Q4 2024 Cemex SAB de CV Earnings Call
In listen only mode. Later, we will conduct a question answer session.
Fernando Gonzalez: On Future in Action, we continue making progress on profitable decarbonization, reducing our Scope 1 and Scope 2 CO2 emissions by 15% and by about 17%, respectively, compared to 2020. In addition, as we look towards developing the new technology necessary to decarbonize beyond 2030, a CEMEX-led consortium was selected to receive EUR 157 million of EU innovation funding for carbon capture at Rudersdorf, which is expected to become CEMEX's first net-zero plant. We are optimistic about the future. In the last 3 years, we have undergone a cyclical downturn in demand in several of our key markets, most notably in the US and Europe. While we have been able to more than offset this decline with pricing, cost efficiencies, and growth investments, this is an opportunity for the future as demand returns to these markets.
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So just within our plan it was to cut it to about half of Mexican volumes. So two 5% of total Mexican volumes more or less looking.
Lucy Rodriguez: And now I will turn the conference over to Lucy Rodriguez Chief Communications Officer. Please proceed.
Looking at it more from the United States perspective, again imports have continued to decline for us. They currently in 2024, we're about 17% of total volumes.
Speaker Change: Good morning, Thank you for joining us today for our fourth quarter 2024 conference call and webcast. We hope this call signs you well.
Speaker Change: Im joined today by Fernando Gonzales, our CEO and Mark I'll have SAR our CFO.
Imports coming from Mexico have been declining as well quite significantly and the plan. This year was to continue to decline.
As always we will spend a few minutes reviewing the business and outlook for 2025, and then we will be happy to take your questions.
<unk>.
Speaker Change: As you know in connection with the announced asset sales in 2024, we closed the sale of our Guatemala, and Philippines operations as well as the remaining minority stake in <unk>.
Obviously tariffs we believe firmly that if tariffs are imposed within a local market on all players that that would be positive. It would increase in import parity it would be positive for pricing.
Speaker Change: Our Dominican Republic operations remained accounted for as discontinued operations as of the end of 2024.
If you see a more limited tariff action in a specific market, where it only applies to one or two origins of imports. We think it would be fairly neutral in terms of pricing.
Speaker Change: This divestment was closed last week on January 30th.
Speaker Change: Reported results assume the sale of these operations for the full year and year over year like to like variations are for the current footprint.
Fernando Gonzalez: We expect volumes to begin recovering in the US and Europe this year, which sustain demand growth over the medium term. While we are confident on the medium-term fundamentals in Mexico, we have limited visibility on 2025 outlook with a difficult comparable base, FX headwinds, and new administration setting into office in Mexico and the United States. In this environment, we are focusing on the variables we can control. While we have achieved a significant improvement in our consolidated profitability metrics, reaching higher operating efficiency levels, EBITDA margins, and free cash flow generation, there is more to be done. We are launching our Project Cutting Edge, which encompasses a three-year, $350 million cost program anticipated to deliver EBITDA savings of $150 million in 2025. Maher will elaborate on this initiative. After an exceptional year in 2023, we delivered strong results in 2024.
Ann: So I hope that covers it Ann.
Hmm.
Yeah.
Fernando: And now I will hand, it over to Fernando.
Speaker Change: And the next question comes from Poclain sweaters from Scotiabank Parker.
Fernando: Thanks, Rafi and good day to everyone.
Fernando: I'm very pleased with our achievements in 2024, which represents by volatile using the corporate transformation, we ambition in 2020.
Fernando: So I think the backdrop early in the year, we achieve our long running goal of recovering our investment grade rating.
Speaker Change: So are you there.
Speaker Change: Maybe I will move on then.
Fernando: While we remain committed to additional credit improvements in the near term.
Speaker Change:
Gila: The next question comes from drought Gila <unk> from Goldman Sachs.
Fernando: This achievement provides a wrong way to more aggressively pursue our growth strategy and lay the foundation for a sustainable shareholder return program.
Speaker Change: Thank you for taking my question. So I wanted to get a better sense of how you view the rebuilding effort for the L. A area of following the unfortunate wildfires earlier this year or do you have any estimates how much capex could take place over the next few years and how much of it could be related to building materials.
Fernando: Our leverage ratio stood at 1.81 times its lowest level since the outbreak of the global financial crisis.
Fernando: With the restoration of our financial health on several years of brokers on our growth strategy.
Speaker Change: And a quick follow up on a question I didn't quite understand what was the key driver for aggregates demand.
Fernando: We took the first step on our shareholder return policy with the announcement of a progressive dividend program in March 2024.
Speaker Change: It's forecast to go down in 2025 in the U S. Thank you.
Fernando Gonzalez: In fact, last year, we posted the second strongest sales and EBITDA. We also achieved the highest free cash flow after maintenance CapEx in 2017, adjusting for the extraordinary payment of the Spanish tax fine. As you know, the guidance we provide at the beginning of each year is based on prevailing FX rates. Adjusting for significant FX volatility experienced during the year, we achieved our 2024 initial guidance of a low to mid single-digit EBITDA growth. In 2024, in a muted volume environment, we focused our attention on costs, as well as optimizing production with increases in operating efficiency in key markets. As a result of these efforts, consolidated EBITDA was relatively stable in 2024 and grew by 3% in Q4. EBITDA margin was also resilient and grew in Q4, driven by positive price-cost dynamics in all regions. Free cash flow benefited from an impressive turnaround in working capital.
Fernando: We expect to expand this in the future years with opportunistic use of our 500 million share buyback program.
Lutz: Lutz do you want to take that.
Fernando: Through the execution of $2 $2 billion in announced divestitures in 2024.
Lutz: Sure.
Lutz: Sorry I was.
Lutz: I was on mute and talking to it.
Fernando: With significantly rebalanced, our portfolio towards developed markets with more consistent and attractive growth potential.
Lutz: So just going back to the aggregates question. We have a couple of quarries that are approaching end of life, which is very normal in an aggregate cycle and what you would like to do is have new quarries that come online to replace those but sometimes you can't always do that in a timely manner our expectation.
Fernando: Approximately 90% of our EBITDA has now generated in the U S Europe and Mexico.
Fernando: Divestment proceeds will free up additional resources for future organic growth opportunities on small to medium sized acquisitions focused primarily on the U S and organization solutions on aggregates.
Lutz: At the moment is that we have a couple of quarries that are going to be closing because they're at end of life. So we won't have that production in the early part of next year and again, just reminding everyone that our strategy in the United States is to continue to boost our aggregates.
As we move towards introducing and organic growth to the portfolio.
Fernando: We expect to gradually reduce our strategic capex spending.
Lutz: Resources and obviously this has to be very local in nature, but we are looking at opportunities to replace these aggregates that are that are depleting, okay did that.
Fernando: Net income for the year reached $939 million.
Fernando: A record level in recent history.
Fernando: Unfiltered, an action, we continue making progress on profitable the carbonization, reducing our scope one and scope two C O two emissions by 15% by about 17%, respectively compared to 2020.
Lutz: Was I clear.
Lutz: Yeah.
Lutz: Yes, so as it was more a.
Lutz: Supply and demand.
Lutz: Yes, correct, Okay and the first part of your question. If you could remind me I'm sorry, I was so focused on the AG now I've forgotten the first part.
Fernando Gonzalez: Maher will provide additional details on our working capital efforts. Consolidated prices increased by 3% in Cement and Ready-Mix and by 2% in Aggregates during 2024, reflecting higher price levels in most markets. While pricing gains have moderated compared to recent years, they more than offset cost inflation despite an adverse demand environment. Inflation in our products decelerated in 2024 to a low single-digit percentage. Going forward, our pricing strategy remains unchanged, aiming to more than recover cost inflation in our markets. In 2024, volumes were stable to lower in all regions. Importantly, volume decline has moderated sequentially in Q4 in virtually all regions. EMEA continued its H2 recovery trend, with high single-digit growth in Cement and Aggregates in Europe, while Middle East and Africa reported double-digit growth in Ready-Mix and Aggregates in Q4.
Fernando: In addition, as we look towards developing the new technology necessary to Decarbonize beyond 2030.
Lutz: Right I just wanted to get a sense of how you view the rebuilding effort in ancillary.
Speaker Change: <unk> led consumption was selected to receive 157 million euros of EU innovation funding for carbon capture at Rudolph.
Lutz: Elliot wildfires earlier.
Lutz: Look our focus in the case of L. A at the moment is obviously on the immediate crisis and the buyers aren't out there. So we had been focused on making sure that our employees are safe that they themselves have housing and we have had a couple that I believe have been at least temporarily displaced and also.
Speaker Change: Which is expected to become <unk> first net zero plant.
Speaker Change: We are optimistic about the future.
Speaker Change: In the last three years, we have undergone a cyclical downturn in demand in several of our key markets.
Speaker Change: Most notably in the U S and Europe.
Lutz: Aiding our community as well.
Speaker Change: While we have been able to more than offset this decline with pricing cost efficiencies and growth investments.
Lutz: There has been a lot of disruption I think that there have been 12000.
Lutz: Residents.
This is an opportunity for the future as demand returns to these markets.
Lutz: Those that have been.
Lutz: Destroyed in this process just to give you some sense in California, 50000 homes typically are built each year.
Speaker Change: We expect volumes to begin to recover in the U S and Europe this year.
Speaker Change: With sustained demand growth over the medium term.
Lutz: So you can see that that will be quite impactful going forward, but.
Speaker Change: While we are confident on the medium term fundamentals in Mexico.
Lutz: At the moment again, we're focused on the immediate crisis and you know.
Speaker Change: We have limited visibility on 2025 outlook with a difficult comparable base FX headwinds, a new administration set into office in Mexico, and the United States.
Lutz: We will think about what we can do to help with sustainable construction going forward.
Lutz: When the government and when our customers are ready to have that discussion, but they definitely aren't there yet.
Fernando Gonzalez: In the US, weather continued to impact volumes in Q4, largely due to the devastation caused by Hurricane Milton in October in Florida. In 2024, Mexico posted relatively stable volumes as pre-election demand dynamics were offset by slower construction activity in H2. During the year, we saw strong price-cost dynamics, with pricing contribution to EBITDA more than compensating for decelerating input cost inflation. This positive effect was offset by lower volumes and adverse FX dynamics, resulting in a roughly flat performance and stable margin. Importantly, in Q4, volume impact to consolidated EBITDA moderated as volumes stabilized. Growth investments continued supporting EBITDA performance. On the cost side, we benefited from a 13% decline in energy costs, mainly driven by lower fuel prices. During the quarter, this favorable energy environment continued driving higher EBITDA and margin. We expect both pricing dynamics and energy costs to remain a tailwind into 2025.
Speaker Change: In this environment, we are focusing on the variables we can control.
Lutz: Yes.
Lutz: Thank you.
Lutz: Okay.
Speaker Change: While we have achieved a significant improvement in our consolidated profitability metrics.
Speaker Change: I think we have time for one last question and the last question comes from Daniel Sasson from Itaipu Danielle.
Speaker Change: Reaching the higher operating efficiency levels.
Speaker Change: Our margins our pre cash flow generation, there is more to be done.
Speaker Change: Unfortunately that has retracted that question.
Speaker Change: We are launching our project cutting edge, which encompasses a three year $350 million cost program anticipated to deliver EBITDA savings of $150 million in 2025.
Speaker Change: Okay. Then I think we have time for one last question from nothing to worry from on field guessing.
Speaker Change: Okay.
Speaker Change: Yes, good morning.
Speaker Change: Market will elaborate on this initiative.
Speaker Change: Congratulations for the very resilient results.
Speaker Change: I would just have a question about I remember in your next day, you will not do anything about the some of the mix.
Speaker Change: After an exceptional year in 2023, we delivered strong results in 2024.
Speaker Change: The big mismatch between the valuation of PFS on your valuation.
Speaker Change: In fact last year, we posted the second strongest sales and EBITDA.
Speaker Change: When I look at the best price.
We also achieved the highest free cash flow after maintenance Capex in 2017, adjusting for the extra ordinary repayment of the Spanish tax filing.
Speaker Change: And you asked you have done a fantastic job.
Speaker Change: Leveraging the business becoming.
Speaker Change: Investment grade.
Speaker Change: Finding projects that we have for growth whether you are seeing the market is missing when we when you look at your stock price today is there anything that you can do.
As you know the guidance we provided at the beginning of each year is based on prevailing FX rates.
Speaker Change: To convince you in vessels into India could you saw your mix.
Speaker Change: Adjusting for significant FX volatility experienced during the year.
Okay.
Speaker Change: We achieved our 2024 initial guidance of a low to mid single digit EBITDA growth.
Sam: Yes, Hi, Sam Thank you very much for your question and.
