October 2011 CEMEX Presentationweb1.amchouston.com/flexshare/002/cfa/Affiniscape... · CEMEX is...
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October 2011 CEMEX Presentation
Transcript of October 2011 CEMEX Presentationweb1.amchouston.com/flexshare/002/cfa/Affiniscape... · CEMEX is...
October 2011
CEMEX Presentation
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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
Investment highlights
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Leading global building materials company
Cement (installed capacity1) 96 million metric tons Ready-Mix (2010 volume1) 51 million m3
Aggregates (2010 volume1) 158 million metric tons
¹ Installed capacity as of December 31, 2010; sales volume for full-year 2010 for the continuing operations.
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Geographic and product diversification enhances profits quality
Mexico 23%
Europe 34%
Vertical integration across value chain
2010 net sales by product
Cement 50% Ready
mix 34%
Aggregates 14%
Geographic diversification
2010 net sales by geography
Other 2%
United States 17%
South/Central America & Caribbean
Africa & Middle East
Asia & Other
11%
8%
7%
Regions are shown as reported in 2010. As of 2Q11 Europe and Africa & Middle East regions were reorganized as Northern Europe and Mediterranean regions
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Stabilizing global demand environment
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
220%
4Q05 2Q06 4Q06 2Q07 4Q07 2Q08 4Q08 2Q09 4Q09 2Q10 4Q10 2Q11
CEMEX gray cement volume evolution in main markets - LTM¹ as of each quarter
Colombia 123%
U.K. 76%
Spain 33% U.S. 44%
Mexico 100% France 98% Germany 97%
Egypt 137%
Panama 161%
CEMEX 76%
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.
Index 4Q05 =100%
Philippines 115%
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Pricing resilience despite demand downturn
80%
100%
120%
140%
160%
180%
200%
220%
4Q05 2Q06 4Q06 2Q07 4Q07 2Q08 4Q08 2Q09 4Q09 2Q10 4Q10 2Q11
CEMEX gray cement price evolution in main markets (local currency)1
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
Germany 134% Panama 145%
Mexico 117% France 111%
U.S. 100% Spain 101%
U.K. 133%
Egypt 165%
Colombia 203%
CEMEX Avg.2 126%
Index 4Q05 =100%
Philippines 118%
2.0 2.3 1.9 2.1
2.5 3.6
4.1 4.6 4.3
2.7
0.9 1.1 0.9 1.1 1.5 2.2
2.7 2.6 2.6
1.2
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
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Ability to generate positive free cash flow through the cycle
FCF/ Operating EBITDA (%)
15.3
8.1
18.2
7.2 6.5 6.9
5.6
21.7 21.7
14.5
Revenue
Operating EBITDA
Free Cash Flow
2.3
0.5
14.1
44 51 49 54 58 62 65 56 60 38 22
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.
Billions of US dollars
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Performance reflecting global economic trends
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.
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
Sales EBITDA Cement Ready Mix Aggregates
Consolidated sales, EBITDA and volume YoY% change 1
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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 2013
Successful kickoff of transformation process
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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
2011 outlook
* Guidance as of September 29, 2011.
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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$6.1 billion in long-term securities
Strengthened our balance sheet since 2009
* Assets in Canary Islands and Italy sold in 2008
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Materially extended and reduced debt
Total debt excluding perpetual debentures as of June 30, 2011 US$ 17,251 million
2011 2012 2013 2014 2015 2016 2017 2018 ≥2019
192 386
8,338
1,433
725 737
1,355
2,558
1,527
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, 2011
Millions of US dollars
Fixed Income ($6,895)
Financing Agreement ($7,624)
Other bank / WC debt ($350)
Convertible Subordinated Notes ($1,962)
Certificados Bursátiles ($421)
2.0 4.1 Jun 2009 Jun 2011
Average life of debt (years)
350 708
1,309
6,916
797
631
1,755
675 994
799
532
163
United States Significant upside potential
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CEMEX is well positioned in the U.S.
