EX-3 4 d758331dex3.htm EX-3

EX-3

2014

Second Quarter Results

Exhibit 3

2

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.

3

2Q14 results highlights

During the quarter, operating EBITDA increased by 3% on a like-to-like basis and adjusting for

the fewer number of business days in our operations

Millions of US dollars

2014

2013

% var

l-t-l   %

var 

2014

2013

% var

l-t-l %

var 

Net sales

7,737

7,322

6%

7%

4,154

4,006

4%

4%

Gross profit

2,313

2,189

6%

7%

1,331

1,280

4%

4%

Operating earnings before

other expenses, net

722

690

5%

8%

456

451

1%

2%

Operating EBITDA

1,270

1,251

1%

3%

737

730

1%

1%

Free cash flow after

maintenance capex

(396)

(568)

30%

63

(86)

N/A

January – June

Second Quarter

4

Consolidated volumes and prices

Cement and ready-mix volumes, on a like-to-like basis and adjusting for the fewer number of

business days, were up in all regions with the exception of Northern Europe, where some

countries had brought forward construction activity as a result of very good weather during the

first quarter

Consolidated

cement

and

aggregates

prices

increased

sequentially

on

a

like-to-like

basis

in

local-

currency terms

Consolidated prices in US-dollar terms for cement, ready mix and aggregates increased by 4%,

3%, and 10%, respectively, from December 2013 to June 2014

1

Like-to-like volumes adjusted for investments/divestments and, in the case of prices, foreign-exchange fluctuations

6M14 vs. 6M13

2Q14 vs. 2Q13

2Q14 vs. 1Q14

Volume (l-t-l

1

)

4%

1%

12%

Price (USD)

(0%)

2%

2%

Price (l-t-l

1

)

2%

3%

1%

Volume (l-t-l

1

)

3%

(1%)

12%

Price (USD)

4%

5%

1%

Price (l-t-l

1

)

3%

3%

0%

Volume (l-t-l

1

)

7%

2%

16%

Price (USD)

7%

9%

2%

Price (l-t-l

1

)

5%

5%

1%

Aggregates

Domestic gray

cement

Ready mix

Consolidated cement, ready-mix and aggregates volumes year-to-date increased by

4%, 3% and 7%, respectively

Consolidated prices in local-currency terms for both cement and aggregates

increased sequentially by 1% during the quarter

Early conversion of approximately US$114.5 million of our 4.875%

convertible

subordinated notes due 2015

Issuance during April of 6.000% senior secured notes for US$1 billion maturing in

2024 and 5.250% senior secured notes for €400 million maturing in 2021

During the quarter, our subsidiary CLH started the construction of a new 860-

thousand-ton cement grinding plant in Nicaragua

5

2Q14 achievements

Second Quarter 2014

Regional Highlights

7

Mexico

Volume

6M14 vs.

6M13

2Q14 vs.

2Q13

2Q14 vs.

1Q14

Cement

(0%)

(2%)

6%

Ready mix

4%

4%

8%

Aggregates

13%

11%

10%

Price (LC)

6M14 vs.

6M13

2Q14 vs.

2Q13

2Q14 vs.

1Q14

Cement

0%

1%

1%

Ready mix

1%

2%

2%

Aggregates

2%

4%

4%

Millions of

US dollars

Net Sales

1,551

1,627

(5%)

(1%)

816

847

(4%)

(1%)

Op. EBITDA

497

514

(3%)

0%

247

250

(1%)

1%

as % net sales

32.0%

31.6%

0.4pp

30.3%

29.6%

0.7pp

2Q14

2Q13

% var

l-t-l % var

6M14

6M13

% var

l-t-l % var  

Increase in adjusted year-over-year volumes

for our three core products

Cement prices increased 7% from December

2013 to June 2014

Formal construction, especially the formal

residential and commercial sectors, was the

main driver of consumption for our products

The self-construction sector was slightly down

during the quarter

8

United States

Millions of

US dollars

Net Sales

1,749

1,604

9%

12%

957

868

10%

13%

Op. EBITDA

147

99

48%

46%

119

80

49%

48%

as % net sales

8.4%

6.2%

2.2pp

12.4%

9.2%

3.2pp

2Q14

2Q13

% var

l-t-l % var

6M14

6M13

% var

l-t-l % var  

Volume

6M14 vs.

6M13

2Q14 vs.

2Q13

2Q14 vs.

1Q14

Cement

8%

7%

20%

Ready mix

(1%)

(2%)

14%

Aggregates

(3%)

(1%)

9%

Price (LC)

6M14 vs.

6M13

2Q14 vs.

2Q13

2Q14 vs.