Speaker Change: Look I, we're obviously very disappointed at that current valuation of our share.
Fernando Gonzalez: However, we expect FX rates to be a headwind, mainly in our operations in Mexico and to a lesser extent in Europe, particularly in H1. Importantly, our FX hedging strategy mitigates the impact of a strong dollar and protects our leverage ratio. EBITDA in our Urbanization Solutions increased 4% in 2024, with margin expanding by 1.1 percentage points. Positive performance is mainly driven by growth in higher margin businesses such as construction and demolition waste recycling, mortars, and admixtures. Since 2019, EBITDA in these three segments has grown at double-digit rates. Our Urbanization Solutions portfolio addresses the changing landscape of the construction industry, focusing on sustainability and climate resiliency solutions. On Future in Action, our successful decarbonization efforts in 2024 continued to rely on existing profitable technology as we look to abate before relying on carbon capture technology.
Speaker Change: In 2024 in a muted volume environment, we focus our attention on cost as well as optimizing production with increases in operating efficiency in key markets.
Speaker Change: Clearly and have been for a while.
Speaker Change: We think that probably the biggest contributor to that especially since.
Speaker Change: Since the first quarter of 'twenty four has been kind of the expectations of what's likely to happen in Mexico more important than anything else and.
Speaker Change: As a result of these efforts consolidated EBITDA was relatively stable in 2024 and grew by 3% in fourth quarter.
Speaker Change: EBITDA margin was also resilient and grew in fourth quarter, driven by positive price cost dynamics in all regions.
Speaker Change: And and you know obviously in a transition year you have.
No.
Speaker Change: Demand issues, you have currency volatility issues of course, which we have suffered from especially in the last couple of quarters.
Speaker Change: Free cash flow benefited from an impressive turnaround in working capital.
Speaker Change: So.
Speaker Change: Marcia will provide additional details on our working capital efforts.
Speaker Change: I think the market is probably going to wait to see how that normalizes over time, we're optimistic.
Speaker Change: Consolidated prices increased by 3% in cement and ready mix and by 2% in aggregate during 2024.
Speaker Change: About that.
Speaker Change: Clearly.
Speaker Change: Deleveraging is it going to continue to probably take place I mean, I don't know if you looked at the numbers, but when I take a look at.
Speaker Change: Reflecting higher price levels in most markets.
Speaker Change: While pricing gains have moderated compared to recent years.
Speaker Change: If you know where we are in terms of our.
Speaker Change: They are more than offset cost inflation, despite an adverse demand environment.
Speaker Change: Investment grade ratings versus our peers.
Speaker Change: And the leverage levels that we are at versus our peers.
Speaker Change: Inflation in our products decelerated in 2024 to a low single digit percentage.
Speaker Change: We have a potential definitely potential upside and continuing to deleverage and as I mentioned in one of the questions earlier.
Fernando Gonzalez: We have reduced our Scope 1 and Scope 2 CO2 emissions by 15% and by about 17%, respectively, compared to 2020. A reduction that historically would have taken us 16 years to achieve. Based on our progress, we are well on our way to reach our 2025 and 2030 SBTi verified CO2 emissions targets. In this decade to deliver, we continue innovating around carbon capture and other technologies to drive decarbonization beyond 2030. As I mentioned earlier, a CEMEX-led consortium was selected to receive EU innovation funding for carbon capture at Rudersdorf, which is expected to become our first net zero plant. More recently, our Knoxville cement plant was awarded funding from the US Department of Energy to develop a pioneering carbon capture, removal, and conversion test center. These awards are recognition of our commitment to advancing decarbonization solutions in our industry.
Speaker Change: Going forward, our pricing strategy remains unchanged.
Speaker Change: Our interest expense when you consider Bob.
Speaker Change: Aiming to more than recover cost inflation in our markets.
Speaker Change: Everything meeting, including the coupons that we pay on our subordinated notes.
In 2024 volumes were stable to lower in all regions.
Speaker Change: It's probably close to 20% of of our EBITDA and that's more than double.
Speaker Change: Importantly, volume decline has moderated sequentially in fourth quarter in literally all regions.
Speaker Change: Than our peers and and that's a huge number of.
Speaker Change: EMEA continued a second half recovery trend.
Speaker Change: Capital or free cash that can be invested in growth or can be returned to shareholders. At the end of the day and I think thats one area that perhaps either the market is not yet paying us for or or or is not discounting that is also probably going to happen over the next couple of years.
Speaker Change: With high single digit growth in cement and aggregates in Europe, while middle East and Africa reported double digit growth in ready mix and aggregates in fourth quarter.
Speaker Change: In the U S.
Speaker Change: Weather continued to impact volumes in fourth quarter.
Speaker Change: I also think that.
Speaker Change: Lastly, due to the devastation caused by Hurricane Milton in October in Florida.
Speaker Change: There's definitely a discount that is being given by the market today in terms of valuation for <unk>.
Speaker Change: In 2024.
Speaker Change: For poor markets like Mexico, compared to the U S. I mean on a risk adjusted basis, I think thats and Thats something that will take time, I mean, I think the Mexican business has demonstrated the nominal resilience and I think that as we continue to deliver as a company and as a macro economy and as there's more integration between Mexico and the U S.
Speaker Change: Mexico posted relatively stable volumes as pre election demand dynamics were offset by slower construction activity in the second half.
Speaker Change: During the year, we saw strong price cost dynamics with price and contribution to EBITDA more than compensated for decelerating input cost inflation.
Speaker Change: I think the value and the risk adjustment to the earnings coming out of our U S business out of our Mexican business is going to get higher and that's when we believe that we will start seeing.
Speaker Change: This positive effect was offset by lower volumes and adverse FX dynamics resulted in a roughly flat performance on stable margin.
Fernando Gonzalez: Finally, we are very pleased with the adoption of our lower carbon family of products, Vertua. In 2024, we increased the adoption rate by 7 percentage points of Vertua cement and ready-mix. We have already surpassed our 2025 adoption target of 50%, with more than 63% of cement volumes and 55% of ready-mix volumes having Vertua attributes. Over the last 4 years, consolidated EBITDA has shown solid growth with a 9% annual growth rate, driven not only by our organic performance, but also by our growth strategy. Close to 50% of our $3.1 billion growth investment pipeline has come online, contributing $344 million in EBITDA in 2024. These projects are delivering average IRRs of 35%, or an EBITDA multiple of about 4x. These projects offer important synergies with our existing portfolio and customers in our key markets.
Speaker Change:
Speaker Change: I don't want to talk from an investor perspective, but that's when we should see a re rating on valuations of those of those earnings what can we do in the interim is very simple frankly has continued to focus on doing the great things that we can do more of and taking a look at the and I know it sounds like motherhood and Apple pie, but taking a look.
Speaker Change: Importantly.
Speaker Change: In fourth quarter volume impact to consolidated EBITDA moderated as volumes stabilize.
Speaker Change: Okay.
Speaker Change: Growth investments continue supporting EBITDA performance.
Speaker Change: On the cost side, we benefited from a 13% decline in energy costs, mainly driven by lower fuel prices.
Speaker Change: Some of the upsides, which which as you heard from the.
Speaker Change: During the quarter these favorable energy environment continue driving higher EBITDA and margin.
Speaker Change: From our cost containment effort program, which we started last year I mean that is also.
Speaker Change: Im going to be an important contributor to growth going forward again, we're not expecting the market to bass, where it immediately but certainly that's something that also is going to translate to growth. The other thing that is also very important for everybody to realize is that over the last three years.
Speaker Change: We expect both pricing dynamics and energy costs to remain a tailwind into 2025.
Speaker Change: However, we expect FX rates to be a headwind mainly in our operations in Mexico and lesser extent in Europe.
Particularly in the first half of the year.
Speaker Change: We had a headwind of volumes at the EBITDA level that is close to $750 million. Okay for a variety of reasons now I'm not I'm not saying here that we're going to necessarily recover all of the 750, but clearly there is a natural tendency or should be a natural tendency of recovering a big chunk of that.
Speaker Change: Importantly, our FX hedging strategy mitigates the impact of a strong dollar and protect our leverage ratio.
Speaker Change: EBITDA in our organization solutions increased 4% in 2024.
Speaker Change: With margin expanding by one one percentage points.
Fernando Gonzalez: We expect this pipeline to contribute approximately $700 million in EBITDA by 2028, with close to 50% coming from investments in the US. As we continue developing the strategy and relying more on small to medium-sized acquisitions, we expect overall return metrics to be somewhat tighter. Now back to you, Lucy.
That over the next.
Speaker Change: Couple of years at least and so when you add all of those things together.
Speaker Change: Positive performance is mainly driven by growth in higher margin businesses, such as construction and demolition waste recycling motors and admixtures.
Speaker Change: And in US delivering of course, I mean, we need to we need to continue to deliver quarter after quarter I believe the.
Speaker Change: The market will see the.
Speaker Change: Since 2019 EBITDA in these three segments has grown at double digit rates.
Speaker Change: The attractiveness of our <unk>.
Speaker Change: The earnings that we can deliver and hopefully our.
Speaker Change: Our organization solutions portfolio addresses the changing landscape of the construction industry, focusing on sustainability and climate resiliency solutions.
Speaker Change: Our evaluation will be.
More realistic and aligned with our expectations going forward.
Lucy Rodriguez: Thank you, Fernando. In our operations in Mexico, despite a challenging volume backdrop in H2, EBITDA for the full year increased by 3%, with margin improvement of almost one percentage point. EBITDA declined in Q4 due to a tough prior year comparison base, where we posted the highest Q4 EBITDA on record. Mexican demand had two speeds in 2024, with cement volumes growing 6% in H1 and declining 7% in H2 post-election. In Q4, we continued to see volume deceleration aligned to Q3 behavior in cement and continued outperformance in ready-mix. Ready-mix volumes remained supported by the formal sector in the northeast and central regions. Depreciation of the Mexican peso resulted in an EBITDA effect of MXN 48 million in the quarter and MXN 52 million in full year results.
Speaker Change: I hope that clarifies your question and ask you don't know if there is.
Speaker Change: Got it.
Speaker Change: Consistent in action, our successful de carbonization efforts in 2024 continue to rely on existing profitable technology as we look to abate before remain in carbon capture technology.
Speaker Change: That's very helpful. Thank you so much.
Speaker Change: Thank you Anthony.
Speaker Change: We appreciate you joining us today for our fourth quarter results. We hope you will come back again for first quarter 2025 webcast on April 28, and if you have any additional questions. Please feel free to reach out to the IR team many facts.
Speaker Change: We have reduced our scope, one and scope two tier two emissions by 15% or about 17%, respectively compared to 2020.
Speaker Change: Thank you for your participation in today's conference. This concludes the presentation you may now disconnect good day.
Speaker Change: A reduction that historically would have taken us 16 years to achieve.
Speaker Change: Based on our progress we are well on our way to reach our 2025 and 20.
Speaker Change: [music].
Speaker Change: <unk> City, SVT I verify tier two emissions targets.
Speaker Change: In this decade to deliver.
Speaker Change: We continue innovating around carbon capture and other technologies to drive the carbonization beyond 2030.
Speaker Change: Yes.
Speaker Change: Yes.
Lucy Rodriguez: As Fernando explained, our dynamic FX hedging strategy is paying off, mitigating impact on our leverage ratio. In January, we announced price increases of approximately 15% in cement and 12% in ready-mix to offset rising input cost inflation. While we are optimistic on medium-term growth prospects, we expect in 2025 to see the typical decline in public construction spending of the 1st year of a new government. The infrastructure sector continues to face a difficult year-over-year comparison due to unusually high project execution pre-election. While the 2025 federal budget contemplates new projects such as rail and port renovations, highway, and rural road construction, it will take time to ramp up the spending. We continue to see ongoing projects at the state level, however, such as the San Miguel de Allende-Dolores Highway, the Metro in Monterrey, and Los Mochis Airport to name a few.
Speaker Change: Yes.
Speaker Change: As I mentioned earlier.
Speaker Change: <unk> sled consumption was selected to receive EU innovation funding for carbon capture the true resource.
Speaker Change: Which is expected to become our first net zero plant.
Speaker Change: And more recently.
Speaker Change: Our <unk> cement plant was awarded funding from the U S Department of energy.
Speaker Change: To develop a pioneering carbon capture removal and convention center.
Speaker Change: These awards and recognition of our commitment to advancing the carbonization solutions in our industry.
Speaker Change: Finally, we are very pleased with the adoption of our lower carbon family of products Bellator.
Speaker Change: In 2024, we increase the adoption rate by seven percentage points of better cement and ready mix.
Speaker Change: We have already surpassed our 2025 adoption target of 50% with more than 63% of cement volumes and 55% of ready mixed volumes have been better attributes.
