Exhibit 3
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Exhibit 3
RESULTS 3Q14
October 22, 2014
Forward looking information
This presentation contains certain forward-looking statements and information relating to CEMEX Latam Holdings, S.A. and its subsidiaries (collectively, “CLH”) 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 CLH 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, changes in general economic, political, governmental, and business conditions globally and in the countries in which CLH and CEMEX, S.A.B. de C.V. and its subsidiaries (“CEMEX”) operate, CLH´s ability to comply with the framework agreement signed with CEMEX, CEMEX’s ability to satisfy its obligations under its debt agreements as well as under the indentures that govern its high yield notes, CLH and CEMEX’s ability to achieve anticipated cost savings, 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, CLH and 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 CLH 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 the context otherwise requires it, all references to prices in this document means our prices for our products.
UNLESS OTHERWISE NOTED, ALL CONSOLIDATED FIGURES ARE PRESENTED IN DOLLARS AND ARE BASED ON THE FINANCIAL STATEMENTS OF EACH COUNTRY PREPARED UNDER INTERNATIONAL FINANCIAL REPORTING STANDARDS.
Copyright CEMEX Latam Holdings, S.A. and its subsidiaries.
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Financial Results Summary
Net Sales
(US$M)
Operating EBITDA
(US$M)
+3% -3% -7% -5%
1,324
1,288
474
460
474
168
443
160
9M13 9M14 3Q13 3Q14 9M13 9M14 3Q13 3Q14
High growth in net sales of 6% in 3Q14 and 5% in 9M14, compared to last year, adjusting for the effect of lower revenue in our housing solutions projects this year
Sequential EBITDA growth in 3Q14 of 12%, driven by Colombia and Panama, with higher volumes and lower maintenance works, compared to 2Q14
EBITDA decline YoY in 3Q14 mainly due to one scheduled maintenance work, lower prices in our products, and a lower EBITDA contribution from our housing solutions projects
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Financial Results Summary
Operating EBITDA Margin
(%)
9M13 36.8%
-3.4pp .
9M14 33.4%
3Q13 35.5%
-0.8pp .
3Q14 34.7%
2Q14 32.2%
+2.5pp
3Q14 34.7%
Sequential increase in EBITDA margins in most of our markets
Sequential margin growth of 2.5pp during 3Q14 vs. 2Q14 mainly explained by less scheduled maintenance
Lower EBITDA margin in 3Q14 YoY due to one scheduled maintenance and the effect of lower prices in our products
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Consolidated Volumes and Prices
Domestic gray cement
Ready-mix concrete
Aggregates
Volume
Price (USD)
Price (LtL1 )
Volume
Price (USD)
Price (LtL1 )
Volume
Price (USD)
Price (LtL1 )
9M14 vs. 9M13
7%
(3%)
1%
7%
(2%)
1%
19%
(5%)
(1%)
3Q14 vs. 3Q13
5%
(2%)
(1%)
5%
(1%)
0%
13%
(4%)
(2%)
3Q14 vs. 2Q14
3%
(2%)
(3%)
12%
0%
(1%)
7%
(3%)
(3%)
(1) Like-to-like prices adjusted for foreign-exchange fluctuations
Continued growth trend in consolidated volumes in all of our three products
Record sales volumes in all three products in Colombia, and in aggregates and ready-mix in Panama, over the past four years
6th consecutive quarter with new record cement volume sales in our operations in Colombia
Higher prices in 3Q14 in local currency terms YoY in our cement operations throughout our markets, were offset by lower prices in Colombia
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CAPACITY EXPANSION PROJECTS
3Q14 Results
Capacity Expansion Project—Colombia
Autopista Conexión Norte
Río Magdalena
Project to increase navegability
Railroad Concession
Autopistaal Mar 2
AutopistaRío Magdalena 1 & 2
Medellín
AutopistaAl Mar 1
Connection to Rutadel Sol
New Concessions (4G)
AutopistasPacífico1, 2 & 3
Existing Concessions
Source: Based on information from Agencia Nacional de Infraestructura
New greenfield project in Colombia increasing our cement capacity in the country from 4.5 to close to 5.5 million tons per year with an investment of about US$340 million
Cement production to start in 2Q15 with the completion of the grinding phase; clinker production line to start operations in 2H16
