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Business Combinations, Divestitures and Discontinued Operations and Selected Financial Information by Reportable Segment and Line of Business

12 Months Ended

Dec. 31, 2023

Text block [abstract]

Business Combinations, Divestitures and Discontinued Operations and Selected Financial Information by Reportable Segment and Line of Business

4)	BUSINESS COMBINATIONS, DIVESTITURES AND DISCONTINUED OPERATIONS AND SELECTED FINANCIAL INFORMATION BY REPORTABLE SEGMENT AND LINE OF BUSINESS

4.1)	BUSINESS COMBINATIONS

On November 1, 2023, through a subsidiary in Germany, Cemex completed the acquisition of Kiesel, a mortars and adhesives technological leader in the construction industry based in Germany that serves the German, French, Polish, and Czech markets, consisting of a production facility and five distribution locations for a total consideration of $13. As of December 31, 2023, based on the preliminary valuation of the fair values of the assets acquired and liabilities assumed, Cemex determined goodwill of $5.

On May 11, 2023, through a subsidiary, Cemex completed the purchase of Atlantic Minerals Limited in Newfoundland, Canada, consisting mainly of an aggregates quarry and maritime port operations for a price of $75. With this investment, Cemex secured a new long-term aggregates reserve for its operations in Florida and the east coast of the United States, as well as a source for chemical-grade stone serving a broader customers. As of December 31, 2023, based on the preliminary valuation of the fair values of the assets acquired and liabilities assumed, Cemex did not determine any goodwill.

On January 30, 2023, through a subsidiary, Cemex acquired a 51% stake in Israel-based SHTANG Recycle LTD (“SHTANG”), a construction demolition and excavation waste (CDEW) recycling company, for a price of $13. The acquisition aligns with Cemex’s strategy to strengthen its business in developed markets through

bolt-on

acquisitions in businesses with strong circular and sustainable attributes. SHTANG has been awarded a

13-year

license to build and operate the CDEW recycling facility. The

state-of-the-art

facility will be capable of processing 600,000 tons of waste annually. The CDEW production will be used by Cemex as raw materials for aggregate production, reintegrating them into the construction value chain. As of December 31, 2023, based on the preliminary valuation of the fair values of the assets acquired and liabilities assumed, Cemex determined goodwill of $3.

On July 11, 2022, through a subsidiary in Germany, Cemex completed the acquisition of a 53% stake in the German aggregates company ProStein for a total consideration of $21. The investment expands Cemex’s aggregates business in the region and Cemex estimates increased the life of aggregates reserves for Cemex’s operations in Central Europe for at least the next 25 years. The majority stake in ProStein’s assets adds a full range of fine and hardstone aggregates to Cemex’s aggregates portfolio. In addition to supplying the greater Berlin area, the additional capacity can supply several urban centers in Poland and the Czech Republic. ProStein’s assets include six active hardstone plants and six CDEW recovery sites. During 2023, based on the valuation of the fair values of the assets acquired and liabilities assumed, Cemex did not determine any goodwill.

On December 10, 2021, through a subsidiary in Mexico, Cemex acquired Broquers Ambiental, a sustainable waste management company for a total consideration of $13. Broquers Ambiental’s assets include a plant for solid waste treatment for its use as alternate fuel. During 2022, considering the valuation of the fair values of the assets acquired and liabilities assumed, Cemex determined goodwill of $4.

In January 2021, a subsidiary of Cemex in Israel acquired two

ready-mix

concrete plants from Kinneret and

Beton-He’Emek

for an amount in shekels equivalent to $6. During 2021, based on the valuation of the fair values of the assets acquired and liabilities assumed, Cemex determined goodwill of $5.

