CX - Earnings call transcript Q1 2022

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Operator

Good morning. Welcome to the CEMEX First Quarter 2022 Conference Call and Webcast. My name is Hannah, and I'll be your operator for today's call. My name is Hannah, and I'll be your operator for today’s call. At this time, all participants are in a listen-only mode. a [Operator conduct will we question-and-answer Instructions]. session Later, the to Lucy now I Chief over turn would And Rodriguez, conference Communications Officer. Please proceed.

Lucy Rodriguez

you conference Al-Haffar, I by Fernando Thank first our in good you CFO. morning. for our joined today families us Good today I'm for and quarter your XXXX this CEO; call hope webcast. Gonzalez, health. and call finds joining our and Maher

questions. business, I will spend now to a and the then we reviewing happy we always, over As take it minutes your will hand Fernando? to be will few Fernando.

Fernando Gonzalez

Lucy, day Thanks, good to and everyone.

convey Before the our we begin, war witnessed I will by there. affected crisis are like in with to much humanitarian as we that the very the Ukraine thoughts people unfolding

better we the hospital. future: homes, Our purpose sparked. it corporate infrastructure, are destruction and to a And see refugee this crisis had is all building saddened school, about

UN We in which communities in authorities are and supporting local across the coordinating with the operate refugee we program Europe.

look to for We will additional people continue support most by crisis. opportunities to this affected the

key we to to In a our achieved with quarter moving sales first very on tried constrained pleased quite needs. We achievements. growth chain world, all supply I'm regions results. a in with meet contributing. customer have hard double-digit Now our

adjust prices with led real-time. higher was pricing challenging to than management Growth by EBITDA by a Our results double-digit. was primarily cement last primarily in achieved our These had team despite year, driven were EMEA. macroenvironment up which to

and highest growth down the increased the core Volumes in X to offset Europe for products significant, completely inflationary pressures While achievement year-over-year. the with margins was pricing sufficient not with U.S. rates our

grew double-digits. Our Urbanization business Solutions

enhancement million bolt-on growth this we We quarter, continue approved margin over And of $XXX investments. roll our to additional projects. out

than initiation to been back During more a X.X% our the we of CEMEX We believe transactions we buyback the bought have the accretive outstanding these our that have shares. share program shares. repurchased XXXX, X% company's Since total of in of quarter, of shareholders.

post to action our continue numbers impressive in climate efforts. We

strides continue to great We make in decarbonization efforts. our

XX.X%. expect carbon in on our COX of by of in a high was our well our This By clinker a reduction a are XX% quarter, of potentially and from X/X into that directly This material gases is that our to how to carbon used smart born converted the of carbon the out Vertua progress actually a below volumes. in our operating of X%, is multiple good of concrete Today, low-carbon converted we in our an COX XXXX, lab X fuels with successfully innovation. concrete cement we largest continue are regard of reduced XXX represent represent currently target growing open increase XXXX in their make of decline our will of to since an innovation cement alternative our quarter. Sales our plants In innovation, an as line With example XXXX new the a setting, significantly we flue factor nanomaterials, be commercialize. a We internal emissions kilns in carbon Vertua and and of and in by platform, can industries. bad kilograms. innovation as record. This result performance XX% introduction our volumes. into of approximately XXXX,

industrial now concept pilot. move an in on this will We forward

transform Carbon we XXXX. Alliance into Neutral plant project consortium Germany, plan COX cement established the first new Additionally, Rudersdorf our ever to in a a by net for the

information, please more see our For website.

corporate governance in improvements. the report our a we a which on prices our of with X up sales double in report Pricing cement recently website. our highlight our in as primary the digits as in progress was well access have sixth integrated X we substantive in driver climate action published XX% made regions. to I our you Finally, we invite roadmap growth significant

you As inflation to even And challenges well we cost we points, out as rising that X.X the this as working is Consolidated pressures seeing XXXX quarter with serving inflation well our than rather of of spending comparison, capital. address the Free flow coming year us the product second as adjusted permanent And war. pricing clouds as well beginning, higher continuing in cash the From we the mix. EBITDA. margin and X% increase and were declined view year-over-year cost geographic difficult the to transitory. delivered strategy a the know, declined we Ukraine as with pandemic lockdown. additional percentage prior in due CapEx reflecting

aggregates declined, and developed expect portfolio as markets we demand from volumes occurring strong we is sector single growing as Mexico formal that portfolio, volumes construction ready-mix, and rebalancing Cement in informal increasing high Throughout the strong in the Our double reflecting well to between are ready-mix continued in the as market market comparison out cement base. difficult enjoy dynamics to while for move reflecting demand formal volumes digits. the all pandemic are a XXXX growth SCAC. demand, seeing with

the since X% X% realized respectively. the sequential record cement a ready-mix with 'XXs, worst backdrop price growth the up XX% year-over-year, and pleased while pricing and cement aggregates the performance. were cement. we quite Against are prices for of We rose inflation Consolidated headwinds

