CEMEX, S.A.B. de C.V. (CEMEXCPO) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to an in-person CEMEX Day 2022. So I think we can all be thankful for that. Today's event is being webcast. So I'd like to review a few housekeeping issues for attendees before we move into the webcast session. The exits are in the back of the room. And for your safety, please look around and locate the nearest exit. We are trying to keep to a pretty tight schedule today and yet, still provide time for everyone to interact with management on a more casual basis. You should have time during the breaks as well as, I don't know if I can call it the lunch, but a light snack at the end of the day. We ask that you now place your cell phones on mute. And if you must make a call, we would suggest that you move out into the lobby to do it. Wi-Fi information should be at the bottom of your agenda. Additionally, some of you in the audience may have privileged and private information regarding CEMEX. And we would like to remind you all that this is a public forum. In the Q&A and in your informal discussions during breaks as well as lunch, we ask you to avoid any disclosure of such information. And now we will open our webcast transmission. Good morning, and welcome to CEMEX Day 2022. My name is Lucy Rodriguez, and I'm the Chief Communications Officer for CEMEX. First and foremost, I'd like to extend a grateful thanks to the New York Stock Exchange for hosting us one more time again this year. Whether you are here with us in New York or online, I'd like to thank you all on behalf of my colleagues for joining us today. For me, CEMEX Day is always a time of reflection, a kind of CEMEX New Year's as it were, where I can look back since the last Analyst Day and say, what did we expect a year ago? Did it happen? And how did we perform? And at least on the first count of what we expected a year ago and even over the last 3 years, I've had this overwhelming sense of, wow, what a difference a year makes and who knew. Admittedly, not a very scientific analysis, but it seems to me that the velocity of these momentous events, if there's any such concept, has increased exponentially. I won't use the term black swans, but if I did, it would be a gaggle of them returning year after year. In the past 10 months, we have come out of a global pandemic, experienced the highest inflation in 40 years, soaring energy prices, seen one of the fastest spread reactions on record and witnessed the breakout of a war with geopolitical consequences that takes us back to the cold war era. And all of this against a pretty complicated domestic political backdrop across many countries where populist governments are taking hold, autocratic governments are cracking down and democracies are being challenged. And let's not even go to the U.K. and what we've seen in the past couple of months there. And to add to this picture, the world can no longer delay rolling out an unprecedented global coordinated effort to decarbonize and reach net zero by 2050. So it has once again been a year with tremendous transition, and I'd say that about the last 3 years. And in a world of uncertainty, what is important for a company with all of this global volatility is ability to pivot, and to pivot without losing sight of your medium-term strategic priorities and your corporate values in the process. And on that measure, I believe we have pivoted very well while advancing significantly on our strategic initiatives, building our growth portfolio, climate action, digital, and expanding our Urbanization Solutions business. And as you will hear today, we have notched a lot of significant achievements. But of course, at the end of the day, it's your view and what you walk away from that matters. So on that note, I would remind you that CEMEX Day is not the form to discuss our short-term outlook. Our intention here today is to discuss medium-term expectations and our strategic direction. Indeed, we have not yet completed our budgeting process for next year, and we will, of course, provide our usual annual guidance on our fourth quarter call in February. Now for some housekeeping details. Slides are available for all of our presentations on our website at cemex.com. We encourage you to access them. We have Q&A sessions scheduled for each of our presenters. In the case of our CEO, Fernando Gonzalez, who will be first this morning, there will be a wrap-up Q&A at the end of the day. We ask that you hold your questions until the Q&A sessions. During the Q&A session, we do ask that you wait to be recognized and handed the microphone prior to asking the question. We suggest that you stand up to ask the question so that you are identified on the webcast. Please keep in mind, however, that we have a limited amount of time and may not be able to cover every question submitted. If for any reason your question is not addressed, please contact CEMEX Investor Relations, and we'll be happy to assist you. As usual, there are no questions that are off-limits, except for those that present disclosure or confidentiality issues. Finally, please note that our presentations today may include forward-looking statements and assumptions based on currently available information. As market conditions change, our views and our forward-looking statements will adjust to incorporate such information. And now without further delay, it is my pleasure to introduce our CEO, Fernando Gonzalez.

Thank you, Lucy, and thank you all for joining us today and for connecting through the webcast. So as Lucy commented, we are going to be commenting and hopefully, through Q&A, having a conversation on the most relevant issues our company and industry has been going through in the last few years and will continue going through in the next few years. Highly interested on commenting and discussing some of those issues. By the way, I already started, I had a couple of chats earlier today, very interesting chats. So I think this is going to get very interesting. First, about results, this has been kind of interesting times. I think the effects that started with the pandemic are still somehow going on. I'm referring to the first stages of the pandemic when we thought -- I thought that our company, our industry was going to suffer the way we ended up knowing that airlines, hotels and other type of industries did suffer. It didn't happen. So we went through a few months of volumes declines because of the first reactions. So we reacted to that, just to see how volumes started growing, this phenomenon of people being at home and spending issues more related to their -- for them staying at home rather than anything else. So volumes started growing. That is what continued to happen in 2021. And then at about midyear, we started seeing the trends that continue evolving, meaning growth expectations softening. That's been happening since mid last year and it continues happening, and it seems like it will continue happening next year. And on the other hand, we saw inflation going up in our sector. I've been using the term hyperinflation going on. And that trend in inflation is continuing. If you remember, the first few months, inflation was supposed to be short-lived. That was the term that was used. It's been some time now and since that inflation will continue, and that will continue next year. Although maybe already, you see some signs, although still very volatile -- in a very volatile context, but you can see some signs of some fuel starting to lower the inflation, but it will be there. But anyhow, with all those considerations, I think we have delivered results and returns that are very positive, as you see in the slides comparing '19 to '22. Sales, and EBITDA are growing mid-single digit. And return on capital employed, almost 13%. And our leverage ratio, which this has been one of our targets since, I don't want to remember how many years, a long time ago, 2009. But finally, as you can see in this chart, we go to a leverage ratio, which is below 3x, that happened in a couple of challenging years. And that's what we have been trying to achieve since ages, we have achieved it. And now -- and we will comment about that. And now we will continue reducing our leverage ratio. Of course, we want to get our investment grade back, so that effort will continue. I'm just pointing out that during very challenging times, like the last couple of years, we managed to make this sizable reduction in our leverage ratio. Now medium-term outlook, as Lucy said, I suppose we are not here to estimate the quarter or even to start getting specific guidance on 2023 because we don't have it. I mean, we are still in the process of discussing and developing our budgets. We do have some ideas. But this is not the time for us to be very specific in guidance on 2023. But what I can say is that growth next year, we believe that growth will continue in a different way that happened this year. I already said, growth in general returns, GDPs all over the world are softening. But we believe that next year, GDPs in most of the markets we are in will continue to be positive, very low single-digit positive, but we are not expecting, let's say, a huge economic adjustment for next year. This is the current expectation that we do have. Now specific to our industry, you know better than I do, the type of programs that are in place in order to support infrastructure development. That is the case in the U.S., the $1.1 trillion or $1.6 trillion, which I think related very directly to our industry is around $600 billion to $700 billion that are supposed to or it's starting to show up already in terms of new permits increasing. So we believe that next year, those monies are going to be spent, and you know this is going to -- it's going to be taking like 4 to 6 years for this infrastructure support is going to be taken to happen. And in Europe, it's $2 trillion. Europe, short-term, might be more impacted than the U.S., but you know the type of plants that Europe has, particularly in our sector. 35 million buildings are going to be rebuilt to reduce the CO2 production in their operation from now to [2030,] meaning it's going to be rebuilt, refurbished, and that's lots of work and investments that are going to be done in Europe. And because of that landscape and given that particularly projects related to the bottlenecking capacity or expanding capacity do take time, 3 to 5 years, depending on the country. We continue -- we have our pipeline of expansions in all our businesses. In cement, we have already almost finished the expansion in Tepeaca, which is working very well. We are in our way to finish the expansion in the Philippines in solid. We have almost finished the expansion of Maceo, and we would be in a position to start up that plant next year. And we do have additional projects that we are putting in place, and we might be able to comment on some of those. I'm mentioning in this slide, we do have plans to develop additional branding in the U.S. and Europe. And I think at some point in time, we're going to engage in the conversation because I've been asked several times about CO2 and CO2 reduction plan as a completely separate thing to others. I cannot make that type of division, meaning if we invest in a grinded mill in the U.S. to enlarge our blended cement capacity that is growing at a low investment per ton, reducing the clinker factored in that product that we're going to produce, substituting imports, which are more expensive than producing locally, so this is, in my opinion, a very good example and proposition on how to invest, increase our profitability in the U.S., increase the proportion of blended cements in the country and impacting whatever the angle caused CO2 reduction and all those issues. And then a couple of years ago, we started preparing ourselves to adjust or to change what we've been doing in the last decade, which was reducing debt again, that job is almost done. We still don't have the investment grade. But we think we are getting or we are already into the parameters of investment grade. But now we are balancing the use of resources in order for us to grow. We have -- now we know we have discovered that there are a number of adjacent business opportunities that we can develop not to demanding in capital, low risk because they are -- most of them are in the same markets we're already participating. And seems like their profile is very attractive, José Antonio González will be commenting more about those type of projects. Now let me move to the transition of our company and to some extent, our industry, but of course, I'm going to speak on behalf of CEMEX, the transition towards a carbon-neutral or a much lower carbon economy. Let me start by saying that I think these new targets, I think the 430 kilos per ton of cement -- are we communicating that today, Lucy? I think we didn't mention that specifically in our press release last week. But this is the third time we change our target in 2 -- 3 years. And I was asked this morning, so can we expect every CEMEX Day a new target on the level of carbon? I don't know. I don't know because we -- when we defined the first target, I thought -- I really thought, wow, this is -- we don't know how we're going to achieve this type of thing. Then we changed it, and we're fully aligned to the well below 2-degree scenario. And then again, we went back to the, oh my, how is it that we are going to be -- because promising is so simple. I mean, the last 2, 3 years have been like market of promises. So we have all been promising whatever. So we can continue promising and promising and not delivering. And now that finally, SBTi does have a specific criteria to validate targets according to the 1.5-degree scenario. It has validated us and other 2 companies, so this is the first time that 3 companies do have objectives validated by SBTi that show or demonstrate that there is a way in our company and in our industry to comply with the criteria in order for temperatures not to go above 1.5 degrees scenarios. I'm sure because it's just natural, it's what happened also with the well below 2-degree scenarios, but I'm sure that in next validation waves from SBTi, we will be seeing dozens and dozens of cement and companies also applying and being certified by SBTi. So of course, we encourage all cement and ready-mix companies all over the world to think in this possibility and to embrace the target and learn and get knowledge enough to be able to comply with this new commitment. Another comment I want to make, because it seems like carbon capture is kind of the elephant in the room in our industry regarding the carbonization. This targets, this 430 kilo per ton target, which is a reduction of 47% in the traditional base we used in 1990 or 31%. There are more recent years, as reference, 2020, for instance -- or no, 2000 -- year 2000, a reduction of 31%. This 430 kilos per ton of cement is not including any technology that has not been currently proved at an industrial level. Meaning, we are talking on offering customers products with a lower footprint in carbon. We are talking about lower clinker factors producing cement with a low clinker factor, but cement that is as good as type 1 cement, at least for certain applications. We are talking on the formula that now is fully known in our industry. Our industry, the cement industry has the capability to substitute 100% of primary fuels with waste, with household waste, with commercial waste and some industrial waste. There are a few novelties in these traditional levers, like, for instance -- again, alternative fuels is not new; it's been there in Germany since the last 30 years or so, and maybe more, I'm not sure. But there are few novelties in these things. For instance, we tried and we saw and we proved that injecting a small amount of hydrogen in cement plants using large amounts of this RDF, this household commercial industrial waste did benefit or improve the combustion of these alternative fuels. So we saw that, okay? We applaud the person who did that experiment to us. And then the second question is, can that be done in close to 50 cement plants? Answer was, yes, it can be done, okay? So that happened 1.5 years ago, I think. And nowadays, half of our cement plants are using hydrogen to improve this combustion of primary together with alternative fuel. So that's a traditional lever. Yes, that is traditional, but it is not that often that we increased 5 percentage points to use of alternative fuels, thanks to this type of in innovations. And then there are some others. Most probably, you know all of them. I -- personally, I've been learning about them lately. Five years ago, 10 years ago, I never thought on making limestone reactive by micronizing it. Well, now we have already tried through it, and we now know in very specific cases when we have done the trials. We know what is the cost of it. And I'm thrilled to know that we can produce this micronized -- limestone micronized pozzolan, the cost being much lower in some places than slack or than even fly ash. So again, traditional levers -- enhanced traditional levers, some new additional, let's call them, technologies or practices. But again, this commitment on 400 and below 430 excludes anything related to technology that has not been proved. For instance, there is no contribution from CO2 capture on storage or use yet. So we will comment about that. Why are we so confident on subscribing to 1.5 and changing again our targets for the third time in a short period of time? Because this is what we see happening. In 2021 and as of September this year, we reduced carbon emissions in cement by 8.6 percentage points, which is fivefold what we have done in the past. What is changing? And I will explain what is changing. We have a new integral strategy and we are putting that strategy or we put the strategy to work. Nowadays, each and every cement plant does have CO2 road map on how to get that plant into -- in compliance with this type of objectives. And the first year, we started with this -- already plans defined, we defined the plans in 2020 -- it was 2021. So it's not by chance that '21 and '22, once we have these specific road maps, we are managing to make this large reduction in CO2, large compared to whoever and to whatever and compared to ourselves in previous years. Now another reason to be positive and confident. We already have 5 plants that are below that target. And I'm sure that will -- from 5, we'll move to 6, to 7, to 8. The process continues happening. I think I already mentioned the increase in alternative fuels with high contents of biomass. We increased that by 5 basis points for the first time, we had above 30%, and we are very pleased with it. We still don't see other public info related to it, but we might be back to leading the industry in the use of alternative fuels. For sure, we are doing that in Europe. On the fuel mix in Europe of all our cement plants, 70% is alternative fuels. That's why we're not that much impacted, but all the fuel inflation in Europe, 70% of our fuels coming from waste, which has completely different economics and it has a completely different dynamic. So this alternative fuels, all in all, taking into account regions like Europe in which we are paid to use them and other regions where we've paid to use them, the cost of these alternative fuels in average is around 40% of the cost of primary fuels. So whenever I'm ask or I'm -- I hear statements of the future of the industry being compromised because it's going to be more expensive, how come? How come? If in a circular economy, our largest production cost can be converted into an income stream, how come I cannot get that positive on the future of our company and our industry? Hydrogen, I already mentioned it. We just found out that a small injection of hydrogen is very helpful. And that's what we're doing. And in a year from now, with the 50%, we will go to 100%. And what we are learning through this 50% of injection is that we can inject much more. I'm not saying that we are going to use hydrogen as a fuel. What I'm saying is that we are still trying the limits on this combination of hydrogen to enhance the combustion of our fuel mix in our cement plants. And the reduction you have there, I already mentioned. And recent developments, well, we are improving our different rating agencies and associations are, let's say, improving their views about our performance and our progress. And by the way, in this slide, I want to mention just one thing because I think it's interesting. The First Movers Coalition, which is the, how to call it, the right arm of President Biden in climate action or climate change. They just launched last week -- Monday last week -- Tuesday last week, they launched what they call the new cement and ready-mix pillar in this First Movers Coalition type of association. And they made a couple of -- or define a couple of criteria to which some consumers have already committed, which is in 2030, they are going to be buying 10% of their cement and ready-mix consumption with cements that are lower than 180 kilos of CO2 per ton of cement, meaning basically cement that is produced already with carbon capture and some sort of storage or use. So directionally, I think they are doing the right thing. And it's too -- it's a harsh or very ambitious target. But again, directionally, I think it is okay. But something as -- another criteria that caught my attention is that they will not include or they will prohibit it, I don't know how to put it, the use of slack and fly ash starting 2035. I don't know if that's going to be just one type of organization. Well, it's the U.S. organization. So it's not a minimum fact. But I wonder what is going to be happening in the future in our industry regarding the use of, what they call, primary fuel materials. Slack and fly ash is produced with coal and with -- well, with coal basically our coke. So then what do we do, how do we substitute these materials that have been used in our industry since ages? But this is progressing according to the progress we do. On -- I mentioned that we made an integral strategy that we are executing. Let me try to summarize something that I've been finding, I do feel the need to say it and to repeat it, our products, and this is not different to other products, still glass, but our products are going to continue being essential in society. Meaning, we are today in a building. We all live in houses or flats here and there. We need to move, we need to eat, we need -- society will need to be doing what society has been doing. The thing is that we need to do all of that without generating CO2 or if it is generated, to convert that bad carbon into a neutral carbon story or a positive carbon meaning producing other useful products for society. So products are essential. The second thing that I think that can command this cause is that the transition. I'm going to be mentioning cement, which is the one that produces most of CO2 in ready-mix. But the transition, perhaps compared to 5 years ago, I'm convinced that the transition is feasible. We can go to 430 kg per ton without any new technologies. So once we start getting the benefits of new technologies, that will move to zero which is our aim for 2050. And I'm starting to think that perhaps that is not our limit. Who knows this is -- we might need a number of new processes and technologies. But what not thinking in ready-mix as an effective carbon zinc, we managed to recarbonate, and switched it to the aggregates and other materials, we might end up being negative, meaning not reducing, not neutral, but contributing. I'm not committing to that. I'm just saying it's a scenario that starts to show up and something that we are very willing to explore. And the third element in this message feed is essential, it's feasible. The third part is now we know that is profitable. A green economy needs to continue being an economy. One of the first lever of sustainability is that it has to be economically sustainable. If it is not economically sustainable, forget about the rest. So it is feasible. And I have already mentioned a couple of examples. If in a circular and green economy, our largest production cost can be converted into an income stream, that should be more profitable, doesn't it? And the other example I mentioned, if with a light investment in our grinding mill, we can produce lower CO2 cements, that should be more profitable than what we've been doing traditionally. So those are the main messages; essential, feasible and profitable. Now the strategy. I think what is new in the strategy is that we brought different elements to it, not all of them are new. CEMEX traditionally has worked a lot on biodiversity. I mean, we have already like 30 books or so once per year, precisely on promotion of biodiversity. But now we have these 6 pillars in our strategy. First, the most important one. The momentum that has been created is causing stakeholders to act and to demand things from us. Customers. Customers are asking for lower carbon products with a certificate because they need to show that their projects, their developments are already considering a reduction in CO2. And nowadays, 40% of our cement and 1/3 of our ready-mix is already offered through the Vertua branding to customers all over the world, and the condition is that this Vertua products have at least 25% reduction of CO2 when compared to type 1. And the targets we have is much more than that as of 2025. I suppose we're going to be hearing more details in the presentation. Then we have decarbonized in our operations, which is what we -- what most of us do talk most of the time. How do we increase the use of renewal energy, how do we reduce clinker factor, how do we increase the use of the carbonated raw materials, how do we increase alternative fuels with high contents of biomass? So that's -- those are the actions referred to carbonizing our operations. The other one is circular economy. One of the things that it is clearer and clearer is that in the low-carbon economy, businesses are going be combined in a different manner. I'm not saying there will be new unknown businesses. I'm saying they will be combined in a different manner. For us nowadays, it makes lots of sense to get some form on integration into 2 types of -- 3 types of waste. The first one is household, commercial, industrial; meaning the ones with energy content that we can use in our plants. And the other one, which is again new to us, is construction demolition and excavation waste. We are getting integrated into that business activity. It makes sense because now we know we can take some of those materials, recarbonate them and use them, at least part of it as alternative aggregates or a substitute for certain ready-mix products. So -- and the other one, which is very traditional is getting into the -- if you think as a waste of products, the fly ash, the slacks and all those materials that we are still using and we will continue using for the next few years. Water on diversity, again, this is not necessarily new, but we are -- I think the climate change momentum and the CO2-specific topic in climate change has kind of sent the rest of variables to a discussion later on, meaning water being one very important. We will hear about that actions that we are taking and that can be taken to rationalize the use of water in our company. The other one is innovation and partnerships. We started like years ago or so, 2 elements complementing our traditional R&D efforts, which is CEMEX Ventures, which is our corporate unit -- investment unit in the company and the objective of this CEMEX Ventures, corporate venture type of activities to identify and to select and to invest in a number of promising startups that might be very useful for us to join forces and to combine forces. There will be some examples mentioned, there are several. One of my preferred ones is that I'm telling nowadays, I have -- would be the only clinker in my office, and I have a small jar with a clinker produced with solar energy. For the first time, our company managed to produce very high temperatures to produce clinker. So there is a joint venture for us to work with them in this type of solutions, thinking that there might be a process in the future, that might be an option for us to produce clinker with solar energy. But there are a number of companies. And I understand that we have this -- the idea of this is like creating a network of open innovation and seems to be working very well, meaning we have more than -- I understand González will talk about that, but more than 2,000 companies relating to us, construct type of companies participating one way or the other. We're not investing in all of them, but this is a network that is very alive and very helpful to understand new possibilities, technologies and trends in our industry. And precisely, I already clarified that our 430 kilo per ton objective is not including any contribution from carbon capture. But we do have several R&D type of projects in carbon capture. So that is going to be -- we are going to be progressing on those. And at some point in time, we will include specific targets on carbon capture. And the last one is promoting a green economy, which is, it sounds like, okay, they needed 6 pillars, so they could promoting the kind of -- this pillar is as important as the technology one. If in a market norms related to our products, and there are markets like those, do not allow the use of blended cements regardless of what we do in that market, we won't be able to market these lower carbon footprint products. So we need to work on markets to widely accept the different types of composite cements that have been accepted in a number of geographies. And I think a good example of what I'm referring to is the U.S. The [indiscernible] rules, which I think they through time will be evolving in order to accept composite cement. They do accept composite cements nowadays lately. I think that is going to be moving forward more to the European type of norms in sententious materials. And that comes also with promoting CO2 markets, meaning assigning a value to CO2. It comes also with norms on waste directives that do allow for the type of activity that I've been describing to be more convenient for us in different markets. Now in order for us to focus and to communicate the interest we have in integrating into a number of activities, we are launching Regeneron, which is unit that will be taking all activities related to waste management in the company and it will operate as sort of an independent unit for us to move forward decisively in how to manage waste and how to improve our cement and ready-mix business because of the type of waste that I have already commented. Regarding digital, and I think I taking more time. Am I? It's okay? Okay. Okay. Digital, 3 levers: commercial, operations and administrative. But let me focus on the commercial part. I think, years ago, like 4, 5 years ago, we told you we were interested in developing an end-to-end commercial platform for our customers. Well, that is done. We do have a platform that is helping us to improve our customer experience or to develop a superior customer experience. Our -- we started measuring through the Net Promoter Score how our customers qualify us and you see the numbers there. It has increased in the last 4, 5 years, from 44 to 66. So this is according to our customers. So it is happening. There is -- customers are much more happy with the way they do business with us or we do business together. This sounds like self-serve, but we do believe that our platform is the best in the industry. If there is another one, I'm willing to know it and to learn from it, but we do believe it's a very complete platform. It is global, meaning we offer it everywhere. And that is one exception on the most recent acquisition we made, but it's everywhere. It's end-to-end, meaning our platform is not a kind of a track-and-trace type of solution, it's from lead to cash, that's end to end. It's multi-device. You can use whatever the device, in their office, in your mobile, no limitations. It covers all products, meaning it's not just for cement or for aggregates for ready-mix. It covers all the range of our cement ready-mix and products. Currently, it represents 90% of our volumes. Of course, we started from 0, and then we moved to 20% to 30% to 40%, 60%. So now we are covering 90% of cement volumes. So it is great. And through time, what we have learned is that at least in this business-to-business experience. It's not like that Amazon solution, where you use -- put your name, address, telephone, credit card, and you're in business with Amazon. It's -- there are certain particularities and different segment, different business lines and different segments do need different solutions as platforms. So for instance, if you say there is a link, there is a small link which is not different to the way we [indiscernible] that was convenient to connect directly with large customers. Large customers don't need to connect with a dozen or 2 dozens of different platforms from suppliers. But through our, we call it, CEMEX development center, what we facilitate is for them to connect with us their systems directly to our systems. So you can imagine the type of advantages there are by having customers directly connected to your own platform. The same way we have developed specific platforms for very small customers, which have a completely different type of needs who are buying ready-mix cement or aggregates. I'm going to skip the other 2. Luis Hernández is going to be explaining more the platform or the strategy. But what I can tell you is that we are very pleased with what we have, but the job is not fully done. So we are now starting, particularly in ready-mix, which seems like it has proved to be the most challenging business to be supported by a digital platform, an initiative that is CEMEX Go Acceleration. And we are starting to execute that initiative, particularly in the U.S. So we can move to even superior customer experience fully enabled by a digital platform that really complies with customers needs. Value creation. I think I mentioned, as of couple of years ago, we started thinking we are at the end of the process of repairing our balance sheet and we are going to start in a position to grow, and that's when we communicated that we are going to be -- that we were going to start balancing debt reduction with growth opportunities through bolt-on investments and acquisitions. And that's what we have been doing so far. José Antonio will be explaining this part and also the return to shareholders, which we continue saying, yes, we would like to return capital to shareholders. But once we are under either investment grade or investment grade parameters, we did try to do something just to find out that it was not necessarily the best timing to -- but we are open to do that. So reaffirming our strategic priorities, I did mention sustainability is key. I do know that there are a number of concerns regarding our industry, our company on sustainability issues, particularly the impact in CO2 production. Again, I think we are properly addressing that in terms of subscribing to the most ambitious scenarios, committing to the most ambitious targets and demonstrating that it can be done. So we managed to reduce 8.6 percentage points in a year and a fraction. I'm sure we will manage to make the total reduction by 2023. And we might -- who knows, we might change targets again, who knows, we can discuss that in future years. Growth EBITDA through margin enhancement as of September is 17.5%. According to our targets, we wanted to recover 2021 margins, which was aligned with our resilience program, gaining those margins back. On the one hand, we are very pleased that we managed to offset input cost inflation in this year -- mid last year and this year. But we still have this target of recovery in '21 margins pending. We have a few percentage points to achieve. I think we are getting into 2023 with a tailwind in prices because this year, we increased prices all year long. The last time it was October. So that is going on. The variable here to better understand is inflation. Is it really going to be materially going down? Or are we going to have something similar than last year? That's to be seen. But again, the objective, we have not fully complied with the objective of gaining back 2021 margins, and that's what will be the criteria in designing our pricing strategies for 2023. Optimizing our portfolio, achievement has been great, I already commented those. So -- and I think that's what I had to say for the time being. Thank you.

