EX-2 3 d158136dex2.htm EX-2

EX-2

EXHIBIT 2

2016

FIRST QUARTER RESULTS

§ Stock Listing Information

Colombian Stock Exchange S.A.

Ticker: CLH

§ Investor Relations

Jesús Ortiz de la Fuente

+57 (1) 603-9051

E-mail: jesus.ortizd@cemex.com

OPERATING AND FINANCIAL HIGHLIGHTS

January - March First Quarter

2016 2015 % var 2016 2015 % var

Consolidated cement volume 1,829 1,740 5% 1,829 1,740 5%

Consolidated domestic gray cement 1,609 1,593 1% 1,609 1,593 1%

Consolidated ready-mix volume 738 848 (13%) 738 848 (13%)

Consolidated aggregates volume 1,735 2,112 (18%) 1,735 2,112 (18%)

Net sales 316 354 (11%) 316 354 (11%)

Gross profit 153 170 (10%) 153 170 (10%)

as % of net sales 48.3% 48.1% 0.2pp 48.3% 48.1% 0.2pp

Operating earnings before other

83 90 (8%) 83 90 (8%)

expenses, net

as % of net sales 26.1% 25.5% 0.6pp 26.1% 25.5% 0.6pp

Controlling interest net income (loss) 45 44 3% 45 44 3%

Operating EBITDA 103 112 (8%) 103 112 (8%)

as % of net sales 32.7% 31.8% 0.9pp 32.7% 31.8% 0.9pp

Free cash flow after maintenance

57 67 (15%) 57 67 N/A

capital expenditures

Free cash flow 26 19 38% 26 19 38%

Net debt 1,008 1,125 (10%) 1,008 1,125 (10%)

Total debt 1,051 1,188 (12%) 1,051 1,188 (12%)

Earnings per share 0.08 0.08 3% 0.08 0.08 3%

Shares outstanding at end of period 556 556 0% 556 556 0%

Employees 4,813 4,982 (3%) 4,813 4,982 (3%)

Cement and aggregates volumes in thousands of metric tons. Ready-mix volumes in thousands of cubic meters. In millions of US dollars, except volumes, percentages, employees, and per-share amounts.

Shares outstanding are presented in millions.

Consolidated net sales during the first quarter of 2016 declined by 11% compared to the first quarter of 2015. This decline is explained mainly as a result of foreign exchange fluctuations and the effect of lower cement volumes from our operations in Panama and Costa Rica.

Cost of sales as a percentage of net sales during the first quarter of 2016 decreased by 0.2pp from 51.9% to 51.7% on a year-over-year basis.

Operating expenses as a percentage of net sales during the first quarter of the year decreased by 0.4pp from 22.6% to 22.2% compared to the same period in 2015.

Operating EBITDA during the first quarter of 2016 declined by 8% compared to the first quarter of 2015. This decline is mainly explained by foreign exchange fluctuations and the effect of lower cement volumes from our operations in Panama and Costa Rica.

Operating EBITDA margin during the first quarter of 2016 increased by 0.9pp, compared to the first quarter of 2015.

Controlling interest net income during the first quarter of 2016 reached US$45 million, increasing 3% compared to the same period in 2015.

Total debt at the first quarter of 2016 was US$1,051 million.

2016 First Quarter Results Page 2

OPERATING RESULTS

Colombia

January - March First Quarter

2016 2015 % var 2016 2015 % var

Net sales 157 176 (11%) 157 176 (11%)

Operating EBITDA 55 59 (8%) 55 59 (8%)

Operating EBITDA margin 34.9% 33.7% 1.2pp 34.9% 33.7% 1.2pp

In millions of US dollars, except percentages.

Domestic gray cement Ready-Mix Aggregates

January - March First Quarter January - March First Quarter January - March First Quarter

Volume 9% 9% (12%) (12%) (18%) (18%)

Price (USD) (11%) (11%) (17%) (17%) (9%) (9%)

Price (local currency) 13% 13% 6% 6% 16% 16%

Year-over-year percentage variation.

