EX-99.2 3 d421270dex992.htm EX-2

EX-2

Exhibit 2

2017 SECOND 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 CEMEX LATAM HOLDINGS

OPERATING AND FINANCIAL HIGHLIGHTS January—June Second Quarter 2017 2016 % var 2017 2016 % var Consolidated cement volume 3,780 3,775 0% 1,887 1,946 (3%) Consolidated domestic gray cement 3,323 3,306 0% 1,647 1,697 (3%) Consolidated ready-mix volume 1,475 1,560 (5%) 719 823 (13%) Consolidated aggregates volume 3,538 3,678 (4%) 1,775 1,943 (9%) Net sales 643 672 (4%) 314 356 (12%) Gross profit 280 328 (15%) 130 176 (26%) as % of net sales 43.6% 48.9% (5.3pp) 41.3% 49.3% (8.0pp) Operating earnings before other expenses, net 125 183 (32%) 53 101 (47%) as % of net sales 19.4% 27.3% (7.9pp) 16.9% 28.3% (11.4pp) Controlling interest net income (loss) 51 101 (49%) 16 55 (72%) Operating EBITDA 168 226 (26%) 75 123 (39%) as % of net sales 26.1% 33.6% (7.5pp) 23.9% 34.4% (10.5pp) Free cash flow after maintenance capital expenditures 58 127 (55%) 40 70 N/A Free cash flow 30 51 (42%) 28 25 12% Net debt 897 984 (9%) 897 984 (9%) Total debt 936 1,034 (10%) 936 1,034 (10%) Earnings per share 0.09 0.18 (49%) 0.03 0.10 (72%) Shares outstanding at end of period 557 556 0% 557 556 0% Employees 4,518 4,737 (5%) 4,518 4,737 (5%) 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 second quarter of 2017 declined by 12% compared to those of the second quarter of 2016. For the first half of the year consolidated net sales decreased by 4%, compared to those of the same period of 2016. These declines are mostly explained by lower cement volumes and prices in Colombia. Cost of sales as a percentage of net sales during the first six months of the year increased by 5.3pp from 51.1% to 56.4%, on a year-over-year basis. Operating expenses as a percentage of net sales during the first half of the year increased by 2.6pp from 21.6% to 24.2%, compared to those of the same period of 2016. Operating EBITDA during the second quarter of 2017 declined by 39% compared to that of second quarter of 2016. During the first half of the year operating EBITDA decreased by 26%, compared to that of the same period in 2016. This decline is mainly explained by lower cement volumes and prices in Colombia. Operating EBITDA margin during the second quarter of 2017 declined by 10.5pp, compared to that of the second quarter of 2016. During the first six months of the year operating EBITDA margin declined by 7.5pp compared to that of the same period last year. Controlling interest net income during the first half of the year reached US$51 million, declining 49% compared to that of the same period in 2016. During the second quarter of 2017 controlling interest net income reached US$16 million, declining by 72% compared to that of the second quarter of 2016. Total debt at the end of the quarter reached US$936 million. 2017 Second Quarter Results Page 2

