CEMEX, S.A.B. de C.V. (NYSE:CX) Q1 2015 Earnings Conference Call - Preliminary Transcript

Apr 23, 2015 • 10:00 am ET


CEMEX, S.A.B. de C.V. (NYSE:CX) Q1 2015 Earnings Conference Call - Preliminary Transcript


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Good morning, welcome to the CEMEX First Quarter 2015 Conference Call and Webcast. My name is Sylvia, and I'll be your operator for today. Our host for today are Fernando Gonzalez, Chief Executive Officer; and Maher Al-Haffar, Executive Vice President of Investor Relations, Communications and Public Affairs. And now, I will turn the conference over to your host, Fernando Gonzalez. Please proceed.

Fernando Angel Gonzalez Olivieri

Thank you. Good day to everyone, and thank you for joining us for our first quarter 2015 conference call and webcast. After Maher and I discuss the results of the quarter, we will be happy to take your questions.

We are pleased with our first quarter results. We had a 7% increase in sales with operating EBITDA generation growing by 14% on a like-to-like basis. First quarter EBITDA was the highest since 2008, despite adverse currency fluctuations. EBITDA margin expanded by 1.8 percentage points, improvement in prices for our three core products in most of our operations, better volumes in most of our products in Mexico, the US, Northern Europe and Asia, the favorable operating leverage affect in the US, as well as our continued construction initiatives led to this EBITDA growth.

We have significant achievements during the quarter. Consolidated first quarter grey cement and ready-mix volumes are the highest in seven and six years respectively. First quarter EBITDA margin was the highest since 2010. In addition, we continue with our working capital initiatives and achieve our record low 24-working capital days during the quarter. We continue with our efforts to improve our free cash flow generation.

In January, we closed the three transactions with Holcim in the Czech Republic, Germany and Spain. We expect our recurring improvement in our EBITDA, including synergies of about $20million to $30 million dollars starting this year. On the financing side, we continue to proactively address our refinancing requirements, improving our debt maturity profile, further reducing our interest expense and strengthening our capital structure. During the quarter, we raised about $1.35 billion equivalents at competitive yields. We are pleased with the way our credit continues to re-rate. We continue to be vigilant and prepare for windows of opportunity to reduce interest expense at the margin.

Consolidated cement and ready-mix volume increased by 4% and 5% respectively, while aggregates volume remain flat. We had higher cement volumes in Mexico, Northern Europe and Asia. We had higher ready-mix volumes and aggregates volumes in Mexico, the US, and the South/Central America, and Caribbean region. In Mexico, our first quarter cement and ready-mix volumes were the highest since 2009. Also, during the quarter, we achieved record high cement volumes in the Philippines and Nicaragua, and record ready-mix volumes in Colombia, Nicaragua, Poland, Egypt and Croatia.

Consolidated prices for cement, ready-mix and aggregates in local currency terms are higher both on a year-over-year and on a quarter-on-quarter basis. Sequentially, cement prices in local currency terms grew by 1%, mainly driven by increases in Mexico, the US, the Northern Europe and South/Central America, and the Caribbean regions. The decline