In Colombia, during the first quarter our domestic gray cement volumes increased by 9%, while our ready-mix and aggregates volumes declined by 12% and 18%, respectively, compared to the first quarter of 2015.

During the quarter, our cement market position improved both versus fourth and first quarter 2015, while sequential and year-over-year local currency prices remained stable and increased 13%, respectively. The residential and infrastructure sectors continued as the main drivers of demand during the quarter. The residential sector growth was supported by the middle-income segment which benefited from government-sponsored programs.

Panama

January - March First Quarter

2016 2015 % var 2016 2015 % var

Net sales 63 72 (13%) 63 72 (13%)

Operating EBITDA 25 29 (14%) 25 29 (14%)

Operating EBITDA margin 39.4% 39.9% (0.5pp) 39.4% 39.9% (0.5pp)

In millions of US dollars, except percentages.

Domestic gray cement Ready-Mix Aggregates

January - March First Quarter January - March First Quarter January - March First Quarter

Volume (21%) (21%) (14%) (14%) (12%) (12%)

Price (USD) 5% 5% (6%) (6%) (1%) (1%)

Price (local currency) 5% 5% (6%) (6%) (1%) (1%)

Year-over-year percentage variation.

In Panama, during the first quarter our domestic gray cement, ready-mix and aggregates volumes decreased 21%, 14% and

12%, respectively, compared to the first quarter of 2015.

Our results were negatively affected during the quarter by lower sales to the Panama Canal expansion project, the

completion of some large infrastructure projects, a slow-down in construction license approval, and low levels of execution

of new infrastructure projects.

OPERATING RESULTS

Costa Rica

January - March First Quarter

2016 2015 % var 2016 2015 % var

Net sales 39 43 (10%) 39 43 (10%)

Operating EBITDA 17 20 (14%) 17 20 (14%)

Operating EBITDA margin 43.6% 45.7% (2.1pp) 43.6% 45.7% (2.1pp)

In millions of US dollars, except percentages.

Domestic gray cement Ready-Mix Aggregates

January - March First Quarter January - March First Quarter January - March First Quarter

Volume (16%) (16%) 5% 5% 8% 8%

Price (USD) (4%) (4%) 11% 11% (9%) (9%)

Price (local currency) (4%) (4%) 12% 12% (8%) (8%)

Year-over-year percentage variation.

In Costa Rica, during the first quarter our domestic gray cement volumes declined by 16%, while our ready-mix and

aggregates volumes increased by 5% and 8%, respectively, compared to the first quarter of 2015.

The decline in our cement volumes is mainly explained by the tough comparison base related to a high exposure to

infrastructure projects in 2015, such as the Northern Interamerican Road.

Rest of CLH

January - March First Quarter

2016 2015 % var 2016 2015 % var

Net sales 62 66 (5%) 62 66 (5%)

Operating EBITDA 19 20 (2%) 19 20 (2%)

Operating EBITDA margin 31.3% 30.3% 1.0pp 31.3% 30.3% 1.0pp

In millions of US dollars, except percentages.

Domestic gray cement Ready-Mix Aggregates

January - March First Quarter January - March First Quarter January - March First Quarter

Volume 8% 8% (38%) (38%) (58%) (58%)

Price (USD) (6%) (6%) (0%) (0%) (19%) (19%)

Price (local currency) (1%) (1%) 2% 2% (16%) (16%)

Year-over-year percentage variation. In the Rest of CLH region, which includes our operations in Nicaragua, Guatemala, El Salvador and Brazil, during the first quarter of 2016 our domestic gray cement increased by 8%, while our ready-mix and aggregates volumes decreased by 38% and 58%, respectively, compared to the first quarter of 2015.

Housing and infrastructure in Nicaragua, along with industrial-and-commercial activity in Guatemala, remained the main

drivers of demand for our products. Our domestic gray cement volumes in these two countries increased at double digit

rates against the first and fourth quarters of 2015.

2016 First Quarter Results Page 4

The decline in ready-mix and aggregates relates to the conclusion of projects like the Izapa-Nejapa highway, and Calles para el Pueblo.