OPERATING RESULTS Colombia January—June Second Quarter 2017 2016 % var 2017 2016 % var Net sales 291 339 (14%) 135 182 (26%) Operating EBITDA 60 116 (48%) 23 61 (63%) Operating EBITDA margin 20.7% 34.2% (13.5pp) 16.7% 33.5% (16.8pp) In millions of US dollars, except percentages. Domestic gray cement Ready-Mix Aggregates January—June Second Quarter January—June Second Quarter January—June Second Quarter Volume (5%) (9%) (14%) (23%) (17%) (26%) Price (USD) (17%) (24%) 4% (3%) 8% 3% Price (local currency) (20%) (23%) (0%) (2%) 4% 4% Year-over-year percentage variation. In Colombia, during the second quarter our domestic gray cement, ready-mix and aggregates volumes declined by 9%, 23%, and 26%, respectively, compared to those of the second quarter of 2016. For the first six months of the year, our domestic gray cement, ready-mix and aggregates volumes decreased by 5%, 14%, and 17%, respectively, compared to those of the same period of 2016. Cement consumption during the quarter was affected by macroeconomic challenges in the country, by adverse weather conditions, as well as by three fewer working days. Despite the soft demand environment, we estimate that our cement market position has remained practically unchanged during the past four consecutive quarters. Our quarterly cement prices, on a year-over-year and sequential basis, were negatively affected by intense competitive dynamics. . Panama January—June Second Quarter 2017 2016 % var 2017 2016 % var Net sales 141 130 9% 72 67 6% Operating EBITDA 58 58 (0%) 27 33 (19%) Operating EBITDA margin 40.9% 44.6% (3.7pp) 37.6% 49.5% (11.9pp) In millions of US dollars, except percentages. Domestic gray cement Ready-Mix Aggregates January—June Second Quarter January—June Second Quarter January—June Second Quarter Volume 9% 9% 23% 18% 19% 10% Price (USD) (0%) (1%) (0%) (1%) (0%) (1%) Price (local currency) (0%) (1%) (0%) (1%) (0%) (1%) Year-over-year percentage variation. In Panama during the second quarter our domestic gray cement, ready-mix and aggregates volumes increased by 9%, 18%, and 10%, respectively, compared to those of the second quarter of 2016. For the first half of 2017, our domestic gray cement, ready-mix and aggregates volumes increased by 9%, 23%, and 19%, respectively, compared to those of the first half of 2016. Our participation in projects like Minera Panama, the second line of the Subway, the AES energy project, and the urban renovation of the city of Colon have been driving demand for our products. During the second quarter our operating EBITDA was negatively affected by the annual major maintenance of kiln #2, which we didn’t have in the second quarter of 2016. 2017 Second Quarter Results Page 3

OPERATING RESULTS Costa Rica January—June Second Quarter 2017 2016 % var 2017 2016 % var Net sales 77 82 (6%) 39 43 (8%) Operating EBITDA 27 35 (22%) 15 18 (16%) Operating EBITDA margin 35.2% 42.5% (7.3pp) 38.0% 41.4% (3.4pp) In millions of US dollars, except percentages. Domestic gray cement Ready-Mix Aggregates January—June Second Quarter January—June Second Quarter January—June Second Quarter Volume (2%) (5%) (7%) (4%) 26% 55% Price (USD) (8%) (9%) (17%) (16%) (52%) (63%) Price (local currency) (4%) (4%) (13%) (12%) (49%) (61%) Year-over-year percentage variation. In Costa Rica, during the second quarter our domestic gray cement and ready-mix volumes declined by 5% and 4%, respectively, while our aggregates volumes increased by 55%, compared to those of the second quarter of 2016. For the first six months of the year our domestic gray cement and ready-mix volumes declined by 2% and 7%, respectively, while our aggregates volumes increased by 26%, compared to those of the same period of 2016. During the second quarter construction activity was negatively affected by fewer working days. However, daily dispatches for our three core products increased during the April-June period, on a year-over-year basis. In spite of the negative effect of the Easter holidays, our cement, ready-mix and aggregates volumes increased on a sequential basis, reinforcing our expectations of stronger demand conditions for the rest of the year. Rest of CLH January—June Second Quarter 2017 2016 % var 2017 2016 % var Net sales 148 133 11% 75 71 6% Operating EBITDA 47 44 5% 23 25 (9%) Operating EBITDA margin 31.6% 33.4% (1.8pp) 30.3% 35.2% (4.9pp) In millions of US dollars, except percentages. Domestic gray cement Ready-Mix Aggregates January—June Second Quarter January—June Second Quarter January—June Second Quarter Volume 12% 6% 30% 32% 87% 128% Price (USD) (0%) (2%) (11%) (10%) (15%) (17%) Price (local currency) (1%) (2%) (10%) (10%) (11%) (13%) Year-over-year percentage variation. In the Rest of CLH region, which includes our operations in Nicaragua, Guatemala, El Salvador and Brazil, during the second quarter of 2017 our domestic gray cement, ready-mix and aggregates volumes increased by 6%, 32%, and 128%, respectively, compared to those of the second quarter of 2016. During the first half of 2017, our domestic gray cement, ready-mix and aggregates volumes increased by 12%, 30%, and 87%, respectively, compared to those of the same period of 2016. While in Nicaragua, infrastructure works continued to drive demand for our products, in Guatemala, a strong activity in the industrial and commercial sector and a resilient private consumption backed by remittances fueled cement dispatches. 2017 Second Quarter Results Page 4

