Q1 2025 CEMEX SAB DE CV Earnings Call

Operator: Good morning, welcome to the CEMEX first quarter 2025 conference call and webcast.

Operator: Good morning. Welcome to the CEMEX Q1 2025 Conference Call and Webcast. My name is Bailey, and I will be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session. If at any time you require operator assistance, please press star followed by zero, and we will be happy to assist you. Now I will turn the conference over to Lucy Rodriguez, Chief Communications Officer. Please proceed.

Good morning, welcome to the <unk> first quarter 2025 conference call and webcast. My name is Bailey and I'll be your operator for today.

Operator: My name is Bailey and I'll be your operator for today. At this time all participants are in listen-only mode.

This time all participants are in listen only mode. Later, we will conduct a question and answer session.

Operator: Later we will conduct a question and answer session.

Operator: If at any time you require operator assistance, please press star followed by zero and we will be happy to assist you and now I will turn the conference over to Lucy Rodriguez, Chief Communications Officer, please proceed.

If at any time you require operator assistance. Please press star followed by zero and we will be happy to assist you.

Dave: And now I will turn the conference Dave that you lose <unk> Chief Communications Officer. Please proceed.

Lucy Rodriguez: Good morning, and thank you for joining us for our first quarter 2025 conference call and webcast. We hope this call finds you. Well, we have several changes to talk about on this quarterly call beginning.

Lucy Rodriguez: Good morning. Thank you for joining us for our Q1 2025 conference call and webcast. We hope this call finds you well. We have several changes to talk about on this quarterly call, beginning of course, with the appointment of our new CEO. In February, our board of directors appointed Jaime Muguiro as Chief Executive Officer effective 1 April. This appointment is part of a planned leadership transition following our former CEO, Fernando A. González's decision to retire after a successful career at CEMEX. Jaime has almost 3 decades of experience at CEMEX, where he has held senior executive positions in different regions. Most recently, he served as President of CEMEX in the United States. Additionally, we have new regional presidents who are bringing extensive experience and new eyes to our operations.

Dave: Good morning, and thank you for joining us for our first quarter 2025 conference call and webcast. We hope this call finds you well.

Dave: We have several changes to talk about on this quarterly call beginning of course with the appointment of our new CEO.

Lucy Rodriguez: Of course, with the appointment of our new CEO in February, our board of directors appointed as chief executive officer effective April. 1st. Disappointment is part of a plan leadership transition following our former CEO, Fernando Gonzalez's decision to retire after a successful career at semi. Jaime has almost three decades of experience at CEMEX, where he has held senior executive positions in different regions. Most recently, he served as president of CEMEX in the United States.

Speaker Change: February our board of directors appointed time in Lugano, as Chief Executive Officer effective April 1st disappointment as part of our planned leadership transition following our former CEO Fernando <unk> decision to retire after a successful career at Zacks Hi.

Tim Lugano: <unk> has almost three decades of experience at <unk>, where he has held senior executive positions in different regions. Most recently he served as president of <unk> in the United States.

Lucy Rodriguez: Additionally, we have new regional presidents who are bringing extensive experience and new eyes to our operations. We have also made some changes to our quarterly documents moving our free cash flow disclosure closer to a cash basis, as well as providing more detailed sources and uses information. Starting this quarter, we are reporting price variations for our products on an FOB basis. We believe this is more reflective of actual pricing dynamics as well as industry practice.

Tim Lugano: Additionally, we have new regional presidents, who are bringing extensive experience and new ideas to our operations.

Lucy Rodriguez: We have also made some changes to our quarterly documents, moving our free cash flow disclosure closer to a cash basis, as well as providing more detailed sources and uses information. Starting this quarter, we are reporting price variations for our products on an FOB basis. We believe this is more reflective of actual pricing dynamics as well as industry practice. In March, we published our 2024 integrated report discussing our strategy, ESG efforts and metrics, as well as financial performance. I encourage you to review it on our website. Now it is my pleasure to introduce Jaime Muguiro and of course, Maher Al-Haffar, our CFO, both of whom are joining us today. As always, we will spend a few minutes reviewing the business and outlook for the rest of the year, and then we will be happy to take your questions.

Tim Lugano: We have also made some changes to our quarterly documents moving our free cash flow disclosure closer to a cash basis as well as providing more detailed sources and uses information.

Tim Lugano: Starting this quarter, we are reporting price variations for our products on an <unk> basis. We believe this is more reflective of actual pricing dynamics as well as industry practice.

Lucy Rodriguez: In March, we published our 2024 Integrated Report discussing our strategy, ESG efforts, and metrics, as well as financial performance. I encourage you to review it on our website.

Tim Lugano: In March we published our 2024 integrated report discussing our strategy ESG efforts and metrics as well as financial performance I encourage you to review it on our website.

Lucy Rodriguez: And now it is my pleasure to introduce Jaime Moguera and, of course, Maher Al-Hafar, our CFO, both of whom are joining us today. As always, we will spend a few minutes reviewing the business and outlook for the rest of the year, and then we will be happy to take your questions.

Tim Lugano: And now it is my pleasure to introduce him and look at all and of course my hair all hubs, our CFO both of whom are joining us today.

Tim Lugano: As always we will spend a few minutes reviewing the business and outlook for the rest of the year and then we will be happy to take your questions and now I will hand, the call over to Jaime.

Jaime Moguera: And now I will hand the call over to Jaime. Thanks, Lucy. And good day to everyone.

Lucy Rodriguez: Now I will hand the call over to Jaime.

Jaime Muguiro: Thanks, Lucy. Good day to everyone. I am excited and deeply honored to take on the role of CEO at CEMEX. While I am still settling into my new role, I'd like to highlight several of my strategic priorities that will guide my tenure as CEO. This is a pivotal moment in our company's history. As we close in on realizing our deleveraging objectives and having substantially consolidated our operations, we're now well positioned to drive sustainable and profitable growth. Our strategic focus will be to continue investing in the US while enhancing shareholder return and creating long-term value for all the stakeholders. Since the CEO transition announcement, I have spent the last few weeks speaking to as many people within the company as possible, reviewing our key objectives, areas of improvement within the company, and the main risks and opportunities in our markets.

Jaime: Thank you Lucy and good day to everyone I am excited I am deeply honored to take on the role of CEO at Phoenix.

Jaime Moguera: I am excited and deeply honored to take on the role of CEO at FEMBA. While I am still settling into my new role, I'd like to highlight several of my strategic priorities that will guide my tenure as CEO. This is a pivotal moment in our company's history. As we close in on realizing our deleveraging objectives, and having substantially consolidated our operations, we're now well positioned to drive sustainable and profitable development. Our strategic focus will be to continue investing in the U.S. while enhancing shareholder return and creating long term value for all. Since the CEO transition announcement, I have spent the last few weeks speaking to as many people within the company as possible.

Jaime: While I am still settling into my new role I'd like to highlight several of my strategic priorities that will guide my tenure as CEO.

Jaime: This is a pivotal moment in our company's history.

Jaime: Closing on realizing our deleveraging objectives, and having substantially consolidated our operations, we're now well positioned to drive sustainable and profitable growth.

Our strategic focus will be to continue investing in the U S. While enhancing shareholder return and creating long term value for all the stakeholders.

Speaker Change: She is the CEO transition announcement I have spent the last few weeks speaking to as many people within the company as possible.

Jaime Moguera: Reviewing our key object. areas of improvement within the company and the main risks and opportunities in our market. I am looking forward to expanding further on these discussions with external stakeholders such as yourselves over the next few months. From what I have learned so far, there is much to be done, but my first priority will be on the basics, achieving industry-leading excellence throughout our operations, while shaping an agile organization that delivers profitable growth to our shareholders. Core to my plan is Project Cutting Edge, our cost savings program introduced by Fernando González last quarter. While it was originally conceived to address a challenging market environment, I intend to use this program as the foundation to drive lasting and transformational change.

Jaime: Reviewing our key objectives.

Speaker Change: Areas of improvement within the company.

Speaker Change: Risks and opportunities in our markets.

Jaime Muguiro: I am looking forward to expanding further on these discussions with external stakeholders such as yourselves over the next few months. From what I have learned so far, there is much to be done, but my first priority will be on the basics, achieving industry-leading excellence throughout our operations while shaping an agile organization that delivers profitable growth to our shareholders. Core to my plan is Project Cutting Edge, our cost savings program introduced by Fernando A. González last quarter. While it was originally conceived to address a challenging market environment, I intend to use this program as the foundation to drive lasting and transformational change. A key element is to simplify and streamline our corporate structure to empower our regional operations, enhancing execution, speed, and accountability throughout the organization. Project Cutting Edge should enhance our EBITDA margin, increase free cash flow, and improve our free cash flow conversion rate.

Speaker Change: I am looking forward to expanding further on these discussions with external stakeholders such as yourselves over the next few months.

Speaker Change: From what I have learned so far there is much to be done, but my first priority will be on the basics achieving industry, leading excellence throughout our operations, while shaping an agile organization that delivers profitable growth to our shareholders.

Speaker Change: Core to my plan is project cutting edge, our cost savings program introduced by Fernando go on solid last quarter.

Speaker Change: What it was originally conceived to address a challenging market environment I intend to use this program as the foundation to drive lasting and transformational change.

Jaime Moguera: A key element is to simplify and streamline our corporate structure to empower our regional operations, enhancing execution, speed, and accountability throughout the organism. Project Cutting Edge should enhance our EBITDA margin, increase free cash flow, and improve our free cash flow conversion rate. As I look to reshape our business, I bring tremendous energy, ideas and commitment, and I am supported by its superb management.

Speaker Change: A key element is to simplify and streamline our corporate structure to empower our regional operations enhancing execution speed and accountability throughout the organization.

Speaker Change: <unk> cutting edge should enhance our EBITA margin increase free cash flow and improve our free cash flow conversion rate.

Jaime Muguiro: As I look to reshape our business, I bring tremendous energy, ideas, and commitment, and I am supported by a superb management team. My recent experience in the US, where we optimized our footprint and improved key efficiency metrics, should serve as a template for other areas. I'd like to recognize the exceptional talent of our operating teams. Our new regional presidents will be addressing challenges in their markets with a fresh perspective, sharing best practices, and working to achieve best-in-class operations. We will continue working on our profitable decarbonization pathway, making progress towards our 2025 targets. Finally, with expectations for higher free cash flow and divestment proceeds, an early priority for me will be a more balanced capital allocation policy. I will concentrate on additional deleveraging, pursuing growth through accretive small to mid-size acquisitions in the US, while enhancing shareholder returns.

Speaker Change: As I look to reshape our business I bring tremendous energy ideas and commitment on am supported by a superb management team Mike.

Jaime Moguera: My recent experience in the U.S. where we optimized our footprint and improved key efficiency metrics should serve as a template for other areas. I'd like to recognize the exceptional talent of our operating teams. Our new regional presidents will be addressing challenges in their markets with a fresh perspective, sharing best practices and working to achieve best in class operations. We will continue working on our profitable decarbonization pathway, making progress towards our 2025 target.

Speaker Change: My recent experience in the U S.

Speaker Change: We optimized our footprint unimproved key efficiency metrics should serve as a template for other areas.

Speaker Change: I'd like to recognize the exceptional talent of our operating teams our new regional presidents will be addressing challenges in their markets with a fresh perspective sharing best practices on working to achieve best in class operations.

Speaker Change: We will continue working on our profitable decarbonization pathway, making progress towards our 2025 targets.

Jaime Moguera: Finally... With expectations for higher free cash flow and divestment proceeds, an early priority for me will be a more balanced capital allocation policy. I will concentrate on additional deleveraging, pursuing growth through accretive small to midsize acquisitions in the U.S., while enhancing shareholder returns. I am committed to providing the highest possible returns to our shareholders by being the best partner to our customers, having a laser-like focus on operational efficiency, and a disciplined capital allocation strategy. This is a tall order, but I'm confident we have the right team to compete. I look forward to meeting with all of you over the next few months and communicating with you as my plans materialize.

Speaker Change: Finally.

Speaker Change: With expectations for higher free cash flow and divestment proceeds on early priority for me will be a more balanced capital allocation policy.

Speaker Change: I will concentrate on additional deleveraging pursuing growth through accretive small to mid size acquisitions in the U S. While enhancing shareholder returns.

Jaime Muguiro: I am committed to providing the highest possible returns to our shareholders by being the best partner to our customers, having a laser-like focus on operational efficiency, and a disciplined capital allocation strategy. This is a tall order, but I'm confident we have the right team to accomplish it. I look forward to meeting with all of you over the next few months and communicating with you as my plans materialize. Now, allow me to review our Q1 performance. Our consolidated net sales proved to be resilient, with pricing strategy partially mitigating volumes in Mexico and the US. It is important to highlight that Q1 results are aligned with our expectations of flat EBITDA for the full year. As discussed in our previous earnings call, we forecasted a challenging H1, followed by more favorable H2 dynamics.

Speaker Change: I am committed to providing the highest possible returns to our shareholders by being the best partner to our customers, having a laser like focus on operational efficiency and a disciplined capital allocation strategy.

Speaker Change: This is a tall order, but I am confident we have the right team to accomplish.

Speaker Change: I look forward to meeting with all of you over the next few months on communicating with you as my plans materialize.

Jaime Moguera: And now, allow me to review our first quarter performance. Our consolidated net sales proved to be resilient with pricing strategy partially mitigating volumes in Mexico and the U.S. It is important to highlight that first quarter results are aligned with our expectations of flat EBITDA for the full year.

Speaker Change: Now allow me to review our first quarter performance.

Speaker Change: Our consolidated net sales proved to be resilient with pricing strategy, partially mitigating volumes in Mexico and the U S.

It is important to highlight that first quarter results are aligned with our expectations of flat EBITDA for the full year.

Jaime Moguera: As discussed in our previous earnings call, we forecasted a challenging first half, followed by more favorable second half dynamics. EBITDA performance is explained primarily by our Mexican operations with peso depreciation resulting in a 65 million dollar headwind, a strong pre-election base in the first half of 2024 and the usual seasonality of the first year of a new government. In addition, adverse winter conditions in the U.S. and Eastern Europe also impacted our research. EBITDA margin was supported by higher prices, lower energy and freight costs, which partially offset volume impact, higher labor costs and maintenance work that was brought forward in the year.

Speaker Change: As discussed in our previous earnings call, we forecasted a challenging first half followed by more favorable second half dynamics.

Jaime Muguiro: EBITDA performance is explained primarily by our Mexican operations, with peso depreciation resulting in a MXN 65 million headwind, a strong pre-election base in H1 2024, and the usual seasonality of the first year of a new government. In addition, adverse winter conditions in the US and Eastern Europe also impacted our results. EBITDA margin was supported by higher prices, lower energy, and freight costs, which partially offset volume impact, higher labor costs, and maintenance work that was brought forward in the US. We continue making progress on the implementation of Project Cutting Edge. These initiatives will support our consolidated EBITDA and free cash flow going forward. We reduced our net CO2 emissions per ton of cement equivalent by 1.6% on a year-over-year basis. We posted record net income, mainly driven by the gain on divestment of our Dominican Republic operations.

Speaker Change: EBITDA performance is explained primarily by our Mexican operations with peso depreciation, resulting in a 65 million dollar headwind.

Speaker Change: Strong pre election base in the first half of 2024 and the usual seasonality of the first year of a new government.

Speaker Change: In addition, adverse winter conditions in the U S and eastern Europe also impacted our results.

Speaker Change: EBITDA margin was supported by higher prices and lower energy and freight cost, which partially offset volume impact higher labor cost and maintenance work that was brought forward in the U S.