4.2)	DIVESTITURES AND DISCONTINUED OPERATIONS

On October 25, 2022, to accelerate the growth and development of Neoris N.V. (“Neoris”), its subsidiary in the digital solutions sector, Cemex closed a partnership with Advent International (“Advent”). As part of the partnership Cemex sold to Advent a 65% stake in Neoris for a total cash consideration of $119. While surrendering control to Advent, Cemex retained a 35% stake and remained a key strategic partner and customer of Neoris. Cemex’s retained stake in Neoris was remeasured at fair value at the date of loss of control and was subsequently accounted for under the equity method within the line item “Investments in associates and joint ventures.” Neoris’ results for the period from January 1 to October 25, 2022 and for the year ended December 31, 2021 are reported in the statements of income, net of income tax, in the single line item “Discontinued operations,” including in 2022 a gain on sale of $117, net of the reclassification of foreign currency translation effects accrued in equity until the date of loss of control.

On August 31, 2022, through subsidiaries in Colombia and Spain, Cemex concluded the sale with affiliates of Cementos Progreso Holdings, S.L. of its entire operations in Costa Rica and El Salvador for a total cash consideration of $325, related to Cemex’s aggregate controlling interest. The assets sold consisted of one cement plant, one grinding station, seven

ready-mix

plants, one aggregates quarry, one distribution center in Costa Rica and one distribution center in El Salvador. Cemex’s results of these operations for the period from January 1 to August 31, 2022 and for the year ended December 31, 2021 are reported in the statements of income, net of income tax, in the single line item “Discontinued operations,” including in 2022 a gain on sale of $240 which includes the reclassification of foreign currency translation effects accrued in equity until the disposal date.

On July 9, 2021, Cemex closed the sale to Çimsa Çimento Sanayi Ve Ticaret A.Ş., of its white cement business, except for Mexico and the United States, for a total cash consideration of $155, including its Buñol cement plant in Spain and its white cement customer list. Cemex’s operations of these assets in Spain for the period from January 1 to July 9, 2021 are reported in the statements of income, net of income tax, in the single line item “Discontinued operations,” including in 2021 a loss on sale of $67 net of the proportional allocation of goodwill of $41.

On March 31, 2021, Cemex closed the sale to LafargeHolcim of 24 concrete plants and one aggregates quarry located in the Rhone Alpes region in the Southeast of France for a total cash consideration of $44. Cemex’s operations of these assets in France for the three-month period ended on March 31, 2021 are reported in the statements of income, net of income tax, in the single line item “Discontinued operations.”

The following table presents condensed combined information of the statements of income of Cemex’s discontinued operations previously mentioned related to: a) Neoris operations for the period from January 1 to October 25, 2022 and for year ended December 31, 2021; b) Costa Rica and El Salvador for the period from January 1 to August 31, 2022 and for the year ended December 31, 2021; c) Spain related to the white cement business for the period from January 1 to July 9, 2021 and; d) France related to the Rhone Alpes region for the three-month period ended March 31, 2021.


		2022			2021
Revenues	$		256			354
Cost of sales and operating expenses			(225	)		(304	)
Other expenses, net			(8	)		(42	)
Financial expenses, net and others			–			5

Earnings before income tax			23			13
Income tax			(3	)		(48	)

Result of discontinued operations			20			(35	)
Net disposal result			304			(4	)

Net result of discontinued operations	$		324			(39	)

4.3)	SELECTED FINANCIAL INFORMATION BY REPORTABLE SEGMENT AND LINE OF BUSINESS

Reportable segments

The Company’s main activities are oriented to the construction industry, mainly through the production, marketing, sale and distribution of cement,