You were a little quicker in moving off stage than I anticipated. So -- and you were quicker in joining. So without further ado, I would like to welcome José Antonio González, our EVP of Planning and Business Development, to talk about our growth strategy.

Thank you very much, Lucy. Thank you very much, and hello to everyone. I add to Fernando, so welcome to this event and it's great to be back altogether. It's -- one pandemic ago, we had a similar event to this, I think it was 2019 the last time. And so it's been a while. And it's been great to be able to see some of you, very old friends, familiar faces. So very happy to be here, and very happy to be able to see all of you. Fernando provided some highlights about sort of our overall broad strategy and our priorities. And I am specifically going to address one portion of the strategy that Fernando described, which has to do with our efforts to pursue profitable growth, profitable growth by deploying capital and investing. Also this is intimately tied to our objectives of rebalancing our portfolio to over time ensure that we are geared towards markets where we want to be significant players in the long run and have important positions. And also, there's a strong linkage between our growth strategy and sustainability because when we think about allocating capital and our investment portfolio, a good portion of it has to do or is aligned to our sustainability targets, in particular, our decarbonization efforts. So we can go to the next -- or I'm supposed to, okay? Sorry about that. Okay. So these are sort of building blocks in terms of how we are approaching growth. So number one, the concept of portfolio rebalancing. So we would -- we are attempting not to find opportunities to reduce allocated capital in certain markets, regions where we believe other players are better positioned to take advantage of the opportunities in those markets, and we can redeploy that capital into areas of high priority for us in 4 businesses; cement, aggregates, a little bit of ready-mix when it makes sense, Urbanization Solutions, which I will describe. And after having reduced exposure to Europe, U.S. over the last 10 years, we are keen on enhancing our position in these markets. So portfolio rebalancing is about recycling capital. That will provide capital for investing in what we call our growth pipeline. So we have been since the middle of 2020, working together with all our operations in identifying attractive investment opportunities and we are very excited about this initiative. We have more than 350 projects, and I will describe a little bit more, but these are highly complementary projects that are fully aligned to the things I mentioned in terms of where we want to be and where we want to enhance our position, sustainability. So third pillar is sustainability investments. So when we think about deploying capital, sustainability is fully embedded here, and we are, let's say -- Fernando mentioned that we have our decarbonization plans brought down to a plant-by-plant level with a specific road map year-by-year towards 2025, towards 2030. And so we are deploying capital to ensure that we meet this, let's say, targets. And very interestingly, but all of these investments that we have in this pipeline are very attractive investments, super positive NPV, quick paybacks, et cetera. And finally, we are keen also on growing our urbanization solutions platform. I will talk a little bit more about that. So in terms of how we look at this, I think the message in this slide is sort of balanced approach. When you look at the chart on the bottom left, this is a 2-year period, '21, '22. We're roughly speaking about sources of $3 billion and then redeployment. So when we think about the sources, we're trying to balance between our free cash generation and the portfolio rebalancing efforts. So as you can see here, based on the size of the bars, more or less a balancing sources between the cash generation and proceeds from asset sales. And when we think about how we deploy that capital, again, balanced approach, invest to grow, but also continue the deleveraging trajectory that remains one of our top priorities. In terms of where, let's say, in the neighborhood of our long-term capital structure targets. When I say in the neighborhood, meaning, we still have some way to go in terms of reaching our, let's say, comfortable level of capital structure, Maher will address that. And we are, of course, keen on recovering our investment-grade credit rating, which we are -- we think we are relatively close to getting there. And when you look at the right side, so it's about combining our deployment of capital into attractive investments that will support EBITDA growth, will, in turn, allow us to delever and all of this supported by our portfolio rebalancing efforts. Now when we think about our growth pipeline, currently, we have around $1.6 billion of, let's say, capital commitments. We expect these capital commitments will be deployed between 2022 and 2026. So when you think about $1.6 billion, part of that is being deployed this year in 2022, and the rest is going to be deployed over this period of time that I mentioned. And in terms of how we are looking at this capital allocation, around 1/2 is geared towards a 10 million-ton cement capacity expansion program. But when we think about cement expansion, we are including a few -- a couple of greenfield projects that will be ready by 2024, the bottleneckings opening up plants that have been closed and grinding mill capacity as well. So when you think about 1/2 of this capital that's going into 10 million tons and you can see here in the chart, more or less when the capacity is being brought on stream. So by 2022, for example, 39% of the 10 million tons are being, let's say, brought on stream. That includes our plant in Tepeaca, CPN plant in Northwestern Mexico, which is allowing us to enhance our exports into the U.S., bringing back online kiln in Dominican Republic where we are sort of oversold and also using that capacity for exports into the region. In 2023, we have a couple of smaller projects coming on stream. 2024, 33% of the capacity, which is mostly our plants, our greenfield plants or greenfield brownfield in Colombia and the Philippines. And then 2025, 2026, we have some sort of grinding mills in Europe, for example. Now when we think about the marginal investments, meaning some of these projects, of course, we began earlier than 2022. So there's capital that has been allocated in prior years. But when we think about the marginal investment, the $800 million for this 10 million tons, that's about a marginal, let's say, investment of $80 per ton of additional capacity. So very attractive, let's say, way of enhancing our ability to serve markets where we are sold out, et cetera. And then the other half has to do with bolt-on margin enhancement in our 4 businesses. That's around $700 million, which I have a little bit more details here. As you can see, main focus is in United States, Europe, cement aggregates. And we think we expect that all these projects, once completed and running at a steady state, are going to contribute incremental EBITDA of $740 million in total. Now some of that is already being, let's say, delivered since 2021, also in 2022. I mentioned we have over 350 projects, around 180 are fully completed by this year and are already delivering results. And we are very excited about the outcome of this project portfolio. So here are some, let's say, average metrics of the projects that have already been completed and are being -- are delivering results in 2022. So on average, these projects have in excess of 20% IRR, around 4-year payback. And we estimate that the incremental EBITDA, the completed projects contributing in 2022 is around $100 million. So what we're looking at is a portfolio of projects that have very attractive metrics and most importantly, contribute to enhancement of our EBITDA performance. And then we have some examples. Here, for example, the Dominican Republic reopening of kiln 1, that's a 4-year payback. Investments in the U.S. in our Langley Quarry to serve the London market, again, 4-year payback. We have a network of -- or we have invested to enhance our network or our capacity to deploy mobile concrete plants, and we have a couple of them right now in very interesting, very attractive projects for us in Arizona where semiconductor facilities are being built. I did mention that sustainability is fully embedded as we think about our sort of growth strategy, our capital deployment, our growth pipeline. So inside the numbers I provided, we expect that we will be investing around $150 million per year. That's the sort of expected requirement in order to achieve our CO2 reduction road maps. Main categories is investments that we're making to be able to increase the use of alternative fuels in our plants, and we will hear more from our colleagues when we have a sustainability panel. We have one of the highest, if not the highest rate of utilization of alternative fuels, and we expect to continue growing that, and we're making investments in order to be able to -- equipment and even some interesting acquisitions that I will talk about shortly. Second -- another category is clinker factor reduction. So we have a strategy deployed to ensure that we are securing, let's say, alternative raw materials that when we combine that to a lower clinker factor is going to allow us again to contribute significantly to the carbon reduction road map. And the third category is sort of thermal efficiency, the carbonated raw materials. So far, the projects that are aligned to this initiative, we're seeing, on average, 30% IRR, 3- to 5-year payback. So as Fernando mentioned, the road to decarbonization happens to also be profitable. Some examples here, investments in our Rugby plant in the U.K. with 3- to 4-year payback, 40% IRR. We are in this particular plant. And it's not the only one in Europe, but with the capacity to utilize in excess of 90% of alternative fuels. So setting the example for what we can do in the rest of CEMEX, and we're constantly benchmarking opportunities so that we can replicate what we do when we learn in certain plants -- in the plants elsewhere in our portfolio. Fernando did mention the program where we are basically ensuring that we have equipment to be able to inject hydrogen in our kilns. We have done 50 projects of that sort, 60 more to go in order to be able to complete the program deployment through all our over 50 plants in the network. And these normally have 3 years payback with average IRRs of 70%. And then we're also pursuing efforts to identify and secure sources of decarbonated raw materials, which will contribute to -- jointly with a lower clinker factor and again, lower carbon footprint these projects 4-year payback, for example, 34% IRR. I did mention that we're also very interested in deploying capital to grow our Urbanization Solutions business, which is our fourth core business. We organized this effort around 4 verticals, as seen on the screen. This is our fastest-growing business. We're growing this business revenue EBITDA double digits this year. From a revenue standpoint it's a little bit under 15% of our total revenue. From an EBITDA standpoint, a little bit less than 10%. But we are ensuring that we have a process in place to identify bolt-on investment opportunities that fit into this, let's say, framework. Performance materials is a vertical where we are hosting sort of our materials businesses. I would -- 2 of them stand out. One is chemical admixtures for our ready-mix and cement business, and mortar business. In the chemical admixtures, we have 15 plants in our network. We're highly vertically integrated. More than 90% of our admixture needs in our concrete business are self-sourced by this network of 15 plants and almost 90% also of our cement admixture needs are self-sourced. And interestingly, 15% of the sales of our admixture business are external and growing. We are keen on developing also an external business. And for that, it has to do a lot with R&D capabilities, and we'll hear from our R&D -- the Head of our R&D efforts, Davide Zampini later. It also has to do with having the right capabilities from a technical sales perspective. So we are developing all these capabilities. I didn't mention mortars is how -- we have a network of 10 plants, and we are keen on developing our mortar business. Between -- yes, we were doing close to 700,000 tons and growing. Industrialized construction, a couple of examples. We have a network of 14 plants of concrete blocks in Florida, which are delivering great results this year, concrete blocks, and we also have activities around railway sleepers in particular in the U.K., but that's also an interesting and growing business. Circularity, we will hear about the circularity strategy in our sustainability panel, but that's a third, let's say, vertical that is a big effort under Urbanization Solutions. And it's all about ensuring we capture streams of municipal industrial waste that we can generate a business around that, taking advantage of opportunities in construction demolition, excavation, waste processing. And we have a couple of facilities, and we're looking at very interesting opportunities around our portfolio to grow this particular business, which we believe is going to gain a lot of traction. And then in related services, we have construction materials, retail, for example, in Mexico, a very successful initiative that Ricardo Naya is sort of leading and we'll talk about, but that's a great initiative that is allowing us to be a solutions provider in the Mexican construction retail sector. And we are doing logistics services, et cetera. And then some examples. We are investing in our portfolio, a couple of examples where we are investing in mortar to expand capacity with very attractive paybacks and most importantly, allowing us to enhance our product offering in this -- in the case of Mexico and the U.K. And then in the bottom, we have 2 examples in our circularity initiative. In France, close to Paris, a very interesting site where we are contributing and generating an interesting business around construction, demolition, excavation, waste. And then in Querétaro, recent acquisition we made of a company that is sort of helping or processing municipal waste in Querétaro that we will use to satisfy our need for alternative fuels in Mexico, but also as a business for third parties. And in conclusion, we're -- we think -- we're thinking about this from a balanced approach, as you saw earlier, it's about -- thinking about the sources where we can balance between the proceeds from portfolio recycling together with our free cash flow and then balance this between investing for growth, but also maintaining the deleveraging trajectory. So we should see sort of a balanced use of resources, both for debt reduction, but also for investing. We have a very robust investment pipeline. Our operations continue identifying very interesting opportunities. Most of them are worthy of pursuing. Relevant focus on our CO2 road map. So the investments required for our CO2 road map are covered -- fully covered as an integral part of this process. And then another important element for us is the pace, the pace at which we go. Of course, we're very vigilant of market dynamics. We're going through volatile times. And we want to make sure that the projects we are undertaking fit completely with the conditions, the environment. And in a way also, the progress that we make on our portfolio rebalancing efforts are also going to dictate the available capital that we have to redeploy into these areas of priority. So that's it for me. I think there's...

It's not it for you. So thank you. I think we're going to go into the Q&A session. I'm not really sure that this is working. But at any rate, if you could state your name and your institution for the webcast, that would be great. Please go ahead. And wait for the microphone, sorry.

It's Alberto Valerio from UBS. My question is about the last year CEMEX Day 2021 when we also have investment plan of 10 million capacity of addition for $425 million. I'm wondering whether this new plan, it's update of the previous plan or is a brand-new plan of investments?

No, no, it's a continuation. I think there's been some adjustments in terms of what are the sort of the capacity additions that we are contemplating. We have added the number of projects slowed down others. But in general, it's a continuation of the same plan, which considers in particular, additional grinding capacity in Europe. So what you see is basically a continuation of the same plan, yes. Ben?

Perfect. Ben Theurer from Barclays. José is there a difference on the investment decision and the hurdles when it comes to sustainability projects versus growth projects, like what the return metrics are, et cetera? Do you have different criteria?

Yes, I think depending on the type of investment, the size of the investment, whether it's completely a greenfield or we're acquiring a small business, the investment, let's say, thresholds are different. Also by region, some investments depending on what we're doing in certain regions, for example, in Europe, where we have the benefit of the pricing of carbon, of course, are going to yield results that are, let's say, different from other regions around the world. So I think there's a differentiated approach. But what we have faced, Ben, right now as we have sort of kicked off this process middle of 2020 until today is, of course, the projects that we are undertaking, we have the benefit of choosing from a wide array of opportunities and selecting those that have the best metrics. But yes, we have the -- metrics are somewhat differentiated depending on the type, the size of project and the geographies.

Gordon Lee from BTG Pactual. Just a couple of questions. First, on -- when you were talking about the decarbonization investments, and you were mentioning the 30% IRR, I was wondering if that included, and if you've quantified the effective production capacity increase that you will have as you reduce clinker factor? Because at the end of the day, you'll be able to produce more cement if you reduce the factor, right? The second question is, I guess it was notable in your presentation that you didn't talk about returning cash to shareholders. And I was wondering what needs to happen for that to happen? And then how you think about that relative to the other investment opportunities you have?