Lucy Rodriguez: While industrial sector demand continued to grow in Q4, our ready-mix order book did experience some disruption late last year. We believe this sector will resume its growth once there is more clarity around US-Mexico trade policy. After many years of a subdued formal housing sector, we expect growth driven by the recently announced national housing program, where the government is targeting 125,000 homes to be built in 2025. This will, of course, take time, but we are encouraged by the fact that some potential projects are already under discussion. The combination of high remittances, high employment levels, increased wages, and lower inflation should support the self-construction sector going forward. Similar to 2024, we expect this year will be a story of two distinct halves. The year-over-year volume comparison and FX rate differential create headwinds in H1, with more favorable performance expected in H2.
Speaker Change: Over the last four years consolidated EBITDAR has strong solid growth with a 9% annual growth rate driven not only by our organic performance, but also by our growth strategy.
Speaker Change: Close to 50% of our $3 1 billion growth investment pipeline has come on line.
Speaker Change: Contributing $344 million in EBITDA in 2024.
Speaker Change: These projects are delivering average IRR of 35% or an EBITDA multiple of about four times.
Speaker Change: These projects also had important synergies with our existing portfolio on customers in our key markets.
Speaker Change: We expect this pipeline to contribute approximately $700 million in EBITDA by 2028.
Speaker Change: With close to 50% coming from investments in the U S.
Speaker Change: As we continue developing the strategy and relying more on small to medium sized acquisitions.
Speaker Change: We expect overall return metrics to be somewhat tighter.
Lucy Rodriguez: In 2024, our operations in the US have been affected by extreme weather events, with four major hurricanes and a deep freeze in Texas. We estimate these events were responsible for an EBITDA impact of approximately $38 million. Adjusting for these weather events, EBITDA would have increased 3% for the whole year. The most significant event occurred in October with Hurricane Milton in Florida, our largest market, with an estimated impact of $17 million in Q4. Largely due to the hurricane, cement and ready-mix volumes declined 3% in Q4, while aggregates declined 7%. On a sequential basis, while cement and ready-mix prices remained stable in Q4, aggregate prices increased by 2%. Importantly, even with lower volumes, full-year EBITDA was stable, while margins expanded due to cost optimization efforts, lower fuel prices, and imports.
Speaker Change: And now back to you to see.
Speaker Change: Thank you Fernando.
Speaker Change: Our operations in Mexico, Despite a challenging volume backdrop in the second half EBITDA for the full year increased by 3% with margin improvement of almost one percentage point.
Speaker Change: EBITDA declined in the fourth quarter due to a tough prior year comparison base when we posted the highest fourth quarter EBITDA on record.
Speaker Change: Mexican demand had two speeds in 2024 Smith volumes growing 6% in the first half and declining 7% in the second half post election.
Speaker Change: In the fourth quarter, we continued to see volume deceleration aligned to third quarter behavior in cement and continued outperformance in ready mix.
Speaker Change: Ready mix volumes remained supported by the formal sector in the northeast and central regions.
Speaker Change: Depreciation and Mexican peso resulted in an EBITDA effect of $48 million in the quarter and $52 million and full year results.
Lucy Rodriguez: Investment in maintenance over the last years is paying off with higher operational efficiency, allowing us to substitute more profitable domestic production for imports. For 2025, we expect demand to be driven by infrastructure as transportation projects under the Infrastructure Investment and Jobs Act continue to roll out. Peak spending years for IIJA are expected to be 2025 and 2026. Indeed, the new high reached in December construction start data backs up this projection. While mortgage rates have remained at high levels, we believe that the more cement-intensive single-family housing starts bottomed out in Q3 2024. While there is substantial upside in housing over the medium term, we expect residential to stabilize at current levels in 2025. The industrial sector should continue to benefit from large investments in our states as manufacturing projects roll out.
Speaker Change: As Fernando explained our dynamic FX hedging strategy is paying off mitigating impact on our leverage ratio.
In January we announced price increases of approximately 15% and 12% ready mix to offset rising input cost inflation.
Speaker Change: While we are optimistic on medium term growth prospects, we expect in 2025 to see the typical decline in public construction spending of the first year of a new government.
Speaker Change: The infrastructure sector continues to face a difficult year over year comparison due to unusually high project execution pre election.
Speaker Change: While the 2025 federal budget contemplates new projects, such as rail and Port renovations Highway and road construction it will take time to ramp up the spending.
Speaker Change: We continue to see ongoing projects at the state level, however, such as the San Miguel de Allende, Dolores Highway the Metrorail in Monterrey, and the small chase airport to name a few.
Lucy Rodriguez: In addition, we expect significant demand from the construction of AI-empowered data centers in our key states, which have been the primary recipients of such investment to date. We see further upside going forward from Microsoft's $40 billion spending program in the US in 2025, as well as the $500 billion Stargate program recently announced by the Trump administration. In 2025, we expect volumes, pricing, and continued optimization efforts to drive results. Over the medium term, we continue to believe the US offers the best risk-weighted returns. Our investment focus remains on the US, where we intend to expand our aggregates business, which already accounts for 35% of US EBITDA, and further develop our Urbanization Solutions portfolio. We are pleased with our results in EMEA, where we are seeing continued improvement in our European operations. In Q4, EBITDA grew by an impressive 43%, while margin expanded by 3.6 percentage points.
Speaker Change: While industrial sector demand continued to grow in the fourth quarter, our ready mixed order book did experience some disruption late last year.
Speaker Change: To lead the sector will resume its growth once there's more clarity around U S Mexico trade policy.
Speaker Change: After many years of us.
Speaker Change: Jude formal housing sector, we expect credits driven by the recently announced National housing program, where the government is targeting 125000 homes to be built in 2025.
Speaker Change: Well of course take time, but we are encouraged by the fact that some potential projects are already under discussion.
Speaker Change: The combination of high remittances high employment levels increased wages and lower inflation should support the self construction sector going forward.
Speaker Change: Similar to 2024, we expect this year will be a story of two distinct tabs.
Speaker Change: Year over year volume comparison, and FX rate differential create headwinds in the first half with more favorable performance expected in the back half.
Speaker Change: In 2020 for our operations in the U S had been affected by extreme weather events with four major hurricanes in a deep freeze in Texas.
Lucy Rodriguez: EBITDA growth and margin improvement was driven by volumes, operational leverage, as well as a one-off adjustment in our UK operation. Europe's EBITDA increased by 30%, marking the second consecutive quarter of growth, and with all countries in Europe showing year-over-year cement volume growth. We continue to see Eastern Europe benefiting from EU-funded infrastructure spending, while Western Europe shows signs of recovery against an easier comparison base. Prices for our three core products for the full year more than offset decelerating cost inflation, particularly in energy. On climate action, with a 5% reduction in CO2 emissions in 2024, CEMEX Europe continues delivering record levels of decarbonization. Our region is very close to reaching both the European Cement Association's and CEMEX's consolidated 2030 CO2 emissions targets. Finally, in the Middle East and Africa, EBITDA improved due to better pricing dynamics in Egypt and increased construction activity in Israel.
Speaker Change: We estimate these events were responsible for an EBITDA impact of approximately $38 million.
Adjusting for these weather events EBITDA would have increased 3% for the whole year.
Speaker Change: The most significant event occurred in October with Hurricane Mountain in Florida, our largest market with an estimated impact of $17 million in fourth quarter.
Speaker Change: Largely due to the hurricane cement and ready mix volumes declined 3% in fourth quarter, while aggregates declined 7%.
Speaker Change: On a sequential basis, while cement and ready mix prices remained stable in fourth quarter aggregate prices increased by 2%.
Speaker Change: Importantly, even with lower volumes full year EBITDA was stable while margins expanded due to cost optimization efforts lower fuel prices and imports.
Speaker Change: Investment and maintenance over the last years is paying off with higher operational efficiency.
Speaker Change: Yes to substitute more profitable domestic production or imports.
Lucy Rodriguez: For 2025, we expect continued EMEA volume recovery driven by Europe's improved construction activity with a low single-digit increase for cement and ready-mix and stable volumes in aggregates. Our operations in South/Central America and the Caribbean once again delivered positive results in 2024 amidst a challenging demand backdrop with growth in EBITDA led by positive pricing dynamics. Cement and ready-mix prices grew 4% and 11% respectively, offsetting cost pressures and leading to a stable EBITDA margin. The formal sector continues driving demand in the region, with large infrastructure projects such as the Bogota Metro, in which CEMEX has been awarded more than 80% of total volumes, and the fourth bridge over the canal in Panama. Our Urbanization Solutions business is expanding rapidly, posting record EBITDA growth of 36% in 2024 with a margin expansion of 5.3 percentage points.
Speaker Change: The 2025, we expect demand to be driven by infrastructure as transportation projects under the infrastructure investment and jobs Act continue to rollout.
Speaker Change: Spending years for II JA are expected to be 2025, and 2026 and indeed, the new high reached in December construction start data backs up the projections.
Speaker Change: Our mortgage rates have remained at high levels, we believe more cement intensive single family housing starts bottomed out in third quarter 2024.
Speaker Change: While there is substantial upside in housing over the medium term, we expect presidential to stabilize at current levels in 2025.
Speaker Change: The industrial sector should continue to benefit from large investments in our states as manufacturing projects roll out.
Speaker Change: In addition, we expect significant demand from the construction of AI empowered data centers in our key states, which have been the primary recipient of such investment to date.
Speaker Change: We see further upside going forward from Microsofts 40 billion dollar spending program in the U S. In 2025 as well as the $500 billion Stargate program recently announced by the Trump administration.
Lucy Rodriguez: For 2025, we expect a mid-single digit and low-double digit increase in cement and ready-mix volumes respectively as formal construction continues growing on the back of infrastructure projects. Now I will pass the call to Maher to review our financial developments.
Speaker Change: In 2025, we expect volumes pricing and continued optimization efforts to drive results over the medium term. We continue to believe the U S offers the best risk weighted returns.
Maher Al-Haffar: Thank you, Lucy, and good day to everyone. As Fernando mentioned earlier, we are very pleased in delivering strong results on the back of a phenomenal 2023, regaining investment-grade rating and advancing on our decarbonization agenda in line with our 2030 goals. Despite volume headwinds, our full year 2024 EBITDA margin showed remarkable resilience and was flat to last year at 19%. This performance was supported by our pricing strategy, which outpaced inflation in our business, as well as cost containment and business optimization efforts. 2024 free cash flow after maintenance CapEx, adjusted for the payment of the Spanish tax fine, was slightly higher than the prior year, driven by a $215 million divestment in working capital. This improvement is the result of targeted management actions to increase efficiency of our assets across the organization.
Speaker Change: Our investment focus remains on the U S, where we intend to expand our aggregates business, which already accounts for 35% of U S. EBITDA and further develop our urbanization solutions portfolio.
Speaker Change: We are pleased with our results in EMEA, where we are seeing continued improvement in our European operations in fourth quarter EBITDA grew by an impressive 43% while margin expanded by three six percentage points.
Speaker Change: EBITDA growth and margin improvement.
Speaker Change: Given by volumes operational leverage as well as a one off adjustment in our UK operations.
Speaker Change: Europe's EBITDA increased by 30%, marking the second consecutive quarter of growth.
Speaker Change: All countries in Europe, showing year over year cement volume growth.
Maher Al-Haffar: On the cost side, fuel costs on a per ton of cement basis declined by 23%, driven by lower fuel prices, the increased use of lower cost and lower carbon fuels, and our continued reduction in clinker factor. For 2025, we have closed hedges for almost 70% of our annual spend related to electricity, diesel, freight, petcoke, and natural gas. Net income for 2024 was $939 million, driven primarily by a lower effective tax rate and the gain from the sale of operations in Guatemala and our minority stake in the Neoris. Given the volatility in the Mexican peso, I would like to highlight our ongoing Mexican peso hedging strategy, fully covering our operating cash flow from our operations. That effectively lowers the volatility of the exchange rate at which we convert pesos into dollars for tenors of up to two years.
Speaker Change: We continue to see eastern Europe, and a fitting from EU funded infrastructure spending, but western Europe showed signs of recovery against an easier comparison base.
Speaker Change: Prices for our three core products for the full year more than offset decelerating cost inflation, particularly in energy.
Speaker Change: On climate action with a 5% reduction in Cotwo emissions in 2020 for some ex Europe continues delivering record levels of de carbonization.
Speaker Change: Our region is very close to reaching both the European cement Association's <unk> consolidated 2030 C O two emissions targets.
Speaker Change: Finally in the Middle East and Africa, EBITDA improved due to better pricing dynamics in Egypt and increased construction activity in Israel.