regions have the traction high-single with products. still for January for up mid-single between compensate sequential we pricing costs. rising digits pricing to consolidated work January to price to do increases important our achievement, to gains. Importantly, contributed All all saw prices Despite

results. increases expect pricing and the April and those Europe U.S. in implemented that markets a have have did not we We increase, for similar January

subsequent increases we lever. We addition, Pricing, announced only months. the have not remain in focused however, summer the is for costs. on In many markets already

and supply EBITDA region. and Solutions climate action for grew strategies paying of digits, pricing transportation In portfolio EBITDA the to points. in driven declined mid-XXXX, increase contribution in in The sufficient to variable margins. volumes, as XXXX increased EMEA primarily ramps significant Urbanization not began inflation growth however, the continue cost it year-over-year energy, fourth up Consolidated growth With to our business, come off. fully expect X.X stemming we this and projects more take the rising we offsets quarter EBITDA strategy largely X%, and chain maintain to and from rising percentage double benefits of quarter. account growth in began was efforts imports. online. our diversified and energy to and are this into Our updated costs. We our prices the to our margins from see in see by investment pricing

course, quarter there pleased am in I in that margins our sequentially. is, While increased first of results, the seasonality consolidated

but pricing strategy has cautious the costs recalibrated managing our we cost We of challenges we to inflation and carefully know of are are the been new and reflect ahead us, environment.

And is our line now Our margins to at recover back with of to resilience target Lucy. you, goal least in XX%. operation

Lucy Rodriguez

growth Fernando. well of on This sales domestic market, volume In prices and high largely single-digit operations as from the you, products. growth the strong a increasing XX%. our residential X experienced expanded U.S. gains XX% across milder products. Pricing weather. back Thank cement reflects with industrial impressive sectors sold-out growth as Sales for all to contributed the demand significantly

our rose the U.S. for In markets and highly cement In remaining their increases for April, X% markets cement year. increase XX% our of account pricing between were received first January successful. volumes, XX%. prices which Our

We in that will traction be are line January. with optimistic

already markets increases price all customers advised have and that may we the further necessary. have additional We announced in price be for summer increases

continued and the and side, negatively shipping imports, are margins. On logistics the on increasing impacts imports biggest cost largely With be energy rising sold-out to rates to headwind reliance margins. markets

and water global today's declined improved of X needs. meet challenging margin shipping seen of market, markets. our With from in the percentage we point. customer The sector softening almost sequential residential oil rail have industry. U.S. operations optimistic due year-over-year, take interest resurgence with the the to and of full and shows not order We onshoring to advantage important outlook by remain industrial evidence Mexican our demand margins rising the manufacturing EBITDA for regard we and recovery commercial will rates, Despite While in to imports activity

Ukraine with from supply industrial trends chain to additional these expect persist pressures We the war.

pandemic of our from XXXX by In yield and volumes cement spending. incremental demand demand announcements in prices move Volume volumes towards XXXX. reflect dynamics pandemic X% rebalancing end the with grew demand X%, in successful with sequentially. to new net continue for between base X%, level comparison of weaker strategy. Jobs reflecting infrastructure, a saw for a Infrastructure we and pre-electoral resurgence. informal Investment improvements difficult and January, out Cement construction cement X%. we decline the In sectors expect the price Act rising results grew a bagged formal Finally, attraction the while products from record cement as driven ready-mix sales home cement pricing volumes to Mexico, high of The declined bagged

by volumes and the cement at sector, share. bagged commercial industrial the formal expect sector and is Going activity forward, we normalized residential. market stabilize driven a In to formal

the still and hotel corridors by is significantly, energy. has manufacturing significant in The EBITDA were responsible mix, post-pandemic to pricing Urbanization driven We in warehousing the largely industrial a build-out performance offset states, inflation in of supported product commercial opportunities. continue led of not space including see facilities largely decline of responds companies to coupled Solutions construction cities strong and advantage sufficient Monterrey. sector for by with Rising as as rapidly taking costs influx growing Demand nearshoring our tourists. Tijuana such been the is expanding The to in by Northern a margin. operations, the with tourism energy business for industry

XX% containment To strategy similar announced X. pricing increase our of January a action. initiatives price effective to to challenges. in second the increase our inflation the cost bagged cement is price expect showing We April and traction date, We address

road over also fuel us map highs. and usage thermal efficiency Alternative Efforts helping reduce clinker clear factor respond supported. to with pressures. of cost posted is our fuels plants to to action climate advantages Our also improved record cost fossil new is

maintain U.S. allows U.S. support the but market of to high-capacity business manner, a sold-out a in While cost-effective needs in also not our us Mexico. only utilization to

cost Top-line strong growth as European XX% results, responsible rising to growth with in price we volumes led in a posted In pushing volumes rising We infrastructure double-digit for additional not Prices much headwinds. January by is between reflecting price volume cement our January implemented those Europe markets, excellent activity from weather. increase. cement. increases. as growth of the milder driven digits. was EBITDA April, with continue for in well represent residential sales X in and as and increases cement about by which price EMEA will sequentially, products did necessary improvement X% that mid-single-digit price for core increased compensate of and XX% for have XX% double increases winter

price second a announced already quarter. second be increases have the round of during to We implemented

pressures. business that war, fortunate is chain cost relatively from Europe insulated in supply are terms in Ukraine footprint, both our We of and the