Yes. So to answer your question, Gordon, there's sort of a little bit of a gray line when we think about clinker factor reduction, for example, of the reduction of carbon per se and then the additional capacity that may result from reduction in clinker factor. Additional incremental capacity, which requires, for example, investments in additional grinding mills, the business case for that has to do with the incremental, let's say, profitability from growing volumes as a result of additional capacity. The portion that has to do with lowering clinker factor, the economics of that and the IRR of that have to do more with the, let's say, reduction of utilization of energy or fossil or fuels or replacing fuels for cheaper fuels. So it's a little bit differentiated, I would say. And the answer to your second question, and it's a very good question because when I showed uses and sources in uses, we didn't mention return of capital to shareholders. Actually, when we -- when I place -- when I show the charts of uses of capital, we have included as part of the investment, for example, the share repurchases that we have done over '21 and '22. But to answer specifically your question, I think our view is that we still have a further step to go to recover the investment-grade credit rating. When we are there, when we think about the balanced approach to deployment of capital right now, half deleveraged or reduced debt, half invest, well, when we have investment grade credit rating, the need to deploy some capital for debt reduction is going to be replaced with return of capital to shareholders. So what needs to happen for us to have, let's say, a bolder, let's say assumption about returning capital to shareholders, investment-grade credit rating. And Maher will address that in his presentation.

Yassine Touahri from On Field Investment Research. So 2 questions. On your urbanization solution, I think it was approximately 11% of sales in 2021. Where would you like this business to be in 5 to 10 years as a percentage of CEMEX? And the second question is if there is a great opportunity, like a bolt-on acquisition of $1 billion or a couple of billion dollar available in the market, what would be your view? Could you bid on asset next year or in the next 5 to 10 years?

Yes. Thank you, Yassine. Yes, great questions. When we think about the ambition in Urbanization Solutions, we think of it this way. Mexico is a business whereas it generates in excess of $1 billion. The U.S. is heading towards $1 billion. We would like, at some point in time, that Urbanization Solutions be this kind of quantum. I mean, this is, of course, the ambition, and this necessitates almost a fivefold increase in the size of the business. So it's -- let's say, it's an ambition. I mean, clearly, at this stage, the only way to get there is to deploy significant amounts of capital. So the more, let's say, realistic target as we think about is to maintain this double-digit growth that we are experiencing this year. Now that would be, let's say, more short term, more long term, that the ambition is the one I described. And the second question you asked is about the -- I mean, what if $1 billion or $2 billion transaction comes across us? And it happens. There are those kinds of opportunities. I think those for us right now, under the current setup, in the current framework that I described are out of the question, unless it is connected with sort of capital recycling approach, where there's a divestment of that quantum that we can redeploy. Otherwise, I think something like that, of that quantum is for us right now under the current framework that I described, not something that we would consider.

Okay. I think we have time for one last question. Paco, can someone give him a mic?

Francisco Chávez from BBVA. When you talk about rebalancing the portfolio, when can we expect that to happen? You've made some divestments in South Central America. So when can we expect that strategy to accelerate?

Look, yes, that's a great question. And as you point out, we did have some divestments, not huge during 2022. I think we pointed to $600 million proceeds from divestments, so it's not insignificant as well. I would have to answer your question in terms of when does this accelerate? We would like to make progress and to accelerate, as you point out. But when I can only respond by saying, well, depends on market conditions. I mean, our approach has also been to be opportunistic -- not opportunistic, to be selective, I would say, selective and we have, let's say, reasonable thresholds in terms of when we would be able to transact when we think about portfolio rebalancing. And I would say that it's -- the velocity, the speed will depend on market conditions. All right.

Thank you very much, José.

Thank you very much. It was a pleasure. Thank you.

So I would like to welcome to the stage our sustainability panel, Juan Romero, who is our EVP of Sustainability, Commercial and Operations Development, will do the introductions for the panel. Thank you.

Thank you very much, Lucy. Thank you, Lucy. It is a pleasure for me to introduce this panel in which we will share with you our strategy in sustainability. As you know perfectly, climate change is -- our Board -- our challenge that -- or the -- of the [Indiscernible] that our work never ever face. It is a big pretty question. There's many [Indiscernible] of queries uniquely positioned to be part of the climate solution. CEMEX is committed to being a leader in the carbonizing the industry and promoting a circular economy. And we are mobilizing the industry to join us in this effort. CEMEX and the cement industry have been working on carbon reduction for more than 20 years, and our industry have been leaders in the industry space of decarbonization. Our industry was the first to develop a standard for the calculation or carbon emission and to establish the global database of CO2 emission, which is updated annually. In fact, there is [Indiscernible] industry with significant emission of CO2 that does not yet have a standard for the calculation of the emissions. You can measure the emission of how you can really solve it. In 2018, we helped to create the global cement and concrete association to facilitate sustainable development of the cement and concrete industry. Over the last 5 years, we have seen increased urgency about the issue of climate change. And this, of course, is related to the pandemic. Under the GCCA, we were the first industry to develop a detailed road map for net zero for 2050. In response to this urgency, we are refine our commitment to sustainability with the launch of future in action program that you have been talking about it. This program galvanize our effort to decarbonization and defines our clear road map to reach our 2030 and 2050 objectives. As Fernando mentioned before, since we roll out the program, we have achieved a record decline in carbon emission of 8.6%. Given this progress as well as the lesson we have learned, we are executing this road map. We been verified by SBTi, and we had no more ambition targets that have been clarified by the SBTi under the 1.5 degree scenario. Fernando has already presented the 6 pillar of the future in action program. We intend to use this panel to focus you for all of them. Decarbonize of our operation, sustainable products and solutions, circular economy and innovation and partnerships. Here with me is today, and it's a pleasure for me to introduce Vicente Saiso, who is the Head of Sustainability in the company. It is also Gonzalo Galindo, who is the Head of CEMEX Venture. Davide Zampini, who is joining us from Switzerland [Indiscernible], he is the Head of Research and Development effort. And last, but not lease, Juan Carlos Herrera, who is the Head of Urbanization Solutions. Yes, please, Vicente.

Thank you. Thank you very much, Juan. We will proceed to have a deeper dive on what Fernando has already explained. I think it's very relevant for us to put emphasis on the achievements that we have had since we have implemented the future in action program. This is kind of a fast track that we have decided to roll out throughout the company, and it's working out very good. For us, a reduction of 8.6% is very impressive. It is 5x faster pace than what we have done in the past, and it reflects that when we focus the company and we roll out the proven technologies and the regional presidents efforts in pushing those in their markets, this can happen very fast. Very impressive increase of alternative fuels, that for sure will place us maybe the first in the industry by the closing of this year and a very relevant reduction of clinker factor in which we have been very consistent at reducing the last 4 or 5 years, and we are reaching the levels that will make a difference in our CO2 footprint. In addition to these levers, we have also some KPIs that I think, also reflects industry-leading performance. In clean electricity, we were the pioneer of reducing the Scope 2 emissions in our business. We are currently at 31% consumption of clean electricity, and we have a target to reach 40% by 2025. With our lower carbon products, we have been very successful. We launched them globally in early 2020. And we have been able to achieve already a very high level of adopters, and very much in line with our target by 2025, which is 50% for both cement and concrete. Regarding Vertua, which is used to be the brand that was focused on lower carbon. What we have decided is after it has consolidated its presence in the market, we are going to extend that umbrella to co-brand other products that we have in our portfolio and to highlight to customers, the products that we already have available for them to make a more sustainable construction. We are going to highlight the recycled content in some of our materials. Some of the high-strength concrete that we have that could optimize design, and we are going to start to roll out this new identity in all of our markets to make sure that our customers are aware of all the attributes that our whole array of portfolio has and that it can really make a difference on the market. As mentioned by Fernando, in concrete, we want to highlight that more than 1/3 of our sales is already happening through Vertua concrete, and we hope that it will continue to grow very fast. Last week, it was an exciting news for us. with a lengthy and very detailed process that we have followed with the science-based target initiative, in which we were one of the first in our sector to be validated on their new methodology. We were part of the advisory committee that developed that methodology for our sector because we are interested in moving our sector faster and aligned it with the science-based targets, which is a very relevant criteria that makes sure that our sector is fully aligned with what is required to fulfill the Paris Agreement cost. We have set this new ambitious targets that you have already heard from Fernando, 430 kilos in cement, which represents a 47% reduction versus our 1990 baseline and in a very recent baseline of 2020, which is the one that is used by EBITDA is a 31% reduction. In clean electricity, we are moving from the 31% that you saw in the last slide, all the way to 65% by 2030. We think this is a very ambitious goal, and it relies on our strong action in all the different markets where we operate to move in every opportunity that we have to clean electricity. And finally, for the first time, we are establishing a Scope 3 targets. Scope 3 is a challenge because there are many categories. Some things are harder to quantify, and we have made a big effort to already include 3 very relevant categories for us in Scope 3, which is our transport emissions in which we are targeting to reduce them by 30% compared to 2020 baseline. 25% of goods that include clinker and cement that we buy from third parties, we are planning to reduce the footprint of those products by 25%. And all the fuels that we consume and we also trade with third parties, we want to reduce by 40% of that footprint by 2030. These are the most ambitious target in our industry. And the transport emission target is linked to our commitment in the First Movers Coalition, where we have said that by 2030, 32% of our heavy-duty truck fleet will move to electric vehicles. Those vehicles are not yet there -- ready to be deployed, but we are working with OEM manufacturers to develop the ready mixers of the future. We are testing in some of our markets, and we hope that we are going to help develop those solutions to reduce our transport emissions. The key levers that we are using to reach 2030 are the ones that we know, that we have tested in our operations, that we know the results that they have. There is some innovation within the traditional levers that Fernando clearly explained in his exposition, like the use of hydrogen, et cetera. These are the ones that we are fast tracking and implementing in all of our markets in a very fast fashion. One example is hydrogen injection, that by the end of the year, we are going to reach 50% implementation in all of our kilns. And as José Antonio explained, all these proven technologies generate relevant cost savings and have positive returns on investment. And that's the good news that our 2030 objective can be fulfilled in a very profitable manner. In addition to these levers that are focused on the 2030 effort, we have additional elements in our production process, all the way to concrete production that can also move the needle beyond 2030. One of the examples shown here in the middle of the screen is carbon capture utilization and storage, solar calcination, potential electrification of our whole calcination process. That could really make a difference for the future. And we are going to elaborate more on how the future looks like after 2030. And there are some things in addition that we can do both in our cement business, but also in our concrete business, looking this as an integrated value chain and the end product that we deliver to customers. Our ultimate goal is to reach a net zero CO2 by 2050. In this process that we initiated with the science-based target initiative. We are now validating also our road map to 2050, and we hope that in a few weeks, we can have the positive news that this will happen. And this will, let's say, have the full validation of our whole road map going from 2030 all the way to 2050. 2030 already some Scope 3 emissions already included. But by 2050, it will be the whole company, and all of our activities, Scope 1 and Scope 2 and Scope 3 emissions as a net zero company. To reach that 2050, there's an element of innovation that I will highlight and then we will be able to go deeper with the rest of my colleagues in which CCUS will play a big and important role in helping us to get to carbon neutrality. The strategy that we are following here is monitoring the CCUS technologies that have the highest potential to reach scale and to lower the cost of implementation that can also be adapted to our production process in the best way. We are looking at a few examples like membranes, amines, cryogenic, direct separation. And we are continuously monitoring how those technologies and our technologies are evolving, to place smart bets in projects to pilot them and test them in our facilities to make sure that we are on the right track of having those in place. We are focusing on technology readiness levels from 6 to 9, meaning those that are more advanced and that we can deploy from here till 2030 in the most accelerated fashion for some of our plants. We are targeting to do industrial scale pilots in 4 of our facilities to test some of these technologies that are mentioned here. We already have defined the first carbon-neutral plant that will be Rüdersdorf in Germany, where we already have 20 partners and growing in defining the combination of technologies and solutions that will allow that factory to become carbon neutral. We are exploring additional plants in Europe that will become large-scale projects and try to implement those since the very early definition into projects that will capture 50% to 60% of the capacity of one of our facilities. In addition to this, storage of CO2 is one of the immediate technologies that you need. Once you capture CO2 in an economic fashion, you need to do something with the CO2. So storage is very relevant for a very immediate deployment. So we are now doing a road map and mapping all the storage possibilities in each one of our plants to make sure that we prioritize in those where we can do that easier and faster. And also we are working in more than 15 R&D initiatives, targeting CO2 utilization because we think CO2 will become a relevant input into the development of other products. We also think that CO2 can recarbonate our materials and can be mineralized in some of our products, and we see high potential of that. For the moment, we are focusing in Europe, in the U.S. for these projects because that's where the government funding and support for innovation is happening right now. And we're confident that by doing that, we are going to be able to later learn and deploy it to the rest of our operations. Thank you. I will turn to Juan Carlos to talk us about circularity.

Thank you, Vicente. Good morning to all. So I'll talk about circular economy. First of all, what is a circular economy. A circular economy is achieved when economies move from a linear model of extract, produce, use and dispose to a circular model of retreat, recycle and transform. But why is this important? Because the world today generates 2.1 billion tonnes of waste a year, of which 33% is estimated that it's not safely disposed. And at the current rate of growth, it is estimated that by 2050, the world will be generating 3.4 billion tonnes of waste a year. In addition, the United Nations has estimated that by 2050, 2 out of 3 people will be living in cities. So growing waste by -- plus ancillary urbanization demands much smarter construction with sustainable products that can be environmentally friendly. That is why CEMEX is at the heart of the circular economy. By being focused on municipal and industrial waste in construction and demolition waste and by byproducts that are being produced by other industries, the cement industry can handle these products. Why? Because we run our kilns at 1,500 degrees centigrade. We have the capability to extract the energy from the municipal waste and to use the minerals from a variety of other industries and still produce cement at the same quality, but with more sustainable attributes. CEMEX in 2021, managed 23 million tons of waste. That is 1/3 of the cement we produced in 2021 and 57x more than what we generate. Fernando has already introduced Regenera. Regenera will put together what we're still doing right now of waste, and we will grow this business. How? By focusing in the 3-way streams I mentioned, which are capable of being transformed into products that can be used in our processes and also be sold to third parties. So we see a future where municipal waste is transformed into alternative fuels that can be co-processed by our kilns, by other customers, by power plants as an example. So let me dig in into each 1 of them. Municipal industrial waste. So basically, we take the waste stream, run it through separators, separate what's recyclable and take what is nonrecyclable. What is nonrecyclable, substitutes are fossil fuels. Today, we're substituting 34% of the fossil fuels we use in our kilns. Basically 1.6 million tons of emissions of CO2. That's equivalent of what 64,000 mature trees would absorb in a year. We have plants in the system like Chelm plant in Poland that is running consistently 94% alternative fuels. So as Fernando mentioned, technology in this sense, still has ways to improve. In Mexico City, ProAmbiente, which in the future will be part of our Regenera business, is managing 25% of the municipal waste produced in Mexico City, the fifth largest city in the world. We take this waste, again, separate what's recyclable from nonrecyclable. The nonrecyclable feeds are Barrientos, Huichapan and Tepeaca plant. This activity allows our largest plant in the Mexico system to be running at less than 400 kilograms of CO2 per ton cement. In Egypt, in collaboration with an NGO, VeryNile and the local fishermen, where basically taking out waste that is floating in Nile River. Again, separate nonrecyclable from recyclable. In this case, the nonrecyclable goes to our fuel plant and the recyclable becomes an income stream for the local fishermen and our communities. All the activities we're doing in municipal industrial waste, are focused on reducing what is being sent to landfills. As you know, landfills generate methane, which is 80x more harmful than CO2. In addition, that if they're not well sealed, there's the effect of leaches or chemicals flowing into the groundwater. Construction and demolition waste. In the U.S. 600 million tonnes a year of construction and demolition waste are being produced. That's 6x the amount of cement consumed in the country. And what is this waste? Demolished concrete, wood, bricks, glass, block, shingles, you name it. All being central landfills a majority, 10% being recycled. Construction and demolition waste can be turned into recycled aggregates. It can be turned into inert sands that can recover our quarries. We have a platform in Gennevilliers, Paris, on the dock of the same. We receive by barge, construction and demolition waste from the outskirts of Paris. Pick it up, clean it, use it, again as recycled aggregates and ready-mix, road base and to recover our quarries. 1 million tons have been used in that and through that platform. Alternative raw materials. Today, all our plants are located where our limestone is. But in the future, we need a supply chain, which we're developing, so we can find the low-carbon materials of the future. We're talking about slags, fly ashes, synthetic gypsum, pozzolans, decarbonated clays. Why? Because these materials can help us not extract limestone. In 2021, we substituted 10 million tonnes of limestone for these materials, which is equivalent to have not driven 5.5 million cars a year because of the CO2 difference. So in summary, CEMEX in 2021 managed 23 million tonnes of waste. We expect that by 2030, we will be managing 41 million tonnes. Why? Because we're going to be doubling the municipal industrial waste we consume to 7 million tonnes. To put it in perspective, that 30% of the municipal waste that the state of Texas produces every year. We will recycle 14 million tonnes of construction and demolished waste, and we will increase our alternative fuel use by 30%, equivalent to not extracting 13 million tonnes per year of materials. The circular economy is here to stay. It's not going anywhere. And CEMEX is at the heart of it and is prepared to manage it and to help the communities that are close to our plants. Thank you very much. And now Gonzalo.