Speaker Change: For 2025, we expect continued EMEA volume recovery driven by Europe's improved construction activity with a low single digit increase for cement and ready mix and stable volumes in aggregates.
Maher Al-Haffar: The benefit of this strategy in our consolidated net debt reached $215 million in 2024, including conversion gains on Peso-denominated debt. Our leverage ratio stood at 1.81 times in December 2024, due primarily to divestments, FX hedging strategies, and free cash flow. We are pleased to announce the launch of our Project Cutting Edge, a project to capture recurring savings by changing the way we execute key business processes and accelerating efficiencies in our operations. After several years of post-pandemic business normalization and portfolio rebalancing, this project was developed during last year and responds to recent years of high inflation, supply chain disruptions, evolving market dynamics, and greater availability and scalability of emerging technologies. As Fernando mentioned, we expect this program to provide recurrent yearly EBITDA savings of $350 million by 2027. In 2025, we expect EBITDA savings of approximately $150 million, with some additional benefits in working capital.
Speaker Change: Our operations in South Central America, and the Caribbean. Once again delivered positive results in 2024 amidst a challenging demand backdrop with growth in EBITDA led by positive pricing dynamics.
Speaker Change: And ready mix prices grew 4% and 11% respectively.
Speaker Change: Offsetting cost pressures and leading to a stable EBITDA margin.
Speaker Change: The formal sector continues driving demand in the region with large infrastructure projects such as the Bogota Metro in which <unk> has been awarded more than 80% of total volumes in the fourth bridge over the canal in Panama.
Speaker Change: Our urbanization solutions business is expanding rapidly.
Speaker Change: Hosting record EBITDA growth of 36% in 2024.
Speaker Change: With margin expansion of five three percentage points.
Maher Al-Haffar: Project Cutting Edge targets several key elements of how we do business, including supply chain, logistics, procurement, operations, and others. We are redesigning, simplifying, and automating many of our current processes and workflows, leveraging artificial intelligence and data analytics. Our supply chain management will be enhanced end to end, leading to an improved client and supplier interface and experience. In operations, we will accelerate our progress in optimizing cement and ready-mix networks, enhance fuel mix, continue improving cement efficiency in the US, along with other SG&A initiatives. In addition, Project Cutting Edge contemplates important savings at the free cash flow level for 2025 and onwards. We will update you on the program's progress as we move along in its implementation. Now back to you, Fernando.
Speaker Change: For 2025, we expect a mid single digit and low double digit increase in cement ready mix volumes, respectively. As formal construction continues growing on the back of infrastructure projects.
Speaker Change: Now I will pass the call to <unk> to review our financials.
Speaker Change: Thank you Lucy and good day to everyone. As Fernando mentioned earlier, we are very pleased and delivering strong results on the back of a phenomenal 2023 regaining investment grade rating and advancing on our de carbonization agenda in line with our 2030 goals.
Speaker Change: Despite volume headwinds our full year 2020 for EBITDA margin showed remarkable resilience and was flat to last year at 19%.
Speaker Change: This performance was supported by our pricing strategy, which outpaced inflation in our business as well as cost containment and business optimization efforts.
Fernando Gonzalez: We are optimistic about growth in the US, EMEA, and South Central America and the Caribbean in 2025. As I explained earlier, visibility for Mexico is currently low, but we believe we face a challenging landscape, both in terms of demand in the first year of a new administration and peso FX rates, particularly in H1 2025. After a very volatile year for the peso, assuming December 2024 FX rates, this will imply a depreciation of close to 20% in H1 2025. After incorporating $150 million in EBITDA savings from Project Cutting Edge, as well as the peso headwind, we are guiding to flattish EBITDA performance for 2025. It is important to know that our guidance assumes a low single-digit EBITDA growth excluding FX impact. We anticipate volume growth in all regions except Mexico. Full volume guidance can be found in the appendix.
Speaker Change: 2020 for free cash flow after maintenance Capex adjusted for the payment of the Spanish tax line was slightly higher than the prior year driven by a $215 million divestment in working capital.
Speaker Change: This improvement is the result of targeted management actions to increase efficiency of our assets across the organization.
Speaker Change: On the cost side fuel costs on a per ton of cement basis declined by 23% driven by lower fuel prices the increased use of lower cost and lower carbon fuels and our continued reduction in clinker factor.
Speaker Change: For 2025, we have closed hedges for almost 70% of our annual spend related to electricity diesel freight pet coke and natural gas.
Speaker Change: Net income for 2024 was $939 million driven primarily by a lower effective tax rate and the gain from the sale of operations in Guatemala, and our minority stake in yours.
Speaker Change: Given the volatility in the Mexican peso I would like to highlight our ongoing Mexican peso hedging strategy fully covering our operating cash flow from our operations that effectively lowers the volatility of the exchange rate at which we convert vessels and $2 four tenders of up to two years.
Fernando Gonzalez: We expect that pricing will continue to more than compensate for decelerating input cost inflation, particularly in energy. On a consolidated basis, we expect continued tailwinds with total energy cost per ton of cement produced declining by a high single-digit rate in 2025. With regards to free cash flow items, Project Cutting Edge incorporates certain efficiencies, which we are reflecting in our 2025 guidance, as well as additional free cash flow savings for future years. For 2025, we are guiding to a reduction in maintenance CapEx, taxes, as well as cash interest expense versus last year. In total, we expect approximately $500 million in savings in free cash flow after maintenance CapEx, representing about 65% growth versus 2024. I'm even more pleased to tell you that now that we have regained our financial footing, we have more opportunities in future years to build on this success.
Speaker Change: The benefit of this strategy and our consolidated net debt reached $215 million in 2024, including conversion gains on peso denominated debt.
Speaker Change: Our leverage ratio stood at 181 times in December 2024, due primarily to divestments, FX hedging strategies and free cash flow.
Speaker Change: We are pleased to announce the launch of our project cutting edge a project to capture recurring savings by changing the way, we execute key business processes and accelerating efficiencies in our operations.
Speaker Change: After several years of post pandemic business normalization and portfolio rebalancing. This project was developed during last year in response to recent years of high inflation supply chain disruptions evolving market dynamics, and greater availability and scalability of emerging technologies.
Speaker Change: As Fernando mentioned, we expect this program to provide recurrent yearly EBITDA savings of $350 million by 2027.
Speaker Change: In 2025, we expect EBITDA savings of approximately $150 million with some additional benefits in working capital.
Fernando Gonzalez: With more cash from operations available as well as proceeds from $2.2 billion in divestments, we have resources to pursue more aggressively our capital allocation priorities. First, on growth. We still have a $1.6 billion of accretive projects in execution stage in our growth pipeline. 2025 is the year where we expect to have the largest spend. We are guiding to $600 million in strategic CapEx this year. You should expect, however, that over the next few years, spending on growth CapEx will cycle down while our small to mid-size acquisition strategy ramps up. Asset sale proceeds are intended to be recycled for acquisitions, focusing primarily on the US market. This will take time to identify when and execute transactions under our disciplined M&A framework. In the interim, this cash will be used to reduce debt.
Speaker Change: Project cutting edge targets several key elements of how we do business, including supply chain logistics procurement operations and others.
Speaker Change: We are redesigning simplifying and automating many of our current processes and workflows, leveraging artificial intelligence and data analytics.
Speaker Change: Our supply chain management will be enhanced end to end, leading to an improved client and supply of interface and experience.
Speaker Change: In operations, we will accelerate our progress in optimizing cement and ready mixed networks enhanced fuel mix continue improving cement efficiency in the U S along with other SG&A initiatives.
Speaker Change: In addition project cutting edge contemplates important savings at the free cash flow level for 2025 and onwards.
Fernando: We will update you on the programs progress as we move along and its implementation and now back to you Fernando.
Fernando: We are optimistic about the growth in the U S EMEA and South Central America, and the Caribbean in 2025.
Fernando Gonzalez: Additionally, we intend to direct a portion of our operational free cash flow to reduce debt and lower our financial burden to better reflect our improved credit standing. We remain committed to reach our leverage target of 1.5 times in the near term. Finally, cash from operations allow us to increase shareholder return, both in terms of delivering on our progressive dividend commitment, as well as eventually taking opportunistic use of our share buyback program. Now back to you, Lucy.
Fernando: As I explained earlier.
Fernando: Relative for Mexico is currently low, but we believe we face a challenging landscape. Both in terms of demand in the first year of a new administration and peso FX rates, but.
Fernando: Early in the first half of 2025.
Fernando: After a very volatile year for the peso assuming December 'twenty 'twenty four FX rates.
Fernando: This will imply a depreciation of close to 20% in the first half of 2025.
Fernando: After incorporating $150 million in EBITDA savings from project cutting edge as well as the peso headwind, we are guiding to flattish EBITDA performance for 2025.
Lucy Rodriguez: Before we go into our Q&A session, I would like to remind you that any forward-looking statements we make today are based on our current knowledge of the markets in which we operate and could change in the future due to a variety of factors beyond our control. In addition, unless the context indicates otherwise, all references to pricing initiatives, price increases or decreases refer to prices for our products. Now, we will be happy to take your questions. In the interest of time and to give other people an opportunity to participate, we kindly ask that you limit yourself to only one question. If you wish to ask a question, please press star followed by one on your touchtone telephone. If your question has already been answered or you wish to withdraw your question, press star followed by two. Press star one to begin.
Fernando: It is important to know that our guidance assumes a low single digit EBITDA growth, excluding FX impact.
Fernando: We anticipate volume growth in all regions, except Mexico.
Fernando: Coal volume guidance can be found in the appendix.
Fernando: We expect that pricing will continue to more than compensate for decelerating input cost inflation, particularly in energy.
Fernando: On a consolidated basis.
Fernando: <unk> continued tailwind with total energy cost per ton of cement produced declining by a high single digit rate in 2025.
Fernando: With regards to free cash flow items.
Fernando: Rajiv cutting edge incorporates certain efficiencies, which were reflecting in our 2025 guidance.
Lucy Rodriguez: The first question comes from Benjamin Theurer from Barclays. Ben?
Fernando: As well as additional free cash flow savings for the future years.
Benjamin Theurer: Yeah, good morning, Fernando, Lucy, Maher. First of all, congrats on the strong finish still. The question I wanted to ask really comes back to what Fernando started to elaborate on as it relates to capital allocation. Maybe you help us a little bit in terms of prioritization. Clearly, you have the layout of the $600 million on the strategic CapEx, but there is obviously a lot left over that could go either into what you said, the dividends or the potential share buybacks, but also M&A at some point. As we think about the onset and the opportunities in 2025, where do you think the largest opportunities lie within your capital allocation framework that you've just introduced? How should we think about the dividend itself from What does progressive growth mean? That would be the key question I have.
Fernando: For 2025, we are guiding to a reduction in maintenance capex taxes, as well as cash interest expense versus last year.
Fernando: In total we expect approximately $500 million in savings and free cash flow after maintenance capex.
Fernando: Representing about 65% growth versus 2024.
Fernando: And I'm, even more pleased to tell you that now that we have regained our financial footing, we have more opportunities in future years to build on this success.
Fernando: With more cash from operations available as well as proceeds from $2 2 billion in divestments.
Fernando: We have resources to pursue more aggressively our capital allocation priorities.
Fernando: First on growth.
Fernando: We still have a $1 6 billion of accretive projects in execution stage in our growth pipeline.
Benjamin Theurer: If you could give me just a one-time answer on what the one-off was in your UK operations. Thank you.
Fernando: 2025 is the year, where we expect to have the largest spend we're guiding to $600 million instead that your capex this year.
Maher Al-Haffar: Yeah, Hi, Benjamin Theurer. Thank you very much for your comments. Maybe I'll take the first stab of answering the question, and then Fernando Gonzalez can help me out if I miss out on anything here. I think the first thing to think about in terms of capital allocation going forward is the emphasis that we are putting on further free cash flow generation. I think you heard Fernando Gonzalez's comments about how we're expecting to be improving our free cash flow generation for this year by close to $500 million, which is very important. That translates to a huge change in conversion of EBITDA to free cash flow for the year. That should go towards capital allocation as well. Don't want to guide beyond 2025, but certainly, psychologically, strategically, that's the approach.
Fernando: You should expect however that over the next few years spending on growth Capex with cycled down while our small to mid size acquisitions throughout the year ramps up.
Fernando: Asset sale proceeds are intended to be recycled for acquisitions.
Fernando: Focusing primarily on the U S market.
Fernando: This will take time to identify win and execute transactions.
Fernando: Our disciplined M&A framework.
Fernando: In the interim this cash will be used to reduce debt.
Fernando: Additionally, we intend to direct a portion of our operational free cash flow to reduce debt and lowered our financial burden to better reflect our improved credit standing.
