CEMEX, S.A.B. de C.V. (NYSE:CX) Q3 2023 Earnings Call Transcript
CEMEX, S.A.B. de C.V. (NYSE:CX) Q3 2023 Earnings Call Transcript October 26, 2023
CEMEX, S.A.B. de C.V. misses on earnings expectations. Reported EPS is $0.09 EPS, expectations were $0.23.
Operator: Good morning and welcome to the Cemex Third Quarter 2023 Conference Call and Webcast. My name is Daisey, and I'll be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instruction] And now I will turn the conference over to Lucy Rodriguez, Chief Communications Officer to begin. Lucy please proceed.
Lucy Rodriguez: Good morning. Thank you for joining us today for our third quarter 2023 conference call and webcast. We hope this call finds you in good health. I'm joined today by Fernando Gonzalez, our CEO; and Maher Al-Haffar, our CFO. As always, we will spend a few minutes reviewing the business and then we will be happy to take your questions. Before we begin, I would like to point out a few changes in our CEMEX quarterly reporting, reflecting the higher CEMEX ownership of CHP and CLH's delisting, we will be moving this quarter from a country reporting framework to more of a regional disclosure. Consequently, we will include quarterly regional results and full year guidance for South Central America and Caribbean and the Asia, Middle East, and Africa subregion, composed of the Philippines, Egypt, Israel, and the United Arab Emirates.
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Currently, this subgroup represents approximately a quarter of Europe, Middle East, Africa, and Asia's EBITDA. And now I will hand it over to Fernando.
Fernando Gonzalez: Thanks, Lucy and good day to everyone. Before I begin, as we watch this terrible situation unfold in Israel and the Middle East, I would like to convey that our thoughts are very much with the people affected by these events. We have accounted for all our employees as well as our assets in Israel. We remain fairly committed to prioritizing our people's health and safety and as such, we are supporting in every possible way, our employees, their families and communities. Now, moving on to our third quarter performance. We continue delivering very strong results with EBITDA growing 32%, reflecting the success of our commercial and growth strategies. Decelerating input cost inflation, coupled with strong pricing led to a material margin expansion.
For the first time since we launched our pricing strategy in mid-2021, our quarterly EBITDA margin exceeded our goal of recovering 2021 margins. The incremental EBITDA contribution from our growth investments continue to ramp up accounting for 11% of incremental EBITDA. In addition, our urbanization solutions business is expanding meaningfully. On the customer centricity front, we achieved a record Net Promoter Score of 73% in the quarter, a benchmark for the industry and similar to digitally native companies. In climate action, we continue to post record lows in CO2 emissions. Free cash flow grew significantly, driven by higher EBITDA and lower investment in working capital. Importantly, the strong earnings growth has amplified our deleveraging trajectory with the leverage ratio now at 2.16 times, a reduction of almost one-third of a turn.
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