Thank you. Good morning, everybody. So let's talk about a little bit about the CEMEX goals about innovation. We have generated an innovation platform, which main purpose is to look into breakthrough ideas, both internally and externally that help us meet our strategic challenges. Through CEMEX Ventures, we keep continuously eyes and ears outside the company looking into and taking into consideration what is happening from the innovation point of view, and breakthrough technologies, which might both affect or help us, but also affect or help us the construction industry and the wider system in itself. Our innovation platform has basically 2 levels. One internal level, where we are continuously creating a workshop where employees feel free and are encouraged to provide breakthrough ideas or simply ways they think we can do better. We have created mechanisms like idea challenges, hackathons, shark tanks to allow this to happen. And as of today, we have received already more than 6,000 ideas, out of which many of them are being piloted, developed and even implemented. In fact, Davide in a few minutes, will show one breakthrough idea which has been created in one of those shark tanks about 2 years ago. The other element is the external element, which is the open innovation platform, where we engage with entrepreneurs, startups, academia, other industries, other companies, venture capitalists, in search of innovation, breakthrough technologies, but most importantly, partnerships. Just to give you an idea, over the last 6 years, we have evaluated more than 5,200 start-ups, out of which half of them came from our own start-up competition, which is probably the largest start-up competition in the construction world. And through those efforts we have, as [Indiscernible] mentioned, we have -- already have collaborations, evaluations, discussions with over 2,000 companies already. But this -- and as a result of that, given the internal and external effort on a continuous basis, we have 150 give-or-take breakthrough projects in different stages of development. But this margin wouldn't happen with the help of the R&D people. Despite the fact that CEMEX Ventures kind of the gate of innovation and partnerships for the company, the R&D people have the technical knowledge to actually help us evaluate those ideas. Any of those technology breakthrough ideas and technologies come to us are not necessarily plug and play. They really need to work to actually make them happen. And that's where R&D comes very handy with the deep technology knowledge, understanding the challenges of the industry and help us really evaluate whether those ideas will be fit for what strategic objectives will be fit for the industry, will be fit for CEMEX as a whole. I'm talking about strategic objectives. We have to rephrase somehow strategic objectives to something more market-driven opportunities in such a way that entrepreneurs, academics and people from the outside, have a much more compatible understanding of what we mean by our strategic objectives. And as such, we have created 4 pillars or 4 verticals of search. The first one has to do with green construction related to our circular economy and decarbonization efforts. The second has to do with enhanced productivity, looking into improving productivity in CEMEX and even through our customers as well. The third one has to do with future now, which is how building materials will evolve and construction processes will evolve. And last but not least, construction supply chain, which has to do with logistics and opportunities or improving material supplies to the whole construction environment. And talking about state strategic objectives. We have to refresh somehow strategic objectives into something more market-driven opportunities in such a way that entrepreneurs, academics and people from the outside have a much more compatible understanding of what we mean by our strategic objectives. And as such, we have created 4 pillars or 4 verticals of search. The first one has to do with green construction related to our circular economy and decarbonization efforts. The second has to do with enhanced productivity, looking into improving productivity in CEMEX and even through our customers as well. The third one has to do with future now, which is how building materials will evolve and construction processes will evolve. And last but not least, construction supply chain, which has to do with logistic and opportunities or improving material supplies to the whole construction environment. But talking about start-ups and entrepreneurs if I were one of them, why would I go to CEMEX Ventures looking for a partnership when there's plenty of money in venture capital being invested, especially in climate tech, I think there's plenty of money right now being invested in climate tech, why [Indiscernible] go to CEMEX Ventures. I think we have a couple of very important elements. The first one is our technological knowledge and our capacity to evaluate and help start to evaluate whether that breakthrough idea will make the cut in improving the construction world or improving businesses like ours. The second is we have a huge array of industrial installation when all these ideas and all these breakthrough technologies can be tested. Many of these ideas, best case scenarios in early stages, they will test it only at the laboratory level. Best case scenario, in the parking lot or the garage of the father of one of those entrepreneurs. That will not make the code. They really need to be tested at the industrial level in real conditions. And that's where these technologies breakdown, and that's where we came in very handy for them and for us to actually test these technologies. And last but not least, we help them all the way to actually make sure that those ideas become a reality and become economically [ vial ] and actually help the companies like us and an industry like us. But let's hear from our partners what they think about dealing and having a partnership with us. Please run the video. Sorry. [Presentation]

I hope you can hear me. Sorry that I cannot be there with you. And -- but it's -- I think it's an opportunity to give you a peak to our corporate R&D facilities in Switzerland, and this is where I am based and learn a little bit about what we do and more importantly, how we do it. Gonzalo talked about and outlined the CEMEX innovation ecosystem and especially how we are interacting with the external world. And I think my job is to explain to you a little bit about what is the R&D's role in contributing to the strategic priorities, especially as we look forward towards the future now. So execution, I think, is the key word. We are currently focusing on the execution of the current decarbonization technologies and levers that will keep us focused on the 2030 objectives. Nonetheless, the R&D team is working on some key developments, and we have things in the pipeline that will allow us to decarbonize faster and further. Fernando Gonzalez has already mentioned some of them, and those are the micronization of limestone, and pozzolans, the calcination of clays. And these [Indiscernible] these advancements that we have made and these topics will actually allow us to substitute further, the clinker factor. While the R&D team is, of course, involved with improving the way we do things currently, we do spend the bulk of our time on the future. This is decade is the time where we are exploring those technologies and solutions that will take us to net zero by 2050. And my team oversees that, devising the future of the industry, imagining and enabling the technologies that will shape the construction industry and its decarbonization. Obviously, carbon capture looms large in the discussion. And as Vicente already pointed out, we are actively engaged in numerous and a variety of carbon-capture technologies. But there's not going to be a single carbon-capture technology that is going to be the solution. The industry will need to rely on several technologies, and these technologies will depend on the infrastructure of the plant, nearby industrial hubs, geographical attributes, the logistic network amongst the various factors to be taken into consideration. Now luckily, there are several government funding mechanisms that have been set up to help cover the upfront cost of CCUS, carbon capture utilization and storage. EU funding, for example, has schemes like Horizon Europe, life and innovation fund that have put a substantial amount of money into the -- to make it available for research projects. And in the DOE in the U.S. has recently launched several calls seeking solutions to decarbonize industries like ours. And it's this funding opportunities that gives us confidence that carbon-capture breakthroughs wherever they occur, will ultimately be shared, not only across our industries, but across all industries that face the same challenge. Our innovation approach really enables us, as explained also by Gonzalo, to really hunt down the key carbon-capture utilization storage technologies. But more importantly, here where it is key for us is to be select. How are we being selective? Well, you're going to test a number of, let's say, technologies that although they may be in the embryonic stage, I mean, but we're going to actually pursue them and actually understand what are their -- let's say, what are their promises. We're going to engage in partnerships that will leverage synergies for both of the companies that are involved. Design pilots that enable really fast, upscaling of the technologies, and diligently work to secure government funding to advance the most promising technologies. However, we can't be myopic and see that carbon capture is the only answer to net zero. We must continue to investigate every possible idea. And if that idea doesn't exist, well, we hope that we are the ones to invent it. We have a very detailed road map using technologies that are currently in existence to achieve the short-term objectives, and we're not pinning our hopes on a single solution for net zero. We're expecting breakthrough technologies to emerge and degenerate disruption. And in fact, you will see on the slide that I highlight that besides the carbon capture and utilization storage, we are pursuing areas where we're going to addressed energy to power our manufacturing processes and be it solar or electric, exploring how to take the chemistry now industry to a higher, more sophisticated level, find new ways to use CO2. We mentioned mineralization, but there are many other ones, and I will show you one example later. And be able to continue to develop the next generation of virtual products, as being highlighted, we have extended the scope now. So as I promised to you, this is going to be an opportunity for you to kind of learn a little bit about what we do and how we do it. So I'm going to add, let's say, call your attention and move towards the 3D printing area that we have in our lab. So you get a chance to appreciate a little bit what we're doing. Why 3D printing? Because this actually is the 3D printing sector in our lab. And 3D printing has been the technology that's been on the spotlight when it comes to construction and new construction technologies for buildings, right? Nonetheless, it's faced some very important challenges, and those challenges has been that the material that is in printing with -- it's this cementitious material. It's a cement-based materials. But nonetheless, this material is highly expensive and it comes in a particular format. It's a motor-led material, meaning it's got fine sand. It's got significant amount of cement in it and some ad mixtures, but it's bagged. And each manufacturer has their favorite bag, let's say, motor for printing. And of course, it's not very practical because you're going to have to basically wherever you print, you may not be the closest to where the motor materials that you used is, and therefore, there's a logistics component to it. But the materials are quite expensive. And that's why when we met up with our partner, COBOD, and they, basically, were crying out loud and saying, "Guys, we need to make the ink that we're printing buildings with much, much more economical and accessible," and that's going to be the way to actually make 3D printing takeoff. So we approached them and said, "Look, guys, we're going to develop a unique admixture system and we have our own admixture business, and we're going to actually take that admixture and enable the production of ready-mix concrete for 3D printing." So this has been the key. We have a 2-component system, that we have developed that is enabling for a ready-mix concrete to be produced in a ready-mix plant and delivered for 3D printing. But the key for that development is not only the admixture technology that we've developed, but also in part, modifications to the machine itself. And this is where COBOD has been instrumental and the partnership has been instrumental. So they have made modifications to enable and allow that technology to take off. And we are very proud in saying that we are able to reduce the cost of the ink by sixfold, and it's -- I think it's going to give way for more 3D printing in the future. Now I'm going to walk over to this apparatus over here. And believe it or not, this is a solar receiver. This is the solar receiver from Synhelion, the first 250-kilowatt solar receiver that they use to demonstrate that they can elevate -- take solar radiation elevated to 1,500 degrees. The moment that we discovered that, we were super excited because 1,500 degrees is unprecedented. I mean these guys are the first ones that are able to actually do it, but its significance is -- relies on the fact that 1,500 degrees is exactly what we need to actually manufacture clinker. So we can absolutely drive the whole, let's say, clinker production process through solar radiation, and this has been a big breakthrough. And what is really neat is that these guys are heating up CO2 and water vapor, the very same, let's say, greenhouse gases to -- and that basically is what we're going to use to actually produce clinker by replacing the fossil fuels. And what's really more interesting is that as these gases that are rich in CO2 and water vapor are used also to heat up the limestone as the limestone decarbonates, the gases are going to become more concentrated in CO2 and it's going to be fairly easy to actually separate the CO2 from water. So carbon capture all of a sudden becomes very economically interesting, and then we can take part of that CO2 and gas in Synhelion they're born as producers of synthetic fuel. So they're happy to take the CO2 to produce synthetic fuels and we can actually take part of that CO2 back and channel it into the gases that we use for producing fuel. So really, we can look at a future where CO2 in production and manufacturing of cement is practically 0. Now I know that for Fernando's its going to be a déjà vu, But I can't help but hold up a sample again of -- and this time it is not a solar clinker, but this time, it's a sample of carbon nanomaterials. And as I mentioned to you before, we're going to -- we're finding, let's say, innovative ways to use carbon. And this one is really interesting because we are using the gases directly from our flue gases, the CO2 directly from our flue gases to manufacture these carbon nanomaterials. And this is quite important because we really avoid the carbon capture. And as I said before, we -- carbon capture is important, but we want to not just rely on carbon capture to the decarbonate our manufacturing process. So this is material that is using actually many things. In electronic industry, it's used in pigments, it's used as -- in the medical field and so forth. So -- and of course, it can be used in concrete to make concrete stronger and giving higher strength of concrete, and this is key. So again, the sample of carbon nanomaterials produced directly from the CO2 gas is coming from fluid gas. So again, I want to show you this big block, this big mas of material because this is actually an element that is used by our partners, Energy Vault to actually store charge and discharge electrical energy, energy. It's basically a gravity-based storage concept, renewable energy is becoming more and more prevalent. And of course, we have to store that energy somehow. The challenge for them was that, okay, how do I make the -- amongst many things they were evaluating to reduce the cost to make it competitive against fossil fuels to store. The challenge was that, hey, I can't make a material that's heavy, but yet economically viable. And so we came again with our admixture technology and said, guys, we can take, soil that we escalate to build these gravity-based system, which is requiring a footprint of almost 1 football field. When you take that material, we can actually mix it with admixtures and make it solidify and be strong and make these big blocks. They're 37 tonnes that lift up to 100 meters and dropped eventually when the energy is needed. So this gives you a flavor of more than -- I mean, of course, it's important what we do, but how we do it. So back to you, Gonzalo.

Thank you very much, Well, I think that's a good example of how proud are we on the achievements we have done with our R&D and CEMEX open innovation platforms. Just as an example, so far, through our CEMEX Ventures team, we have invested in around 22 start-ups. 22 start-ups we have with the 4 verticals we have just mentioned. For example, we have invested in carbon capture and usage through carbon clean or carbon recycling, which were featured in the video, in alternative sources of power like sun or hydrogen, in Synhelion, HiiROC, in circular economy like Soil Connect, which is a company here in the U.S., as well in future of construction like COBOD, 3D printing and Modulous, which are companies which have helped us in different ways of building things through modularity, offsite construction so on, but also some other digital concepts like last-mile delivery with PartRunner, which is a last-mile delivery company or productivity like Voyage Control or ProPlanner, which is today one of the most relevant job site schedules which are right now in the market. Our investments in those are not necessarily important from the [Indiscernible] point of view or innovation point of view, but also our providing us some healthy investments. Our current nominal value for those investors is around $50 million. And in fact, in 2022, Energy Vault, which was featured as well by Davide reached the level of unicorn, which is a company that storages renewable energy. As mentioned, we have about 150 products any single moment in our product portfolio management. Some of them relate to internal issues, like the carbon nanomaterials that Davide mentioned or the continuous improvement of core machines CO2 emissions or sustainable attributes of our products, but also external innovations and partnerships like generating clinker with solar power. So bottom line, we're really proud of what we have achieved so far in the innovation front. And we are certain that in the future, there will be far more breakthrough strategic improvements that we will achieve. Thank you very much.

Okay. That was a lot to take in. I'd like to open it up for questions. We have about 10 minutes. So are there any questions. Paco, I'll start over here.

Francisco Suarez from Scotiabank. Can you disclose what level of incremental CapEx and OpEx exists to make consistent your new target of 1.5 degrees, and on that note, can you -- and to make that consistent with the presentation that José Antonio made before. Can you also share a little bit about the potential paybacks and returns on that? And of course, related to that, if there are any major key assumption on those returns to help us get out the visibility, say, a grant from the U.S. Inflation Act or similar programs in Europe?

Yes, as José Antonio said before, the payment we have CapEx for the next 10 years is about $150 million each year for the decarbonization process and with an internal rate of return 30%. I mean that the payback is between 3 to 5 years for the different projects we are executing right now. It is not all for Europe, it's for the whole company, the whole project we are managing going on.

Okay. Go. Yes, okay.

Yassine Touahri from On Field Investment Research again. Just one question for me. You updated your target for CO2 emission per ton of cement in 2030. But I think initially, you were expecting a clinker factor of 71% in 2030. Have you updated this clinker factor target?

The implied clinker factor that will be more ambitious and will go below 70% under these new targets.

Is there a precise number or it's not -- is there a precise number? Or is it just below 70%?

Well, we are expressing everything in below numbers, but it will be below 70%, I would say. Because it can vary a little bit. But more or less, that's the level that we are thinking.

And what is your strategy to replace all this clinker that you will not use? Will you use? Do you have a strategy to secure some new supplementary cement issues material through investments, partnership? It would be great if you give up little bit .

I think Fernando mentioned that there is going to be some innovation in supplementary cementation materials. We have -- we rely on the traditional ones, but we are also doing innovation in micronization of limestone, micronization of pozzolan, calcined clays, and those are incorporated into this road map for 2030. There will be some substitution of those fossil cementitious materials as fast as we can to rely on our own, let's say, production of cementitious materials that can be more controlled by ourselves. And we will also play with the market availability of cementitious wherever that's available. And in an economic fashion, we will use them. Cementitious will be important in the U.S. market, for example, and we will take advantage of those existing there and we'll refine or enhance the strategy with some innovation in the mix of materials that we can use in each facility because it's very local and depends on the geographical position of each one of our plants.

Otherwise, all this strategy is supported by the development of the different mixtures we are developing to use much more different materials.

Okay. And other questions? Maybe Nik, that would be great.

Nik Lippmann from Morgan Stanley. Could you talk a bit about the economics as you see it for carbon capture? Also how is it likely to evolve over time kind of at what point do you feel that you would find an attractive return in moving into a little bit more aggressively? I'm also intrigued and I know it's early stage with this -- with the nano material, carbon nanomaterial. But if you can share anything in terms of what it cost today? And what do you think it could cost tomorrow?

I can address the first one here -- yes, I can address the question on CCUS from the information that we have and the public information and digging into how some of the products are developing, we think that the current total cost including CapEx and OpEx of CCUS, depending on the range of technologies that are available would be currently at the level of $70 to $100 per ton of CO2 captured. That's the whole cost that includes capture, storage and transportation. It's a range because each location will play out differently given the different solutions that could be there for storage. That would be more or less a starting point right now with the information that is available from current technologies that are identified and available. There are some reference in the market of certain projects that give you precise references more or less in this range. There was a project in the U.S. in Houston on the power sector Petra Nova that we estimate more or less at 70% -- $70 per ton that has been operating from 2017 to 2020 you see for a [Indiscernible] recovery. So that's an actual real project that has captured 1 million tons per year. It has had to be stopped because of economics of oil business, but it's a real project. And then we have 1 project in our industry that is currently being developed, heavily subsidized by a Nordic government, that has a cost of around $100 per ton. So I think that's a starting point. And we are making some extrapolations of what has happened with energy with technologies like solar, photovoltaic and also some scrubbers to allow for to mitigate some emissions of SOx in some of our factories. The way that they have been able to bring down the costs according to scale and adaptability of that, gives us more or less an estimate of a 30% decrease in the cost of that carbon capture and storage in the future. So it will take us to a range of $50 to $70 per ton by 2030, more or less. This is completely an uncertain world where technology is moving very fast. It's very hard to make predictions. There is no historic information specifically for CCUS in our industry. So we don't have historic references. So we are just extrapolating from what has happened in other sectors and trying to make the best guess of how we think this will play out.

And if I could just complement this and, they just make sure that everybody in the audience knows that is per ton of carbon capture. That is not per ton of cement, and it includes an amortization rate on the CapEx of about 25 years. So just to be clear.

Yes. Regarding nano material, we have tested right now in the lab, the technology we are developing. We have -- we are now preparing the pilot -- the industrial pilot test. It just depends how is the conversion rate you can obtain from the CO2 to nano materials. And also the conversion in the what kind of materials you will obtain because you will obtain different kind of nano material from carbon favors to carbon black, that whole material. I don't know if you can say something else, Davide, but we are right now developing the pilot -- initial pilot test right now.

Yes. I think we need to scale up. And I think what you mentioned was important, Juan, in the sense that depending on the type of materials that we produce, they will have also a different market outlets and so different uses. And of course, the price of carbon nanomaterials is quite high. And I think we can become quite competitive if we do it correctly, and actually, create and carve out some space in the market for us to actually position this product coming from an industry that's actually using the CO2 emissions to actually produce these products. So I think it's a combination of a couple of things, how we scale up and what we learn from the scale up, and it will allow us to cost better, what it takes to do with the conversion. And efficiency, as Juan said, today, we're about 80% conversion from CO2 to carbon nanomaterials. And then look at-ing the price of carbon nanomaterials in the market and different applications. So not only self-use, but being able to go to the market and actually capitalize on that.

Okay. And I think we have one more question from our web audience. [ Fabienne ], yes.

This is from the webcast from Vanessa Quiroga from Crédit Suisse. Does the U.S. Inflation Reduction Act provide the framework to have net zero plans in the U.S. in the future?

I could take it or [Indiscernible], but...

I think -- well, we have started to analyze that how the mechanism will work. But definitely, the level of incentive for $85 for storage and $60 for utilization. I think it's in the right level to think that this will be catching up, and this will allow our projects to become feasible. And certainly, in the outlook, at some point in time, there will be net zero plants in the U.S. It will depend also on their storage capabilities around them. The industrial hubs that will be created is surrounding some of the factories, some of our plants. And it will be a different solution for each plant, but I think it will play out definitely. And it's a big push for this. And we will start to see a very dynamic movement towards creating and start to develop projects. And we are actually starting that process already, identifying the plants that will have the biggest potential for us to achieve.

I know there are still questions in the audience, but we are running late. So what I'm going to ask is everyone will be available during the break that we're about to have right now. And if you could take advantage of their physical attendance to ask questions, please do. I also, before we break would like to point out that we have some exhibits on CEMEX Go that are here on the side as well as some of the data that we generate from management perspective of our orders coming on our digital platform. So please go and order yourself some concrete and deliver at home and take a look at how that process works. And we have, let's make it a 15-minute break, if that's all right. So maybe back at 11:05, if that's okay. Thank you all.

Thank you.

And thank you, Panel. [Break]

Okay. Well, thank you all. It is my pleasure to introduce our regional panel, who I think you all know. We are going to start with Ricardo Naya, who is our President from CEMEX Mexico. Then Sergio Menéndez, our Head of EMEA and followed by Jesus Gonzalez, Head of SAC; and Jaime Muguiro, Head of the United States. So Ricardo, please.

