CEMEX(US:CX)2020-04-30 20:38Financial Data and Key Metrics Changes - In Q1 2020, consolidated cement volumes increased by 1%, with prices improving in the range of 1% to 4% for core products, leading to a 2% like-to-like increase in sales [23] - EBITDA improved by 1%, while margins declined by 0.3 percentage points [53] - Free cash flow after maintenance CapEx was $215 million, compared to a deficit of $337 million in the same quarter last year, mainly due to lower investment in working capital [24] Business Line Data and Key Metrics Changes - In Mexico, cement volumes grew by 2% during the quarter, driven by higher consumption, with cement prices increasing by 3% sequentially [26] - In the U.S., demand and aggregate volumes increased by 10% on a like-to-like basis, while ready-mix volumes rose by 9% [33] - In Europe, domestic cement volumes were up 1% year-over-year, with solid growth in Central European markets, partially offset by declines in the UK and Spain [38] Market Data and Key Metrics Changes - The construction industry is considered essential in most markets, allowing operations to continue despite COVID-19 restrictions [8] - In South Central America and the Caribbean, regional sales and EBITDA declined mainly due to drops in Colombia and Panama [43] - In Asia, cement volumes in Egypt increased by 11%, while prices remained stable [50] Company Strategy and Development Direction - The company is focusing on safety, customer support, and preserving cash positions during the crisis [10][17] - A significant reduction in capital expenditures by $400 million was announced, representing a 60% reduction in non-committed CapEx for the rest of the year [18] - The company is monitoring demand conditions and market positions to adapt rapidly to changes [19] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of infrastructure spending to reactivate economies post-COVID-19 [7] - The company expects construction to be one of the first sectors to recover, supported by government stimulus programs [31] - There is uncertainty regarding the speed of recovery in the construction industry and cement demand for the rest of the year [30] Other Important Information - The company has suspended its share repurchase program and will not pay dividends this year [19] - Pro forma cash as of the end of the quarter reached about $1.7 billion, significantly higher than the average cash in hand during the last two years [21] - The company has initiated requests for amendments to its leverage and coverage ratios under its facilities agreement [20] Q&A Session Summary Question: Any initiatives in the U.S. or Europe for new infrastructure packages? - Management noted that there haven't been specific packages yet, but there are bipartisan conversations in the U.S. and Europe regarding potential infrastructure packages [64] Question: Can you comment on the performance in the U.S. during the last month of the quarter? - Management indicated that while there was a general slowdown in March, construction companies were speeding up job sites, leading to resilient volumes [68][74] Question: What is the volume development seen in early April across various markets? - Management reported stable to slight growth in the U.S., while Mexico experienced a decline in cement volumes but growth in bag cement demand [91][100] Question: How are margins in Mexico and the U.S. performing? - In Mexico, margins improved due to lower fuel costs, while in the U.S., strong volume growth and pricing contributed to a significant margin expansion [78][82] Question: Are there discussions with banks regarding covenants? - Management confirmed that they have approached banks for amendments to current covenants and expect continued support from the syndicate [102]