CEMEX has reported nine per cent YoY growth in sales for the third quarter of 2023. EBITDA over the same period advanced by 32 per cent, while the EBITDA margin expanded by 3.5 percentage points to 19.9 per cent. For the first time since the launch of CEMEX’s pricing strategy in 2021, designed to regain profitability after a surge in input cost inflation, quarterly EBITDA margin exceeded its goal of recovering 2021 margins, according to the company.
Free cash flow after maintenance capex over the three-month period grew significantly, reflecting EBITDA growth and lower working capital spending. Leverage ratio stood at 2.16x, marking the third consecutive quarter of declining leverage, accelerating the path to an investment grade rating. According to CEMEX, the results were bolstered by strong pricing across all markets, decelerating input cost inflation, contributions from CEMEX’s growth investment strategy, and Urbanisation Solutions business. In the third quarter of 2023, growth investments contributed 11 per cent of incremental EBITDA and 10 per cent of total EBITDA.
By region, net sales in Mexico increased 21 per cent YoY in the 3Q23, to US$1361m. EBITDA grew 31 per cent to US$399m and the EBITDA margin expanded 2.4 percentage points to 29.3 per cent. In the US, net sales were up five per cent to US$1394million. EBITDA increased 36 per cent to US$268m, with the EBITDA margin reaching 19.3 per cent, a 4.4 percentage point expansion.
In the Europe, Middle East, Africa, and Asia region, net sales increased by two per cent to US$1306m, EBITDA improved by 12 per cent to US$213m, while the EBITDA margin advanced by 1.5 percentage points to 16.3 per cent. Finally, CEMEX’s operations in South, Central America, and the Caribbean region reported net sales of US$442m in the 3Q23, marking 11 per cent growth, while EBITDA rose 18 per cent to US$105m. The region’s EBITDA margin increased by one percentage point to 23.8 per cent.
“2023 is proving to be an exceptional year for our company, and I am especially encouraged by our recovery of EBITDA margins to 2021 levels, a key strategic priority,” says Fernando A. González, CEO of CEMEX. “The success of our pricing strategy, contribution of growth investments and our fast- growing Urbanisation Solutions business, as well as decelerating cost inflation, are contributing to profitability in a very meaningful way. Importantly, we are making significant progress on our decarbonisation roadmap, reducing Scope 1 and Scope 2 carbon emissions by 12 per cent and 11 per cent, respectively, since 2020. Prior to the introduction of our Future in Action program in 2020, a reduction of this magnitude would have taken almost 15 years.”
