128 million and US$55 million
respectively, as compared to the amounts recorded under MFRS.
2012 Third Quarter Results Page 18
OTHER INFORMATION
m) Ready Mix Consolidation
Considering certain potential voting rights, under IFRS, the acquisition
date of Ready Mix USA, LLC was March 31, 2011, whereas under MFRS,
CEMEX acquired Ready Mix USA, LLC on August 1, 2011 date in which
CEMEX assumed effective control. As a result of this difference, CEMEX’s
statement of operations under IFRS for the nine month and three month
period ended September 30, 2011,include results of operations of Ready
Mix USA, LLC for the same period.
Mexican Tax Reform 2010
In November 2009, the Mexican Congress approved amendments to the
income tax law that became effective on January 1, 2010. The new law
included changes to the tax consolidation regime that require CEMEX to,
among other things, determine income taxes as if the tax consolidation
provisions in Mexico did not exist from 1999 onward. These changes also
required the payment of taxes on dividends between entities of the
consolidated tax group (specifically, dividends paid from profits that were
not taxed in the past), certain special items in the tax consolidation, as
well as tax loss carryforwards generated by entities within the
consolidated tax group that should have been recovered by such
individual entities over the succeeding 10 years. These amendments
increased the statutory income tax rate from 28% to 30% for the years
2010 to 2012, 29% for 2013, and decreased it to 28% for 2014 and future
years. Pursuant to these amendments, the parent company was required
to pay in 2010 (at the 30% tax rate) 25% of the tax resulting from
eliminating the tax consolidation effects from 1999 to 2004, and to pay
an additional 25% in 2011. The remaining 50% is required to be paid as
follows: 20% in 2012*, 15% in 2013, and 15% in 2014. With respect to the
consolidation effects originated after 2004, these should be considered
during the sixth fiscal year following their origination and are be payable
over the succeeding five years in the same proportions (25%, 25%, 20%,
15%, and 15%), and, in relation to this, the consolidation effect for 2005
has already been notified to CEMEX and considered. Applicable taxes
payable as a result of the changes to the tax consolidation regime will be
increased by inflation, as required by the Mexican income tax law. As of
December 31, 2009, based on Interpretation 18, the parent company
recognized the nominal value of estimated taxes payable in connection
with these amendments of approximately US$799 million. This amount
was recognized by the parent company as a tax payable on its balance
sheet against “Other non current assets” for approximately US$628
million, in connection with the net liability recognized before the new tax
law and that the parent company expects to realize in connection with
the payment of this tax liability; and approximately US$171 million
against “Retained earnings” for the portion, according to the new law,
related to: a) the difference between the sum of the equity of the
controlled entities for tax purposes and the equity for tax purposes of the
consolidated entity; b) dividends from the controlled entities for tax
purposes to CEMEX, S.A.B. de C.V.; and c) other transactions between the
companies included in the tax consolidation that represented the
transfer of resources within the group. In December 2010, pursuant to
additional rules, the tax authorities eliminated certain aspects of the law
related to the taxable amount for the difference between the sum of the
equity of the controlled entities for tax purposes and the equity for tax
purposes of the consolidated entity. As a result, the parent company
reduced its estimated tax payable by approximately US$235 million
against a credit to “Retained earnings.”