X/X One and XX% modifications less XX% our by to allowing other Recent of result cement strategy than Europe minimize plant a boost almost today XXXX contributing midyear. business, cement Republic products fuels business is about account total runs network at Czech energy-intensive our implemented alternative of and U.K., our allow our plants of with consolidation of The fuel cement alternative fuels even fossil As Germany, us footprint, EBITDA. further well utilization. our regional us Within the to in for volatility. the our high-capacity will the to to mix, fuel our in up diversified

on expected approximately allowances energy programs in that waves we values. should trillion, a with support through last demand totaling new renovation independence expect XXXX. We side, COX EUR coupled infrastructure and the And X.X of other have investments will and surplus the

cement impacted Cement and prices growth. improved rest by by of declined Typhoon to quarters the COVID disruptions Odette Moving X% consecutive Philippines, In volumes of sequentially, caused December lockdown the region. in the X measures. marking X%,

our between information, please growing with our was which pricing be For mid- high-single for Israel, construction sequential available evening. this and rose quarterly see while aggregate digit. to more CHP activity will ready-mix In earnings, strong volumes products

Similar strong Egypt, cement to sales American the X%. net line Regional strong EBITDA increased by growth utilization announced we price margins markets while with by that formal bagged plan cement XX% sector our in of effective Central volumes. growth operations, year-over-year. second driven round top industry prices Finally, around to and growth, government to EBITDA mainly costs. X% the most countries. increased and In Mexico, strong was continues This due announced recovering increases a moderates. in of the cement in represent The from decline the in continue high-capacity Caribbean pricing by South, see increases April in X, rationalization is pandemic regional We energy driven XXXX. midyear in

effect kiln review coupled be developments. were and to today. the the alternative production cement region, X%, X/X, cement advantage to as will a quarterly pass are increasing volumes shipping the with by in of also will our the our fuels a country. results, an advantage. We increase rising multiple dampen capacity as our country in global XG you well of plant, by reduction switch believe tools we full remains our taking In commitment plants costs of growth largely in which Colombia, led to of reopened ability our housing, formal strategy I order declined infrastructure. which supported underscoring I highway volumes The call CLH's also logistics network, of In the review capacity in will to housing by additions financial Republic, increased our We competitive prices. to development continued our to the between rollout energy X%, And important sales. healthy outlook higher Maher bagged published sold-out and the and invite sector. cement projects With positive with now strong Dominican a cement self-construction the a in a

Maher Al-Haffar

Lucy, to you, day Thank everyone. good and

higher CapEx. investments as As chain in to EBITDA Fernando financial higher demand CapEx the continue and due mentioned, to higher declined bottlenecks. capital supply year pleased lower plus working after we Despite our due face with free customer flow are versus to increased Investment and first capital to cash maintenance expense, higher working maintenance markets support quarter very prior sales, in inventory performance.

are efficiency like record been levels. our We efficient. that significant receivables technologies our quality receivables collections has our processes turnover in new the introducing make credit redesigning to would highlight them a collection led at of This to more turn CapEx slated of mostly have to originally early and part delivery and is in I delayed cycle. improvement This The in due the our chain seasonal for typically disruptions. working equipment investments supply primarily around capital and maintenance cycle relates the in quarter is of the half. The in second first to mobile the XXXX. increase to

us year, energy performance goodwill, months operating of financial for expenses, cost positive income to for production XX.X%, production capital. the above Inflation employed net last when of result adjusting gains tripled of our for has last for of after stood which costs. in more Return capital compared a As approximately felt the XX% our quarter XX at of well the and sale assets. of lower than from on in been cement represents excluding cement, mostly total that

primarily XX% increased cost petcoke it alternative is up the and quarter, Unitary by by partially the driven increase coal fuel in During usage. fuel in XX%, mitigated year-over-year. and an increase

XX.X%, year. This was quarter, X.X substitution the than fuel points percentage alternative higher rate last

further We in our up Unitary expect XX%, rate is our year. substitution electricity cost the principally operations driven to Europe. by increase during

due energy have in combination to of is the experienced than we increase factors. an indices. This a cost it lower much While important continued our key energy, to volatility a of

price fuel a First, a fixed and basis. on are portion our of negotiated contracts electricity

energy of fossil fuels, the we're our which energy have from transportation needs on had a exposed XX next We've the conditions. place diesel XXXX in we hedging in our all in cover our is about X/X price as the than second, before, there fuels. are these So diesel in used which form fuels Apart dynamics cement, program And to depending lag different to months, some direct production of contracts. repricing for in mentioned of also exposure for XX of market alternate the in products.

respect capital to with management. our structure risk and Now,

to entered is position minimal very as XX% strong interest fixed rates. for next refinancing of and a quarter, years, last our As liquidity a debt I position X at we the strong rates commented no XXXX needs with financial with exposure

capital an be strategy, risk adequate in profile prudent We an with maintaining investment-grade our consistent will to structure. financial continue

