CEMEX, S.A.B. de C.V. (NYSE:CX) Q2 2024 Earnings Conference Call July 25, 2024 11:00 AM ET

Company Participants

Lucy Rodriguez - Executive Vice President of Investor Relations, Corporate Communications and Public Affairs
Fernando Gonzalez - Chief Executive Officer
Maher Al-Haffar - Chief Financial Officer

Conference Call Participants

Alejandra Obregon - Morgan Stanley
Benjamin Theurer - Barclays
Paul Roger - Exane BNP Paribas
Carlos Peyrelongue - Bank of America
Yassine Touahri - On Field Research
Alberto Valerio - UBS
Jorel Guilloty - Goldman Sachs
Marcelo Furlan - Itau

Operator

Good morning, and welcome to the CEMEX Second Quarter 2024 Conference Call and Webcast. My name is Drew, 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 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 second quarter 2024 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'll hand it over to Fernando.

Fernando Gonzalez

Thanks, Lucy, and good day to everyone. I'm pleased with our second quarter results, where EBITDA grew year-over-year despite significant weather challenges in several key markets. Even with the decline in volumes and a strong prior year comparison, EBITDA margin expanded to the highest levels of the last three years, marking five consecutive quarters of expansion. Our pricing strategy adjusting to reflect decelerating cost inflation continue to pay off with a widening price to cost ratio. Bolt-on growth investments, mainly in the U.S. and our urbanization solutions business continued to support EBITDA growth.

During the quarter, we achieved another important milestone with our second investment-grade rating from Fitch ratings. Our return on capital in the double-digit area remains comfortably above our cost of capital. In climate action, we are focused on delivering on our future in action road map, reducing our Scope 1 CO2 emissions by 3% in the first half of the year relative to the same period of 2023.

During the quarter, we were recognized by the World Benchmarking Alliance, a nonprofit organization that assesses and ranks the world's most influential companies on their contribution to the UN sustainable development goals with the highest climate transition score. Net sales were flat impacted by difficult weather conditions in several of our regions. Pricing growth offset the decline in ready-mix and aggregate volumes. EBITDA rose 2%, driven by strong growth in Mexico. EBITDA margin expanded to the highest level since 2016 as our pricing strategy effectively outpaced input cost inflation.