EX-99.2 3 d383987dex992.htm EX-2

EX-2

Exhibit 2

2017
FIRST QUARTER RESULTS
? Stock Listing Information
Philippine Stock Exchange Ticker: CHP
? Investor Relations
+ 632 849 3600 E-Mail: chp.ir@cemex.com

Operating and Financial Highlights January—March First Quarter 2017 2016 % var 2016 2017 2016 % var 2016 Pro Forma1 Actual Pro Forma1 Actual Cement volume2 1.2 1.3 (9%) 1.3 1.2 1.3 (9%) 1.3 Net sales 5,362 6,328 (15%) 6,328 5,362 6,328 (15%) 6,328 Gross profit 2,573 3,097 (17%) 3,097 2,573 3,097 (17%) 3,097 as % of net sales 48.0% 48.9% (0.9pp) 48.9% 48.0% 48.9% (0.9pp) 48.9% Operating earnings before other expenses, net 768 1,336 (43%) 533 768 1,336 (43%) 533 as % of net sales 14.3% 21.1% (6.8pp) 8.4% 14.3% 21.1% (6.8pp) 8.4% Controlling Interest Net Income 350 460 (24%) 214 350 460 (24%) 214 Operating EBITDA 1,071 1,640 (35%) 837 1,071 1,640 (35%) 837 as % of net sales 20.0% 25.9% (5.9pp) 13.2% 20.0% 25.9% (5.9pp) 13.2% Free cash flow after maintenance capital expenditures (239) (239) Free cash flow (313) (313) Net debt 14,865 14,865 Total debt 15,647 15,647 Earnings per share3 0.07 0.07 In millions of Philippine Pesos, except volumes 1 Refer to page 7 for information on pro forma adjustments 2 Cement volume is in millions of metric tons. It includes domestic and export volume of gray cement, white cement,special cement, mortar and clinker. 3 In Philippine Pesos Net sales for the first quarter of 2017 was PhP 5,362 million, a decrease Operating EBITDA, at PhP 1,071 million pesos during the first quarter of of 15% compared to the first quarter of 2016, reflecting lower cement 2017, decreased by 35% year-on-year, reflecting lower sales as well as volumes and prices. an unfavorable operating leverage effect. Cost of sales as a percentage of net sales increased by 0.9pp during the Operating EBITDA margin decreased by 5.9pp during the first quarter of first quarter of 2017 compared with the same period last year, from 2017 versus the same period in 2016, from 25.9% to 20.0%. 51.1% to 52.0%. As a percentage of cost of sales, power and fuel accounted for 20% and 19%, respectively. Controlling interest net income (loss) was an income of PhP 350 million in the first quarter of 2017 versus a pro forma income of PhP 460 Operating expenses as a percentage of net sales increased by 5.9pp million in the same quarter of 2016. Other income and expenses, during the first quarter of 2017 compared with the same period last financial expenses, and income tax expenses provided positive gains to year, from 27.8% to 33.7%. Distribution expenses increased 4.0 pp, mitigate lower operating earnings before other expenses, net. driven by lower transport efficiencies and higher diesel prices. Selling and administrative expenses increased 1.9 pp due to intensified Total debt at the end of March 2017 stood at PhP 15,647 million. In promotions, andother overhead expenses. particular, PhP 14,012 million pertained to long-term debt owed to BDO Unibank, Inc., having concluded the refinancing of debt owed to related party New Sunward Holding B.V. 2017 First Quarter Results Page 2

