CEMEX, S.A.B. de C.V. (NYSE:CX) Q4 2023 Results Conference Call February 8, 2024 10:00 AM ET

Company Participants

Lucy Rodriguez - Chief Communications Officer

Fernando Gonzalez - CEO

Maher Al-Haffar - CFO

Conference Call Participants

Ben Theurer - Barclays

Carlos Peyrelongue - Bank of America

Alejandra Obregon - Morgan Stanley

Francisco Suarez - Scotiabank

Adam Thalhimer - Thompson Davis

Anne Milne - Bank of America

Gordon Lee - BTG Pactual

Operator

Good morning, and welcome to the CEMEX Fourth Quarter 2023 Conference Call and Webcast. My name is Brika, and I will 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 Instructions]

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 fourth quarter 2023 conference call and webcast. We hope this call finds you in good health. And even though it's already February, let us take this opportunity to give you our best wishes for 2024. While we are here to talk about 2023, we hit the ground running in January and are optimistic about the opportunities that 2024 presents.

I am 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 Gonzalez

Thanks, Lucy, and good day to everyone. Thank you for joining our call today, and I would like to extend my best wishes for a healthy and successful 2024.

I am pleased to present to you today the results of what was an exceptional year where we delivered not only record results, but achieved our goal of recovering from the extraordinary inflationary pressures over the last few years. This performance is a testament to the focus and commitment of our employees around the world.

2023 results were achieved despite a challenging demand backdrop in most markets. Full year EBITDA grew 20%, reaching a record $3.35 billion. Growth investments contributed to 13% of incremental EBITDA, while organization solutions grew on the double-digit area. With margin expansion of 2 percentage points, driven by strong pricing and decelerating cost inflation, we reached our goal of recovering 2021 margins.

Free cash flow after maintenance CapEx of $1.2 billion was a highlight, growing $655 million on the back of higher EBITDA and a turnaround in working capital investment. Our leverage ratio declined by 0.8x of a turn to 2.06x already within investment-grade credit parameters. And finally, our return on capital for the full year expanded by 1.5 percentage points to close to 14%, excluding goodwill.