Fernando: We remain committed to reach our leverage target of one five times in the near term.
Maher Al-Haffar: The other thing that is also important to mention is that this year is probably going to be the peak year in terms of strategic CapEx spending. Going forward, we are probably going to be much more biased towards focusing on small and medium M&A activity. Which should be as accretive as the investments that we have made and should be contributing to the bottom line kind of immediately as we make that. Those two points are very important to keep in mind. Today, as we've discussed, we believe the growth investments are the most accretive use of our cash. The majority of the investments are generating in excess of 30% IRRs. They have payback periods of 3 to 4 years.
Fernando: Finally.
Fernando: Cash from operations allow us to increase shareholder return both in terms of delivering on our progressive dividend commitment as well as eventually taking opportunistic use of our share buyback program.
Fernando: And now back to <unk>.
Fernando: Before we go into our Q&A session I would like to remind you that any forward looking statements. We make today are based on our current knowledge of the markets in which we operate and could change in the future due to a variety of factors beyond our control.
Fernando: In addition, unless the context indicates otherwise all references to pricing initiatives price increases or decreases refer to prices for our products.
Fernando: And now we will be happy to take your questions in the interest of time and again other people an opportunity to participate we kindly ask that you limit yourself to only one question.
Maher Al-Haffar: As you know, we've already completed close to a billion and a half in the last few years. That is contributing, for this year at least, close to $350 million of EBITDA. This is being done at a very attractive effective multiple of close to four times which compares favorably to where we're currently trading at in the market. Now, the investment pipeline is of course much more than that. We're expecting almost an equal amount to be executed by 2028, which should take us to a close contribution of about $700 million by 2028. Now, in terms of priorities, clearly because of these return dynamics, we will continue to invest in growth and M&A.
Fernando: If you wish to ask a question. Please press star followed by one on your Touchtone telephone. If your question has already been answered or you wish to withdraw your question Press Star followed by two.
Fernando: Thats star one to begin.
Fernando: Yeah.
Ben Theurer: And our first question comes from Ben Theurer from Barclays.
Ben Theurer: Hey, good morning, Fernando Lucy Maharam first of all congrats on the strong finish still.
Ben Theurer: So the question I wanted to ask really comes back to what Fernando started to elaborate on as it relates to capital allocation and maybe you help us a little bit in terms of prioritization clearly you have to lay out of the $600 million of the strategic Capex, but.
Maher Al-Haffar: Having said that, we do believe that our interest expense, when we take a look at our peers and our leverage compared to our peers, we think that we have a lot of upside there, both in terms of reducing leverage, reducing interest expense. If we take a look at our interest expense as a percentage of EBITDA, we're almost double our global peers. That's something that we would like to bring down. Leverage, we're probably a turn away from global peers, so that's something that we will be working on. Of course, as we achieve all of that, we will definitely take a look at returning capital to shareholders, either in the form of dividends as we have done and will continue to do, or eventually, exercising share buybacks under our program. I don't know, Fernando, you want to add anything to that?
Ben Theurer: There is obviously a lot leftover that could go either into what you said the dividends or potential share buybacks, but also M&A at some point. So as we think about the onset and the opportunities in 2025, where do you think the largest opportunities lie within your capital allocation framework that you've just interim.
Ben Theurer: And how should we think about the dividend itself from a.
Ben Theurer: What does the progressive growth means so that that would be like the key question I have and then if you could give me just a one time answer on what the one off was in your U K operations. Thank you.
Speaker Change: Yes, maybe I'll take the hi, Ben Thank you very much for your comments and.
Speaker Change: Maybe I'll take the first stab of answering the question and then <unk>.
Fernando Gonzalez: Well, thanks, Ben, for your comments. Maybe just commenting that you can most probably perceive that in the last few years, we have been adjusting our, let's say, our strategies and the use of capital. If you remember, we constantly communicate what we are planning to do. We started in 2020 with the idea of using a portion of our free cash flow to make some growth investments, bolt-on businesses that are related with our own portfolio, with high synergies, short paybacks and the likes. Of course, we didn't have the muscle to do everything in the first year, but we started building it, and now we have a pipeline of very attractive projects of that type of investments. At the same time, we have been improving our balance sheet.
Speaker Change: Endo can.
Speaker Change: Help me out if I Miss out on anything here.
Speaker Change: The first thing to think about in terms of capital allocation going forward is the emphasis that we're putting on.
Speaker Change: Further free cash flow generation and I think you heard fernando's.
Speaker Change: Comments about how we're expecting to be improving our free cash flow generation for this year.
Speaker Change: By close to $500 million, which is very important that that translates to a huge change in and conversion of EBITDA to free cash flow for the year and that that should go towards capital allocation as well and don't want to guide beyond 'twenty five, but certainly you know psychologically.
Speaker Change: Psychologically strategically that's the approach and the other thing that is also important to mention is that this year is probably going to be the highest.
Speaker Change: It's going to be probably the peak year in terms of strategic Capex spending and.
Fernando Gonzalez: Last year, in our CEMEX Day, we did communicate that we wanted to move from that focus to a more calibrated one in terms of we want to continue deleveraging, and we mentioned another half a turn in a couple of years, but we wanted to start a progressive dividend and at the same time continue with these investments. In these investments, as Maher said, and I think it's just natural, we're going to be moving from mostly growth CapEx and we will continue doing that, but we will add some small to mid-size acquisitions. The growth portfolio is going to be evolving into that equation, more M&A and a figure that is going to be lower on the type of investments we have been doing in the last 4 years. That's the only clarification I have.
Speaker Change: Going forward.
Speaker Change: We are probably going to be much more biased towards focusing on small and medium.
Speaker Change: M&A activity, which should be as accretive as the investments that we have made and should be.
Speaker Change: Contributing to the bottom line kind of immediately as we make that so so those two points are very important to keep in mind.
Speaker Change: Today, you know as we've discussed we believe the growth investments are the most accretive use of our of our cash.
Speaker Change: The majority of them.
Speaker Change: Of the investments are generating in excess of 30% IRR is they have payback periods of three to four years.
And as you know we've already completed.
Speaker Change: Two 1 billion and a half.
Speaker Change: In the last few years and that is contributing.
Speaker Change: For this year at least close to $350 million of EBITDA and this is being done at a very attractive effective multiple of close to four times, which compares favorably to where we're currently trading at in the market now the investment pipeline is of course much more than that we're expecting almost an equal amount.
Lucy Rodriguez: Ben, maybe I can take your question on EMEA. We had great results in EMEA in Q4. We're seeing that European recovery that we were expecting. Both EMEA EBITDA as well as European EBITDA was up in the 30% area. A portion of that we did mention was because of a one-off legal case that was resolved during the quarter, a commercial case, and that contributed about $10 million of the $50 million incremental EBITDA we saw both at the European and EMEA level. Just to give you some sense of magnitude of that. Hopefully we've answered your questions.
Speaker Change: To be executed by <unk>, 28, which should take us to a close contribution of about $700 million.
Speaker Change: By 2028 now in terms of in terms of priorities I mean, clearly because of these return dynamics.
Speaker Change: We will continue to invest in growth and M&A, having said that we do believe that our interest expense when we take a look at our peers and our leverage compared to our peers. We think that we have a lot of upside there.
Speaker Change: In terms of reducing leverage reducing interest expense I mean were almost double that if we take a look at our interest expense as a percentage of EBITDA were almost double our global peers and so that's something that we would like to bring down leverage we're probably a turn away from from global beer. So that's something that we will be.
Benjamin Theurer: Very clear. Thank you very much.
Lucy Rodriguez: Okay. The next question comes from Carlos Peyrelongue from Bank of America. Carlos.
Carlos Peyrelongue: Thank you, Lucy. Thank you for the call, Fernando and Maher. My question is set to pricing. You mentioned some remarks in the call. Just wanted to see if you could provide some more color on your pricing strategy, including the US and Europe. In the case of Mexico, you mentioned an increase in the double digits. I don't know if you could comment how the traction is doing in Mexico would be great as well. Thank you.
Speaker Change: Working on.
Speaker Change: And of course.
Speaker Change: As we achieve all of that.
Speaker Change: We will definitely take a look at returning capital to shareholders either in the form of dividends as we have done and will continue to do or eventually exercising share buybacks under under our program I don't know Fernando you want to add anything to that.
Speaker Change: Maybe thanks for the info.
Speaker Change: For your permits maybe maybe just commenting the you can you can.
Maher Al-Haffar: Yeah, Carlos. Hi, good morning. Thank you very much for your question. I think our pricing strategy going forward has not changed, really, from what we have followed in the last 3 years, frankly. That is our pricing strategy has always been to be calibrated to what's happening on our input cost inflation, which is very important. Of course, when input cost inflation was at hyper levels, as we saw, and you saw that over the last 3 years, our cumulative inflation total cost was close to 40%. On the other hand, we were able to implement very successful pricing strategy in virtually all of our markets, exceeding that performance. Of course, in the last few months, we have definitely seen a slowdown in our input cost inflation in all of our core businesses. Accordingly, I think the whole market has calibrated pricing increases accordingly.
Speaker Change: Most broadly perceive that.
Speaker Change: In the in the last few years, we have been adjusting our let's say our spread the use of the use of capital.
Speaker Change: Do you remember.
Speaker Change: We constantly communicate what we're planning to do and we started in 2013 with the idea of using a portion of our free cash flow to make some growth investments small pond.
Speaker Change: Businesses that are related with our own portfolio with high synergies shorter paybacks on the legs and of course, we didn't have the multiple to the web of science in the first year, where we started building it and now we have a pipeline of very attractive projects.
Speaker Change: That type of investments, but at the same time, we have been improving our balance sheet.
Speaker Change: And this year.
Speaker Change: I mean last year in our sandbox. They we did communicate that we wanted to to move from that focus though are more liberated the one in terms of.
Speaker Change: We want to continue deleveraging and we mentioned another half a turn and a couple of years, but we wanted to start a progressive.
Maher Al-Haffar: We do anticipate to continue our pricing strategy when we compare price increases compared to cost increases to be above that. We will always target a positive gap between price and cost. We believe that the announcements that have been made in both the US and Mexico are targeted towards that. Of course, we're very optimistic that we will be able to get those positive increases. I don't know if you're aware, but we had pricing increases at a national level, both in Mexico and in the US markets. In the US, it's a mid-single-digit increase. In Mexico, it's a double-digit increase across all sectors, both in bulk and in bags.
Speaker Change: The dividend although at the same time continue with these investments but in this is mez investments as Margaret said.
Speaker Change: Zinc is just natural we're gonna be moving from <unk>.
Speaker Change: Mostly cap.
Speaker Change: Growth Capex too.
Speaker Change: And we will continue doing that but we will add some.
Speaker Change: <unk> to mid size acquisitions.
Speaker Change: So it's the growth of our portfolio is going to be evolving into that equation more M&A on a figure that is going to be lower on the type of investments we have been doing.
Speaker Change: In the last.
Speaker Change: Four years.
Speaker Change: So thats the only clarification ahead.
Speaker Change: And then maybe I can take your question on EMEA.
Maher Al-Haffar: We're cautiously optimistic or constructive about those pricing increases, because I don't think anybody in any of our businesses has a sustainable lower cost curve, frankly, that could behave in a different way than we are. Now, one thing that you have to consider, of course, is that these increases and announcements are very local market specific, so when you take a look at what others are doing, there's definitely a distinct difference between where we are and the specific market dynamics, supply-demand dynamics, other potential movers in each one of those markets, right? It's very important to take that into consideration. Fernando, I don't know if you want to
Speaker Change: We had great results in EMEA in the fourth quarter, we're seeing that European recovery that people were expecting.
Both EMEA EBITDA as well as European EBITDA was up in the 30% area now a portion of that we did mention.
Speaker Change: Was because of a one off legal case that was resolved during the quarter, our commercial case and that contributed about $10 million of the $50 million incremental EBITDA. We saw both at the European and EMEA level, just to give you some sense of magnitude.
Speaker Change: So hopefully we've answered your questions.
Speaker Change: Very clear thank you very much.
Fernando Gonzalez: Yes, I want to complement Maher in terms of, again, clarifying what has been the dynamics or what has been the trend in prices and inflation in the last 3 years. I'm intentionally using 2022, 2023, and 2024, because if you remember, we started seeing very high levels of inflation in 2022, at least in our cost inflation at the levels of between 20% and 22%. In 2022, we started moving our pricing strategies on a very simple basis. Our pricing should at least assure that we can maintain margins. Prices of each and every product should be able to achieve that. In 2022, we didn't do it because inflation came very fast and you cannot change prices just in a jiffy. It takes some time. In 2022, our pricing strategy didn't recover inflation. In 2023, the opposite happened.