ready-mix

concrete, aggregates, urbanization solutions and other construction materials and services. Under IFRS, the Company’s operating segments represent the components of Cemex that engage in business activities from which Cemex may earn revenues and incur expenses, whose operating results are reviewed by the entity’s top management to make decisions about resources to be allocated to the segments and assess their performance, and for which discrete financial information is available. A reportable segment represents an operating segment or an aggregation of operating segments considering certain thresholds, under which entities must report separately any operating segments which account for 10% or more of combined revenues, both internal and external, 10% or more of combined net profit or loss, depending on the individual result of the operating segment, and/or 10% or more of the combined assets of all operating segments. In addition, despite the described 10% threshold not being met individually, entities must report as many individual operating segments as needed to cover at least 75% of the entity’s revenue. Cemex operates by geography and line of business. Cemex discloses its segment information presenting 15 reportable segments. For the reported periods, Cemex’s operations were organized in four regions, each under the supervision of a regional president, as follows: 1) Mexico, comprised of one operating and reportable segment, 2) United States, comprised of one operating and reportable segment, 3) Europe, Middle East, Africa and Asia (“EMEAA”), comprised of 11 operating segments, of which four were aggregated into a single reportable operating segment as described below, and 4) South, Central America and the Caribbean (“SCA&C”), comprised of 12 operating segments, of which nine were aggregated into two reportable operating segments as described below. The Company’s regional presidents, who are part of Cemex’s Executive Committee, report to Cemex’s Chief Executive Officer or CEO. In addition, for those regions comprising several operating segments, such as EMEAA and SCA&C, each operating segment is supervised by a country manager whom in turn reports to the regional president.

The material accounting policies applied to determine the financial information by reportable segment are consistent with those described in note 28.

Aggregation criteria

Considering similar regional and/or economic characteristics and materiality, such as: (a) the nature of the products and services, all related to construction materials and the construction industry, (b) the nature of the production processes, which are the same for cement,

ready-mix

concrete, aggregates and urbanization solutions across geographies, (c) the type of customers for their products or services, in all cases construction materials distributors and wholesalers, governments and big construction firms, and (d) the methods used to distribute their products or provide their services, which are very similar among the Company’s geographies using both third-party transportation for cement and aggregates and our own mixers fleet for

ready-mix,

certain operating segments have been aggregated and presented as single reportable segments. These reportable segments are as follows: a) the “Rest of EMEAA” reportable segment refers to Cemex’s operating segments in the Czech Republic, Croatia, Egypt and the United Arab Emirates; b) the “Rest of SCA&C” reportable segment refers to Cemex’s operating segments in Puerto Rico, Nicaragua, Jamaica, the Caribbean and Guatemala, excluding the operations of Trinidad Cement Limited (“TCL”); and c) the “Caribbean TCL” reportable segment refers to the operating segments of TCL and subsidiaries in Trinidad and Tobago, Jamaica, Guyana and Barbados. The line item “Other activities,” included to reconcile the total of reportable segments with the consolidated amounts from continuing operations, refers to the following combined transactions: 1) cement trade maritime operations, 2) the Parent Company, other corporate entities and finance subsidiaries, and 3) other minor subsidiaries with different lines of business.

Selected information of the consolidated statements of income by reportable segment for the years 2023, 2022 and 2021, excluding the share of profits of equity accounted investees by reportable segment that is included in note 14.1, was as follows:


2023		Sales (including intragroup transactions)		Less: Intragroup transactions			External revenues		Operating EBITDA			Less: Depreciation and amortization		Operating earnings (loss) before other expenses, net			Other expenses, net			Financial expense			Other financing items, net
Mexico	$		5,060		(205	)		4,855		1,488			221		1,267			(59	)		(39	)		105
United States			5,338		–			5,338		1,040			483		557			(31	)		(75	)		(30	)
EMEAA
United Kingdom			992		–			992		193			72		121			(6	)		(14	)		(17	)
France			842		–			842		53			54		(1	)		(39	)		(15	)		(1	)
Germany			497		(50	)		447		37			32		5			(3	)		(2	)		(5	)
Poland			467		(1	)		466		72			24		48			1			(2	)		2
Spain			449		(38	)		411		71			31		40			3			(2	)		1
Philippines 1			312		–			312		34			32		2			(2	)		(3	)		1
Israel			794		–			794		90			33		57			5			(6	)		1
Rest of EMEAA			770		(4	)		766		147			48		99			(7	)		(6	)		(6	)
SCA&C
Colombia 2			458		–			458		62			25		37			(19	)		(6	)		(1	)
Panama 2			158		(26	)		132		35			17		18			(2	)		–			–
Caribbean TCL 3			329		(12	)		317		78			20		58			(17	)		(2	)		(2	)
Dominican Republic			378		(18	)		360		139			9		130			(2	)		(1	)		13
Rest of SCA&C 2			414		–			414		90			13		77			(10	)		(2	)		1

