EX-99.2 3 d489452dex992.htm EX-2

EX-2

Exhibit 2

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

Operating and Financial Highlights                January—December Fourth Quarter 2017 2016 % var 2016 2017 2016 % var 2016 Pro Forma1 Actual Pro Forma1 Actual Cement volume2 5.1 5.1 1% 5.1 1.3 1.1 10% 1.1 Net sales 21,784 24,287 (10%) 24,287 5,223 5,278 (1%) 5,278 Gross profit 9,384 12,401 (24%) 12,401 2,168 2,870 (24%) 2,870                as % of net sales 43% 51% (8pp) 51% 42% 54% (12pp) 54% Operating earnings before other 1,987 5,506 (64%) 4,946 315 1,133 (72%) 1,133 expenses, net                as % of net sales 9% 23% (14pp) 20% 6% 22% (16pp) 22% Controlling Interest Net Income (Loss) 659 1,872 (65%) 1,413 (29) (7) (306%) 10 Operating EBITDA 3,256 6,727 (52%) 6,167 628 1,417 (56%) 1,417                as % of net sales 15% 28% (13pp) 25% 12% 27% (15pp) 27% Free cash flow after maintenance capital 1,232 3,896 (68%) 3,335 (270) 7 N/A 7 expenditures Free cash flow 747 3,099 (76%) 2,539 (314) (138) (127%) (138) Net debt3 14,138 14,406 (2%) 14,406 14,138 14,406 (2%) 14,406 Total debt3 15,196 15,743 (3%) 15,743 15,196 15,743 (3%) 15,743 Earnings per share4 0.13 0.66 (81%) 0.50 (0.01) (0.00) 306% 0.00 In millions of Philippine Pesos, except volumes and earnings per share 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 2016 U.S. dollar debt converted using end-of-period exchange rate of PHP 49.72 4 In Philippine Pesos Net sales declined by 1% and 10%, respectively, for the fourth quarter As a percentage to sales, operating expenses were also higher, and full year of 2017 versus the same periods of the previous year. In reflecting a lower revenue base. both cases, mainly reflecting lower cement prices. Operating EBITDA declined on a year-over-year basis by 56% during the Cost of sales, as a percentage to sales, increased year-over-year by 12 fourth quarter, and by 52% during the full year of 2017. pp during the fourth quarter and by 8 pp in 2017. Higher fuel prices and a lower base of revenue were the main drivers for this increase. As a Operating EBITDA margin compared to pro-forma 2016 figures declined percentage of cost of sales, power and fuels accounted for 21% and by 15 pp during the fourth quarter and by 13 pp in 2017. Lower prices 22%, respectively, for the full year. accounted for about two-thirds of the margin decrease, with the other third explained mainly by fuel and distribution costs. Operating expenses, as a percentage to sales, increased year-over-year by 2 pp during the fourth quarter and by 6 pp in 2017. Controlling interest net income declined 65% in 2017 mainly due to lower operating earnings before other expenses, net. Distribution expenses during the fourth quarter were 10% higher versus last year. However, on a unitary basis, they remained relatively flat both Total debt at the end of December 2017 stood at PHP 15,196 million, of on a year-over-year and on a sequential basis. For the full year, which PHP 13,907 million pertained to long-term debt owed to BDO distribution expenses increased by 9% versus 2016. This was a result of Unibank, Inc. higher fuel costs and lower economies of scale in fleet utilization.    Selling and administrative expenses remained stable during the fourth quarter and was 5% higher for the full year mainly due to organizational realignment initiatives. 2017 Fourth Quarter Results    Page 2