. OPERATING EBITDA, FREE CASH FLOW AND DEBT RELATED INFORMATION Operating EBITDA and free cash flow January—June Second Quarter 2017 2016 % var 2017 2016 % var Operating earnings before other expenses, net 125 183 (32%) 52 100 (48%) + Depreciation and operating amortization 43 43 23 23 Operating EBITDA 168 226 (26%) 75 123 (39%)—Net financial expense 32 29 15 14 —Capital expenditures for maintenance 23 22 14 18—Change in working Capital (12) (22) (35) (32) —Taxes paid 65 64 43 51 —Other cash items (Net) 2 6 (2) 2 Free cash flow after maintenance capital exp 58 127 (55%) 40 70 (43%)—Strategic Capital expenditures 28 76 12 45 Free cash flow 30 51 (42%) 28 25 12% In millions of US dollars, except percentages. Information on Debt Second Quarter First Quarter Second Quarter 2017 2016 % var 2017 2017 2016 Total debt 1, 2 936 1,034 960 Currency denomination Short term 2% 25% 2% U.S. dollar 98% 98% Long term 98% 75% 98% Colombian peso 2% 2% Cash and cash equivalents 39 51 (23%) 35 Interest rate Net debt 897 984 (9%) 925 Fixed 66% 76% Variable 34% 24% 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. 2017 Second 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—June Second Quarter INCOME STATEMENT 2017 2016 % var 2017 2016 % var Net sales 642,755 672,076 (4%) 314,072 356,108 (12%) Cost of sales (362,592) (343,740) (5%) (184,393) (180,437) (2%) Gross profit 280,163 328,336 (15%) 129,679 175,671 (26%) Operating expenses (155,568) (144,860) (7%) (76,557) (74,738) (2%) Operating earnings before other expenses, net 124,595 183,476 (32%) 53,122 100,933 (47%) Other expenses, net (1,458) (274) (432%) 849 (389) N/A Operating earnings 123,137 183,202 (33%) 53,971 100,544 (46%) Financial expenses (32,144) (29,378) (9%) (15,494) (14,505) (7%) Other income (expenses), net (8,174) 11,561 N/A (12,937) 4,800 N/A Net income before income taxes 82,819 165,385 (50%) 25,540 90,839 (72%) Income tax (31,498) (64,516) 51% (9,752) (35,436) 72% Consolidated net income 51,321 100,869 (49%) 15,788 55,403 (72%) Non-controlling Interest Net Income (190) (313) 39% (76) (163) 53% Controlling Interest Net Income 51,131 100,556 (49%) 15,712 55,240 (72%) Operating EBITDA 167,737 226,051 (26%) 75,129 122,635 (39%) Earnings per share 0.09 0.18 (49%) 0.03 0.10 (72%) as of June 30 BALANCE SHEET 2017 2016 % var Total Assets 3,315,647 3,358,440 (1%) Cash and Temporary Investments 38,954 50,541 (23%) Trade Accounts Receivables 112,944 120,326 (6%) Other Receivables 59,345 39,542 50% Inventories 76,823 76,399 1% Other Current Assets 18,603 17,987 3% Current Assets 306,669 304,795 1% Fixed Assets 1,241,541 1,217,641 2% Other Assets 1,767,437 1,836,004 (4%) Total Liabilities 1,809,908 1,890,535 (4%) Current Liabilities 355,778 574,064 (38%) Long-Term Liabilities 1,438,135 1,308,078 10% Other Liabilities 15,995 8,393 91% Consolidated Stockholders’ Equity 1,505,739 1,467,905 3% Non-controlling Interest 4,961 5,757 (14%) Stockholders’ Equity Attributable to Controlling Interest 1,500,778 1,462,148 3% 2017 Second 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—June Second Quarter INCOME STATEMENT 2017 2016 % var 2017 2016 % var Net sales 1,887,526 2,066,868 (9%) 932,429 1,054,122 (12%) Cost of sales (1,064,794) (1,057,120) (1%) (547,433) (533,698) (3%) Gross profit 822,732 1,009,748 (19%) 384,996 520,424 (26%) Operating expenses (456,843) (445,495) (3%) (227,286) (220,738) (3%) Operating earnings before other expenses, net 365,889 564,253 (35%) 157,710 299,686 (47%) Other expenses, net (4,284) (842) (409%) 2,521 (1,210) N/A Operating earnings 361,605 563,411 (36%) 160,231 298,476 (46%) Financial expenses (94,393) (90,347) (4%) (46,000) (42,674) (8%) Other income (expenses), net (24,005) 35,553 N/A (38,408) 13,882 N/A Net income before income taxes 243,207 508,617 (52%) 