Reportable segments								16,904		3,629			1,114		2,515			(188	)		(175	)		62
Other activities 4								484		(282	)		119		(401	)		(77	)		(356	)		(29	)

Consolidated	$							17,388		3,347			1,233		2,114			(265	)		(531	)		33


2022		Sales (including intragroup transactions)		Less: Intragroup transactions			External revenues		Operating EBITDA			Less: Depreciation and amortization		Operating earnings (loss) before other expenses, net			Other expenses, net			Financial expense			Other financing items, net
Mexico	$		3,842		(200	)		3,642		1,133			172		961			(69	)		(28	)		32
United States			5,038		(4	)		5,034		762			455		307			(205	)		(55	)		(21	)
EMEAA
United Kingdom			982		–			982		195			60		135			(8	)		(8	)		(8	)
France			781		–			781		63			50		13			1			(10	)		2
Germany			485		(46	)		439		40			28		12			2			(2	)		(3	)
Poland			419		(4	)		415		64			22		42			1			(2	)		4
Spain			382		(36	)		346		6			28		(22	)		(113	)		(2	)		2
Philippines 1			379		–			379		84			37		47			(2	)		18			(9	)
Israel			840		–			840		112			46		66			5			(4	)		–
Rest of EMEAA			707		(1	)		706		116			55		61			(10	)		(4	)		2
SCA&C
Colombia 2			429		–			429		61			24		37			12			(7	)		22
Panama 2			149		(34	)		115		28			16		12			(2	)		–			–
Caribbean TCL 3			302		(8	)		294		74			17		57			(19	)		(4	)		(1	)
Dominican Republic			348		(6	)		342		133			8		125			(1	)		(1	)		(3	)
Rest of SCA&C 2			394		(1	)		393		90			13		77			(2	)		(2	)		(3	)

Reportable segments								15,137		2,961			1,031		1,930			(410	)		(111	)		16
Other activities 4								440		(280	)		89		(369	)		(57	)		(394	)		135

Consolidated	$							15,577		2,681			1,120		1,561			(467	)		(505	)		151


2021		Sales (including intragroup transactions)		Less: Intragroup transactions			External revenues		Operating EBITDA			Less: Depreciation and amortization		Operating earnings (loss) before other expenses, net			Other expenses, net			Financial expense			Other financing items, net
Mexico	$		3,466		(142	)		3,324		1,164			161		1,003			(43	)		(29	)		2
United States			4,359		(4	)		4,355		778			464		314			(127	)		(47	)		(19	)
EMEAA
United Kingdom			940		–			940		141			69		72			(3	)		(8	)		(17	)
France			863		–			863		93			50		43			(6	)		(11	)		–
Germany			472		(43	)		429		69			28		41			–			(2	)		(2	)
Poland			405		(6	)		399		73			25		48			(4	)		(2	)		1
Spain			359		(25	)		334		(6	)		33		(39	)		(331	)		(3	)		51
Philippines 1			424		–			424		114			40		74			(1	)		17			(2	)
Israel			785		–			785		114			45		69			(1	)		(4	)		2
Rest of EMEAA			618		(5	)		613		87			56		31			(110	)		(3	)		1
SCA&C
Colombia 2			437		–			437		87			26		61			(19	)		(7	)		(12	)
Panama 2			121		(23	)		98		31			16		15			(2	)		–			–
Caribbean TCL 3			280		(7	)		273		65			19		46			(1	)		(6	)		(6	)
Dominican Republic			299		(8	)		291		128			7		121			3			–			(1	)
Rest of SCA&C 2			465		(21	)		444		110			13		97			(5	)		(2	)		(3	)

Reportable segments								14,009		3,048			1,052		1,996			(650	)		(107	)		(5	)
Other activities 4								370		(209	)		68		(277	)		568			(469	)		(156	)

Consolidated	$							14,379		2,839			1,120		1,719			(82	)		(576	)		(161	)

Cemex’s operations in the Philippines are mainly conducted through Cemex Holdings Philippines, Inc. (“CHP”), a Philippine company whose shares trade on the Philippines Stock Exchange. As of December 31, 2023 and 2022, there is a

non-controlling

interest in CHP of 10.14% and 22.10%, respectively, of its ordinary shares (note 21.4).