In 2011, changes in the parent company’s tax payable associated with
the tax consolidation in Mexico are as follows (approximate US$
Millions):
2011
Balance at the beginning of the period $727
Income tax received from subsidiaries $168
Restatement for the period $35
Payments during the period ($36)
Other ($5)
Balance at the end of the period $889
As of December 31, 2011, the balance of tax loss carryforwards that have
not been considered in the tax consolidation was approximately
US$1,038 million. As of December 31, 2011, the estimated payment
schedule of taxes payable resulting from these changes in the tax
consolidation regime in Mexico were as follows (approximate amounts in
millions of US dollars):
2012 $50*
2013 $50
2014 $143
2015 $151
2016 $127
2017 and thereafter $368
$889
| * |
|
This payment was done in March 2012. |
Nationalization of CEMEX Venezuela
On August 18, 2008, the Government of Venezuela expropriated all
business, assets and shares of CEMEX Venezuela and took control of its
facilities. CEMEX controlled and operated CEMEX Venezuela until August
17, 2008. In October 2008, CEMEX submitted a request to the
International Centre for Settlement of Investment Disputes (“ICSID”),
seeking international arbitration claiming that the nationalization and
seizure of the facilities located in Venezuela and owned by CEMEX
Venezuela did not comply with the terms of the treaty for the protection
of investments signed by the Government of Venezuela and the
Netherlands and with international law, because CEMEX had not receive
any compensation and no public purpose was proven. On November 30,
2011, following negotiations with the Government of Venezuela and its
affiliate Corporación Socialista de Cemento, S.A., a settlement agreement
was reached between CEMEX and the Government of Venezuela that
closed on December 13, 2011. Under this settlement agreement, CEMEX
received compensation for the expropriation of CEMEX Venezuela and
administrative services provided after the expropriation in the form of: (i)
a cash payment of US$240 million; and (ii) notes issued by Petróleos de
Venezuela, S.A. (“PDVSA”), with nominal value and interest income to
maturity totaling approximately US$360 million. Additionally, as part of
the settlement, claims among all parties and their affiliates were released
and all intercompany payments due from or to CEMEX Venezuela to and
from CEMEX were cancelled, resulting in the cancellation for CEMEX of
accounts payable net of approximately US$154 million. Pursuant to this
settlement agreement, CEMEX and the government of Venezuela agreed
to withdraw the ICSID arbitration. As a result of this settlement, CEMEX
cancelled the book value of its net assets in Venezuela of approximately
US$503 million and recognized a settlement gain in the statement of
operations of approximately US$25 million, which includes the write off
of estimated currency translation effects accrued in equity.
2012 Third Quarter Results Page 19
DEFINITIONS OF TERMS AND DISCLOSURES
Methodology for translation, consolidation, and presentation of
results
Under IFRS, beginning January 1, 2008, CEMEX translates the financial
statements of foreign subsidiaries using exchange rates at the reporting
date for the balance sheet and the exchange rates at the end of each
month for the income statement. CEMEX reports its consolidated results
in Mexican pesos.
For the reader’s convenience, beginning June 30, 2008, US dollar
amounts for the consolidated entity are calculated by converting the
nominal Mexican peso amounts at the end of each quarter using the
average MXN/US$ exchange rate for each quarter. The exchange rates
used to convert results for the third quarter of 2012 and the third
quarter of 2011 are 13.14 and 12.65 Mexican pesos per US dollar,
respectively.
Per country/region figures are presented in US dollars for the reader’s
convenience. Figures presented in US dollars for Mexico, as of
September 30, 2012, and September 30, 2011, can be converted into
their original local currency amount by multiplying the US dollar figure
by the corresponding average exchange rates for 2012 and 2011,
provided below.
Breakdown of regions
Northern Europe includes operations in Austria, the Czech Republic,
France, Germany, Hungary, Ireland, Latvia, Poland, and the United
Kingdom, as well as trading operations in several Nordic countries.
The Mediterranean region includes operations in Croatia, Egypt, Israel,
Spain, and the United Arab Emirates.
The South, Central America and the Caribbean region includes
CEMEX’s operations in Argentina, Bahamas, Brazil, Colombia, Costa
Rica, the Dominican Republic, El Salvador, Guatemala, Haiti, Jamaica,
Nicaragua, Panama, Peru, and Puerto Rico, as well as trading
operations in the Caribbean region.
The Asia region includes operations in Bangladesh, China, Malaysia,
the Philippines, Taiwan, and Thailand.
Definition of terms
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 and coupon
payments on our perpetual notes).
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.
Net debt equals total debt (debt plus convertible bonds and financial
leases) minus cash and cash equivalents.
Operating EBITDA equals operating income plus depreciation and
operating amortization.
pp equals percentage points
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.
Working capital equals operating accounts receivable (including other
current assets received as payment in kind) plus historical inventories
minus operating payables.
Earnings per ADS
The number of average ADSs outstanding used for the calculation of earnings
per ADS was 1,117.4 million for the third quarter of 2012, 1,114.7 million for
year to date 2012, 1,109.2 million for the third quarter of 2011, and 1,107.7
million for year to date 2011.
According to the IAS 33 Earnings per share, the weighted average number of
common shares outstanding is determined considering the number of days
during the accounting period in which the shares have been outstanding,
including shares derived from corporate events that have modified the
stockholder’s equity structure during the period, such as increases in the
number of shares by a public offering and the distribution of shares from
stock dividends or recapitalizations of retained earnings and the potential
diluted shares (Stock options, Restricted Stock Options and Mandatory
Convertible Shares). The shares issued as a result of share dividends,
recapitalizations and potential diluted shares are considered as issued at the
beginning of the period.