Jaime Moguera: We continue making progress on the implementation of Project Cutting Edge. These initiatives will support our consolidated EBITDA and free cash flow going forward. We reduced our net CO2 emissions per ton of cement equivalent by 1.6% on a year-over-year basis.

Speaker Change: We continue making progress on the implementation of project cutting edge. These initiatives will support our consolidated EBITDA and free cash flow going forward.

Speaker Change: We reduced our net <unk> emissions per tonne of cement equivalent by one 6% on a year over year basis.

Jaime Moguera: We posted record net income mainly driven by the gain on divestment of our Dominican Republic operation. The cash flow is largely explained by lower EBITDA, severance payments, and the effect of discontinued operations.

Speaker Change: We posted record net income mainly driven by the gain on divestment of our Dominican Republic operations.

Jaime Muguiro: Free cash flow is largely explained by lower EBITDA, severance payments, and the effect of discontinued operations. We expect working capital investment to fully reverse in the year, while the timing of maintenance CapEx should result in lower spending during the rest of the year compared to 2024. Maher will provide additional details on our financial results. Consolidated sequential prices are increasing across all 3 products, with a stable to positive performance in all markets. Sequential cement and ready-mix prices rose 2%, while aggregates prices increased by 4%. In Mexico, despite the current demand environment, pricing dynamics remain constructive. In the US, we continue to see supportive conditions for aggregates pricing, while cement increases have been delayed due to adverse weather. Our pricing strategy continues to achieve its goal of more than recovering cost inflation in our markets.

Speaker Change: Free cash flow is largely explained by lower EBITDA severance payments on the effect of discontinued operations.

Jaime Moguera: We expect working capital investment to fully reverse in the year, while the timing of maintenance capex should result in lower spending during the rest of the year compared to 2024.

Speaker Change: We expect working capital to investment to fully reverse in the year, while the timing of maintenance Capex should result in lower spending during the rest of the year compared to 2024.

Maher Al-Hafar: Macher will provide additional details on our financial results. Insolidated sequential prices are increasing across all three products. stable to positive performance in all markets. Sequential Cement and ReadyMix prices rose 2% while Aggregate prices increased by 4%. in Mexico. Despite the current demand environment, pricing dynamics remain constructive. In the U.S., we continue to see supportive conditions for aggregate pricing, while cement increases have been delayed due to adverse weather. Our pricing strategy continues to achieve its goal of more than recovering cost inflation in our Consolidated cement volume variation is mainly explained by a strong pre-election comparison base combined with the typical first-year seasonality of a new government in motion.

Speaker Change: <unk> will provide additional details on our financial results.

Speaker Change: Consolidated sequential prices are increasing across all three products with stable to positive performance in all markets.

Speaker Change: Sequential cement and ready mix prices rose, 2%, while aggregate prices increased by 4%.

Speaker Change: In Mexico, despite the current demand environment pricing dynamics remain constructive in the U S. We continued to see supportive conditions for aggregates pricing, while cement increases have been delayed due to adverse weather.

Speaker Change: Our pricing strategy continues to achieve its goal of more than recovering cost inflation in our markets.

Jaime Muguiro: Consolidated cement volume variation is mainly explained by a strong pre-election comparison base, combined with the typical first-year seasonality of a new government in Mexico. In the US, cement and ready-mix volume dynamics were mostly driven by weather. Volume growth in EMEA partially offset conditions in Mexico and the US, with solid cement demand in Western Europe and the Middle East and Africa. European demand was disrupted by unfavorable weather in Eastern Europe countries. Our Urbanization Solutions portfolio was impacted by the conclusion of large infrastructure projects in Mexico related to pavement services and by lower demand in our US concrete block business. Despite a 14% decline in sales, EBITDA margin proved to be resilient and expanded by a half percentage point.

Speaker Change: Consolidated cement volume variation is mainly explained by a strong pre election comparison base combined with a typical first year seasonality of a new government in Mexico.

Maher Al-Hafar: In the U.S., cement and ready-mix volume dynamics were mostly driven by weather. Volume growth in EMEA partially offset conditions in Mexico and the U.S., with solid cement demand in Western Europe and the Middle East and Africa. European demand was disrupted by unfavorable weather in Eastern Europe. Our urbanization solutions portfolio was impacted by the conclusion of large infrastructure projects in Mexico related to pavement services and by lower demand in our U.S. concrete block. Despite a 14% decline in sales, EBITDA margin proved to be resilient and expanded by 0.5%. This improvement was driven by our circularity business, which posted an EBITDA growth of 5% on flat sales, driven by a strong performance in the repurposing of industrial byproducts.

Speaker Change: In the U S cement and ready mix volume dynamics were mostly driven by weather.

Speaker Change: Volume growth in EMEA, partially offset conditions in Mexico on the U S with solid cement demand in Western Europe, and the Middle East and Africa.

Speaker Change: European demand was disrupted by unfavorable weather in eastern Europe countries.

Speaker Change: Our urbanization solutions portfolio was impacted by the conclusion of large infrastructure projects in Mexico related to pay them in services and by lower demand in our U S concrete block business.

Speaker Change: Despite a 14% decline in sales EBITDA margin proved to be resilient and expanded by a half percentage point.

Jaime Muguiro: This improvement was driven by our circularity business, which posted an EBITDA growth of 5% on flat sales, driven by a strong performance in the repurposing of industrial byproducts. Our circularity business, with margin in excess of 20%, has been one of the fastest-growing business verticals in our portfolio, with a compounded annual growth rate of 27% over the last 2 years. We are optimistic about our Urbanization Solutions portfolio as it addresses the changing landscape of the construction industry. Volumes and fixed costs, driven by operating leverage and maintenance, largely explain our EBITDA performance in the quarter. Variable costs remained relatively stable, driven mainly by a 17% decline in unitary energy costs. These savings in energy are in line with our full year guidance of a high single-digit percentage decline.

Speaker Change: This improvement was driven by our <unk> business, which posted an EBITDA growth of 5% on flat sales driven by strong performance in the Repurposing of industrial byproducts.

Maher Al-Hafar: Our circularity business with margin in excess of 20% has been one of the fastest growing business verticals in our portfolio with a compounded annual growth rate of 27% over the last two years. We are optimistic about our urbanization solutions portfolio as it addresses the changing landscape of the construction industry. Volumes and fixed costs driven by operating leverage and maintenance largely explain our EBITDA performance in the quarter. Variable costs remain relatively stable, driven mainly by a 17% decline in unitary energy costs. These savings in energy are in line with our full year guidance of a high single digit percentage decline.

Speaker Change: Our circle already of the business with margin in excess of 20% has been one of the fastest growing business verticals in our portfolio with a compounded annual growth rate of 27% over the last two years.

Speaker Change: We are optimistic about our urbanization solutions portfolio as it addresses the changing landscape of the construction industry.

Speaker Change: Volumes and fixed costs, driven by operating leverage and maintenance largely explain our EBITDA performance in the quarter.

Speaker Change: Viable cost remained relatively stable driven mainly by a 17% decline in unitary energy cost.

Speaker Change: These savings in energy are in line with our full year guidance of a high single digit percentage decline.

Maher Al-Hafar: Operating expenses as a percentage of net sales remained stable as lower freight and logistics were offset by higher SG&A. Half of the EBITDA margin variation is explained by geographic mix with a lower contribution from high margin. Going forward, we expect improving demand condition in most of our markets, along with cost reduction efforts on our pricing strategy to drive increased profitability.

Jaime Muguiro: Operating expenses as a percentage of net sales remained stable, as lower freight and logistics were offset by higher SG&A expense. Half of the EBITDA margin variation is explained by geographic mix, with a lower contribution from high margin regions. Going forward, we expect improving demand condition in most of our markets, along with cost reduction efforts and our pricing strategy to drive increased profitability. As announced in February, Project Cutting Edge is a transformational savings program that addresses the way we work, aiming to reduce costs while increasing efficiency. Under this program, we expect to realize recurring yearly EBITDA savings of at least $350 million by 2027, and $150 million is expected in 2025. Project Cutting Edge centers on three main elements of our operating model. First, it addresses our supply chain, logistics, and procurement on a global basis.

Speaker Change: Operating expenses as a percentage of net sales remained stable as lower freight and logistics were offset by higher SG&A expense.

Speaker Change: Half of the EBITDA margin variation is explained by geographic mix with a lower contribution from high margin regions.

Speaker Change: Going forward we are.

Speaker Change: Expect improving demand condition in most of our markets along with cost reduction efforts on our pricing strategy to drive increased profitability.

Maher Al-Hafar: As announced in February, Project Cutting Edge is a transformational savings program that addresses the way we work, aiming to reduce costs while increasing efficiency. Under this program we expect to realize recurring yearly EBITDA savings of at least 350 million dollars by 2027 and 150 million dollars expected in 2020. Project Cutting Edge centers on three main elements of our operating model. First, it addresses our supply chain, logistics, and procurement on a global basis. Second, it optimizes our operations footprint and entails a review to ensure every operation delivers a sufficient return on capital.

Speaker Change: As announced in February project cutting edge is a transformational savings program that addresses the way, we work aiming to reduce costs, while increasing efficiency.

Speaker Change: Under this program, we expect to realize recurring yearly EBITDA savings of at least $350 million by 2027 and $150 million expected in 2025.

Speaker Change: Project cutting edge centers on three main elements of our operating model.

Speaker Change: It addresses our supply chain logistics and procurement on a global basis.

Jaime Muguiro: It optimizes our operations footprint and entails a review to ensure every operation delivers a sufficient return on capital. The US serves as a model. Two years ago, we assessed return on capital of each individual facility in the region and then made significant adjustments to our footprint, including closure or sale of certain operations. While the work in the US is still not complete, it has allowed us to recognize substantial margin improvement. The final leg of Project Cutting Edge centers around free cash flow initiatives with savings in 2025 and onwards. While it's still early in the process, we saw tangible benefits of Project Cutting Edge in the quarter, such as the improvement in operational efficiency in the US, margin enhancement in Europe, and overall reduced headcount. The actions already taken this quarter have effectively locked in approximately $40 million in full year savings.

Speaker Change: It Optimizes our operations footprint on entails eight with you to ensure every operation delivers a sufficient return on capital.

Maher Al-Hafar: The U.S. serves as a model. Two years ago, we assessed return on capital of each individual facility in the region and then made significant adjustments to our footprint, including closure or sale of certain operations. While the work in the U.S. is still not complete, it has allowed us to recognize substantial margin improvements. The final leg of Project Cutting Edge centers around free cash flow initiatives, with savings in 2025 and onward. While it's still early in the process, we saw tangible benefits of project cutting-edge in the quarter, such as the improvement in operational efficiency in the U.S., and margin enhancement in Europe, and overall reduced headcount.

Speaker Change: The U S serves as a model two years ago, we assessed return on capital of each individual facility in the region, and then made significant adjustments to our footprint, including the closure or sale of certain operations.

Speaker Change: While the work in the U S. This is still not complete it has allowed us to recognize substantial margin improvement.

Speaker Change: The final leg of project cutting edge centers around free cash flow initiatives with savings in 2025 onwards.

Speaker Change: While it's still early in the process, we saw tangible benefits of project cutting edge in the quarter such as the improvement in operational efficiency in the U S on margin enhancement in Europe, and overall reduced head count.

Maher Al-Hafar: Actions already taken this quarter have effectively locked in approximately 40 million dollars in four years I want to highlight that as part of my transition, I am conducting an exhaustive review of our cost. and organizational structure which may lead to additional With expectations for increased free cash flow from operations, as well as proceeds from asset divestment, we will follow a disciplined capital allocations. I am currently reviewing every ongoing project in our growth investment pipeline to ensure that they meet the required return metrics under the expected demand environment. For those ongoing projects that meet the return criteria, you should expect that we will continue.

Speaker Change: The actions already taken this quarter.

Speaker Change: Tactically locked in approximately $40 million in full year savings.

Jaime Muguiro: I want to highlight that as part of my transition, I am conducting an exhaustive review of our costs and organizational structure, which may lead to additional savings. With expectations for increased free cash flow from operations as well as proceeds from asset divestments, we will follow a disciplined capital allocation strategy. I am currently reviewing every ongoing project in our growth investment pipeline to ensure that they meet the required return metrics under the expected demand environment. For those ongoing projects that meet the return criteria, you should expect that we will continue to invest. As these projects reach completion, we will transition from growth CapEx to more accretive small to mid-size acquisitions in the US. We remain committed to maintaining a strong liquidity position and to continue paying down debt, reducing our interest cost. Additionally, I am determined to boost shareholder return.

Speaker Change: I want to highlight that as part of my transition I am conducting an exhaustive review of our cost and organizational structure, which may lead to additional savings.

Speaker Change: With expectations for increased free cash flow from operations as well as proceeds from asset divestments, we will follow a disciplined capital allocation strategy.

Speaker Change: I am currently reviewing every ongoing project in our growth investment pipeline to ensure that they meet the required return metrics under the expected demand environment.

Speaker Change: For those ongoing projects that meet the return criteria you should expect that we will continue to invest.

Maher Al-Hafar: As these projects reach completion, we will transition from growth CAPEX to more accretive small to mid-size acquisitions in the years to come. remain committed to maintaining a strong liquidity position and to continue paying down debt, reducing our interest costs. Additionally, I am determined to boost shareholder return. We will continue to follow a progressive dividend policy and look at opportunistically using our share buyback program. While we do want to maintain a balanced capital allocation, capital allocation decisions will be driven by maximum return to shareholders.

Speaker Change: As these projects reach completion.

Speaker Change: We'll transition from growth Capex to more accretive small to mid sized acquisitions in the U S.

Speaker Change: We remain committed to maintaining a strong liquidity position and to continue paying down debt, reducing our interest cost.

Speaker Change: Additionally, I am determined to boost shareholder return, we will continue to follow a progressive dividend policy and look at Opportunistically using our share buyback program.

Jaime Muguiro: We will continue to follow a progressive dividend policy and look at opportunistically using our share buyback program. While we do want to maintain a balanced capital allocation, capital allocation decisions will be driven by maximum return to shareholders. Let me emphasize that given the heightened uncertainty in the current global macroeconomic environment, we will ensure that our capital allocation decisions do not compromise our financial metrics. Now, back to you, Lucy Rodriguez.

Speaker Change: While we do want to maintain a balanced capital allocation.

Speaker Change: Capital allocation decisions will be driven by maximum return to shareholders.

Lucy Rodriguez: Let me emphasize that given the heightened uncertainty in the current global microeconomic environment, we will ensure that our capital allocation decisions do not compromise our financial And now, back to you, Lucy. Thank you, Jaime. First quarter results for Mexico are aligned to our guidance for the year, which anticipated a challenging first half with improving conditions in the back half. First half expectations were based on the typical construction slowdown in the first year of a new administration in Mexico, a strong prior year comparison base driven by pre-electoral spending, and a significant peso head. Peso depreciation accounted for 65 million or 60% of the variation in EBITDA.

Speaker Change: Let me emphasize that given the heightened uncertainty in the current global microeconomic environment.

Speaker Change: We'll ensure that our capital allocation decisions do not compromise our financial metrics.

Speaker Change: And now back to you losing.

Lucy Rodriguez: Thank you, Jaime. Q1 results for Mexico are aligned to our guidance for the year, which anticipated a challenging H1 with improving conditions in the H2. H1 expectations were based on the typical construction slowdown in the first year of the new administration in Mexico, a strong prior year comparison base driven by pre-electoral spending, and a significant peso headwind. Peso depreciation accounted for $65 million or 60% of the variation in EBITDA. The prior year pre-electoral spend in infrastructure projects and rural roads explain about 50% of the decline in cement volumes. Volume drop was most acute in the south, which benefited disproportionately from 2024 pre-electoral spend. Importantly, we are seeing sequential improvement in daily cement volumes in April month to date.