1Q14

Cement

4%

6%

5%

Ready mix

8%

9%

2%

Aggregates

12%

11%

5%

EBITDA increase fueled by steady volume growth,

healthy pricing gains and favorable operating

leverage

Increase in year-over-year cement and pro-forma

ready-mix volumes

Sequential prices increased in our three core

products

The residential and industrial-and-commercial

sectors continued to be the main drivers of

demand in most of our major markets

9

Northern Europe

Volume

6M14 vs.

6M13

2Q14 vs.

2Q13

2Q14 vs.

1Q14

Cement

7%

(2%)

36%

Ready mix

4%

(3%)

24%

Aggregates

11%

2%

31%

Price (LC)

1

6M14 vs.

6M13

2Q14 vs.

2Q13

2Q14 vs.

1Q14

Cement

1%

2%

(1%)

Ready mix

0%

0%

(4%)

Aggregates

(0%)

1%

(4%)

Millions of

US dollars

Net Sales

2,049

1,846

11%

5%

1,138

1,088

5%

(2%)

Op. EBITDA

133

92

45%

38%

121

108

12%

6%

as % net sales

6.5%

5.0%

1.5pp

10.6%

9.9%

0.7pp

2Q14

2Q13

% var

l-t-l % var

6M14

6M13

% var

l-t-l % var  

Regional cement and ready-mix volumes declined

during the quarter mainly due to declines in

Germany and Poland, where good weather in

1Q14 resulted in some activity starting earlier in

the year; year-to-date volumes continue to be

favorable

Year-to-date volume growth in our three core

products in all countries in the region

In Germany and the UK, demand for our products

was driven by the residential sector

In Poland, infrastructure is the main contributor

to cement demand, from a very low base last year

1

Volume-weighted, local-currency average prices

10

Mediterranean

Millions of

US dollars

Net Sales

861

747

15%

13%

449

400

12%

10%

Op. EBITDA

181

168

8%

8%

100

94

6%

6%

as % net sales

21.0%

22.5%

(1.5pp)

22.2%

23.5%

(1.3pp)

2Q14

2Q13

% var

l-t-l % var

6M14

6M13

% var

l-t-l % var  

Increase during the quarter in cement volumes in

Spain, Croatia and the UAE more than offset the

decline in Egypt

Sequential increase in regional prices in cement

and aggregates

In Egypt, the informal sector continued to be the

main driver for cement demand

In Spain, domestic gray cement volumes showed

year-over-year growth for the first time since

1Q11

1

Volume-weighted, local-currency average prices

Volume

6M14 vs.

6M13

2Q14 vs.

2Q13

2Q14 vs.

1Q14

Cement

1%

1%

13%

Ready mix

6%

1%

(3%)

Aggregates

(3%)

(12%)

(8%)

Price (LC)

1

6M14 vs.

6M13

2Q14 vs.

2Q13

2Q14 vs.

1Q14

Cement

8%

9%

9%

Ready mix

3%

2%

(0%)

Aggregates

21%

25%

2%

11

South, Central America and the Caribean

1

Volume-weighted, local-currency average prices

Millions of

US dollars

Net Sales

1,099

1,059

4%

9%

562

561

0%

3%

Op. EBITDA

365

399

(9%)

(4%)

178

211

(16%)

(14%)

as % net sales

33.2%

37.7%

(4.5pp)

31.6%

37.6%

(6.0pp)

2Q14

2Q13

% var

l-t-l % var

6M14

6M13

% var

l-t-l % var  

Increase in regional cement volumes mainly

driven by growth in Colombia, the Dominican

Republic, Costa Rica and Nicaragua

In Colombia, positive performance during the

quarter was mainly driven by the residential and

infrastructure sectors

In Panama, the residential and industrial-and-

commercial sectors were the main drivers of

consumption; quarterly volumes reflect a

construction-workers strike as well as reduced

consumption rate from the Canal expansion

project

Volume

6M14 vs.

6M13

2Q14 vs.

2Q13

2Q14 vs.

1Q14

Cement

8%

1%

1%

Ready mix

11%

7%

7%

Aggregates

21%

16%

11%

Price (LC)

1

6M14 vs.

6M13

2Q14 vs.

2Q13

2Q14 vs.

1Q14

Cement

(0%)

(1%)

(1%)

Ready mix

1%

(1%)

(2%)

Aggregates

(0%)

(0%)

0%

12

Asia

1

Volume-weighted, local-currency average prices

Volume

6M14 vs.

6M13

2Q14 vs.

2Q13

2Q14 vs.

1Q14

Cement

5%

1%

4%

Ready mix

(21%)

(29%)

1%

Aggregates

14%

(28%)

(44%)

Price (LC)

1

6M14 vs.

6M13

2Q14 vs.