2012 Third Quarter Results Page 20
Exchange rates January September Third Quarter
2012 2011 2012 2011
Average Average Average Average
Mexican peso 13.21 12.10 13.14 12.65
Euro 0.7778 0.7077 0.7979 0.7122
British pound 0.6307 0.6191 0.6297 0.6220
Amounts provided in units of local currency per US dollar.
| Exhibit 3 |
| ||
| ||
Forward looking information
This presentation contains certain forward?looking statements and information relating to CEMEX, S.A.B. de C.V. and its subsidiaries (collectively, “CEMEX”) that are based on its knowledge of present facts, expectations and projections, circumstances and assumptions about future events. Many factors could cause the actual results, performance or achievements of CEMEX to be materially different from any future results, performance or achievements that may be expressed or implied by such forward?looking statements, including, among others, changes in general economic, political, governmental, and business conditions globally and in the countries in which CEMEX operates, CEMEX’s ability to comply with the terms and obligations of the facilities agreement entered into with major creditors and other debt agreements, CEMEX’s ability to achieve anticipated cost savings, changes in interest rates, changes in inflation rates, changes in exchange rates, the cyclical activity of the construction sector generally, changes in cement demand and prices, CEMEX’s ability to benefit from government economic stimulus plans, changes in raw material and energy prices, changes in business strategy, changes in the prevailing regulatory framework, natural disasters and other unforeseen events 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 as anticipated, believed, estimated, expected or targeted. Forward?looking statements are made as of the date hereof, and CEMEX does not intend, nor is it obligated, to update these forward?looking statements, whether as a result of new information, future events or otherwise. UNLESS OTHERWISE NOTED, ALL FIGURES ARE PRESENTED IN DOLLARS, BASED ON INTERNATIONAL FINANCIAL REPORTING STANDARDS Copyright CEMEX, S.A.B. de C.V. and its subsidiaries. 2
| ||
3Q12 results highlights
January – September Third Quarter
Millions of US dollars 2011 % var
l?t?l %
var
2012 2011 % var
l?t?l %
var
Net sales 11,274 11,513 (2%) 2% 3,899 3,977 (2%) 2%
Gross profit 3,301 3,291 0% 5% 1,197 1,177 2% 6%
Operating income 1,022 742 38% 51% 410 303 35% 41%
Operating EBITDA 2,003 1,838 9% 15% 730 671 9% 13%
Free cash flow after
| (56) |
|
(230) 76% 204 102 100% |
maintenance capex
? Fifth consecutive quarter with year?over?year operating EBITDA growth and the highest i operating EBITDA generation since 3Q09 ? Operating EBITDA margin highest in the last three years ? Infrastructure and housing continued to be the main drivers of demand for our products 3
| ||
Consolidated volumes and prices
9M12 vs. 9M11 3Q12 vs. 3Q11 3Q12 vs. 2Q12
Volume (l?t?l1) (1%) (1%) (1%)
Price ( USD) ( 0%) 1% 1%
Domestic gray
t
) )
Price (l?t?l1) 4% 5% (0%)
Volume (l?t?l1) (3%) (2%) 2%
Price (USD) (1%) (1%) (0%)
cement
Ready mix
Price (l?t?l1) 5% 4% (0%)
Volume (l?t?l1) (3%) 1% 7%
Price (USD) (2%) (4%) (3%)
P i l t l1) 3% 1% (2%)
Aggregates
Increase in domestic gray cement volumes in our operations in Mexico, U.S., South, Central
America and the Caribbean and Asia, partially mitigated the negative contribution of the Northern
Europe and the Mediterranean regions
CalibriConsolidated prices for cement and ready mix were stable on a quarter]over]quarter basis in
local]currency terms
Calibri1 Like]to]like volumes adjusted for investments/divestments and, in the case of prices, foreign]exchange fluctuations 4
|
3Q12 achievements
? Operating EBITDA margin highest in the last three years ? Favorable volume dynamics in Mexico, U.S. , and the South, Central America and the Caribbean and Asia regions ? Successful completion of the refinancing of our August 2009 Financing Agreement ? Issuance of US$1.5 billion in 9.375% senior secured notes due 2022 ? Continued success of our transformation process
• Expected incremental improvement of US$200 million in our steady?state operating
EBITDA during 2012 and to reach a run rate of US$400 million by the end of 2012
? Close to 28% alternative fuel substitution rate during 3Q12
? 10? year strategic agreement with IBM, in which IBM will provide back?office
and IT?related services
| 5 |
|
| ||
October 2012
Regional Highlights
|
Mexico
Millions of
US dollars 3Q12 3Q11 % var l?t?l % va9M12 9M11 % var l?t?l % var r
Net Sales 2,545 2,661 (4%) 4% 875 856 2% 6%
Op. EBITDA 910 894 2% 11% 313 289 9% 13%
as % net sales 35.8% 33.6% 2.2pp 35.8% 33.7% 2.1pp
Volume
9M12 vs.