OPERATING EBITDA, FREE CASH FLOW AND DEBT

RELATED INFORMATION

Operating EBITDA and free cash flow

January - March First Quarter

2016 2015 % var 2016 2015 % var

Operating earnings before other expenses, net 83 90 (8%) 83 90 (8%)

+ Depreciation and operating amortization 20 22 20 22

Operating EBITDA 103 112 (8%) 103 112 (8%)

- Net financial expense 15 21 15 21

- Capital expenditures for maintenance 4 4 4 4

- Change in working Capital 10 5 10 5

- Taxes paid 13 14 13 14

- Other cash items (Net) 4 1 4 1

Free cash flow after maintenance capital exp 57 67 (15%) 57 67 (15%)

- Strategic Capital expenditures 31 48 31 48

Free cash flow 26 19 38% 26 19 38%

In millions of US dollars, except percentages.

Information on Debt

Fourth

First Quarter First Quarter

Quarter

2016 2015 % var 2015 2016 2015

Total debt 1, 2 1,051 1,188 12% 1,088 Currency denomination

Short term 25% 12% 24% U.S. dollar 98% 99%

Long term 75% 88% 76% Colombian peso 2% 1%

Cash and cash equivalents 43 63 (31%) 54 Interest rate

Net debt 1,008 1,125 (10%) 1,034 Fixed 76% 79%

Variable 24% 21%

In millions of US dollars, except percentages.

1 Includes capital leases, in accordance with International Financial Reporting Standards (IFRS).

2 Represents the consolidated balances of CLH and subsidiaries.

2016 First Quarter Results Page 5

OPERATING RESULTS

Income statement & balance sheet

CEMEX Latam Holdings, S.A. and Subsidiaries

in thousands of U.S. Dollars, except per share amounts

January - March First Quarter

INCOME STATEMENT 2016 2015 % var 2016 2015 % var

Net sales 315,968 353,838 (11%) 315,968 353,838 (11%)

Cost of sales (163,303) (183,606) 11% (163,303) (183,606) 11%

Gross profit 152,665 170,232 (10%) 152,665 170,232 (10%)

Operating expenses (70,122) (80,045) 12% (70,122) (80,045) 12%

Operating earnings before other expenses, net 82,543 90,187 (8%) 82,543 90,187 (8%)

Other expenses, net 115 (1,980) N/A 115 (1,980) N/A

Operating earnings 82,658 88,207 (6%) 82,658 88,207 (6%)

Financial expenses (14,873) (20,589) 28% (14,873) (20,589) 28%

Other income (expenses), net 6,761 4,703 44% 6,761 4,703 44%

Net income before income taxes 74,546 72,321 3% 74,546 72,321 3%

Income tax (29,080) (28,357) (3%) (29,080) (28,357) (3%)

Consolidated net income 45,466 43,964 3% 45,466 43,964 3%

Non-controlling Interest Net Income (150) (173) 13% (150) (173) 13%

Controlling Interest Net Income 45,316 43,791 3% 45,316 43,791 3%

0 0

Operating EBITDA 103,416 112,426 (8%) 103,416 112,426 (8%)

Earnings per share 0.08 0.08 3% 0.08 0.08 3%

as of March 31

BALANCE SHEET 2016 2015 % var

Total Assets 3,281,586 3,458,651 (5%)

Cash and Temporary Investments 43,279 62,562 (31%)

Trade Accounts Receivables 109,899 134,445 (18%)

Other Receivables 39,753 31,316 27%

Inventories 86,583 105,726 (18%)

Other Current Assets 24,049 26,980 (11%)

Current Assets 303,563 361,029 (16%)

Fixed Assets 1,145,106 1,109,691 3%

Other Assets 1,832,917 1,987,931 (8%)

Total Liabilities 1,890,395 2,076,453 (9%)

Current Liabilities 559,122 435,666 28%

Long-Term Liabilities 1,323,399 1,629,922 (19%)

Other Liabilities 7,874 10,865 (28%)