Speaker Change: Okay and the next question comes from Carlos <unk> from Bank of America Carlos.
Carlos: Thank you Lucy and thank you for the call and then I hurt my question.
Speaker Change: The pricing you mentioned some remarks.
Speaker Change: Nicole just wanted to see if you could provide some more color on your pricing strategy.
Speaker Change: Including the U S and in Europe, and in the case of Mexico excellent increasing double digits.
Speaker Change: Don't know if you could comment how the traction is going in Mexico would be great as well. Thank you.
Speaker Change: Yes, Carlos Hi, Good morning, Thank you very much for your for your question.
Speaker Change: I mean I think.
Speaker Change: Our pricing strategy going forward has not changed really from what we have followed in the last three years frankly and that is all.
Speaker Change: Pricing strategy has always been to.
Speaker Change: Be calibrated to what's happening on our input cost inflation, which is which is very important.
And of course, when input cost inflation was at hyper levels. As we saw I mean, you saw that over the last three years, our cumulative inflation total cost was close to 40%.
Speaker Change: On the other hand, we were able to implement very successful pricing strategy in virtually all of our markets exceeding.
Fernando Gonzalez: Our pricing strategy, because of the tailwind and all the efforts that were applied in 2022, were between 6 and 8 percentage points higher than inflation. That was 2023. What happened in 2024 is that the gap between inflation and prices almost disappeared. Good enough to continue maintaining and slightly increasing our margins. Now, even though price increases now are much lower than the 20-something% we did in 2022, the basis of the strategy is still the same. We need to assure that we maintain or increase, if market dynamics allow, our margins. You can imagine, we have detailed all the information needed for our salesforce and managers to assure that every time we think on a pricing strategy, this idea of maintaining or increasing margins is assured.
Speaker Change: That performance now of course in the last few months, we have definitely seen a slowdown.
In our input cost inflation in all of our core businesses.
Speaker Change: And accordingly, I think that the whole market has calibrated pricing increases accordingly, now we do anticipate to continue our pricing strategy. When we compare price increases compared to cost increases to be above that so we will always target a positive gap.
Speaker Change: <unk> between price and cost and we believe that the the announcements that have been made in both the U S and Mexico are targeted.
Speaker Change: Towards that.
Speaker Change: And and of course, we were very optimistic that we will be able to to get those <unk>.
Speaker Change: Positive increases I don't know if you're aware, but we've we had pricing increases at a national level, both in Mexico and in the U S markets.
Speaker Change: And in the U S. It's mid.
Fernando Gonzalez: I wish we could increase prices 20% with an inflation of, I don't know, 3%. No, that is not necessarily doable. You can count that we continue insisting that our prices at least assure maintaining our margins.
Speaker Change: Mid single digit increase.
Speaker Change: In Mexico.
Speaker Change: It's a double digit increase across.
Speaker Change: Across all sectors, both in bulk and bags and we you know we're we're cautiously optimistic we're constructive about those pricing increases because I don't think anybody in any of our businesses has a a sustainable lower cost curve frankly that could behave in a different in a different way than we are.
Lucy Rodriguez: Thank you, Fernando.
Carlos Peyrelongue: Thank you, Fernando. Thank you, Maher.
Maher Al-Haffar: Thank you, Carlos.
Speaker Change: Now one thing that you have to consider of course is that.
Lucy Rodriguez: Sorry. The next question comes from Alejandra Obregon from Morgan Stanley. Ale?
Speaker Change: These these increases and announcements are very local market specific and they made so when you take a look at what others are doing there's definitely a distinct difference between where we are in a specific market dynamics supply demand dynamics other.
Alejandra Obregon: Hi, good morning, CEMEX team. Thank you for taking my question. It's actually a follow-up on all the prior questions on capital allocation. I just want to make sure that I understand that this $600 million of strategic CapEx, if we apply these three, four times multiple, it's around $100 million, $150 million of incremental EBITDA. Is this coming on top of your EBITDA guidance? If you can talk of where should we expect these incremental EBITDA be coming from? Just on the buybacks and dividends comment that you mentioned, just to make sure this is happening this year, how are you thinking of dividends and buybacks for 2025? Thank you so much.
Speaker Change: Uh huh.
Speaker Change: In each one of those markets right. So it's very important to take that into consideration Fernando I don't know if you want to.
Fernando: Yes, I want to complement.
Speaker Change: Yeah.
Speaker Change: Margaret.
Speaker Change: Terms of.
Speaker Change: Then.
Speaker Change: Clarifying what has been the dynamics or what has been the trend in prices and inflation in the last three years.
Speaker Change: Intentionally using plenty to jump in before because if you remember we started seeing very high levels of inflation.
Maher Al-Haffar: Thank you, Alejandra. Yeah, the guidance that we've given essentially takes into consideration all of the capital allocation decisions that we have discussed. There's no additional things to add to that. In terms of what is the additional amount going to, obviously, we are increasing strategic CapEx from last year by a bit. Last year, we think we underperformed our guidance. This year, we're definitely looking at a slight bit of an increase. As you remember, last year was close to about $500. This year, we're guiding $600. The investments are really targeted into 3 areas in that order of importance. 1 is expanding cement capacity and bolt-ons. Climate investments, which we think are doing 2 things. Number 1 is making sure that we execute on our decarbonization roadmaps, as well as improving margins in some of those businesses.
Speaker Change: In 'twenty two.
Speaker Change: At least in an hour.
Speaker Change: Awesome.
Speaker Change: Inflation at the levels of between 2022%.
Speaker Change: And in 'twenty, two we started.
Speaker Change: Yeah.
Speaker Change: Moving our pricing strategies on a very simple basis, our pricing should at least.
Speaker Change: I assure that we can maintain margins so prices of each and every product.
Speaker Change: Should should be able to achieve that in 2022 we didn't do it because inflation came came.
Very fast and you cannot change prices.
Speaker Change: Just.
Speaker Change: In the JV. So it takes some time for in 'twenty, two our pricing that the deepened recover inflation, but then in 2023.
Speaker Change: The opposite happened our pricing strategy because of the data when that all the airports that would apply in 'twenty two.
Speaker Change: There like between six and eight percentage points higher than inflation.
Speaker Change: That was 2023, what happened in 'twenty 'twenty four is that the gap between inflation and prices almost disappeared.
Maher Al-Haffar: The third bucket is aggregates replenishment. In terms of geographic focus, we're going to continue to be biased towards the US market, followed by Mexico and the US. There's no additional contribution that has not been included in the guidance that we've given so far in the comments that we made before we started the Q&A. In terms of dividends and buybacks, all I can tell you is to, again, repeat what Fernando said, is that we do aspire, we have indicated that our dividends should be progressive. Of course, dividends will have to be proposed and approved at our AGM, which is going to happen next month. I can't frankly comment on that. In terms of share buybacks, definitely that is an area that we're always looking at.
Speaker Change: But good enough to continue maintaining and slightly increasing our margins now.
Speaker Change: Even though oil price increases now are much lower than the 20 something percent we didn't.
Speaker Change: And try to do the basis of the strategy is still the same.
Speaker Change: We need to assure that we maintain or increase if you can.
Speaker Change: Market dynamics allow.
Speaker Change: Allow it.
Speaker Change: I would I wouldn't model. So you can imagine we have we have.
Speaker Change: They'll all the information needed for our sales force and managers to assure that every time, we think on a pricing strategy these idea of maintaining or increasing.
Speaker Change: Margins is he's not sure so.
Speaker Change: I wish we could increase prices, 20% with an inflation of.
Speaker Change: I dunno to present, but no.
Speaker Change: Not necessarily.
Speaker Change: Doable, but you can count that will be continue insistent that our prices at least assure maintaining our margins.
Maher Al-Haffar: It's not something that we take off the table or put on the table from a strategic basis because of the valuation that we have for the company today. We're always looking at that. We have the ability to do up to $500 million, as you know. We're always calibrating, and to the extent that it makes sense to do it, we will do it. 2025 is no different than prior years, frankly.
Speaker Change: Thank you Fernando Thank you Fernando thank him or her.
Speaker Change: Thank you.
Speaker Change: Sorry.
Speaker Change: The next question comes from Alejandro <unk> from Morgan Stanley Ali.
Alejandro: Hi, good morning, some extreme thank you for taking my question.
Alejandro: It's actually a follow up on all of the prior questions on capital allocation. So I just want to make sure that I understand that this 600 million of strategic Capex.
Lucy Rodriguez: Maher, maybe if I could just add a little bit on the cadence of the contribution of our growth investments, of our growth portfolio, because I think that was part of Ali's question. Right now, our growth portfolio contributed about $350 million so far. We expect that by 2028, that number will be $700 million, so it will literally double by that point. For this year, included in the guidance that we're giving is an $80 million in incremental EBITDA we expect from our growth investments. Of course, when you look at our growth investment pipeline, it's about $3.1, $3.2 billion in total, and a half of that has already been completed. Hopefully that helps.
Alejandro: If we apply these sort of like three or four times multiple it's around $150 million of incremental EBITDA is this coming on top of your EBITDA guidance and if you can sort of talk of where should we expect these incremental EBITDA coming from and just on the buybacks and dividends come in that you mentioned just to make sure. This is happening this year like how are you.
Alejandro: King of dividends and buybacks worked for for 2025. Thank you so much.
Alejandro: Thank you Alejandro Yeah, I mean look.
Alejandro: The guidance that we've given it essentially takes into consideration all of the capital allocation decisions that we have that we have discussed so there's no. There's no additional things to do to add to that.
Maher Al-Haffar: Great. Thanks, Lucy.
Alejandro: But in terms of what does the additional amount going through I mean, obviously, we are increasing.
Alejandra Obregon: Got you. That was very clear. Thank you, Maher and Lucy.
Lucy Rodriguez: The next question comes from Gordon Lee, from BTG Pactual.
Alejandro: Strategic Capex from last year by a bit last year, we think we underperformed our guidance.
Gordon Lee: Hi, good morning. Thank you very much for the call. It's a bit of a housekeeping question, but linked to free cash flow, and it has to do with the Spanish tax penalty or fine. It seems to me, and I just want to confirm, that it wasn't fully paid in 2024, that it looks like a little bit of that will slip over to 2025. I just wanted to confirm that that was the case, and if so, that that's in your cash taxes guidance for 2025. I guess the second related question is, sort of 15 months later, do you still think that that extra $100 million that you provisioned on the income statement in the Q4 of last year, is that something you may reverse or is that something that you're thinking of leaving there for the moment? Thank you.
Alejandro: This year, we're definitely looking at a slight bit of an increase as.
Alejandro: As you remember last year was close to about 500 this year regarding 600.
Alejandro: The investments are really targeted into three areas and in that order.
Alejandro: Of importance, one is expanding cement capacity and bolt ons.
Alejandro: And then.
Alejandro: Climate investments, which.
Alejandro: We think are doing two things number one is.
Alejandro: Making sure that we execute on our de Carbonization Roadmaps.
Alejandro: As well as improving.
Alejandro: Margins in some of those businesses and then.
Alejandro: The third bucket is aggregates replenishment.
Maher Al-Haffar: Yeah. Thanks a lot, Gordon. Nice to hear from you. I guess just for clarity for all the listeners, cash taxes for the year last year was $870 million. That included about $370+ related to the Spanish tax assessments for a number of tax returns over the years. This year, as you heard from Fernando, the expectation for cash taxes is $450. Now, Gordon, in terms of provisions, last year, we did reverse $387 million of the tax provision that we took on three different tax matters. The biggest one, of course, is the tax returns from 2006 to 2009. Then as you recall, we had two other open tax matters in Spain that went from 2010 to 2018. We also reached an agreement with the tax authorities there. We reversed some of that provision.
Alejandro: In terms of geographic focus I mean, we're going to continue to be biased towards the U S market, followed by Mexico and in the U S and so.
Alejandro: So I think but there is no additional.
Alejandro: You know contribution that has not been included in the guidance that we've given.
Alejandro: So far in the in the comments that we made.
Alejandro: Before we started the Q&A now in terms of dividends and buybacks I mean, all I can tell you is to again repeat what Fernando said is that we do aspire, we have indicated that our dividend should be progressive.
Alejandro: Of course dividends will have to be proposed and and approved that are at our AGM, which is going to happen next month. So I cant frankly comment on that in terms of share buybacks.
Alejandro: Definitely that is an area that we're always looking at I mean, it's not something that we take off the table or put on the table on up from a strategic basis because of the valuation that we have for the company. Today. So we're always looking at that we have the ability to do up to $500 million as you know.