9M11
3Q12 vs.
3Q11
3Q12 vs.
2Q12
Cement 1% 4% 1%
The informal residential sector continued to
benefit from robust employment levels and
an increase in aggregate wages
Ready mix (4%) 0% 9% f h d l d
Aggregates (2%) 8% 15%
Price (LC) 9M12 vs. 3Q12 vs. 3Q12 vs.
Positive performance in the industrial and
commercial sector reflecting improvements
in private consumption
The formal residential sector hampered by
lack of available working capital financing for
9M11 3Q11 2Q12
Cement 3% 3% (1%)
Ready mix 5% 4% (2%)
Aggregates 2% 1% (2%)
homebuilders
Lower?than?expected infrastructure activity
in cement?intensive projects
| 7 |
|
|
United States
Millions of
US dollars 3Q12 3Q11 % var l?t?l % va9M12 9M11 % var l?t?l % var r
Net Sales 2,305 1,934 19% 15% 826 734 12% 12%
Op. EBITDA 30 (74) N/A N/A 27 (11) N/A N/A
as % net sales 1.3% (3.8%) 5.1pp 3.3% (1.6%) 4.9pp
Volume
9M12 vs.
9M11
3Q12 vs.
3Q11
3Q12 vs.
2Q12
Cement 16% 8% (1%)
Ready mix 24% 13% 6%
Aggregates 11% 14% 13%
Price 9M12 vs. 3Q12 vs. 3Q12 vs.
(LC)
9M11 3Q11 2Q12
Cement 1% 2% 0%
Ready mix 3% 3% 1%
Aggregates 1% (4%) (5%)
Year?over?year increase in sales of US$92
million with a favorable swing in operating
EBITDA of US$39 million reflecting continued
evidence of operating leverage in our results
Second consecutive quarter of positive EBITDA
generation
Strength in residential sector fueled quarterly
volumes
Increase in industrial?and?commercial demand
driven by manufacturing, lodging, office and
commercial segments
September was the 14th consecutive month of
| 8 |
|
year?over?year growth in cement volumes
? Cement and ready?mix prices reflect favorable
trend
|
Northern Europe
Millions of
US dollars 3Q12 3Q11 % var l?t?l % va9M12 9M11 % var l?t?l % var r
Net Sales 3,086 3,633 (15%) (8%) 1,105 1,302 (15%) (7%)
Op. EBITDA 324 332 (2%) 5% 143 173 (18%) (10%)
as % net sales 10.5% 9.1% 1.4pp 12.9% 13.3% (0.4pp)
Volume
9M12 vs.
9M11
3Q12 vs.
3Q11
3Q12 vs.
2Q12
Cement (13%) (11%) 8%
Ready mix (8%) (6%) 1%
Aggregates (8%) (5%) 4%
P i (LC) 1 9M12 vs. 3Q12 vs. 3Q12 vs.
Price 9M11 3Q11 2Q12
Cement 2% 1% (2%)
Ready mix 2% 1% (1%)
Aggregates 3% 2% (1%)
Quarterly volumes in the region were
affected by reduced public spending
The residential sector continued to be
h d fd d
the main driver of demand in Germany
In Poland, cement volumes affected by
a reduction in infrastructure spending
from a high level in 2011
| 1 |
|
Volume?weighted, local?currency average prices |
9
| ||
Mediterranean
Millions of
US dollars 3Q12 3Q11 % var l?t?l % va9M12 9M11 % var l?t?l % var r
Net Sales 1,103 1,337 (17%) (12%) 342 425 (19%) (13%)
Op. EBITDA 293 345 (15%) (10%) 99 104 (5%) 2%
as % net sales 26.5% 25.8% 0.7pp 28.9% 24.6% 4.3pp
Volume
9M12 vs.