Until June 2023, after the conclusion of a tender offer and delisting process, Cemex Latam Holdings, S.A. (“CLH”), a company incorporated in Spain, traded its ordinary shares on the Colombian Stock Exchange. CLH is the indirect holding company of Cemex’s operations in Colombia, Panama, Guatemala and Nicaragua, and until August 31, 2022, of the operations in Costa Rica and El Salvador. As of December 31, 2023 and 2022, there was a

non-controlling

interest in CLH of 0.50% and 4.70% of its ordinary shares, respectively, excluding shares held in CLH’s treasury (note 21.4).

3	The shares of TCL trade on the Trinidad and Tobago Stock Exchange. As of December 31, 2023 and 2022, there was a non-controlling interest in TCL of 30.17% of its ordinary shares in both years (note 21.4).

4	In the caption of external revenues, refers mainly to trade maritime transactions of cement and clinker carried by Cemex’s trading unit and, in the rest of the captions, refers to Cemex’s corporate activities.

Debt by reportable segment is disclosed in note 17.1. As of December 31, 2023 and 2022, the selected statement of financial position information by reportable segment was as follows:


2023		Associates and joint ventures		Other segment assets		Total assets		Total liabilities		Net assets by segment			Capital expenditures 1
Mexico	$		–		5,381		5,381		2,052		3,329			264
United States			216		12,782		12,998		2,770		10,228			521
EMEAA
United Kingdom			6		1,484		1,490		960		530			107
France			41		922		963		467		496			44
Germany			3		506		509		289		220			47
Poland			–		415		415		153		262			44
Spain			–		666		666		212		454			38
Philippines			–		795		795		135		660			85
Israel			–		808		808		507		301			41
Rest of EMEAA			11		852		863		329		534			75
SCA&C
Colombia			–		1,007		1,007		308		699			76
Panama			–		292		292		78		214			13
Caribbean TCL			–		478		478		207		271			18
Dominican Republic			–		233		233		95		138			16
Rest of SCA&C			–		280		280		111		169			25

Reportable segments			277		26,901		27,178		8,673		18,505			1,414
Other activities			452		754		1,206		7,644		(6,438	)		3
Assets held for sale			–		49		49		–		49			–

Total consolidated	$		729		27,704		28,433		16,317		12,116			1,417


2022		Associates and joint ventures		Other segment assets		Total assets		Total liabilities		Net assets by segment			Capital expenditures 1
Mexico	$		–		3,846		3,846		1,381		2,465			265
United States			198		12,425		12,623		2,642		9,981			551
EMEAA
United Kingdom			5		1,388		1,393		921		472			74
France			42		910		952		471		481			57
Germany			3		449		452		255		197			33
Poland			–		341		341		119		222			33
Spain			–		616		616		204		412			27
Philippines			–		792		792		155		637			72
Israel			–		771		771		495		276			37
Rest of EMEAA			10		773		783		303		480			55
SCA&C
Colombia			–		742		742		274		468			45
Panama			–		302		302		88		214			19
Caribbean TCL			–		499		499		218		281			16
Dominican Republic			–		232		232		81		151			18
Rest of SCA&C			–		268		268		104		164			20

Reportable segments			258		24,354		24,612		7,711		16,901			1,322
Other activities			382		1,385		1,767		7,827		(6,060	)		40
Assets held for sale			–		68		68		–		68			–

Total consolidated	$		640		25,807		26,447		15,538		10,909			1,362

1	Capital expenditures represent: a) the purchases of property, machinery and equipment, b) stripping costs, as well as c) assets for the right-of-use incurred during the respective period (notes 15.1 and 15.2) and exclude increases related to asset retirement obligations (note 18.2).

