October 2011 CEMEX Presentation

Transcription

1 October 2011 CEMEX Presentation

2 Investment highlights Global leader in the building materials industry Our products are the foundation for growth, with virtually no substitutes Positive demographic trends in our markets Pent up demand for infrastructure and housing Operating leverage leading to stronger cash flow growth 2

3 Leading global building materials company Cement (installed capacity 1 ) 96 million metric tons Ready-Mix (2010 volume 1 ) 51 million m 3 Aggregates (2010 volume 1 ) 158 million metric tons ¹ Installed capacity as of December 31, 2010; sales volume for full-year 2010 for the continuing operations. 3

4 Geographic and product diversification enhances profits quality Vertical integration across value chain 2010 net sales by product Other 2% Geographic diversification 2010 net sales by geography South/Central America & Caribbean Aggregates 14% Ready mix 34% Cement 50% Europe 34% United States 17% 11% 8% Mexico 23% 7% Africa & Middle East Asia & Other Regions are shown as reported in As of 2Q11 Europe and Africa & Middle East regions were reorganized as Northern Europe and Mediterranean regions 4

5 Stabilizing global demand environment CEMEX gray cement volume evolution in main markets - LTM¹ as of each quarter 220% 200% Index 4Q05 =100% 180% 160% 140% 120% 100% 80% 60% 40% 20% 4Q05 2Q06 4Q06 2Q07 4Q07 2Q08 4Q08 2Q09 4Q09 2Q10 4Q10 2Q11 Panama 161% Egypt 137% Colombia 123% Philippines 115% Mexico 100% France 98% Germany 97% CEMEX 76% U.K. 76% U.S. 44% Spain 33% 1 Last twelve months (LTM). Domestic gray cement volume (except for France where ready-mix volume is used given that CEMEX does not have cement operations in the country) for the last twelve months as of each quarter using 4Q05 LTM volume as base. Volumes are presented pro forma for the Rinker and RMC acquisitions. 5

6 Pricing resilience despite demand downturn CEMEX gray cement price evolution in main markets (local currency) 1 220% 200% Index 4Q05 =100% Colombia 203% 180% 160% 140% 120% 100% Egypt 165% Panama 145% Germany 134% U.K. 133% CEMEX Avg % Philippines 118% Mexico 117% France 111% Spain 101% U.S. 100% 80% 4Q05 2Q06 4Q06 2Q07 4Q07 2Q08 4Q08 2Q09 4Q09 2Q10 4Q10 2Q11 1 Domestic gray cement price in local currency (except for France where ready-mix price is used as CEMEX does not have cement operations in the country). 2 CEMEX weighted average price in USD 6

7 Ability to generate positive free cash flow through the cycle Revenue Operating EBITDA Free Cash Flow Billions of US dollars FCF/ Operating EBITDA (%) Free cash flow equals Operating EBITDA minus net interest expense, maintenance capital expenditures, change in working capital, taxes paid, and other cash items (net other expenses less proceeds from the disposal of obsolete and/or substantially depleted operating fixed assets that are no longer in operation). FCF / Operating EBITDA conversion in 2009 is based on the FCF from continuing operations, excluding FCF from Australia. 7

8 Performance reflecting global economic trends Consolidated sales, EBITDA and volume YoY% change 1 20% 10% 0% -10% -20% -30% -40% -50% Sales EBITDA Cement Ready Mix Aggregates 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 1 Year-over-year percentage variations for Net Sales and EBITDA for 1Q09, 2Q09 and 3Q09 are calculated including Australia. Volumes shown on a like to like basis. 8

9 Successful kickoff of transformation process We have embarked on an extensive reshaping of our organization Increasing accountability and responsibility at the operating level Shifting important functions from corporate headquarters to operations The new members of our Executive Committee and newly assigned country managers will improve our ability to create value in our key markets Majority of actions already implemented Transformation process expected to result in a recurring improvement in our steady state EBITDA Target set at ~US$400 million annually Expect US$150 million to be realized in 2011; full amount to be reflected in

10 2011 outlook Consolidated cement and ready-mix volumes expected to grow 1% and 5%, respectively, while aggregates volumes expected to remain flat Cost of energy, on a per-ton-of-cement-produced basis, expected to increase by about 17% Total capex expected to reach US$470 million, US$350 million in maintenance capex and US$120 million in strategic capex No significant change expected in working capital investments from 2010 levels No significant change expected in cost of debt, including perpetual and convertible notes * Guidance as of September 29,

11 Strengthened our balance sheet since 2009 Successfully refinanced US$15 billion in debt Total debt plus perpetual debentures reduced by US$3.85 billion from June 2009 to June 2011 Sold assets for US$2.4 billion, including our operations in Australia, Canary Islands, Italy, and certain quarries in the U.S.* Raised US$4.6 billion of equity and equity-like capital Issued US$6.1 billion in long-term securities * Assets in Canary Islands and Italy sold in

12 Materially extended and reduced debt Total debt excluding perpetual debentures as of June 30, 2011 US$ 17,251 million Financing Agreement ($7,624) Other bank / WC debt ($350) Average life of debt (years) Jun 2009 Jun ,338 6,916 2,558 Fixed Income ($6,895) Certificados Bursátiles ($421) Convertible Subordinated Notes ($1,962) 799 Millions of US dollars 1,527 1,433 1, , , Chart includes $26 M of CBs maturing in 2011 for which a cash reserve has been created In addition, we have perpetual debentures totaling $1,177M as of June 30,