9M11
3Q12 vs.
3Q11
3Q12 vs.
2Q12
Cement (20%) (20%) (6%)
Ready mix (11%) (12%) (8%)
Aggregates (17%) (16%) (2%)
Price (LC) 1 9M12 vs. 3Q12 vs. 3Q12 vs.
9M11 3Q11 2Q12
Cement (2%) (1%) (3%)
Ready mix 5% 4% 0%
Aggregates 3% 3% 1%
| 1 |
|
Volume?weighted, local?currency average prices |
Increase in ready?mix volume from our
Croatian operations was offset by declines in
Spain, Egypt and UAE
l f d fl d
In Spain, volumes of our products reflected
the adoption of austerity measures which
have affected infrastructure spending as well
as continued high inventories in the
residential sector
In Egypt during the quarter, volumes
dampened by low infrastructure activity; the
informal sector continues to be the main
driver for cement demand
10
| ||
South, Central America and the Caribbean
Millions of
US dollars 3Q12 3Q11 % var l?t?l % va9M12 9M11 % var l?t?l % var r
Net Sales 1,574 1,298 21% 22% 520 454 15% 16%
Op. EBITDA 544 376 45% 45% 177 142 25% 25%
as % net sales 34.6% 28.9% 5.7pp 34.0% 31.2% 2.8pp
Volume
9M12 vs.
9M11
3Q12 vs.
3Q11
3Q12 vs.
2Q12
Cement 6% 5% (1%)
Ready mix 6% (1%) (3%)
Aggregates 8% 2% 1%
P i 1 9M12 vs. 3Q12 vs. 3Q12 vs.
Price (LC) 9M11 3Q11 2Q12
Cement 12% 10% 2%
Ready mix 17% 15% 1%
Aggregates 11% 12% 4%
| 1 |
|
Volume?weighted, local?currency average prices |
The region continued experiencing a positive
economic growth environment resulting in
favorable results this quarter
f d h d l
Infrastructure and the residential sector were
the main drivers of consumption for our
products
Quarterly cement volumes in Colombia
reflect two fewer business days versus 3Q11
and increased cement pre?ordering in
anticipation to the July price increase
Infrastructure activity in Panama continued to
be strong driven by projects strong, including the
Panama Canal, the Panama City metro
system, and hydroelectric plants
11
|
Asia
Millions of
US dollars 3Q12 3Q11 % var l?t?l % va9M12 9M11 % var l?t?l % var r
Net Sales 403 381 6% 6% 133 130 2% 1%
Op. EBITDA 70 63 11% 11% 28 19 46% 44%
as % net sales 17.4% 16.5% 0.9pp 21.3% 14.9% 6.4pp
Volume
9M12 vs.
9M11
3Q12 vs.
3Q11
3Q12 vs.
2Q12
Cement 13% 7% (11%)
Ready mix (19%) (24%) (7%)
Aggregates (54%) (59%) (37%)
P i (LC) 1 9M12 vs. 3Q12 vs. 3Q12 vs.
Price 9M11 3Q11 2Q12
Cement 6% 11% 2%
Ready mix 0% (1%) 1%
Aggregates (8%) (13%) (5%)
| 1 |
|
Volume?weighted, local?currency average prices |
Increase in quarterly domestic cement
volumes driven by positive performance in
the Philippines and Bangladesh
l d
Sequential price increase in cement and
ready?mix in local?currency terms
Demand for building materials in the
Philippines positively affected by the
continued recovery in public spending
Infrastructure and the residential sector
were the main drivers of demand
12
|
October 2012
3Q12 Results
|
Operating EBITDA, cost of sales and SG&A
Millions of US dollars 2012 2011 % var
l?t?l
% 2012 2011 % var
l?t?l
% January – September Third Quarter
var
var
Net sales 11,274 11,513 (2%) 2% 3,899 3,977 (2%) 2%
Operating EBITDA 2,003 1,838 9% 15% 730 671 9% 13%
as % net sales 17.8% 16.0% 1.8pp 18.7% 16.9% 1.8pp
Cost of sales 7,973 8,222 3% 2,702 2,800 4%
as % net sales 70.7% 71.4% 0.7pp 69.3% 70.4% 1.1pp
SG&A 2,279 2,549 11% 787 874 10%
as % net sales 20.2% 22.1% 1.9pp 20.2% 22.0% 1.8pp
Higher operating EBITDA margin due to higher volumes and prices in some regions, g p g g g p g the
continued results of our transformation process, as well as a favorable operating?leverage effect
in some of our markets
Decrease in cost of sales and SG&A as a percentage of net sales reflect the savings of our cost