Thank you. Lucy. Well, again, Ricardo Naya presenting Mexico and glad to take your questions during the panel. Let me begin by saying that 2022 is a great proof of the resiliency of the Mexican operations because it's a great observatory of what can happen in our ability to deliver good results despite the circumstances. This year, we are facing strong headwinds, especially on one hand, because we're coping with a level of inflation we have not experienced in decades. And in the other, volumes are down, specifically driven by the informal sector. Now -- however, CEMEX Mexico continues to deliver value despite the circumstances by managing the variables that we control. And this year, let's say, Again, it's another proof that under tough times, we're able to deliver good results. And in good times, we're able to deliver excellent results. Despite the volume contraction that we are experiencing, our commercial teams have been able to increase cement prices by 18%. But we have been able to increase prices in all of our products. But despite this volume -- despite the volume performance and these price increases, we have not been able to fully compensate for the skyrocketing inflation. Now -- and I want to convince you that we are fully committed on recovering margins and again, making sure that we compensate via prices, the input cost inflation. But now -- we're not here to discuss, let's say, the short term. I will try to focus the presentation on the medium-term outlook for the industry. And I hope to convince you on the even stronger fundamentals of the Mexican market and how CEMEX is fully well prepared to capture all the opportunities going forward. Now let me start here. Let's talk about the demand and the dynamics. If we break down the industry demand into formal and informal construction we see contrasting performance between the 2 sectors. But this year and going forward, we see healthy performance, especially in the formal sector, driven by the commercial and industrial segments. Because with the largest global consumer in the world at the north and a healthy young population internally, we see that Mexico's moment seems to have arrived. Now Mexico is a very large market with different dynamics by geography and also by segment. And the markets today that are integrated into near-shoring opportunities are the ones that are performing the highest -- with the highest growth. Now in the first 9 months of this year, we have been -- we have seen announcements of more than $12 billion in a wide range of sectors. And you can see also how trade is increasing, especially with the U.S. We believe that the relationship and the integration among the U.S., Canada and Mexico is stronger than ever. Now Mexico is also developing internally. And I'll give you a couple of examples. The expanding e-commerce activity is also supportive of the industrial segment in Mexico. Mexico today has one of the lowest e-commerce penetrations in the world, and the pandemic jump started the e-commerce activities across the country with almost all small merchants doubling the, let's say, the participation in online activities. But we are also seeing big players like Amazon or Mercado Libre and Liverpool, expanding their facilities and warehouses across the country. And we believe that this activity is just beginning and will continue going forward. Now on the commercial side, we see a lot of strength, specifically in tourism and domestic consumption. And let me give you an example. Coming out of the pandemic, Mexico was the second most visited country in the world with more than 32 million visitors annually. And only this year, visitors are up 20% again. And this shows the strength of the commercial segment in Mexico and how CEMEX is supplying hundreds of hotels being built in Puerto Vallarta, Cancun, Los Cabos, Mazatlán across the Mexican Pacific. Now the formal housing has been impacted specifically by rising interest rates and the inflation that is impacting all construction materials. However, we believe that as interest rates stabilize, the -- coupled with Mexico's demographics, we are confident that housing should return to normalized growth patterns over the medium term. Now the last element of the cement, let's say, industry is -- of the formal part of the cement industry is infrastructure. And as you can see, this is the lowest in terms of weight. And this element, we believe that we'll continue benefiting from the ongoing rollout of the flagship projects executed by the federal government. And we also believe that in the coming, let's say, before the next election, we expect to see an acceleration of this investment in infrastructure. CEMEX, Mexico has been supplying most of the infrastructure projects driven by the federal government. And next year, we are confident that the federal budget allocated to the infrastructure projects will be one of the largest since 2012 mainly driven because of the development of the Train Mayan. Now the informal construction segment is the one that has been very weak and heavily impacted by the hyperinflation and also by the rise of interest rates. But we anticipate that eventually this segment will recover, and that will be driven mainly by the typical, let's say, factors. The strong remittances, the job and wage growth, the improving consumer confidence and also the effect of the government spending that happens before any election. There are some programs that are driven by the federal government that have an impact in bagged cements. We have, for example, programs like the urban improvement program, like the school improvement program. But most importantly, rural roads is one of the programs that is demanding a lot of cement, especially bagged cement in the Southeast of Mexico. Next year, only the budget for rural roads will have expected consumption of more than 400,000 tons of bagged cement, which is super healthy. Now let me go back to -- let's turn to the next slide. So all in all, after analyzing all of the demand drivers, we remain very confident on the medium-term outlook for Mexico because on one hand, we have very strong foundations and with the increased integration of the U.S., this justifies the cement capacity that we have put in place, especially in Tepeaca and CPN that came at the right time. Now the main lever for growth in our core businesses will continue to be our pricing strategy. Because recovering margins on a dollar per unit basis is not enough. We are committed to increasing margins on a -- as a percentage of sales. And we have been proving how CEMEX is able to deliver pricing performance despite the volume situation in Mexico. Now besides the demand prospects, we're also exploring opportunities created by the proximity with our U.S. cement business. Cement exports will remain very strong from Mexico to the U.S. And actually, this year, we're breaking the record of exports that happened back in 2006. And we believe that going forward, we should be integrated even more into our U.S. business. And actually, for that purpose, we put in place our CPN plant, which was recommissioned last year, the first line and recently the second line, just a few weeks ago. Now the aggregate business is also picking up momentum in Mexico. Aggregates pricing in Mexico is beginning to reach more or less the fundamentals that we see in developed markets, because there's better regulation and also the prices are reflected the scarcity of the aggregate materials in Mexico. And that's why we are growing the aggregate business in selective and profitable markets. CEMEX Mexico is the largest producer of aggregates in Mexico, and we will continue investing in developing this profitable business. Now going back to Urbanization Solutions. We are confident that CEMEX in Mexico is a great incubator of business opportunities. Our new global brand, Regenera, as mentioned by Juan Carlos, it is responsible for building up the sources of alternative fuels for our plants. We already mentioned that Regenera today manages about 1/4 of all the waste that is produced in a city like Mexico, and we are expanding that business to other geographies in a very rapid way, not only organically but also inorganically by the acquisition we did in Querétaro. The CEMEX admixtures business has become after 4 years one of the top 3 players in the industry and is generating great results this year. We're increasing the sales about 25% and is the one that is contributing the most in terms of OCF generation in organization solutions. Construrama supply, as you can see, the picture down here. We are becoming the leading wholesaler of building materials in Mexico. We serve thousands of small retailers with a complete solution of selling close to 30,000 SKUs nationwide, we have a network of 14 warehouses across the territory. And we are, let's say, generating this year more than $400 million in sales in this business alone. And last but not least, this year, we relaunched a business we had which is a supply -- I'm sorry, it's a company that provides logistic services to third parties, industries such as gas, mining, chemicals and others. And this business, which is called Alliera is generating sales of -- in excess of $30 million this year. Now I cannot close my intervention without mentioning the progress that we're making in future in action. Our 2 largest cement plants in Mexico, Tepeaca and Huichapan are already below the 430 kilograms, which is our 2030 target. So we have a concrete examples Mexico that we can deliver the 2030 targets and in the most profitable and largest plants in our network. Now this year, we are increasing -- we're reaching [indiscernible] fuels rates of 35% and which is a 10 percentage point increase compared to last year. And this is happening at an accelerated pace in the time where fossil fuels continue to be on the rise. So it's a great strategy at the right time. So in closing, I want to say that CEMEX Mexico, this year proves again the resiliency in how we are able to generate concrete positive results despite the circumstances. And we will continue excelling on the basics, making sure that we differentiate ourselves versus other competitors. And how we do it, first, by our commitment to the success of our business partners, trying to always develop customer-centric solutions enabled by digital technologies. And second, with innovation, like you saw with our colleagues, like Davide and Gonzalo and also with the agility to execute, which is a unique differentiator of Mexico. And finally, and I want to emphasize this, which is becoming even stronger than ever. We have a team that is focused on purpose-driven performance because that is how we do business in Mexico. We have more than 15,000 colleagues that work day by day, side by side to make sure that we are building a better future. Thank you very much. Now Sergio?

Thank you, Ricardo, and good day to all. Very happy to be here to share with you an update of our EMEA region. In EMEA, we're very much focused on growth. And this year, we are delivering double-digit EBITDA growth like-for-like in a very challenging environment, both for volumes and also in terms of input cost increases, as you know. We're also being able to maintain our margins versus last year in this environment. And if you look at the last couple of years, we have increased our return on capital employed by over 200 basis points. So we are delivering on results. The second point is that EMEA is a diverse region, and its diverse not only in geographies but also in terms of our business lines. Europe and Israel represent around 80% of our EBITDA. And if you look at Urban Solutions and aggregates account for around 50% of our EBITDA. Cement is around 30%. So it's really a diverse region in terms of businesses and also in terms of geographies. Two of our main priorities are: first, pricing, as you know, to recover input cost inflation, and we have been very successful this year in recovering precisely. That's why we're able to maintain margins. We have increased prices in cement in Europe by 30% this year. Ready-mix, around 18%; aggregates, 13%. And this performance has been replicated across the region. It's not only Europe. And then second high priority is climate action. In Europe, which is one of the, let's say, the leading regions of the world on climate action, CEMEX is leading the industry on climate action. We have reached a 40% emissions reduction rate already, and we were the first company to align our ambition with a European target of 55% reduction by 2030. So we're delivering on this. And the reason we're delivering on this is mainly through innovations. There's a lot of innovations that we are implementing, testing and then replicating across the company in CEMEX to reduce our CO2 emissions. One of the first ones, for example, was the introduction of hydrogen, as we mentioned. Today, all our plants in Europe are using hydrogen. This is an initiative that started in our Alicante plant in Spain and is helping us increase our alternative fuel substitution rate. Today, we are over 70% substitution rate of alternative fuels across Europe. Of course, that helped us mitigate the impact of input cost increases in energy and so on. Also, today, more than 70% of our products are blended cement [indiscernible] products in the market. And we continue increasing the percentage of blended cement products and reducing the clinker factor across our portfolio. As Ricardo mentioned, we have also in Europe in addition to the 2 plants that he mentioned, we have 3 cement plants that are today already operating below 430 kilograms of CO2 per ton of cement. And all of these actions are helping us increase our CO2 surplus position in ETS credits. We used to have -- it used to last until 2025. We think it's going to last us until 2027 because of all of these actions that we're implementing. Moving on to volumes. It's true that for next year, we expect a slowdown, perhaps single-digit slowdown in Europe, but that will be compensated by growth in Egypt, the Philippines and Israel. Now in the medium term, as has been mentioned already, Europe has a significant amount of resources committed, both for public and private projects in different areas of the economy. For example, just to mention a few. In transportation, there's over EUR 1 trillion earmarked for development projects we can see, for example. In Poland and Germany, only in those 2 countries is a EUR 400 billion plan to improve highways and network infrastructure. Also in the case of the Grand Paris Express network, the high-speed train in the U.K. And in many of these projects, we are participating in cement, in ready-mix and in aggregates. A second big area of development is all the climate adaptation and energy reconfiguration that became even more important after the conflict in Ukraine started. And we are seeing significant projects on wind farms, solar energy, also LNG terminals. The first one was announced yesterday, was completed in Germany yesterday just in over 200 days. So we see a lot of activity on this area. And this is going to continue throughout the decade. It's not something only short term. And lastly, similar to what Ricardo mentioned, there's a movement of onshore in [indiscernible] production in Europe to support and develop supply chains. For example, in the case of electric batteries, there are a few plants to produce electric barriers in Europe, electric cars. Of course, there is a plan to eliminate all combustion engines by 2035. And we see even, for example, in the semiconductor value chain, investments like Intel, over $40 billion to produce chips in Europe and to develop a full supply chain in Europe. So there's pent-up demand coming significantly and not to mention climate adaptation that we start to see significant projects on climate adaptation, all in coastal areas, rivers and so on. And lastly, just to complement this, one of the reasons we're able to grow double digits in this environment is because we have been investing in a growth pipeline. We have over 100 projects either executed or in executing, an execution that are contributing to this EBITDA growth. Let me start just mention in some facts, for example, in Circularity complementing what Juan Carlos mentioned. Every year, in EMEA, we recycle and reuse over 10 million tons of materials, almost half of what we do globally. And within these volumes, we include, for example, municipal and solid waste. Every year, we co-process the equivalent of all the waste of a city like Madrid or Berlin, just in our facilities in EMEA. And then in construction and demolition waste, we process around 4 million tons of these materials in more than 50 facilities across the continent. And this is something that, for example, in the last couple of years, we have been inaugurating new facilities almost in every country to co-process and to reduce construction and demolition waste, the latest one in Israel. We have done in Croatia, in France, in the U.K. and so on. So some examples before. Aggregates is a significant business for us. We sell around 50 million tons every year of aggregates. We have the largest marine aggregates operation in the U.K. and is one of the largest in Europe operating with significant reserves in the English channel, for example, something that not many people know. And we keep investing in our aggregates business. This year, we bought a company in Germany that doubled our aggregates capacity for the foreseeable future in Germany. In the case of cement, we're investing to maintain our leadership in climate action. We're going to add capacity -- grinding capacity to keep expanding our blended cements and reducing clinker factor in Germany and the U.K. and Poland will be across the region. It's probably that's going to take some years. But this is definitely the direction that is taking. Today, the cement standards in Europe allow for clinker factors of about 50 points. So there is still a long way to get to that position. But we see the industry moving towards 50% clinker factor cements. And that is the direction. And as Fernando mentioned, it's a direction that is feasible. That is profitable, and that's going to take us there in a couple of things. You can see a big change in the way that cements are moving and penetrated in the market. Finally, on Urban Solutions. Urban Solutions in EMEA is already a $70 million per year business growing at double digit. And that doesn't take into account $30 million on vertical integration. The businesses are very much related to cement, ready-mix and aggregates. So in addition to the $70 million, it generates another $30 million in our other business in the company. And it is an area where we keep investing, for example, this year, we commissioned a new concrete products plan in Israel that is doing very well. And we have among the 100 projects and margin improvement initiatives that we have implemented many are related to Urban Solutions. Jose Antonio mentioned also more transplants many examples in Europe and Israel as part of those investments. So in summary, we have a diversified, a resilient portfolio that is prepared for growth and to succeed in the green economy. That's how we are. Thank you.

Okay. Good day to everyone. I'm here to -- my goal is in 10 minutes to convince you that the South America and Central America and Caribbean region has medium growth potential, a huge medium growth potential. So let me start with briefly describing our region. We are a region with different flavors and colors, 3 different countries but we operate as a one single network. And you can see in the slide on the left-hand side that has give us a very important advantage because we are operating at close to full capacity. So operating as one single network allow us to move cement around from the region and support the countries in case we need support because of demand conditions. For example, in Panama, we have developed Panama, where we have excessive capacity as an export hub in just 2 years. We are now exporting more than 250,000 tons. And we are also interconnected with the rest of the Americas region. So we are interconnected with Mexico. We are also bringing cement from Mexico into the Caribbean and to Central America and Mexico is connected to the U.S. So I don't think that there is any other competitor in the region that has such an interconnected supply network system, which is, believe me, a huge advantage for supply chain, especially now in current times where the supply chain network is very congested, and that has given us a huge opportunity, a huge source of value. I mentioned that we're operating at very high levels of capacity utilization. Most of our operations are running above 85%. And you can see that there are certain operations running at 100% of capacity. So as part of our global growth EBITDA program, we are also part of the debottleneck in our capacity system, CEMEX capacity system with 2.5 million tons of expansions. We have already done part of it in restarting the kiln #1 in the Dominican Republic, as Jose Antonio mentioned, and we are about to start up projects in Guatemala, in Jamaica and in Colombia and also good projects because now we're buying from third parties were importing cement from other areas and these projects are very accretive because we can replace imports with domestic capacity right away. Going to the right-hand side of the slide. I said that it's a very diversified region with different countries, but volatility is controlled because we don't have any single country operation with more than 1/3 of the EBITDA. Now it's diversified. For those of you that were here in the CEMEX Day last year, I made the case about Dominican Republic. And here, we are Dominican Republic is now our largest operation in the region, breaking records of OCF, and that's why we decided to spend capacity here. The second largest operation is TCL. For those of you that don't know, TCL is our [indiscernible] Limited Company, which manages assets in the English Caribbean, in Jamaica, in Trinidad, Guyana, Barbados is our second largest market now, and this is a very good example of a very accretive acquisition. In just 4 years, we were able to achieve also record EBITDA numbers in TCL. And the third largest operation now is Colombia. You see that also we're implementing our pricing strategy like in the rest of the regions, implementing price increases of double digit. We have been able to offset inflation cost, but we're not going to stop there because as the rest of the regions, we have the target to recover margins. We're still short from that target, and we're going to continue pursuing that pricing increase strategy going forward. So overall, it's a region that demand is slowing down. Remember that after COVID, the informal segment, grew very rapidly and now it's starting to slow down because of the hyper inflation and that's impacting disposable income of the people that buy bags of cement in the informal segment. But the good news is that the formal segment is picking up, almost 10% increase in demand. And the perspective for the medium-term growth are very interesting. And let me explain you why. First of all, regional drivers. There are certain things that are, I think, position in this region as a source of growth. Social housing, for example, is something that is massive needs and it's happening in Colombia, for example, social housing programs year-to-date, with more than 30% increase in housing starts. Tourism, as mentioned by Ricardo, is also a source of growth especially in the Caribbean with a lot of activity in hotels and hospitality network or infrastructure. Resilient construction, this is something that this region is very exposed to hurricanes. This year so far, 8 hurricanes affected the region. So that gives us the opportunity not only about reconstruction, which is very sad to be involved in that type of activities, but also adapting to climate change. We believe that there is a massive potential of growth related to adaptation to climate change events, flooding, et cetera. And nearshoring. This is also happening in the Caribbean and in Central America. For example, in Colombia, now is the position in the -- one of the largest hubs for outsourcing of our call centers. In fact, our call center for the region is located in Bogota. And 3% of the GDP of Colombia now is related to these type of activities. Also in Dominican Republic, there is a huge growth in industrial activity to position textiles, medical equipment to be exported into the U.S. Those are the drivers for growth. Why are we able -- why are we going to be able to capture that growth because we have certain competitive advantages. I mentioned the integrated supply chain network, which is a very important one. I'm not going to elaborate on that one anymore. Our Construrama network. This is the network of stores to serve the retail market. We have more than 450 stores in the region. The volume that is sold through the retail segment is sold through these stores. And we're not just selling cement. We're selling all type of building materials. So that gives us a very strong competitive advantage on that part of the market. And finally, the digital platform. Fernando mentioned how important is our value offer CEMEX's role to our customers in this region. Almost 90% of the volume that is sold through our CEMEX oil platform. So that's -- I don't think there's any other competitor that can compete with us on that front. And finally, our commitment to sustainability is another source of growth. And I'm going to focus mainly on waste management. This is a massive opportunity in this region. The tallest mountain in Bahamas is a land fill. And this is not just in the Bahamas. It's happening across all the regions, especially in the Caribbean islands. It's a massive problem, and there is a solution through waste management. We're about to launch Regenera as well in the region. We already have a good platform to grow from it. We processes or manage around 3 million tons of waste in the region. We have a good platform or good activities in Colombia and Bogota, where we have construction, the Malaysian excavation waste facility in Tuque, in Bogota. And this is not going just to serve us to impulse or grow our alternative fuel strategy. But also, we want to do this as a business. I think there is a huge opportunity in this front in the region, and everything needs to be done. We have the advantage that we can develop the industry, and we're working on that. And finally, I want to finish with the impact that we can make to the communities in which we operate. This is a region where we have very poor communities, low-income communities in surrounding our operations. So we have the moral valuation to support these communities. Last year, we impacted more than 400,000 families. But this is not just about be good with the community. There is also opportunities to capture growth by promoting these social programs. For example, in Latin America, 10 million families still leaving our dirt floor. So we're working on social programs to promote concrete floors in our communities, which is going to give us also additional source of growth. So I hope that I have been clear on convincing you that there is medium-term growth potential in the region. We have the right network, the digital strategy, committed to sustainability, our pricing strategy. So I hope that you are convinced, and I will be happy to answer your questions later on. So Jaime, back to you.