Operating Results
Domestic Gray Cement January—March First Quarter First Quarter 2017
2017 vs. 2016 2017 vs. 2016 vs. Fourth Quarter 2016
Volume (9%) (9%) 4% Price in USD (13%) (13%) (4%)
Price in PHP (7%) (7%) (2%)
Domestic gray cement volume decreased 9% during the first quarter of 2017 versus the same period last year. Adverse weather conditions, especially in January and February, led to 24 additional downtime days compared with the same quarter last year, due to rough sea conditions and mandatory sheltering of our vessels. Strong construction activity before elections during the first quarter of 2016 also resulted in a high base of comparison versus the first quarter of 2017.
Nevertheless, cement sales increased throughout the quarter as weather improved. Sales volumes in March were the highest in the last 17 months. Sequentially, cement volumes increased by 4% in the first quarter of 2017 versus the prior quarter. We estimate that our market position remained unchanged compared with the fourth quarter of 2016.
On a year-over-year and quarter-on-quarter basis, our domestic gray cement price in this period decreased 7% and 2%, respectively. The price decline during the quarter on a year-over-year basis was mainly due to intensified competition from higher import volumes and weaker demand relative to the same quarter last year. However, the price decline on a sequential basis was mainly due to product and geographical mix.
2017 First Quarter Results Page 3

Operating EBITDA, Free Cash Flow and Debt Information
Operating EBITDA and Free Cash Flow
January—March First Quarter
2017 2016 % var 2017 2016 % var Pro Forma1 Pro Forma1 Operating earnings before other expenses, net 768 1,336 (43%) 768 1,336 (43%)
+ Depreciation and operating 303 304 (0%) 303 304 (0%)
Operating EBITDA 1,071 1,640 (35%) 1,071 1,640 (35%)
- Net financial expenses 258 258—Capital expenditures for maintenance 49 49—Change in working Capital 920 920—Taxes paid 102 102—Other cash items (Net) (19) (19)
Free cash flow after maintenance capital (239) (239)
- Strategic Capital expenditures 74 74
Free cash flow (313) (313)
In millions of Philippine Pesos, except volumes and percentages

1 Refer to page 7 for information on pro forma adjustments

Debt Information
First Quarter First Quarter
2017 2017 Total debt 15,647 Currency denomination
Short term 0% U.S. dollar 10% Long term 100% Philippine peso 90% Cash and cash equivalents 782 Interest rate Net debt 14,865 Fixed 36%
Variable 64%
In millions of Philippine Pesos, except percentages
U.S. dollar-denominated debt converted using end March 2017 exchange rate of PHP 50.16
2017 First Quarter Results Page 4

Financial Results
Income Statement & Balance Sheet Information
CEMEX Holdings Philippines, Inc.
(Thousands of Philippine Pesos in nominal terms, except per share amounts)
January—March First Quarter
INCOME STATEMENT 2017 2016 % var 2016 2017 2016 % var 2016 Pro Forma1 Actual Pro Forma1 Actual
Net sales 5,362,377 6,328,209 (15%) 6,328,209 5,362,377 6,328,209 (15%) 6,328,209 Cost of sales (2,789,516) (3,231,475) (14%) (3,231,475) (2,789,516) (3,231,475) (14%) (3,231,475)
Gross profit 2,572,861 3,096,734 (17%) 3,096,734 2,572,861 3,096,734 (17%) 3,096,734
Operating expenses (1,804,749) (1,760,869) 2% (2,563,659) (1,804,749) (1,760,869) 2% (2,563,659)
Operating earnings before other
768,112 1,335,865 (43%) 533,075 768,112 1,335,865 (43%) 533,075 expenses, net
Other expenses, net 19,166 8,116 136% 8,116 19,166 8,116 136% 8,116
Operating earnings 787,278 1,343,981 (41%) 541,191 787,278 1,343,981 (41%) 541,191
Financial expenses (249,183) (334,474) (26%) (17,942) (249,183) (334,474) (26%) (17,942) Other financial income (expenses), net (97,341) (199,304) (51%) (199,304) (97,341) (199,304) (51%) (199,304)
Net income before income taxes 440,754 810,203 (46%) 323,945 440,754 810,203 (46%) 323,945
Income tax (91,217) (350,480) (74%) (109,643) (91,217) (350,480) (74%) (109,643)
Consolidated net income 349,537 459,723 (24%) 214,302 349,537 459,723 (24%) 214,302
Non-controlling Interest Net Income 9 6 52% 6 9 6 52% 6
Controlling Interest Net Income 349,546 459,729 (24%) 214,308 349,546 459,729 (24%) 214,308
Operating EBITDA 1,070,695 1,639,701 (35%) 836,910 1,070,695 1,639,701 (35%) 836,910 Earnings per share 0.07 0.07

