Financial Data and Key Metrics Changes - In 2025, the company achieved a free cash flow from operations of $1.4 billion, with a conversion rate of 46% after adjusting for one-off items [5][9] - Net income increased by 2% for the full year, but adjusting for a goodwill impairment of $538 million, net income would have risen by 41% to $1.5 billion [10][30] - EBITDA for the fourth quarter increased by 20% year-over-year, with a significant margin expansion of 5 percentage points [16] Business Line Data and Key Metrics Changes - Consolidated cement volumes grew by 1% and aggregates volumes increased by 2% in the fourth quarter [10] - The aggregates business contributed 39% to U.S. EBITDA, highlighting its importance in the overall portfolio [20] - The Urbanization Solutions portfolio saw higher EBITDA in the admixtures business in EMEA, partially offsetting soft performance in Mexico and the U.S. [12] Market Data and Key Metrics Changes - In Mexico, average daily cement sales increased by 8% sequentially, marking a recovery trend [16] - EMEA region reported record EBITDA and EBITDA margins in 2025, driven by higher volumes and prices [23] - In the U.S., cement prices were slightly softer due to competitive dynamics, but a 10% price increase was announced for 2026 [19][22] Company Strategy and Development Direction - The company is focused on a multi-year strategic plan, including cost efficiency measures under Project Cutting Edge, aiming for $400 million in recurring savings by 2027 [4][13] - There is a clear focus on portfolio rebalancing, with divestments in non-core markets and investments in targeted U.S. businesses [5][6] - The company aims to enhance shareholder returns through increased dividends and share buybacks, proposing a 40% increase in annual cash dividends [6][32] Management's Comments on Operating Environment and Future Outlook - Management expects a more favorable demand environment in 2026, particularly in Mexico and EMEA, with anticipated high single-digit EBITDA growth [35] - The company is optimistic about the recovery in construction activity and infrastructure projects, which are expected to drive demand [17][21] - Management highlighted the importance of operational excellence and cost control as key drivers for future performance [37] Other Important Information - The company achieved a 2% reduction in consolidated gross CO2 emissions in 2025, with significant progress in decarbonization efforts [6][25] - The company plans to activate a share buyback program of up to $500 million over the next three years, subject to shareholder approval [6][32] Q&A Session Summary Question: Impact of potential EU ETS target changes on pricing and profitability - Management indicated that potential changes in EU ETS targets would not significantly alter pricing strategies, maintaining mid-single digit price increase targets for 2026 and beyond [39][40] Question: Clarification on high single-digit EBITDA growth guidance - Management expressed confidence in the guidance, highlighting more upside than downside risks, particularly from currency fluctuations and ongoing cost savings initiatives [46][47] Question: Plans for refinancing and capital structure - Management outlined plans to use free cash flow for debt reduction while prioritizing shareholder returns and growth through M&A [60][62] Question: Expectations for divestments and reinvestments in U.S. aggregates - Management confirmed ongoing divestments with plans to reinvest proceeds in the U.S. aggregates market, focusing on accretive acquisitions [81][83] Question: Progress on social housing projects in Mexico - Management noted improvements in cement sales due to new social housing projects and infrastructure initiatives, contributing positively to volume guidance [86]

Financial Data and Key Metrics Changes - Net income for the quarter increased by 38% due to strong foreign exchange rates and lower interest expenses [13] - Free cash flow from operations was slightly over $200 million, with a year-over-year increase of 3% when adjusted for severance payments and discontinued operations [33][34] - Consolidated EBITDA margin remained resilient, slightly above the historical ten-year second quarter average, despite a significant volume decline [18] Business Line Data and Key Metrics Changes - In the EMEA region, strong volume recovery and operating leverage led to impressive results, extending four consecutive quarters of earnings recovery [12] - Consolidated prices for ready mix and aggregates increased by 12% sequentially, while cement prices remained relatively flat year-over-year [14] - In the U.S., ready mix volume adjusted for asset divestitures declined by a mid-single-digit rate, while aggregate prices increased by 5% compared to the fourth quarter of 2024 [22] Market Data and Key Metrics Changes - The Mexican market faced challenges due to difficult prior year comparisons and record precipitation levels, impacting volumes [19] - The EMEA region experienced strong demand conditions, with double-digit growth rates in the Middle East and Africa [28] - In the U.S., the residential sector showed weakness, but infrastructure projects and data centers are expected to drive demand in the second half of the year [101] Company Strategy and Development Direction - The company is focused on operational excellence and sustainable shareholder returns, with a roadmap to streamline operations and empower regional teams [5][6] - A strategic shift towards prioritizing small to midsize M&A transactions in the U.S. is planned, aiming for immediate positive impacts on earnings [9] - The company aims to progressively grow its shareholder return program, including potential dividend increases and opportunistic share buybacks [48] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for the second half of the year, expecting improvements in volumes in Mexico as the government accelerates infrastructure projects [21] - The company anticipates a tailwind of about $60 million in consolidated EBITDA if foreign exchange rates remain stable [38] - Management acknowledged the volatility and lack of visibility in key markets but remains confident in self-help measures taken to date [38] Other Important Information - The company expects EBITDA savings from Project Cutting Edge to reach $200 million this year, up from an initial expectation of $150 million [10] - Energy costs on a per ton of cement basis declined by 15% in the first half, driven by lower power and fuel prices [34] - The company has a comfortable debt maturity schedule with no immediate need to access capital markets [36] Q&A Session Summary Question: Additional savings from Project Cutting Edge - Management indicated that the additional $50 million in savings mainly comes from overhead headcount reductions, with confidence in achieving the $200 million target [42][43] Question: Shareholder return platform - The company clarified that building a shareholder return platform involves capital allocation decisions focused on shareholder returns, including potential dividend increases and share buybacks [48][49] Question: Free cash flow generation levers - Management highlighted that free cash flow generation will be driven by various factors, including reduced CapEx, cutting edge savings, and operational excellence [51][56] Question: New corporate structure and free cash flow conversion - Management explained that the new corporate structure aims to decentralize operational excellence initiatives, which will support improved free cash flow conversion [59][62] Question: Pricing trends in Mexico and the U.S. - Management confirmed a price increase in Mexico effective July 1, expecting further improvements, while in the U.S., cement prices are not expected to increase significantly [72][74] Question: EMEA region performance outlook - Management expressed excitement about the EMEA region, anticipating strong growth driven by infrastructure investments and potential reconstruction efforts in Ukraine [78][80]