Maher Al-Haffar: The total reversal was a little bit over $380 million. We have $200 million remaining, covering the additional $200 million of the larger tax penalty from 2006 to 2009, which we expect to occur over the next 4 years. As we pay those tax fines, we will reverse the provisions in our income statement. I hope that answers your question.
Alejandro: And we're always calibrating and to the extent that it makes sense to do it we will do it and 25 2025 is no different.
Alejandro: In that than prior years frankly.
Alejandro: Maybe if I could just add a little bit on the cadence of the contribution of our growth investments our growth portfolio, because I think that was part of Ali's question.
Gordon Lee: Just to be clear, the $450 guidance for this year includes whatever portion of that penalty you expect to pay, right? That's included there. You're not bringing that forward separately.
Alejandro: Right now our gross portfolio contributed about $350 million.
Alejandro: So far.
Maher Al-Haffar: Yes, it does. Yeah, it does. Exactly, yeah.
Alejandro: We expect that by 2028 that number will be 700, so literally doubled by that point and for this year included in the guidance that we're giving is an $80 million in incremental EBITDA, we expect from our growth investments and of course, when you look at our gross investment.
Gordon Lee: Perfect. Super. Thank you very much.
Maher Al-Haffar: Thank you.
Lucy Rodriguez: Okay. Thanks, Gordon. The next question comes from Adrian Huerta from JPMorgan. Adrian?
Adrian Huerta: Thank you, Lucy. Hi, Fernando and Maher. Congrats on the results. My questions are regarding the US, first on pricing. Can you give us a little bit more details on what happened during the year regarding pricing across the different markets within the US? The overall price increase that you had was less versus what peers have reported for the full year. I wonder if you were not able to push price increases in coastal markets, et cetera. Can you just provide more details on that? The second one is, can you just explain why the expectation on lower aggregate volumes for this year in the US?
Alejandro: Pipeline, it's about 313 2 billion in total and half of that has already been completed so hopefully that helps.
Alejandro: Great. Thanks, Scott so that that was very clear. Thank you my list here.
Alejandro: Yeah.
Speaker Change: The next question comes from Gordon Lee from BTG Pactual.
Speaker Change: Hi, Good morning, Thank you very much for the call. It's a bit of a housekeeping question, but linked to <unk>.
Speaker Change: Free cash flow and it has to do with the Spanish tax penalty or fine. It seems to me and I just want to confirm that that it wasn't fully paid in 2024 that they will take a little bit of that will slip over into 2025.
Lucy Rodriguez: Great. Thanks, Adrian. Maybe first on pricing. We've reported low single-digit pricing increases for 2024. We were successful with mid-single-digit increases in most of our portfolio, but as you know, pricing is very local in the United States. In about 75% to 80% of our volumes, we were able to get mid-single-digit pricing. Where we had a very difficult time was specifically in Texas, and of course, in Texas, in the first 6 months of the year, right when pricing normally takes place, there was quite a bit of dislocation with volumes down in Texas. Houston in particular is a large import market, and you had a lot of imports literally stuck on ships offshore that had to be sent to where they needed to go fairly quickly when there were openings in weather. I think that that really delayed pricing increases in the US.
Speaker Change: Wanted to confirm that that was the case and if so does that in your cash taxes, our guidance for 2025 and I got the second related question is.
Speaker Change: So 15 months later.
Speaker Change: Do you still think that that extra $100 million that you provisioned.
Speaker Change: On the income statement in the fourth quarter of last year.
Speaker Change: Is that something you may reverse or is that something that you're thinking of leaving that for the moment. Thank you.
Speaker Change: Yeah. Thanks, Thanks, a lot Gordon nice to hear from you.
Speaker Change: I guess just for clarity for all of the listeners I mean cash taxes.
Speaker Change: For the year last year was $870 million.
Speaker Change: That included about 370, plus related to the Spanish tax assessments for a number of tax returns.
Speaker Change: Over the years.
Speaker Change: And this year as as you heard from.
Speaker Change: Fernando that the expectation for cash taxes is 450 now Gordon in terms of provisions last year, we did reverse $387 million of the tax provision that we took on on three different tax matters.
Lucy Rodriguez: We have seen a recovery in volumes in Texas, very importantly in H2. Really, the issue for us in the past year was specifically in Texas and had a lot to do with weather in H1. We're hoping we don't get a repeat of a weather phenomena. I think we're very optimistic regarding pricing increases in the US and in Texas specifically for this year. In the case of aggregates, the decline that we're guiding to largely reflects the closing of some quarries that are at end of life, effectively. We have two of those. These are fairly low contributions in terms of profitability relative to other quarries, and they are approaching end of life. We of course, are looking to invest more to substitute for these. So far we haven't found appropriate substitutes yet.
Speaker Change: Biggest one of course is the is the tax returns from 2006 to 2009 and then as you recall, we had two other open tax matters in Spain that went from 2010 to 2018. We also reached an agreement with the tax authorities, there and we reversed some of that provision.
Speaker Change: So the total reversal was about 300, a little bit over $380 million, we have $200 million remaining covering the additional $200 million of of the the larger tax penalty from <unk> six to <unk> nine.
Speaker Change: Which we expect to occur over the next four years and then as we pay those tax fines, we will reverse the provisions in our income statement.
Lucy Rodriguez: We think that that will come with time with our strategy on aggregates in the US. Hopefully that helps.
Speaker Change: So I hope that answered the question.
Speaker Change: Clear.
Adrian Huerta: Yes. Thank you, Lucy.
Speaker Change: Yes, just to be clear the $4 50 guidance for this year includes whatever portion of that penalty would you expect to pay that's included there.
Lucy Rodriguez: Okay. Thanks, Adrian. The next question comes from the webcast from Anne Milne from Bank of America. A question on tariffs. Could you please give us an update on the exports you currently have from Mexico to the US, and how this could shift if tariffs were to be imposed by Trump on all Mexican imports? If you were to redirect this production, would it be resolved within Mexico or to other destinations? Just quickly on this, well, not quickly, but just to answer this. First, covering it from the Mexico point of view, Mexico last year exported about 5% of their volumes to the US. As you know, imports and where we import from change all the time based on the economics and where we can find the right quality and price for imports into specific markets.
Speaker Change: Something scored yes. It does yes. It does yes, it does exactly yep yep perfect.
Speaker Change: Super Thank you very much.
Speaker Change: Thank you okay.
Speaker Change: Thanks Clayton.
Speaker Change: And the next question comes from Adrien Wester from J P. Morgan Hi, Dan.
Speaker Change: Thank you Lucy Hi, Fernando and Maher and congrats on the results my questions are regarding the U S. A first on pricing if you can give us a little bit more details on what happened during the year.
Speaker Change: I think pricing across the different markets within the U S. A I mean, the overall price increases that you had was a less one versus what peers have reported for the full year.
Speaker Change: So I wonder if.
Speaker Change: You were not able to push price increases in coastal markets et cetera. So you can just provide more details on that and the second one is if you can just explain the why the expectation of lower aggregate volumes for this year in the U S.
Lucy Rodriguez: Our plan for this year, even before there was any whiff of potential tariffs on Mexico, Canada, and China, was to reduce, because of the profitability and where we could get imports, was to continue to reduce those imports coming from Mexico. Just within our plan, it was to cut it to about half of Mexican volumes, so 2.5% of total Mexican volumes, more or less. Looking at it more from the United States perspective, again, imports have continued to decline for us. They currently, in 2024, were about 17% of total volumes, and imports coming from Mexico have been declining as well, quite significantly. The plan this year was to continue to decline. Obviously, tariffs, we believe firmly that if tariffs are imposed within a local market on all players, that that would be positive. It would increase import parity. It would be positive for pricing.
Speaker Change: Great. Thanks century.
Speaker Change: Maybe first on pricing.
Speaker Change: Reported low single digit pricing increases for 2024.
Speaker Change: We were successful with mid single digit increases in most of our portfolio, but as you know pricing is very local in the United States.
Speaker Change: So in about 75% to 80% of our of our volumes, we were able to get mid single digit pricing.
Speaker Change: Where we had a very difficult time was specifically in Texas and of course in Texas in the first six months of year right when pricing normally takes place there.
Speaker Change: There were.
Speaker Change: There was quite a bit of dislocation with volumes down in Texas Houston in particular is a large important market and you had a lot of imports literally stuck on ships offshore.
Speaker Change: Offshore that had to be had to be.
Speaker Change: To where they needed to go fairly quickly when there are openings and weather.
Lucy Rodriguez: If you see a more limited tariff action in a specific market where it only applies to one or two origins of imports, we think it would be fairly neutral in terms of pricing. I hope that covers it, Anne. The next question comes from Paco Suarez from Scotiabank. Paco? Paco, are you there? Maybe I will move on then. The next question comes from Jerrel Guilahon from Goldman Sachs.
Speaker Change: I think that that really delayed pricing increases in the U S. We have seen a recovery in volumes in Texas fairly carry importantly in the back half of the year, but it really the issue for us in the past year was specifically in Texas and I have a lot to do with weather in the first six months, we're hoping we don't get a repeat of a weather phenomenon.
Speaker Change: I think we're very optimistic regarding our pricing increases in the U S and in Texas specific late this year.
Speaker Change: In the case of aggregates the decline that we're guiding to largely reflects.
Speaker Change: The closing of some quarries that are at end of life. So effectively we have a couple of those these are fairly low contributions in terms of profitability relative to other quarries and they are approaching end of life. We of course are looking to invest more to substitute for these but.
Jerrel Guilahon: Thank you for taking my question. I wanted to get a better sense of how you view the rebuilding effort for the LA following the unfortunate wildfires earlier this year. Do you have any estimates to how much CapEx could take place over the next few years, and how much of it could be related to building materials? A quick follow-up on Adrian's question. I didn't quite understand, what was the key driver for aggregates forecast to go down in 2025 in the US? Thank you.
Speaker Change: So far we haven't we.
Speaker Change: We haven't found appropriate substitutes, yet that we think that that will come with time with our strategy on aggregates in the U S.
Speaker Change: Hopefully that helps.
Speaker Change: So.
Speaker Change: Yes, Thank you Lucy.
Speaker Change: Okay. Thanks again.
Speaker Change: And the next question comes from the webcast from Anne <unk> from Bank of America.
Anne: A question on tariffs could you. Please give us an update on the exports you currently have from Mexico to the U S and how this could shift if tariffs were to be imposed by Trump all Mexican imports. If you were to redirect this production would it be resolved.
Maher Al-Haffar: Yeah. Lucy, do you want to take that?
Lucy Rodriguez: Sure. Sorry, I was on mute and talking to it. Just going back to the aggregates question, we have a couple quarries that are approaching end of life, which is very normal in an aggregate cycle. What you would like to do is have new quarries that come online to replace those, but sometimes you can't always do that in a timely manner. Our expectation at the moment is that we have a couple quarries that are going to be closing because they're at end of life. We won't have that production in the early part of next year. Again, just reminding everyone that our strategy in the United States is to continue to boost our aggregates resources, and obviously this has to be very local in nature, but we are looking at opportunities to replace these aggregates that are depleting. Okay. Was I clear?
Speaker Change: Within Mexico or to other destinations.
Speaker Change: So just quickly on this quickly.
Speaker Change: Just to answer this first covering it from the Mexico point of view, Mexico last year export at about 5% of their volumes to the U S and.
Speaker Change: As you know imports and where we import from change all the time and based on the economics, and where we can find the right quality and price for imports into specific markets. Our plan for this year, even before there was any with potential tariffs on Mexico, Canada and Chi.
Speaker Change: Daina was to reduce because of the profitability and where we can get imports was to continue to reduce those imports coming from Mexico.
Speaker Change: Just within our plan it was to cut it to about half of Mexican volumes up two 5% of total Mexican volumes far less.
Maher Al-Haffar: Yeah. This is more supplier than demand.
Lucy Rodriguez: Yes, correct. Okay. The first part of your question, if you could remind me, I'm sorry, I was so focused on the aggs, now I've forgotten the first part.
Speaker Change: Looking at it more from the United States perspective again imports.
Speaker Change: Can you two declined for us. They currently in 2024, we're about 17% of total volumes.
Maher Al-Haffar: Right. Just wanted to get a sense of how you viewed the rebuilding effort in LA.
Lucy Rodriguez: LA. Yes
Maher Al-Haffar: following the unfortunate wildfires earlier.
Speaker Change: Imports coming from Mexico have been declining as well quite significantly and the plan. This year was to continue to decline.
Lucy Rodriguez: Look, our focus in the case of LA at the moment is obviously on the immediate crisis and the fires that aren't out there. We have been focused on making sure that our employees are safe, that they themselves have housing, and we have had a couple that I believe have been at least temporarily displaced. Also aiding our community as well. There has been a lot of disruption. I think that there have been 12,000 residents or houses that have been destroyed in this process. Just to give you some sense, in California, 50,000 homes typically are built each year. You can see that that will be quite impactful going forward.