reduction 14
initiatives as well as lower fuel costs
During the quarter, kiln?fuel and electricity bill on a per?ton?of?cement?produced basis
decreased by close to 5%
|
Free cash flow
Millions of US dollars 2012 2011 % var 2012 2011 % var
Operating EBITDA 2,003 1,838 9% 730 671 9%
January – September Third Quarter
? Net Financial Expense 1,026 1,001 344 348
? Maintenance Capex 219 159 96 72
Change in Working Cap 513 ? 640 51 99
? Taxes Paid 298 169 48 19
? Other Cash Items (net) 3 100 (12) 30
Free Cash Flow after Maint.Capex (56) (230) 76% 204 102 100%
? Strategic Capex 93 79 33 32
Working capital days decreased to 30 days in the first nine months of 2012 versus 32 days in the
same period of 2011
Free Cash Flow (149) (309) 52% 171 70 146%
15
|
Other income statement items
Other expenses, net, of US$168 million during the quarter included mainly a
provision related to the implementation phase of the outsourcing
agreement for back?office services as well as impairments of fixed assets
Gain on financial instruments for the quarter of US$19 million related
mainly to CEMEX y shares
16
|
October 2012
Debt Information
|
Debt related information
Successful completion of the refinancing of our August 2009 Financing
Agreement
• Participanting creditors representing approximately 92 7% of the aggregate 92.7% principal
amount agreed to exchange
• Issuance of US$6.155 billion of new loans and new private placement notes with
final maturity in February 2017 and US$500 million of new 9.5% senior secured
notes due in 2018; US$525 million remained under the original Financing Agreement
Issuance in early October of US$1.5 billion in 9.375% senior secured notes due
2022
• Proceeds to be used to satisfy the US$1 billion milestone due March 2013 and the
US$500 million amortization due February 2014 under the new Facilities Agreement;
these payments will result in a reduction of interest rate of 25 basis points under
new Facilities Agreement
During the quarter, total debt plus perpetual securities increased by US$14
million
18
• Negative foreign exchange conversion effect of US$56 million during the quarter
| ||
Consolidated debt maturity profile
Total debt excluding perpetual notes1 as of September 30, 2012
US$ 17,180 million
Millions New Facilities Agreement
9,000
10,000
of
US dollars
Fixed Income
Other bank / WC debt / Certificados
Bursátiles
Original Financing Agreement
6,000
7,000
8,000 Convertible Subordinated Notes
| 3 |
|
000 |
4,000
5,000
4,751
3,092
2,679
1,000
2,000
3,000
55
1,137
1,698
943
1,434 1,392
,
19
0
2012 2013 2014 2015 2016 2017 2018 2019 ?2020
| 1 |
|
CEMEX has perpetual debentures totaling US$471 million |
|
Consolidated debt maturity profile – pro forma 1
Total debt excluding perpetual notes2 as of September 30, 2012
US$ 17,180 million
Millions of
US dollars New Facilities Agreement
| 8 |
|
000 |
9,000
10,000
Fixed Income
Other bank / WC debt / Certificados
Bursátiles
Original Financing Agreement
6,000
7,000
8,000
| 4 |
|
751 |
Convertible Subordinated Notes
3,000
4,000
5,000
4,751
2,892
3,086
2,679
0
1,000
2,000
2012 2013 2014 2015 2016 2017 2018 2019 ?2020
55 137
1,204
943
1,434
20
1 Reflecting the use of proceeds of US$1.5 billion from the 9.375% senior secured notes due 2022 issued on October, to satisfy the US$1 billion
milestone due March 2013 and US$500 million amortization due February 2014 under the new Facilities Agreement
| 2 |
|
CEMEX has perpetual debentures totaling US$471 million |
| ||
October 2012
Appendix
|
Additional information on debt and perpetual notes
d i i Interest ratCurrency denomination e