2Q13

2Q14 vs.

1Q14

Cement

2%

2%

2%

Ready mix

14%

15%

2%

Aggregates

9%

(9%)

(20%)

Millions of

US dollars

Net Sales

306

305

0%

11%

160

162

(2%)

7%

Op. EBITDA

59

62

(5%)

(2%)

34

38

(11%)

(8%)

as % net sales

19.3%

20.5%

(1.2pp)

21.2%

23.5%

(2.3pp)

2Q14

2Q13

% var

l-t-l % var

6M14

6M13

% var

l-t-l % var  

Increase in regional domestic cement volumes

during the quarter reflects positive performance

in the Philippines

Increase in regional cement and ready-mix prices

sequentially, in local-currency terms

Growth in cement volumes in the Philippines

reflects positive performance in all sectors;

infrastructure activity reflects ongoing

reconstruction and rehabilitation efforts

2Q14 Results

14

Operating EBITDA, cost of sales and operating expenses

Millions of US dollars

2014

2013

% var

l-t-l

% var  

2014

2013

% var

l-t-l

% var

Net sales

7,737

7,322

6%

7%

4,154

4,006

4%

4%

Operating EBITDA

1,270

1,251

1%

3%

737

730

1%

1%

as % net sales

16.4%

17.1%

(0.7pp)

17.7%

18.2%

(0.5pp)

Cost of sales

5,424

5,134

(6%)

2,823

2,725

(4%)

as % net sales

70.1%

70.1%

0.0pp

68.0%

68.0%

0.0pp

Operating expenses

1,591

1,498

(6%)

875

829

(6%)

as % net sales

20.6%

20.5%

(0.1pp)

21.1%

20.7%

(0.4pp)

January – June

Second Quarter

Our operating EBITDA increased by 3%, adjusting for the fewer number of business days in our

operations during the quarter

Operating EBITDA margin, adjusted for business days, decreased by 0.3pp

Operating expenses, as a percentage of net sales, increased by 0.4pp mainly due to higher

distribution expenses during the quarter

15

Free cash flow

Millions of US dollars

2014

2013

% var

2014

2013

% var

Operating EBITDA

1,270

1,251

1%

737

730

1%

- Net Financial Expense

692

719

343

362

- Maintenance Capex

189

149

121

101

- Change in Working Cap

453

538

148

207

- Taxes Paid

438

408

211

133

- Other Cash Items (net)

(108)

5

(148)

14

Free Cash Flow after Maint.Capex

(396)

(568)

30%

63

(86)

N/A

- Strategic Capex

55

35

32

8

Free Cash Flow

(451)

(603)

25%

31

(94)

N/A

January – June

Second Quarter

Working capital days declined to 27 in the first half of 2014 versus 28 days during the same

period in 2013

Other

expenses,

net,

during

the

quarter

resulted

in

an

income

of

US$62

million

which

includes

a gain in sales of fixed assets, especially in Northern Europe, mitigated by severance payments

Foreign-exchange gain of US$65 million resulting primarily from the fluctuation of the

Mexican peso versus the U.S. dollar

Gain

on

financial

instruments

of

US$77

million

related

mainly

to

CEMEX

shares

Controlling interest net income of US$76 million, versus a loss of US$152 in 2Q13, mainly

reflects an income in the other expenses line, a gain on financial instruments, lower income

taxes, and higher operating earnings before other expenses, mitigated by higher financial

expenses and a lower foreign-exchange gain

16

Other income statement items

Second Quarter 2014

Debt Information

Early conversion of additional US$114.5 million of our 4.875% convertible subordinated notes

due 2015; approximately US$320 million of these notes remain outstanding

Issuance

of

US$1

billion

of

6.000%

senior

secured

notes

maturing

in

2024

and

€400

million

of         

5.250% senior secured notes maturing in 2021. Proceeds used to pay:

•

US$597 million of our 9.250% senior secured notes due 2020

•

US$483 million of our 9.000% senior secured notes due 2018

•

The remaining €130 million of our 9.675% senior secured notes due 2017

•

The remaining €115 million of our 8.875% senior secured notes due 2017

During the quarter, total debt plus perpetual securities decreased by US$125 million

•

Positive conversion effect during the quarter of US$5 million

18

Debt-related information

19

Consolidated debt maturity profile

Total

debt

excluding

perpetual

notes

1

as

of

June

30,

2014

US$ 16,569 million

1

CEMEX has perpetual debentures totaling US$476 million

2

Convertible Subordinated Notes include only the debt component of US$1,807 million. Total notional amount is about US$1,988 million

171

1,109

2,748

591

928

1,550

4,297

2,540

Millions of

US dollars

1,513

160

•

Avg. life of debt: 4.6 years

963

Fixed Income

New Facilities Agreement

Other bank / WC debt / Certificados

Bursátiles

Convertible

Subordinated

Notes

2

Appendix

21

Additional information on debt and perpetual notes

Interest rate

Fixed

66%

Variable

34%

Currency denomination

U.S. dollar

87%

Euro

11%

Mexican peso

2%

1

2

3

4

First Quarter

2014

2013

% Var.