13 United States Significant upside potential

14 CEMEX is well positioned in the U.S. CEMEX U.S. market presence 2010 Sales by Product WA OR CA NV ID UT AZ MT WY CO NM ND SD NE KS TX OK MN IA MO AR LA WI IL MS IN AL MI KY TN OH GA CEMEX presence CEMEX key states NC PA NY MD DE WV VA SC VT NH MA R ME Other 24% Aggs. 18% Other 28% Cement 31% RM 27% 2010 Sales by State FL 28% FL Strong market positions CEMENT READY-MIX AGGREGATES Total U.S. #1 #1 #5 California #1 #1 #3 Florida #1 #1 #1 Texas #2 #1 #4 Arizona #3 #1 #1 Source: PCA and CEMEX estimates AZ 11% TX 16% CA 17% 14

15 Significant upside potential in the U.S. Portland Cement Association s expected cement demand evolution Million metric tons % 18% 32% % 20% 26% % 19% 24% % 16% 25% 61% 14% 26% 60% 16% 24% 58% 16% 26% CAGR ( ) Public - Streets & Highways Ind. & Commercial Residential TOTAL % 16% 34% % 16% 36% 4% 0% 13% 21% 10% % 17% 35% e 2012e 2013e 2014e 2015e PCA Summer Forecast July

16 Our key states will continue to benefit from stimulus spending ARRA funds for infrastructure Total ARRA funds for infrastructure $85 billion % Funds To be spent Spent Public Buildings Other Water/Sewer $33.3 B $51.7 B Transportation High-Speed Rail Clean Water 39% 61% 59% 37% 63% 28% 72% 21% 79% 41% U.S. CA FL TX AZ Funds (US$ Billion) Source: House Transportation & Infrastructure Report, June

17 Mexico Bedrock of operating stability and cash flow generation

18 Resilient Mexican market 30% 20 Cement consumption in Mexico (%) % -5% -4% Housing represents 65% of cement demand Industrial & Commercial Infrastructure 21% 15% 33% 32% Informal Housing Source: CANACEM Formal Housing 18

19 Mexico recovering quickly from one of the worst economic crises GDP growth YoY % Increasing non-oil exports 8% 3% -2% -7% -12% -2.0% 4.5% 7.6% 5.1% 4.4% 4.6% -5.5% -7.4% -9.6% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q % 4.0% 2011e Consensus YoY% 60% 40% 20% 0% -20% -40% Jan-09 Nov-09 Sep-10 Aug-11 Record level of international reserves Employment recovery underway $Bn $138.0 billion 7.5% 6.0% % 3.0% Unemployment rate 60 Jan-08 Sep-08 Jun-09 Mar-10 Dec-10 Sep % Jan-08 Nov-08 Oct-09 Sep-10 Aug-11 Source: Banco de Mexico and INEGI 19

20 Attractive demographics and housing deficit to drive residential investment Housing needs in the medium term Million homes Mortgages granted in each presidential term Million mortgages Progress Housing deficit New households Total housing needs through Target Source: CONAPO, INEGI Source: CONAVI, SHCP, Plan Nacional de Vivienda Over 50% of population is under the age of 25 20

21 Other Regions

22 South America & Caribbean Region The strong economic expansion in the region reflects government policies that favor home ownership as well as public spending in the lead-up to elections in Nicaragua, Guatemala, and Puerto Rico Significant infrastructure rebuilding investment still expected in Colombia and other countries In Panama, the infrastructure sector is the main contributor to cement consumption driven by new projects, such as the construction of hydroelectric plants in the Chiriquí province 22

23 Northern Europe, Mediterranean and Asia Region Western Europe Residential sector is driving volume growth in Germany & France Debt crisis & fiscal adjustment will reduce infrastructure spending Eastern Europe Continued strength of the infrastructure sector Private recovery still weak Mediterranean In Spain, the decline in domestic cement volumes continues to be partially mitigated by exports to other countries Despite political situation in Egypt, our distribution of cement has continued uninterrupted since the beginning of the year Asia Fundamentals remain strong despite current political environment 23

24 Forward looking information This presentation contains certain forward-looking statements and information relating to CEMEX, S.A.B. de C.V. and its subsidiaries (collectively, CEMEX ) that are based on its knowledge of present facts, expectations and projections, circumstances and assumptions about future events. Many factors could cause the actual results, performance or achievements of CEMEX to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, the global financial crisis, changes in general economic, political, governmental, and business conditions globally and in the countries in which CEMEX operates, CEMEX s ability to comply with the terms and obligations of the financing agreement and other debt agreements entered into with major creditors, changes in interest rates, changes in inflation rates, changes in exchange rates, the cyclical activity of the construction sector generally, changes in cement demand and prices, CEMEX s ability to benefit from government economic stimulus plans, changes in raw material and energy prices, changes in business strategy, changes in the prevailing regulatory framework, natural disasters and other unforeseen events and various other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or targeted. Forward-looking statements are made as of the date hereof, and CEMEX does not intend, nor is it obligated, to update these forward-looking statements, whether as a result of new information, future events or otherwise. UNLESS OTHERWISE NOTED, ALL FIGURES ARE PRESENTED IN DOLLARS, BASED ON OUR MEXICAN FRS FINANCIAL STATEMENTS Copyright CEMEX, S.A.B. de C.V. and its subsidiaries. 24

25 October 2011 CEMEX Presentation

26 Contact Information Maher Al-Haffar Luis Garza Eduardo Rendón Lucy Rodriguez Fernando Schwartz Patricio Treviño