75,823 269,684 (72%) Income tax (92,495) (198,409) 53% (28,951) (105,200) 72% Consolidated net income 150,712 310,208 (51%) 46,872 164,484 (72%) Non-controlling Interest Net Income (561) (963) 42% (225) (483) 53% Controlling Interest Net Income 150,151 309,245 (51%) 46,647 164,001 (72%) Operating EBITDA 492,579 695,186 (29%) 223,047 361,220 (38%) Earnings per share 270.75 557.76 (51%) 84.20 295.74 (72%) as of June 30 BALANCE SHEET 2017 2016 % var Total Assets 10,073,799 9,793,716 3% Cash and Temporary Investments 118,353 147,386 (20%) Trade Accounts Receivables 343,153 350,889 (2%) Other Receivables 180,306 115,311 56% Inventories 233,407 222,792 5% Other Current Assets 56,524 52,449 8% Current Assets 931,742 888,827 5% Fixed Assets 3,772,124 3,550,825 6% Other Assets 5,369,932 5,354,064 0% Total Liabilities 5,498,970 5,513,084 (0%) Current Liabilities 1,080,945 1,674,058 (35%) Long-Term Liabilities 4,369,429 3,814,551 15% Other Liabilities 48,596 24,475 99% Consolidated Stockholders’ Equity 4,574,829 4,280,632 7% Non-controlling Interest 15,072 16,790 (10%) Stockholders’ Equity Attributable to Controlling Interest 4,559,757 4,263,842 7% 2017 Second 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—June Second Quarter 2017 2016 % var 2017 2016 % var NET SALES Colombia 290,518 338,981 (14%) 135,350 182,247 (26%) Panama 141,200 129,782 9% 71,594 67,273 6% Costa Rica 76,563 81,664 (6%) 39,136 42,727 (8%) Rest of CLH 148,174 133,069 11% 75,146 70,723 6% Others and intercompany eliminations (13,700) (11,420) (20%) (7,154) (6,862) (4%) TOTAL 642,755 672,076 (4%) 314,072 356,108 (12%) GROSS PROFIT Colombia 111,320 159,977 (30%) 47,131 83,209 (43%) Panama 65,555 64,356 2% 30,767 36,687 (16%) Costa Rica 35,452 43,116 (18%) 19,218 22,442 (14%) Rest of CLH 59,117 54,314 9% 28,483 29,797 (4%) Others and intercompany eliminations 8,719 6,573 33% 4,080 3,536 15% TOTAL 280,163 328,336 (15%) 129,679 175,671 (26%) OPERATING EARNINGS BEFORE OTHER EXPENSES, NET Colombia 46,361 103,064 (55%) 15,551 54,279 (71%) Panama 48,747 48,955 (0%) 22,523 28,785 (22%) Costa Rica 24,500 31,613 (23%) 13,645 16,178 (16%) Rest of CLH 43,812 41,564 5% 21,077 23,469 (10%) Others and intercompany eliminations (38,825) (41,720) 7% (19,674) (21,778) 10% TOTAL 124,595 183,476 (32%) 53,122 100,933 (47%) OPERATING EBITDA Colombia 60,265 115,777 (48%) 22,605 61,031 (63%) Panama 57,796 57,944 (0%) 26,947 33,323 (19%) Costa Rica 26,986 34,672 (22%) 14,885 17,688 (16%) Rest of CLH 46,808 44,394 5% 22,738 24,898 (9%) Others and intercompany eliminations (24,118) (26,736) 10% (12,046) (14,305) 16% TOTAL 167,737 226,051 (26%) 75,129 122,635 (39%) OPERATING EBITDA MARGIN Colombia 20.7% 34.2% 16.7% 33.5% Panama 40.9% 44.6% 37.6% 49.5% Costa Rica 35.2% 42.5% 38.0% 41.4% Rest of CLH 31.6% 33.4% 30.3% 35.2% TOTAL 26.1% 33.6% 23.9% 34.4% 2017 Second 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—June Second Quarter 2017 2016 % var 2017 2016 % var Total cement volume 1 3,780 3,775 0% 1,887 1,946 (3%) Total domestic gray cement volume 3,323 3,306 0% 1,647 1,697 (3%) Total ready-mix volume 1,475 1,560 (5%) 719 823 (13%) Total aggregates volume 3,538 3,678 (4%) 1,775 1,943 (9%) 1 Consolidated cement volume includes domestic and export volume of gray cement, white cement, special cement, mortar and clinker. Per-country volume summary January—June Second Quarter Second Quarter 2017 2017 vs. 2016 2017 vs. 2016 vs. First Quarter 2017 DOMESTIC GRAY CEMENT Colombia (5%) (9%) (4%) Panama 9% 9% 1% Costa Rica (2%) (5%) 1% Rest of CLH 12% 6% 0% READY-MIX Colombia (14%) (23%) (9%) Panama 23% 18% (2%) Costa Rica (7%) (4%) 3% Rest of CLH 30% 32% 24% AGGREGATES Colombia (17%) (26%) (12%) Panama 19% 10% 1% Costa Rica 26% 55% 74% Rest of CLH 87% 128% 48% 2017 Second Quarter Results Page 9

