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Cemex expects to accelerate growth in the US, lead profitable decarbonization in Europe, leverage leading position in Mexico, and scale its fast-growing Urbanization Solutions business.
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Strong free cash flow, consistent results, and Investment Grade rating should enable increased flexibility in capital allocation.
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New target to further improve leverage ratio1 by half a turn.
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Cemex intends to introduce a progressive shareholder return program with the announcement of a dividend, subject to shareholder approval, to begin in the second quarter of 2024.
At its analyst and investor day at the New York Stock Exchange, Cemex outlined its strategic plan to achieve a high single-digit growth rate in EBITDA in the medium term.
Cemex’s strategy, outlined by CEO Fernando A. González and his management team, is focused on accelerated growth in the US, leveraging its leading position in the Mexico market to take advantage of unique growth opportunities, pioneering profitable lower-carbon and circular practices in Europe to implement worldwide, and expanding its fast-growing Urbanization Solutions business.
“With industry-leading organic EBITDA growth rate over the last 4 years, strong free cash flow generation, and our recently received investment grade rating, we will continue to focus on rolling out our bolt-on growth strategy, strengthening our capital structure while introducing a sustainable shareholder return,” said Mr. González. “We aim to continue focusing on expanding our US business and becoming the leader in lower-carbon, sustainable, and circular building solutions. Additionally, we will continue strengthening our capital structure and maintain a systematic and progressive dividend policy.”
Cemex’s fastest growing region, the US, offers the most growth potential with a multi-year construction cycle just beginning. Since 2020, Cemex has focused on rebalancing its portfolio towards the US, increasing its percentage of EBITDA contribution from 24% to 29%. The company intends to increase this number to 40% in the medium term by increasing the growth capex and investing divestment proceeds to the region.
Cemex also plans to continue leveraging its fastest-growing business, Urbanization Solutions. First incorporated as a core business in 2020, Urbanization Solutions reached US$2.5 billion in sales and US$300 million in EBITDA in 2023, accounting for 9% of consolidated EBITDA. Cemex expects this business to continue growing at a double-digit rate.
On the sustainability front, Cemex highlighted its “Reduce before Capture” strategy, which seeks to maximize decarbonization through existing profitable technologies. Cemex’s European operations are leading the way in this transition, proving that it is not only feasible, but also profitable. Over the past four years, Cemex Europe’s EBITDA grew at a 7% compounded annual growth rate, with approximately a 1 percentage point margin expansion, accompanied by a 17% reduction in CO2 emissions. Over 90% of its cement sales are from its Vertua family of more sustainable products, with an average 45% carbon reduction.
About Cemex
Cemex is a global construction materials company that is building a better future through sustainable products and solutions. Cemex is committed to achieving carbon neutrality through relentless innovation and industry-leading research and development. Cemex is at the forefront of the circular economy in the construction value chain and is pioneering ways to increase the use of waste and residues as alternative raw materials and fuels in its operations with the help of new technologies. Cemex offers cement, ready-mix concrete, aggregates, and urbanization solutions in growing markets around the world, powered by a multinational workforce focused on providing a superior customer experience enabled by digital technologies. For more information, please visit: www.cemex.com