Jaime: Thank you Jaime.

Jaime: First quarter results from Mexico are aligned to our guidance for the year, which anticipated a challenging first half with improving conditions in the back half.

Jaime: First half expectations were based on the typical construction slowdown in the first year of the New administration in Mexico.

Jaime: Strong prior year comparison base driven by pre electoral spending.

Jaime: If significant peso headwind.

Jaime: Peso depreciation accounted for $65 million or 60% of the variation in EBITDA.

Lucy Rodriguez: Prior year pre electoral spend in infrastructure projects and rural roads explain about 50% of the decline in cement volume. volume drop was most acute in the south which benefited disproportionately from 2024 pre-electoral span. Importantly, we are seeing sequential improvement in daily cement volumes in April month to date. In the case of ReadyMix, the Northeast region continues to outperform, supported by ongoing industrial projects and state-level infrastructure works, such as the new metro line in Monterey. The decline in aggregate volumes is attributable to large infrastructure projects in the prior year where we supplied low margin based products.

Jaime: Prior year pre electoral spend in infrastructure projects and we're already explained about 50% of the decline in cement volumes.

Jaime: Volume drop was most acute in the south which benefited disproportionately from 2024 pre electoral stand.

Jaime: Importantly, we are seeing sequential improvement in daily Smith volumes in April month to date.

Lucy Rodriguez: In the case of ready-mix, the northeast region continues to outperform, supported by ongoing industrial projects and state-level infrastructure works, such as the new metro line in Monterrey. The decline in aggregates volumes is attributable to large infrastructure projects in the prior year where we supplied low margin-based products. Adjusting for these volumes, our aggregates volumes declined by 1% with a significant expansion in EBITDA margin. There was positive traction from our January pricing increase, with cement and aggregate prices rising 5% sequentially while ready-mix increased 3%. Effective 1 April, we announced a 9% price increase in bag cement. We will continue to look for opportunities to at least recover input cost inflation going forward. EBITDA margin was supported by favorable pricing and lower energy and freight cost, which offset much of the volume effect. In our path of profitable decarbonization, we achieved a new record in clinker factor of 65.9%.

Jaime: In the case of ready mix and northeast region continues to outperform.

Jaime: Courted by ongoing industrial projects and state level infrastructure works, such as the new Metro line in Monterrey.

Jaime: The decline in aggregate volumes is attributable to large infrastructure projects in the prior year, where we supplied low margin based products.

Lucy Rodriguez: Adjusting for these volumes, our aggregates volumes declined by 1% with a significant expansion in EBITDA margins. There is positive traction from our January pricing increase with cement and aggregate prices rising 5% sequentially, while ReadyMix increased 3%. Effective April 1st, we announced a 9% price increase in bags. We will continue to look for opportunities to at least recover input cost inflation going forward. EBITDA margin was supported by favorable pricing and lower energy and freight cost, which offset much of the volume effect. In our path of possible decarbonization, we achieved a new record in clinker factor of 65.9%.

Jaime: Adjusting for these volumes are aggregates volumes declined by 1% with a significant expansion in EBITDA margin.

Jaime: There is positive traction from our January pricing increase with cement and aggregate prices rising.

Jaime: Sequentially, while ready mix increased 3%.

Jaime: Effective April one we announced a 9% price increase in bank of America.

Jaime: We will continue to look for opportunities to at least recover input cost inflation going forward.

Jaime: EBITDA margin was supported by favorable pricing and lower energy and freight costs, which offset much of the body.

Jaime: Correct.

In our path of profitable de Carbonization, we achieved a new record in clinker factor of 65, 9%.

Lucy Rodriguez: In the second half, we expect a pickup in construction activity as the new government settles in and begins to execute its budget for rural roads and social housing, while we lapped the prior year's comparison base. Additional government spending in railroads, highways, and water, along with ongoing projects at the state level, like the San Miguel de Allende-Valores Highway, the Metro Monterey, and Los Mochis Airport, among others, should further support growth. We are encouraged by the progress in establishing the National Housing Program. The government recently increased its 2025 target for social housing to about 180,000. There are several projects already under negotiation, which could start construction in the upcoming month.

Lucy Rodriguez: In H2, we expect a pickup in construction activity as the new government settles in and begins to execute its budget for rural roads and social housing while we lap the prior year's comparison base. Additional government spending in railroads, highways, and water, along with ongoing projects at the state level, like the San Miguel de Allende-Dolores Highway, the Monterrey Monorail, and Los Mochis Airport, among others, should further support growth. We are encouraged by the progress in establishing the National Housing Program. The government recently increased its 2025 target for social housing to about 180,000 homes. There are several projects already under negotiation, which could start construction in the upcoming months. Finally, we are also seeing a healthy ready-mix backlog, mainly driven by industrial projects in the Northeast and Central regions. In the US, unusually cold winter weather in many of our key markets disrupted construction activity.

Jaime: In the second half, we expect a pickup in construction activity has the new government settles in and begins to execute its budget to rural roads and social housing, while we lapped the prior year's comparison base.

Jaime: Additional government spending and railroad highways and water along with ongoing projects at the state level like the San Miguel de Allende, the Lotus highlight the metro in Monterrey, and the small chief airport among others.

Jaime: Further support growth.

Jaime: We are encouraged by the progress in establishing the National housing program government recently increased its 2025 target for social housing to about 180000 homes. There are several projects already under negotiation, which could start construction in the upcoming months.

Lucy Rodriguez: Finally, we are also seeing a healthy ready-mix backlog, mainly driven by industrial projects in the northeast and central regions.

Jaime: Finally, we are also seeing a healthy redi mix backlog, mainly driven by industrial projects in the northeast and central regions.

Lucy Rodriguez: In the U.S., unusually cold winter weather in many of our key markets disrupted construction activity. In fact, freeze conditions in January and one less working day explain the entirety of our cement and ready mix volume decline. In aggregates, about half of the volume variation is explained by inclement weather, fewer shipping days, and the previously communicated closure of several depleted quarries. Volumes across all products are supported by continued infrastructure spend, as well as the industrial and commercial sector, where we see construction in data centers, chip manufacturing, health care, and education. This is offset, however, by lower residential activity, particularly in Arizona and Florida.

Jaime: In the U S unusually cold winter weather in many of our key markets disrupted construction activity.

Lucy Rodriguez: In fact, freeze conditions in January and 1 less working day explain the entirety of our cement and ready-mix volume decline. In aggregates, about half of the volume variation is explained by inclement weather, fewer shipping days, and the previously communicated closure of several depleted quarries. Volumes across all products are supported by continued infrastructure spend, as well as the industrial and commercial sector, where we see construction in data centers, chip manufacturing, healthcare, and education. This is offset, however, by lower residential activity, particularly in Arizona and Florida. With weather impacting demand, we brought forward maintenance, completing almost 50% of annual scheduled outage days in the US in Q1. In the case of pricing, we continue to see strength in aggregates with prices adjusted for product and geographic mix, increasing 3% sequentially and 7% year over year.

Jaime: In fact, please conditions in January and one less working day explain the entirety of our cement ready mix volume decline.

Jaime: In aggregate about half the volume variation is explained by inclement weather fewer shipping days and the previously communicated closure of several discrete inquiries.

Jaime: Volumes across all products are supported by continued infrastructure spend as well as the industrial and commercial sector, where we see construction in data centers chip manufacturing healthcare and education.

Jaime: This is offset however by lower residential activity, particularly in Arizona and Florida.

Lucy Rodriguez: With weather impacting demand, we brought forward maintenance, completing almost 50% of annual scheduled outage days in the U.S. in first quarter. In the case of pricing, we continue to see strengthened aggregates with prices adjusted for product and geographic mix, increasing 3% sequentially and 7% year over year. Cement and ReadyMix prices were stable sequentially, as price increases were delayed due to weather-related inventory buildup in many of our coastal markets. We are currently rolling out summer price increases in most markets. In the quarter EBITDA margins excluding maintenance spend and volume loss remained stable, indicating that pricing continued to offset input costs.

Jaime: With weather impacting demand, we brought forward maintenance completing almost 50% of annual scheduled outage days in the U S in first quarter.

Jaime: In the case of pricing, we continue to see strength in aggregates with prices adjusted for product and geographic mix, increasing 3% sequentially and 7% year over year.

Lucy Rodriguez: Cement and ready-mix prices were stable sequentially as price increases were delayed due to weather-related inventory buildup in many of our coastal markets. We are currently rolling out summer price increases in most markets. In the quarter, EBITDA margin, excluding maintenance spend and volume loss, remained stable, indicating that pricing continued to offset input cost inflation. Despite the volume decline, aggregates margin remained in excess of 30%, driven by higher prices. We are making progress on Project Cutting Edge with additional adjustments to our ready-mix network in the quarter, as well as a significant improvement in operational efficiency, allowing us to substitute imports for more profitable domestic production. In a cement tariff scenario with the market structurally dependent on imports, we expect this improvement in domestic production, as well as our ability to flex Mexican imports, to be an important competitive advantage.

Jaime: And ready mix prices were stable sequentially as price increases were delayed due to weather related inventory buildup in many of our coastal markets.

Jaime: We are currently rolling out summer price increases in most markets.

Jaime: In the quarter EBITDA margin, excluding maintenance spend and volume loss.

Jaime: <unk> stable, indicating that pricing continued to offset input cost inflation.

Lucy Rodriguez: Despite the volume decline, aggregate margin remained in excess of 30 percent, driven by higher prices. We are making progress on Project Cutting Edge with additional adjustments to our ReadyMix network in the quarter, as well as a significant improvement in operational efficiency, allowing us to substitute imports for more profitable domestic production. In a cement tariff scenario with the market structurally dependent on imports, we expect this improvement in domestic production as well as our ability to flex Mexican imports to be an important competitive advantage. For 2025, we anticipate demand to be driven by infrastructure as IIJA transportation projects continue to roll out.

Jaime: Despite the volume decline aggregates margin remained in excess of 30% driven by higher prices.

Jaime: We are making progress on projects cutting edge with additional adjustments to our ready mixed network in the quarter as well as a significant improvement in operational efficiency, allowing us to substitute imports from more profitable domestic production.

Jaime: In our cement tariffs scenario with the market structurally dependent on imports. We expect this improvement in domestic production as well as our ability to flex Mexican imports can be an important competitive advantage.

Lucy Rodriguez: For 2025, we anticipate demand to be driven by infrastructure as IIJA transportation projects continue to roll out. About 35% of funds under IIJA have actually been spent to date, and we expect to reach peak spending in 2026. Solid growth in construction starts data supports this view. We are optimistic about the outlook for the industrial and commercial sector, with several semiconductor and data center projects being planned in our markets, as well as large projects in Cape Canaveral. While we expect the single-family home segment to be pressured in the short term with mortgage rates at elevated levels and increased economic uncertainty, we see substantial upside in housing over the medium term. In EMEA, we are pleased with our performance, with EBITDA growing by 49% and margin expanding by almost 3 percentage points.

Jaime: The 2025, we anticipate demand to be driven by infrastructure as J, a transportation projects continue to roll out.

Lucy Rodriguez: About 35% of funds under IIJA have actually been spent to date, and we expect to reach peak spending in 2026. solid growth in construction starts data support this view. We are optimistic about the outlook for the industrial and commercial sector, with several semiconductor and data center projects being planned in our market, as well as large projects in Cape Canaveral. While we expect the single family home segment to be pressured in the short term, with mortgage rates at elevated levels and increased economic uncertainty, we see substantial upside in housing over the medium term. In EMEA, we are pleased with our performance, with EBITDA growing by 49% and margin expanding by almost 3%.

Jaime: 35% of funds under J J has actually been spent to date and we expect to reach peak spending in 2026.

Jaime: Solid growth in construction starts data support this view.

Jaime: We are optimistic about the outlook for the industrial and commercial sector with several semiconductor and data center projects being planned in our markets as well as large projects in Cape Canaveral.

Jaime: While we expect the single family homes segment to be pressured in the short term with mortgage rates at elevated levels and increased economic uncertainty, we see substantial upside in housing over the medium term.

Jaime: In EMEA, we are pleased with our performance with EBITDA growing by 49% and margin expanding by almost three percentage points.

Lucy Rodriguez: These results were driven by higher volumes and prices, operating leverage, as well as our project cutting edge initiatives. In Europe, while we continue to see an improving demand trend, harsh winter conditions in February affected dynamics in our Eastern European operations. Growth resumed in March with better weather. During the quarter, we announced the expansion of our urbanization solutions business in the UK with a new lower carbon mortar plant near London. This plan, which will begin operations in the third quarter, will produce Cemex's virtual mortar with a minimum 30% lower carbon footprint than a standard product. We continue making progress on profitable decarbonization in Europe, with net CO2 emissions declining by 1.2% year over year.

Lucy Rodriguez: These results were driven by higher volumes and prices, operating leverage, as well as our Project Cutting Edge initiative. In Europe, while we continue to see an improving demand trend, harsh winter conditions in February affected dynamics in our Eastern European operations. Growth resumed in March with better weather. During the quarter, we announced the expansion of our Urbanization Solutions business in the UK with a new lower carbon mortar plant near London. This plant, which will begin operations in Q3, will produce CEMEX's Vertua mortar with a minimum 30% lower carbon footprint than a standard product. We continue making progress on profitable decarbonization in Europe with net CO2 emissions declining by 1.2% year over year. We expect EU-funded infrastructure spending to drive construction activity in several of our markets.

Jaime: These results were driven by higher volumes and prices operating leverage as well as our project cutting edge initiatives.

In Europe, while we continue to see an improving demand trend harsh winter conditions in February affected dynamics in our eastern European operations.

Jaime: Growth resumed in March with better weather.

Jaime: During the quarter, we announced the expansion of our urbanization solutions business in the U K with a new lower carbon mortar plant London.

Jaime: This plan, which will begin operations in the third quarter will produce <unk> virtual mortar with a minimum 30% lower carbon footprint than a standard product.

Jaime: We continue making progress unprofitable de carbonization in Europe, with net <unk> emissions declining by one 2% year over year.

Lucy Rodriguez: We expect EU-funded infrastructure spending to drive construction activity in several of our markets. We are encouraged by the recently announced infrastructure package in Germany for 500 billion euros, which over the next 10 years is expected to translate to an 11% annual growth in construction output. Additional spending on defense could further increase construction activity. in Poland, the industrial and commercial sector and a potential ceasefire in the Ukraine. is expected to support demand, while in the UK and Spain, the residential sector should drive demand. In the Middle East and Africa, we continue to experience strong volume growth as conditions stabilize.

Jaime: We expect EU funded infrastructure spending to drive construction activity in several of our markets. We are encouraged by the recently announced infrastructure package in Germany for 501 billion euros.

Lucy Rodriguez: We are encouraged by the recently announced infrastructure package in Germany for €500 billion. Which over the next 10 years is expected to translate to an 11% annual growth in construction output. Additional spending on defense could further increase construction activity. In Poland, the industrial and commercial sector and a potential ceasefire in Ukraine is expected to support demand, while in the UK and Spain, the residential sector should drive demand. In the Middle East and Africa, we continue to experience strong volume growth as conditions stabilize. We remain optimistic on the outlook for EMEA and are adjusting upwards our volume guidance for the full year. In our South/Central America and the Caribbean region, prices posted a solid performance while volumes grew by 3% in cement and 6% in ready-mix.