Good morning, everybody. I'm also very happy to be here to talk to you about our U.S. business. Today, I'd like to focus on the medium term, 2023 to I'd like to share with you 3 things: first, the solid demand outlook underpinning our markets, then I want to highlight the strong pricing characteristics we see, and lastly, I will comment about incremental EBITDA growth opportunities beyond volumes and prices. With regards to demand, we see a positive solid demand outlook for our building materials because of much higher spending in infrastructure, solid positive performance in residential once affordability improves and construction spending growth in the Industrial and Commercial segment. On infrastructure, which accounts for 50% to 55% of cement demand, we have already seen the $1.2 trillion infrastructure begin to roll out as the 12-month trailing contracts awards for highways and streets have already risen by 14% across our key states. As you know, the infrastructure build provides incremental $600 billion of new federal funding, including $110 billion for highways and streets, which is the most cement intensive. So we do expect the infrastructure to do very well across our footprint. This represents 50% increase in new federal funding on top of current federal funding levels and on top of funding at this stage levels. With regards to residential, which accounts for between 30% to 35% of cement demand across our markets, we do expect this segment to slow down mildly next year because of less activity in single-family homes, although partially offset by very strong multifamily. However, I'm very positive about residential in the U.S. This is a segment that will do very well across our footprint as soon as affordability improves. And that is because as we speak, currently, there is a significant unfulfilled demand that was not covered during this year, and there is a deficit for housing, and this is mainly driven by population growth, but more importantly, by a strong domestic migration to our key states. The Industrial and Commercial segment will also experience positive growth in the midterm, supported by the onshoring supply chain dynamics that are taking place in the United States, underpinned by the $53 billion chips act and the $370 billion portion of the Inflation Reduction Act, which is favoring onshoring of clean energy value chain into the United States. In fact, we have begun to see new semiconductor plants and new LNG facilities break ground across our footprint. So in summary, with regards to demand, we expect demand growth for building materials CAGR between 4% to 6% from 2023 to 2026. And now let me put together this positive demand outlook with the overall capacity utilization of the industry, okay? The industry in 2022,operated at full domestic capacity and so did CEMEX. And this is evident by the fact that demand outpaced supply across most of the United States and that led to general customer allocations. Going forward, as the demand grows in line with our forecast. We do expect the industry to continue operating at very high utilization rates. And so with CEMEX and is in this environment of a very tight supply and demand dynamics that we do see significant pricing characteristics. And we plan for strong pricing to recover margins loss inflation. Let me give you an example of our pricing strategy. In September of this year, we communicated to all our cement customers a cement price increase of $20 per short ton effective January 1 of which we anticipated $8 per short ton effective October differs in some of our markets. As a result of all the efforts during the year on pricing, our October cement ready-mix and aggregate prices are already north of 20% when compared to our prices of October of 2021. And the October price increase in the markets where we implemented them, that $8 short ton that I talked to you about went well with a significant traction and sequential increase October compared to September. Now let me give you some flavor about our growth opportunities beyond volumes and prices. We do see clear opportunities to increase the cement and aggregate businesses EBITDA beyond volumes and strong pricing. In cement, our EBITDA will increase as we materially improved the operational efficiencies and operational utilization of our plants. We have increased materially platform CapEx investment and also maintenance OpEx. And this will lead to incremental cement production at a lower cost per ton. In addition, as part of our future in action program, we will continue increasing production of blended cements with lower clinker factors, and that will also lower the cost per ton. The combination of these 2 efforts will lead to incremental cement production of close to 1 million short tons by 2026 at a lower cost per ton. And the latter will be supported by an increase in the usage of alternative fuels also as part of the future in action program from current 20%, all the way up to 40% by 2030. Using more alternative fuels will not only reduce our CO2 but will also lower our fuel cost per ton. And now let me tell you how excited about -- I am about EBITDA growth of our aggregate business as we begin to capture incremental EBITDA from our bolt-on investments in the United States, which amounts to a pipeline of around $645 million that we will deploy in the next years in this midterm that I described to you. These investments 2/3 of the pipeline relate to the aggregate business. It includes investments to replenish mineral reserves, but also new greenfield projects. With regards to mineral reserves, we've made significant progress by increasing our reserves bank by 75% in the last 3 years. And now let me give you a few examples of the bolt-on investments we are commissioning in aggregates. First, when we entered the agri business in Alabama by operating a hardware limestone quarry in Birmingham. We also acquired an aggregates rail connected yard in Atlanta, in Georgia. That project will increase EBITDA by $6 million. A second example is a sand mine project in Florida, in [indiscernible] with an investment of $31 million that will increase EBITDA by $12 million per year at a steady state. But let me give you a third example. In Central Texas, they go to my home, Texas. There, in Central Texas in our quarry, in Balcones, in July of next year, we will be commissioning a project to increase Limestone Hardrock production capacity. Also base material for road construction to support infrastructure. And that investment includes an upgrade to our rail loading capabilities that will allow us to dispatch by rail more rock at a lower cost per ton. This investment will increase EBITDA by another close to $10 million per year. And as you can see, when you look at these projects individually, they don't sound much, right? But when you start adding them up altogether, it begins to be a material increase in our EBITDA. And what we like about a bolt-on acquisition is that it derisks our capital allocation as we target different market segments across different geographies. So in summary, I've told you today 3 things. First, optimistic, and we do see solid demand outlook for building materials from '23 to '26 fundamentals in the U.S. are very good. Second, we expect the industry on them to operate at a very tight supply and demand dynamics, which will lead to strong pricing, and we are targeting a strong pricing to recover margins loss to inflation. And finally, will build on top beyond volumes and prices to increase EBITDA in our cement business by increasing cement production by close to 1 million short tons, which we will use to partially replace third-party imports from the Mediterranean basin or to serve the expected demand growth going forward at a lower cost per ton. And then we will finally begin to capture the EBITDA growth from our bolt-on strategy, particularly in the aggregate business. Well, thank you very much for your attention. And I think that together with my colleagues who are ready for the Q&A, isn't it Lucy? Thank you very much.

Okay. So we could open it up for Q&A. Can we get a microphone. Thank you.

Alberto Valerio from UBS again. My question -- I actually have 2 questions, one in housing, mainly in the U.S. and Mexico. I'm wondering whether we can have a full offset for the other sub segment on a potential housing decrease in demand for next year. And my second one is about inflation costs. We run some regressions on our model, and it's clear that there is a delay on the impact on the cost I'm wondering whether we will take this delay if you should see cost increase even with inputs price level that stabilized. If you should see some further increase costs for the segments. I think, mainly Mexico and the U.S.

Thank you for the question. Two relevant ones. I'll start with the housing. And many of you follow the housing sector and are even more knowledgeable than some of us of what is happening in Mexico. But let me go to the fundamentals of the housing sector in Mexico. Mexico has about 35 million houses built, but there's a deficit of about 8 million houses according to different stories. In order to close the deficit or the gap, there needs to be about 800,000 units built every year. This has not happened in many, many years. But there has been years where we have seen houses of 500,000 to 300,000 houses being built in a year. this year, I mean, it's been dramatically down. It's less than -- or it's a little bit more than 100,000 units. This shows the potential demand that has been unmet for many, many years. Now we do see this as temporary because when you see the population and the demographics of the Mexican economy are super strong. Out of the 125 million Mexicans that live in the country, 50 million are below 30 years old. And those are the young people that will get their houses in the coming years. So the demand is there. And obviously, right now, we're living an extraordinary moment. We believe that is the bottom of the cycle because interest rates and the hyperinflation has had an impact on the housing. But we see it as temporary. That's on the housing sector. Now on inflation. And let me put in perspective the magnitude of what has happened this year compared to other years. If I see the effect of inflation that took place in the last 5 years, CEMEX Mexico was impacted by accumulated inflation of about $380 million in our EBITDA in 5 years, and we were able to compensate in 5 years with prices that hyperinflation. But this year, the accumulated inflation has been close to $380 million. This year only. So in this year, we're impacting more or less what happened in the last 5 years. And our pricing efforts this year in all of the products will contribute to a little bit more than $400 million of increased EBITDA. The total unitary costs variable and fixed costs have increased this year close to 30%. Our prices are increasing like 16%, 17% on a year-to-date basis. This means that in unitary terms, our prices have increased like, I don't know, like $22 while our costs have increased like $20. And on unitary terms, our pricing efforts have compensated the input cost inflation. However, margins are still down and our commitment is to recover margins in the next quarters. We are committed that we should be able to do it. So this goes to the temporary effect and how long does it take to get back to those margins. But I want to emphasize how strong the impact was this year and our ability to deliver results despite the circumstances.

In the U.S. very quickly, we expect a strong multifamily. If infrastructure spending accelerates quite materially and with this strong heavy site industrial segment, we see there is a likelihood that all of that demand might offset weakness in single-family homes. But if we didn't, the potential reduction in demand will be very small. And that will not change the fundamentals, not only for next year but also for the midterm. The industry will continue to operate with a very tight supply and demand dynamics. And in the case of the U.S., we will operate at full capacity, we will just cut imports. And that's what -- it will happen, right, across many of the states. And with regards to inflation, we do see a moderation in the inflation rate, but inflation will continue. And we prefer to be conservative so that when we plan for our strong pricing strategy, we make sure that we more than cover that inflation as we target to recover margins lost to this stubborn inflation. If later inflation is lower, we will benefit even more from our strong pricing strategy. Thank you for your question.

Nick Lippmann.

Just one question for you, Ricardo. I'm sorry if I didn't get it right. Did you say that you are seeing similar economics in [indiscernible] in Mexico to what you're seeing in developed markets? If so, what changed? And what does it mean? I mean it sounds like a great opportunity for M&A bolt-on acquisitions because it's so small today in Mexico. Can you expand on that content.

Yes, more than happy because I think this is an emerging and growing opportunity, but it has to be very selective. Nowadays, we have about 13 quarries operating across the country. And when I look at the profitability of those quarries of our own production are very similar to what we see in other geographies like in Europe or in the U.S. So operating margins are healthy. And also, let's say, we are seeing better pricing dynamics in specific locations where regulation is starting to be a little bit more stricter or in places where there's a scarcity of material. Let me give you an example. In the Yucatan. Peninsula right now, there's a huge scarcity of material because of many things happening on one hand, there's an increased demand, but there has been also a limited availability of permits to increase production in the Yucatan Peninsula. We are setting up new facilities in Cancun, in [indiscernible] Carmen, which we believe are going to be very profitable now. But again, I think that we need to be very selective in which places we will invest because this is not something that is taking place across the board. But we are justifying to our investment committee, the profitability of those investments, and we hope that we continue supporting the growth of that business.

Paco?

My question is for Jesus is regarding Colombia. I know it is the third most important market in the region now, but in bit surprised to see CEMEX underperforming the industry in terms of volumes. So what is happening there? And is there any risk that this situation may happen in other countries of the region.

Thank you for the question. Well, you have realized that the industry volumes are growing in Colombia, but our volumes are going down and it's because of as pushing very strong on the price increases, we pushed for 2 price increases in Colombia this year, and we have lost some market share as a result of that process and that speaks for the commitment that we have to recover margins in this market and in all markets. We're going to continue with this strategy. We think it's the right thing to do. And just to give you data point, prices in Colombia are now around $90 when import prices are around $130, $140 per ton So there's a huge gap in terms of value upside. So that's the answer to the mismatch between our volumes and the market volumes. Our pricing is right.

Carlos?

Carlos Peyrelongue from Bank of America. My question is for Jaime. Jaime, could you elaborate a bit more on infrastructure demand in your key markets for next year, just to get a sense of what are the big drivers that make you positive in terms of infra demand for next year?

Carlos, my comments about infrastructure were for the midterm between 23% and 26%, right? We do begin to beat significant projects right now on infrastructure. We do expect a significant increase for next year relative to what we supply to infrastructure this year. But then the demand will dramatically strengthen, okay, in '24, '26. We are expecting construction starts to grow by around 6% per year. And that's something that we have included in our estimates of the CAGR between 4% to 6% that I gave you while I was delivering my presentation for the whole of the demand across our states. So healthy construction starts, annual average 6% and, okay, starting next year. And we consider that as linear. But what's going to happen is that '24, '26, '26 are going to be much stronger than 2023, as you can imagine. But we've dramatically seeing the number of bidding to new projects on infrastructure. And Carlos, now that you asked me that question, in '22 in our ready-mix business, right, we are quite exposed to industrial and commercial. Commercial is specifically 43%, of our exposure; 29% is residential only; 20% is on infrastructure; and the rest is on a small medium-sized contractors. And we are increasing exposure to infrastructure as we continue bidding for many, many more projects. And then we have some projects that relate to industrial/infrastructure. For example, this year, we supplied and continue to supply 400,000 short tons to just 1 project in 12 months in Texas, Louisiana area. And we are supplying 2 very large projects, one of them, 18 months, 1 million cubic yards; and another 1 800,000 cubic yards right, both of them in Arizona. So a lot of momentum going on. But the shape, as you know, Carlos, is going to be bell shape. The peak is not going to be in '23, it's going to be '25; 26, but that's our estimate is right now. I hope I did answer your question. Thank you, Carlos.

Rene Pimentel from Banorte. My question is for Ricardo. We are hearing about the great opportunity that Mexico has in terms of nearshoring and reshoring and [indiscernible] and all the shorings that they want to -- what data can you share with us in terms of the volume growth that you're seeing in industrial part in north of Mexico? And what type of volume expectations do you have forward regarding this opportunity that we're seeing?

The most concrete data point that I can provide is our concrete volumes. Our concrete volumes are growing double digits. 10% this year in an environment, which has been very challenging. So I would give you that data point that, again, it's a clear sign on how contrasting the volumes are between the informal sector and the formal sector. But we are also confident on the pipeline of the projects that we are bidding and that are at a very early stage at this point. So I think that this is a structural change that is taking gradual momentum, and I feel very confident on the future prospects of the industrial and commercial integration between Mexico and the U.S. because when you see, let's say, the level of trade between Mexico and the U.S. is more or less comparable between Mexico, U.S. and Canada. It's about EUR 500 billion as of the last data point, which is more than what the U.S. trades with China, and this should continue growing. So very excited about the future aspects.

I think we have time for 2 more questions. Alex, why don't we start with you and then we'll go to Adrian.

Alex Azar from GBM. Ricardo, how do you see the competitive landscape in the region, especially with internal problems at some of your competitors, new owners in one or new controllers, in one of the -- in Elementia. And the other question would be for all you guys. The regional players, what is your view on the regional players with upcoming regulation and players that don't invest in digital, that don't invest in [indiscernible] economy that don't invest in carbon capture. What do you think is going to happen to them in maybe 5 or 10 years?

In terms of the competitive landscape, I can tell you that in Mexico, we operate in a highly competitive environment However, let's say, CEMEX always has been, let's say, leading the efforts, especially in terms of how we see prices moving forward. But again, it's very competitive because we have players that are very significant in terms of size and scope. You have [indiscernible], you have Holcim, you have Moctezuma. Those are really relevant players and the competition is very intense. But I can guarantee that, for example, in terms of our performance and our behavior is that we are committed on continue maintaining a very healthy level of profitability in this market. And I have seen, let's say, in terms of the recent performance and the behavior that, let's say, most of the competitors, I believe they're facing more or less the same pressures in terms of cost pressures. And I don't see any major, major risk. Of course, there will be always appetite to expand capacities in this market, in an industry of more than 40 million tons, it's quite normal and usual to see expansions of new lines or new grinding facilities. That is part of the industry. But I don't see any major disruption right now taking place.

On your question about the regional players. What I would say is that at least in South America and Caribbean region is that they're starting to pay more attention to digital, they are trying to pay more attention to sustainability and they are reacting. But we have a huge advantage in terms of when we started working on those topics. I'm part of the Executive Committee of the Industry Association in Latin America, and we have discussions about net and those things. And regional competitors are moving, but we have started that move many years ago. So we have that advantage. It's not that they're not paying attention is that they started later.

If I my complement in the case of Europe, there are many regional competitors as well that are behind, and they're realizing that the transition is profitable. So for example, alternative fuel substitution rate is about 50%, well at 70%. it has been moving. But for example, clinker factor and blended cements used to be around 10%, 15%. Now it's around 60% for us. Other companies may be 20 %, 30%, It's. moving in that direction as they realize that it's a profitable transition. So we expect to catch up going forward.

And what about the U.S. where you have players like 1 million ton capacity? Do you think that, that is going to get acquired maybe in the future?

I don't know. That will be a speculation on my side. What I can share with you is that we're convinced that our digitalization strategy as well as our future enaction program, will provide us a competitive advantage.

Okay. And for the last question, Adrian Warta.

Ricardo, very 2 quick questions. Number 1 is, if you can just share with us as well volume performance across the regions in Mexico. I mean the North versus the Central region versus the South region, when overall volumes are down high single digits in Mexico. But is that the case really across the country or it has been more? That's my first question. And the second one, very quick 1 as well, is aggregates, I think it's around $40 million of EBITDA in Mexico. U.S. is around $270 million. Why is much lower? And those things that you mentioned how much can we see on aggregates in 2, 3 years from now, $150 million?

I hope. I'm wondering -- thank you for the number. First of all, volume performance, yes, volumes are down because of -- you saw the informal sector, which has a significant weight in Mexico. And coming out of the pandemic, we saw last year a big performance during the first half of the year, especially in bags and this year has been, let's say, impacted heavily by the hyperinflation. You can see it in the customers' wallets, how the informal sector is down across the world. Now in terms of regional performance, I would say that the central area in the Northwest part of Mexico are the ones that are performing the best, especially because have a higher share of formal construction activity. And I already mentioned that, for example, in contrast, our ready-mix volumes are growing double digits. But in terms of geography, I would say the tightest also supply-demand dynamics are taking place in the north because you have some plants, cement plants, not only for CEMEX, but also from other competitors that are exporting into the U.S. and this is creating a lot of stress in the supply chain dynamics. Actually, this year, we have not been able to supply fully all the needs from our colleagues in the U.S., our system in the Ermosilo region is at full capacity. And we also see exports coming from other competitors that are in the northern part of Mexico. That is also supportive of pricing dynamics between the North, the Central, the Southeast. Now going forward, we do see a lot of activity taking place again in the Yucatan Peninsula. The trend Maya will be a catalyst for higher consumption, but also, let's say, tourism and other industries are picking up, but more than happy to give you more details on a per state basis, like we do it in the U.S. now. The other question was regarding aggregates. On a yearly basis, we do a 5-year plan, which gets updated. And we do have an ambition to in the medium term, double the size of the aggregate business in Mexico. We do see investment opportunities. Again, we have the knowledge because on one hand, today, we sell about 25 million tons of aggregates in Mexico. Half of them comes from our own quarries, 13 quarries, but the other half is volume that we trade. We buy from third parties, and we sell internally or to third parties as well. So we develop a network of knowledge via this arbitration where the profitability of the market lies. And we are also developing very strong relationships with other suppliers that eventually could become, let's say, potential bolt-on acquisitions.

Thank you very much, Ricardo. Adrian, I think you just discovered why we had to put Jaime at one end and Ricardo at the other end. It was because of those exports. So thank you all very much. A big round of applause for our panel.

Thank you for your question.

And now it's my pleasure to introduce Luis Hernández to talk about our digital strategy. Thank you.