During taking quarter, of a executed current advantage series of transactions environment. the we the

This credit very in rates, rise of an X million yield our the savings the the end we the interest offer exercise with at $XXX attractive rate tender purchase million revolving funded First, launched interest those than after lower at which much expense notes. a prices. result process, repurchased in facility approximately of be the more tender we a at discount. to through and will closed annual of Through of to the quarter, than up in in million $XXX attractive $XX will our bonds

activated share the a through stock. Since combination of XXXX, our buyback our shareholders $XXX which to and returned in have quarter million we program We in million also approximately buybacks repurchased of share we dividends. cash $XXX

before, mentioned we have needs As do refinancing any not year. this

$XXX XX-year was of interest rate locks risk million to in rate the locks anticipation yield in However, mitigate were treasury we future. partially executed the rate X.X%. rising interest transactions environment, approximately liability connection in with executed rate These when a management potential in at interest

of a this the in of result The mark-to-market. amortized will as issued. be positive life financial So transaction of new a when they potential today, have over bond expense

align continue structure with to our sustainability our capital our We targets. to goal

quarter, we sustainability and France $XXX U.K. introduced into And securitization framework you, receivable this the During for to our Fernando. accounts million. our back now approximately programs in

Fernando Gonzalez

February performance, signs expectations We in full-year of significantly. first realize are and industry. of pleased accelerated operations that indicator has guidance. with always good Today, first pricing our seeing our are which exceeded our underlying a in quarter We performance is we quarter our not quite not slowdown

mid-single-digit growth. We are maintaining EBITDA guidance our of

Although be risk. the current downside environment, given some might there

volume primarily grow with confident we Growth However, increases. flat driven be will year-over-year. should that mid-single-digit by we are pricing consolidated to

prices. the Given can we announcements, as we between seen traction price gap that successful the closing and have as believe we continue pricing well additional cost

maintenance issues to spending. in improve, of now produced million for no of to per escalation global strategic. cement increasing CapEx $X.X to XX% CapEx going cement assuming $XXX $XXX billion are we If ton million the supply production further We with chain accelerate and could our going expect on We a basis, this energy costs. guidance energy in of

margin towards will projects. primarily be bolt-on enhancement directed strategic CapEx Our

to Mexico, EBITDA but growth recognize continue by million we in such anticipate will among be We U.K., production expect this $XXX others. Cash year headwinds supported the a environment in now sustainable our that taxes fuels from in strong at upgrade cost utilization. high-capacity Rugby with our of dynamics expected block million. investments, challenge, and $XXX to and pricing ready-mix Florida, growth be plants plant We a for mortar management volume favorable as are moderate incremental alternative waste

Operation take margins we While with our it aim goal. Resilience back recover Lucy. now in expected, than longer we And line to may initially you, to

Lucy Rodriguez

go forward-looking remind statements like session, current today Q&A we our make beyond change any a we we based the to due you operate into of to I Before could in and the future that knowledge would variety control. our factors our which are on markets of in

In prices decreases happy the products. for will initiatives, take now to or to And otherwise, all indicates addition, be to context questions. pricing we refer your unless references increases price our

Lucy Rodriguez

you In the to give only interest of participate, question. yourself limit an from time from and Scotiabank. opportunity people kindly And to we that the first question to Suarez one ask [Operator comes Instructions]. other Francisco

Francisco Suarez

fossil difficulty] this question particularly with. pipeline? rates, that for My improvement investments have this levers that upside playing positive you in you the this costs quarter improvement, would fuel the side in on to these And you incremental have are [Technical outside margin risk that perhaps your perhaps actually sequential made at statements beginning the equation clinker room is see linked to Europe. on the and factors, impressive. better was relates substitution cost price your to margin levers that that you allow your of Do

Fernando Gonzalez

you, Francisco. Thank

answer year. transition XX% basis carbon in economically think, progress and quarter yes, lower X me contributing particularly, about fuels in last increasing both comment our And on lower percentage cost on higher the targets substitution and I do doing to those and was more you question from contributing variables, consolidated we both have We to preparing points. economy. towards particular Let to that year factor. investing of alternative and definitely been fuels alternative to commented were a we is have the clinker XX% our your a side, this room, It's referring and to first

continue Now that explanations. will few growing a

of European plants That's RDF, made We all one improve our alternative hydrogen, in reason. to installations to already main our inject the have fuel. combustion

The order in will other in week, promote positive U.K. in think substitution it one to the the announced, will is, the in was in projects have increase plants a rate. finished of reason very recently and our is largest Spain this Rudersdorf the the alternative that Germany where in Spain, because already be to was And our Rugby the have fuels cement very we use other in RDF plants why low of I increase rule our we that use -- of it we X in Europe,

done, we those Poland. in higher levels So plants, to what XX%, that substitution have we to and starting are see similar XX%, is to much close of in

fuels or the in as, rates you of are Europe economically. the Now know, substitution use the ones most alternative contributing

improve to we end the around XX% -- first our be other injecting Europe are in because understand combustion around And in to we in don't the hydrogen projects of regarding substitution going in and just substitution finished, we is the info have around is these as the mentioned, rules We the We of above levels. Europe. Spain industry average moving the XX%. X or in substitution was the which in XX%, So at of high Europe. new is variables quarter, I very that just understand