Jaime: <unk> opened the next 10 years is expected to translate to an 11% annual growth in construction.

Jaime: Additional spending on defense could further increase construction activity.

Jaime: In Poland, the industrial and commercial sector and a potential ceasefire in the Ukraine.

Jaime: Is expected just import demand while in the UK and Spain, the residential sector should drive demand.

Jaime: In the Middle East and Africa, we continued to experience strong volume growth as conditions stabilize.

Lucy Rodriguez: We remain optimistic on the outlook for EMEA and are adjusting upwards our volume guidance for the full year. In our South, Central America, and the Caribbean region, prices posted a solid performance, while volumes grew by 3% in cement and 6% in readiness. The formal sector continues driving demand in the region with our ReadyMix volumes in Columbia and Panama increasing by 8 and 10% respectively. ReadyMix sales to the Bogota Metro accounted for nearly one-third of our total volumes in Colombia and are expected to remain strong going forward. On the operations front, higher kiln efficiency along with lower clinker factors continue to support profitability.

Jaime: We remain optimistic on the outlook for EMEA and are adjusting upwards, our volume guidance for the full year.

Jaime: In our South Central America, and the Caribbean region prices posted a solid performance, while volumes grew by 3% and Smith and 6% in ready mix.

Lucy Rodriguez: The formal sector continues driving demand in the region with our ready-mix volumes in Colombia and Panama increasing by 8% and 10% respectively. Ready-mix sales to the Bogota Metro accounted for nearly 1/3 of our total volumes in Colombia and are expected to remain strong going forward. On the operations front, higher kiln efficiency along with lower clinker factor continued to support profitability. Our Urbanization Solutions portfolio in the region posted an EBITDA growth of 16% with a margin expansion of more than 4 percentage points. Now I will pass the call to Maher to review our financial developments.

Jaime: The formal sector continues driving demand in the region with our ready mix volumes in Colombia, and Panama, increasing by eight and 10% respectively.

Jaime: Sales to the Bogota Metro accounted for nearly one third of our total volumes in Colombia and are expected to remain strong going forward.

Jaime: On the operations front higher kiln efficiency, along with lower clinker factor continued to support profitability.

Lucy Rodriguez: Our urbanization solutions portfolio in the region posted an EBITDA growth of 16% with a margin expansion of more than 4%.

Speaker Change: Our urbanization solutions portfolio in the region posted an EBITDA growth of 16% with a margin expansion of more than four percentage points and now I will pass the call them out here to review our financial developments.

Maher Al-Hafar: And now, I will pass the call to Maher to review our financial development. Thank you, Lucy, and good day to everyone. Our free cash flow from operations during the quarter reflects normal seasonality of our working capital needs in the early part of the year. Free cash flow was primarily impacted by EBITDA, free cash flow from discontinued operations and severance payments related to Project Cutting Edge, which were partially offset by a reduction in cash taxes and net interest paid. Interest paid was $34 million lower than last year, while cash taxes due to timing effects were $113 million.

Maher Al-Haffar: Thank you, Lucy. Good day to everyone. Our free cash flow from operations during the quarter reflects normal seasonality of our working capital needs in the early part of the year. Free cash flow was primarily impacted by EBITDA, free cash flow from discontinued operations, and severance payments related to Project Cutting Edge, which were partially offset by a reduction in cash taxes and net interest paid. Interest paid was $34 million lower than last year, while cash taxes due to timing effects were $113 million less. While investment in working capital during the quarter was higher than last year, the average working capital days declined by 6 days, driven by the targeted management actions we implemented last year to improve our working capital. We expect this investment in working capital to reverse throughout the rest of the year.

Speaker Change: Thank you Lucy and good day to everyone. Our free cash flow from operations during the quarter reflects normal seasonality of our working capital needs in the early part of the year.

Speaker Change: Free cash flow was primarily impacted by EBITDA free cash flow from discontinued operations and severance payments related to project cutting edge, which were partially offset by a reduction in cash taxes and net interest paid.

Speaker Change: Interest paid was $34 million lower than last year, while cash taxes due to timing effects were $113 million less.

Maher Al-Hafar: While investment in working capital during the quarter was higher than last year, the average working capital days declined by six days, driven by the targeted management actions we implemented last year to improve our working capital. We expect this investment in working capital to reverse throughout the rest of the year. We remain on track to reach our expected savings of $500 million on free cash flow elements from operations versus prior years. On the cost side, energy costs on a per ton of cement basis declined by 17 percent, driven by lower power and fuel prices, and a continued improvement in clinker factor and thermal efficiency.

Speaker Change: While investment in working capital during the quarter was higher than last year. The average working capital days declined by six days driven by the targeted management actions, we implemented last year to improve our working capital.

Speaker Change: We expect this investment in working capital to reverse throughout the rest of the year.

Maher Al-Haffar: We remain on track to reach our expected savings of $500 million on free cash flow elements from operations versus prior year. On the cost side, energy costs on a per ton of cement basis declined by 17%, driven by lower power and fuel prices, and a continued improvement in clinker factor and thermal efficiency. For 2025, we have closed hedges for 76% of our annual spend related to electricity, diesel, freight, petcoke, and natural gas. Record net income of $734 million was driven primarily by the sale of our operations in the Dominican Republic. Given the volatility in the Mexican peso, I would like to remind you of our ongoing Mexican peso hedging strategy, fully covering our operating cash flow from Mexico. That effectively lowers the volatility of the exchange rate at which we convert pesos into dollars for tenors of up to 2 years.

Speaker Change: We remain on track to reach our expected savings of $500 million on free cash flow elements from operations versus prior year.

Speaker Change: On the cost side energy cost on a per ton of cement basis declined by 17% driven by lower power and fuel prices and a continued improvement in clinker factor and thermal efficiency.

Maher Al-Hafar: For 2025, we have closed hedges for 76% of our annual spend related to electricity, diesel, freight, Petco, and natural gas.

Speaker Change: For 2025, we have closed hedges for 76% of our annual spend related to electricity diesel freight pet Coke and natural gas.

Maher Al-Hafar: Record net income of $734 million was driven primarily by the sale of our operations in the Dominican Republic. Given the volatility in the Mexican Peso, I would like to remind you of our ongoing Mexican Peso hedging strategy. Fully covering our operating cash flow from Mexico. 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: Record net income of $734 million was driven primarily by the sale of our operations in the Dominican Republic.

Speaker Change: Given the volatility in the Mexican peso I would like to remind you of our ongoing Mexican peso hedging strategy fully covering our operating cash flow from Mexico.

Speaker Change: That effectively lowers the volatility of the exchange rate at which we convert vessels into dollars for tenders of up to two years.

Maher Al-Hafar: During April, we fully redeemed our $9.181 billion subordinated notes due to a change in methodology from S&P for these kinds of instruments. That triggered the option of redeeming the notes at 101. The redemption of these notes will result in importance. Our leverage ratio stood at 1.9 times, 1 tenth of a turn higher versus December. In this volatile market conditions with heightened macro uncertainty, I want to underscore that we enjoy a strong liquidity position bolstered by recent divestitures with substantial availability under our $2.3 billion in committed bank facilities after calling the 9-1-8 notes in April.

Maher Al-Haffar: During April, we fully redeemed our 9 1/8 $1 billion subordinated notes due to a change in methodology from S&P for these kinds of instruments. That triggered the option of redeeming the notes at 101. The redemption of these notes will result in important savings. Our leverage ratio stood at 1.9 times, one-tenth of a turn higher versus December. In this volatile market conditions with heightened macro uncertainty, I want to underscore that we enjoy a strong liquidity position bolstered by recent divestitures with substantial availability under our $2.3 billion in committed bank facilities after calling the 9 1/8 notes in April. We have a comfortable debt maturity schedule with no need to access the capital markets, and we remain committed to further strengthening our capital structure, as Jaime commented in his remarks. Now back to you, Jaime.

Speaker Change: During April we fully redeemed our 900 181 billion subordinated notes due to a change in methodology from S&P for these kinds of instruments.

Speaker Change: That triggered the option of redeeming the notes at 101.

Speaker Change: The redemption of these notes will result in important savings.

Speaker Change: Our leverage ratio stood at one nine times 110th of a turn higher versus December.

Speaker Change: In this volatile market conditions with heightened macro uncertainty I want to underscore that we enjoy a strong liquidity position bolstered by recent divestitures with substantial availability under our $2 $3 billion in committed bank facilities after calling the 90 and 100% notes in April.

Maher Al-Hafar: We have a comfortable debt maturity schedule with no need to access the capital markets and we remain committed to further strengthening our capital structure as Jaime commented in his remarks and now back to you.

Speaker Change: We have a comfortable debt maturity schedule.

Speaker Change: No need to access the capital markets and we remain committed to further strengthening our capital structure as Jaime commented in his remarks and now back to you Jaime.

Lucy Rodriguez: Thank you, Majer. As Majer pointed out, we're currently navigating an uncertain micro-outlook. And while first quarter results were very much in line with our full year expectations, we must recognize the current lack of macro visibility.

Jaime Muguiro: Thank you, Maher. As Maher pointed out, we're currently navigating an uncertain macro outlook. While Q1 results were very much in line with our full year expectations, we must recognize the current lack of macro visibility. While the organizational transformation I am envisioning is driven by strategy, certainly today's economic landscape only adds urgency and makes our plan even more relevant. In this environment, we will focus on managing the variables we can control. I will be expanding the scope of Project Cutting Edge and expect to deliver incremental EBITDA savings. We will keep you updated on the progress achieved on this important initiative. Recognizing the uncertain macro outlook as well as our intention to drive incremental savings under Project Cutting Edge, we continue to expect a flat EBITDA performance with significant improvement in free cash flow from operations in 2025. Now back to you, Lucy.

Jaime: Thank you Martha.

Speaker Change: As Mark pointed out we're currently navigating uncertain macro outlook.

Speaker Change: And while first quarter results were very much in line with our full year expectations, we must recognize the current lack of microbial ability.

Lucy Rodriguez: While the organizational transformation I am envisioning is driven by strategy, certainly today's economic landscape only adds urgency and makes our plan even more relevant. In this environment, we will focus on managing the variables we can control. I will be expanding the scope of Project Cutting Edge and expect to deliver incremental EBITDA. We will keep you updated on the progress achieved on this important initiative. Recognizing the uncertain macro outlook, as well as our intention to drive incremental savings under Project Cutting Edge, we continue to expect a flat EBITDA performance with significant improvement in free cash flow from operations in 2025.

Speaker Change: While the organizational transformation I'm envisioning is driven by strategy certainly today's economic landscape only adds urgency on makes our plan even more relevant.

Speaker Change: In this environment.

Speaker Change: We'll focus on managing the variables, we can control I will be expanding the scope of project cutting edge on expect to deliver incremental EBITDA savings.

Speaker Change: We will keep you updated on the progress achieved on this important initiative.

Speaker Change: Recognizing the uncertain macro outlook as well as our intention to drive incremental savings under project cutting edge. We continue to expect a flat EBITDA performance with significant improvement in free cash flow from operations in 2025 now.

Lucy Rodriguez: And now, back to you, Lucy. 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 our prices for our product.

Lucy: Back to you Lucy.

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 our 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.

Lucy: 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.

Lucy: In addition, unless the context indicates otherwise.

Lucy: References to pricing initiatives.

Lucy: Price increases or decreases refer to our prices for our products.

Operator: And now we will be happy to take your questions.

Lucy: And 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.

Operator: 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. Press star 1 to begin.

Lucy: If you wish to ask a question. Please press star followed by one on your Touchtone telephone.

Lucy: If your question has already been answered or you wish to withdraw your question Press Star followed by two.

Lucy: Press Star one to begin.

Adrian Muerta: And the first question comes from Adrian Muerta from J.P. Morgan. Adrian. Thank you, Lucy. Good morning, everyone.

Lucy Rodriguez: The first question comes from Adrian Huerta from JP Morgan. Adrian?

Adrian Huerta: And the first question comes from Adrian Huerta from Jpmorgan.

Adrian Huerta: Thank you, Lucy. Good morning, everyone. Jaime, first of all, congrats on your new role, and best wishes. You spoke a lot already about this organization transformation and things that you would like to focus on. What other details can you give us in terms of, let's say, for example, first on the cost side on this program that you guys released at the end of Q4? Could we say that is just the beginning of even more potential achievements in terms of cost reductions as the year progresses? Is that something that you want to look into detail, understanding the big opportunity that the company has to reduce costs and enhance margins? Then as the year goes out, how can we think about your agenda in terms of what you will be looking in terms of geographical mix and investments?

Adrian Huerta: Thank you Lucy good morning, everyone.

Jaime Moguera: Jaime, first of all, congrats on your new role and best wishes. And I mean, you spoke a lot already about this organization transformation and things that you would like to focus on. Um What other details can you give us in terms of, let's say, for example, first on the cost side on the on on this program that you guys released at the end of the four quarter? We say that that is just the beginning of even more potential achievements in terms of cost reductions as the year progresses. Is that something that you want to look into detail, understanding that big opportunity that the company has to reduce costs and enhance margins?

Adrian Huerta: First of all congrats on your new role and best.

Adrian Huerta: Best wishes.

Adrian Huerta: And.

Adrian Huerta: You spoke a lot already about.

Adrian Huerta: This organizational transformation and things that you would like to focus on.

Adrian Huerta: What other details can you give us in terms of let's say for example, first on the cost side on the <unk>.

Adrian Huerta: On this program that you guys.

Adrian Huerta: Released at the end of the fourth quarter can.

Adrian Huerta: Can we say that that is just the beginning of even more.

Adrian Huerta: Potential.

Jim: Jim mentioned.

Adrian Huerta: Cost reductions as.

Adrian Huerta: As the year progresses is that something that you want to look into the deal understanding the big opportunity that the company has.

Adrian Huerta: To reduce cost and enhance margins.

Adrian Muerta: And then as the year goes out, how can we think about your agenda in terms of what you would look in terms of a geographical mix and investments? And I'm assuming that these three things are the key three things that you're going to be focusing on, unless there's something else that you would like to add.

Adrian Huerta: And then as the year goes out.

Adrian Huerta: How can we think about your agenda in terms of what you would be looking in terms of a geographical mix and.

Adrian Huerta: On investments and I am assuming that these three things are.

Adrian Huerta: I am assuming that these three things are the key three things that you're going to be focusing on, unless there's something else that you would like to add.

Adrian Huerta: Three things are you going to be focusing on unless there is something else that you would like to add.

Jaime Moguera: First, thank you for congratulating me. Good talking to you. I hope that you're doing great regarding a project cutting edge. The answer is yes. Beyond what we were working on, mainly significant savings around supply chain, network, logistics. That includes frayed on procurement. Right. I'm also looking at incremental savings. Um, by. Reducing Materially Overhead. basically after deleveraging and after achieving great milestones in most of our strategic initiatives. We can now move on and do many less but very relevant things with many less resources. And that's what we're planning to do. We will be empowering our regions to deliver significant improvements to margins, looking at every part of our portfolio, making sure that every asset in our portfolio delivers ROCE above WAC.

Jaime Muguiro: Adrian, first, thank you for congratulating me. Good talking to you. I hope that you're doing great. Regarding Project Cutting Edge, the answer is yes. Beyond what we were working on, mainly significant savings around supply chain network, logistics. That includes freight and procurement, right? I'm also looking at incremental savings by reducing materially overheads. Basically, after deleveraging and after achieving great milestones in most of our past strategic initiatives, we can now move on and do many less but very relevant things with many less resources. That's what we're planning to do. We will be empowering our regions to deliver significant improvements to margins, looking at every part of our portfolio, making sure that every asset in our portfolio delivers ROACE above WACC.