Strategically located in Antioquia a region that will benefit from the construction of highway infrastructure projects
Higher operating efficiencies Fuel and electricity costs at this new plant are expected to be 15% and 10% lower than our current cement operation
Lower distribution expenses are expected in our cement network once we start operations
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Capacity Expansion Project - Nicaragua
New cement grinding plant
Pacific Ocean
Atlantic Ocean
Managua
Current Asset Base
Cement Plant
Ready-mix Plant
Aggregates Quarry
New cement grinding plant to increase cement production capacity in Nicaragua by 440 thousand tons reaching 860 thousand tons per year in 2017, with a total investment of US$55 million in Ciudad Sandino, Managua
Construction in two phases with first phase including a 220 thousand ton mill and representing an investment of US$30 million; second phase includes a second 220 thousand ton mill with an investment of US$25 million
First phase to be completed in 2Q15 and the second phase of construction is expected to finalize in 2017; construction is progressing according to schedule
New capacity to support growth and allow CLH to continue participating in the development of Nicaragua
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Uniquely Positioned to Participate in Infrastructure Projects in the Region
ENHANCED ASSET FOOTPRINT
ROBUST COMMERCIAL OFFERINGS
Ready-mix plants
Distribution centers
In Colombia since 2010 we have
More than doubled the number of ready-mix plants
Expanded our ready-mix operation from 11 cities to 30
Doubled our distribution centers
Opened grinding mill in Caribbean coast last year
Started construction of a new cement plant
Portfolio of Infrastructure Solutions
Design and construction of urban and highway pavement
Pre-cast concrete elements for bridges
Project analysis, financial planning, structuring and management
Use of specialty products
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REGIONAL HIGHLIGHTS
3Q14 Results
Results Highlights Colombia
Colombia –Results Highlights
9M14 9M13% var 3Q14 3Q13% var
Net Sales 768.6 734.7 5% 266.7 287.3(7%)
Financial Summary US$ Million
Op. EBITDA 280.7 304.7(8%) 99.9 114.8(13%)
as % net sales 36.5% 41.5% (5.0pp) 37.5% 40.0% (2.5pp)
9M14 vs. 9M13 3Q14 vs. 3Q13 3Q14 vs. 2Q14
Cement 18% 14% 6%
Volume Ready mix 14% 8% 8%
Aggregates 24% 12% 6%
9M14 vs. 9M13 3Q14 vs. 3Q13 3Q14 vs. 2Q14
Cement (3% )(6%) (3%)
Price
(Local Currency) Ready mix 1% 0%(1%)
Aggregates (1%) (1%) (3%)
Double-digit growth in volumes in all of our three products during 9M14 compared to 9M13
High growth in net sales of 8% in 3Q14 vs. 3Q13, and 9% in 9M14 vs. 9M13, when adjusting for the effect of lower revenue in our housing solutions projects this year
Double-digit growth in EBITDA in 3Q14 vs. 2Q14, with a margin expansion of 3.5pp
Lower EBITDA in 3Q14 driven by one scheduled maintenance, lower prices in our products and a lower contribution from our housing solutions projects this year, vs. 3Q13
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Colombia –Residential Sector
Continued positive trend in residential sector supported by government-sponsored initiatives and a favorable performance in self-construction
In the January to August 2014 period, permitted area for non-social housing increased by 11%, on a year-over-year basis
Subsidies program for social housing should start construction soon and will continue supporting activity in the sector
Expect to build ~700 houses in 4Q14, under our housing solutions projects, after delays in the execution of the subsidies program; construction is expected to continue in 2015 and 2016
New free-home program expected to be announced before end of year
Our volumes to the residential sector are expected to grow by about 13% in 2014
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Colombia –Infrastructure Sector
Activity in the infrastructure sector continues to be supported by ongoing projects awarded in past years like Ruta del Sol and Corredoresde la Prosperidad
US$ 1.7 B allocated for infrastructure under the Royalty Fund; about 80% of these projects have been awarded
7 highway projects of 4G have already been awarded; the remaining 2 under the first wave of projects are expected to be awarded during the remainder of the year