So rate with alternative substitution the XX% of in this leading we fuels. might be Europe

factor, from limestone reduce U.S. -- clinker other for cement hand we been blended we've the cement example, types cement factor. to and instance in And type as you clinker the X continue an been, switching of other know On we've

reducing are clinker U.S. have using compared that itself. a cost we So when the lower in to clinker materials factor

on top is contributing competitiveness. that So our to to contributing of reduction, which COX also is

quarter, continue and it. do first reducing lowest during We we factor have the clinker the expect

additional you have in our force is an And we than reduction. reduced last main quarter, driving X% the commitments these first we before, know, variables X COX said more year, As as of reduction on X%.

can sharing, and map, is see working. info and So we comprehensive a executing we are the very you that projects are we because road of have it these

moving forward effectively. are We

Francisco Suarez

-- that advantages -- that helpful. might those market potential may have Do in Yes, positive the overlooking you you be Europe? that think that's

Fernando Gonzalez

is know. an was [hardly What heated] good hard inflation inflation reasons, seen meaning in obvious fossil that for Europe for reasons, Well, in there being the fuels, to war, electricity I've expectation prices. the Europe this of being in XX% based in because our of prices comment comes But case case I from electricity is, cement. what about reference can our of of in EBITDA gas of

The mentioned, from than their XX% Urbanization in and fossil that XX%, fuels by much XX% ready-mix, are fuels. production less And instances, in alternative other even already alternative inflation is which in fossil real as XX% the us impact comes related EBITDA. an Solutions fuels, inflation is in And I of aggregates for income or are fuels. businesses most And this impacted in to the of stream. Europe, cement of cost case lower Europe fuels on of

we what So of can as regions, given -- because And I'm in just will our because have expect It's of in what other impact to quarter EBITDA that the Europe. are Europe exposure, of in alternative was the in fossil continue that least repeat it XX% of first we going explained, fuels and of not lower. to at XX% use I be was potential inflation that. fuels that going the increasing

have comment. but hard I say what it's facts this other So been these to can if is look,

Lucy Rodriguez

where a saw Mexico usage increase we that neglect Europe, alternative to fuel well even XX% year-over-year add shouldn't alternative question increase, I would outside fuel year-over-year. Maybe about I a as we've in think, had usage alternative I while just in think we in usage of Europe. asked XX% almost a you And because

The and from Just is web. to that Paul mind. next comes question this Roger question keep BNP in Paribas the from from

stoppage of on Europe. the it Has for a in What's cancellation It's it. cost. a to impact read hedging power project pushes CEMEX, the is group assuming What European demand any seen have higher risk also up prices? I'll due and of there would So destruction Europe gas continuation electricity? position

Fernando Gonzalez

on is, part, cement we Well, clarification gas production. first the don't First for use

facilities. production, in us shouldn't So or gas our shortages directly impact processes

XX% alternative of coal. have rest said, mainly, RDF fuels is we the pet As are field, coking

our a So -- fuel gas of is not it's Europe. in not one of part mix

an is Spain, good gas Portugal there Regarding on electricity, prices was in where European XX% prices. we agreement And year. and to the European have for our or news in the post fixing about electricity don't Spain contracts is idea by year, Union for electricity the of regarding the this of recent that of a with very type contracted made this the based this news Union

So that the a electricity recent Material, Spain. decision very material will prices to have -- in material have meaning seen. in maybe impact meaning be of

that's our our fuels coverage in hedge or electricity. So regarding situation the inflation

Lucy Rodriguez

the a on part any was to there yes. question second And the has group seen cancellations, project

Fernando Gonzalez

construction. of No, delays in There we are that not credit chain because is have seen have in new material supply there are might and not cancellations. developments, in time issues, projects. What that seen through we a this -- be there delays delays are

Russia news to latest that and conflict latest -- process between of might meaning that Ukraine the delays. Now add

still course, books monitoring order are see that We strong. deterioration. far, But sizable situation. we will of don't continue So any

Lucy Rodriguez

comes next from the question And GBM. Okay. from Alejandro Azar

Alejandro Azar

in pricing you second Mexico of remind And the did made and a where price if already in a in and us there increase side, on is your you Mine where price a third one? have some markets. is you of increase SCAC later possibility announce the if could year

Fernando Gonzalez

your for Thanks Sure. question.

because a on strategy high the take me year, our opportunity have better pricing we clarification Let inflation. explanation or a this to very give

as already qualified our in Sometimes industry. I hyperinflation

increases only of of that our is cement at March price was in markets. important. we to So impacting level a the volumes different XX% most X% achieved consolidated December commented the from The sequentially pricing -- strategy increase timing consolidated of because of