Speaker Change: Well, let me first thank you for congratulating me good talking to you I hope Youre doing great regarding.

Adrian Huerta: Cutting edge the answer is yes.

Adrian Huerta: Beyond what we were working on mainly a significant savings around supply chain network.

Adrian Huerta: Sticks.

Adrian Huerta: It includes sprayed on procurement.

Adrian Huerta: Right.

Adrian Huerta: I'm also looking at incremental savings.

Adrian Huerta: Bye.

Adrian Huerta: Reducing materially overheads.

Adrian Huerta: Basically after deleveraging on after achieving great milestones in most of our strategic initiatives.

Adrian Huerta: We can now move on.

Adrian Huerta: Do many less but very relevant things with many less resources and Thats what were planning planning to do we will be empowering our regions to deliver cigna.

Adrian Huerta: Significant improvements to margins looking at every part of our portfolio, making sure that every asset in our portfolio delivers Ross it above one.

Adrian Muerta: I'm planning to, together with some of my peers, to engage very close with the regions in two performance reviews every year in which we will talk about margin expansion, operational efficiency, and much higher free cash flow conversion rates. So yes, Adrian, do expect that we're working on incremental structural cost savings by reducing materially overhead. And that means overheads across the whole portfolio, not just corporate, in central. So that was your first question. And could you remind me of the second question, Adrián? Sorry about that. Yes. No, the second one was also within those things that you're going to be focusing on, what and how soon we could expect also changes.

Jaime Muguiro: I'm planning to, together with some of my peers, to engage very close with the regions in two performance reviews every year, in which we will talk about margin expansion, operational efficiency, and much higher free cash flow conversion rates. Yes, Adrian Huerta, do expect that we're working on incremental structural cost savings by reducing materially overheads. That means overheads across the whole portfolio, not just corporate in Central. That was your first question. Could you remind me the second question, Adrian Huerta? Sorry about that.

Adrian Huerta: I'm planning to.

Adrian Huerta: Together with some of my peers to engage very close with the regions in two performance reviews every year in which we will talk about margin expansion operational efficiency.

Adrian Huerta: Much higher free cash flow conversion right. So yes.

Adrian Huerta: Do expect that we're working on incremental.

Adrian Huerta: Structural cost savings by reducing materially overheads.

Adrian Huerta: Means overheads across the whole portfolio not just corporate in central.

Adrian Huerta: So that was your first question could you remind me the second question I am sorry about that.

Adrian Huerta: Yes. No, the second one was also within those things that you're going to be focusing on. What and how soon we could expect also, not changes, more activity regarding the geographic mix that you have and investments?

Adrian Huerta: Yes.

Adrian Huerta: The second one was also within those.

Adrian Huerta: Things that you are going to be focusing on.

Adrian Huerta: What on how soon we could expect also changes.

Jaime Moguera: What changes, more activity regarding the geographic mix that you have and. Yeah, okay, on on geographic mix, we will continue to focus on Mexico, the US on Europe, as we've done so far. and the difference might be that whether is emerging or a developed market, we're going to be focusing relentlessly on improving free cash flow conversion from every asset we operate. And we're going to be optimizing CAPEX to reduce it. Uh by either improving pieces of our portfolio to the point that they should deliver a significant free cash flow conversion on a Rossi above block or otherwise if it's worth more to others, we might we might see some further divestment.

Adrian Huerta: And what changes more activity regarding the geographic mix that you have and in investments.

Jaime Muguiro: Yeah. Okay. On geographic mix, we will continue to focus on Mexico, the US, and Europe as we've done so far. The difference might be that whether it's emerging or a developed market, we're going to be focusing relentlessly on improving free cash flow conversion from every asset we operate. We're going to be optimizing CapEx to reduce it by either improving pieces of our portfolio to the point that they should deliver a significant free cash flow conversion and a ROACE above WACC. Otherwise, if it's worth more to others, we might see some further divestments. We're going to be looking at that, and we're going to be working a lot on operational excellence. Which means recovering competitiveness, being very agile, and with a very competitive cost structure. I hope I have answered your question, Adrian Huerta. Thank you.

Adrian Huerta: Yes, Okay on geographic mix and we will continue to.

Adrian Huerta: The focus on Mexico, the U S on Europe as weak.

Adrian Huerta: Done.

Adrian Huerta: So far.

Adrian Huerta: The difference might be that.

Adrian Huerta: Weather is emerging or.

Adrian Huerta: Developed market, we're going to be focusing relentlessly on improving free cash flow conversion from every asset we operate.

Adrian Huerta: And we're going to be optimizing capex to reduce it.

Adrian Huerta: Bye.

Adrian Huerta: Either improving pieces of our portfolio to the point that they should deliver a significant free cash flow conversion on a rossiya about walk or otherwise.

Adrian Huerta: Worth more to others, we might we might see some further divestments, so we're going to be.

Jaime Moguera: So we're going to be looking at that, and we're going to be working a lot on operational excellence, which means recovering competitiveness, being very agile, and with a very competitive cost structure. I hope I have answered your question, Adrián, thank you. You did, Jaime. Thank you.

Adrian Huerta: Looking at that we're going to be working a lot on operational excellence.

Adrian Huerta: Which means recovery and competitiveness.

Adrian Huerta: Be very agile and with a very competitive cost structure.

Adrian Huerta: I hope I have answered your question already on thank you.

Adrian Huerta: You did, Jaime. Thank you.

Adrian Huerta: You did hear me thank you.

Francisco Suarez: And the next question comes from Francisco Suarez from Scotiabank. Yes, thank you so much.

Lucy Rodriguez: The next question comes from Francisco Suarez from Scotiabank. Paco?

Speaker Change: And the next question comes from Francisco Suarez from Scotiabank.

Francisco Suarez: Yes, thank you so much. Good morning, and congrats, Jaime, for the new role. The question that I have is actually a follow-up on Project Cutting Edge. To me, it seems that it's far more than just a cost-cutting reduction program, and it is about more aligning the entire organization with investors and your overall new strategic objectives. If the answer is yes, can you provide more details on how you expect to change the entire organization in ways that it could be better aligned with what investors care about, and if possible, to add any specific KPIs that you have in mind for these efforts? Thank you.

Francisco Suarez: Yes. Thank you so much good morning, Congrats segment for the new role.

Francisco Suarez: Good morning and congrats Jaime for the new role. The question that I have is actually a follow-up on Project Cutting Edge. To me, it seems that it's far more than just a cost-cutting reduction program and it is about more aligning the entire organization with investors and your overall new strategic objective. The answer is yes. Can you provide more details on how you expect to change the entire organization in ways that it could be better aligned with what investors care about? And if possible, to add any specific KPIs that you have in mind for these efforts?

Francisco Suarez: It's actually a follow up on the cost cutting it to me. It seems that is far more than just a cost cutting reduction program and maybe it's about more aligning the entire organization with investors.

Francisco Suarez: Overall, new strategic objectives.

Francisco Suarez: Yes.

Speaker Change: Can you provide more details on how you expect to change the entire organization in ways that it could be better aligned with what investors care about.

And if possible to add any specific kpis that you have in mind to 240 <unk> efforts.

Jaime Moguera: Thank you. Yes, Francisco. Thanks for your question. The answer the answer is yes. And what we're planning to do is to introduce EBIT. Precast Flow Conversion on ROSA over WEX. And we're going to be trickling down these KPIs to every P&L owner in the organization. And we're going to be relentlessly reviewing them in these performance reviews that I will be doing with my peers twice a year across the portfolio. In addition, in the second semester of the year, I'm planning to review executives' compensation to align those with these additional KPIs, Francisco. So I hope that I have answered your question.

Speaker Change: Thank you.

Jaime Muguiro: Yes, Francisco. Thanks for your question. The answer is yes. What we're planning to do is to introduce EBIT, free cash flow conversion, and ROACE over WACC. We're going to be trickling down these KPIs to every P&L owner in the organization. We're going to be relentlessly reviewing them in these performance reviews that I will be doing with my peers twice a year, across the portfolio. In addition, in the second semester of the year, I'm planning to review executives' compensation to align those with these additional KPIs, Francisco. I hope that I have answered your question.

Francisco Suarez: Yes Francisco.

Speaker Change: For your question.

Speaker Change: The answer the answer is yes.

Speaker Change: What we're planning to do is to introduce.

Speaker Change: EBIT.

Speaker Change: Free cash flow conversion on Rosa over work.

Speaker Change: And we're going to be trickling down these kpis to every P&L owner in the organization.

Speaker Change: We're going to be relentlessly reviewing them in these performance reviews that I will be doing with my peers twice a year.

Speaker Change: Across the portfolio.

Speaker Change: In addition in the second semester of the year pledge.

Speaker Change: Planning to review executives' compensation to align those with these additional kpis.

Speaker Change: Kpis.

Speaker Change: If not please call. So I hope that I have answered. Your question. This is perfect. Thank you so much congrats again.

Francisco Suarez: This is perfect. Thank you so much.

Francisco Suarez: This is perfect. Thank you so much. Congrats again.

Francisco Suarez: Thanks for that, Michael. Bye.

Jaime Muguiro: Thanks for that, Paco. Bye.

Speaker Change: Thanks.

If I could.

Gordon Lee: And the next question comes from Gordon Lee from BTG Paxua. Gordon. Gordon, where are you? I'm I'm not sure he's on the call. So maybe maybe we will move on and come back to him if we can reconnect.

Lucy Rodriguez: The next question comes from Gordon Lee from BTG Pactual. Gordon?

Speaker Change: And the next question comes from Gordon Lee from BTG Pactual Gordon.

Jaime Muguiro: Gordon, where are you?

Speaker Change: Gordon where are you on.

Lucy Rodriguez: I'm not sure he's on the call, so maybe we will move on and come back to him if we can reconnect. The next question comes from Paul Rogers from BNP Paribas via our webcast. Could there be any change in strategy regarding Urbanization Solutions under new leadership, maybe expanding into light side verticals, for example?

Speaker Change: I'm not sure he's on the call seven maybe.

Speaker Change: Maybe we'll move on and come back to them, if we can reconnect.

Speaker Change: The next question comes from Paul Roger from BNP Paribas.

Paul Roger: The next question comes from Paul Roger from via our website. Could there be any change in strategy regarding organization solutions under new leadership, maybe expanding into light side verticals, for example?

Speaker Change: Via our webcast.

Speaker Change: Could there be any change in the strategy regarding urbanization solutions under new leadership, maybe expanding into lifestyle verticals for example.

Jaime Moguera: Thanks Paul for the for the question. The way I look at urbanization solutions is is as follows. I do see certain verticals with great potential to provide sustainable and profitable growth in our portfolio. You see great opportunities in Mexico, in the U.S., and in Europe. I like to be more exposed to the renovation industry and not just new construction. And I like the verticals where we can achieve significant operating synergies, both by vertically integrating further into cement aggregates and admixtures through those urbanization solutions businesses, but also achieving synergies by market segment and customer segment with cross selling opportunities.

Jaime Muguiro: Thanks, Paul, for the question. The way I look at Urbanization Solutions is as follows. I do see certain verticals with great potential to provide sustainable and profitable growth in our portfolio. I see great opportunities in Mexico, in the US, and in Europe. I like to be more exposed to the renovation industry and not just new construction. I like the verticals where we can achieve significant operating synergies, both by vertically integrating further into cement, aggregates, and mixtures through those Urbanization Solutions businesses. Also achieving synergies by market segment and customer segment with cross-selling opportunity. Personally, I like mortars, stuccos, renders, insulation, and screeds for flooring solutions, and also circularity, particularly in Europe.

Speaker Change: Thanks, Paul for the question the way I look at organization solutions.

Speaker Change: This follows I do see certain verticals.

Speaker Change: With great potential to provide sustainable profitable growth in our portfolio.

Speaker Change: You see great opportunities in Mexico in the U S on.

Speaker Change: Europe.

Speaker Change: Are you like.

Speaker Change: The more exposed to the real innovation.

Speaker Change: In industry of not just new construction on our lives the verticals, where we can achieve significant operating synergies both by vertically integrating further into cement aggregates mixtures.

Speaker Change: Through those organization solutions.

Speaker Change: Businesses, but also.

Achieving synergies by market segment, and customer segment with cross selling opportunity.

Jaime Moguera: Personally, I like mortars, stucas, renders, insulation and squids for flooring solutions and also circularity, particularly in Europe.

Speaker Change: Personally I like mortars stickers renders installation.

Speaker Change: Installation is squeezed for flooring solutions.

Speaker Change: Our solutions also circle are they particularly.

Jaime Moguera: So the conclusion is we will continue responsibly deploying capital to grow our urbanization solutions businesses, but we are doing it with a very focused strategy around those specific verticals. And I repeat, Mexico, where we have a very strong customer base, the U.S. on Europe. And yes, it includes their four light side solutions.

Speaker Change: In Europe. So the completion is we will continue.

Jaime Muguiro: The conclusion is we will continue responsibly deploying capital to grow our Urbanization Solutions businesses. We are going to do it with very focused strategy around those specific verticals in, and I repeat, Mexico, where we have a very strong customer base, the US, and Europe. Yes, it includes therefore light side solutions.

Speaker Change: Responsibly deploying capital to grow our urbanization solutions businesses, but we weren't going to do it with very focused strategy around those specific verticals.

Speaker Change: And I repeated Mexico, where we have a very strong customer base.

Speaker Change: As an on Europe.

Speaker Change: Yes. It includes therefore light side.

Speaker Change: Solutions.

Lucy Rodriguez: Thank you, Jaime. I'm going to try one more time to see if we can hear Gordon. He's actually on the line. Gordon, are you there? If not, I'll read his question.

Speaker Change: Yeah.

Jaime Moguera: Thank you, Jaime.

Speaker Change: Thank you Jaime I am going to try one more time to see if Gordon can if we can hear Gordon he is actually on the line. So Gordon are you there and if not I'll read his question.

Gordon Lee: I'm going to try one more time to see if Gordon can, if we can hear Gordon, he's actually on the line. So, Gordon, are you there? And if not, I'll read. I'm here. Can you hear me? Yes. Yes, Gordon, I can hear you. Perfect. Super.

Gordon Lee: I'm here. Can you hear me?

Gordon: I'm here can you hear me.

Lucy Rodriguez: Yes.

Jaime: Yes, yes, Gordon I can hear you.

Jaime Muguiro: Yes, Gordon, I can hear you.

Gordon Lee: Okay. Perfect. Super. Well, first of all, Jaime, let me again echo, give congratulations for your new role and obviously, my best wishes. Very exciting. I have a very quick question. Going back to the priorities you mentioned at the beginning of the call as you take over the new role, but focusing a little bit more on the financial/capital allocation side of things. I was wondering if you could tell us where share buybacks rank in your list of capital allocation priorities, and whether we can expect CEMEX to be more aggressive on that front going forward, given the stock's current valuation. Thank you.

Gordon Lee: Well, first of all, Jaime, let me again, you know, echo your congratulations for the new role and obviously, my best wishes. Very exciting. The I have a very quick question. Going back to your to your sort of the priorities you mentioned at the beginning of the call, as you take over the new role, but focusing a little bit more on the financial slash capital allocation side of things. I was wondering if you could if you could tell us where share buybacks rank in your list of capital allocation priorities and whether we can expect SEMEC to be more aggressive on that front going forward given given the stock's current valuation.

Gordon: Well first of all if I may let me again.

Jaime: <unk>.

Speaker Change: Congratulations for the new role and obviously my best wishes.

Speaker Change: Citing the I have a very quick question.