Euro
16%
Mexican peso
2%
Fixed
59%
Variable
U.S. 41%
dollar
82%
Thi d Q
Second Quarter
2012 2011 % Var. 2012
Total debt1 17,180 17,210 (0%) 17,167
Short?term 1% 2% 1%
Long?99% 98% 99%
Third Quarter
Millions of US dollars
ong term Perpetual notes 471 1,161 (59%) 470
Cash and cash equivalents 785 736 7% 625
Net debt plus perpetual notes 16,866 17,635 (4%) 17,012
Consolidated Funded Debt2 / EBITDA3 5.98 6.15
Interest Coverage3 4 2.03 1.99
22
| 1 |
|
Includes convertible notes and capital leases, in accordance with IFRS |
2 Consolidated Funded Debt as of September 30, 2012 was US$15,207 million, in accordance with our contractual obligations under the
Facilities Agreement
| 3 |
|
EBITDA calculated in accordance with IFRS |
| 4 |
|
Interest expense in accordance with our contractual obligations under the Facilities Agreement |
|
9M12 volume and price summary:
Selected countries
AggregateDomestic gray cement Ready mix s
Prices Prices Prices
(LC) (LC) (LC)
Mexico 1% (6%) 3% (4%) (4%) 5% (2%) (7%) 2%
U S 16% 1% 1% 16%1 3% 3% 10%1 1% 1%
9M12 vs. 9M11 9M12 vs. 9M11 9M12 vs. 9M11
Prices
(USD)
Volumes
Prices
(USD)
Volumes
Prices
(USD)
Volumes
U.S. Spain (42%) (7%) 2% (46%) (4%) 5% (49%) (10%) (1%)
UK (9%) 1% 3% (14%) 1% 3% (13%) (1%) 1%
France N/A N/A N/A (4%) (8%) 2% (5%) (3%) 7%
Germany (13%) (7%) 3% (5%) (9%) 0% (7%) (7%) 3%
Poland (12%) (14%) (1%) (10%) (13%) (0%) (6%) (20%) (8%)
Colombia 6% 23% 20% 14% 23% 21% 31% 5% 3%
Egypt (10%) (5%) (3%) 6% (16%) (14%) 1% (13%) (11%)
Philippines 15% 7% 5% N/A N/A N/A N/A N/A N/A
| 1 |
|
On a like?to?like basis for the ongoing operations 23 |
| ||
3Q12 volume and price summary:
Selected countries
Domestic gray cement Ready mix Aggregates
Prices Prices Prices
(LC) (LC) (LC)
Mexico 4% (2%) 3% 0% 0% 4% 8% (3%) 1%
U S 8% 2% 2% 13% 3% 3% 14% (4%) (4%)
3Q12 vs. 3Q12 vs. 3Q11 3Q11
Prices
(USD)
Volumes Volumes
Prices
(USD)
Volumes
Prices
(USD)
3Q12 vs. 3Q11
U.S. Spain (41%) (9%) 2% (45%) (12%) (1%) (55%) (16%) (5%)
UK (5%) 2% 3% (10%) 1% 2% (10%) (2%) (0%)
France N/A N/A N/A (3%) (9%) 2% (2%) (5%) 6%
Germany (10%) (8%) 3% (4%) (10%) 1% (2%) (9%) 3%
Poland (10%) (14%) (4%) (8%) (16%) (7%) (9%) (14%) (5%)
Colombia (0%) 19% 18% 9% 22% 21% 25% 4% 3%
Egypt (10%) (4%) (2%) (5%) (12%) (10%) (9%) 10% 12%
Philippines 8% 12% 10% N/A N/A N/A N/A N/A N/A
24
| ||
Definitions
9M2012 / 9M2011: results for the nine months of the years 2012 and 2011, respectively.
Cement: When providing cement volume variations, refers to domestic gray cement operations
(starting in 2Q10, the base for reported cement volumes changed from total domestic cement
including clinker to domestic gray cement).
LC: Local currency.
Like?to?like percentage variation (l?t?l % var): Percentage variations adjusted for
investments/divestments and currency fluctuations.
Maintenance capital expenditures: investments incurred for the purpose of ensuring the company’s
operational continuity. These include capital expenditures on projects required to replace obsolete
assets or maintain current operational levels, and mandatory capital expenditures, which are projects
required to comply with governmental regulations or company policies.
Operating EBITDA: Operating income plus depreciation and operating amortization.
pp: percentage points.
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.
25
|
Contact information
Investor Relations Stock InformatioInvestor n
In the United States
+1 877 7CX NYSE
In Mexico
52 Information
NYSE (ADS): CX
Mexican Stock Exchange:
CEMEXCPO
+81 8888 4292
Ratio ir@cemex.com
of CEMEXCPO to
CX:10 to 1
26