CEMEX, S.A.B. de C.V. (NYSE:CX) Q2 2023 Earnings Conference Call July 27, 2023 10:00 AM ET
Company Participants
Lucy Rodriguez - Chief Communications Officer
Fernando Gonzalez - Chief Executive Officer
Maher Al-Haffar - Chief Financial Officer
Conference Call Participants
Ben Theurer - Barclays
Anne Milne - Bank of America
Paul Roger - Exane BNP Paribas
Vanessa Quiroga - Credit Suisse
Nik Lippmann - Morgan Stanley
Bruno Amorim - Goldman Sachs
Adrian Rodriguez - JPMorgan
Gordon Lee - BTG Pactual
Operator
Good morning. Welcome to the Cemex Second Quarter 2023 Conference Call and Webcast. My name is Lauren, 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. Please proceed.
Lucy Rodriguez
Good morning. Thank you for joining us today for our second 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.
And now I will hand it over to Fernando. Fernando?
Fernando Gonzalez
Thanks, Lucy, and good day to everyone. I'm beyond pleased with our second quarter results. But before we drill down, I must congratulate our employees around the world who have been instrumental in our mission to recover profitability in the face of twoyears of extraordinary input cost inflation.
It is your efforts and dedication that has led to this moment, and I am confident there is more to come. While sales grew 10% EBITDA rose almost 30% as a result of our pricing strategy, growth investment contribution and decelerating input cost inflation.
Indeed, we have seen total cost as percent of sales declining for three consecutive quarters on a sequential basis and for the first time on a year-over-year basis. This coupled with pricing has led to an expansion in our EBITDA margin in the quarter that is approaching our goal of recovering our 2021 margin.
Our growth strategy of bolt-on margin enhancement investments, which we adopted in 2020 is paying off and continues to ramp up as projects are completed. Our urbanization solutions business, one of the beneficiaries of this strategy continues to expand rapidly.
In climate action, we continue to execute on our future and action road map posting significant quarterly CO2 reductions since 2020. Free cash flow after maintenance CapEx is growing both sequentially and year-over-year. Importantly, the strong earnings growth is accelerating our deleveraging trajectory with the leverage ratio now under 2.5 times.