Thank you, Lucy. Thank you very much. Good afternoon, everybody, and welcome to CEMEX Day, and I must add also welcome to CEMEX Go. And I hope you had an opportunity to visit the booths that we have prepared for you, but you can interact more closely with the platform. It's actually the real products there. We have both the app native application, and we also have the web-based application. We have also put some screens so that you can see how is the activity overall in the world of orders being taken and dispatch has been happening as we speak. So I hope you have a chance to go see it. Regarding the presentation, the first part, what I would like to do is share the progress that we have had in the digital platform. So far, my colleagues, Fernando, already talked about some of them. I will try to wrap up some of the broader conversation. And then I would also like to stress 3 the priorities that I think is going to be critical to move our digital strategy forward. So the first thing. Since the beginning, our digital strategy had the customer at the center. In its initial phases, it did emphasize the commercial processes for obvious reasons. And soon after, we have extended the scope of the digital strategy also to cover supply chain, production and administration and support services. The overreaching goal is to provide the best customer experience enabled by technology. This enhanced scope is important because to really have a superior customer experience is not only about being very effective during this -- the way we sell. So making the value proposition and have the customers buy on that value proposition, but we have to be able to deliver on the promise, embedding the value proposition and you have to do it at a cost-effective manner. So you have to wrap up all of that to really provide a superior customer experience that is actually profitable for the company, okay? Some of you may remember in 2017, we launched CEMEX Go and it became the leader as an omnichannel platform that has a coverage across the whole customer experience from identifying the product, to making the order, to tracking the order, to get on the invoice and to pay. It also has a platform that has global coverage. So it's available exactly the same with the same look and feel everywhere in our operations. And you can also transact in all of the products that the company has. So it's a scope that is very unique from what we've seen in the industry. The other very important component has to do with the integration that it has as an omnichannel, which means that the customer that is transacting with CEMEX Go, regardless in which channel they're contacting the company. They have the same experience. The information that is moving across each of these commercial platforms is completely synchronized. So you don't have to have differences in the information that is running in one place to the other. That also enables our sales force, our sales organization to move a lot of the transactional work that they typically do into the digital platform and have more time to do more value-added activities. That's kind of the value of the platform of the space of the customer. The platform has had a very significant impact in the market. Fernando already commented some of that and some of my colleagues did as well. It has impacted the way we perceive in terms of service. And he has raised the NPAs in the last 3 years, almost 50%. It's now available for over 50,000 customers, which represents 90% of our volume. I think Fernando said that as well. And it has a very strong representation of our cement customers, ready-mix customers and even the aggregate, the words are lagging, they're still getting very close to 50%. In terms of use of the platform. We have today over 80% of our invoices being processed paperless, and we have 60% of the orders getting into the company. This is a global average. We heard that [indiscernible] is way over that number. But on average, it's 60%. And of course, we want to make that number higher. We want to move as much of the transactional services to be moved online. We have already deployed. A couple of functionalities are very attractive in that regard. One of them is the digital online confirmation, where a customer had an almost immediate response when they make an order. And then if that slot or that time frame for delivery is not available, they can receive almost instantaneously as well, alternatives to supply that offer. That's a level of response that a service center cannot compete. So we are trying to give enough value in the platform so that the customers prefer to use a platform rather than having to call an agent and wait for a response, which takes longer. The other important one that it was also mentioned is related to the integration, B2B of the CEMEX Go services directly to the platforms of our customers. Bigger customers, more sophisticated customers that have many, many construction sites, they rather do the sourcing in their own systems And they want to be able to place an order in their systems and track their orders in their systems. And if they can connect to a supplier in a way that is seamless to them, they don't even have to think about going back to the web and try to make the orders there. The orders will happen just automatically. And through the AP connections, for example, that the tracking API will just display, for example, the trucks moving in their own platform. So that's very, very convenient, and we're moving more bigger contractors to that platform. Also, the AP connectivity is relevant for software providers like Procore. If you can have a presence in CEMEX into the Procore platform, all of the users of the Procore platform can actually access CEMEX Go directly from Procore without having even then to have the direct connectivity with CEMEX. I think we've been doing a very good progress. I would like to show you a brief video that will let you feel better the kind of functionality that the platform gives you. [Presentation]

So again, a good progress to date. I think we believe from what we're seeing is that CEMEX Go is clearly a leader in this space. But we're not happy with the level of adoptions. We believe that we raised that number even higher. And for that purpose, one of the key initiatives that we're launching on the digital strategy is -- we call it CEMEX Go Acceleration. And the target here is to go and build the functionality that is required to make sure that those customers that are hesitant for whatever reason to move into the digital platform for most of the transactional work do so. And also to make sure that we can automatize the order fulfillment process as much as possible so that the delivery of those orders are -- become more seamless. We're going to do it first in the U.S. And basically, in Texas that we're going to start. We're going to go deep dive into understanding these subsegments that operate in Texas. Texas has large variety of business scenarios, segments and the like, that if we address those and build that functionality, we can then export that functionality directly to the rest to the CEMEX Go platforms in the rest of the world and make those functionality available. And hopefully, we can close the gap further. To give you some detail on what we're talking about when we say new business scenarios or new segments. For example, in the U.S. right now, that they're an allocation. So the platform in its original design does not have the algorithm to actually limit the ordering that a customer is doing based on another logic on allocation. So that, for example, is not there. And of course, today, it's very difficult for a customer in the U.S. that is an allocation to actually place an order in CEMEX Go. They can do the rest because if -- whatever volume is being set through the service center, once you're in the service center, as I said, is an omnichannel platform, they can track and follow the rest of the journey. Once the order is placed, they can still see it in any device. They can see the delivery date, the tracking, the invoicing and the payments. So this is a big undertaking, and we already launched it together with Jaime in the U.S., and we're going to be very busy, I guess, for the next 6 to 10 months. The other big part of our digital strategy has to do with data and advanced analytics. The enormous amount of information that is being generated through all of these transactional activity that is digitalized provides an enormous amount of insight to improve on almost anything that we have in the business. In parallel to the effort that we've done to build these platforms, we have put together the architecture, the system architecture to be able to capture all that information, have that information clean, have that information curated by domain. So commercial, operations, logistics and the like. So there's only 1 source of truth about all this information. And that information becomes easily available for everybody in the organization, of course, with the right credentials. And it's just makes this cognitive and enterprise work in an exponential way. In parallel to having the data, we're also working on building the human capabilities with Centers of Excellence that are working on data science. And we have recruited an important number of data scientists to help us build business cases in specific domains that are addressing critical management and operational questions. And we have a pipeline. We have enormous of initiatives going on to the pipeline at different stages. I'm going to show you just to give you a flavor of a couple of them that we chose from different parts of the company. This is the first one, the dynamic of our booking. You probably know that in the ready-mix business, around 50% of the orders that are made on the original date are eventually changed or canceled or move before the date of delivery. So that's a big management challenge with the group in analytics have built a model that can actually define the optimal overbooking that you can put in every slot way into the future. So when you're doing the confirmation of orders, you can do it or the system actually when you go to CEMEX Go, confirms the order and that original rate taking into account this overbooking on that slot that we know we don't have the capacity today but we know as the date will arrive, the cancellations will start to come in and at the date of the delivery will be able to match the actual capacity with a volume that is needed to be delivered. Another interesting use cases has to do with dynamic pricing. There's been -- there are a lot of conversations. We're already doing some testing of these models where will the algorithms calculate the willingness to pay of customers for specific high-demand slots. So in that sense, we were able to move prices up in those lots that have more demand and therefore, try to improve the price realization for that specific service. And on the other hand, it could also discriminate on some of the lower volume slots where we can drive additional sales with some kind of discounts. Now I have to say that this is -- these kind of systems are usable in specific segments where the prices are not saved by the contract. But a lot of our sales are contracted in advance and then the orders are being taken out of that contract at a set price. There are segments like the professional self-builder that is not the case. Actually, it's a market that buys on spot. So in that market, you could actually operate already these models as we speak. In the other ones, there's -- we can extrapolate some of the learnings from dynamic pricing and see how we can integrate it in markets where you already have contracts, and there's a conversation we'll leave us to see if there is like in the contract can have a discount or subcharge embedded in the contract so that then you can kind of also operate in shifting demand and supply for specific slots with price differentials. So that's also a work in process. Another use cases is -- by the way, the first 1 that I mentioned, it's already deployed or it's in the process of being deployed through CEMEX Go, the overbooking one in the whole of CEMEX. The dynamic pricing is being used very locally in a few places where you have these spot markets in operation. And this 1 is about logistic planning. A big challenge in ready-mix is how to assign the trucks to every trick and plant on the date of delivery. So you can optimize where each truck should be in the morning for the first delivery, and even for the second and third and fourth, and you can optimize the cost for the whole distribution of that network. But in the first or second hour of the day, there's always changes, the weather, an accident, the holding time that the truck has a specific location. So what the dynamic fleet optimization does is that after every delivery it recalculates or can recalculate the optimal sourcing and destination for the next trip for every driver. In that way, you have a very tight optimized system throughout the delivery of the day. We also choose another 1 that is more on the production area, and this is still in a pilot. It was a project that was highlighted in the internal innovation system that we have that Gonzalo refer about, which, by the way, everything that we're doing here is completely enacted with the system innovation and the register and everything. This one, in particular, what it does is trying to optimize the cement content of the mix to make sure that you can deliver the same performance of the ready mix without having to have such a big margin of safety in the amount of cement that you put in. So that's also being done with modeling in advanced analytics. So again, this is a second priority, very important. And data science is a very promising capability that we need to build and leverage. The third one that is also impacting the data strategy has to do with developing opportunities to monetize our digital capabilities. Assets that we already have with investments that we already made to run the operation that could actually be extended to serve other markets or simply to get returns over capacity investments that we've done. You probably know NEORIS, which is the subsidiary of CEMEX that was running the IT consulting services that was actually built from within as part of the process and IT operation. It had significant sales outside of CEMEX to independent prime companies. And we divested a majority stake at a reasonable valuation. And we're still partners in a significant way. We're part of the Board, and we look forward with a financial partner to grow NEORIS and hopefully make it public sometime in the future. The other cases that I'm highlighting here is the 1 of Arkik. Arkik is a company that we created to commercialize our internal ready-mix management system, which does the order taking as the dispatching as the quality assessment, batching, has a series of model that actually automatize completely the operation of a ready-mix plant. So what Arkik is doing is selling as a Software-as-a-Service, this digital asset, and we're running it right now in Mexico, and we expect to have at the end of the year, around 100 plants running with Arkik. It's a very interesting proposition because for them, it creates a lot of value just because automating the plants makes a very important efficiency case for them. And for us, it's a new revenue source that we can use to continue development platform with more users. As you know, Software assets have a very strong scale economies of scale. So for us, any additional sales that we do has a basically as cost. So as much as we can extend the platform, that will be the better now. Then there's the case of [Construs]. [indiscernible] is a retail platform very similar to the 1 that is operating in Construrama in Mexico that was referred by Ricardo. It's basically the same code, the same software, and we just translate it into Colombia to start building a business out of the same digital asset that we built for CEMEX, Mexico and Construrama. Again, a very promising, and hopefully, we can extend this even further. And the last one is related to a platform that we did specifically for a professional sell builder market. is a very simplified version of CEMEX Go, very, very simplified, but very appealing for that segment where you can actually transact with a couple of clicks in a credit card. So that market is more suitable for dynamic pricing, for example. And we're using it today to run a couple of businesses in the U.S. as Houston Shell and Kennedy and the U.K. is actually under the name of the same ready mix to go. So again, very interesting perspective also to gain more value out of our digital assets. In summary, we'll be very busy in accelerating the development CapEx code to go to full adoption and full automation, to double down on data science and the building of this pipeline of interesting models to run the business. And thirdly, to continue doing more opportunities in the monetization of digital assets. And with that, I'll finish, give some time back to Lucy.

So questions on our digital strategy? Anything? Or so -- okay. All right. We have one.

There you go.

The brave one the crowd.

We give an incentive for the questions.

All right. So actually coming back and just a little bit of maybe what customer experience is and obviously, you have the challenges to overcome and you've had someone like the dynamic pricing, et cetera. How is that perceived by customers in different areas? Is there a common understanding and acknowledgment of these strategies? Or do you get some pushback in certain areas? How do you deal with customers need in different regions and just different perception maybe around the dynamic pricing model?

Yes. Well, in the case of dynamic pricing in specific, again, it's a very localized segment that we're using it. It's a segment that uses RMX to go that actually, as I said, don't have contracts. So this is the customer that is not, I would say, even a regular customer, this is the architect or the contract that is building a pool, and he searches in the web for concrete. The well we're electing him there, and then he makes a purchase here. that's right away. We are -- we have not started attempting to do dynamic pricing with a regular broader customer segments are regular customers of. But again, a lot of the learnings we're getting here about understanding the willingness to pay, could also we apply even to determine prices on longer time contracts, but that's another conversation.

Anyone else? Adrian, and then we'll go with you, Alex.

Luis, do you think that pricing has become less relevant now with this technology for customers when they make a decision to buy from you or for many of your peers?

Well, I think for some segment, it does if you are able to get a better service, a better delivery, again, it's not only the platform that makes the trick. It's the full delivery system. But I think if you're able to fulfill on the promise that you're doing, and that's why we're connecting also the piece on the supply chain, it's very valuable for them. The cost for a lot of customers of having delays on the construction side, we're not being able to kind of make a pause on deliveries could prove very, very costly. So I think it does help and maybe my colleagues can tell me more about it, but I think it does give us more stickiness to the relationship.

And maybe Alex here, I think, had a question.

Luis, what is the level of acceptance between your regions. And especially when you -- when we talk about maybe Mexico, Colombia or I don't know 40% of the volumes is people going to the Construrama stores and get 1, 2 bags, what can you tell us the difference between that and maybe in the same region, Mexico where you -- what's the percentage between Mexico and the U.S. or maybe?

Yes. I will say Mexico and SCAC have the strongest adoption rates, in particular, because the most challenging 1 has been aggregates and ready mix. In terms of the complexity of that interaction. Buying cement has a lot less variables into it. Ready-mix has thousands of different recipes. And it's not only the product, but the service associated with the product, the slot, the delivery. So it's a very complex ordering process. And that is more challenging and the same with aggregates. So those markets that have a higher or a bigger business related to that, on the average, they tend to be lower. And that is the reason why we're doing this in the U.S., and that's what we're doing in Texas. It's about building more functionality, but it's also about improving the way we onboard customers. In many of these segments, we have a lot of the traditional non -- I will say nondigital savvy generation still running some of these businesses and they prefer to have someone on the phone or a salesperson coming in. And I think that's very prevalent, I would say, in many parts of the U.S. surprising to me in that segment. So we need to enhance the way we onboard customers. So when someone calls to the call center instead of placing the order for him, we should connect with him directly. We have the functionality in the platform to actually do a walk-through on CEMEX Go from the service center just pushing the customer to do the first transactions in the platform. And it happened in many other industries when they started to digitalize in the first deposit that you had to be in the bank or the first interaction with the platform was the most difficult. Once you pass that threshold, I think it's -- and that's 1 of the challenges that we have to move that. Let's say, 60% in order because it's the lowest one. When you go to other like payments, invoices, that's very high. I guess, because the accounting departments are more digitally savvy than someone that is in the actual construction side on the procurement side.

Great. Okay. And maybe the last question with Gordon. Okay.

Thanks, Lucy. Two quick questions, please. The first is you spoke a lot about going further and sort of potential optimization of more processes. Have you quantified -- have you tried.

Former what?

So you spoke a lot about potential progress in terms of optimizing more processes for instance, to ready-mix logistics, et cetera. Have you quantified what that could represent in terms of additional savings at the CEMEX level? And the second question is you monetize the notice is a business that is -- it's been around for a long, long time, right? And reached a certain scale. How quickly do you think or how realistic is it to expect that in the medium term, you could monetize some of the other businesses that you mentioned?

Yes. Yes. Okay. On the second question, I think in the digital space, some of these cycles could go faster. I'm thinking about, for example, the case of Arkik, you were able to deliver on a strong sales rate. I think we are in a position like in 1.5 years to invite an external financial partner to help us fuel growth and go very fast. So that's kind of, I will say, 12 months or 25 months. On the first question, we have make assessments of the potential at different stages of -- or areas of digitalization. Remember, we said we have supply chain. We have production and then we have -- well, we have commercial, but that is more -- commercial is more driven by the revenue side of sales. And although there's a cost associated with running the commercial organization and we will have savings with that as well because as more digital work comes from the service centers also to the digital platform, we will be able to reduce the cost of the service centers. And it's actually a project being run right now to integrate more of these service centers, we could potentially have maybe $15 million to $20 million of savings on that project. That would add to the administrative part of it. That has to do with all of these record to report, purchase to pay, procurement, HR, et cetera, that Maceo runs. And there's a project there also to digitalize that to outsource it, and that one has between $90 million of potential savings on steady stage. On the other projects around supply chain, we're working closer in a specific project to get a better view of the potential there. But just the ones that we have in the pipeline, as I mentioned, there's a pipeline for data science. Right now, just what we have is around $30 million just for that set of projects that have a very high chance to get off the funnel. So there's interesting numbers down the road.

Great. Well, a big round of applause, please, for Luis. And now for someone who has been very patient all day to day. Maher Al-Haffar, our CFO.

Thanks a lot, Lucy. When they told me I'm going to speak last, I was kind of a little nervous because everybody wants to head out of here and have lunch or whatever. But in any case, I would like just to start with just kind of following from some of the remarks that Lucy made this morning, I can't help but think against the backdrop of what's happening in capital markets, geopolitics and all out of a comment that was made. I think about a few weeks ago by a very famous pundit that speaks a lot on Bloomberg without mentioning any names. He said, with all of the stuff that is going on in the market, we're not going through ordinary volatility. We're going through unsettling volatility which is really true. And of course, I started getting depressed a little bit, especially seeing my PA going down with that situation. And then he started going through the analysis and the point that we were making is that we are definitely going through a bumpy journey, right? But the very interesting part of this bumpy journey and especially given a lot of the information that my colleagues have shown and discussed with you about our own markets and certainly the prospects of our own markets, we're taking a journey to a much better destination very interesting. I really believe that, that is the case. And against that backdrop, our financial strategy is really in this kind of dynamic situation, our financial strategy is based on really 3 pillars, very important. First pillar is resilience. We have always and will always continue to make sure that we manage our balance sheet and cash flow from a resilience perspective. The second pillar is predictability. We want to make sure that all of you here and all of our stakeholders, financial stakeholders can predict what we're going to do next, and that's extremely important. So our communication to the markets banks, investors, both equity and debt is aspiring always to do that. And you should expect that, that will continue. The other element is, especially against this backdrop of the capital markets is agility and we will see that in a second. We need to be prepared and we need to be agile to take to either mitigate risk or to take advantage of opportunities that present theirselves to us. Now as I mentioned, I think against this backdrop of, I would say, pretty extreme volatility, we are extraordinarily well positioned at CEMEX. And we focus on kind of 4 things in that preparedness. Number one, making sure that we have a very healthy debt stack. And as many of you know, we don't have any maturities in the next few years until, in fact, no major maturities until '26. We have an average life of about 5 years, which is quite comfortable in today's markets. And we don't need to come to the market essentially. The other element is liquidity. We have very recently over the last few months, arranged for a fairly sizable liquidity facility, a committed credit facility close to about $1.8 billion. That plus our usual cash on hand on the balance sheet translates to anywhere between 2 to 3x the cash needs throughout the cycle, which gives us ample comfort to make sure that we can address our needs and go through the cycle with all the volatility that we're seeing in the markets. The other thing that is also very important, and we tested very recently, and we appreciate all of the banks that are here that supported us very recently, access to the markets in a very, very volatile markets, rising rates, increasing risks, we were able to raise EUR 0.5 billion the market, very attractive terms, very attractive tenor, not much worse of a spread than the facilities that we've raised last year, frankly. And so we were very happy with that, and we were able to take advantage of some market opportunities as a consequence of that. We also aspire to have an appropriate rates and currency exposure and mixture in our desk stack. Currently we're at about 75% fixed rate. So a lot of you -- the whole market is worried about what's happening to rates. 75% of our debt stack is fixed right now, 25% is floating. What is very important to mention is that out of the floating component, half of it is roughly based on your IBOR, which is a little bit less, not as volatile. And where we also think that the stability in that market is likely to be more than what we see in the dollar side. Now as rates went up, obviously, some of our bonds gave us an opportunity, frankly, for some liability management. As you know, we ended up purchasing about $1.2 billion of our bonds in the market at roughly around a 10% discount. So we essentially were able to take in and realize about 100-some-odd million worth of a discount. And also we created a net present value for the company and for our shareholders, close to about $150 million, which is very important. And sensitivity to interest rates going especially when you take a look at the floating component needs to be taken against how much net present value we created for our shareholders today. A percentage point increase in our rates should increase our interest expense by around $15 million to $20 million per year, assuming we don't do anything for that. And then the other component that we manage as well from a financial strategy perspective, is energy. And in the case of energy, we have several elements of our energy, right? We have transportation, we have fossil fuels, we have electricity. And in the case of transportation, where we have been most successful. This year, 75% of our energy bill has already been hedged. For 2023, 75% has also been hedged. This is for directly managed transportation costs. We're also looking at indirectly managed transportation costs for next year, which happens to be around the same magnitude as the direct transportation cost. In the case of fossil fuels, I have to tell you, well, actually, in all energy, the first line of defense in terms of managing risk is pricing. And I think you've heard my colleagues and the different strategies that they have implemented in order to hedge that. The other line of defense, frankly, has been, and of course, also you've heard the substitution or transition into alternative fuels. And by the end of this year at the exit rates of utilization of alternative fuel alternative fuels will become our primary fuels, actually, which is very interesting. And you've seen all of the -- and heard of all of the benefits that we get from that, not only economically, but also to society and to decarbonization, which is extremely important. Now in terms of actual fossil fuels like pet coke and coal, that represents in terms of how much of that is being hedged is probably about 15% on a consolidated basis. The volatility this year has made it extraordinarily difficult to entertain any kind of hedging strategies on that. But clearly, as volatility drops, and it has dropped. I think there will be opportunities in the future to afford us strategies to dampen the cost of those fuels. In terms of electricity, roughly 70% of our electricity this year is either fixed or regulated. And for next year, we've already fixed around a little bit more than 1/3 of our electricity cost, and we should be more proactive. Most of that is in Europe. If we go to the next slide, we -- and I've asked -- I've been asked that question a lot, why are you so fixated on getting investment grade? Well, bottom line, we think we can create a lot of shareholder value by getting to investment grade. Everything else being equal, every dollar of debt that we reduce, and again, everything else being equal, every dollar we reduce goes to our shareholders. So that's a very important big driver from our perspective. Now the second thing, of course, that we believe that investment grade is very important because it reduces our cost of borrowing, it reduces our risk and rerates, our cost of capital, a rerating of cost of capital creates enormous shareholder value from our perspective. Not only that, but it also frees up free cash flow to invest in our growth strategy, which is extremely important. And of course, beyond that, it allows us, at some point in time, as Jose Antonio mentioned, then as Fernando mentioned this morning in his presentation that as soon as we get that investment grade, I believe would be in a very comfortable and steady state to be able to potentially return cash to our shareholders, which we need to do to improve the total shareholder return for our investors. Now as you have seen, over the past couple of years, we've reduced debt by almost $2.5 billion. This is a consolidated net debt. We've reduced leverage almost 1/3 turn. And from 2014 until now, we've almost halved our leverage. So you can see a very consistent strategy. This is nothing new. This is something that we've been working on very diligently over the last few years, and you should expect to continue to see us continuing to do that. Despite the backdrop of extremely volatile markets and challenging headwinds in some of the markets that we're in. We're probably going to end up with a leverage that is pretty flattish to last year's leverage, which I think against that backdrop, that's a very achievement, frankly. And then the last message that I would like to mention here is our financial strategy is also aligned with our climate action goals, which is extremely important. So we have gone on record, and this is something that we have been working on now for a number of years. It's not something that new, as you can see from the graph from 2020 to now, you see the percentage of our debt stack that is linked to climate goals has gone from 26% to, as we speak, around 40%. And we are on record with probably the most -- in fact, I believe we have the most ambitious goals for certainly 2025 and in 2030. So we have indicated to the market that by 2025, 50% of our debt stack will be sustainability linked and by 2030, 85% of our debt stack will be sustainability linked. Also very important is that we're not just doing that ourselves, but we are very important players, and we are founding members in the United Nations Global Compact CFO Coalition where we actually lead 2 of the tracks in the construction and building materials space, focusing on investments and financing strategies in that regard, and we're advocating to other similar companies around the world to adopt similar strategies to make sure that climate action goals are aligned with financial strategy of the different companies and making them material for those companies and making sure that we transform ourselves at the end of the day. Now of course, many of you know that, as I said, we do have sustainable linked financings on the balance sheet. And of course, because of the recent SPGI strategy that has been rolled out for our industry, the 1.5-degree scenario. Clearly, we will be working with some of you guys here to change some of the KPIs to align them with the new metrics. And with that, I would like to end the presentation and have take questions. Hopefully made up some time?