1 Refer to page 7 for information on pro forma adjustments

as of March 31
BALANCE SHEET 2017 Total Assets 50,795,952
Cash and Temporary Investments 782,084 Trade Accounts Receivables 1,002,487 Other Receivables 201,490 Inventories 2,729,999 Other Current Assets 1,750,714 Current Assets 6,466,774 Fixed Assets 15,623,365 Other Assets 28,705,813
Total Liabilities (21,747,872)
Current Liabilities (5,293,500) Long-Term Liabilities (1,634,746) Other Liabilities (14,819,626)
Consolidated Stockholders’ Equity (29,048,080)
Non-controlling Interest (238) Stockholders’ Equity Attributable to Controlling Interest (29,047,842)
2017 First Quarter Results Page 5

Financial Results
Income Statement & Balance Sheet Information
CEMEX Holdings Philippines, Inc.
(Thousands of U.S. Dollars, except per share amounts)
January—March First Quarter
INCOME STATEMENT 2017 2016 % var 2016 2017 2016 % var 2016 Pro Forma1 Actual Pro Forma1 Actual
Net sales 107,148 134,390 (20%) 134,390 107,148 134,390 (20%) 134,390 Cost of sales (55,738) (68,626) (19%) (68,626) (55,738) (68,626) (19%) (68,626)
Gross profit 51,410 65,764 (22%) 65,764 51,410 65,764 (22%) 65,764
Operating expenses (36,061) (37,395) (4%) (54,444) (36,061) (37,395) (4%) (54,444)
Operating earnings before other
15,349 28,369 (46%) 11,320 15,349 28,369 (46%) 11,320 expenses, net
Other expenses, net 383 172 123% 172 383 172 123% 172
Operating earnings 15,732 28,541 (45%) 11,492 15,732 28,541 (45%) 11,492
Financial expenses (4,979) (7,103) (30%) (381) (4,979) (7,103) (30%) (381) Other financial income (expenses), net (1,945) (4,232) (54%) (4,232) (1,945) (4,232) (54%) (4,232)
Net income before income taxes 8,808 17,206 (49%) 6,879 8,808 17,206 (49%) 6,879
Income tax (1,823) (7,443) (76%) (2,328) (1,823) (7,443) (76%) (2,328)
Consolidated net income 6,985 9,763 (28%) 4,551 6,985 9,763 (28%) 4,551
Non-controlling Interest Net Income 0 0 0 0 0 0
Controlling Interest Net Income 6,985 9,763 (28%) 4,551 6,985 9,763 (28%) 4,551
Operating EBITDA 21,394 34,822 (39%) 17,773 21,394 34,822 (39%) 17,773 Earnings per share 0.00 0.00

1 Refer to page 7 for information on pro forma adjustments

as of March 31
BALANCE SHEET 2017 Total Assets 1,012,680
Cash and Temporary Investments 15,592 Trade Accounts Receivables 19,986 Other Receivables 4,017 Inventories 54,426 Other Current Assets 34,903 Current Assets 128,924 Fixed Assets 311,471 Other Assets 572,285
Total Liabilities (433,570)
Current Liabilities (105,532) Long-Term Liabilities (32,591) Other Liabilities (295,447)
Consolidated Stockholders’ Equity (579,108)
Non-controlling Interest (5) Stockholders’ Equity Attributable to Controlling Interest (579,104)
2017 First Quarter Results Page 6