2014

Total debt

1

16,569

16,476

1%

16,693

Short-term

3%

3%

6%

Long-term

97%

97%

94%

Perpetual notes

476

472

1%

477

Cash and cash equivalents

737

746

(1%)

845

Net debt plus perpetual notes

16,308

16,201

1%

16,325

Consolidated

Funded

Debt

2

/

EBITDA

3

5.49

5.54

5.54

Interest

coverage

4

2.15

2.06

2.12

Second Quarter

Millions of US dollars

Includes convertible notes and capital leases, in accordance with IFRS

Consolidated Funded Debt as of June 30, 2014 was US$14,629 million, in accordance with our contractual obligations under the

Facilities Agreement

EBITDA calculated in accordance with IFRS

Interest expense in accordance with our contractual obligations under the Facilities Agreement

3

22

6M14 volume and price summary: Selected countries

Prices

Prices

Prices

(LC)

(LC)

(LC)

Mexico

(0%)

(3%)

0%

4%

(2%)

1%

13%

(2%)

2%

U.S.

8%

4%

4%

(1%)

8%

8%

(3%)

12%

12%

Germany

6%

7%

2%

5%

9%

4%

6%

4%

(1%)

Poland

2%

6%

(1%)

2%

(6%)

(11%)

25%

10%

3%

France

N/A

N/A

N/A

1%

3%

(1%)

8%

4%

(0%)

UK

2%

10%

1%

4%

12%

3%

15%

11%

2%

Spain

0%

(4%)

(8%)

2%

10%

5%

(23%)

3%

(1%)

Egypt

(3%)

14%

17%

(1%)

9%

12%

1%

(21%)

(18%)

Colombia

20%

(7%)

(2%)

17%

(4%)

1%

32%

(6%)

(0%)

Panama

(19%)

13%

13%

(8%)

0%

0%

(6%)

(2%)

(2%)

Costa Rica

7%

(4%)

4%

(19%)

(2%)

6%

(4%)

(11%)

(3%)

Philippines

7%

(5%)

2%

N/A

N/A

N/A

N/A

N/A

N/A

Prices

(USD)

Volumes

Prices

(USD)

Volumes

Prices

(USD)

Volumes

Aggregates

6M14 vs. 6M13

Domestic gray cement 

6M14 vs. 6M13

Ready mix                    

6M14 vs. 6M13

23

2Q14 volume and price summary: Selected countries

Prices

Prices

Prices

(LC)

(LC)

(LC)

Mexico

(2%)

(1%)

1%

4%

(1%)

2%

11%

1%

4%

U.S.

7%

6%

6%

(2%)

9%

9%

(1%)

11%

11%

Germany

(7%)

7%

2%

(7%)

9%

4%

(12%)

4%

(1%)

Poland

(15%)

6%

(1%)

(6%)

(3%)

(10%)

10%

18%

9%

France

N/A

N/A

N/A

(8%)

4%

(1%)

3%

4%

(1%)

UK

1%

11%

1%

2%

14%

3%

14%

12%

1%

Spain

6%

(7%)

(12%)

7%

9%

3%

(21%)

7%

2%

Egypt

(2%)

17%

19%

10%

9%

11%

34%

(15%)

(14%)

Colombia

9%

(3%)

(2%)

13%

(0%)

1%

27%

(0%)

1%

Panama

(20%)

10%

10%

(22%)

(2%)

(2%)

(16%)

(5%)

(5%)

Costa Rica

1%

(6%)

3%

(21%)

(6%)

3%

2%

(18%)

(10%)

Philippines

2%

(2%)

3%

N/A

N/A

N/A

N/A

N/A

N/A

Prices

(USD)

Volumes

Prices

(USD)

Aggregates

2Q14 vs. 2Q13

2Q14 vs. 2Q13

Domestic gray cement 

2Q14 vs. 2Q13

Prices

(USD)

Volumes

Ready mix  

Volumes

24

Definitions

6M14

/

6M13:

Results

for

the

six

months

of

the

years

2014

and

2013,

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

earnings

before

other

expenses,

net

plus

depreciation

and

operating amortization

pp:

Percentage points

Prices:

All references to pricing initiatives, price increases or decreases, refer to our prices for

our products

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

Calendar of Events

October 23, 2014

Third quarter 2014 financial results conference call