Yes.

Great.

Milne, please. If we can get her a microphone.

Thanks, Maher. Given how you started out with this unsettling [indiscernible]. Could you tell us of your -- since there will be uncertainty next year on the cash flows, how are you looking at the flexibility, let's say, on your CapEx line or some of the other lines? What will be your sort of -- is there a range that you would maybe bring it down to or go up to depending on what the cash flows are looking like during the year?

Yes. I will try -- I will take a stab at it, but I would encourage you to ask that question in the next cession to as Antonio. But clearly, we are not excluding the backdrop of what we're seeing. So we will be very conscious of what type of expansion or platform CapEx that we're likely to do. We will modulate it, obviously, to the extent that it's needed in order to make sure that we have the right levels of cash flow given the things that are following. But I don't want to get into more precise response to that. But clearly, that is -- it's in the backdrop of our thinking for 2023.

Okay. And CEMEX has always been very active on the liability management front, whether it's calling bonds, buying back bonds, issuing sustainability-linked loans. Anything planned for the next year?

It's tough to tell, obviously, but we're always -- obviously, like I said, we're always prepared to take the opportunity. It depends on what happens in the markets. I am a little bit -- not concerned, but rates have gone up. We do expect rates to kind of probably turn down a little bit. On the fixed rate side, today, it's not a very particularly interesting market for us. On the floating rate side, it's a bit more interesting. And so we'll have to wait and see what happens next year, but we're always looking at it. And to the extent that we have opportunities like we had this year, which were which was incredibly accretive from a shareholder perspective, right, between the discounts, the NPVs. And so we will continue to always look at that clearly yes.

And I think, Alex, did you have a question? Okay. If we could get a microphone over here.

An easy one here on dividends. What metrics should we use? Should we use a payout ratio? Should we use a percentage of the free cash flow? What do you guys are thinking in terms of dividends in the medium term?

You mean if and when eventually we announced something?

Yes.

Look, I have to tell you -- I mean, first, I think it's extremely important that on dividends, we want to make sure that if and when we do some like that, we need to make sure that it can be something that could be sustained. And as we've discussed this morning, getting to an investment grade or investment-grade capital structure, which probably means another half turn drop in our leverage. I believe that would get us to that kind of area. Now what percentage? I mean I think that I would rather not say right now because this is something that has not been discussed. But clearly, it will be something that will be compatible with our cash flow generation and predictability of our cash flow generation. The North Star in doing something will be that we will be able to sustain it. That's extremely important. I mean, dividends, episodic dividends or episodic share buybacks at the end of the day, don't really translate to sustainable shareholder value. And what we want is we want to do something that is going to be contributing to sustainable shareholder value. so predictability and sustainability is extremely important.

Okay. Thank you, Maher. Any other questions? Okay. Right ahead, Alberto.

Maher, I'm missing your presentation the guidance for next year.

Say it again?

The guidance for next year. We are always looking for the guidance.

You are missing that.

It's bumpy road, but what should we expect next year? Looking at the picture we have today, should we keep seeing some growth for next year, something more stable, some challenged time, if you could give some color to us?

Why don't we wait until the next session for that? And as we said at this time, as you know, Alberto though, we give guidance in early February. So we're 2.5 months 3 months away from that, but I think there are probably some comments for good try. Yes. Very good try. Okay. I think there was 1 more question?

This is Fernanda from Bank of America. Maher, you said that there is 75% of 2020 and 2023 hedging for commodities in energy transportation. I understood from previous presentation that you increased the prices from 15 to 16 globally, I guess. My question here is, where is it coming from that inflation increase is not coming from the energy prices? And how does it compare to competition?

Well, I'll start backwards and responding to your question. First, I don't know about the competition. I mean, I think you probably either yourself or other folks and your institution would know better on what they're doing. Hedging, of course, doesn't eliminate it manages, it mitigates it dampens the risk, right, unless markets structurally change time as we go through that. So what other -- I mean, the other thing is that when we hedge, you're not eliminating 100%. So you're eliminating some of the risk. So clearly, whatever we did not manage to hedge or other input costs are definitely translating or impacting the inflation in our cost structure, right? I don't know if I answered the question, if you want to follow up.

No, that's fine. I wonder if this is coming from elevated wages, probably? You mean the some components that cannot be hedged?

No. I mean, I think -- no, no. I mean.

Step back and discuss what we hedge because I think it's diesel that's being energy for the production of cement.

Yes. For transportation, I mean, it's diesel, and we hedge that primarily in the oil markets, right, because diesel is too volatile, too expensive to do and fossil fuels, whether it's coal or pet coke, it's -- there's very little hedging that is done there. As I said, 15% of the consolidated amount is being hedged and electricity is the other piece. So.

But energy for the production of cement is the biggest energy use within CEMEX, and we are limited in how much we can hedge that. So I think -- Yes. Okay. Any other questions? Great -- sorry, sorry about that. Okay. Last question, and then we'll move into a general Q&A.

Francisco Suarez, Scotiabank. To what extent -- I mean, how does meter the CEMEX balance sheet for 2030 in order to deploy all the solutions that are needed to aim for this Net Zero quest? I know that it is an unfair and a question on that. But I mean, if you as a CFO, if you have to prefer CEMEX for that endeavor what is your overall target for -- in terms of overall leverage by then?

Yes, that's a great question. And I really would kind of like to refer back to what Fernando said this morning about our business being essential and being profitable, most important, that was the last point that he made. A lot of people -- it's very interesting, when they talk about our industry and just transition in general, they talk about transition risk and transition cost. And I personally, and I think we, as a company, take issue with that because in our industry and particularly in the case of CEMEX, there's no such thing where there's a sunk cost that we are making. A lot of these growth projects that you saw that Jose Antonio talked about, are that go towards decarbonization that are highly accretive, as you saw. I mean the -- so from my perspective, expectation is that these projects are going to contribute and are contributing to our EBITDA. And so in terms of what do we do to prepare the balance sheet for 2030, I mean, honestly, nothing different than what we're doing right now. All I can tell you is that hopefully, by 2030, we're going to be significantly investment-grade territory, that's about it. But I don't see that we need to take kind of protective or defensive measures on the balance sheet to make sure that we can make these investments because I really do believe that these investments are accretive and creating value to shareholders and contributing to our EBITDA and cash flow at the end of the day.

So I think now if I could call Fernando to the stage?

Thank you very much.

Sorry. Thank you. Thanks, Maher. Great.

I thought we already run out of time, Lucy.

We're making extra time.

At your disposal.

I don't know if you want to go back to the question that was asked of Maher and maybe just talk in general terms.

The guidance? The guide that we will guide in February if that is -- No. I mean I think this morning, I did refer to guidance directionally and I think we cannot, at this point in time, go much further than that, meaning, how are we expecting the trends that we started observing mid last year going to continue evolving next year? On the one hand, growth, we've seen growth expectations softer and softer. So we think next year, that trend will continue. Although when looking at current data in GDP growth for most of our markets or countries it's going to be a lower growth, but not all of them, not the majority of them getting into negative numbers. So it's softer growth during next year than the other, and because of that softer growth in our own volumes, although there are some -- our volumes do not directly correlate to GDP. So there are some reasons why we believe that our volumes are going to have growth like the ones we mentioned in infrastructure investments, mainly in the U.S. and Europe. But it's just -- the general indication is for softer economic activity. Then on the side on -- of inflation. So what we saw, again, mid-last year, nitration started going up the trend has been for the inflation to continue growing until -- and referring to our own inflation until perhaps August this year, when we started seeing some fuels been reducing their cost, particularly pet coke so I wonder if there is a kind of an inflection point on lower inflation on our production cost because you most probably, you know that what happened with pet coke, it started going down, but then the last couple of months, it's again going up, meaning it seems to be a sort of an inflection point, but under still a very volatile context. So we don't know if that is a trend that will continue. But for the time tank, we want to be on the conservative side because depending on our cost assumptions, then we will define our pricing strategies. So we want to be on the safe side on that regard. You directly ask on -- but is there going to be growth or not? Well, I think what we are showing this year is that our pricing strategies are being successfully executed, but they have not been enough yet. I mean, this is a process. You cannot immediately offset or recover margins once the have the -- an impact of the inflation, the size that we are having, but this is a process that will continue. And yes, we do expect to recover markets. What is the estimate for this year in margin loss? Well, I think we -- as of third quarter is 2.7 or so percentage points of margin loss compared to '21. That's more than $300 million of EBITDA. So that's what we need to recover, and that's what we will need to recover during next year. Are we going to be doing it starting in January in 1 or 2 regions? I do believe that we will recover those margins during the first quarter. our price strategies are, let's say, the first 4 months of the month are the strategies have -- the pricing strategies having most of the impact during the whole year. So I think U.S. and perhaps Europe are going to recover margins in the first quarter. And I think Mexico and [indiscernible], that's to be seeing given that the impact we had this year on lower volumes in cement, we need to better understand how those dynamics are going to be impacting our pricing strategies this year. So I think that's that as far as I can go right now on guidance. As you can imagine, we are going through all the analysis. We're going through all the budgeting process discussing fortunately, we don't agree on things. So meaning we still have lots of discussion to go through. But those are more or less directionally what we are expecting.

Next question, Adrian.

We're now thinking that the pandemic is somewhat over. What would you say are the -- what made CEMEX differently during these last 2 years in the industry as well? Pricing, how the company is managing cost, the growth strategy? Are there things that end up being different for CEMEX over the last 2 years versus let's say the pandemic didn't happen? I don't know if I made myself clear.

You did. let me start by saying that when we made some adjustments to our strategy, that was pre-pandemic. When we said we are adding a fourth business line and we call it urbanization solutions that was before the pandemic. Immediately before early 2020, late '19, I don't remember exactly. When we said that we wanted to let's say, to make a balance between the production and bolt-on investments for growth. It was immediately before the pandemic what the pandemic did is that it completely switch our attention to the trust potential stress of the company really suffering big time. I even thought on something worse than 2009. Yes, for you to imagine that what we were thinking. So again, I think I did comment that a few months 4 months after the initial -- after March in 2020, we saw that, that was not going to be the case. And you know the story, we reacted and everything. So we continue exploring ways for us to grow through these bolt-on investments, and that's what we have been doing. The pandemic itself is not changing the adjustments we did to our strategy. It's a larger portion of our portfolio in U.S. and Europe, balancing the current 3 businesses now with urbanization solutions. That has not changed, and that's the core or the -- what I think is more important. There are a lot of things that have changed in terms of on, let's say, how to incorporate all the facilities, video conference facilities, remote work facility, all those issues, that has been changing and we're adapting to those. I think we're still growing -- I mean, we're still going through the consequences of the pandemic to me. This is the same phenomena, but it's different steps of the phenomena. It was the pandemic economic activity declining, then going up, then lots of money in the street than inflation, then now adjustment, increase in interest rates. So to me, is still the process that we are all going through in order to make the adjustments needed after the pandemic. But in short, not dramatic changes because of it.

I think Ben has a microphone, then it can go to Yassine, if that's okay.

Perfect. Thank you very much. Fernando, talked a lot and it's been clear within the presentation that focus is to recover the level of profitability to just be back on track.

What, sorry?

Recover profitability?

Yes.

So where do you think -- what are the low-hanging fruits? And where do you think it's going to be more complicated to deliver on driving that margin expansion over time? From shift mix, is it a volume question? Is it customer agreement on pricing? What are the low-hanging fruits? And where do you see the challenges?

I think we have already ate all the low hanging fruit that we have found in the business. But the way I see it tends to be very simple. We are losing margins to inflation, not to anyone, not to anything else. And that's what we have to recover. Again, I already mentioned an amount to on a fraction of margin loss this year compared to '21 is more than $320 million, $330 million of EBITDA. Why did we lose it? Because inflation was 20-something percent and price increases were like 16% or so. So how do we recover that profitability is insisting in each and every market as much as possible on our pricing strategy to recover that those margins. Somebody made a question to Jesus in terms of what's going on with your volumes in Colombia because it seems like competitors are doing next and your volumes are lower than dose. The answer was very simple, is we are trying to recover margins. Now we don't succeed each and every time in each and every market, and then we need to decide again how to continue insisting in those prices. As you can imagine, I may also describe in a very simple manner. In the U.S., the U.S. is back to the condition of a structural importer of cement, which was the case before the 2007 crisis capacity utilization is fully utilized. So that context is, let's say, too much different to Colombia, where capacity utilization is around 60% I think. So market per market, year per year, we need to try different things. And you might say, by the way, are you trying I think, in Colombia with a 60% capacity, because we feel obliged to try, we feel able to try and see how it goes, who knows. In Mexico, we did try price increases with the capacity utilization going down because volumes are decreasing like how much, 8%, 9%. So that is a process that we have to follow and we succeed. And if we don't, we will try again. But that, to me, that's it.

Yassine?

Yassine from On Field again. Maybe a question looking a little bit more at the big picture. So if I look at CEMEX over the past 10 years, you've grown your EBITDA by nearly 20%. You managed to reduce the leverage from more than 6x net debt to EBITDA to less than 3x. You've done a great job in terms of decarbonization. Your way to become investment grade. But the share price is 20% to 30% lower than what it was 10 years ago. What do you think the market is missing?

Time ago, I thought that the us and the industry because when you -- I mean, the same question applies to 1 of our competitors in the industry, at least some of the public companies in the sector. Time ago, I was sort of let's say, inclined to believe that all this carbon capture -- I mean all the carbon the tracing towards on the carbon economy was impacting the value of the company. And nowadays, I think it might, but it's not necessarily the reason why the value of the share in terms of multiples is at this level. I think it's the cycle. It is the cycle, and I'm sure that it will change whenever the cycle changes. How come we reported our third quarter results and we reduced materially our guidance just to see the value of our share increase in almost 10%. The market, the cycle has been sort of negative already for a few years. This pre, post, middle pandemic thing has been very long. So I do believe that the cycle is going to is going to continue playing its way. Now is this -- the concerns on our industry impacting the value of the company? I think it might, and we do want to continue clearly communicating to investors, to bankers, to the market to customers, to potential employees, to NGOs, to ourselves that compared to what many people thought years ago, our industry, even though it's considered a hard-to-abate type of industry. The products we produce are and will continue to be essential. I know there might be other substitutions. But as of today and according to what we can see, our products are essential. The transition is able. It's doable. We've been talking about that all day long, and I'm not going to repeat it, but it's feasible. And I have shared at least, I think I shared with you in the break a couple of examples on why we are sure, I'm sure that the transition is it has been profitable and will continue being profitable. And in the case of our industry, it is not just that in the circular economy, we will be more profitable. We will be in a position to better provide services to society, as Ricardo mentioned, we are already safely disposing 1/4 of the waste produced by Mexico City. And you know what, we can do half of it, and it will happen in the next few years. And we can do the same thing wherever we operate. And that will be a great service to society. Another comment I can make Things are changing. We are changing. We are better understanding all this transition towards a low carbon economy. I'm likely inclined to believe that the CO2 we are releasing to is not different to any other ways we produce and landfill. And in the future, that CO2 that is released to the year is going to be converted into an asset. From a liability from a bad carbon to a neutral if it is landfilled, if it is stored or to a good car. As an example, you saw in [indiscernible] and carbon fibers and other mineralization of that CO2 and other another possibilities. So the cycle, perhaps still some investors doubting about the feasibility and profitability of the transition. But I think that, that's changing very fast. That's changing very fast.

Okay. I'm going to go with Paco. I think this is the last question, unfortunately. So Paco, please go ahead. That was a great one to end on, but we'll go 1 more.

Thank you so much for Francisco Suarez, Scotiabank. The questions I have is that many years of you have used the word of cement like if it is something bad. I mean Heidelberg Cement is getting rid of the name. I mean, at the end of day, you have shown us a lot of transformation within CEMEX how at the high level, perhaps at the port level you are discussing how do you see the future of the company in terms of going more to the light side rather than the heavy side? Is there anything that you are already discussing compared to what your peers are announcing globally and how they see the next -- the future of the building materials industry?

Yes. Our strategy has been evolving through time. I suppose it doesn't change that fast. So you -- sometimes you don't realize all the adjustments that we've been doing. Remember, we started as a cement company in emerging markets. That was our origin, and that's the meaning of CEMEX, Cement Mexico. And we have moved from there to cement, not only in emerging markets and from cement to ready-mix and from their 2 aggregates. And 2 years ago, we added urbanization solutions, which another way to put it is our entry point to lightweight materials, but selecting a few segments of those materials as who explained that Jose Antonio I think like at mixtures like mortars like concrete products like waste management and others. So our strategy has been evolving little by little. So who knows a few years from now, depending on the way things evolve, we might continue making those adjustments. I think lately, what we've seen, and we need to be more precise on what we've seen lately is that different businesses or activities are combining now because of the transition towards the low carbon economy. I think I used the example of Waste Management. But we're interested in getting into a few years ago? No. Today? Indeed, yes, definitely, yes. I don't remember if somebody said, but I will say it myself, because of these different ways of businesses evolving and combining, we better be clear on how value creation in our industry is going to migrate because it's migrating. So we better be in the place in which this value creation migration is going to get. And again, the type of examples that we discussed today. So it's a process. For instance, when you think of the statement we did 2 years ago on us increasing the relevance of our portfolio in developed markets compared to emerging, you might think that was kind of a new strategy, is what? The last $25 billion we invested before 2007 were investments in U.S. and Europe. So is it that different? Well, maybe I'm not sure this is that much different, but it's stating where is it that we want to -- for the company to evolve.

Great. Well, thank you very much, Fernando. I think with that, we're going to bring CEMEX Day to an end. I hope you found this morning informative I encourage everyone who is here with us to take advantage of the next 20 minutes or so to follow up with any of the speakers. We will be sending out a survey to evaluate CEMEX Day. We encourage you all to submit. It's your feedback that causes us to make changes the following year. And I just want to thank all of you for your interest, thank our online audience, and we look forward to seeing you again soon. Thank you.

Thank you. Thank you all. Thank you.