Operating Results                Domestic Gray Cement January—December Fourth Quarter Fourth Quarter 2017 2017 vs. 2016 2017 vs. 2016 vs. Third Quarter 2017 Volume 0% 10% (5%) Price in USD (15%) (12%) (1%) Price in PHP (10%) (9%) (1%) Our domestic cement volumes increased by 10% year-over-year during the fourth quarter of 2017, in line with industry growth, as per our estimates. Public infrastructure spending continued to increase in the last three months of the year, driving demand for our products, and compensated for a slowdown in private construction activity. On a sequential basis, our average daily cement volumes declined by 1% due to unfavorable weather conditions. Volume recovery in the second half of 2017 resulted in full-year domestic cement volumes ending flat versus 2016. Due to unfavorable weather conditions, we had 6 and 26 additional loading-port downtime days during the fourth quarter and full year 2017, respectively, versus the comparable periods of the previous year. Our weather-related downtime days during the fourth quarter and full year 2017 were the worst in the last three years for their respective periods. Our domestic cement prices in local-currency terms decreased by 9% during the quarter and by 10% during the full year, on a year-over-year basis. On a sequential basis, our fourth quarter prices declined by 1%. However, for the last five months of the year, our prices remained flat. 2017 Fourth Quarter Results    Page 3

Operating EBITDA, Free Cash Flow and Debt Information    Operating EBITDA and Free Cash Flow January—December Fourth Quarter 2017 2016 % var 2016 2017 2016 % var 2016 Pro Forma1 Actual Pro Forma1 Actual Operating earnings before other 1,987 5,506 (64%) 4,946 315 1,133 (72%) 1,133 expenses, net + Depreciation and operating 1,269 1,221 1,221 313 284 284 Operating EBITDA 3,256 6,727 (52%) 6,167 628 1,417 (56%) 1,417—Net financial expenses 895                1,404 1,404 228                 339 339—Capital expenditures for maintenance 844                 534 534 431                 341 341—Change in working Capital (116) (378) (378) 232 306 306—Taxes paid 553                1,240 1,240 129                 388 388—Other cash items (Net) (153) 32 32 (122) 35 35 Free cash flow after maintenance capital 1,232 3,896 (68%) 3,335 (270) 7 N/A 7—Strategic Capital expenditures 485                 796 796 43                 145 145 Free cash flow 747 3,099 (76%) 2,539 (314) (138) (127%) (138) In millions of Philippine Pesos, except volumes and percentages 1 Refer to page 7 for information on pro forma adjustments Debt Information Fourth Quarter Third Quarter Fourth Quarter 2017 2016 1 % var 2017 1 2017 2016 Total debt 15,196 15,743 (3%) 15,016 Currency denomination                Short term 2% 0% 0%                U.S. dollar 1% 100%                Long term 98% 100% 100%                Philippine peso 99% 0% Cash and cash equivalents 1,058 1,337 (21%) 1,586 Interest rate Net debt 14,138 14,406 (2%) 13,430                Fixed 44% 91%                Variable 56% 9% In millions of Philippine Pesos, except percentages 1 U.S. dollar debt converted using end-of-period exchange rate 2017 Fourth 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—December Fourth Quarter INCOME STATEMENT 2017 2016 % var 2016 2017 2016 % var 2016 Pro Forma1 Actual Pro Forma1 Actual Net sales 21,784,450 24,286,753 (10%) 24,286,753 5,223,198 5,278,223 (1%) 5,278,223 Cost of sales (12,400,901) (11,885,883) (4%) (11,885,883) (3,054,759) (2,408,348) (27%) (2,408,348) Gross profit 9,383,549 12,400,870 (24%) 12,400,870 2,168,439 2,869,875 (24%) 2,869,875 Operating expenses (7,396,982) (6,894,661) (7%) (7,455,230) (1,852,985) (1,736,850) (7%) (1,736,850) Operating earnings before other expenses, 1,986,567 5,506,209 (64%) 4,945,640 315,454 1,133,025 (72%) 1,133,025 net Other income (expenses), net (226,179) (31,853) (610%) (319,783) (257,280) (34,796) (639%) (10,239) Operating earnings 1,760,388 5,474,356 (68%) 4,625,857 58,174 1,098,229 (95%) 1,122,786                Financial expenses, net (895,295) (1,404,319) 