Speaker Change: Going back to your to your sort of the priority as you mentioned at the beginning of the call as you take over the new rule, but focusing a little bit more on the financial slash capital allocation side.

Speaker Change: Are things I was wondering if you could if you could tell us where share buybacks rank in your list of capital allocation priorities and whether we can expect <unk> to be more aggressive on that front going forward given given the stock's current valuation. Thank you.

Jaime Moguera: Thank you. Gordon, thanks for congratulating me. The straight answer is that Shared by Vax is in our toolkit. The shareholders general meeting approved a program for up to $500 million.

Jaime Muguiro: Gordon, thanks for congratulating me. The straight answer is that share buybacks is in our toolkit. The shareholders general meeting approved a program for up to $500 million. As part of our capital allocation, I see three main buckets. I see opportunities to continue deleveraging, because we can save materially interest expenses and boost free cash flow conversion. That's one. Number two, I do want to enhance total shareholder returns with progressive dividends combined with share buybacks when they become opportunistic and at the right time. Third, we don't want to miss opportunities for growth through very responsible, accretive to free cash flow, small to medium size acquisitions in the US mainly. The answer is yes, share buybacks is in our toolkit.

Speaker Change: Gordon Thanks for Congratulating me straight answer is that share buybacks is in our toolkit.

Speaker Change: Shareholders' General meeting approved a program for up to $500 million gutters.

Jaime Moguera: And as part of our capital allocation, I see three main buckets. I see opportunities to continue deleveraging because we can save materially interest expenses and boost free cash flow conversion. So that's one. Number two, I do want to enhance total shareholder returns with progressive dividends combined with share buybacks when, you know, they become opportunistic and at the right time. And third, we don't want to miss opportunities for growth through, it's very responsible, accretive to free cash flow, small to medium-sized acquisitions in the U.S. mainly. So the answer is share buybacks is in our toolkit.

Speaker Change: On debt as part of our capital allocation I see three main buckets.

Speaker Change: Opportunities to continue deleveraging.

Speaker Change: Because we can save materially interest expenses and boost free cash flow conversion.

Speaker Change: So that's one number two.

Speaker Change: I do want to enhance total shareholder returns with progressive dividends combined with share buybacks when they become opportunistic and at the right time on third we don't want to Miss.

Speaker Change: Opportunities for growth.

Speaker Change: Both through.

Speaker Change: Very responsible accretive to free cash flow.

Speaker Change: Small to medium size acquisitions in the U S. Mainly so the answer is yes share buybacks is in our toolkit.

Jaime Moguera: Having said that, I also want to share, Gordon, that in these uncertain macro environments, I do want to preserve cash in hand and definitely continue paying the principle of our debt to lower interest specs expenses. It makes a lot of sense.

Jaime Muguiro: Having said that, I also want to share, Gordon, that in this uncertain macro environments, I do want to preserve cash in hand. Definitely continue paying the principal of our debt to lower interest expenses, it make a lot of sense. Finally, we're walking away from strategic CapEx. We've done enough. I will be working with the team to relentlessly make sure that the incremental EBITDA and free cash flow from current strategic CapEx pipeline meet our targets over time. That doesn't mean that we wouldn't approve any strategic CapEx, we're now shifting from strategic CapEx to other uses of capital. I hope that I answer your questions, Gordon.

Speaker Change: Having said that I also want to assure gorton that in these uncertain macro environments I do want to preserve cash in hand on definitely continue paying the principal of our debt to lower interest expenses expenses make a lot of sense and then finally, we're walking away from.

Jaime Moguera: And finally, we're walking away from a strategic apex. We've done enough. I will be working with the team to relentlessly make sure that the incremental levy down free cash flow from current strategic apex pipeline meet our targets over time. That doesn't mean that we wouldn't approve any strategic apex, but we're now shifting from strategic apex to other uses of capital. So I hope that I answered your questions, Gordon. Thank you very much. Thank you. Thanks, Gordon.

Speaker Change: As Judy Capex, we've done enough.

Speaker Change: I will be working with the team to <unk>.

Speaker Change: He is really make sure that the incremental EBITDA and free cash flow from current and the strategic Capex Potline Mead.

Speaker Change: Meade.

Speaker Change: Our targets over time.

Speaker Change: Doesn't mean that we wouldn't approve any strategic capex, but we're now shifting from strategic Capex too.

Speaker Change: Two other uses of capital so I hope that I answered your questions Gordon.

Gordon Lee: You did, Jaime. Thank you very much.

Speaker Change: You did comment thank you very much.

Jaime Muguiro: Thank you.

Speaker Change: Thank you thanks Gordon.

Lucy Rodriguez: Thanks, Gordon. The next question comes from Anne Milne from Bank of America. Anne?

Anne Milne: And the next question comes from Anne Milne from Bank of America. Anne. Good morning, Jaime Lucy Maher. Nice to hear you on the call. And Jaime, yes, I will also congratulate you on the role. Having known you for many years in different functions, it's very nice to see you in the CEO position.

And the next question comes from Ann Millner from Bank of America Ann.

Anne Milne: Good morning, Jaime, Lucy, Maher. Nice to hear you on the call. Jaime, yes, I will also congratulate you on the role, having known you for many years in different functions. It is very nice to see you in the CEO position.

Ann Millner: Hi, Good morning, Hi May loosen.

Speaker Change: Nice to hear you on the call and highway Yes, I will also congratulate you on the role of <unk>.

Speaker Change: For many years and different functions, it's very nice to see you in the CEO position.

Jaime Muguiro: Thanks, Anne.

Maher Al-Hafar: My question is on the financials. You're very welcome. My question is on the financial side. Now that you have called the 9-1-1 perps, you haven't called the 5-1-1. Obviously, it has a low coupon. Maybe you could just walk us through a couple things on the financing side. I assume that you will pay down the other perpetual, at least by the call date, if not sooner, just because it is expensive. Well, it's not so expensive, but it doesn't give you any sort of equity treatment. And then just your thoughts on potentially doing a new perpetual without the penalizing language going forward, and if you have any other plans on doing anything else on the financial side this year.

Anne Milne: You're very welcome. My question is on the financial side. Now that you have called the nine and an eighth perps, you haven't called the five and an eighth. Obviously, it has a low coupon. Maybe you could just walk us through a couple things on the financing side. I assume that you will pay down the other perpetual, at least by the call date, if not sooner, just because it is expensive. Well, it's not so expensive, but it doesn't give you any sort of equity treatment. Then just your thoughts on potentially doing a new perpetual without the penalizing language going forward, and if you have any other plans on doing anything else on the financial side this year. Thank you.

Speaker Change: My question is on the financials.

Speaker Change: Very welcome.

Speaker Change: <unk> is on the financial side now that you have called the <unk>.

Speaker Change: Perhaps.

Speaker Change: You haven't called the 508, obviously it has a low coupon maybe you could just walk us through a couple of things on the financial financing side.

Speaker Change: I assume that you will pay down the other perpetual.

Speaker Change: At least by the call date, if not sooner just because it is.

Speaker Change: Expenses.

Speaker Change: Expensive, but it doesn't give you any sort of equity treatment and then just your thoughts on potentially doing a new perpetual without D.

Speaker Change: Penalizing language going forward and if you have any other plans.

Speaker Change: Doing anything else on the financial side this year. Thank you.

Anne Milne: Thank you. Okay, thanks.

Jaime Muguiro: Okay. Thanks, Anne. I will ask Maher to answer your question. Please, Maher.

Marco: Okay, Thanks, and I will ask a market to answer your question. Please Marco Thank you Jaime and good to hear from you.

Maher Al-Hafar: I will ask Maher to answer your question.

Maher Al-Hafar: Please, Maher. Thank you, Jaime. Hi, Anne. Good to hear from you. So let's go through all of the questions in series, right? I mean, our biggest concern is to reduce interest expenses. You know, if we take a look at our interest expense plus the coupons on the subordinated notes, you know, we're probably using about a quarter of our EBITDA, you know, to pay interest. So very importantly, during the year, we will continue, as Jaime said, to the extent there are no other opportunities to do anything else to de-leverage. as you know, gave us an opportunity to call the notes at 101.

Maher Al-Haffar: Thank you, Jaime. Hi, Anne. Good to hear from you. Let's go through all of the question in series, right? Our biggest concern is to reduce interest expense. As you know, if we take a look at our interest expense plus the coupons on the subordinated notes, we're probably using about a quarter of our EBITDA to pay interest. Very importantly, during the year, we will continue, as Jaime said, to the extent there are no other opportunities to do anything else to deleverage, to continue to deleverage and reduce our interest expense. The change in ratings methodology from S&P definitely, as you know, gave us an opportunity to call the notes at 101. Currently, we do see the perpetual notes as part of the capital structure of the company for the foreseeable future. We will be monitoring the markets, to renew the nine and one-eighth, definitely.

Speaker Change: So let's go through.

Marco: All of the debt.

Speaker Change: Western series right I mean, our biggest.

Speaker Change: Our concern is to reduce interest expenses you know if we take a look at our interest expense plus.

Speaker Change: The coupons on the subordinated notes.

Speaker Change: We're probably using about a quarter of our EBITDA.

Speaker Change:

Speaker Change: To pay interest so very importantly.

Speaker Change: During the year, we will continue as Jaime said.

Speaker Change: To the extent there.

Speaker Change: Other opportunities to do anything else to deleverage to continue to deleverage and reduce our interest expense.

Speaker Change: The change in ratings methodology from S&P.

Speaker Change: Definitely gives us as you know gave us an opportunity to call the notes at 101.

Maher Al-Hafar: Currently, the you know, we do see the perpetual notes as part of the capital structure. So we will be monitoring the markets to renew the 9-N-1-H. at significant savings from what we had before the, just to remind the audience.

Speaker Change: Currently the we do see the perpetual notes as part of the capital structure of the company for the foreseeable future. So we will be monitoring.

Speaker Change: The markets to renew the 900 <unk> definitely.

Maher Al-Haffar: At significant savings from what we had before. Just to remind the audience, the coupon is nine and one-eighth, and we bought it 101. The other perpetual, frankly, today is trading at below par, and it would be expensive to call. For the time being, I don't anticipate that we would do anything on that. We are working on some other financings in euros that may enable us to reprice or extend some of our euro-denominated outstandings that we can manage during the course of the year. Now, in terms of the call of the nine and one-eighth, we used a little bit of cash and some of the revolver during the quarter, but frankly, that was just because of seasonality. Pretty much now it's all cash, essentially.

Speaker Change: At significant savings from what we had before the <unk> just to remind the audience.

<unk> is not in one eight then we bought at 101, so the other perpetual frankly today is trading at.

Maher Al-Hafar: Что Добрый день, Я как что ector в Creo как Заказ в Mehr Reprice or extend some of our Euro denominated outstandings that we can manage during the course of the year Now in terms of the call of the 9 and 1 8 We used a little bit of cash and some of the revolver during the quarter, but frankly, that was just because of seasonality, you know, pretty much now it's all it's all cash essentially. And so we're monitoring the market with a view to potentially refining that towards the end of the year. But we're not in a hurry.

Speaker Change: Below par.

Speaker Change: And would be expensive to call and so for the time being.

Speaker Change: I don't anticipate that we would do anything on that.

Speaker Change: And then we are working on some other.

Speaker Change: Financings in euros that may enable us to.

Speaker Change: Reprice or extend some of our euro denominated outstandings that we can manage during the course of the year.

Speaker Change: Now in terms of the call of the nine and one eighth.

Speaker Change: No.

Speaker Change: We used a little bit of cash in and some of the revolver during the quarter, but frankly that was just because of seasonality.

Speaker Change: Pretty much now it's all it's all cash essentially and so we're monitoring the market with a view to potentially refined that towards the end of the year, but we're not in a hurry I mean, we're patient and.

Maher Al-Haffar: We're monitoring the market with a view to potentially refine that towards the end of the year, but we're not in a hurry. We're patient, and we're monitoring the markets to see what we can do in terms of our financial strategy.

Maher Al-Hafar: I mean, we're we're patient and and we're monitoring the markets to see what we can do in terms of our finances.

Speaker Change: And we're monitoring the markets to see what we can do in terms of our financial strategy.

Maher Al-Hafar: Okay, thanks. And just, just, can I just ask a clarification on the purchase of the or the repayment of the perps? You said you use cash and some revolver, but that the revolver is due to seasonality. Has that been repaid now? Or will it be repaid in the near term? Yeah, exactly. Yeah. Yeah, exactly. That was intra quarter and and so now we're kind of back to pretty much no, no undrawn, no drawn amounts. Okay, perfect. Thank you very much, Maher. I appreciate that.

Jaime Muguiro: Thanks, Maher.

Speaker Change: Thanks, a lot okay. Thanks, and just just can I just ask a clarification on the <unk>.

Anne Milne: Okay, thanks. Can I just ask a clarification? On the purchase or the repayment of the perps, you said, you used cash and some revolver, but that the revolver is due to seasonality. Has that been repaid now, or will it be repaid?

Speaker Change: Purchase of the or the repayment of debt, perhaps you said.

Speaker Change: Cash and some revolver, but there was also good.

Speaker Change: Seasonality has that been repaid now or will that be repaid, yes, Kim yes, exactly yeah, yeah, exactly intra quarter AD and so now we're kind of back to pretty much no undrawn them no drawn amounts under that.

Maher Al-Haffar: Yes

Anne Milne: in the near term?

Maher Al-Haffar: Yeah, exactly. That was just intra-quarter.

Anne Milne: Okay.

Maher Al-Haffar: Now we're kind of back to pretty much no drawn amounts under that.

Anne Milne: Okay, perfect. Thank you very much, Maher. I appreciate that.

Speaker Change: Okay perfect. Thank you very much my I appreciate that.

Maher Al-Haffar: Thank you.

Speaker Change: Thank you.

Yassine Tawere: And, and the next question comes from Yassine Tawere from Onfield. Yassine. Yes, good morning and thank you very much for taking the invitation. Again, congratulations for your new position, Jaime, and best of luck for the future. My question would be on your peers. Holcim and Heidelberg materials are targeting EBGA to free cash flow conversion rates above 50%. When I'm looking at your 2025 guidance, it suggests less than 25%. So my question is, do you believe that CEMEX can achieve best in class conversion, cash conversion in the coming years? And if so, what would be the level of cash, financial expenses and strategic capex that you would target midterm?

Lucy Rodriguez: The next question comes from Yassine Touahri from On Field Investment Research. Yassine?

Speaker Change: And and the next question comes from <unk> from on field USA.

Yassine Touahri: Yes, good morning. Thank you very much for taking our question. Again, congratulations for your new position, Jaime, and best of luck for the future. My question would be on your peers. Holcim and Heidelberg Materials are targeting EBITDA to free cash flow conversion rates above 50%. When I'm looking at your 2025 guidance, it suggests less than 25%. My question is, do you believe that CEMEX can achieve best-in-class conversion, cash conversion in the coming years? If so, what would be the level of cash financial expenses and strategic CapEx that you would target midterm? Also, is your higher exposure than peers to ready-mix concrete a problem or a difficulty to achieve the better cash conversion?

Speaker Change: Yes, good morning, and thank you very much focus on integration again, congratulations for your new position on the highway.

Speaker Change: Best of luck for the future My question would be on.

Speaker Change: On the on your <unk> on the hydro dominated youll start getting EBITDA to free cash flow conversion rates.

Speaker Change: Above 50%.

When I'm looking at your 2025 guidance. It suggests less than 25%. So my question is do you believe that <unk> can achieve best in class conversion.

Speaker Change: Cash conversion in the coming years.

Speaker Change: And if so what would be the reverse of cash financial expenses and Capex.