OPERATING RESULTS Price Summary Variation in U.S. dollars January—June Second Quarter Second Quarter 2017 2017 vs. 2016 2017 vs. 2016 vs. First Quarter 2017 DOMESTIC GRAY CEMENT Colombia (17%) (24%) (10%) Panama (0%) (1%) (0%) Costa Rica (8%) (9%) (2%) Rest of CLH (0%) (2%) (1%) READY-MIX Colombia 4% (3%) (5%) Panama (0%) (1%) (0%) Costa Rica (17%) (16%) (1%) Rest of CLH (11%) (10%) 0% AGGREGATES Colombia 8% 3% 0% Panama (0%) (1%) (2%) Costa Rica (52%) (63%) (32%) Rest of CLH (15%) (17%) (6%) For Rest of CLH, volume-weighted average prices. Variation in local currency January—June Second Quarter Second Quarter 2017 2017 vs. 2016 2017 vs. 2016 vs. First Quarter 2017 DOMESTIC GRAY CEMENT Colombia (20%) (23%) (8%) Panama (0%) (1%) (0%) Costa Rica (4%) (4%) (0%) Rest of CLH (1%) (2%) (0%) READY-MIX Colombia (0%) (2%) (3%) Panama (0%) (1%) (0%) Costa Rica (13%) (12%) 1% Rest of CLH (10%) (10%) (1%) AGGREGATES Colombia 4% 4% 3% Panama (0%) (1%) (2%) Costa Rica (49%) (61%) (31%) Rest of CLH (11%) (13%) (6%) For Rest of CLH, volume-weighted average prices. 2017 Second 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 June 30, 2017 and June 30, 2016 was $3,038.26 and $2,916.15 Colombian pesos per US dollar, respectively, and (ii) the consolidated results for the second quarter of 2017 and for the second quarter of 2016 were $2,968.84 and $2,945.49 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—June January—June Second Quarter 2017 closing 2016 closing 2017 average 2016 average 2017 average 2016 average Colombian peso 3,038.26 2,916.15 2,936.62 3,075.35 2,968.84 2,945.49 Panama balboa 1.00 1.00 1.00 1.00 1.00 1.00 Costa Rica colon 579.87 554.20 571.27 545.25 576.90 547.50 Euro 1.14 1.11 1.09 1.11 1.12 1.12 Amounts provided in units of local currency per US dollar. 2017 Second Quarter Results Page 11

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. 2017 Second Quarter Results Page 12