In it's our of quarter. the which one case volumes. single XX%-XX% executed strategy this the part in of strategy, the still our not XX%. increase is is So pricing April, half first of And in pricing U.S., impacted in price our Europe case of

increases So in XX% increasing April, in again we of volumes. double-digit our cement are

second Now the Germany, the case all increases like be relevant other part. Poland, like in U.S. in increases Colombia In this in in products, if XXX% the increase, the Croatia, in of not first and cement price of countries regions. certain markets the other most Mexico, Europe, and April are might

of May XXXX will -- price the will strategy. first and the of -- be these quarter, meaning our with case increases and comparing first increases pricing in be will Now price June, we our in some December will We we price that pricing double-digit phase be increases, achieve when April the to completing and way double-digit same same that increase price strategy. the June, half that believe be in

main for the will have the announced and And reason our summer, be might of so price in price pricing the increase, June, -- Europe billion case We of why feel and is margins. is XXXX increases confident of EBITDA. our based price already other $X the is the beyond U.S. third margins increase. the strategy strategy idea recovering markets Pricing guidance second that in we In on be -- July. the recovering affirming

so so good. far, effectively has It And implemented. been

Lucy Rodriguez

Ben Okay. at And Barclays. question the from comes Theurer next

Benjamin Theurer

States knew a import in started you Maher, lock from in. and prepared you on issues Mexico of now Fernando, had we a into of congrats the view, able your hence the been on side contracted about remarks spend results. I the from If on the disruption you've the because logistics proximity maybe logistics, comments that here made follow on any logistics. and advantages on the and the to where wanted margins the that you I need import year point margin Can down. dynamics ago, you dynamics comments remember on for right given some up to you United to have some face import enough during the so haven't came you share

any incremental please? And here, so color

Fernando Gonzalez

will to complement, necessary. and some me make I Maher general Let ask comments, if

As it's high maritime of Mexico, or then transportation, other inflation Asian much instead countries, East imagine, less the Middle faster. part Transportation to a serving from are needs south these European levels. of of is in are from is much our That convenient referring serving issue. shorter, response exposed countries particularly the exposure a this sort the I'm U.S., meaning we cost from you or is bring from to to the maritime of volumes supply nowadays customers huge. can Mexico, means it more chain because they times much nearshore

convenient. very So that is

the in complement case, know if attractive more these the do or we I maritime want So cannot that imports on margin the than anything, you. Mexico ones specifically. exports on the or from Maher, margins you cost transportation. parties much both third I that for to and don't U.S., are through Maher hear

Lucy Rodriguez

I think mute. you are on

add Maher I'll then Yes, comment. one and While I'll his add. go voice, regains maybe ahead,

Maher Al-Haffar

know wrong happened. Sorry have the the about or what don't something that. must that. hit like I way I phone

you imports year, pricing close expecting million mean, some These Sorry, that ramped the Huichapan, significantly CPN, into about for the about U.S. through million. thing, this of expecting Tamuin, are Ben. course, that some the transportation have into to have dynamics. course, from Last grow. one U.S. and up production to be strongest I export as tons highest And year $X.X Torreon. the showing good of know, are of We're markets the growth we, Mexico to imports. within all were we're imports market logistics plants of X and very very of attractive our probably

It amount consolidated of directly a let's within in for the party, profits. profit Mexico and year from say, as that are cement, to are third-party and shortens are able is profitable, imports But doubling imports to which we big -- satisfy the We're quality out clearly almost the cement. because important. not them we're have on capturing assurance the demand into of important third And that. the imports able their not of been don't a CEMEX they the this the of deliver chunk good profitable using domestically clearly, fortunately, lot of margins instance, traders, So we I contract. our all break for heard our of of of terms very specific mean, to details CEMEX as some us imports produced very it's of customers, from and reasons, U.S. but We've supply gives and chain. extremely

So increasingly being of certainty to I think reduces able deliver. that

imports. it's we think probably continue do imports than we because so are Mexican important of to that, XX% that. almost expensive less that third-party And And

of So in year to when by see the last CEMEX imagine substitution coming swing from growing you from volumes year and benefit could Mexico. are you product third-party the you product this see

that guess, think that -- we to to need the anything -- I Lucy, are we don't is I there mean, else those So add I question.

Lucy Rodriguez

one, clear time. X have that I we trying of frustrating very I now the and the is comments. best much very up mean, a as doing are meet important of is But ramp right that of add I as because United know we in would what's customers in ability supply, maybe do is we customer X imports is number States issue quicker the just the goal. to our are or hardest that source some to but shortages, one our our us And demand. for to possible. reaction a this

say energy much other in this before Secondly, the in imports did we that we think in year last year in transportation message that to would in as first specifically, ramp-up first we as and quarter, I weren't bringing the and this were last the costs. the quarter, is was year, see the that quarter. importing first here I we began

was very contract, So we time we of this it for at relative as do. did year, to ahead obviously, a always low-cost

better So hard But versus year-over-year have comp quarter. we're we seeing a transportation on basis, first costs. a

to just that keep mind, in Ben. So

JPMorgan. comes Huerta from Adrian question Next from

Adrian Huerta

how guidance did the I you of after but with also did assumption? prices. change guidance much now is for you're know up from question price now? then growth XQ price don't you results EBITDA How until reiterating assumption digits. My When mid-single and increase on pricing, much guidance give the gave your

