CEMEX (CEMEXCPO) Q2 2024 earnings summary

Executive summary

• Achieved sixth consecutive quarter of EBITDA growth, with margin reaching an eight-year high at 21.5% and five consecutive quarters of expansion.

• Upgraded to investment grade by Fitch; double-digit return on capital above cost of capital.

• Urbanization Solutions EBITDA up 10%, now 10% of total EBITDA, maintaining double-digit growth and margin expansion.

• Continued reduction in CO2 emissions; ranked #1 by World Benchmarking Alliance for climate action.

• Net sales for Q2 2024 were $4.5B, flat year-over-year, as higher local currency prices offset lower volumes due to adverse weather.

Financial highlights

• Q2 2024 net sales: $4,494M, flat year-over-year; EBITDA: $965M, up 2%; EBITDA margin: 21.5%, up 0.3pp.

• Free cash flow after maintenance CapEx declined due to higher tax payments and lower fixed asset sales, at $252M for Q2 2024.

• Net income for the first six months was $485M, down 3% year-over-year, mainly due to FX losses from peso depreciation; Q2 controlling interest net income declined 15% to $230M.

• Leverage ratio improved to 2.13x, about one-third of a turn lower than last year.

• Total debt as of June 30, 2024: $7,553M; net debt: $7,128M; average debt life: 4.6 years.

Outlook and guidance

• 2024 EBITDA growth guidance reaffirmed at low- to mid-single digits, excluding the Philippines and assuming current FX rates.

• Upgraded guidance for energy cost per ton of cement to a high-single-digit decline for the year.

• Capital expenditures: ~$1.6B ($1.0B maintenance, $0.6B strategic); working capital investment to reduce by ~$300M.

• 2024 volume guidance: cement flat to low-single digit increase; ready-mix and aggregates low-single digit decline.

• Expect improved volume performance in the U.S. and Europe in the second half, with continued pricing resilience.