Definitions of Terms and Disclosures
Methodology for translation, consolidation, and presentation of Nevertheless and for the convenience of the reader, and in order to results present a comprehensive comparative operating information for the three?month period ended March 31, 2017, CHP continued to use pro CEMEX Holdings Philippines, Inc. (“CHP”) reports its interim financial forma selected consolidated income statement information for the statements under Philippine Financial Reporting Standards (“PFRS”). three?month period ended March 31, 2016, intended in all cases and to
When reference is made in 2017 and 2016 to consolidated interim the extent possible, to present the operating performance of CHP on a financial statements, it means CHP financial information together with like?to?like basis under a “normalized” expected ongoing operation; its subsidiaries. therefore, as if the new royalty scheme and insurance agreements would have been effective from the beginning of 2016.
For the purpose of presenting figures in U.S. dollars, the consolidated balance sheet as of March 31, 2017 has been converted at the end of CHP Pro forma consolidated income statement for the three-month period exchange rate of 50.16 Philippine pesos per US dollar while the period ended March 31, 2016 appearing in this report represent consolidated income statement for the three-month period ended combined historical selected income statement information of CHP March 31, 2017 has been converted at the January to March, 2017 subsidiaries, adjusted to reflect the 5% corporate service charges and average exchange rate of 50.05 Philippine pesos per US dollar. On the royalties, and reinsurance agreements (on a like?to?like basis) for the other hand, the consolidated income statement for the three-month three?month period ended March 31, 2016. period ended March 31, 2016 has been converted at the January to March, 2016 average exchange rate of 47.09 Philippine pesos per US In addition: dollar.
(1) beginning fiscal year of 2017, a change in accounting treatment of Pro forma financial information included in the report the effects from the new reinsurance agreements will be adopted recognizing the same as a reduction in operating expenses instead of an
For the purpose of the below clarification, the term “Company” refers increase of revenue (which was the accounting treatment utilized in to CEMEX Holdings Philippines, Inc., “CHP”” refers to the Company and 2016). its subsidiaries, and “CEMEX” refers CEMEX, S.A.B. de C.V. and its subsidiaries excluding CHP. This change in accounting treatment is presented in this report’s Pro Forma consolidated income statement information for the three-month CEMEX Holdings Philippines, Inc. was incorporated on September 17, period ended March 31, 2016 This difference in presentation does not 2015 for purposes of the initial equity offering concluded on July 18, have an effect on the reported Pro Forma operating income, reported
2016 (the “IPO”). For accounting purposes, the group reorganization by Pro Forma Operating EBITDA or reported Pro Forma net income for the means of which the Company acquired its consolidated subsidiaries was three months ended March 31, 2016. effective January 1, 2016. Several strategies discussed in the CHP primary offer prospectus (“the Prospectus”) were implemented upon (2) the Pro Forma selected consolidated income statement information conclusion of the initial equity offering: a) the new royalty scheme was for the three-month period ended March 31, 2016 appearing in this implemented in July 2016 with retroactive effects as of January 1, 2016, report was prepared by (a) removing IPO-related operating expenses, and b) the new reinsurance scheme was incorporated prospectively (b) removing interest payments on short-term debt, and (c) annualizing effective August 1, 2016. These strategies are already in full effect in long-term debt.
2017.
2017 First Quarter Results Page 7

Definition of Terms and Disclosures
Definition of terms
PHP refers to Philippine Pesos.
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 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 minus cash and cash equivalents.
Operating EBITDA equals operating earnings before other expenses, net, plus depreciation and operating amortization.
pp equals 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. Change in Working capital in the Free cash flow statements only include trade receivables, trade payables, receivables and payables from and to related parties, other current receivables, inventories, other current assets, and other accounts payable and accrued expense.
January—March First Quarter January—March
2017 2016 2017 2016 2017 2016 average average average average End of period End of period
Philippine peso 50.05 47.09 50.05 47.09 50.16 46.07
Amounts provided in units of local currency per US dollar
2017 First Quarter Results Page 8