36% (1,268,755) (228,192) (338,957) 33% (338,957)                Foreign exchange loss, net (66,738) (1,379,892) 95% (1,379,892) 90,470 (504,852) N/A (504,852) Net income (loss) before income taxes 798,355 2,690,145 (70%) 1,977,210 (79,548) 254,420 N/A 278,977                Income tax (139,544) (818,294) 83% (563,744) 50,397 (261,601) N/A (268,968) Consolidated net income (loss) 658,811 1,871,851 (65%) 1,413,466 (29,151) (7,181) (306%) 10,009 Non-controlling interest net income (loss) 25 24 4% 24 4 5 (20%) 5 Controlling Interest net income (loss) 658,836 1,871,875 (65%) 1,413,490 (29,147) (7,176) (306%) 10,014 Operating EBITDA 3,255,800 6,727,481 (52%) 6,166,913 628,342 1,416,710 (56%) 1,416,710 Earnings per share 0.13 0.66 (81%) 0.50 (0.01) (0.00) 306% 0.00 1 Refer to page 7 for information on pro forma adjustments as of December 31 BALANCE SHEET 2017 2016 % Var Total Assets 51,751,676 51,041,884 1%                Cash and Temporary Investments 1,058,267 1,337,155 (21%)                Trade Accounts Receivables 833,259 909,667 (8%)                Other Receivables 101,002 342,561 (71%)                Inventories 3,258,252 2,577,577 26%                Assets held for sale 90,629 0                Other Current Assets 1,310,504 1,420,056 (8%) Current Assets 6,651,913 6,587,016 1% Fixed Assets 15,582,732 15,814,811 (1%) Other Assets 29,517,031 28,640,057 3% Total Liabilities 22,329,280 22,357,672 (0%) Current Liabilities 6,873,552 5,654,205 22% Long-Term Liabilities 14,674,110 15,919,322 (8%) Other Liabilities 781,618 784,145 (0%) Consolidated Stockholders’ Equity 29,422,396 28,684,212 3% Non-controlling Interest 221 246 (10%) Stockholders’ Equity Attributable to Controlling Interest 29,422,175 28,683,966 3%    2017 Fourth 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—December Fourth Quarter INCOME STATEMENT 2017 2016 % var 2016 2017 2016 % var 2016 Pro Forma1 Actual Pro Forma1 Actual Net sales 432,388 509,499 (15%) 509,499 103,218 107,096 (4%) 107,096 Cost of sales (246,139) (249,348) 1% (249,348) (60,367) (48,866) (24%) (48,866) Gross profit 186,249 260,151 (28%) 260,151 42,851 58,230 (26%) 58,230 Operating expenses (146,819) (144,639) (2%) (156,399) (36,618) (35,241) (4%) (35,241) Operating earnings before other expenses, 39,430 115,512 (66%) 103,752 6,233 22,989 (73%) 22,989 net Other income (expenses), net (4,489) (668) (572%) (6,709) (5,084) (706) (620%) (208) Operating earnings 34,941 114,844 (70%) 97,043 1,149 22,283 (95%) 22,781                Financial expenses, net (17,770) (29,460) 40% (26,617) (4,509) (6,877) 34% (6,877)                Foreign exchange loss, net (1,325) (28,948) 95% (28,948) 1,788 (10,244) N/A (10,244) Net income (loss) before income taxes 15,846 56,436 (72%) 41,478 (1,572) 5,162 N/A 5,660                Income tax (2,770) (17,167) 84% (11,826) 996 (5,308) N/A (5,457) Consolidated net income (loss) 13,076 39,269 (67%) 29,652 (576) (146) (295%) 203 Non-controlling interest net income (loss) Controlling Interest net income (loss) 13,076 39,270 (67%) 29,653 (576) (146) (295%) 203 Operating EBITDA 64,623 141,132 (54%) 129,372 12,417 28,745 (57%) 28,745 Earnings per share 1 Refer to page 7 for information on pro forma adjustments as of December 31 BALANCE SHEET 2017 2016 % Var Total Assets 1,036,485 1,026,587 1%                Cash and Temporary Investments 21,195 26,894 (21%)                Trade Accounts Receivables 16,689 18,296 (9%)                Other Receivables 2,023 6,890 (71%)                Inventories 65,256 51,842 26%                Assets held for sale 1,815 0                Other Current Assets 26,247 28,561 (8%) Current Assets 133,225 132,483 1% Fixed Assets 312,092 318,077 (2%) Other Assets 591,168 576,027 3% Total Liabilities 447,212 449,672 (1%) Current Liabilities 137,664 113,722 21% Long-Term Liabilities 293,894 320,179 (8%) Other Liabilities 15,654 15,771 (1%) Consolidated Stockholders’ Equity 589,273 576,915 2% Non-controlling Interest 4 5 (20%) Stockholders’ Equity Attributable to Controlling Interest 589,269 576,910 2% 2017 Fourth Quarter Results    Page 6