Consolidated Stockholders’ Equity 1,391,191 1,382,198 1%

Non-controlling Interest 5,536 5,600 (1%)

Stockholders’ Equity Attributable to Controlling Interest 1,385,655 1,376,598 1%

2016 First Quarter Results Page 6

OPERATING RESULTS

Income statement & balance sheet

CEMEX Latam Holdings, S.A. and Subsidiaries

in millions of Colombian Pesos in nominal terms, except per share amounts

January - March First Quarter

INCOME STATEMENT 2016 2015 % var 2016 2015 % var

Net sales 1,012,746 886,263 14% 1,012,746 886,263 14%

Cost of sales (523,422) (459,882) (14%) (523,422) (459,882) (14%)

Gross profit 489,324 426,381 15% 489,324 426,381 15%

Operating expenses (224,757) (200,489) (12%) (224,757) (200,489) (12%)

Operating earnings before other expenses, net 264,567 225,892 17% 264,567 225,892 17%

Other expenses, net 368 (4,958) N/A 368 (4,958) N/A

Operating earnings 264,935 220,934 20% 264,935 220,934 20%

Financial expenses (47,673) (51,571) 8% (47,673) (51,571) 8%

Other income (expenses), net 21,671 11,780 84% 21,671 11,780 84%

Net income before income taxes 238,933 181,143 32% 238,933 181,143 32%

Income tax (93,209) (71,027) (31%) (93,209) (71,027) (31%)

Consolidated net income 145,724 110,116 32% 145,724 110,116 32%

Non-controlling Interest Net Income (480) (434) (11%) (480) (434) (11%)

Controlling Interest Net Income 145,244 109,682 32% 145,244 109,682 32%

Operating EBITDA 331,471 281,596 18% 331,471 281,596 18%

Earnings per share 262.01 197.99 32% 262.01 197.99 32%

as of March 31

BALANCE SHEET 2016 2015 % var

Total Assets 9,918,102 8,909,656 11%

Cash and Temporary Investments 130,806 161,160 (19%)

Trade Accounts Receivables 332,154 346,338 (4%)

Other Receivables 120,149 80,670 49%

Inventories 261,684 272,355 (4%)

Other Current Assets 72,682 69,502 5%

Current Assets 917,474 930,025 (1%)

Fixed Assets 3,460,912 2,858,621 21%

Other Assets 5,539,716 5,121,010 8%

Total Liabilities 5,713,436 5,349,047 7%

Current Liabilities 1,689,861 1,122,299 51%

Long-Term Liabilities 3,999,776 4,198,759 (5%)

Other Liabilities 23,799 27,989 (15%)

Consolidated Stockholders’ Equity 4,204,666 3,560,609 18%

Non-controlling Interest 16,733 14,425 16%

Stockholders’ Equity Attributable to Controlling Interest 4,187,933 3,546,184 18%

2016 First Quarter Results Page 7

OPERATING RESULTS

Operating Summary per Country

in thousands of U.S. dollars

Operating EBITDA margin as a percentage of net sales

January - March First Quarter

2016 2015 % var 2016 2015 % var

NET SALES

Colombia 156,734 176,246 (11%) 156,734 176,246 (11%)

Panama 62,509 71,915 (13%) 62,509 71,915 (13%)

Costa Rica 38,937 43,043 (10%) 38,937 43,043 (10%)

Rest of CLH 62,346 65,649 (5%) 62,346 65,649 (5%)

Others and intercompany eliminations (4,558) (3,015) (51%) (4,558) (3,015) (51%)

TOTAL 315,968 353,838 (11%) 315,968 353,838 (11%)

GROSS PROFIT

Colombia 76,768 85,493 (10%) 76,768 85,493 (10%)

Panama 27,669 31,635 (13%) 27,669 31,635 (13%)

Costa Rica 20,674 24,442 (15%) 20,674 24,442 (15%)

Rest of CLH 24,517 25,304 (3%) 24,517 25,304 (3%)

Others and intercompany eliminations 3,037 3,358 (10%) 3,037 3,358 (10%)