Tim Lugano: Doug It's Tim.

Yassine Tawere: And also, is your higher exposure than peers to ready-mix concrete a problem or a difficulty to achieve a better cash conversion?

Tim Lugano: Is your high yield exposure that appears to have any concrete.

Speaker Change: Our problem or difficult to achieve that EBITDA cash conversion.

Jaime Moguera: Yashin, thank you so much for congratulating me and let me respond to your first question. And that's exactly what I'm doing right now benchmarking to those who are achieving better metrics. And our target is to at least meet the best in class. I do believe that we can achieve best in class cash conversion in the short in the short to medium term. Now, what are the Number one, we're going to be working to increase EBITDA. That's going to happen because we're going to see in the mid term after the macro uncertainty goes away, a recovery of volumes in many of our markets, and that will boost operational leverage.

Jaime Muguiro: Yassine, thank you so much for congratulating me. Let me respond to your first question. That's exactly what I'm doing right now, benchmarking to those who are achieving better metrics. Our target is to at least meet the best-in-class. I do believe that we can achieve best-in-class cash conversion in the short to medium term. Now, what are the drivers? Number one, we're going to be working to increase the EBITDA. That's going to happen because we're going to see in the midterm, after the macro uncertainty goes away, a recovery of volumes in many of our markets, and that will boost operational leverage. Second, we will also benefit from incremental EBITDA and free cash flow conversion from our strategic CapEx that's undergoing right now from our pipeline. Those at a steady state should generate around $680 million of incremental EBITDA with solid free cash flow as well.

Speaker Change: Yes, Shannon. Thank you so much for congratulating me let.

Speaker Change: Let me respond to your first question.

Speaker Change: That's exactly what I'm doing right now benchmarking to those who are achieving better metrics on our target is to at least meet the best in class I do believe that we can achieve best in class cash conversion in the shore in the short term.

Speaker Change: Medium term now what are the drivers number one.

Speaker Change: We're going to be working to increase EBITDA, that's going to happen because we're going to see in the mid term after the macro uncertainty goes away.

Speaker Change: Recovery of volumes in many of our markets that will boost operational leverage.

Jaime Moguera: Second, we will also benefit from incremental EBITDA and free cash flow, sorry, from our strategic CAPEX that's undergoing right now, from our pipeline. And those at a steady stage should generate around point six, eight million dollars of incremental EBITDA with solid free cash flow as well. So those are two factors. The third factor is that we're going to be reducing strategic CAPEX. and again focusing on realizing the committed incremental EBITDA and fee cash flow from the ongoing pipeline. Fourth, we're going to be doing portfolio management from a RASA to WACC point of view, meaning that assets that do not deliver a RASA above WACC, as I said, targets top down for every asset in the portfolio and provided that it is worth more to others would go away.

Speaker Change: Second we will also benefit from incremental EBITDA and free cash flow conversion from on free cash flow sorry from our strategic Capex.

Speaker Change: Undergoing right now.

Speaker Change: From our.

Speaker Change: Top line.

Speaker Change: Those at a steady state to generate around <unk>, six 8 million daughters.

Speaker Change: Incremental EBITDA with solid free cash flow as well.

Jaime Muguiro: Those are two factors. The third factor is that we're going to be reducing strategic CapEx. Again, focusing on realizing the committed incremental EBITDA and free cash flow from the ongoing pipeline. Fourth, we're going to be doing portfolio management from a ROACE to WACC point of view, meaning that assets that do not deliver a ROACE above WACC, as I set targets top-down for every asset in the portfolio and provided that it is worth more to others, would go away. We will be working relentlessly, therefore, to improve margins and return on assets.

Speaker Change: So those are two factors the third factor is that we're going to be reducing in strategic capex.

Speaker Change: Again, focusing on realizing the committed incremental EBITDA and free cash flow from the ongoing poplar.

Speaker Change: Topline fourth we're going to be doing portfolio management from a rough set to what point of view, meaning that assets that do not deliver raw stay above walk.

Speaker Change: Set the bar gets top down for every asset in the in their portfolio and.

Speaker Change: Provided that it is worth more to others would go away.

Jaime Moguera: We will be working with landless leaders to improve margins and return an asset. And finally, regarding your question about ready-mix concrete, we are, as we did in the U.S., I think in the U.S. is a good template because there we exited by divesting and or shutting down, but divested some ready-mix positions that although contributed for vertical integration, we could achieve that vertical integration through other means, being a long-term supply contract or a joint venture, what would retain a minority holding. So, as part of our performance reviews across our portfolio, we are revisiting our ready-mix concrete positions and wherever we think that they wouldn't achieve our RASA to WACC metrics, we would take action.

Speaker Change: We will be working relentlessly therefore to improve margins and return on assets.

Jaime Muguiro: Finally, regarding your question about ready-mix concrete, as we did in the US, I think the US is a good template, because there we exited by divesting and/or shutting down, but divested some ready-mix positions that although contributed for vertical integration, we could achieve that vertical integration through other means, being a long-term supply contract or a joint venture, what would retain a minority holding. As part of our performance reviews across our portfolio, we are revisiting our ready-mix concrete positions, and wherever we think that they wouldn't achieve our ROACE to WACC metrics, we would take action. The overall answer is we do know what we need to do, and I do believe that we can improve our free cash flow conversion, meeting those that are today generating more.

Speaker Change: <unk>.

Speaker Change: And finally regarding your question about ready mix concrete.

Speaker Change: We are as we did in the U S. I think in the U S is a good template.

Speaker Change: Cause there.

Speaker Change: Exited by divesting or shutting down but the divested.

Speaker Change: Some ready mixed positions that although contributed for vertical integration, we could achieve that vertical integration through other means being a long term supply contract or a joint venture what would retain a minority holding so as part of our performance.

Speaker Change: Use across our portfolio, we are revisiting our ready mixed concrete positions on that.

Speaker Change: Wherever we think that there were.

Speaker Change: Wouldn't achieve are.

Speaker Change: Ross it to what metrics.

Speaker Change: We would take action. So the overall answer is we do have the.

Jaime Moguera: So, the overall answer is we do know what we need to do, and I do believe that we can improve our free cash flow conversion, meeting those that are today generating more. I hope I answered your question.

Speaker Change: We do know what we need to do and I do believe that we can improve our free cash flow conversion, meaning those that are today generating more.

Yassine Touahri: Thanks a lot.

Jaime Muguiro: I hope I answered your question.

Speaker Change: Thanks, Rob did I answer your question.

Yassine Tawere: That's very clear. Thanks a lot.

Yassine Touahri: That's very clear. Thanks a lot.

Rob: That's very clear thanks.

Jose Espitia: Okay, and then the next question comes from Jose Espitia from BBDA.

Lucy Rodriguez: Okay.

Okay. Thanks, and then the next question comes from Jose Sbcs from DB.

Yassine Touahri: Thanks.

Lucy Rodriguez: The next question comes from José Espitia from BBVA. José? We might have lost him. Let me move on to the next one. The next question comes from Alejandra Obregon from Morgan Stanley. Ale?

Jose Espitia: Jose? We might have lost him. So, let me move on to the next one.

Rob: Jose.

We might have lost him.

Rob: Let me move on to the next one.

Alejandra Obregón: And the next question comes from Alejandra Obregon from Morgan Stanley. Ale? Hi, good morning. Good morning, Zemex team.

Speaker Change: And the next question comes from Alejandro <unk> from Morgan Stanley Ali.

Alejandra Obregon: Hi. Good morning, CEMEX team. Jaime, congratulations on your new position. My question is a little bit related to all the previous ones. As you put together, you mentioned Project Cutting Edge, cost savings, free cash flow generation initiatives, and above WACC returns. My question is a little bit perhaps on a horizontal view of that. Where do you think from a regional perspective or perhaps from a product perspective, you're going to get to see more benefits from all these strategy? Where do you see more opportunities as you do perhaps an early assessment of where things are today? Thank you.

Alejandro: Hi, Good morning, good morning, some extreme high may congratulations on your new position.

Alejandra Obregón: Hi May, congratulations on your new position. My question is a little bit related to all the previous ones. As you put together, you mentioned project cutting edge, cost savings, free cash flow generation initiatives and above WAC returns. My question is a little bit perhaps in a horizontal view of that. Where do you think from a regional perspective or perhaps from a product perspective, you're going to get to see more benefits from all these strategies or do you see more opportunities as you do perhaps an early assessment of where things are today? Thank you. Thanks for the question, Alejandra.

Alejandro: My question is related to all the previous ones as you put together you mentioned project cutting edge cuts cost savings free cash flow generation and is it the initiatives and above whack returns.

Alejandro: My question is a little bit perhaps in a horizontal view of that where do you think from a regional perspective, or perhaps from a product perspective, youre going to get to see more.

Alejandro: Benefits from all these strategy, where do you see more opportunities as you do or perhaps an early assessment of where things are today. Thank you.

Jaime Muguiro: Thanks for the question, Alejandra. First of all, what are the main legs, if you allow me to use that expression, for Project Cutting Edge? First, supply chain optimization. You're going to see improvements, particularly in the cement and potentially aggregate business. We have another pillar, which is fuel sourcing. That's going to be primarily cement driven. We do have a material improvement in operational efficiency in the US. That's something that we've been working on. That also applies to cement. So far, the team did a great job improving operational efficiency by 5 percentage points year over year in 1Q at 25. You're going to see procurement savings, and those are targeting all third-party addressable spend. That cuts across, not just for cement, but also aggregates, ready-mix across the company. Do expect a material reduction on overheads, and that targets SG&A across the board.

Alejandro: Thanks for the question Alejandro first of all what are the main.

Jaime Moguera: Well, first of all, what are the main legs, if you allow me to use that expression, for project cutting edge? First, supply chain optimization. That's, you're going to see improvements, particularly in the cement and potentially aggregate business. We have another pillar, which is fuel sourcing. That's going to be primarily cement-driven. We do have a material improvement in operational efficiency in the U.S. That's something that we've been working on. That also applies to cement. So far, we've been, the team did a great job improving operational efficiency by five percentage points year over year in one queue at 25.

Alejandro: The legs, if you allow me to use that exploration for project cutting edge first supply chain optimization.

Alejandro: Youre going to see improvements, particularly in the cement on potentially aggregate business.

Alejandro: We have another pillar, which is fuel sourcing that's going to be primarily cement driven.

Alejandro: We do have a material improvement in operational efficiency in the U S. That's something that we've been working on that also applies to cement so far.

Alejandro: The team did a great job improving operational efficiency by five percentage points year over year and <unk> 25, then you are going to see.

Jaime Moguera: Then you're going to see procurement savings. And those are targeting all third-party addressable spend. So that cuts across, not just for cement, but also aggregates a ready mix across the company. Then do expect a material reduction on overheads. And that targets SG&A across the board. And finally, as we revisit our ready mix network, do expect some enhanced margins in the ready mix. That's that's how we're looking. That's how we're looking at it. I hope I answered your question Alejandra. You did.

Alejandro: Procurement savings those are targeting all third party addressable spend so that cuts across not just for cement, but also aggregates ready mix.

Alejandro: Across the company.

Alejandro: Then.

Alejandro: Do expect a material reduction on overheads.

Alejandro: It targets SG&A across the board on finally, us where <unk> already makes network do expect.

Jaime Muguiro: Finally, as we revisit our ready-mix network, do expect some enhanced margins in the ready-mix business. That's how we're looking at it. I hope I answered your question, Alejandra.

Alejandro: <unk> margins in the ready mix business.

Speaker Change: That's how we're looking that's how we're looking at it I hope I answered your question Alejandro.

Alejandra Obregon: You did. Thank you very much, and congratulations again on the role.

Speaker Change: You did thank you very much and congratulations again on the wrong.

Jaime Moguera: Thank you very much and congratulations again on the role. Thanks, man. And thank you, Ali.

Jaime Muguiro: Thanks, ma'am.

Speaker Change: Thanks Man.

Lucy Rodriguez: Thank you, Ale. The next question comes from Ben Theurer from Barclays. Ben?

Speaker Change: Thank you Allen. The next question comes from Ben Theurer from Barclays Bank.

Ben Thur: The next question comes from Ben Thur from Barclays. Ben. Yeah, good morning, and I'll just follow suit, Jaime. Congrats. Best of luck in your new role as CEO. So I wanted to follow up and, I mean, taking off the advantage that you were in charge of the US business in the past. You've been very detailed in terms of some of the issues in the first quarter. So I wanted to understand what you're seeing in the US market and the three main buckets of demand, i.e., infrastructure, but also you flagged industrial, commercial, and the softness in housing.

Ben Theurer: Hi. Yeah, good morning. I'll just follow suit, Jaime. Congrats. Best of luck in your new role as CEO. I wanted to follow up and taking also advantage that you were in charge of the US business in the past. You've been very detailed in terms of some of the issues in Q1. Wanted to understand what you're seeing in the US market and the three main buckets of demand, i.e., infrastructure, also you flagged industrial commercial and the softness in housing. How much do you think is already related to the fear of a potential slowdown in economic activity, or how much of that is yet to come? If you've seen any improvements in April versus what was clearly a challenging Q1. Thank you.

Speaker Change: Hi, yes, good morning.

Speaker Change: I'll just follow suit congrats.

Speaker Change: Congrats best of best of luck.

Speaker Change: On your new role.

Speaker Change: Joe.

Speaker Change: So I wanted to follow up and taken off the advantage did you were in charge of the U S business in the past you've been very detailed in terms of some of the issues in the first quarter.

Speaker Change: So I wanted to understand what you are seeing in the U S market and the free.

Speaker Change: Main buckets of demand.

Speaker Change: The infrastructure, but then also you flex industrial commercial and the softness in and housing how much do you think is already related to the fear of a potential slowdown in economic activity or how much of that is yet to come and if you've seen any improvement in April versus what was clearly.

Jaime Moguera: How much do you think is already related to the fear of a potential slowdown in economic activity, or how much of that is yet to come, and if you've seen any improvements in April versus what was clearly a challenging first quarter? Thank you. Okay. Thanks, Ben, for congratulating me and thank you for the question.

Speaker Change: A challenging first quarter. Thank you.

Jaime Muguiro: Okay. Thanks, Ben Theurer, for congratulating me, and thank you for the question. The first quarter in the US was pretty slow. Indeed, the weather was very difficult, and it even affected the states such as Florida with heavy snow. We have seen since January an increased month after month, so sequentially, of daily sales across cement and ready-mix, and also aggregates because of much better weather in Florida. Therefore, I can confirm you that we've seen that increase month after month. It's not just seasonality of winter, but also we saw it on better daily sales, and that is encouraging. We still see a robust infrastructure spending, and we see more projects coming along. According to our data, we think that only 35% of the funding from the infrastructure bill has been deployed, and I think that the best is yet to come.

Speaker Change: Okay. Thanks, Ben for Congratulating me and thank you for the question.

Jaime Moguera: The first quarter in the US was pretty slow. Indeed, the weather was very difficult, and it even affected, you know, the states such as Florida with heavy, heavy snow. We have seen since January an increased quarter, sorry, month after month, so sequentially, of daily sales across CEMEND on ReadyMix. and also aggregates because of much better weather in Florida. Therefore, I can confirm to you that we've seen that increase month after month. So it's not just seasonality of winter, but also we saw it on better daily sales. And that is encouraging. We still see a robust infrastructure spending, and we see more projects coming along.

Speaker Change: The first quarter in the U S was pretty slow.

Speaker Change: Indeed, the weather was very difficult.

Speaker Change: Have you been affected.

Speaker Change: The states such as Florida with heavy heavy snow.