Revenues including intragroup transactions and external customers by line of business and reportable segment for the years ended December 31, 2023, 2022 and 2021, were as follows:


2023		Cement		Concrete		Aggregates		Urbanization solutions		Others		Eliminations			External revenues
Mexico	$		3,378		1,397		399		1,163		13		(1,495	)		4,855
United States			1,988		3,070		1,347		694		14		(1,775	)		5,338
EMEAA
United Kingdom			315		344		376		201		22		(266	)		992
France			–		656		356		17		–		(187	)		842
Germany			227		171		91		38		62		(142	)		447
Poland			331		169		44		6		–		(84	)		466
Spain			326		119		41		25		–		(100	)		411
Philippines			311		–		–		3		1		(3	)		312
Israel			–		662		200		116		2		(186	)		794
Rest of EMEAA			551		288		52		17		23		(165	)		766
SCA&C
Colombia			316		163		48		54		22		(145	)		458
Panama			128		30		9		12		4		(51	)		132
Caribbean TCL			316		5		8		1		4		(17	)		317
Dominican Republic			301		24		–		60		10		(35	)		360
Rest of SCA&C			373		18		5		28		1		(11	)		414

Reportable segments			8,861		7,116		2,976		2,435		178		(4,662	)		16,904
Other activities			–		–		–		–		484		–			484

Consolidated	$															17,388


2022		Cement		Concrete		Aggregates		Urbanization solutions		Others		Eliminations			External revenues
Mexico	$		2,663		925		261		843		14		(1,064	)		3,642
United States			2,017		2,871		1,202		697		12		(1,765	)		5,034
EMEAA
United Kingdom			312		329		371		206		27		(263	)		982
France			–		622		332		15		–		(188	)		781
Germany			220		186		81		32		71		(151	)		439
Poland			282		160		41		4		1		(73	)		415
Spain			281		99		34		25		–		(93	)		346
Philippines			378		–		–		4		–		(3	)		379
Israel			–		718		213		97		21		(209	)		840
Rest of EMEAA			504		260		48		18		26		(150	)		706
SCA&C
Colombia			296		137		40		62		19		(125	)		429
Panama			119		27		7		13		2		(53	)		115
Caribbean TCL			297		4		6		2		5		(20	)		294
Dominican Republic			285		20		–		46		10		(19	)		342
Rest of SCA&C			360		16		3		22		1		(9	)		393

Reportable segments			8,014		6,374		2,639		2,086		209		(4,185	)		15,137
Other activities			–		–		–		–		440		–			440

Consolidated	$															15,577


2021		Cement		Concrete		Aggregates		Urbanization solutions		Others		Eliminations			External revenues
Mexico	$		2,412		733		208		810		14		(853	)		3,324
United States			1,731		2,479		1,005		558		13		(1,431	)		4,355
EMEAA
United Kingdom			270		311		377		200		53		(271	)		940
France			–		682		397		6		–		(222	)		863
Germany			210		204		65		30		69		(149	)		429
Poland			272		154		38		6		1		(72	)		399
Spain			256		93		31		23		–		(69	)		334
Philippines			423		–		–		4		1		(4	)		424
Israel			–		657		199		89		27		(187	)		785
Rest of EMEAA			423		232		47		14		21		(124	)		613
SCA&C
Colombia			309		130		36		58		21		(117	)		437
Panama			103		16		5		7		1		(34	)		98
Caribbean TCL			271		5		7		4		6		(20	)		273
Dominican Republic			240		16		–		44		8		(17	)		291
Rest of SCA&C			400		20		6		24		1		(7	)		444

Reportable segments			7,320		5,732		2,421		1,877		236		(3,577	)		14,009
Other activities			–		–		–		–		370		–			370

Consolidated	$															14,379