TOTAL 152,665 170,232 (10%) 152,665 170,232 (10%)

OPERATING EARNINGS BEFORE OTHER EXPENSES, NET

Colombia 48,785 52,629 (7%) 48,785 52,629 (7%)

Panama 20,169 23,856 (15%) 20,169 23,856 (15%)

Costa Rica 15,435 18,009 (14%) 15,435 18,009 (14%)

Rest of CLH 18,095 18,688 (3%) 18,095 18,688 (3%)

Others and intercompany eliminations (19,942) (22,995) 13% (19,942) (22,995) 13%

TOTAL 82,543 90,187 (8%) 82,543 90,187 (8%)

OPERATING EBITDA

Colombia 54,746 59,313 (8%) 54,746 59,313 (8%)

Panama 24,621 28,662 (14%) 24,621 28,662 (14%)

Costa Rica 16,984 19,679 (14%) 16,984 19,679 (14%)

Rest of CLH 19,496 19,924 (2%) 19,496 19,924 (2%)

Others and intercompany eliminations (12,431) (15,152) 18% (12,431) (15,152) 18%

TOTAL 103,416 112,426 (8%) 103,416 112,426 (8%)

OPERATING EBITDA MARGIN

Colombia 34.9% 33.7% 34.9% 33.7%

Panama 39.4% 39.9% 39.4% 39.9%

Costa Rica 43.6% 45.7% 43.6% 45.7%

Rest of CLH 31.3% 30.3% 31.3% 30.3%

TOTAL 32.7% 31.8% 32.7% 31.8%

2016 First Quarter Results Page 8

OPERATING RESULTS

Volume Summary

Consolidated volume summary

Cement and aggregates in thousands of metric tons Ready mix in thousands of cubic meters

January - March First Quarter

2016 2015 % var 2016 2015 % var

Total cement volume 1 1,829 1,740 5% 1,829 1,740 5%

Total domestic gray cement volume 1,609 1,593 1% 1,609 1,593 1%

Total ready-mix volume 738 848 (13%) 738 848 (13%)

Total aggregates volume 1,735 2,112 (18%) 1,735 2,112 (18%)

1 Consolidated cement volume includes domestic and export volume of gray cement, white cement, special cement, mortar and clinker.

Per-country volume summary

January - March First Quarter First Quarter 2016

2016 vs. 2015 2016 vs. 2015 vs. Fourth Quarter 2015

DOMESTIC GRAY CEMENT

Colombia 9% 9% (5%)

Panama (21%) (21%) 10%

Costa Rica (16%) (16%) 9%

Rest of CLH 8% 8% 7%

READY-MIX

Colombia (12%) (12%) (4%)

Panama (14%) (14%) 5%

Costa Rica 5% 5% 7%

Rest of CLH (38%) (38%) (28%)

AGGREGATES

Colombia (18%) (18%) (7%)

Panama (12%) (12%) (2%)

Costa Rica 8% 8% 18%

Rest of CLH (58%) (58%) (61%)

2016 First Quarter Results Page 9

OPERATING RESULTS

Price Summary

Variation in U.S. dollars

January - March First Quarter First Quarter 2016

2016 vs. 2015 2016 vs. 2015 vs. Fourth Quarter 2015

DOMESTIC GRAY CEMENT

Colombia (11%) (11%) (5%)

Panama 5% 5% 0%

Costa Rica (4%) (4%) (1%)

Rest of CLH (6%) (6%) 0%

READY-MIX

Colombia (17%) (17%) (2%)

Panama (6%) (6%) (1%)

Costa Rica 11% 11% 4%

Rest of CLH (0%) (0%) (0%)

AGGREGATES

Colombia (9%) (9%) 1%

Panama (1%) (1%) (6%)

Costa Rica (9%) (9%) 4%

Rest of CLH (19%) (19%) (10%)

For Rest of CLH, volume-weighted average prices.