Other projects awarded include the Río Magdalena project to improve its navigability, as well as four airport concessions
Our volumes to infrastructure sector are expected to grow by about 16% in 2014
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Colombia – Industrial and Commercial Sector
Activity in the industrial and commercial sectors has accelerated in 2014
Building permits for the industrial and commercial sector have increased by 30% in the January to August period, on a year-over-year basis
High activity levels of office and commercial buildings with permits growing by close to 80% and 40%, respectively in the January to August period, compared to last year
Our volumes to this sector are now expected to increase by a double-digit rate in 2014, in light of the recent strong performance
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Results Highlights Panama
Panama – Results Highlights
Financial Summary US$ Million
9M14 9M13% var 3Q14 3Q13% var
Net Sales 241.3 237.7 2% 92.6 84.1 10%
Op. EBITDA 108.3 113.9 (5%) 42.3 39.6 7%
as % net
sales 44.9% 47.9% (3.0pp) 45.7% 47.1% (1.4pp)
9M14 vs. 9M13 3Q14 vs. 3Q13 3Q14 vs. 2Q14
Cement (14%) (6%) 21%
Volume Ready mix (4%) 4% 40%
Aggregates (1%) 7% 25%
Price (Local Currency)
9M14 vs. 9M13 3Q14 vs. 3Q13 3Q14 vs. 2Q14
Cement 12% 11% 0%
Ready mix 0% (1%) 2%
Aggregates (2%) (2%) 2%
8% volume growth in 3Q14 in our cement daily sales, compared to 3Q13, adjusting for the effect of lower cement consumption in the Canal expansion project this year
New volume record in 3Q14 in our aggregates, and also new volume record in our ready-mix volumes, over the past four years
New sales and EBITDA record during 3Q14
EBITDA margin in 3Q14 declined by 1.4pp vs. 3Q13 due to higher revenue from our paving solutions initiatives 17
Panama – Sector Highlights
The residential sector continued to be the main driver for demand of our products during the quarter
Infrastructure in 3Q14 also had a favorable performance with ongoing projects like “Corredor Norte” and a wind farm project in the central region of Panama
Industrial & commercial building permits increased by 28.5% in the January to August period, compared to last year; this is expected to translate into higher demand going forward
Ongoing & new projects in infrastructure should support construction activity going forward
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Results Highlights Costa Rica
Costa Rica – Results Highlights
Financial Summary US$ Million
9M14 9M13% var 3Q14 3Q13% var
Net Sales 113.7 117.2 (3%) 37.7 40.2 (6%)
Op. EBITDA 51.1 51.9 (1%) 17.8 17.3 2%
as % net
sales 44.9% 44.3% 0.6pp 47.1% 43.1% 4.0pp
9M14 vs. 9M13 3Q14 vs. 3Q13 3Q14 vs. 2Q14
Cement 1%(10%)(9%)
Volume Ready mix (24%) (32%) (11%)
Aggregates 0% 7% 12%
9M14 vs. 9M13 3Q14 vs. 3Q13 3Q14 vs. 2Q14
Cement 5% 5% 1%
Price (Local Currency) Ready mix 4% 1% 1%
Aggregates (3% ) (4%) (2%)
Cement and ready-mix vols. in 3Q14 were affected by a slowdown in construction activity and delays in new projects
Double-digit growth rate in our total cement volumes in 3Q14, including exports, compared to 3Q13
Higher prices in 3Q14 in our cement and ready-mix, in local currency terms, compared to 3Q13
EBITDA margin expansion of 4pp in 3Q14 vs. 3Q13
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Costa Rica – Sector Highlights
Ongoing infrastructure projects, like the Cañas-Liberia highway, continued driving cement demand in 3Q14
Government is committed to continue supporting investment in infrastructure but still has to present infrastructure plan for the following years
Infrastructure is expected to continue driving cement demand
New expected projects like the Chucás hydroelectric dam, the Guacamaya overpass, the Circunvalación Norte in San José, and the APM container port terminal project in Moín, expected to be approved shortly
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Results Highlights Rest of CLH
Rest of CLH – Results Highlights
Financial Summary US$ Million
9M14 9M13% var 3Q14 3Q13% var
Net Sales 210.2 210.6 (0%) 66.9 65.5 2%
Op. EBITDA 60.0 59.1 1% 20.0 18.4 9%
as % net
sales 28.6% 28.1% 0.5pp 29.8% 28.0% 1.8pp
9M14 vs. 9M13 3Q14 vs. 3Q13 3Q14 vs. 2Q14
Cement 0% (2%) (10%)