Cement 31%
RM 27%
Aggs. 18%
Other 24%
FL 28%
CA 17%
TX 16%
Other 28%
AZ 11%
2010 Sales by Product
2010 Sales by State
CEMEX U.S. market presence
CEMEX presence
CEMEX key states
MN
SD
OH IN IL
VT NH
ID
AL
AR
CO DE
GA
IA
KS KY
LA
ME
MD
MA
MI
MS
MO
MT
NE
NV
NM
NY
NC
ND
OK
OR
PA R
SC
TN
UT
VA
WA
WV
WI
WY
CA
AZ
TX
FL
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
Strong market positions
Source: PCA and CEMEX estimates
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Significant upside potential in the U.S.
4%
0%
13%
21%
10%
Public
- Streets & Highways
Ind. & Commercial
Residential
TOTAL
CAGR (2011-2015) Portland Cement Association’s expected cement demand evolution
2006 2007 2008 2009 2010 2011e 2012e 2013e 2014e 2015e
Million metric tons
114.7
96.5
70.6 70.4 70.6 70.9
94.0
54%
20%
26%
59%
16%
25%
61%
14%
26%
60%
16%
24%
58%
16%
26%
57%
19%
24%
51%
16%
34%
48%
16%
36%
127.4
50%
18%
32%
104.2
47%
17%
35%
PCA Summer Forecast – July 2011
82.5
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Our key states will continue to benefit from stimulus spending
61%
41%
63%72%
79%
39%59%
37%28%
21%
U.S. CA FL TX AZ
% Funds
51.7 6.8 1.8 2.9 0.7
Spent To be spent Total ARRA funds for infrastructure $85 billion
Transportation High-Speed Rail Clean Water
$51.7 B
$33.3 B
Public Buildings Other Water/Sewer
Funds (US$ Billion)
ARRA funds for infrastructure
Source: House Transportation & Infrastructure Report, June 2011
Mexico Bedrock of operating stability
and cash flow generation
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Resilient Mexican market
Informal Housing
Industrial & Commercial
Formal Housing
Infrastructure 32%
33%
21%
15%
Source: CANACEM
%
-30
-20
-10
0
10
20
30
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
-25% -5% -4%
Cement consumption in Mexico (%)
Housing represents 65% of cement demand
1.5%
3.0%
4.5%
6.0%
7.5%
Jan-08 Nov-08 Oct-09 Sep-10 Aug-11
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Mexico recovering quickly from one of the worst economic crises
Source: Banco de Mexico and INEGI
-7.4% -9.6%
-5.5%
-2.0%
4.5%
7.6%
5.1% 4.4% 4.6% 3.3% 4.0%
-12%
-7%
-2%
3%
8%
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q -40%
-20%
0%
20%
40%
60%
Jan-09 Nov-09 Sep-10 Aug-11
60
80
100
120
140
Jan-08 Sep-08 Jun-09 Mar-10 Dec-10 Sep-11
$Bn
Unemployment rate
YoY%
$138.0 billion
2009 2010
2011e Consensus
GDP growth YoY % Increasing non-oil exports
Record level of international reserves Employment recovery underway
2011
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Attractive demographics and housing deficit to drive residential investment
Source: CONAVI, SHCP, Plan Nacional de Vivienda
1.5
3.0
4.4
1995-2000 2001-2006 Target2007-2012
6.0
Progress 2007 - 2010
Housing deficit
New households 2011-2012
Total housing needs
through 2012
8.9
1.3 10.2
Source: CONAPO, INEGI
Million homes Million mortgages
Housing needs in the medium term Mortgages granted in each presidential term
Over 50% of population is under the age of 25
Other Regions
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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
South America & Caribbean Region
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Northern Europe, Mediterranean and Asia Region
Residential sector is driving volume growth in Germany & France
Debt crisis & fiscal adjustment will reduce infrastructure spending
Continued strength of the infrastructure sector
Private recovery still weak
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
Fundamentals remain strong despite current political environment
Western Europe
Eastern Europe
Mediterranean
Asia
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
Forward looking information
October 2011
CEMEX Presentation
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Contact Information
Maher Al-Haffar
+212 317-6011
Lucy Rodriguez
+212 317-6007
Eduardo Rendón
+52-81 8888-4256
Luis Garza
+52-81 8888-4136
Fernando Schwartz
+52-81 8888-4286
Patricio Treviño
+52-81 8888-4293