Definitions of Terms and Disclosures                Methodology for translation, consolidation, and presentation of implemented in July 2016 with retroactive effects as of January 1, 2016, results and b) the reinsurance scheme was incorporated prospectively effective August 1, 2016. These strategies are already in full effect in 2017. CEMEX Holdings Philippines, Inc. (“CHP”) reports its consolidated financial statements under Philippine Financial Reporting Standards Nevertheless and for the convenience of the reader, and in order to (“PFRS”). When reference is made in 2017 and 2016 to consolidated present a comprehensive comparative operating information for the financial statements, it means CHP financial information together with twelve-month and the three-month periods ended December 31, 2017, its subsidiaries. CHP continued to use pro forma selected consolidated income statement information for the twelve-month and the three-month For the purpose of presenting figures in U.S. dollars, the consolidated periods ended December 31, 2016, intended in all cases and to the balance sheet as of December 31, 2017 has been converted at the end extent possible, to present the operating performance of CHP on a of period exchange rate of 49.93 Philippine pesos per US dollar while like-to-like basis under a “normalized” expected ongoing operation; the consolidated income statement for the twelve-month period ended therefore, as if the new royalty scheme and insurance agreements December 31, 2017 has been converted at the January to December, would have been effective from the beginning of 2016. 2017 average exchange rate of 50.38 Philippine pesos per US dollar. On the other hand, the consolidated income statement for the three- In addition: month period ended December 31, 2017 has been converted at the October to December, 2017 average exchange rate of 50.60 Philippine (1) beginning fiscal year of 2017, a change in accounting treatment of pesos per US dollar. the effects from the reinsurance agreements is adopted recognizing the same as a reduction in operating expenses instead of an increase of Pro forma financial information included in the report revenue (which was the accounting treatment utilized in 2016).    For the purpose of the below clarification, the term “Company” refers This change in accounting treatment is presented in this report’s pro to CEMEX Holdings Philippines, Inc., “CHP” refers to the Company and forma and actual consolidated income statement information for the its subsidiaries, and “CEMEX” refers CEMEX, S.A.B. de C.V. and its twelve-month and the three-month periods ended December 31, 2016. subsidiaries excluding CHP. This difference in presentation does not have an effect on the reported Pro Forma operating income, reported Pro Forma Operating EBITDA or CEMEX Holdings Philippines, Inc. was incorporated on September 17, reported Pro Forma net income for the twelve-month and the three-2015 for purposes of the initial equity offering concluded on July 18, month periods ended December 31, 2016. 2016 (the “IPO”). For accounting purposes, the group reorganization by means of which the Company acquired its consolidated subsidiaries was (2) the Pro Forma selected consolidated income statement information effective January 1, 2016. Several strategies discussed in the CHP for the twelve-month and the three-month periods ended December primary offer prospectus (“the Prospectus”) were implemented upon 31, 2016 appearing in this report was prepared by (a) removing interest conclusion of the initial equity offering: a) the royalty scheme was payments on short-term debt, and (b) annualizing long-term debt. 2017 Fourth Quarter Results    Page 7

Definition of Terms and Disclosures                Definition of terms    PHP refers to Philippine Pesos.    pp equals percentage points.    Prices all references to pricing initiatives, price increases or decreases, refer to our prices for our products. Operating EBITDA equals operating earnings before other expenses, net, plus depreciation and operating amortization. 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. 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. Net debt equals total debt minus cash and cash equivalents.    January—December Fourth Quarter January—December 2017                2016                2017 2016                2017 2016                 average average average average End of period End of period Philippine peso 50.38 47.67 50.60 49.29 49.93 49.72 Amounts provided in units of local currency per US dollar 2017 Fourth Quarter Results    Page 8