Speaker Change: Obviously tariffs we believe firmly that if tariffs are imposed within a local market on all players that that would be positive and it would increase in <unk>.
Speaker Change: <unk> priority it would be positive for pricing.
Speaker Change: You see them more limited tariff action in a specific market, where it only applies to one or two origins of imports. We think it would be fairly neutral in terms of pricing.
Speaker Change: So I hope that covers it Ann.
Hmm.
Speaker Change: Yeah.
Lucy Rodriguez: At the moment, again, we're focused on the immediate crisis, and we'll think about what we can do to help with sustainable construction going forward, when the government and when our customers are ready to have that discussion, but they definitely aren't there yet.
Speaker Change: And the next question comes from pocket Suarez from Scotiabank HOKA.
Speaker Change: So where are you there.
Maher Al-Haffar: Thank you.
Lucy Rodriguez: Okay. I think we have time for one last question. The last question comes from Daniel Sasson from Itaú BBA. Daniel?
Speaker Change: Maybe I will move on then.
Speaker Change:
Speaker Change: The next question comes from Jarrell Gila from Goldman Sachs.
Operator: Unfortunately, Daniel has retracted their question.
Jarrell Gila: Thank you for taking my question. So I wanted to get a better sense of how you view the rebuilding effort for the L. A area. Following the unfortunate wildfires earlier this year or do you have any estimates how much capex could take place over the next few years and how much of it could be related to building materials and.
Lucy Rodriguez: Okay. I think we have time for one last question from Yasin Tawari from On Field Investment Research. Yasin?
Yasin Tawari: Yes, good morning, Anna, and congratulations for the very resilient results. I would just have a question about, I remember in your Cemex Day, you were mentioning about the sum of the parts in CEMEX and the big mismatch between the valuation of peers and your valuation. When I look at the past 5, 10 years, you've done a fantastic job at deleveraging the business, becoming investment-grade, and finding a trajectory for growth. What do you think the market is missing when you look at your share price today? Is there anything that you can do to convince investors in the equity story of CEMEX?
Jarrell Gila: A quick follow up on a question I didn't quite understand what was the key driver for aggregates demand aggregates are forecast to go down in 2025 in the U S. Thank you.
Speaker Change: Yeah, let's see you want to take that.
Jarrell Gila: Sure.
Jarrell Gila: Sorry I was.
Jarrell Gila: It's on mute and talking to it.
Jarrell Gila: So just going back to the aggregates question. We have a couple of cranes that are approaching end of life, which is very normal in an aggregate cycle and you know what you would like to do is have new quarries that come online to replace those but sometimes you can't always do that in a timely manner our expectation.
Maher Al-Haffar: Yes. Hi, Yasin. Thank you very much for your question. Look, we're obviously very disappointed at that current valuation of our share, clearly, and have been for a while. We think that probably the biggest contributor to that, especially since Q1 2024, has been kind of the expectations of what's likely to happen in Mexico, more important than anything else. Obviously in a transition year, you have demand issues, you have currency volatility issues, of course, which we have suffered from, especially in the last couple of quarters. I think the market is probably going to wait to see how that normalizes over time. We're optimistic about that. Clearly, deleveraging is going to continue to probably take place.
Jarrell Gila: At the moment is that we have a couple of quarries that are going to be closing because they're at end of life. So we won't have that production in the early part of next year and again, just reminding everyone that our strategy in the United States is to continue to boost our aggregates.
Jarrell Gila: Resources and obviously this has to be very local in nature, but we are looking at opportunities to replace these aggregates that are that are depleted.
Jarrell Gila: Okay. Good.
Did that.
Jarrell Gila: Was I clear.
Jarrell Gila: Yeah.
Jarrell Gila: Yes, so as I said this is more.
Jarrell Gila: Supply and demand.
Jarrell Gila: Yes, correct and catch and the first part of your question. If you could remind me I'm sorry, I was so focused on the AG now I've forgotten the first part.
Speaker Change: Right I just wanted to get a sense of how you view the rebuilding effort in L. A.
Jarrell Gila: Elliot wildfires earlier.
Maher Al-Haffar: I don't know if you looked at the numbers, but when I take a look at where we are in terms of our investment-grade ratings versus our peers and the leverage levels that we are at versus our peers, we have a definitely potential upside in continuing to deleverage. As I mentioned in one of the questions earlier, our interest expense, when you consider everything, meaning including the coupons that we pay on our subordinated notes, is probably close to 20-plus% of our EBITDA. That's more than double than our peers. That's a huge number of capital, of free cash that can be invested in growth or can be returned to shareholders at the end of the day. I think that's one area that perhaps either the market is not yet paying us for or is not discounting.
Jarrell Gila: Look you know our focus in the case of L. A at the moment is obviously on the immediate crisis in the tires aren't out there. So we have been focused on making sure that our employees are safe that they themselves have housing and we have had a couple that I believe have been at least temporarily displaced and also aiding.
Jarrell Gila: Our community as well.
Jarrell Gila: There has been a lot of disruption I think that there have been 12000.
Jarrell Gila: Residents.
Jarrell Gila: <unk> that have been.
Jarrell Gila: Destroyed in this process just to give you some sense in California, 50000 homes typically are built each year.
Jarrell Gila: So you can see that that will be quite impactful going forward, but.
Jarrell Gila: At the moment again, we're focused on the immediate crisis and you know.
Jarrell Gila: We will think about what we can do to help with sustainable construction going forward.
Jarrell Gila: And the government and when our customers are ready to have that discussion, but they definitely aren't there yet.
Maher Al-Haffar: That is also probably going to happen over the next couple of years. I also think that there's definitely a discount that is being given by the market today in terms of valuation for markets like Mexico compared to the US. On a risk-adjusted basis, I think that will take time. The Mexican business has demonstrated phenomenal resilience, and I think that as we continue to deliver as a company and as a macroeconomy, and as there's more integration between Mexico and the US, I think the value and the risk adjustment to the earnings coming out of our Mexican business is going to get higher. That's when we believe that we will start seeing, I don't want to talk from an investor perspective, but that's when we should see a re-rating on valuations of those earnings.
Jarrell Gila: Yeah.
Thank you.
Jarrell Gila: Okay.
Speaker Change: I think we have time for one last question and our last question comes from Daniel Sasson from Italo Danielle.
Speaker Change: Unfortunately, Daniela has protracted that question.
Speaker Change: Okay. Then I think we have time for one last question from <unk> <unk> from on field caffeine.
Speaker Change: Yeah.
Speaker Change: Yes, good morning on the on the congrats.
Speaker Change: Congratulations for the very resilient results.
Speaker Change: I would just have a question about the remember when you're in your <unk> you were mentioning about the sum of about <unk> <unk>.
Speaker Change: The big mismatch between the valuation of PFS on the your valuation and.
Speaker Change: When I look at the best Price then you asked you have done a fantastic job deleveraging the business becoming investment.
Maher Al-Haffar: What can we do in the interim is very simple, frankly, is continue to focus on doing the great things that we can do more of and taking a look at. I know it sounds like motherhood and apple pie, but taking a look at some of the upsides, which as you heard from our cost containment effort program, which we started last year, that is also going to be an important contributor to growth going forward. We're not expecting the market to pay us for it immediately, but certainly, that's something that also is going to translate to growth. The other thing that is also very important for everybody to realize is that over the last three years, we had a headwind of volumes at the EBITDA level that is close to $750 million for a variety of reasons.
Speaker Change: Investment grade.
Speaker Change: Finding a project for growth, whether you're seeing the market is missing when we when you look at your share price today and is there anything that you can do.
Speaker Change: To to convince our investors.
Speaker Change: Could you sort of your mix.
Speaker Change: Yeah.
Speaker Change: Yes, Hi, Sam Thank you very much for your question and.
Speaker Change: Look I, we're obviously very disappointed at the current valuation of our share.
Speaker Change: You know clearly and have been for a while.
Speaker Change: We think that probably the biggest contributor to that especially since.
Speaker Change: Since the first quarter of 'twenty four.
Maher Al-Haffar: Now, I'm not saying here that we're going to necessarily recover all the $750, but clearly, there's a natural tendency or should be a natural tendency of recovering a big chunk of that over the next couple of years, at least. When you add all of those things together, and us delivering, of course, we need to continue to deliver quarter after quarter. I believe the market will see the attractiveness of the earnings that we can deliver, and hopefully, our valuation will be more realistic and aligned with our expectations going forward. I hope that answers your question, Yasin.
Speaker Change: Has been kind of the expectations of what's likely to happen in Mexico more important than anything else and.
Speaker Change: And you know obviously in a transition year you have.
Speaker Change: Demand issues, you have currency volatility issues of course, which we have suffered from especially in the last couple of quarters.
Speaker Change: So I.
Speaker Change: I think the market is probably going to wait to see how that normalizes over time, we're optimistic.
Speaker Change: About that.
Speaker Change: Clearly.
Speaker Change: Deleveraging is going to continue to probably take place I mean, I don't know if you looked at the numbers, but when I take a look at.
Speaker Change: If you know where we are in terms of our.
Lucy Rodriguez: Thank you, Yasin.
Yasin Tawari: It does. Very helpful. Thank you so much.
Speaker Change: Investment grade ratings versus our peers and and the leverage levels that we are at versus our peers.
Maher Al-Haffar: Thank you, Yasin.
Lucy Rodriguez: We appreciate you joining us today for our Q4 results. We hope you'll come back again for Q1 2025 webcast on 28 April. If you have any additional questions, please feel free to reach out to the IR team. Many thanks.
Speaker Change: We have a potential definitely potential upside and continuing to deleverage and as I mentioned in one of the questions earlier.
Speaker Change: Our interest expense when you consider Bob.
Speaker Change: Everything, meaning including the coupons that we pay on our subordinated notes.
Operator: Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.
Speaker Change: It's probably close to 20 plus percent of of our EBITDA and that's more than double.
Speaker Change: Than our peers and and Thats a huge number of <unk>.
Speaker Change: Capital or free cash that can be invested in growth or can be returned to shareholders. At the end of the day and I think that's one area that perhaps either the market is not yet paying us for or or or or is not discounting that is also probably going to happen over the next couple of years.
Speaker Change: I also think that.
Speaker Change: There's definitely a discount that is being given by the market today in terms of valuation for.
Speaker Change: For poor markets like Mexico, compared to the U S. I mean on a risk adjusted basis, I think thats and Thats something that will take time, I mean, I think the Mexican business has demonstrated the nominal resilience and I think that as we continue to deliver as a company and as a macro economy and as there's more integration between Mexico and the U S.
Speaker Change: I think the value and the risk adjustment to the earnings coming out of our U S business out of our Mexican business is going to get higher and that's when we believe that we will start seeing.
Speaker Change:
Speaker Change: I don't want to talk from an investor perspective, but that's when we should see a re rating on valuations of those of those screenings. What can we do in the interim is very simple frankly has continued to focus on doing the great things that we can do more of and taking a look at the and I know it sounds like motherhood and Apple pie, but taking a look.
Speaker Change: At some of the upsides, which you know, which as you heard from the.
Speaker Change: From our cost containment effort program, which we started last year I mean that is also.
Speaker Change: I'm going to be an important contributor to growth going forward again, we're not expecting the market to bass, where it's immediately but certainly that's something that also is going to translate to growth. The other thing that is also very important for everybody to realize is that over the last three years.
Speaker Change: We had a headwind of volumes at the EBITDA level that is close to $750 million. Okay for a variety of reasons now I'm not I'm not saying here that we're going to necessarily recover all of the 750, but clearly there is a natural tendency or should be a natural tendency of recovering a big chunk of that.
Speaker Change: Over the next.
Speaker Change: Couple of years at least and so when you add all of those things together.
Speaker Change: And in US delivering of course, I mean, we need to we need to continue to deliver quarter after quarter I believe the the you know the market will see.
Speaker Change: The attractiveness of.
Speaker Change: The earnings that we can deliver and hopefully our.
Speaker Change: Our evaluation will be.
Speaker Change: More realistic and aligned with our expectations going forward.
Speaker Change: I hope that sort of how much of your question, Yes, I don't know if there's a gap.
Yep.
Speaker Change: Very helpful. Thank you so much.
Speaker Change: Thank you Anthony.
Speaker Change: We appreciate you joining us today for our fourth quarter results. We hope you will come back again for first quarter 2025 webcast on April 28, and if you have any additional questions. Please feel free to reach out to the IR team many facts.
Speaker Change: Thank you for your participation in today's conference. This concludes the presentation you may now disconnect good day.