Fernando Gonzalez

being prices this with year, our and Xst, then pricing very a we September. saw we to about power, few with our we August did strategy have meaning have newer meaning same. you seen a we as particularly last inflection cope and either adjusted we to to I as inflation low much of as adjusted January start more or an inflation changed early again since year of positive think pricing inflation When with growth mid-year, escalate, started levels. then it for with the year -- things or strategy trends Let we adjusted much started that, year, how be And lower to can assumptions call or that Lucy but do expectations that we all fuels we a outlook. complement. a started July in saw comments in our increasing we can point, the regular, Then mean or electricity. we the me started And Maher less might at continue July now last Adrian, could I start executing as we and prepared mean, in

find being it, was top GDP we what we, the there is XXth out in these deterioration, saw growth of the Just growth comes February, or the humanitarian and either to XXth deterioration inflation a war on that accelerated. trends higher and the -- pain that with

executed we prices in or current in the the full are updating we assumptions this the have So -- inflation yet didn't call. January for that

Now, strategy in the newest rest been of updated estimates increases to of inflation. our price have the

saw, As we inflation assumption the are you of increasing materially of fuels.

have continue our high aiming adjusting the are strategy second that we increases calling and having what think price adapted we the we base of That's of I phase, the executing. we other first in that monitoring level strategy margins. continue half. question. elements the the And rest the we That's phase, full are we your will of And our to the phase the what for that this first So adjusting. hope for price pricing our is half; under we are are and for. recover continue to on inflation. we prepared That's considered and second answers have first I prepared aim strategy what second objectives, our our are year,

Lucy Rodriguez

from Bank of And question from comes Anne America. the next Milne

Anne Milne

you maybe seen in commented to Fernando an ask on interest or earlier the want related that a I impact markets will see higher question I know housing far, to rates. haven't that markets. the U.S. higher rates. is Maher, maybe impact you of debt wondering you do rate. where most I fixed I said But see know interest that and other was the the of so

So you discussed? that that these the that's rate us have do Where you bit opportunity lock business? or you on percentage you could the interest call rates a give more maybe, see the on small impact interest on information Mark, to the And of until floating. little

Maher Al-Haffar

to But seeing to and you're we book. because talking refinancings, doing prices Sure. we forward-looking, mean, positioned if now address a when Fernando, so if me a houses to of better, disruption about you is take terms you in infrastructure, one the look do side in interest also what the rates rate. quite the we rentals order mean, If for And at if look mean drop be bit. in interest impact look demand potentially gone you want I we on for I imagine, the quite commercial of on Anne, mean, X and up well a are But there gone the impact inventories in book are think at certainly And in U.S. I affordable budgets at we the we other clearly markets actually seen a that growing. industrial but of a on continues order then probably frankly. areas side. would also could take okay, financing of going moderation, right? haven't a continues have all healthy. mean stable our to own say, potentially -- continue hand, that bit. the so then new largest U.S. housing more I the U.S. to that on affordability existing at I market, the have either the perspective look we're it take at very in I and year in that's very happen. to impact expected they the a be we be, be and on at to of is and up take take is good. the less demand a mean good. yet quite I in seen But tight. a residential but clearly, inventories DOT very look have slowdown continues homes, demand certainly it's I

perspective I not So continues financing to continues not for fairly major Mexico, area in affordability seeing are time environment be interest good, the consequence disruption U.S. a the we're to from the expecting we affordable. a as being, In any again, rate of think fairly housing and demand the

market, it. have is of with is We to highest which in into Mexico, the which remittances trend sensitivity terms market goes that -- risk continue in the into interest residential to highest highest the

that. that's see beating And something not that way don't important we're certainly, any in we Europe. So in

not rate -- from areas which interest the that the being seeing impacted, residential we're frankly, market, sensitive is that are are So perspective. our

facility, bothering sales operating floating. But the year. us that, And that's Now that asset reason numbers, in the really cash from stack, to through offer the or of XX% we our need is to the kind to of XX%, funded of we're our we're capital revolving our fixed be And that are that you credit be that closing flow debt course is financing, fix rate I'm would at from recently, the range tender somewhere did structure, been terms because component no already. either anticipation exposure. how there's is depending which of generation paid for of technically between look throughout our our on the XX% amount giving

higher it's terms that Now were that, forward-looking, of And expect proactive. we in because be of in that of needs, liability rates terms think may next management. do opportunities but have kind precisely through going that, into of we interest year. I don't everybody say, fairly frankly, of would we our do course, and And of there any came we financing expectations

that X.X% morning, between very locked because probably the looked that treasuries we've a and go we starting of essentially and year. expectations few but higher. level mean, X.X%, X.XXX X.X%, at in maybe would At their it in I the this haven't treasuries very time attractive treasuries one of so the forward took hovering been is lowest -- of at rate and entered into rate at the months, I a were rate which and June locks it moments for is a last And next advantage we did the we window XX-year locks, we a at attractive that of

why Now callable. we because of excluding that? bonds activity, bonds in do some did our next know, some discounting our of of become of you year, market the Because the starting market