Variation in local currency

January - March First Quarter First Quarter 2016

2016 vs. 2015 2016 vs. 2015 vs. Fourth Quarter 2015

DOMESTIC GRAY CEMENT

Colombia 13% 13% (0%)

Panama 5% 5% 0%

Costa Rica (4%) (4%) (1%)

Rest of CLH (1%) (1%) 1%

READY-MIX

Colombia 6% 6% 3%

Panama (6%) (6%) (1%)

Costa Rica 12% 12% 4%

Rest of CLH 2% 2% 1%

AGGREGATES

Colombia 16% 16% 6%

Panama (1%) (1%) (6%)

Costa Rica (8%) (8%) 5%

Rest of CLH (16%) (16%) (9%)

For Rest of CLH, volume-weighted average prices.

2016 First Quarter Results Page 10

DEFINITIONS OF TERMS AND DISCLOSURES

Methodology for translation and presentation of results

Under IFRS, CLH reports its consolidated results in its functional currency, which is the US Dollar, by translating the financial statements of foreign subsidiaries using the corresponding exchange rate at the reporting date for the balance sheet and the corresponding exchange rates at the end of each month for the income statement.

For the reader’s convenience, Colombian peso amounts for the consolidated entity are calculated by converting the US dollar amounts using the closing COP/US$ exchange rate at the reporting date for balance sheet purposes, and the average COP/US$ exchange rate for the corresponding period for income statement purposes. The exchange rates used to convert: (i) the balance sheet as of March 31, 2016 and March 31, 2015 was $3,022.35 and $2,576.05 Colombian pesos per US dollar, respectively, and (ii) the consolidated results for the first quarter of 2016 and for the first quarter of 2015 were $3,205.22 and $2,504.71 Colombian pesos per US dollar, respectively.

Per-country/region selected financial information of the income statement is presented before corporate charges and royalties which are included under “other and intercompany eliminations.”

Consolidated financial information

When reference is made to consolidated financial information means the financial information of CLH together with its consolidated subsidiaries.

Presentation of financial and operating information

Individual information is provided for Colombia, Panama and Costa Rica.

Countries in Rest of CLH include Nicaragua, Guatemala, El Salvador and Brazil.

Exchange rates

January - March January - March First Quarter

2016 closing 2015 closing 2016 average 2015 average 2016 average 2015 average

Colombian peso 3,022.35 2,576.05 3,205.22 2,504.71 3,205.22 2,504.71

Panama balboa 1.00 1.00 1.00 1.00 1.00 1.00

Costa Rica colon 542.23 539.08 543.00 540.91 543.00 543.00

Euro 1.0864 1.0738 1.0900 1.1085 1.0900 1.0900

Amounts provided in units of local currency per US dollar.

2016 First Quarter Results Page 11

OTHER ACTIVITIES AND INFORMATION

Information Request in Costa Rica

As a result of a claim made by a third party, in March 2016, the Competition Directorate of Costa Rica notified CEMEX (Costa Rica), S.A.

(“CEMEX Costa Rica”) of a formal information request that has the objective of calculating the cement market share in Costa Rica and the geographical areas in which CEMEX Costa Rica has a presence. CEMEX Costa Rica has delivered the requested information. As of March 31, 2016, we are not able to assess the likelihood of this request for information leading to a formal investigation or any other actions by the Competition Directorate of Costa Rica, but if any formal investigations are commenced or if any actions are taken by the Competition Directorate of Costa Rica or any other governmental authority in Costa Rica we would not expect that any adverse result from any investigation or actions taken by the corresponding authority of the government of Costa Rica would have a material adverse impact on our results of operations, liquidity and financial condition.

2016 First Quarter Results Page 12

DEFINITIONS OF TERMS AND DISCLOSURES

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).

Maintenance capital expenditures investments incurred for the purpose of ensuring CLH’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 internal policies.

Net debt equals total debt minus cash and cash equivalents.

Operating EBITDA equals operating earnings before other expenses, net, plus depreciation and operating amortization.

pp equals percentage points.

Strategic capital expenditures investments incurred with the purpose of increasing CLH’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.

2016 First Quarter Results Page 13