Volume Ready mix 0% 6% 9%
Aggregates 57% 81% (13%)
9M14 vs. 9M13 3Q14 vs. 3Q13 3Q14 vs. 2Q14
Cement 1% 3% 0%
Price (Local Currency) Ready mix 7% 11% 2%
Aggregates (4%) 2% 7%
Double-digit volume growth in all of our three products in Nicaragua in 3Q14 vs. 3Q13, driven by infrastructure and housing
Cement and ready-mix vols. in our operations in Guatemala during the quarter were affected by delays in construction due to heavy rain conditions
Higher prices in 3Q14 in local currency terms in all of our three products compared to 3Q13
EBITDA margin in 3Q14 increased by 1.8pp vs. 3Q13
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Rest of CLH – Sector Highlights
Infrastructure remains the main driver for cement demand in Nicaragua
Housing also contributed to demand growth in 3Q14
In Nicaragua Infrastructure is expected to continue its positive trend
We are also participating in the housing developments for the population affected by the earthquake in April of this year
In Guatemala we expect to see a recovery in construction activity after the rainy season
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FREE CASH FLOW
3Q14 Results
Free Cash Flow
US$ Million 9M14 9M13% var 3Q14 3Q13% var
Operating EBITDA 443 474 (7%) 160 168 (5%)
- Net Financial Expense 75 87 28 28
- Maintenance Capex 38 22 12 14
- Change in Working Cap (3) 43 (13) 13
- Taxes Paid 81 85 22 20
- Other Cash Items (net) (0) 5 0 2
Free Cash Flow
Free Cash Flow 253 232 9% 111 91 22%
After Maintenance Capex
- Strategic Capex 40 31 28 15
Free Cash Flow 213 201 6% 83 76 8%
FCF generation in 3Q14 reached US$83 million and was used to reduce debt
Strong FCF conversion rate during the first nine months of 2014, reaching 74%, before strategic capex and financial expense
Net debt was reduced by by about US$89 million during 3Q14 to US$1,088 million
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GUIDANCE
3Q14 Results
2014 Guidance
Volume YoY%
Colombia Cement Ready - Mix Aggregates
15% 13% 18%
Panama Cement Ready - Mix Aggregates
(13%)(4%)(3%)
Costa Rica Cement Ready - Mix Aggregates
2%(15%) 1%
On a consolidated basis we expect our cement, ready-mix and aggregates volumes to increase by 6%, 8% and 13%, respectively in 2014, compared to 2013
Maintenance capex is expected to reach US$52 million in 2014
Strategic capex is expected to reach US$120 million in 2014
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APPENDIX
3Q14 Results
Consolidated debt maturity profile
US$1,142 million Total debt as of September 30, 2014
US$ Million
153 143 143 143 560
2014 2015 2016 2017 2018
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Definitions
9M14 / 9M13: Results for the first nine months of the years 2014 and 2013, respectively
Cement: When providing cement volume variations, refers to our domestic gray cement operations.
Operating EBITDA: Operating earnings before other expenses, net plus depreciation and operating amortization.
Maintenance capital expenditures: Investments incurred for the purpose of ensuring CLH’s operational continuity. These include capital expenditures on projects required to replace obsolete assets or maintain current operational levels, and mandatory capital expenditures, which are projects required to comply with governmental regulations or internal policies.
Strategic capital expenditures: Investments incurred with the purpose of increasing CLH’s profitability. These include capital expenditures on projects designed to increase profitability by expanding capacity, and margin improvement capital expenditures, which are projects designed to increase profitability by reducing costs.
LC: Local currency.
pp: Percentage points.
Like-to-like Percentage Variation (l-t-l%var): Percentage variations adjusted for investments/divestments and currency fluctuations.
Rest of CLH: Includes Brazil, Guatemala, El Salvador and Nicaragua.
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Contact information
Investor Relations
Patricio Treviño Garza
Phone: +57(1) 603-9823
E-mail: patricio.trevinog@cemex.com
Stock Information
Colombian Stock Exchange CLH
Calendar of Events
4 – Feb – 2015
4Q14 Earnings Report and Conference Call
RESULTS 3Q14
October 22, 2014
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