Cemex reports record quarterly EBITDA with significant margin recovery

The improvement in EBITDA across all regions reflects not only the success of Cemex’s pricing strategy and decelerating input cost inflation but also the incremental contribution from its growth investments portfolio and expanding Urbanization Solutions business.

Cemex’s growth strategy, introduced in 2020, focuses on bolt-on and margin enhancement investments across its four core businesses, mainly in developed markets. Cemex’s Urbanization Solutions business, Cemex’s newest core business and a primary beneficiary of these investments, has been growing at a 20% compound annual growth rate since its launch in 2019. Urbanization Solutions now represents 9% of Cemex’s consolidated EBITDA. During the second quarter, the incremental EBITDA from growth investments and Urbanization Solutions business was close to US$50 million dollars versus the same period of the previous year.

“The success of our pricing strategy, bolt-on investments, and Urbanization Solutions business, as well as decelerating cost inflation, are driving what is shaping up to be a very strong year for our company,” said Fernando A. González, CEO of Cemex. “One of our main priorities has been to recover 2021 margins, and we are getting very close. Our growth investment strategy and our Urbanization Solutions business are ramping up nicely and contributing to profitability in a meaningful way. Beyond our financial results, we continue progressing on the ambitious carbon reduction and circularity commitments of our Future in Action program, remaining on the path to becoming a net-zero CO2 company by 2050.”

• Net Sales increased 10% to US$4566 million.
• Operating EBITDA increased 29% to US$961 million.
• EBITDA margin of 21.1%, taking the company closer to its strategic priority of recovering margins to 2021 levels.
• Free Cash Flow after Maintenance Capital Expenditures was US$278 million, US$124 million higher YoY.
• Year-over-year reduction of 4.4% in CO2 levels in first half of 2023 vs the same period last year.
• Leverage ratio at 2.45x, the lowest level since Cemex started measuring the metric in 2009 in connection with the signing of its syndicated bank facility.
• Incremental EBITDA contribution of US$46 million from growth investments and Urbanization Solutions.
• Increase of 26% in EBITDA from Urbanization Solutions business.

• Net Sales in Mexico increased 14% in the second quarter, to US$1298 million, while Operating EBITDA increased 9% to US$399 million. EBITDA margin declined 1.3 pp to 30.8%.
• Cemex’s operation in the United States reported a record quarter, with EBITDA growing 87%, reaching US$303 million. Net Sales increased 10% to US$1420 million while EBITDA Margin increased 8.8 pp to 21.3%.
• In the Europe, Middle East, Africa, and Asia region, Net Sales increased 6% in the Second Quarter, to US$1354 million. Operating EBITDA was US$212 million, 11% higher, while EBITDA Margin increased 0.8 pp to 15.7%.
• Cemex’s operations in South, Central America, and the Caribbean region, reported Net Sales of US$447 million in the Second Quarter, an increase of 10%, while Operating EBITDA grew 15% to US$112 million. EBITDA Margin increased 1.4 pp, to 25.1%.

Note: All percentage variations related to Net Sales and EBITDA are on a like-to-like basis for the ongoing operations and for foreign exchange fluctuations compared to the same period of last year.

Read the article online at: https://www.worldcement.com/the-americas/27072023/cemex-reports-record-quarterly-ebitda-with-significant-margin-recovery/