CEMEX (CEMEXCPO) Q3 2024 earnings summary

Executive summary

• Announced $2.2 billion in asset sales year-to-date, with proceeds to be recycled into growth strategy focused on developed markets, especially the U.S.; 90% of EBITDA expected from U.S., Europe, and Mexico post-divestitures.

• Net income grew over 200% year-over-year in Q3 2024, mainly due to a lower effective tax rate and gains from the Guatemala sale, despite a 9% EBITDA decline from adverse weather and higher fixed costs.

• Growth investments contributed 13% of EBITDA in Q3 2024, with a 14% EBITDA CAGR over the last three years.

• Recognized by Fortune Magazine for sustainability leadership and selected for EU Innovation Fund grant for CO2 capture in Germany.

• Quarterly results were significantly impacted by extraordinary weather events and a strong base effect from the prior year.

Financial highlights

• 9M24 net sales were $12.39 billion, down 1% year-over-year; EBITDA was $2.40 billion, down 2%; EBITDA margin stable at 19.4%.

• Q3 2024 net sales declined 6% year-over-year to $4.09 billion; EBITDA fell 13% to $747 million; EBITDA margin dropped 1.4pp to 18.3%.

• Net income for the first nine months was $891 million, up 43% year-over-year, mainly due to a lower effective tax rate and gain from the Guatemala sale.

• Free cash flow after maintenance capex was impacted by $383 million in non-recurring items, including a $306 million Spanish tax fine payment.

• Leverage ratio stood at 2.22x, expected to decrease after divestiture proceeds are received.

Outlook and guidance

• Full-year 2024 EBITDA guidance adjusted to a low single-digit percentage decrease, reflecting weather impacts and FX headwinds; energy cost per ton of cement to decline high single digits.

• CapEx guidance reduced by $100 million to $1.5 billion; cash tax guidance reduced by $100 million to $900 million, including a Spanish tax fine.

• 2024 volume guidance: low single-digit decline in cement and aggregates, mid-single-digit decline in ready-mix.

• 2025 expected to benefit from fiscal stimulus, nearshoring, and lower interest rates, supporting demand in core markets.

• Expectation of working capital turnaround in Q4 due to seasonality and new initiatives.