XXX better attractive to management nothing. we would liability And position to liked mean ourselves more so we do want with rate have done I but cost than is to locks, have in advance.

continuing our did. And in of I'm going so bonds. market. we in to continue some pricing they're primarily to you. that to if because necessarily calling Lucy, that's anything more of would because discount, the hear know trade at our than suggesting I the increase in of don't course, can't bonds be else. we And interesting we're I any what very creditworthiness question. not mean, answers not see I say, a we rates, that your

Lucy Rodriguez

I'd that that first like up on people reflects side think that, quarter were easy add somehow volumes the the maybe it quickly U.S. X% doesn't. in to comp, an but would year-over-year. And

X%. First of grade up quarter year-over-year. the 'XX rate states Texas key But interestingly growth X also were in the in a had lowest We Xs. enough, out volumes Texas did have weather our with impact XXXX

It's here. on industrial residential, going like Maher more said, commercial. there's So and it's

activity migration, We of from and in There's Arizona. because much and lot that migrations footprint grow. A going on. side are pickup pandemic so of given resourcing footprint commercial have on chip the seeing our a residential to industrial this lot been benefited. seeing We're our of real manufacturers a has continues

next So question that with we seen And Yassine of keep the for in but keeping out U.S., yes, haven't from residential from side far. mind, we're just Field. the in to course, our the Touahri certainly weakness so On on eyes that, it comes

Yassine Touahri

you or one in or material seen because Europe, the of or shortages? construction postponement of America Latin me. in of of U.S. works for building increasing Have because building cancellation cost in Just question any

Fernando Gonzalez

before, it. we as Yassine, no, we briefly have Hi, seen not commented

are have issues. by seen, in it's that Our order not construction strong. last but didn't months What that the chain several happening impacted we has books is couple are start meaning there of been it issues, new, supply

suspension. there but of So jobs are delays certain certain developments, not the in to in point

of depend we seen be far, suspension projects. the of what's our is happening conflict, on to so concern. context, in the it things. But because many work. in the of the deterioration Now type It a those a and so Europe on will the particularly duration going I mean, case have not

Lucy Rodriguez

Thanks, Yassine.

from I one Suisse. and question, think Vanessa we from Quiroga last comes this have time Credit for

Vanessa Quiroga

on about first is the that. surprised will for I the volume the U.S. quarter conservative you the guidance guess year upside Congrats the in result. because ask than your more full the I and on

expect get of happen guidance? current what during Or guidance? do So the to your you year rest the to the there's upside think to to you do volume

Fernando Gonzalez

to Lucy, let answer going one. that you I'm

Lucy Rodriguez

Okay.

we're the kind seeing that in strength U.S. I think, of Vanessa, I the talked about

terms are think in any is our might that while I future. be some guidance, we into of there taking of in and seen account but it think the weakening that cautious we being I demand, residential softening haven't

lot don't or books it's going I does already think on residential industrial to because if of pick X and not commercial to happen, -- that, that's a out. the up. continues I quarter and be a orders we immediate it have for think

we one are of are sell, while contributed Texas the a are had of of Western our seeing both benefit of we lot in chain side. are the can happening that we was course, I But the industry, there or You a argument are. that we from are going states aggregates And Houston chip that growth, Europe on make oil enormous, worse where pretty exposure sell those. being again good benefited we lot issues future. a in and have of involved out call large a because, you with again, would today pickup I the supply in but X business, get in what's Texas but where And don't oil-related facilities. would companies also from add are from Arizona, in more slower These manufacturing a it constructed. we in only to either other that directly the

So seeing same we is going stronger, trend benefit. in Europe we're strong in demand onshoring onshoring, But we're going to seeing forward. thing that Mexico from even will the this only think believe, I what make

commentary. So that my be would

Vanessa Quiroga

you infra maybe backlog to that Okay, that's of deal, that great. already related get deal? okay. indicates No, And about starting projects are the to some frontloading

Lucy Rodriguez

those rises as least fairly we February. is bidding, contract seeing awards which, the are step at of but seeing before course, robustly are We of rising,

and in in significant in industrial that think So year's growth of of Remember and is beginning primarily will seeing primarily more on based the that volume growth this we primarily year for residential the I piece. end the industrial start are XXXX, that kind that guidance the towards benefit optimistic we and commercial, moderated of infrastructure.

For back. in time seeing we're the sector years, come first of a number that

Lucy Rodriguez

first you appreciate today and for joining call. we Well, webcast quarter our conference us

Relations, look have quarter contact any you Investor please to forward If feel webcast. you to we again additional free our and questions, results thanks. Many seeing on second

Operator

in conference. the Thank you for your concludes participation This today's presentation.

day. Good disconnect. now may You

CEMEX, S.A.B. de C.V. (CX) 30 Apr 222022 Q1 Earnings call transcript