We have seen since January and increased quarter, sorry month after month so sequentially.

Speaker Change: Daily sales across cement on ready mix.

Speaker Change: I'd also aggregates because of much better weather in Florida, Therefore, I can confirm you that.

Speaker Change: We've seen that increase it month after month. So it's not just the seasonality of winter, but also we saw it on better daily sales and that is encouraging.

Speaker Change: We still see a.

Speaker Change: Robust infrastructure spending and we see more projects coming along.

Jaime Moguera: According to our data, we think that only 35% of the funding from the infrastructure bill has been deployed, and I think that the best is yet to come. It's probably picking up in, what, maybe 2026, but we do see a strength there. We also have a pretty solid backlog in ReadyMix, and we're, you know, vertically integrated upstream with aggregates and cement. And the backlog in ReadyMix is resilient, particularly in industrial and heavy commercial. We're doing data centers, second phases of semiconductor facilities, and we have also a lot of work around Cape Canaveral. So the data centers, the industrial and heavy commercial, are pretty resilient.

Speaker Change: According to our data, we think that only 35% of the funding from the infrastructure Bill has been deployed and I think that the best is yet to come it probably peaking up.

Jaime Muguiro: Probably picking up in, what, maybe in 2026. We do see a strength there. We also have a pretty solid backlog in ready-mix, and we're vertically integrated upstream with aggregates and cement. The backlog in ready-mix is resilient, particularly in industrial and heavy commercial. We're doing data centers, second phases of semiconductor facilities, and we have also a lot of work around Cape Canaveral. The data centers, the industrial and heavy commercial are pretty resilient. Where we see weakness is in residential, both multi-family and single-family homes. Let's see what happens with multi-family after dropping quite significantly in the last 18 months and see if it behaves on anti-cyclical to a worst single-family home environment because of lack of affordability, because of high mortgage rates. The weak segment is indeed residential. That's how we see things, Ben, in the next months.

Speaker Change: What may be in 2026.

Speaker Change: We do see a strength there we also have a pretty solid backlog in ready mix on we're vertically integrated upstream with aggregates and cement the backlog in ready mix is resilience.

Speaker Change: Particularly in industrial.

Speaker Change: Commercial we're doing data centers.

Speaker Change: Second phases semiconductor facilities and we have also a lot of work around Cape Canaveral. So the the data centers the industrial heavy commercial are pretty resilient.

Jaime Moguera: Where we see weakness is in residential, both multifamily and single-family homes. Let's see what happens with multifamily after dropping quite significantly in the last 18 months and see if it behaves anticyclical, right, to a worst single-family home environment because of lack of affordability because of high market rates. So the weak segment is indeed residential. That's how we see things then in the next months. Obviously, we do want macro uncertainty to disappear as fast as possible so that investors can continue and resume some of their investment projects that were planned, that indeed some of them were put on hold because of uncertainty.

Speaker Change: C witness.

Speaker Change: Is in residential.

Speaker Change: Both multifamily and single family homes, let's see what happens with multifamily after dropping quite significantly in the last 18 months and see if it behaves.

Speaker Change: Anti cyclical right too.

Speaker Change: Worst.

Speaker Change: Family home environment, because of lack of affordability because of high market rates so that week.

Speaker Change: Segment is indeed.

Speaker Change: Essential.

Speaker Change: That's how we see things have been in the next.

Speaker Change: Months, obviously, we do one macro uncertainty to disappear as fast as possible. So that investors can continue on <unk> some of their investment.

Jaime Muguiro: Obviously, we do want macro uncertainty to disappear as fast as possible so that investors can continue and resume some of their investment projects that were planned, that indeed some of them were put on hold because of uncertainty. I hope I answered your question, Ben.

Speaker Change: Projects that were planned.

Speaker Change: Indeed, some of them were put on hold because of uncertainty.

Jaime Moguera: I hope I answered your question. Yes, he did, Jaime. Muchas gracias. Thanks Ben.

I Hope I answered your question Ben.

Ben Theurer: Yes, you did, Jaime. Muchas gracias.

Speaker Change: Yes, Hey, Dave which other Ics.

Jaime Muguiro: Igualmente.

Lucy Rodriguez: Thanks, Ben. The next question is coming from Carlos Peyrelongue from Bank of America. Carlos.

Speaker Change: Thanks, Dan.

Carlos Perelon: The next question is coming from Carlos Perelon from Bank of America, Carlos. Thanks, Lucy. My question has been answered, but I want to thank Jaime as well on the new position and best of luck. Thanks, Carlos.

Carlos: The next question is coming from Carlos <unk> from Bank of America Carlos.

Carlos Peyrelongue: Thanks, Lucy. My question has been answered, but I want to thank Jaime as well on the new position, and best of lucks.

Carlos: Thanks, Lucy My question has been answered, but I wanted to thank him as well on the new position and Vista blocks.

Carlos: Yeah.

Jaime Muguiro: Thanks, Carlos.

Carlos: Thanks Scott.

Gerald: So, I think we have time for 1 last question and it's coming from from Goldman Sachs. Thank you, Lucy. Congrats, Jaime. And hello, Mar. So I just wanted to focus a little bit more on the near term. So we're nearly about a month from the initial tariff announcements that came on and came off. But I just wanted to get a sense of how this uncertainty might be impacting the flows that you're seeing for cement imports. It can be at an industry level. It can be at your level. But just wanted to get a sense if you're seeing any changes in how flows have been changing by country of origin.

Lucy Rodriguez: I think we have time for one last question, and it is coming from Jorel Guilloty from Goldman Sachs. Jorel.

Speaker Change: So I think we have time for one last question and it's coming from Jarrell Gulati from Goldman Sachs.

Jorel Guilloty: Thank you, Lucy Rodriguez. Congrats, Jaime Muguiro, and hello, Omar. I just wanted to focus a little bit more on the near term. We're nearly about a month from the initial tariff announcements that came on and came off. I just wanted to get a sense of how this uncertainty might be impacting the flows that you're seeing for cement imports. It can be at an industry level, it can be at your level, but I just wanted to get a sense of if you're seeing any changes in how flows have been changing by country of origin. Also, you mentioned that you could flex your imports from Mexico, but I just wanted to get a sense of how much of your imports from Mexico can address total imports and which states would be impacted. Those are my questions. Thank you.

Thank you Lucy Congrats <unk> Hello, Mark.

Speaker Change: So I just wanted to focus a little bit more on the near term.

Speaker Change: We're nearly about a month from the initial tariff announcements that came on and it came off but.

Speaker Change: I just wanted to get a sense of how this uncertainty might be impacted impacting the flows that youre seeing.

Speaker Change: Cement imports it can be at an industry level and it can be at your level, but I just wanted to get a sense if youre seeing any changes in how flows have been changing by country of origin.

Gerald: And also, you mentioned that you could flex your imports from Mexico. But I just wanted to get a sense of how much of your imports from Mexico can address total imports and which states would be impacted. Those are my questions. Thank you. OK.

Speaker Change: And also you mentioned that you can flex your imports from Mexico, but I just wanted to get a sense of how much of your imports from Mexico can address total imports and which states would be impacted.

Speaker Change: Those are my questions. Thank you okay.

Jaime Muguiro: Okay. All right, Jorel, thank you so much for your question. Overall picture, if the tariffs were confirmed in 90 days, as far as I understood, there is some sources, such as Vietnam, for example, that would be subject to 46%, I think it was, and obvious Chinese, but there are no Chinese imports into the United States right now. The rest would be 10%, excluding imports from Canada and Mexico that are part of the free trade agreement. Let me start with the West. If that 46% tariff was confirmed, we would be ready to materially increase our price through a surcharge, a tariff surcharge. We're familiar with these type of situations.

Jaime Moguera: All right, Gerald, thank you so much for your question and overall picture. If if the targets were confirmed, not today's United Day. As far as I understood, there is. Some sources, such as Vietnam, for example, that would be subject to 46%, I think it was. in on obvious Chinese but there are no Chinese imports into the United States right now and then the rest would be temporary. excluding imports from Canada and Mexico that are part of the free trade agreement. So let me start with the West. If that 46% tariff was confirmed, we would be ready to materially increase our price through a surcharge, a tariff surcharge.

Speaker Change: Alright. Thank you so much for your question.

Speaker Change: Overall picture.

Speaker Change: If the targets were confirmed 90 days 90 days.

Speaker Change: As far as I understood it.

Speaker Change: There is.

Speaker Change: Some sources such as Vietnam for example that would be subject to 46% I think it was.

Speaker Change: In an obvious Chinese but.

Speaker Change: There are no Chinese imports into the United States right now.

Speaker Change: And then.

Speaker Change: Rest of it would be 10%.

Speaker Change: Excluding imports from Canada, and Mexico that are part of the free trade agreement.

Speaker Change: So let me start with the west if if if those if that 46% target was confirmed.

Speaker Change: We would be ready.

Speaker Change: To materially increase our price through a surcharge a target surcharge. We're familiar with these type of situations. We lifted back in 2022 with a hyper inflation when we faced at $60 per ton landed incremental cost in very.

Jaime Moguera: We're familiar with these type of situations. We lifted back in 2022 with a hyperinflation when we faced $60 per ton landed incremental cost in a very short time. And we were able to increase prices to more than offset that cost preserving margins. In the West, most of the cement imported comes from Vietnam. Therefore, you know, I do expect to be able to introduce that surcharge and we've already communicated that to our customers. Having said Regarding the West, again, because we didn't, we last year we decided not to lock in all imports we needed for the year.

Jaime Muguiro: We lived it back in 2022 with a hyperinflation when we faced a $60 per ton landed incremental cost in a very short time, and we were able to increase prices to more than offset that cost, preserving margins. In the West, most of the cement imported comes from Vietnam. I do expect to be able to introduce that surcharge, and we've already communicated that to our customers. Having said that, regarding the West, again, because last year, we decided not to lock in all imports we needed for the year. Why? We wanted to keep flexibility on our ability to switch sources. That allow us to rely more on our Mexican network, both maritime and rail, to top the West using our cement, which is covered by the United States-Mexico-Canada Agreement.

Speaker Change: In a very short time.

Speaker Change: We were able to increase prices to more than offset that cost and preserving margins in the west most of the cement import it comes from Vietnam.

Speaker Change: Therefore.

Speaker Change: I do expect to be able to introduce that surcharge and we've already communicated that to our customers having said that.

Speaker Change: Regarding the west again, because we didn't we last year, we decided not to lock in all imports we needed for the year why because we.

Jaime Moguera: Why? Because we wanted to keep flexibility on our ability to switch sources. And that allow us to rely more on our Mexican network, both maritime and rail, to tap the West. using our cement, which is, you know, covered by the free trade agreement. Therefore, we can do that and cover a lot of our needs in it for the West replacing Vietnamese imports. Now, if you look at the East Florida and the Gulf Coast, there are some industry players who might be importing Vietnamese. Most of the sourcing comes from Turkey, Saudi Arabia, in some European countries, particularly maybe Greece.

Speaker Change: We wanted to keep flexibility on our ability to switch sources and that allow us to.

Speaker Change: To rely more on our Mexican network, both maritime on rail to the west.

Speaker Change: Using our cement, which is covered by the <unk>.

Speaker Change: Free trade agreement. Therefore, we can do that can cover a lot of our needs.

Jaime Muguiro: Therefore, we can do that and cover a lot of our needs for the West, replacing Vietnamese imports. Now, if you look at the East, Florida, and the Gulf Coast, there are some industry players who might be importing Vietnamese. Most of the sourcing comes from Turkey, Saudi Arabia, some European countries, particularly maybe Greece. The largest player is Turkey. There, the tariff is 10%. What I can tell you is that we have already communicated to our customers that should those tariffs be implemented, we would be introducing a surcharge immediately to pass along to consumers that cost increase. Having said that, we do have flexibility because we didn't fix costs for everything we need to import.

Speaker Change: For the west replacing Vietnamese.

Imports now if you look at the East, Florida, and the Gulf Coast there.

Speaker Change: We there are some industry players who might be importing Vietnamese most of the sourcing comes from Turkey.

Speaker Change: Saudi Arabia.

Speaker Change: Some European countries, particularly maybe Greece, but the largest player is Turkey.

Jaime Moguera: But you know, the largest player is Turkey. There, the tariff is 10%. What I can tell you is that we have already communicated to our customers. that should those tariffs be implemented, we would be introducing a surcharge immediately to pass along to consumers that cost increase. We do have flexibility because we didn't fix costs for everything we need to improve. And therefore, we are planning to leverage both rail auditorium planned and maritime out of our East Mexican capacity to displace the sources that would be subject to 10% import tariffs. And finally, we do have and we own two vessels that can do those lanes effectively.

Speaker Change: The target is 10%.

Speaker Change: What I can tell us that we have already communicated to our customers.

Speaker Change: That should those start to be in.

Speaker Change: Implemented.

Speaker Change: Would be introducing a surcharge.

Speaker Change: Immediately.

Speaker Change: To pause along to consumers that cost increase having said that.

Speaker Change: We do have flexibility because we didnt fixed costs.

Speaker Change: Everything we need to.

Jaime Muguiro: Therefore, we are planning to leverage both rail out of Torreón plant and maritime out of our East Mexican capacity to displace the sources that would be subject to 10% import tariffs. Finally, we do have, and we own two vessels that can do those lanes effectively. Finally, the great news, which is that we are improving operational efficiency in the US, as I said, five percentage points year-over-year. That means that we're producing more cement locally, and we do plan to replace imports. I think that we are in a good position to navigate current uncertainty on tariffs. I hope I answered your question, Jorel.

Speaker Change: Therefore, we are planning to leverage both our rail auditoriums planned on maritime out of our east Mexican capacity to displays.

Speaker Change: The sources that would be subject to.

Speaker Change: 10% import targets and finally, we do have and we own two vessels.

Speaker Change: Is that can do those.

Speaker Change: <unk>.

Jaime Moguera: And finally, the great news, which is that we are improving operational efficiency in the US, as I said, five percentage points year over year. And that means that we're producing more cement locally. We do plan to replace imports. So I think that we are in a good position to navigate current uncertainty on tariffs. I hope I answered your question, Jorrel.

Speaker Change: <unk>.

Speaker Change: Effectively on finally, the great news, which is that we are improving operational efficiency in the U S. As I said five percentage points year over year and that means that we're producing more cement locally we do plan to replace it.

Speaker Change: So I think that we are in a good position to navigate current uncertainty on alright.

Speaker Change: I Hope I answered your question Joel.

Operator: Thank you. Thank you for the call. Thanks to them.

Jorel Guilloty: Thank you. Thank you for the color.

Joel: Thank you.

Speaker Change: Thank you for the color.

Lucy Rodriguez: Thanks, Todo. We appreciate you joining us today for our Q1 results. We hope that you'll come back again for our Q2 2025 webcast on 24 July 2025. If you have any additional questions, please feel free to reach out to investor relations. Many thanks.

Speaker Change: And he stood out.

Lucy Rodriguez: We appreciate you joining us today for our first quarter results.

Speaker Change: We appreciate you joining us today for our first quarter results. We hope they will come back again for our second quarter 2025 webcast on July 24.

Lucy Rodriguez: We hope that you'll come back again for our second quarter 2025 webcast on July 24th. If you have any additional questions, please feel free to reach out to Investor Relations. Many thanks. Thank you for your participation in today's conference.

If you have any additional questions. Please feel free to reach out to Investor relations. Many thanks.

Operator: Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.

Thank you for your participation in today's conference. This concludes the presentation you may now disconnect good day.

Operator: This concludes the presentation. You may now disconnect.

Operator: Good day.

Speaker Change: [music].