Cemex outlines strategy for high-single-digit EBITDA growth in the medium-term

Cemex’s strategy, outlined by CEO Fernando A. González and his management team, is focused on accelerated growth in the US, leveraging its leading position in the Mexico market to take advantage of unique growth opportunities, pioneering profitable lower-carbon and circular practices in Europe to implement worldwide, and expanding its fast-growing Urbanisation Solutions business.

“With industry-leading organic EBITDA growth rate over the last four years, strong free cash flow generation, and our recently received investment grade rating, we will continue to focus on rolling out our bolt-on growth strategy, strengthening our capital structure while introducing a sustainable shareholder return”, said Mr. González. “We aim to continue focusing on expanding our US business and becoming the leader in lower-carbon, sustainable, and circular building solutions. Additionally, we will continue strengthening our capital structure and maintain a systematic and progressive dividend policy.”

Cemex’s fastest growing region, the US, offers the most growth potential with a multi-year construction cycle just beginning. Since 2020, Cemex has focused on rebalancing its portfolio towards the US, increasing its percentage of EBITDA contribution from 24% to 29%. The company intends to increase this number to 40% in the medium term by increasing the growth CAPEX and investing divestment proceeds to the region.

Cemex also plans to continue leveraging its fastest-growing business, Urbanisation Solutions. First incorporated as a core business in 2020, Urbanisation Solutions reached US$2.5 billion in sales and US$300 million in EBITDA in 2023, accounting for 9% of consolidated EBITDA. Cemex expects this business to continue growing at a double-digit rate.

On the sustainability front, Cemex highlighted its 'Reduce before Capture' strategy, which seeks to maximise decarbonisation through existing profitable technologies. Cemex’s European operations are leading the way in this transition, proving that it is not only feasible, but also profitable. Over the past four years, Cemex Europe’s EBITDA grew at a 7% compounded annual growth rate, with approximately a 1 percentage point margin expansion, accompanied by a 17% reduction in CO₂ emissions. Over 90% of its cement sales are from its Vertua family of more sustainable products, with an average 45% carbon reduction.

Read the article online at: https://www.worldcement.com/the-americas/21032024/cemex-outlines-strategy-for-high-single-digit-ebitda-growth-in-the-medium-term/